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AMICUS AI
Citation Codes
Neutral Citations
1999 INSC 459
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Debt Relief Act
  • Article 180, Limitation Act, 1908
  • Code of Civil Procedure (CPC)
  • Order 34 Rule 5 of the Code of Civil Procedure
  • Transfer of Property (Amendment) Act (21 of 1929)
  • Limitation Act, 1963
  • Order 21, Rule 90 and Order 34, Rule 5 of the Code of Civil Procedure
  • CPC (Code of Civil Procedure)
  • Order 21 Rule 92(1) of the Schedule to the Civil Procedure Code
  • Section 19 of Madras Act 4 of 1938
  • Section [not specified] of the [no specific act/article mentioned]
  • Article 180 of the Limitation Act, 1908
  • Section 5, Subsection 2 of the 1983 Income Tax Act
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Cites
Cited by
Citation Codes
Neutral Citations
1999 INSC 459
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Debt Relief Act
  • Article 180, Limitation Act, 1908
  • Code of Civil Procedure (CPC)
  • Order 34 Rule 5 of the Code of Civil Procedure
  • Transfer of Property (Amendment) Act (21 of 1929)
  • Limitation Act, 1963
  • Order 21, Rule 90 and Order 34, Rule 5 of the Code of Civil Procedure
  • CPC (Code of Civil Procedure)
  • Order 21 Rule 92(1) of the Schedule to the Civil Procedure Code
  • Section 19 of Madras Act 4 of 1938
  • Section [not specified] of the [no specific act/article mentioned]
  • Article 180 of the Limitation Act, 1908
  • Section 5, Subsection 2 of the 1983 Income Tax Act
Smart Summary

Factual and Procedural Background

The respondent mortgaged certain immovable properties to the appellant in 1976 by deposit of title deeds. When the mortgage money was not repaid, the appellant filed OS No. 21 of 1978 before the Sub-Judge, Tanjore and obtained a preliminary mortgage decree on 10-9-1979 for Rs 73,915, followed by a final decree on 21-3-1980.

Execution proceedings ensued:

  • EP No. 164 of 1980 and EP No. 106 of 1981 were filed for sale of the mortgaged properties, but both auctions attracted no bidders.
  • With leave obtained in EA No. 88 of 1982, the appellant bid at the auction held on 29-4-1982 and purchased the property for Rs 75,005.
  • The respondent’s application (EA No. 151 of 1982) under Order 21 Rule 90 CPC to set aside the sale was dismissed for default on 18-9-1982 and the sale was confirmed under Order 21 Rule 92.
  • Subsequent applications for restoration (EA No. 293 of 1982) and for setting aside confirmation (EA No. 294 of 1982) were also dismissed on 2-4-1983, prompting CMAs Nos. 267 and 462 of 1983 in the High Court.
  • During the appeals the High Court, by interim order, directed the respondent to deposit Rs 25,000 and later remanded the matter (21-7-1983), reopening the question of confirmation.
  • The respondent then filed EA No. 226 of 1983 in the suit seeking to deposit the balance mortgage amount under Order 34 Rule 5 CPC. Though initially rejected, the High Court on 7-9-1983 ordered issuance of challan, and the trial court on 16-9-1983 accepted the balance of Rs 62,563 and recorded discharge of the mortgage.
  • After remand, the trial court again dismissed the respondent’s restoration/setting-aside applications on 12-12-1983, leading to CMAs Nos. 19 & 74 of 1984 and CRP No. 4402 of 1985. By common judgment dated 14-1-1988 the High Court dismissed the CMAs but allowed the revision, directing return of title documents and affirming that the mortgage stood discharged.

The appellant has now challenged the High Court’s decision before the Supreme Court.

Legal Issues Presented

  1. Whether an application by the mortgagor under Order 34 Rule 5 CPC to deposit the mortgage money is maintainable after a sale has been confirmed by the executing court.
  2. Whether such an application remains maintainable while an appeal is pending against the order refusing to set aside the sale (or refusing restoration of an application to set aside the sale).

Arguments of the Parties

Appellant's Arguments

  • The confirmation of sale, unchallenged by a valid restoration, vested title in the appellant; consequently the High Court lacked jurisdiction to entertain or allow an Order 34 Rule 5 application.
  • Once the sale was upheld, applications under Order 34 Rule 5 and 5-A should have been dismissed; permitting deposit afterwards creates contradictory orders.
  • The High Court erred in reopening issues already concluded, thereby defeating the finality of confirmation under Order 21 Rule 92 CPC.

