Brij Behari Lal v. Firm Srinivas Ram Kumar And Others

Brij Behari Lal v. Firm Srinivas Ram Kumar And Others

(High Court Of Judicature At Patna)

| 09-03-1939

Harries, C.J.This is a petition for revision of an order of the learned District Judge of Shahabad affirming an order of the learned Munsif of Sasaram dismissing, the petitioners application to set aside a, certain auction sale which was held on 4th August 1936. The petition came in the first place, before Wort J., who referred it to a larger Bench. James and Agarwala J J. being of opinion that the points involved were of considerable importance, referred the matter for the constitution of a larger Bench. Accordingly the petition was heard-by this Full Bench of five Judges. The application to set aside the sale, which is dated 2nd September 1936, was made by Brij Behari Lal who was a person entitled to share in a rateable distribution of the sale proceeds and was an application under Order 21, Rule 90, Civil P.C. The application, was registered in the Court of the learned Munsif as a miscellaneous case, and notices were served on the opposite party. On 14th October 1936, the petitioner Brij Behari Lal deposited in Court a sum amounting to per cent, of the sale proceeds, and on 25th May 1937, the application came on for hearing before the learned Munsif. The opposite parties took a preliminary objection that as no sum was deposited with the application to set aside the sale as required by the Rule within 30 days from the date of the sale, the application was barred by time. The learned Munsif upheld this preliminary objection and on appeal the learned District Judge affirmed the decision of the Court below and dismissed the application. It has been contended before this Court that in dismissing the application the Courts below were clearly wrong and that this is a case in which revision lies. As I have stated, the application to set aside the sale was one under Order 21, Rule 90, Civil P.C.

2. This Rule has been amended by this Court, and the amended Rule, under which the application was made, is in these terms:

(1)Where any immovable property has been sold in execution of a decree, the decree-holder, or any person entitled to share in a rateable distribution of assets, or whose interests are affected by the sale, may apply to the Court to set aside the sale on the ground of a material irregularity or fraud in publishing or conducting it:

(i) Provided that no application to set aside a sale shall be admitted unless

(a) it discloses a ground which could not have been put forward by the applicant before the sale was concluded, and

(b) the applicant deposits with his application such amount not exceeding per cent, of the sum realized by the sale or such other security as the Court may in its discretion fix, unless the Court, for reasons to be recorded, dispenses with the deposit.

(ii) Provided further that no sale shall be set aside on the ground of irregularity or fraud unless upon the facts proved the Court is satisfied that the applicant has sustained substantial injury by reason of such irregularity or fraud.

(2) In case the application is unsuccessful the costs of the opposite party shall be a first charge upon the deposit referred to in Proviso (i)(b), if any.

3. The present Provisos have been substituted by this Court for the original Proviso to the Rule. It will be seen that by reason of Proviso (i)(b) no application to set aside a sale is to be admitted unless the applicant deposits with his application, such an amount not exceeding per cent, of the proceeds of the sale or such other security as the Court in its discretion may fix unless the Court dispenses with, the deposit altogether. In the present case the petitioner deposited neither a sum of money nor gave any security nor did he on or before making the application apply to the Court to dispense with the deposit. On 10th October 1936 however the petitioner applied to the Court to accept a deposit of per cent of the sum realized by the sale, and upon this application the Court made an order to issue a chalan. On 14th October 1936 the sum was actually deposited in Court. An application to set aside a sale must be made within thirty days from the date of the sale: see Limitation Act, 1908, Schedule 1 Article 166. The sale took place on 4th August 1936, and as the application to set aside the sale was made on 2nd September 1936, it was within thirty days of the sale. The deposit however was not made until 14th October 1936, which was long after the expiry of the period of thirty days from the date of sale. It was urged by the opposite parties in the Courts below that where the deposit had not been dispensed with by the Court, an application accompanied by no deposit was no application at all within amended Order 21, Rule 90, and that the defect in the application could not be cured by a deposit made on 14th October 1936, because an application on that date was clearly barred by limitation.

4. As I have stated, the Courts below accepted this contention and dismissed the application. Counsel for the petitioner has contended before us that the application to set aside the sale in this case was within time and should have been decided on the merits. Alternatively, he has. contended that the amendment made by this Court to Order 21, Rule 90, Civil P.C., requiring a deposit is ultra vires the rulemaking power of the Court and therefore void. If Proviso (i)(b) which is part of the amendment made by this Court is void, then clearly the application was within time, as the Rule as it originally stood required no deposit to be made with the application.

