Mandatory court auction deposit requirements can make a sale a nullity when not complied with under Order XXI CPC.

Mandatory deposit and payment requirements for a court auction sale under Order XXI CPC must be strictly complied with. Immediate deposit of 25 per cent of the purchase money and payment of the balance within the prescribed time were treated as essential conditions of a valid sale, and the court could not permit set-off beyond the rule or invoke inherent powers to bypass the Code. Non-compliance meant no completed sale came into legal existence, so the proceedings were ineffective as a nullity rather than a mere irregularity challengeable under the setting-aside provisions.

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Issues: Whether non-compliance with the deposit and payment requirements for a court auction sale under Order XXI of the Code of Civil Procedure rendered the sale merely irregular and challengeable only under the provision for setting aside sales, or whether it made the sale a nullity.

Analysis: The rules governing court sales require immediate deposit of 25 per cent of the purchase money and payment of the balance within the prescribed period. Those requirements were held to be mandatory. A decree-holder purchaser may claim set-off only within the limits of the rule, and the court had no authority to allow set-off in favour of mortgagee-purchasers whose claim had not been adjudicated and who had obtained no decree. Failure to comply with the mandatory requirements meant that there was no completed sale in law, and the resulting proceedings were treated as wholly ineffective rather than as a mere case of material irregularity. Inherent powers could not be used to override the express provisions of the Code.

Conclusion: The sale was a nullity for non-compliance with the mandatory requirements, and the challenge to it succeeded against the appellants.

Final Conclusion: The appeal failed because the auction purchasers acquired no rights under an incomplete sale, and the order dismissing the appeal was affirmed.

Ratio Decidendi: Where the statutory conditions for deposit and payment in a court auction sale are mandatory, non-compliance prevents a sale from coming into legal existence and cannot be cured by set-off or inherent powers.

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