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  • Sec. 17(i) of the Provincial Small Cause Courts Act
  • Sec. 17 of the Provincial Small Cause Courts Act,
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  • Sec. 17(i) of the Provincial Small Cause Courts Act
  • Sec. 17 of the Provincial Small Cause Courts Act,
Smart Summary

Factual and Procedural Background

This matter is a judgment-debtor's revision application against an order of the Civil Judge dismissing the judgment-debtor's objections under Rule 90 of Order XXI, Civil Procedure Code (C.P.C.). A money decree had been obtained against the judgment-debtor, and certain of his property was sold at auction on 17 October 1958. On 30 October 1958 the judgment-debtor applied under R. 90, Or. XXI to set aside the sale on grounds of alleged irregularities.

Objections to that application were raised by both the Official Receiver and the auction purchaser. The auction purchaser contended that the judgment-debtor had not deposited 12½% of the sale proceeds nor furnished security as required by clause (b) of the proviso to R. 90, Or. XXI, and therefore the application should be rejected. The judgment-debtor applied (12 June 1959) for time to furnish the security; the Civil Judge allowed time (26 February 1960) and the security was filed on 7 March 1960. When the Civil Judge heard the matter, he sustained the auction purchaser's objection and dismissed the R. 90 application on the ground that the requisite deposit/security had not accompanied the application when filed.

A Single Judge of this Court doubted the Civil Judge's interpretation of the proviso to R. 90, and, after consideration of an earlier decision of this Court (Bawan Ram v. Kunj Behari Lal, 1960 A.L.J.R. 578), referred the matter to a Division Bench for determination.

Legal Issues Presented

  1. What is the proper interpretation of the proviso to R. 90, Order XXI, C.P.C.: specifically, whether clause (b) (requiring deposit up to 12½% of the sum realised by the sale or security) must be complied with at the time of presenting/filing the application, or whether compliance may lawfully be made any time before the court actually entertains (hears and disposes of) the application on the merits.
  2. Whether the earlier decision of this Court in Bawan Ram v. Kunj Behari Lal (1960 A.L.J.R. 578), which interpreted the proviso to require compliance by the time up to which the objection can be legally entertained, was correctly decided.

Arguments of the Parties

Applicant (judgment-debtor) — as presented by Mr. Rajaram Agarwal

  • The proviso to R. 90, Or. XXI requires that the judgment-debtor should deposit 12½% of the sale price in cash or furnish security for that amount within the time allowed by the court, not necessarily at the time of filing the application to set aside the sale.
  • Therefore compliance may occur after filing but before the court finally entertains and disposes of the application; the proviso does not mandate deposit/security at the moment of filing.
  • The judgment-debtor in this case obtained leave to give security and filed the required security on 7 March 1960 within the time allowed by the Civil Judge, and thus complied with the proviso before final disposal.

Auction Purchaser

  • Contended that clause (b) of the proviso requires that the 12½% deposit or security accompany the application; because the judgment-debtor did not deposit the amount or furnish security with the application, the application was liable to be rejected as not maintainable.
  • Advanced an interpretation treating the word "entertained" narrowly, equating it with "filed" or "admitted for filing", arguing that an application not backed by deposit/security should not be admitted for consideration.

Official Receiver

  • Raised objections to the R. 90 application (specific objections are not detailed beyond the fact of objection).
  • At the Division Bench hearing the learned counsel for the Official Receiver conceded that the view taken by the Division Bench (allowing compliance prior to final hearing) was correct.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Bawan Ram v. Kunj Behari Lal, 1960 A.L.J.R. 578 Held that the proviso introduced by this Court to R. 90, Or. XXI bars entertaining an objection altogether if the requirements of the proviso are not complied with by the time up to which the objection can be legally entertained; the objection cannot thereafter be validly made nor can the security deposit be accepted. The Division Bench examined this precedent and stated that it has not been correctly decided — the Bench rejected the narrow interpretation and concluded the proviso does not require deposit/security at the time of filing but allows compliance before the court actually entertains the application on the merits.
Dhoom Chand v. Chaman Lal, S.A. No. 527 of 1960 (decided 27-2-1962) Considered the meaning of the word "entertain" in the proviso to R. 90, Or. XXI and held that "entertain" bears the meaning of admitting to consideration; the contention that the court should not admit an application which is not backed by deposit or security was rejected in that case. The Division Bench relied on this authority as supportive of the view that "entertain" means admitting to consideration and that the deposit/security requirement need not be satisfied at the moment of filing but must be complied with before the hearing/decision.

