2003 (12) TMI 670 - SC - Indian Laws

Supreme Court Sets Aside Orders, Restores Execution Proceedings: Compliance with Rule 89 Conditions

The Supreme Court allowed the appeal, setting aside the orders of the High Court and the first Appellate Court, and restoring the order of the executing ... Application to set aside sale under Order 21 Rule 89 of CPC - Deposit requirements for setting aside sale (five per cent to purchaser and amount specified in proclamation) - Objection / memo filed by judgment-debtor treated as application - Mandatory duty of Court under Rule 92(2) of Order 21 to set aside sale on compliance - Execution of decree and termination of execution proceedings on complianceApplication to set aside sale under Order 21 Rule 89 of CPC - Deposit requirements for setting aside sale (five per cent to purchaser and amount specified in proclamation) - Objection / memo filed by judgment-debtor treated as application - Mandatory duty of Court under Rule 92(2) of Order 21 to set aside sale on compliance - Whether the executing Court rightly set aside the sale where the judgment-debtor deposited the decretal amount and solatium and filed a memo of objections within the prescribed period, and whether such acts satisfied the requirements of Order 21 Rule 89 read with Rule 92(2) of the CPC. - HELD THAT: - The Court held that Rule 89 postulates two conditions for setting aside a sale: deposit of five per cent of the purchase money for payment to the purchaser and deposit of the amount specified in the proclamation (less amounts already received by the decree-holder). Rule 92(2) mandates that where those conditions are satisfied and an application is made and allowed, and the deposit is made within thirty days of sale (or deficiency cured within time fixed), the Court shall make an order setting aside the sale after notice to affected persons. The Rule does not prescribe a particular form of application; a memo or objection which evidences the judgment-debtor's intention to set aside the sale and accompanies the requisite deposits is sufficient. In the present case the judgment-debtor paid the decretal amount with costs within the stipulated period and filed a memo of objections seeking to close execution; the executing Court directed deposit of solatium which was complied with. Those acts satisfied the requirements of Rule 89(1)(a) and (b). The First Appellate Court and the High Court failed to attach effect to the payment and the memo; however there is no bar to treating the objection/memo as an application under Rule 89. Upon such compliance the executing Court was bound under Rule 92(2) to set aside the sale, and its order setting aside the sale was therefore correct. [Paras 9, 10]The setting aside of the sale by the executing Court was correct as the judgment-debtor satisfied the deposit conditions and filed a memo of objections which could be treated as an application; the executing Court's order is restored.Final Conclusion: The appeal is allowed; the High Court's order affirming the First Appellate Court is set aside and the executing Court's order setting aside the sale is restored. Issues:Setting aside of sale in execution of a decree under Order 21 Rule 89 of CPC.Detailed Analysis:Issue: Setting aside of sale under Order 21 Rule 89 of CPCThe case involved the execution of a decree where the properties of the Petitioner-Judgment Debtor were brought for sale. The Petitioner paid the decretal amount and filed objections for confirmation of sale. The executing Court directed the Petitioner to pay solatium to the Auction Purchaser, who refused to accept it. Subsequently, the Auction Purchaser filed an application for confirmation of sale. The executing Court set aside the sale, closing the execution proceedings. On appeal, the first Appellate Court reversed the decision. The High Court dismissed the revision petition, stating that an objection cannot be treated as an application under Order 21 Rule 89, and the deposit was not made within the prescribed date. The Supreme Court considered whether the setting aside of the sale by the executing Court was correct.The Supreme Court analyzed the provisions of Order 21 Rule 89(1) of CPC, which allows an application to set aside a sale on deposit. The Court highlighted the conditions to be met for setting aside a sale under Rule 89(1) and the follow-up action provided under Rule 92(2) of Order 21. The Court examined various judicial precedents that presented conflicting views on whether a mere deposit of money can be considered an application to set aside a sale.The Court discussed the purpose of Rule 89 of Order 21, emphasizing that it provides a last opportunity for the Judgment Debtor to prevent the sale and save their property from dispossession. The Court clarified that compliance with the conditions of Rule 89 leads to the Court setting aside the sale under Rule 92(2). The Court noted that the Rule does not mandate a specific form of application and even a memo with a prayer for setting aside the sale is deemed sufficient compliance.In the present case, the Petitioner-Judgment Debtor paid the decree amount to the Decree Holder within the stipulated period and filed objections for setting aside the sale. The Court observed that the payment fulfilled the requirements under Rule 89(1)(b) and the subsequent deposit of solatium with the Court met the second requirement under Rule 89(1)(a). The Court emphasized that the objection could be treated as an application to set aside the sale, and the executing Court's decision was in line with the law. Therefore, the Supreme Court allowed the appeal, setting aside the orders of the High Court and the first Appellate Court, and restoring the order of the executing Court to close the execution proceedings.This detailed analysis of the legal judgment provides a comprehensive understanding of the issues involved and the Supreme Court's decision regarding the setting aside of a sale in execution of a decree under Order 21 Rule 89 of CPC.