Respondent's Arguments

  • The Order 34 Rule 5 application was filed while CMAs Nos. 267 and 462 of 1983 were pending; during such pendency the sale had not become absolute, preserving the right to redeem.
  • The High Court’s remand order explicitly reopened all questions, directed issuance of challan, and authorised deposit of the balance mortgage amount, which was duly made and never challenged by the appellant.
  • Under the equitable scheme of Order 34, the mortgagor’s right to save his property subsists until the sale becomes “absolute”, and that stage is reached only after disposal of appeals concerning the validity of the sale.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Chandra Mani Saha v. Anarjan Bibi, AIR 1934 PC 134 Sale does not become absolute until disposal of appeal against order refusing to set aside the sale. Primary authority for interpreting “before confirmation of sale” and for treating sale as non-absolute during appeal.
Chhogan Lal Bagri v. Behari Lal Saha Ray, AIR 1933 Cal 311 Same principle later affirmed by Privy Council. Cited as precedent followed in the above Privy Council decision.
Neckbar Sahai v. Prakash Chandra Nag Choudhari, AIR 1930 Cal 86 Contrary view (sale absolute on confirmation). Noted as overruled by Privy Council; supports current court’s stance.
Kandukuri Chellamma v. Ranganilayam Ramakrishnarao, ILR 1946 Mad 795; AIR 1946 Mad 337 Sale not absolute during appeal; debtor may seek statutory relief. Used to bolster maintainability of Order 34 Rule 5 during pendency of appeal.
S.V Ramalingam v. K.E R ajagopalan, (1975) 2 MLJ 494 Confirmation is inchoate; right to redeem survives till appeal decided. Relied on to describe confirmation as “fluidal and nebulous”.
V.A Narayana Raja v. Renganayaki Achi, AIR 1984 Mad 27 Order 34 Rule 5 application maintainable while appeal on sale pendency subsists. Cited for the proposition that sale certificate remains subject to appeal outcome.
Maganlal v. Jaiswal Industries, (1989) 4 SCC 344 Supreme Court reiteration that sale attains finality only after appeal disposal. Reaffirmed the overarching legal position adopted in the present case.
Hukumchand v. Bansilal, AIR 1968 SC 86 Deposit must precede confirmation; courts cannot indefinitely delay confirmation. Invoked by appellant; court distinguished facts but accepted general rule regarding timing of deposit.
Varadarajan v. Muthu Venkatapathi Reddi, AIR 1953 Mad 587 Restoration of Order 21 Rule 90 application nullifies earlier confirmation. Applied to equate restoration appeal with direct appeal against refusal to set aside sale.
Ramathal v. Nagarathinammal, (1967) 1 MLJ 260 Same effect of restoration on confirmation of sale. Cited consistently with Varadarajan.
Satyanarayana v. Ramamurthi, (1960) 2 AnWR 431 Existence of Order 21 Rule 90 application bars confirmation; pendency of appeal keeps sale open. Reinforced view that confirmation lacked finality while appeal survived.

Court's Reasoning and Analysis

The Supreme Court began with the text of Order 34 Rule 5 CPC, emphasising that the mortgagor may deposit the mortgage amount “at any time before the confirmation of a sale”. It then analysed Order 21 Rules 89–92 CPC and, guided by the Privy Council decision in Chandra Mani Saha, held that a sale becomes “absolute” only when any appeal challenging the refusal to set aside the sale is finally decided.

Applying this principle, the Court reasoned that:

  • The respondent’s appeals (CMAs Nos. 267 & 462 of 1983) kept the issue of confirmation open; therefore the sale had not become absolute when the respondent sought to deposit under Order 34 Rule 5.
  • The High Court’s orders of 21-7-1983 and 7-9-1983 expressly reopened the entire matter and authorised the deposit; the trial court’s subsequent acceptance of Rs 62,563 on 16-9-1983 validly discharged the mortgage.
  • Although the High Court later dismissed CMAs Nos. 19 & 74 of 1984, it simultaneously allowed CRP No. 4402 of 1985, recognising discharge of the mortgage—an internal inconsistency cured by invoking Order 41 Rule 33 CPC and treating the appeals as allowed to harmonise the result.
  • The equitable purpose of Order 34 Rule 5—preventing exploitation of mortgagors in distress—supports the liberal interpretation that preserves the right of redemption until appellate proceedings concerning the sale are finally over.
  • The appellant’s reliance on Hukumchand v. Bansilal was rejected because that case addressed deliberate postponement of confirmation, a circumstance absent here.

Holding and Implications

APPEAL DISMISSED. The Supreme Court affirmed that the respondent’s deposit under Order 34 Rule 5 was valid and that the mortgage stands discharged; the appellant is entitled only to a refund of monies deposited in court with accrued interest.

Implications: The judgment reiterates that a mortgage sale does not attain finality until appeals challenging its validity are resolved, thereby preserving the mortgagor’s statutory right to redeem under Order 34 Rule 5 CPC. It reinforces an equitable reading of the Code to prevent irreversible transfer of property while judicial scrutiny is still pending, without creating any new doctrine but consolidating existing jurisprudence.

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    U. Nilan v. Kannayyan (Dead) Through Lrs.

    S. Saghir Ahmad, J.— The facts labyrinthically placed in the jargon of hosts of applications, appeals and revisions, are summed up below.

    2. The respondent who is since dead and is now represented by his legal representatives (hereinafter referred to as “the respondent”), had mortgaged his properties by deposit of title deeds in favour of the appellant in 1976. On 9-1-1978, the appellant filed OS No. 21 of 1978 for the recovery of mortgage money in the Court of the Sub-Judge, Tanjore. A preliminary decree in the suit was passed on 10-9-1979 for a sum of Rs 73,915. This was followed by a final decree passed on 21-3-1980.

    3. Since the respondent did not pay the decretal amount to the appellant, the latter, namely, the appellant filed an execution application (EP No. 164 of 1980) for the sale of the hypothecated property. When the property was put up for sale on 25-6-1981, no person was available to offer his bid and, therefore, EP No. 164 of 1980 was consigned to records as closed.

