1999 (10) TMI 748 - SC - Indian Laws

Supreme Court: Mortgage redemption rights protected during appeal. Confirmation of sale not final.

The Supreme Court upheld the respondent's right to deposit the mortgage amount under Order 34 Rule 5 CPC during the pendency of the appeal against the ... - Issues Involved:1. Maintainability of the application under Order 34 Rule 5 CPC after confirmation of sale.2. Validity of the sale confirmation during the pendency of an appeal.3. Impact of the restoration of an application dismissed in default on the confirmation of sale.4. Entitlement of the respondent to redeem the mortgage and return of documents.Detailed Analysis:1. Maintainability of the Application under Order 34 Rule 5 CPC after Confirmation of Sale:The primary issue was whether the respondent's application under Order 34 Rule 5 CPC for depositing the balance mortgage money was maintainable even after the sale was confirmed. The court referred to Order 34 Rule 5, which allows a mortgagor to deposit the mortgage money at any time before the confirmation of sale. The court clarified that this provision gives the mortgagor a last chance to save his property from being transferred to a third party by depositing the entire amount due, including additional amounts as per sub-rule (2) of Rule 5.2. Validity of the Sale Confirmation during the Pendency of an Appeal:The court analyzed whether the sale becomes absolute merely upon the confirmation by the executing court or if it remains pending during an appeal against the order refusing to set aside the sale. The court cited precedents, including the Privy Council's decision in Chandra Mani Saha vs. Anarjan Bibi, which held that the sale does not become absolute until the appeal is disposed of. This principle was reiterated in various judgments, indicating that the pendency of an appeal keeps the sale in a nebulous state, allowing the judgment-debtor to invoke Order 34 Rule 5 CPC.3. Impact of the Restoration of an Application Dismissed in Default on the Confirmation of Sale:The court discussed the implications of restoring an application dismissed in default. It was noted that the restoration of an application under Order 21 Rule 90 CPC, which was dismissed in default, would nullify the earlier order confirming the sale. This principle was supported by judgments from the Madras High Court and Andhra Pradesh High Court, which held that the existence of an application to set aside the sale bars the confirmation of the sale, and the restoration of such an application reverts the parties to the status quo ante.4. Entitlement of the Respondent to Redeem the Mortgage and Return of Documents:The court examined the respondent's entitlement to redeem the mortgage by depositing the balance amount and the subsequent return of documents. The High Court had allowed the respondent's application under Order 34 Rule 5 CPC, and the trial court had accepted the balance mortgage amount, discharging the mortgage. The High Court's decision to allow the return of documents under Order 34 Rule 5A CPC was contested but ultimately upheld, as the mortgage was deemed discharged upon the deposit of the balance amount.Conclusion:The Supreme Court upheld the respondent's right to deposit the mortgage amount under Order 34 Rule 5 CPC during the pendency of the appeal against the order confirming the sale. The court emphasized that the sale does not attain finality until the disposal of the appeal. The restoration of the application dismissed in default nullified the confirmation of sale, allowing the respondent to redeem the mortgage. The court dismissed the appellant's contentions and ordered the refund of amounts deposited by the appellant, affirming the respondent's entitlement to redeem the mortgage and obtain the return of documents.