Gas Point Petroleum India Limited vs Rajendra Marothi

Gas Point Petroleum India Limited ...Appellant(S)

Versus

Rajendra Marothi & Ors. ...Respondent(S)

JUDGMENT

M. R. Shah, J.

1. Feeling aggrieved and dissatisfied with the impugned

judgment and order dated 29.04.2016 passed by the High

Court of Madhya Pradesh Principal Seat at Jabalpur in

W.P. No. 3342/2015, by which, the High Court has

allowed the said writ petition preferred by respondent No.

1 herein and has set aside the order passed by the lower

Appellate Court and has restored the order passed by the

Signature Not Verified Executing Court with respect to the property in question, Digitally signed by R Natarajan Date: 2023.02.10 16:41:43 IST Reason: 1 the original respondent No. 1 – objector before the

Executing Court has preferred the present appeal.

2. The facts leading to the present appeal in a nutshell are as

under: ­

2.1 There was a dispute between National Ginni Enterprises

and Smt. Gayatri Agrawal with respect to the L.P.G. gas

agreement. A civil suit No. 07­A/98 was filed by the said

Smt. Gayatri Agrawal against the National Ginni

Enterprises. The learned Trial Court passed a decree by

directing the judgment debtor (National Ginni Enterprises)

to provide L.P.G. gas as per the conditions of the

agreement. The decree provided that if the defendants are

unable to implement the said order, in alternatively it was

directed that the plaintiff was entitled to get the amount of

Rs. 2,38,450/­ + Rs. 23,500/­ (sic) relating to cost of the

gas cylinders and regulators respectively. The judgment

debtor did not fulfill the first portion of the order and did

not supply the gas cylinders and regulators. Therefore, the

decree holder filed the execution petition before the

Executing Court. It was decided to sell the property of the

2 judgment debtor. Accordingly, a declaration was made

and property was auctioned and sold on 03.11.2011 in

favour of respondent No. 1 herein. The appellant herein –

original respondent No. 1 filed objection before the

Executing Court, contending, inter­alia, that the property

was purchased by him from judgment debtor on

31.08.1999 and that they are in possession of the said

land. An application under Order 21 Rule 90 r/w 151 of

the CPC was filed. The learned Executing Court overruled

the objections and rejected the application under Order 21

Rule 90 by order dated 23.01.2013. The appellant flied

miscellaneous civil appeal before the Court of Additional

District Judge, Damoh being Misc. Civil Appeal No.

12/2013. The lower Appellate Court allowed the said

appeal and set aside the order of Executing Court dated

23.01.2013 and remitted the matter back to the Executing

Court to rehear the parties and after taking into account

all the facts and circumstances, pass a fresh order in

accordance with law. The order passed by the lower

Appellate Court was the subject matter before the High

Court by way of present writ petition. By the impugned

3 judgment and order the High Court has allowed the said

writ petition and has set aside the order passed by the

lower Appellate Court by observing that the appellant

herein – original respondent No. 1 has failed to plead and

establish the nature of irregularity or fraud committed in

sale and therefore, no fault can be found in the order of

the Executing Court.

2.2 Feeling aggrieved and dissatisfied with the judgment and

order passed by the High Court, the original respondent

No. 1 has preferred the present appeal.

3. Shri Ravindra Shrivastava, learned Senior Advocate has

appeared on behalf of the appellant and Shri Sanjay K.

Agrawal, learned counsel has appeared on behalf of

respondent No. 1.

4. Shri Ravindra Shrivastava, learned Senior Advocate

appearing on behalf of the appellant has vehemently

submitted that in the facts and circumstances of the case

the High Court has committed a serious error in allowing

4 the writ petition and quashing and setting aside the well­

reasoned order passed by the lower Appellate Court.

4.1 It is submitted that in the present case there was breach of

Order 21 Rule 64 and Order 21 Rule 84/85 of CPC and

therefore, due to non­compliance of the aforesaid

provisions the sale has been vitiated.