    4. The appellant, thereafter, filed EP No. 106 of 1981 for sale of the mortgaged properties but when this application too failed to fetch bidders for the properties which were put up for sale on 25-1-1982 and 25-3-1982, the appellant himself, through another application, namely EA No. 88 of 1982, sought permission of the Court to bid at the auction-sale and to set off the decretal amount against the sale price. This application was allowed on 28-4-1982. The respondent, in the meantime, filed EAs Nos. 115 and 116 of 1982 claiming relief under the Debt Relief Act but the applications were rejected by the Court.

    5. In the auction which was held on 29-4-1982, the appellant offered his bid in the sum of Rs 75,005. The case was directed to come up on 1-7-1982 for confirmation of sale. In the meantime on 21-6-1982, the respondent filed EA No. 151 of 1982 under Order 21 Rule 90 read with Section 47 CPC for setting aside the sale held on 29-4-1982. This application was contested by the appellant who indicated in his counter-affidavit that there was no irregularity or fraud committed in conducting the sale.

    6. On 18-9-1982, EP No. 151 of 1982 was dismissed in default and the sale was confirmed under Order 21 Rule 92 CPC. The respondent, thereafter, filed EA No. 293 of 1982 for restoration of EP No. 151 of 1982 which was dismissed in default. He also filed another application, namely, EA No. 294 of 1982 for setting aside the confirmation of sale. Application for setting aside the sale was rejected by the executing court on 2-4-1983 as not maintainable and on the same day, EA No. 294 of 1982 was also dismissed.

    7. The respondent then filed CMA No. 267 of 1983 in the High Court against the order by which EA No. 294 of 1982 for setting aside the confirmation of sale was rejected. He also filed CMA No. 462 of 1983 in the High Court against the order rejecting the application (EA No. 293 of 1982) for restoration of EA No. 151 of 1982. In CMA No. 267 of 1983, the respondent moved an application (CMP No. 7710 of 1983) for an order of interim stay which was granted subject to his depositing Rs 25,000 in the Court before 30-6-1983. This order was complied with and the respondent deposited that amount in the executing court on 24-6-1983.

    8. While CMAs Nos. 267 and 462 of 1983 were pending in the High Court, the respondent made an application (EA No. 226 of 1983) in the suit (OS No. 21 of 1978) for depositing the balance of the mortgage amount under Order 34 Rule 5 CPC. While this application was pending, CMA No. 267 of 1983 was allowed by the High Court by its judgment dated 21-7-1983 and the order passed by the executing court in EA No. 294 of 1982 was set aside and the case was remanded to the executing court to hear and decide the application (EA No. 294 of 1982) afresh after allowing the parties to lead such evidence as they considered necessary. In the meantime, by order dated 27-7-1983, the respondent's application (EA No. 226 of 1983) under Order 34 Rule 5 was dismissed on the ground that it was not maintainable as the High Court, in its judgment dated 21-7-1983 while remanding the case, had not indicated anything in that regard nor had it issued any direction. Against this order, the respondent filed CRP No. 3473 of 1983.

    9. CMA No. 462 of 1983 and CRP No. 3473 of 1983 were taken up together and the High Court by its judgment dated 7-9-1983, allowed both the matters with a direction to the lower court to issue challan for the deposit of Rs 62,563 by the respondent without prejudice to the contentions of the parties.

    10. On 16-9-1983, when the matter was taken up by the trial court, the respondent's application (EA No. 226 of 1983) was allowed and the balance amount of Rs 62,563, which was directed to be deposited, was accepted and it was recorded that the mortgage was discharged.

    11. After remand by the High Court, EAs Nos. 293 and 294 of 1982 were both dismissed by the trial court on 12-12-1983 with the finding that the respondent had committed forgery by filing and relying upon false documents for which he was liable to be prosecuted. Against this judgment, the respondent filed CMAs Nos. 19 and 74 of 1984. While these two appeals were pending in the High Court, the respondent filed IA No. 337 of 1984 before the trial court for return of documents under Order 34 Rule 5-A CPC, but the application was rejected by the trial court on 6-9-1985, against which the respondent filed CRP No. 4402 of 1985 in the High Court.

    12. CMAs Nos. 19 and 74 of 1984, as also CRP No. 4402 of 1985 were taken up together by the High Court and by the common judgment dated 14-1-1988, CMAs Nos. 19 and 74 of 1984 were dismissed, but CRP No. 4402 of 1985 was allowed with the findings: (i) application under Order 34 Rule 5 had been filed during the pendency of the appeal in the High Court and the High Court in that proceeding had already directed a challan to be issued to the respondent to enable him to deposit the balance of the mortgage money, which he did deposit though without prejudice to the respective contentions of the parties; (ii) after remand, the respondent's Application No. 226 of 1983 was allowed and the balance amount of Rs 62,563 was deposited by the respondent, which order became final as it was never challenged by the appellant. Therefore, the application, namely, IA No. 337 of 1984 for return of documents, which was dismissed by the trial court on 6-9-1985, was liable to be allowed.

    13. The High Court reversed the order of the trial court and allowed the revision. It is against this judgment that the present appeal has been filed.

