GAS POINT PETROLEUM INDIA LTD.versusRAJENDRA MAROTHI & ORS.

                         [2023] 1 S.C.R. 433                            433


             GAS POINT PETROLEUM INDIA LTD.                             A
                                 v.
                 RAJENDRA MAROTHI & ORS.
                   (Civil Appeal No. 619 of 2023)
                       FEBRUARY 10, 2023                                B
          [M. R. SHAH AND C.T. RAVIKUMAR, JJ.]
       Code of Civil Procedure, 1908 – Order XXI, rules 64, 84, 85
and 86 – Execution proceedings – Decree passed in civil suit –
Property of judgment debtor auctioned and sold on 03.11.2011 in
favour of respondent No.1 for recovery of amount – Appellant filed      C
objection before the Executing Court, contending, inter-alia, that
the property was purchased by him from judgment debtor on
31.08.1999 and they were in possession of the same – Executing
Court overruled the objections – Lower Appellate Court allowed
appeal and remitted the matter back to the Executing Court – Writ       D
petition – High Court set aside the order of lower Appellate Court
observing that appellant failed to plead and establish the nature of
irregularity or fraud committed in sale and therefore, no fault could
be found in the order of the Executing Court – On appeal, held: As
per Order XXI, rules 84 and 85, the auction purchaser has to deposit
25% of the sale amount immediately on being declared to be the          E
purchaser and full amount of purchase-money is to be paid by the
purchaser into the Court before the Court closes on fifteenth day
from the sale of the property – In the present case, the purchaser-
respondent No.1 did not deposit 25% of the amount as required
under Order XXI, rule 84 immediately – Even the balance 75% of
                                                                        F
the amount was not deposited as required under Order XXI, rule 85
– Full amount of purchase-money in the present case was deposited
on 04.11.2011 i.e., after the period prescribed /provided under Order
XXI, rule 85 – Evidently, there was non-compliance of mandatory
provisions of Order XXI, rules 84 and 85 and therefore, the sale
was vitiated – Even otherwise, when the property in question was        G
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 – When the property
was put to auction, the judgment debtor was not the owner and
therefore, the same could not have been put to auction – Under the
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                                433
434             SUPREME COURT REPORTS                          [2023] 1 S.C.R.


A     circumstances, the Executing Court erred in overruling the objections
      raised by the appellant – Order of the High Court, quashed – Order
      passed by lower Appellate Court, restored.
              Manilal Mohanlal Shah and Ors. v. Sardar Sayed
              Ahmed Sayed Mahmad and Anr, (1955) 1 SCR 108 and
B             Rosali V. v. Taico Bank and Ors. (2009) 17 SCC 690 –
              relied on.
                               Case Law Reference
      (1955) 1 SCR 108                  relied on                 Para 8.1

C     (2009) 17 SCC 690                 relied on                 Para 8.2
              CIVIL APPELLATE JURISDICTION : Civil Appeal No. 619 of
      2023.
            From the Judgment and Order dated 29.04.2016 of the High Court
      of M.P. Principal Seat at Jabalpur in WP No.3342 of 2015.
D
           Ravindra Shrivastava, Sr. Adv., Arjun Garg, Shobhit Jain, Aakash
      Nandolia, Ms. Sagun Shrivastava, Advs. for the Appellant.
           Sanjay K. Agrawal, Sarthak Nema, Ms. Ankita Khare, Ramsakha
      Kushwaha, Yashovardhan Jain, Ms. Sangeeta Singh, Advs. for the
      Respondents.
E
              The Judgment of the Court was delivered by
              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
F     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 Executing Court with respect
      to the property in question, the original respondent No. 1– objector before
      the Executing Court has preferred the present appeal.
G
              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. 07-A/98 was filed by the said Smt. Gayatri Agrawal against the
H     National Ginni Enterprises. The learned Trial Court passed a decree by
   GAS POINT PETROLEUM INDIA LIMITED v. RAJENDRA                                  435
           MAROTHI & ORS. [M. R. SHAH, J.]

directing the judgment debtor (National Ginni Enterprises) to provide             A
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.         B
Therefore, the decree holder filed the execution petition before the
Executing Court. It was decided to sell the property of the 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           C
Court, contending, inter-alia, 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             D
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               E
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 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     F
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.                                                               G
       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
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436             SUPREME COURT REPORTS                            [2023] 1 S.C.R.