4.2 It is submitted that in the present case the property in

question was put to auction on 18.10.2011 and therefore,

the auction purchaser was required to deposit 25% of sale

amount immediately. It is submitted that in the present

case the auction purchaser deposited 25% of the amount

on 03.11.2011. It is submitted that therefore there is a

non­compliance of Order 21 Rule 84 of CPC. It is further

submitted that the balance sale consideration (75%) was

required to be deposited by the auction purchaser within a

period of fifteen (15) days from the date of auction. It is

submitted that in the present case balance 75% of the sale

consideration was deposited by the auction purchaser on

04.11.2011. It is submitted that therefore there is also a

5 violation of Order 21 Rule 85 of CPC. Relying upon Order

21 Rules 64, 84, 85 and 86 and relying upon the decisions

of this Court in the cases of Manilal Mohanlal Shah and

Ors. Vs. Sardar Sayed Ahmed Sayed Mahmad and Anr.;

(1955) 1 SCR 108 and Rosali V. Vs. Taico Bank and

Ors.; (2009) 17 SCC 690, it is prayed to allow the present

appeal.

4.3 It is further submitted by learned Senior Advocate

appearing on behalf of the appellant that even otherwise

the High Court has not properly appreciated the fact that

the property in question was purchased by the appellant

on 31.08.1999 from the judgment debtor and at that time

the property in question was not the subject matter of civil

suit. It is submitted that civil suit was filed for specific

performance of the L.P.G. gas agreement. It is submitted

that even injunction dated 18.05.1999 was not the subject

matter of property in question. It is submitted that when

the property in question was put to auction by the

Executing Court on 18.10.2011/03.11.2011 much prior

thereto the appellant purchased the property on

6 31.08.1999. It is submitted that therefore at the time when

the property was auctioned the judgment debtor was not

the owner of the property in question, which as such was

purchased by the appellant by the registered sale deed on

31.08.1999. It is submitted that therefore the High Court

has committed a very serious error in observing that the

appellant purchased the property despite the injunction

granted by the Trial Court on 18.05.1999 and that the

appellant cannot be permitted to raise the objection as the

appellant has purchased the property despite the

injunction.

4.4 Making the above submissions and relying upon the above

decisions, it is prayed to allow the present appeal.

5. Present appeal is vehemently opposed by Shri Sanjay

Agrawal, learned counsel appearing on behalf of

respondent No. 1 herein – auction purchaser.

5.1 It is submitted by learned counsel appearing on behalf of

respondent No. 1 that in the facts and circumstances of

the case no error has been committed by the High Court in

7 restoring the order passed by the learned Executing Court

and overruling the objections raised by the appellant

herein – objector.

5.2 It is submitted that on true interpretation of Order 21 Rule

90 the High Court has rightly refused to set aside the sale

on the alleged violation of Order 21 Rule 64 and Order 21

Rule 84/85. It is submitted that the appellant purchased

the property in question during the pendency of the suit

and the injunction dated 18.05.1999 was in operation. It is

submitted that therefore the appellant shall not be entitled

to raise any objection thereafter and pray to set aside the

sale on the ground that the property in question was

purchased by it. It is submitted that therefore, the High

Court has rightly observed that since, in the civil suit a

temporary injunction was granted by the Trial Court on

18.05.1999 and by that time the property was not

purchased by the appellant herein there was no question

of putting the appellant to notice.

8 5.3 It is further submitted that even the alleged non­

compliance of Order 21 Rule 64, Order 21 Rule 84 and 85

were not raised before the Executing Court and therefore,

the High Court has rightly observed that the same cannot

be permitted to be raised subsequently.

5.4 Making the above submissions it is prayed to dismiss the

present appeal.

6. We have heard learned counsel appearing on behalf of the

respective parties at length.

7. While appreciating the submissions on behalf of the

respective parties the chronological dates and events are

required to be considered which are as under: ­

7.1 In the year 1998, the decree holder filed a suit for specific

performance of the L.P.G. gas agreement;

7.2 The civil suit was not with respect to the property in

question. An interim injunction application was filed by

the original plaintiff. It was apprehended that the

defendants were trying to leave Damoh after selling and

9 transferring their firm, namely, National Gini Enterprises,

to any other person. The application was filed under Order

38 CPC as well as for permanent injunction. By order

dated 18.05.1999 the learned Trial Court directed to

maintain status quo. The learned Trial Court also directed

that if the defendants transfer their firm Ginni Enterprises

to any other person then they would not transfer the same

against the interest of the plaintiff. That thereafter the

decree came to be passed on 30.09.1999 directing the

defendants – judgment debtor – Ginni Enterprises to

supply LPG gas and in the alternative to pay 2,38,450/­ +

Rs. 23,500/­ (sic). As the decree was not executed the

decree holder filed the execution proceeding. In the

execution proceeding the property in question was put to

auction for recovery of Rs. 2,38,450/­ + Rs. 23,500/­ (sic).