Court's Reasoning and Analysis

The Division Bench undertook a textual and contextual analysis of the proviso to R. 90, Or. XXI, C.P.C. It first set out the full text of the proviso and distilled its operative components: (1) an application shall not be entertained on grounds which could have been taken earlier; (2) an application shall not be entertained unless the applicant deposits an amount not exceeding 12½% of the sum realised by the sale; (3) or furnishes such security as the court may fix; (4) unless the court, for reasons recorded, dispenses with these requirements.

The court focused on the meaning of the word "entertain." Drawing on ordinary dictionary usage, the Bench concluded that to "entertain" an application is to deal with it or take it into consideration — i.e., to hear and decide it on the merits — not merely to receive or file the paper application. Thus, the proviso's requirements (including clause (b) relating to deposit/security) become relevant at the stage when the court is actually seised of the application for final consideration.

The Bench observed that if the legislature had intended the deposit or security to be furnished at the time of presentation/filing, it would have used explicit language to that effect. To illustrate the difference, the court compared the proviso to Section 17 of the Provincial Small Cause Courts Act, which explicitly mandates that an applicant must, at the time of presenting his application, deposit the amount or give security (language that unambiguously requires compliance at filing). That statutory contrast supported the conclusion that the proviso to R. 90 was not intended to require deposit/security at the moment of filing.

The Bench also relied on the Division Bench decision in Dhoom Chand v. Chaman Lal, which held that "entertain" means admission to consideration and that the court should not refuse to admit an application merely because it lacks deposit/security at the time of filing. Weighed together, these considerations led the court to conclude that compliance with clause (b) may be made at any time before the application is heard and disposed of on the merits.

Applying this interpretation to the facts, the court found that the judgment-debtor's application was validly presented and that he had complied with the proviso by filing the required security on 7 March 1960 after obtaining leave and before final adjudication. The earlier decision in Bawan Ram was examined and the Bench expressed the view that it was not correctly decided insofar as it treated the proviso as requiring deposit/security at filing.

Holding and Implications

Revision allowed.

The court allowed the revision application, set aside the order of the learned Civil Judge dated 8 November 1960, and remanded the R. 90 application for decision according to law. Costs were awarded to the revisional applicant.

Consequences for the parties:

  • The judgment-debtor's R. 90 application is to be considered on the merits because the court found that compliance with clause (b) need only occur before the court "entertains" (hears and disposes of) the application; the judgment-debtor had filed the required security within the time allowed.
  • The Civil Judge's dismissal based on the absence of deposit/security at the time of filing is set aside and the matter is remanded for fresh adjudication according to the Bench's interpretation.

The Division Bench expressed the view that the earlier decision in Bawan Ram v. Kunj Behari Lal "has not been correctly decided." The opinion does not, in its text, state any broader rule about setting or overruling precedent beyond that statement; its direct effect, as recorded in this judgment, is to allow the revision, set aside the Civil Judge's order and remand the application for reconsideration.

Revision allowed.

    Kundan Lal v. Jagan Nath Sharma

    Uniyal, J.:— This is a judgment-debtors application in revision against an order dismissing his objections under R. 90 of Or. XXI, C.P.C The matter came up before a learned single Judge of this Court who was of the opinion that the order of dismissal, based as it was on the proviso to R. 90 of Or. XXI, C.P.C added by this Court, had been wrongly interpreted by the Civil Judge. The attention of the learned Single Judge was invited to a decision of this Court in Bawan Ram v. Kunj Behari Lal . 1960 A.L.J.R 578. in which it was held that the proviso introduced by this Court to R. 90 of Or. XXI bars entertaining an objection altogether if the requirements of the proviso are not complied with by the time up to which the objection can be legally entertained and that the objection cannot thereafter be validly made nor can the security deposit be accepted. The learned Single Judge was of the opinion that the view taken by this Court in Bawan Ram's case was not sound. On his reference the matter was referred to the Division Bench.