    14. Mr A.T.M Sampath, learned counsel appearing on behalf of the appellant has contended that the application of the respondent for setting aside the sale having been dismissed in default by the trial court and the application for restoration also having been dismissed, the sale as also its confirmation in favour of the appellant, shall be treated to have been upheld by the High Court and consequently the application of the respondent under Order 34 Rule 5 CPC as also the application filed under Order 34 Rule 5-A for return of documents, were liable to be dismissed. It is contended that the sale having been confirmed in favour of the appellant and the confirmation of sale having been upheld by the High Court, there was no jurisdiction left in the High Court to allow the application under Order 34 Rule 5 CPC. It is also contended that the High Court passed contradictory orders. It is pointed out that as the respondent's application for setting aside that order, by which his application for setting aside the sale was dismissed in default, was rejected and the confirmation of sale in favour of the appellant was thus upheld, the High Court passed a contradictory order that mortgage amount could be legally deposited by the respondent and on the amount being so deposited, the mortgage stood discharged.

    15. Learned counsel for the respondent, on the contrary, contended that when the application for setting aside the order by which EA No. 151 of 1982 was dismissed for default was rejected, an appeal was filed in the High Court and it was during the pendency of that appeal that an application under Order 34 Rule 5 CPC was filed by the respondent for depositing the balance of the mortgage money. This application was ultimately allowed and the balance of the amount of Rs 62,563 was deposited by the respondent and consequently the mortgage was discharged. The application under Order 34 Rule 5 CPC was clearly maintainable even at that stage. It is contended that CMA No. 267 and AAO No. 462 of 1983 were allowed by the High Court and the case was remanded to the executing court for deciding the application of the respondent for setting aside the sale afresh. That being the stage of the proceedings, the application under Order 34 Rule 5 CPC cannot be said to be not maintainable. In fact, the application, it is contended, was clearly maintainable and the executing court by its order dated 16-9-1983 had rightly discharged the mortgage. This order, it is contended, had not been challenged by the appellant at any stage and has become final. The appellant cannot, therefore, rely upon the order dated 16-9-1983 by which the sale in his favour was confirmed.

    16. In view of the respective contentions made by the learned counsel for the parties, the question which is required to be decided by us in this appeal is whether the application filed by the respondent under Order 34 Rule 5 CPC was maintainable even after confirmation of sale. The further question which is required to be decided is whether an application under Order 34 Rule 5 CPC would be maintainable during the pendency of the appeal against the order of the executing court by which the application for setting aside the sale was rejected.

    17. Order 34 Rule 5 provides as under:

    “ORDER XXXIV

    Suits Relating to Mortgages of Immovable Property

    5. Final decree in suit for sale.—(1) Where, on or before the day fixed or at any time before the confirmation of a sale made in pursuance of a final decree passed under sub-rule (3) of this rule, the defendant makes payment into court of all amounts due from him under sub-rule (1) of Rule 4, the court shall, on application made by the defendant in this behalf, pass a final decree or, if such decree has been passed, an order—

    (a) ordering the plaintiff to deliver up the documents referred to in the preliminary decree,

    and, if necessary,—

    (b) ordering him to transfer the mortgaged property as directed in the said decree,

    and, also, if necessary,—

    (c) ordering him to put the defendant in possession of the property.

    (2) Where the mortgaged property or part thereof has been sold in pursuance of a decree passed under sub-rule (3) of this rule, the court shall not pass an order under sub-rule (1) of this rule, unless the defendant, in addition to the amount mentioned in sub-rule (1), deposits in court for payment to the purchaser a sum equal to five per cent of the amount of the purchase money paid into court by the purchaser.

    Where such deposit has been made, the purchaser shall be entitled to an order for repayment of the amount of the purchase money paid into court by him, together with a sum equal to five per cent thereof.

    (3) Where payment in accordance with sub-rule (1) has not been made, the court shall, on application made by the plaintiff in this behalf, pass a final decree directing that the mortgaged property or a sufficient part thereof be sold, and that the proceeds of the sale be dealt with in the manner provided in sub-rule (1) of Rule 4.”

    18. The provisions extracted above clearly indicate that an application under Order 34 Rule 5 CPC can be filed or moved by the mortgagor for the deposit of mortgage money at any time before the confirmation of sale.

    19. Originally, there was no provision under Order 34 Rule 5 CPC enabling the defendant to deposit the mortgage money into court at any time before confirmation of sale so as to save his property from being sold. This provision was introduced by the Transfer of Property (Amendment) Act (21 of 1929) and it was provided that if, at any time, before the confirmation of sale made in pursuance of a final decree, the defendant makes payment into court of all amounts due from him under sub-rule (1) of Rule 4 of Order 34, the court shall, on an application made by the defendant, pass a final decree and if such a decree has already been passed, it would be open to the court to pass an order:

    (a) directing the plaintiff mortgagee to deliver up the documents referred to in the preliminary decree to the mortgagor; and, if necessary,

    (b) directing him to transfer the mortgaged property, as directed in the said decree; and, also, if necessary,

    (c) directing the plaintiff mortgagee to put the defendant in possession of the property.