The property was put to auction on 18.10.2011. The

auction purchaser – respondent No. 1 herein deposited

25% of the amount on 03.11.2011 and deposited balance

75% of the amount on 04.11.2011. In light of above factual

scenario, submissions on behalf of the respective parties,

more particularly, submission on behalf of the appellant

10 on non­compliance of Order 21 Rules 64, 84 and 85 are

required to be considered.

7.3 While considering the issue involved in the present appeal

with respect to non­compliance of the relevant provisions

of CPC, the relevant provisions of the CPC are required to

be referred to, namely, Order 21 Rules 64, 84, 85 and 86,

which read as under: ­

“Order 21 – Execution of Decrees and Orders

Rule 64. Power to order property attached to be sold and proceeds to be paid to person entitled.—Any Court executing a decree may order that any property attached by it and liable to sale, or such portion thereof as may seem necessary to satisfy the decree, shall be sold, and that the proceeds of such sale, or a sufficient portion thereof, shall be paid to the party entitled under the decree to receive the same.

Rule 84. Deposit by purchaser and re­sale on default. —(1) On every sale of immovable property the person declared to be the purchaser shall pay immediately after such declaration a deposit of twenty­five per cent on the amount of his purchase­money to the officer or other person conducting the sale, and in default of such deposit, the property shall forthwith be re­sold. (2) Where the decree­holder is the purchaser and is entitled to set­off the purchase­money under Rule 72, the Court may dispense with the requirements of this rule.

Rule 85. Time for payment in full of purchase­money. —The full amount of purchase­money payable shall be paid by the purchaser into Court before the Court closes on the fifteenth day from the sale of the property:

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Provided, that, in calculating the amount to be so paid into Court, the purchaser shall have the advantage of any set­off to which he may be entitled under Rule 72.

Rule 86. Procedure in default of payment.—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.”

7.4 As per Order 21 Rule 84, on every sale of immovable

property the person declared to be the purchaser shall pay

immediately after such declaration deposit of twenty­five

per cent on the amount of his purchase­money and in

default of such deposit, the property shall forthwith be re­

sold.

7.5 As per Order 21 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. Thus, as per the aforesaid provisions, the

purchaser has to deposit 25% of the sale amount

immediately on declaring to be the purchaser and the full

amount of the purchase­money shall have to be paid by

12 the purchaser into the Court before the Court closes on

fifteenth day from the sale of the property.

7.6 In the present case admittedly the purchaser – respondent

No. 1 deposited 25% of the amount on 03.11.2011 and did

not deposit 25% of the amount as required under Order 21

Rule 84 immediately. The auction purchaser was required

to deposit 25% of the amount the day on which he was

declared purchaser i.e., 18.10.2011. Even the balance 75%

of the amount has not been deposited as required under

Order 21 Rule 85. The full amount of the purchase­money

in the present case has been deposited on 04.11.2011 i.e.,

after the period prescribed/provided under Order 21 Rule

85. Therefore, there is non­compliance of Order 21 Rule 84

and Rule 85 of CPC.

8. In light of the aforesaid facts, few decisions of this Court

on Order 21 Rules 84 and 85 are required to be referred to

and considered.

8.1 In the case of Manilal Mohanlal Shah (supra), it is

observed and held that the provision regarding the deposit

of 25% of the amount by the purchaser other than the

13 decree­holder is mandatory and the full amount of the

purchase money must be paid within fifteen days from the

date of the sale. It is further observed and held that if the

payment is not made within the period of fifteen days, the

Court has the discretion to forfeit the deposit, and there

the discretion ends but the obligation of the Court to resell

the property is imperative. In paragraph 8 of the decision,

it is observed and held as under: ­

“8. The provision regarding the deposit of 25 per cent by the purchaser other than the decree­holder is mandatory as the language of the Rule suggests. The full amount of the purchase money must be paid within fifteen days from the date of the sale but the decree­holder is entitled to the advantage of a set­off. The provision for payment is, however, mandatory…. (Rule 85). If the payment is not made within the period of fifteen days, the court has the discretion to forfeit the deposit, and there the discretion ends but the obligation of the court to resell the property is imperative. A further consequence of non­payment is that the defaulting purchaser forfeits all claim to the property.… (Rule 86).”