    2. The facts giving rise to this application in revision are as follows. There was a money decree passed against the defendant judgment-debtor. In execution of that decree certain property of the judgment-debtor was put to auction sale on the 17th October 1958. On the 30th October 1958 he made an application under R-90 of Or. XXI, C.P.C to set aside the sale on ground of certain irregularities committed in the conduct of the sale. Objections to this application were made both by the Official Receiver as well as by the auction purchaser. One of the grounds raised in the objections made by the auction purchaser was that along with the application filed by the judgment-debtor he had not deposited 12½% of the sum realised by the sale nor furnished security as required by Cl. (b) of the proviso to R. 90 of Or. XXI, and that the application was, therefore, liable to be rejected. Thereupon the judgment-debtor made an application on the 12th June 1959 praying that he might be allowed time to give the necessary security. The learned Civil Judge allowed this application on the 26th February 1960 and the judgment-debtor then filed the necessary security within the time allowed, that is, on the 7th March, 1960. When the application came on for disposal the learned Civil Judge upheld the objection of the auction purchaser and held that the application of the judgment-debtor was not maintainable in view of the fact that he had not made any necessary deposit of 12½% of the sale price nor filed the security along with the application.

    3. The learned counsel for the applicant, Mr. Rajaram Agarwal, has contended that the true meaning and scope of the proviso to R. 90 of Or. XXI, C.P.C is that 12½% of the sale price in cash or security for the same should be deposited, by the judgment-debtor within the time allowed by the court. He contended that the proviso did not require that the applicant should make the deposit or give, security along with the application. In order to appreciate the contention of the learned counsel it would be useful to quote the proviso to R. 90 of Or. 21 C.P.C in full:—

    “Provided that no application to set aside the sale shall be entertained—

    (a) upon any ground which should have been taken by the applicant on or before the date on which the sale proclamation was drawn up;

    (b) unless the applicant deposits such amount not exceeding 12½% of the sum realised by the sale or furnishes, such security as the court may in its discretion fix, except when for reasons to be recorded it dispenses with the requirements of this clause; ………”

    4. It would thus appear that the proviso to R. 90 of Or. XXI provides for the following: (1) that the application to set aside the sale shall not be “entertained” on any of the grounds which could have been taken by the applicant on or before the date on which the sale proclamation was drawn up; (2) that the application to set aside the sale shall not be entertained unless the applicant deposits such amount not exceeding 12½% of the sum realised by the sale; (3) or unless the applicant furnishes such security as the court-may in its discretion fix; and (4) that the application for sale shall not be entertained unless the court for reasons to be recorded dispenses with the requirements of this clause. The clear meaning of the proviso, it appears to us, is that at the time when the court is considering the application to set aside the sale it shall not allow the judgment-debtor to raise any ground which he could have raised at the time when the sale proclamation was drawn up and, further, that the court will not consider the grounds of the objection, to the sale unless it finds that the applicant has deposited either such amount not exceeding 12 of the sum realised by the sale or furnished such security as required by the court. This in our opinion clearly goes to indicate that the stage at which the question as to whether the applicant has complied with the terms of the proviso to R. 90 of Or. XXI arises is when the court is actually seized of the application filed by the judgment-debtor for setting aside the sale.

    5. The expression ‘entertain’ in our opinion does not mean the same thing as the filing of the application or the admission of the application by the court. The dictionary meaning of the word ‘entertain’ is to deal with or to take a matter into consideration. A court hearing an application under R. 90 of Or. XXI, C.P.C can only be said to entertain the application when it is actually disposing of the application on the merits. It, therefore, follows that the mere filing, of the application by the judgment-debtor would not be its entertainment by the court and therefore what is contemplated by the proviso to R. 90 of Or. XXI is that the conditions which are prescribed by the proviso have to be complied with by the judgment-debtor before the court comes to dispose of the application on the merits. If this be the correct interpretation of the proviso to R. 90 of Or. XXI then it follows that the present application of the judgment-debtor was validly presented and that the judgment-debtor had fully complied with the proviso to R. 90 of Or. XXI.

