Kharaiti Lal v. Raminder Kaur And Others

S. Saghir Ahmad, J.— Leave granted.

2. The appellant, who was the owner of a plot of land measuring one-and-a-half kanal, situated in Industrial Area, Chandigarh, had mortgaged the said land with one Col. Joginder Singh for a sum of Rs 20,000 after raising certain constructions thereon.

3. Col. Joginder Singh subsequently filed a suit for foreclosure in order to recover the mortgage money by sale of Industrial Plot No. 255-P and the building constructed thereon. A preliminary decree was passed in that suit on 23-1-1976, directing the appellant to deposit a sum of Rs 28,187.50 along with future interest at the rate of 9 per cent per annum on or before 23-3-1976. The amount was not deposited and, therefore, Col. Joginder Singh filed an application for final decree which was passed by the Subordinate Court, Chandigarh, on 8-4-1976. The decree was put to execution and in execution proceedings, the property was auctioned on 25-8-1976. Nazar Singh, who is now represented by the present respondents, purchased the property at the auction for a sum of Rs 45,000. The auction-sale was challenged by the appellant by filing an application under Order 21 Rule 90 CPC on 28-8-1976. The objections were rejected on 28-11-1977 and on the next day, namely, on 29-11-1977, the Court confirmed the auction-sale.

4. The appellant, thereafter, filed two appeals (Appeals Nos. 373 and 374 of 1977) in the High Court. During the pendency of those appeals, he also deposited a sum of Rs 47,250 on 3-5-1985 and another amount of Rs 525 was deposited by him on 19-8-1985. When the appeals came up for hearing before the Single Judge, it was noticed that the appellant had already deposited the requisite amount under Order 34 Rule 5 of the Code of Civil Procedure and, therefore, the appeals were allowed on 30-8-1985 and the auction-sale as also its confirmation were set aside with the direction that the amount, deposited by the appellant, would be paid to the heirs of Nazar Singh who had, in the meantime, died and was substituted in the appeals by the present respondents. The judgment passed by the Single Judge was challenged by the respondents in the letters patent appeals filed before the Division Bench, which allowed both the appeals by the impugned judgment dated 2-7-1998 and set aside the judgment passed by the Single Judge. It is in these circumstances that the present appeals have come up before us.

5. Learned counsel for the appellant has contended that the Division Bench of the High Court was in error in interfering with the judgment passed by the learned Single Judge on the ground that the desposits, made by the appellant during the pendency of the appeals in the High Court, would not enure to his benefits and could not be treated to have been made under Order 34 Rule 5 CPC as the auction-sale had already been confirmed. It is further contended that Order 34 Rule 5 CPC contemplates deposit before “confirmation of sale” and if the order by which the sale was confirmed had been challenged in appeal, the sale would not be treated as confirmed unless the appeal was disposed of. It is further contended that since the appellant, in the instant case, had made the deposits during the pendency of the appeals in the High Court, which were directed against the auction-sale as also its confirmation, the deposits so made were valid and could not have been treated to have been made “after confirmation”.

6. Learned counsel for the respondents, on the contrary, contended that when a preliminary decree was passed by the trial court, the appellant was allowed time to deposit the whole of the decretal amount by a specific date, namely, by 23-3-1976 but the appellant did not do so and, consequently, the property was auction-sold. The sale was challenged by the appellant through objections under Order 21 Rule 90 CPC, which were rejected and the sale was thereafter confirmed. It is contended that after rejection of the objections under Order 21 Rule 90 CPC, the executing court was bound to confirm the sale and since the sale was confirmed on the next day of the rejection of the objections under Order 21 Rule 90 CPC, the sale, for all practical purposes, shall be deemed to have been confirmed on that day. Any deposit, made by the appellant thereafter, would be of no avail and on the basis of that deposit, the sale could not be set aside. It is contended that the Division Bench of the High Court was justified in setting aside the judgment passed by the Single Judge.

7. A perusal of the judgment passed by the Division Bench would show that after setting out the facts, it formulated a question as under:

“The question that arises for consideration is — when can a sale of the mortgaged property be said to have been confirmed? The ancillary question would be — Can a deposit be made under Order 34 Rule 5 even when an appeal is pending?”

8. Thereafter, the Division Bench proceeded to answer the question by holding ultimately that the deposit of money, during the pendency of appeals in the High Court, could not be treated as a valid deposit under Order 34 Rule 5 CPC. For this purpose, it placed reliance upon a decision of this Court in Hukumchand v. Bansilal AIR 1968 SC 86, (1967) 3 SCR 695. The decision in Hukumchand case AIR 1968 SC 86, (1967) 3 SCR 695 was given on the particular facts of that case. It was noticed by the Court, in that case, as under: (SCR Headnote)

“Though Order XXXIV 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.”

9. The Court did not hold in that case that a deposit under Order 34 Rule 5 CPC could not be made during the pendency of an appeal against the order by which the sale was confirmed.

10. The entire case-law was reviewed by this Court in a recent decision in U. Nilan v. Kannayyan (1999) 8 SCC 511, (1999) 6 Scale 358, JT (1999) 7 SC 621 in which also the Court had formulated the following question:

“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.”

11. The above question is identical to the question framed by the Division Bench of the High Court in this case. This Court, on a consideration of a number of decisions, including the decision of this Court in Hukumchand case AIR 1968 SC 86, (1967) 3 SCR 695 laid down that if an appeal was pending against an order refusing to set aside the sale, the confirmation of sale as also the 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 the decree passed in the mortgage suit. It may be mentioned that in U. Nilan case (1999) 8 SCC 511, (1999) 6 Scale 358, JT (1999) 7 SC 621 reliance was also placed upon the decision of this Court in Maganlal v. Jaiswal Industries (1989) 4 SCC 344, (1989) 3 SCR 696, AIR 1989 SC 2113 in which 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.

12. This decision, though rendered by this Court in 1989, was not noticed by the Division Bench of the High Court.

13. For the reasons stated above, we allow the appeals, set aside the judgment dated 2-7-1998, passed by the Division Bench and restore the judgment dated 30-8-1985, passed by the Single Judge. There shall be no order as to costs.