    20. Order 34 Rule 5 provides the last chance to the mortgagor to save his property from being passed on to the auction-purchaser and avoid the disturbance of his title ensuring, at the same time, that mortgage money is paid to the person in whose favour the property had been mortgaged by depositing the entire amount in the court, including the amount, where the property has been sold, contemplated by sub-rule (2) of this rule. The whole step has to be taken before the confirmation of sale.

    21. What is the meaning of the phrase “before the confirmation of sale” may now be considered in the light of other relevant provisions of the Code of Civil Procedure.

    22. Now, an application to set aside the sale can be filed under Order 21 Rule 89 CPC while another application for setting aside the sale on the ground of irregularity or fraud can also be given under Order 21 Rule 90 CPC. Similarly, if the property has been sold, it would be open to the purchaser to make an application for setting aside the sale on the ground that the judgment-debtor had no saleable interest in the property sold in execution of the decree.

    23. Order 21 Rule 92(1) CPC including the proviso thereto provides as under:

    “92. Sale when to become absolute or be set aside.—Where no application is made under Rule 89, Rule 90 or Rule 91, or where such application is made and disallowed, the court shall make an order confirming the sale, and thereupon the sale shall become absolute:

    Provided that, where any property is sold in execution of a decree pending the final disposal of any claim to, or any objection to the attachment of, such property, the court shall not confirm such sale until the final disposal of such claim or objection.”

    24. The above provisions indicate that if an application is not made either under Rule 89 or Rule 90 or Rule 91 for setting aside the sale, the court would confirm the sale. So also, where such application is made and is disallowed, the sale would be confirmed. When the “sale” thus becomes absolute, the court is required to grant a certificate under Order 21 Rule 94 to the person in whose favour the sale has been confirmed specifying therein the details of the property sold, the name of the purchaser as also the date on which the sale became absolute. Once these steps have been taken and a certificate has been issued to the purchaser, the latter, namely, the purchaser can obtain delivery of possession of the property sold through the court process by making an application under Order 21 Rule 95 CPC or if the property is in possession of the tenant, symbolic possession would be delivered to him.

    25. Article 180 of the Limitation Act, 1908 which has since been replaced by the Limitation Act, 1963, provided for a limitation of three years for making an application for delivery of possession under Order 21 Rule 95 CPC.

    26. In a case which was ultimately decided by the Privy Council, the question arose as to when the sale shall be deemed to have become absolute: either on and from the date on which it was confirmed or on and from the date on which the appeal, filed against an order rejecting application for setting aside the sale, was disposed of. The Privy Council in Chandra Mani Saha v. Anarjan Bibi AIR 1934 PC 134 held as under:

    “[I]n construing the meaning of the words ‘when the sale becomes absolute’ in Article 180, Limitation Act, regard must be had not only to the provisions of Order 21 Rule 92(1) of the Schedule to the Civil Procedure Code, but also to the other material sections and orders of the Code, including those which relate to appeals from orders made under Order 21 Rule 92(1). The result is that where there is an appeal from an order of the Subordinate Judge, disallowing the application to set aside the sale, the sale will not become absolute within the meaning of Article 180, Limitation Act, until the disposal of the appeal, even though the Subordinate Judge may have confirmed the sale, as he was bound to do, when he decided to disallow the above-mentioned application.

    Their Lordships, therefore, are of opinion that on the facts of this case the sales did not become absolute within the meaning of Article 180, Limitation Act, until 17th March 1927, and that the applications for possession of the properties purchased at the auction-sales were not barred by the Limitation Act.”

    27. The Privy Council confirmed the view taken by the Calcutta High Court in Chhogan Lal Bagri v. Behari Lal Saha Ray AIR 1933 Cal 311 and overruled the earlier judgment of that Court in Neckbar Sahai v. Prakash Chandra Nag Choudhari AIR 1930 Cal 86. The effect of the Privy Council decision is that the sale of property, in execution of decree, does not become absolute merely on the passing of an order confirming the sale under Order 21 Rule 92 but if there has been an appeal against an order rejecting an application for setting aside the sale, made either under Order 21 Rule 89 or Rule 90 or Rule 91, the sale would not become absolute till the disposal of that appeal. It was held that the limitation of three years prescribed under Article 180 of the Limitation Act, 1908 for making an application for delivery of possession under Order 21 Rule 95 would run, not from the date on which the sale is confirmed under Order 21 Rule 92 but from the date on which the appeals are disposed of.

    28. This question was also considered in a slightly different situation by the Madras High Court in Kandukuri Chellamma v. Ranganilayam Ramakrishnarao ILR 1946 Mad 795, AIR 1946 Mad 337. The question in that case was whether an application under Section 19 of Madras Act 4 of 1938 to scale down the decree-debt would lie during the pendency of an appeal against the order refusing to set aside the sale. The objection was that once the sale has become absolute and has been confirmed, an application to scale down the decree-debt would not lie. This was rejected by the High Court which held that in view of the pendency of the appeal, the validity of the sale was still in question and until that question was finally decided by the High Court, the sale could not be treated to have become absolute particularly as the appeal had to be regarded as a continuation of the proceedings initiated in the lower court for setting aside the sale.