    6. A similar question came up for consideration before another Division Bench in Dhoom Chand v. Chaman Lal . S.A No. 527 of 1960 decided on 27-2-1962.. One of the arguments raised before that Bench was that there was a breach of Cl. (b) of the proviso to R. 90 of Or. XXI, C.P.C inasmuch as the judgment-debtor had not made the necessary deposit nor given proper security before making the application to set aside the sale. It was held in that case that the word ‘entertain’ bears the meaning of admitting to consideration and that the contention that the court should not admit an application which was not backed by deposit of security is not sound.

    7. The use of the word ‘entertain’ in the proviso to R. 90 of Or. XXI denotes a point of time at which an application to set aside the sale is heard by the court. This appears to be clear from the fact that in the proviso it is stated that no application to set aside a sale shall be entertained ‘upon any ground which could have been taken by the applicant on or before the date on which the sale proclamation was drawn up.’ Surely, the question as to the consideration of the grounds upon which the application is based can only arise when it is being considered by the court on the merits, that is, when the court is called upon to apply its mind to the grounds urged in the application. In our view the stage at which the applicant is required to make the deposit or give the security within the mening of Cl. (b) of the proviso would come when the hearing of the application is due to commence.

    8. If it had been intended that the deposit to be made or the security to be furnished had to be done at the time of presenting the application to set aside the sale, the language employed would have been in terms similar to that used in Sec. 17 of the Provincial Small Cause Courts Act, which reads thus:

    9. Sec. 17 “(1) The procedure prescribed in the C.P.C, 1908, shall, save in so far as is otherwise provided by that Code or by this Act, be the procedure followed in a court of Small Causes in all suits cognizable by it, and in all proceedings arising out of such suits:

    “Provided that an applicant 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.”

    10. The proviso to Sec. 17(i) of the Provincial Small Cause Courts Act makes it clear that the applicant seeking for an order to set aside a decree passed ex parte must, at the time of presenting his application, either deposit in the court the amount due from him under the decree or give such security for the performance of the decree as the court may on a previous application made by him in this behalf had directed. This proviso clearly postulates that the applicant should have already applied for giving security for the performance of the decree and it is only when he has done so that an application to set aside the ex parte decree would be entertained by the court. Thus the legislature clearly intended that the applicant shall have a right to make an application to set aside a decree if he had already obtained permission of the court to furnish the necessary security for the performance of the decree or compliance with the judgment of the court. Had this been the intention of the proviso to R. 90 of Or. XXI, C.P.C the language of that proviso would have been similarly worded as is to be found in the proviso to Sec. 17 of the Provincial Small Cause Courts Act. This lends support to the view that the legislature intended that a judgment-debtor applying to have the sale set aside could, after making an application, obtain leave of the court to make the necessary deposit or give security, or even ask the court to dispense with the compliance of that rule. We have, therefore, no hesitation in holding that the true intention of the proviso is that compliance of Cl. (b) of the proviso may be made at any time before the application under R. 90 of Or. XXI, C.P.C comes up for decision by the court on the merits.

    11. It was contended by the learned counsel for the auction purchaser that the proviso to R. 90 of Or. XXI should be construed in a narrow sense and that the expression ‘entertained’ must be given the same meaning as the word ‘filed’. We find no warrant for this argument. In fact, as we have pointed out above, the true intention of the proviso appears to us to be to allow the judgment-debtor to prosecute his application to set aside the sale if he complies with the conditions contained in the proviso to R. 90 before the application is finally heard and disposed of by the court. We are respectfully of the view that the case Bawan Ram v. Kunj Behari Lat has not been correctly decided.

    12. The learned counsel for the applicant states that the second question referred to us does not arise for decision.

    13. The learned counsel appearing for the Official Receiver has conceded that the view that we have taken of the case is the correct one.

    14. We, therefore, allow this revision with costs and set aside the order of the learned Civil Judge dated the 8th November, 1960 and remand the application for decision according to law.

    Revision allowed.

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    Comments

    Kundan Lal v. Jagan Nath Sharma
    (Mar 9, 1962)