TaxTMI 
TaxTMI 
1954 (4) TMI 46
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....urth lot only in the event of a deficiency in sale price to cover the deceretal amount. The first 3 lots with which alone we are concerned in the appeal were sold to the mortgagees for Rs. 53,510 on August 13, 1942. They were sold free from the encumbrance under the order of the Court passed at the instance of the decree-holder and the mortgagees but without notice to the judgment-debtor. It may, however,, be noted that on the application of certain third parties their right of annuity over the properties sought to be sold was notified in the sale proclamation. On the same date the mortgagees applied for a set-off stating that the purchase price was Rs. 53,510 while the amount due to them was Rs. 1, 20,000. The Court allowed the set-off then and there. It is important to bear in mind that the mortgagees had filed no suit and obtained no decree to recover the money due on the mortgage. The order notifying the claim to annuity was challenged by the Judgment-debtor in' revision to the High Court but it was dismissed on November 10, 1943 by Sen J. who observed that as the sale had already taken place, the proper remedy of the judgment-debtor was to move the Court for setting aside the ....
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....t justified in taking such an unauthorised order from the Court without fully acquainting with all the facts. Under all these circumstances, these opponents can with little justification avoid the consequences of noncompliance with the provisions of Order XXI, rules 84 and 85, referred to above. 'Without proving their claim under the mortgage, they have succeeded in purchasing for a gross under-value these properties and even that value they have not paid in Court by taking recourse to the device of setoff. In my opinion, there could not be a more fraudulent and materially irregular procedure than what has taken place in the present case at the instance of these mortgagees, to the great detriment and injury of the present applicant, viz., the judgment debtor." The Court held that the application under rule 90 was barred by limitation but this being a case of a void sale and not of a mere material irregularity the Court was bound to resell the property irrespective of any application being made by the judgment-debtor. The High Court of Bombay (Chagla C. J. and Gajendragadkar J.) dismissed the appeal of the mortgagee-purchasers on the ground that the order of the trial Co....
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.... forthwith be resold. (2) Where the decree-holder is the purchaser and is entitled to set off the purchase-money under rule 72, the Court may dispense with the requirement of this rule. " 85. The full amount of purchase-money -payable shall be paid by the purchaser into Court before the Court closes on the fifteenth day from the sale of the property : Provided that, in calculating the amount to be so paid into Court, the purchaser shall have the advantage of any set-off to which he may be entitled under rule 72. 86. In default of payment within the period mentioned in the last preceding rule, the deposit may, if the Court thinks fit, after defraying the expenses of the sale, be forfeited to the Government, and the, property shall be resold, and the defaulting purchaser shall forfeit all claim to the property or to any part of the sum for which it may subsequently be sold." The scheme of the rules quoted above may be shortly stated. A decree-holder cannot purchase property at the Court auction in execution of his own decree without the express permi....
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....date of the sale. Both the deposit and the payment of the purchase-money being mandatory under the combined effect of rules 84 and 85, the Court has the discretion to forfeit the deposit but it was bound to re-sell the property with the result that on default the purchaser forfeited all claim to the property. These provisions leave no doubt that unless the deposit and the payment are made as required by the mandatory provisions of the rules, there is no sale in the eye of law in favour of the defaulting purchaser and no right to own and possess the property accrues to him. In two cases decided by the Calcutta High Court, viz., Munshi Md. Ali Meah v. Kibria Khatun (15 Weekly Notes (Cal.) P. 350), and Sm. Annapurna Dasi v. Bazley Karim Fazley Moula (A.I.R. 1941 Cal. 85), the sale was held to be no sale where the purchaser had failed to deposit the balance of the purchase-money as required by rule 85. A similar view was taken by a Division Bench of the Allahabad High Court in Nawal Kishore and Others v. Buttu Mal and Subhan Singh (57 All. 658). The provisions of rule 86 were held to be mandatory in another decision of the same Court, Haji Inam Ullah v. Mohammad Idris (A.I.R. (30....