8.2 The decision of this Court in the case of Manilal Mohanlal

Shah (supra) fell for consideration before this Court in the

subsequent decision in the case of Rosali V. (supra). In

the said decision this Court interpreted the word

“immediately” in Order 21 Rule 84. In the said decision,

this Court considered paragraph 11 of the decision in the

14 case of Manilal Mohanlal Shah (supra) in paragraph 20 as

under: ­

“20. What would be the meaning of the term “immediately” came up for consideration before this Court, as noticed hereinbefore, in Manilal Mohanlal Shah [AIR 1954 SC 349] wherein it was held : (AIR pp. 351­52, para 11)

“11. Having examined the language of the relevant rules and the judicial decisions bearing upon the subject we are of opinion that the provisions of the rules requiring the deposit of 25 per cent of the purchase money immediately, on the person being declared as a purchaser and the payment of the balance within 15 days of the sale are mandatory and upon non­compliance with these provisions there is no sale at all. The rules do not contemplate that there can be any sale in favour of a purchaser without depositing 25 per cent of the purchase money in the first instance and the balance within 15 days.

When there is no sale within the contemplation of these rules, there can be no question of material irregularity in the conduct of the sale. Non­payment of the price on the part of the defaulting purchaser renders the sale proceedings as a complete nullity. The very fact that the Court is bound to resell the property in the event of a default shows that the previous proceedings for sale are completely wiped out as if they do not exist in the eye of the law. We hold, therefore, that in the circumstances of the present case there was no sale and the purchasers acquired no rights at all.”

8.3 Applying the law laid down by this Court in the aforesaid

decisions to the facts of the case on hand, it is evident that

there is non­compliance of mandatory provisions of Order

15 21 Rule 84 and Order 21 Rule 85 and therefore, the sale

was vitiated.

9. Even otherwise, it is required to be noted that the

appellant herein purchased the property in question much

before the auction of the property i.e., 31.08.1999. At the

relevant time the property in question was not the subject

matter of suit. As observed hereinabove, the subject matter

of suit was specific performance of the L.P.G. gas

agreement and even the ad­interim injunction dated

18.05.1999 was also against the transfer of firm Ginni

Enterprises to any other person and the defendants were

directed to maintain status quo with respect to their firm

Ginni Enterprises. Therefore, at the time when the

property in question was put to auction on 18.10.2011 the

appellant had already purchased the said property as far

as back on 31.08.1999 as there was no injunction with

respect to the said property while ad­interim injunction

dated 18.05.1999 and as observed hereinabove, the

property in question was not the subject matter of suit and

the decree came to be passed on 30.09.1999 and the

16 property was put to auction in the year 2011 for recovery

of sum of Rs. 2,38,450/­ + Rs. 23,500/­ (sic). The ad­

interim injunction dated 18.05.1999 cannot be pressed

into service against the appellant. Therefore, the High

Court has committed an error in considering injunction

dated 18.05.1999 against the appellant. Therefore, at the

time when the property was put to auction on 18.10.2011,

the judgment debtor was not the owner and therefore, the

same could not have been put to auction. Under the

circumstances, learned Executing Court erred in

overruling the objections raised by the appellant against

the auction/sale of the property which the appellant

purchased much prior to the date of the auction i.e., on

31.08.1999.

10. In view of the above and for the reasons stated above, the

impugned judgment and order passed by the High Court

deserves to be quashed and set aside and is accordingly

quashed and set aside and consequently the order passed

by the Executing Court overruling the objections raised by

the appellant also deserves to be quashed and set aside

17 and is quashed and set aside. The order passed by the

lower Appellate Court is hereby restored. It will be open for

respondent No. 1 to get back the amount deposited by

him, lying with the Executing Court. Present appeal is

accordingly allowed. In the facts and circumstance of the

case there shall be no order as to costs.

…………………………………J. (M. R. SHAH)

…………………………………J. (C.T. RAVIKUMAR) NEW DELHI, FEBRUARY 10, 2023.

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