A     circumstances of the case the High Court has committed a serious error
      in allowing 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
B     non-compliance 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
C     non-compliance 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.
D     It is submitted that therefore there is also a 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.
E             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
F     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 31.08.1999. It is submitted that therefore at the time
G     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
H
   GAS POINT PETROLEUM INDIA LIMITED v. RAJENDRA                                437
           MAROTHI & ORS. [M. R. SHAH, J.]

raise the objection as the appellant has purchased the property despite         A
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        B
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 restoring the order passed
by the learned Executing Court and overruling the objections raised by
                                                                                C
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         D
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
                                                                                E
the property was not purchased by the appellant herein there was no
question of putting the appellant to notice.
       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.                    F
       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        G
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;
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438             SUPREME COURT REPORTS                            [2023] 1 S.C.R.


A            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 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
B
      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
C     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 –
D     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 on
      non-compliance of Order 21 Rules 64, 84 and 85 are required to be
      considered.
E            7.3 While considering the issue involved in the present appeal
      with respect to non-compliance 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
F            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
G            sufficient portion thereof, shall be paid to the party entitled under
             the decree to receive the same.
             Rule 84. Deposit by purchaser and re-sale 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 twenty-five per cent on the amount of his purchase-money to
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   GAS POINT PETROLEUM INDIA LIMITED v. RAJENDRA                               439
           MAROTHI & ORS. [M. R. SHAH, J.]

      the officer or other person conducting the sale, and in default of       A
      such deposit, the property shall forthwith be re-sold.
      (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 requirements of this rule.
      Rule 85. Time for payment in full of purchase-money.—The                 B
      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
                                                                               C
      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 re-sold, and the defaulting purchaser shall forfeit all claim to      D
      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 twenty-five per cent on the amount of his          E
purchase-money 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      F
immediately on declaring to be the purchaser and the full amount of the
purchase-money shall have to be paid by 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            G
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 purchase-money in the present
case has been deposited on 04.11.2011 i.e., after the period prescribed/       H
440             SUPREME COURT REPORTS                            [2023] 1 S.C.R.


A     provided under Order 21 Rule 85. Therefore, there is non-compliance 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
B     and held that the provision regarding the deposit of 25% of the amount
      by the purchaser other than the decree-holder 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
C     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 decree-holder 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
D
             but the decree-holder is entitled to the advantage of a set-off.
             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
E            is imperative. A further consequence of non-payment 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
F     interpreted the word “immediately” in Order 21 Rule 84. In the said
      decision, this Court considered paragraph 11 of the decision in the 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
G            Manilal Mohanlal Shah [AIR 1954 SC 349] wherein it was held :
             (AIR pp. 351-52, 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
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   GAS POINT PETROLEUM INDIA LIMITED v. RAJENDRA                               441
           MAROTHI & ORS. [M. R. SHAH, J.]

          declared as a purchaser and the payment of the balance within        A
          15 days of the sale are mandatory and upon non-compliance
          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        B
          question of material irregularity in the conduct of the sale.
          Non-payment 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        C
          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        D
non-compliance of mandatory provisions of Order 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   E
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 ad-interim 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
                                                                               F
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 ad-interim 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         G
30.09.1999 and the 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
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442              SUPREME COURT REPORTS                        [2023] 1 S.C.R.


A     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.
B
             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
C     aside 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.
D     Bibhuti Bhushan Bose                                        Appeal allowed.
      (Assisted by : Abhishek Pratap Singh, LCRA)




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