5. In the first place, I shall deal with the contention that the present application complied with the provisions of amended Order 21, Rule 90, Civil P.C., and was within limitation. At the outset it must be observed that the substituted Proviso (i) to Sub-rule (1) of Order 21, Rule 90, Civil P.C., places conditions not upon the presentation of an application to set aside a sale but upon its admission. The words of the substituted Proviso are "provided that no application to set aside a sale shall be admitted unless...." Admission of the application presumably means the stage when the Court decides to issue notice upon such application to the opposite parties concerned. By the terms of the substituted Proviso such application cannot be admitted unless the provisions of Sub-clause (a) and (b) of Proviso (i) are complied with. In my view this substituted Proviso contemplates that after an application to set aside a sale has been presented, an inquiry must be made by the Court, because the Proviso directs that (a) no such application shall be admitted unless it discloses a ground which could not have been put forward by the applicant before the sale, and (b) the application must be accompanied with a deposit of per cent, or such less sum or other security as the Court may direct, unless, for reasons to be recorded, the Court has dispensed with security.

6. It appears to me that an application cannot therefore be admitted until some inquiry, no matter how perfunctory, has been made by the Court. If a deposit of 124 per cent, has been made at the time of presentation of the application, the Court must admit the application provided Proviso (i)(a) has been complied with. If, on the other hand, the application has not been accompanied by any deposit, must the Court refuse forthwith to admit it and; accordingly reject it, or should the Court direct, unless it dispenses with the security altogether, a deposit to be made or security to be given before a date fixed for admission In my view the Court must follow this latter course. Substituted Proviso (i)(b) requires that no application shall be admitted unless the applicant deposits with the application such amount not exceeding per cent, of the proceeds of the sale or such other security as the Court may fix unless the Court dispenses altogether with any such deposit.

7. Do the words "unless the applicant deposits with his application such amount..."mean that the applicant must deposit the amount at the time he makes his application or do they mean that at some stage or another, unless the Court dispenses with the deposit, a sum must be deposited with the application which has already been made The learned District Judge appears to have thought that Proviso (i)(b) is very similar to the provisions of the Proviso to the amended Section 17(1), Provincial Small Cause Courts Act. That Proviso is in these terms:

Provided that an application for an order to set aside a decree passed ex parte, or for a review of judgment, shall, at the time of presenting his application, either deposit in the Court the amount due from him under the decree or in pursuance of the judgment, or give such security for the performance of the decree or compliance with the judgment as the Court may, on a previous application made by him in this behalf, have directed.

8. By the terms of this Proviso it is clear that the deposit must be made at the time the application is presented, because it is expressly stated that such must be the case. Further, it is expressly provided that if the applicant wishes to give security instead of depositing money, a previous application must be made to the Court in this behalf and the applicant must deposit such security as the Court directs when presenting his application. It is to be observed that no such express words appear in the substituted Proviso (i)(b) to Order 21, Rule 90, Civil P.C. It has been contended that the wording of this substituted Proviso (i)(b) contemplates a deposit of per cent, of the sale proceeds with the application unless the Court has directed on a previous application that a deposit be dispensed with or that a smaller deposit or some other security be given. The terms of the substituted Proviso however do not make it clear that an application to dispense with the deposit or for leave to deposit less than 124 per cent, of the sale proceeds or to give some other security must be made before the application to set aside the sale is made.

9. It must be inferred, if such contention be sound, that the words "unless the applicant deposits with his application such amount &c." mean unless the applicant deposits at the time he makes his application 124 per cent, of the sale proceeds or such other sum or such other security as the Court has previously directed. I am not prepared to place such a construction upon these words. In my view the applicant can be said to deposit with his application a sum of money or other security even if he does it after he has presented the application. In my judgment if a sum of money or other security is deposited with a view to ensuring the admission of an application, such can be said to be deposited with the application, provided such deposit is made before the date of admission. The learned Munsif appears to have thought that the deposit need not be made at the time the application is presented. In his view if no deposit is made at the time of presentation of the application to set aside the sale, then a further application to dispense with the deposit or for leave to deposit a smaller sum or other security should accompany the application to set aside the sale. Further, he was clearly of opinion that an application to set aside a sale unaccompanied by a deposit was a defective application and that such defect could not be cured unless a deposit was made within 30 days of the sale. In his view admission of the application was bound to take place within the period of limitation.

10. In my judgment there is no justification for this view as there is nothing in the Rule to suggest that admissions must take place within the period of limitation. Further, the wording of the substituted Proviso in no way suggests that in the event of no deposit being made at the time the application is presented, the application should be accompanied by a further one to dispense with the deposit or for leave to deposit a lesser sum or other security. The view of the learned Munsif that admission must take place within the period of limitation is further open to a very grave objection. The point of time when the application is admitted depends upon the Court, and if admission must be within limitation, an applicant might find his application dismissed by reason of the failure of the Court to deal with it within 30 days of the sale. Such can never have been the intention of the framers of this Rule. The learned District Judge appears to have thought that the substituted Proviso contemplated a deposit of per cent, in every case at the time when the application to set aside the sale was presented. In his view, if the applicant desired that the deposit should be dispensed with or that he should be permitted to deposit a lesser sum or other Security, an application should be made to the Court to that effect.