    29. In another Madras decision in S.V Ramalingam v. K.E Rajagopalan (1975) 2 MLJ 494 rendered by S. Natarajan, J. (as his Lordship then was), this principle was reiterated and it was held that:

    “16. The confirmation of a sale subsequent to the dismissal of a petition under Order 21 Rule 90 cannot, in reality, after the situation when the mortgagor-judgment-debtor has preferred within time an appeal against the dismissal of his petition under Order 21 Rule 90. Though the confirmation of the sale does take the auction-purchaser a step further than before the confirmation of the sale, the confirmation, by itself, is in one sense, inchoate. The confirmation gives the sale only viability but does not render the sale an indefeasible one, till such time as the appeal preferred by the mortgagor against the validity of the sale remains undisposed. In that sense, the confirmation effected by the executing court may become final as far as the executing court is concerned, but it certainly does not stamp the transaction with irrevocable finality when alone the rights of parties get crystallised beyond retracement. Consequently, the appeal preferred by the judgment-debtor has the effect of rendering a sale and its confirmation fluidal and nebulous. It, therefore, follows that the finality of the sale is rendered at large before the appellate court in appeal and as such, the petitioners will be entitled to exercise the right conferred on them under Order 34 Rule 5 to redeem the mortgage.”

    30. In another decision rendered by the Madras High Court in V.A Narayana Raja v. Renganayaki Achi AIR 1984 Mad 27, (1983) 96 MLW 536 it was again reiterated that an application under Order 34 Rule 5 would be maintainable during the pendency of the appeal filed by the judgment-debtor against an order passed by the executing court refusing to set aside the sale effected in execution of the decree passed in the mortgage suit. It was further held that although as a result of the confirmation of sale and the issue of a sale certificate, the auction-purchaser got title to the property and the title of the judgment-debtor was lost but since the sale was subject to the final result of the petition, filed by the judgment-debtor under Order 21 Rule 90 CPC, the confirmation of sale and the sale certificate issued thereafter would also be subject to the result of that petition. Similarly, if an appeal was pending against an order refusing to set aside the sale, the whole situation relating to confirmation of sale and issuance of sale certificate would be in a nebulous state and consequently it would be open to the judgment-debtor to invoke the provisions of Order 34 Rule 5 CPC and make the necessary deposits to save his property from being transferred to a third person or, maybe, to the decree-holder, in execution of decree passed in the mortgage suit.

    31. The entire legal position was reviewed by this Court in Maganlal v. Jaiswal Industries (1989) 4 SCC 344, (1989) 3 SCR 696 and it was held that the sale does not become absolute or irrevocable merely on passing an order confirming the sale under Order 21 Rule 92 but it would attain finality on the disposal of the appeal, if any, filed against an order refusing to set aside the sale.

    32. Mr A.T.M Sampath, learned counsel appearing on behalf of the appellant has vehemently contended that the principles set out above would not be applicable to the present case inasmuch as the appeal was not filed by the respondents against the order refusing to set aside the sale but it was filed against an order by which their application for restoration of another application, namely, the application for setting aside the sale under Order 21 Rule 90, which was dismissed in default, was rejected. He has invited our attention to the decision of this Court in Hukumchand v. Bansilal AIR 1968 SC 86, (1967) 3 SCR 695 in which it was held that: (SCR Headnote)

    “Though Order 34 Rule 5(1) recognises the right of the judgment-debtor to pay the decretal amount in an execution relating to a mortgage decree for sale at any time before the confirmation of sale, the rule does not give any power to the court to grant time to deposit the money after the final decree has been passed. It is not open to the court to go on fixing date after date and postponing confirmation of sale merely to accommodate a judgment-debtor.”

    It was further held:

    “A harmonious construction of Order 34 Rule 5 and Order XXI Rule 92 makes it clear that if the provisions of Order XXI Rule 92(1) apply the sale must be confirmed unless before the confirmation the mortgagor-judgment-debtor has deposited the amount as permitted by Order 34 Rule 5.”

    33. The first part of the above extract is wholly inapplicable to the present case as it is nobody's case that the Court had been deliberately fixing dates after dates to avoid confirmation of sale or to accommodate the judgment-debtor. The other part of the extract is relied upon by both the parties, specially the respondent in support of the contention that the deposits under Order 34 Rule 5 can be made and has to be made before the confirmation of sale.

    34. It is true that when the sale was held under the court auction, the respondent, in the present case, had made an application (EA No. 151 of 1982) for setting aside the sale but the application was dismissed in default and the sale was confirmed. Thereafter, the respondent had made an application (EA No. 293 of 1982) for restoration of that application. They had also made an application (EA No. 294 of 1982) for setting aside the confirmation of sale but both these applications were rejected and it was against these orders that the respondent had filed appeals (CMAs Nos. 267 and 462 of 1983) in the High Court. It was during the pendency of these appeals that the respondent had made an application under Order 34 Rule 5 for deposit of money. The situation where an appeal is filed directly against the order dismissing an application under Order 21 Rule 90 is not different from the situation where the appeal is filed against the order dismissing that application in default inasmuch as in both the situations, it is the validity of confirmation of sale, which is involved and is under possible jeopardy.

    35. An identical situation with which we are faced in this case was considered by the Madras High Court itself in Varadarajan v. Muthu Venkatapathi Reddi AIR 1953 Mad 587, (1953) 1 MLJ 148 in which the appeal was filed against an order by which the application under Order 21 Rule 90 CPC was dismissed in default. It was held that restoration of the application under Order 21 Rule 90 CPC would automatically operate to vacate, or, render ineffective, the earlier order confirming the sale under Order 21 Rule 92. The High Court was of the opinion that pendency of an application under Order 21 Rule 90 CPC would operate as a bar to an order of confirmation of sale being made under Order 21 Rule 92. It was further of the view that restoration of an application under Order 21 Rule 90 CPC, which was earlier dismissed for default, would relegate the parties to the earlier position and the application for setting aside the sale would be treated as pending and not disposed of despite the confirmation of sale in the interregnum.

    36. In Ramathal v. Nagarathinammal (1967) 1 MLJ 260 the above view was reiterated and it was held that the restoration of an application under Order 21 Rule 90, which was earlier dismissed in default, would render ineffective the order by which the sale was confirmed.

    37. The Andhra Pradesh High Court in Satyanarayana v. Ramamurthi (1960) 2 AnWR 431 held that it is only where no application under Order 21 Rule 90 is made within the statutory period or where such an application is made but is rejected that the court can exercise its power to confirm the sale. It further held that the existence of an application for setting aside the sale would operate as a bar in making the sale absolute. It also held that during the pendency of the appeal, no finality attaches to the sale notwithstanding the confirmation of sale having been made in the meantime.

    38. Mr A.T.M Sampath then pointed out that even after remand by the High Court, both the applications, namely, application for restoration as also the application for setting aside the confirmation of sale were dismissed on 12-12-1983 and the appeals filed against those orders, being CMAs Nos. 19 and 74 of 1984, have also been dismissed by the impugned judgment with the result that the objections under Order 21 Rule 90 CPC shall be treated to have been dismissed on merits, and the confirmation of sale in favour of the appellant shall be treated to have been validly done. It is contended that once the order, by which the sale was confirmed in favour of the appellant, is found to have been validly passed, the title in the property passed in favour of the appellant while the title of the respondent, from that moment, came to an end. The consequence of this situation, it is further contended, was that the application under Order 34 Rule 5 CPC for deposit of money was not maintainable and was liable to be rejected. It was not open to the executing court to have accepted the deposit or to have passed an order for return of document.

    39. Having given our anxious consideration to these submissions, we are unable to accept them not only on equitable considerations but on the merits of the case also.

    40. Adversity of a person is not a boon for others. If a person in stringent financial conditions had taken the loan and placed his properties as security therefor, the situation cannot be exploited by the person who had advanced the loan. The court seeks to protect the person affected by adverse circumstances from being a victim of exploitation. It is this philosophy which is followed by the court in allowing that person to redeem his properties by making the deposit under Order 34 Rule 5 CPC.

    41. We may, at this moment, recapitulate the facts which have already been given above.

    42. In this case, the sale was held on 29-4-1982. The respondent made an application on 21-6-1982 for setting aside the sale but this application was dismissed in default on 18-9-1982. Thereafter, the sale was confirmed. This compelled the respondent to make an application for setting aside the confirmation of sale. They also made an application for restoration of their earlier application under Order 21 Rule 90 CPC. Both the applications were made on 12-10-1982 but they were rejected on 2-4-1983 against which, as pointed out earlier, CMAs Nos. 267 and 462 of 1983 were filed. In these appeals, the respondent also moved an application (CMP No. 7710 of 1983) for stay and the High Court passed conditional order of stay by directing the respondent to deposit a sum of Rs 25,000 in the executing court on or before 30-6-1983. The respondent deposited the amount on 26-6-1983. While these appeals were pending in the High Court, the respondent made an application (EA No. 226 of 1983) in the original suit for deposit of money under Order 34 Rule 5.

    43. CMA No. 267 of 1983 was allowed by the High Court on 21-7-1983 by the following order:

    “Appellant came forward with a claim that on 12-9-1982 he was afflicted with chicken pox and this was preceded by fever for two days. Court below held that when no prescription issued by a doctor or any bill was produced regarding purchase of medicines, this claim cannot be accepted, though for chicken pox there are no medicines.

    Learned counsel for the respondent would state that appellant herein indulges in protracting the proceedings, and at every stage he deliberately allows the matter to be dismissed for default and thereby prevents an early conclusion of proceedings.

    On behalf of appellant, it is pleaded that a bona fide impression was entertained that by filing such affidavit, the matter could be successfully concluded, but since the court below had approached the matter differently by stating that no other evidence had been adduced, if only it had been indicated by Court that this matter calls for oral and documentary evidence to be adduced as well, then appellant would have adduced the necessary evidence. Therefore, to enable the appellant to establish the truthfulness of the claim made, the matter is now remitted, for him to adduce such evidence as he may choose to give, thereafter for the Court below to pass suitable orders. Accordingly, the CMA is allowed. No costs. It is open to both parties to adduce such oral and documentary evidence as they may consider necessary, and the enquiry is to be completed positively, on or before 31-8-1983.

    It is stated that pursuant to the orders passed in CRP No. 2251 of 1983, the premises is kept under lock and key. Since respondent herein is prevented from enjoying the property in spite of securing an order for confirmation of sale, the premises will continue to be kept under lock and key as per the orders passed in the above CRP, subject to an added condition that appellant herein shall deposit by the 10th of every succeeding month to the credit of the EP a sum of Rs 300 per month into the Court below, failing which, it will be open to the Court below to proceed to pass suitable orders.