11. In other words, the learned District Judge appears to have thought that per cent, of the proceeds must first be deposited and then an application made for leave to dispense entirely with the deposit or to reduce the amount of such deposit or to substitute some other security for it. In my judgment this view also cannot be sustained. Obviously, the framers of the substituted Proviso contemplated that nothing need be deposited in cases in which the Court thought that no deposit was necessary and that a lesser sum or other security could be deposited when the circumstances warranted the Court taking that view. Clearly," the framers of the Rule never contemplated that in every case a deposit of per cent, should first be made and then steps should be taken to have such deposit dispensed with or reduced.

12. Unless the view which I have expressed of the meaning of the words "deposits with his application" is accepted, extraordinary results might ensue. If the substituted Proviso means that the applicant must in every case deposit at the time he makes his application per cent, of the proceeds or such other sum or security as the Court may direct, then if an application is made without any deposit and a deposit of per cent, is subsequently made within thirty days of the sale and before admission, such application would have to be rejected, because the deposit was not made at the time the application was presented. In my view, if a deposit of per cent, is made after the application is filed but within thirty days of the sale, such would clearly be a deposit made with the application. Why, therefore, should not a deposit, made after thirty days of the sale but before admission be a deposit made with the application In my judgment all that this substituted Proviso requires is that before admission the necessary sum of money or security unless dispensed with must be deposited.

13. The applicant can then be said to have deposited with his application such deposit or security within the meaning of the substituted Proviso. The Limitation Act only requires that the application be made within thirty days of the sale, and in my view there is nothing in the substituted Proviso to suggest that the money or other security must be deposited within limitation. The substituted Proviso is complied if such is made before actual admission and the date of admission cannot be governed by the Limitation Act. As I have stated earlier in this judgment, this application was registered as a miscellaneous case immediately upon presentation, and it has been argued that rightly or wrongly the application was admitted and that it was not open to the learned Munsif at a later stage to question his own order. There is some force in this contention; but it is unnecessary to decide the point because at a later stage the trial Court actually accepted a deposit of per cent on 10th October 1936, the present petitioner applied for leave to deposit a sum equal to per cent, of the sale proceeds and the Court issued a chalan and the money was actually deposited.

14. Even if the original admission of this application could not be justified, the acceptance of this deposit and the subsequent proceedings clearly show that the application was properly admitted at the date of the deposit and the Court was bound thereafter to adjudicate upon it.

For the reasons which I have given, II am satisfied that where no deposit accompanies an application to set aside a sale, the Court has no power to reject such application forthwith. On the other hand, it must give the applicant an opportunity to urge that the deposit should be dispensed with or to deposit the full or lesser amount or other security before some date fixed for admission.

15. If the orders of the Court are complied with, the application must be admitted and heard upon the merits provided that it complies also with the substituted Proviso (i)(a). In the present case the Courts below should have exercised the jurisdiction vested in them and heard this application upon its merits. Having regard to the view which I have taken, it is unnecessary for me to consider the second contention of the petitioner, namely that the amendment made by this Court to Order 21, Rule 90, Civil P.C., is ultra vires the rule-making powers of this Court, as the question does not arise. Counsel for the petitioner relied upon a Pull Bench case of the Rangoon High Court in O.N.R.M.M. Chettyar v. Central Bank of India Ltd. A.I.R (1937) Ran 419. For the reasons which I have given, I prefer to leave the consideration of this question open and to decide the matter in a case where the decision of such point is essential.

16. The result therefore is that I would allow this petition, set aside the orders of the Courts below and remand the case to the Court of the learned Munsif through the Court of the District Judge with a direction that the application should be heard and determined on the merits according to law.

Wort J.

I agree.

James J.

I agree.

Agarwala J.

I agree.

Manohar Lall J.

I agree.

Advocate List
Bench
  • HON'BLE JUSTICE Harries, C.J
  • HON'BLE JUSTICE Wort, J
  • HON'BLE JUSTICE Manohar Lall, J
  • HON'BLE JUSTICE Agarwala, J
  • HON'BLE JUSTICE Jamesa, J
  • HON'BLE JUSTICE James, J
Eq Citations
  • AIR 1939 PAT 248
  • LQ/PatHC/1939/57
Head Note

- Limitation applies to application to set aside an auction sale under amended Order 21, Rule 90, C.P.C - Deposit of 12% of sale proceeds or other security to be filed unless dispensed with, but need not be filed with the application - Amendment of Order 21, Rule 90, C.P.C. by High Court is intra vires.