    21-7-1983…”

    44. The trial court, in the meantime, by its order dated 27-7-1983 rejected the respondent's application (EA No. 226 of 1983) for permission to deposit the balance of the mortgage money under Order 34 Rule 5 CPC against which CRP No. 3473 of 1983 was filed in the High Court. This revision petition as also CMA No. 462 of 1983 were taken up together and disposed of by a common judgment dated 7-9-1983. The revision petition and the appeal both were allowed. The judgment, inter alia, provided as under:

    “It is stated that in respect of orders passed in EA No. 293 of 1982 which was filed to set aside the orders passed in EA No. 151 of 1982 and which in turn was filed to set aside the sale, CMA No. 262 of 1983 is filed in this Court. In the light of the orders already passed in CMA No. 267 of 1983 and the entire matter having been reopened, both the appeal and the revision petition are allowed with costs with a direction to the Court below to dispose of the connected EAs along with EA No. 294 of 1982, which is being presently enquired into.

    It is stated that the Court below did not issue challan for remittance of Rs 62,563. Now that the matter has been reopened, the Court below is directed to issue necessary challan for the amount to be deposited but without prejudice to the contentions of parties. If by the date of deposit, it is open to the judgment-debtor to deposit the high amount, on production of the steno copy of this order, the Court below shall proceed further in the matter.

    7-9-1983…”

    45. A perusal of the portion of the order extracted above would show that the whole matter was reopened with the result that the confirmation of sale could not be treated as final and it was open, even at that stage, to the respondent to deposit the balance of the mortgage money.

    46. Thereafter, the trial court, by its order dated 16-9-1983, allowed EA No. 226 of 1983 and accepted the balance of the mortgage money amounting to Rs 62,563. The trial court discharged the mortgage. It is contended by the learned counsel for the respondent that this order has become final as it was, at no stage, challenged by the appellant. But the matter does not end here. The trial court, in the meantime, by its order dated 12-12-1983, dismissed EAs Nos. 293 and 294 of 1982 against which CMAs Nos. 19 and 74 of 1984 were filed in the High Court. It also, by its order dated 16-9-1984, dismissed the respondent's application (IA No. 337 of 1984) for return of documents under Order 34 Rule 5-A CPC. Against this order, CRP No. 4402 of 1985 was filed in the High Court.

    47. CMAs Nos. 19 and 74 of 1984 and CRP No. 4402 of 1985 were disposed of by the High Court by a common judgment dated 14-1-1988 by which CMAs Nos. 19 and 74 of 1984 have been dismissed while CRP No. 4402 of 1985 has been allowed. The judgment apparently is self-contradictory. While rejecting CMAs Nos. 19 and 74 of 1984, the High Court allowed CRP No. 4402 of 1985 and has held that the mortgage stood discharged. The relevant portion of the judgment is reproduced below:

    “24. I am afraid that the abovesaid principles are not applicable to the facts of the present case, since there is no foundation for holding that the order passed by Sathiadev, J., was obtained by fraud and the matter is being raised for the first time before this Court. It is no doubt true that the conduct of the petitioner in adopting all sorts of dilatory tactics in delaying the execution of the decree has to be condemned. But that will not be sufficient to ignore the order passed by the Court on the basis of the alleged fraud. Therefore, I find that the order passed by the lower court in IA No. 337 of 1984 in OS No. 21 of 1978 is not sustainable. As already observed, the order passed by the lower court in EA No. 226 of 1983 has given a complete discharge of the mortgage decree and consequently the petitioner is entitled to get return of the documents as prayed for in IA No. 337 of 1984.

    25. In the result, this revision petition is allowed and the order of the lower court is set aside. No costs.”

    48. The High Court endorsed the view of the trial court that on the deposit of the balance amount of the mortgage money, the mortgage stood discharged. The trial court having also allowed the application of the respondent for return of documents under Order 34 Rule 5-A CPC, there was no occasion for the High Court to have dismissed CMAs Nos. 19 and 74 of 1984.

    49. Mr A.T.M Sampath has contended that having dismissed CMAs Nos. 19 and 74 of 1984, the High Court should not have allowed CRP No. 4402 of 1985 nor should it have allowed the respondent's application under Order 34 Rule 5-A for return of documents. He is, to that extent, right. But once the balance of the mortgage money was allowed to be deposited under Order 34 Rule 5 and the documents were also ordered to be returned under Rule 5-A, with the consequence that the mortgage was treated as discharged, the obvious conflict can be removed by allowing both the appeals, namely, CMAs Nos. 19 and 74 of 1984, which are hereby allowed, so as to bring in harmony the earlier part of the judgment with the latter part. The objection that the respondent had not filed any appeal in this Court against that part of the judgment of the High Court by which CMAs Nos. 19 and 74 of 1984 were dismissed, cannot be entertained as the principles contained in Order 41 Rule 33 can be invoked in the instant case so as to do complete justice between the parties.

    50. For the reasons stated above, we find no merit in this appeal which is hereby dismissed with the observation that the amount deposited by the appellant from time to time in the High Court or any other court, in this case, shall be refunded to him together with all interest accrued thereon. There shall be no order as to costs.

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