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Brij Behari Lal v. Firm Srinivas Ram Kumar And Others Opposite Party.
Digest of the Full Bench Opinion (Harries, C.J., with concurring opinions)
Factual and Procedural Background
This petition for revision challenged the order of the District Judge of Shahabad affirming an order of the Munsif of Sasaram, which had dismissed an application to set aside an auction sale held on 4 August 1936. The application to set aside the sale was presented on 2 September 1936 by Brij Behari Lal and was brought under Order 21, Rule 90 of the Civil Procedure Code (as amended by this Court). Notices were served on the opposite parties. On 14 October 1936 the petitioner deposited a sum equal to 12½% of the sale proceeds in Court. The learned Munsif sustained a preliminary objection that the application was barred by limitation because no deposit had been made with the application within thirty days of the sale; the District Judge affirmed that decision. The petition first came before Wort, J., who referred it to a larger Bench; James and Agarwala, JJ. considered the points important and a Full Bench of five Judges (including Harries, C.J.) heard the matter.
Legal Issues Presented
- Whether, under the amended proviso (Proviso (i)(b)) to sub-rule (1) of Order 21, Rule 90 CPC, an application to set aside a sale must be accompanied by the required deposit at the time the application is presented, or whether the deposit may validly be made after presentation but before the application is "admitted" for the purposes of the Rule.
- Whether the amended proviso to Order 21, Rule 90 (requiring a deposit up to 12½% unless dispensed with) is ultra vires the rule-making power of this Court (raised as an alternative contention by the petitioner).
Arguments of the Parties
Petitioner's Arguments
- The petitioner contended that the application to set aside the sale was within the thirty-day period prescribed by law and therefore should have been decided on its merits.
- Alternatively, the petitioner contended that the amendment to O.21, R.90 of the CPC (specifically Proviso (i)(b) requiring a deposit) was ultra vires the Court's rule-making power and therefore void; if that proviso were void, no deposit would have been required and the original application would have been valid without deposit.
Opposite Parties' Arguments
- The opposite parties raised a preliminary objection that because no deposit was made with the application within thirty days of the sale (as required by the amended Proviso), the application was barred by limitation and thus was not a valid application at all.
- They contended that an application not accompanied by the required deposit (and not previously dispensed with by the Court) is not an "application" within the amended Rule and that a deposit made after the thirty-day limitation period could not cure the defect.
Table of Precedents Cited
The opinion cites one Full Bench case relied upon by petitioner's counsel and refers to statutory provisions; the Court did not treat the Full Bench case as determinative and left related issues open.
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| ILR (1937) Rang 268 (Full Bench of the Bangoon High Court) | Relied upon by counsel for the petitioner (Full Bench authority cited in support of the petitioner's contentions). | The Court noted the citation but declined to decide the broader constitutional/rule-making question raised in the petition based on that authority; the Court preferred to leave that point open for a case in which the question is essential. Thus the authority was not applied to dispose of the present controversy. |
Court's Reasoning and Analysis
The Court's analysis focused on the meaning and effect of the substituted Proviso (i) to sub-rule (1) of Order 21, Rule 90 CPC, particularly Proviso (i)(b) which provides that "no application to set aside a sale shall be admitted unless" the application (a) discloses a ground which could not have been put forward before the sale and (b) the applicant deposits with his application such amount not exceeding 12½% or such other security as the Court may fix, unless the Court dispenses with the deposit for reasons to be recorded.
Key steps in the Court's reasoning:
- The Court distinguished between "presentation" of an application and its "admission." The substituted Proviso imposes conditions upon admission of the application, not upon mere presentation. The Court interpreted "admitted" to mean the stage at which the Court decides to issue notice to opposite parties (i.e., takes steps to treat the filing as formally before the Court).
- The Court considered whether the phrase "deposits with his application" requires that the deposit be physically made at the time of presentation. It compared the substituted Proviso to the explicit wording of the proviso to the amended Section 17(1) of the Provincial Small Cause Courts Act, which expressly required deposit "at the time of presenting his application." Finding no similar express requirement in the substituted Proviso, the Court refused to construe Proviso (i)(b) as mandating deposit at the instant of presentation.
- The Court held that a fair and sensible construction of the words permits a deposit to be made after presentation but before admission, provided the deposit is intended to ensure admission of the application. The necessary requirement is that the money or security be deposited before the Court actually admits the application; admission itself does not have to occur within the statutory limitation period.
- The Court rejected the view that admission must occur within the period of limitation. It observed that making admission dependent on a time fixed by the Limitation Act could produce absurd results (e.g., unfairly penalising applicants because the Court did not act within thirty days).
- Applying these interpretive conclusions to the facts: although the original filing of the application (2 September 1936) was not accompanied by the deposit, the petitioner applied on 10 October 1936 for leave to deposit 12½% and the Court issued a chalan; the sum was actually deposited on 14 October 1936. The Court found that acceptance of that deposit and subsequent proceedings showed the application was properly admitted as of the date of the deposit and that the trial Court thereafter was bound to adjudicate the application on the merits.
- Because of this interpretation, the learnèd Munsif and the District Judge erred in rejecting the application outright on the ground that no deposit had been made with the application at presentation or within thirty days of the sale; instead, the Court should have allowed the applicant an opportunity either to deposit or to seek a dispensation/reduction before admission and, if the deposit or dispensation were granted, to proceed to decide the application on merits subject to Proviso (i)(a).
- The Court expressly declined to decide the alternate contention that the amendment to O.21, R.90 was ultra vires the rule-making power; it left that question open for a case in which the point was essential to the decision.
Holding and Implications
Holding: The petition was allowed. The orders of the Courts below (the Munsif and the District Judge) dismissing the application to set aside the sale were set aside, and the case was remanded to the Court of the learned Munsif through the Court of the District Judge with a direction that the application be heard and determined on the merits according to law.
Implications and immediate consequences:
- The trial Courts should not have rejected the application solely because the deposit was not made at the time of presentation; a deposit made after presentation but before admission suffices to comply with Proviso (i)(b) of the substituted rule.
- The present order requires the application to be heard on its merits by the Munsif (through the District Judge), but the Full Bench left undecided the broader constitutional/rule-making question whether the amended proviso is ultra vires; accordingly, no definitive ruling was made on that issue and no new precedent on that question was laid down by this opinion.
- No further or different consequence (such as a determination of costs) is addressed in the opinion; the matter returns to the trial Court for adjudication on the merits consistent with the Full Bench's interpretation of the proviso.
Disposition: Petition allowed. (All five Judges concurred — Harries, C.J., Wort, J., James, J., Agarwala, J., and Manohar Lall, J.)
Harries, C.J:— This is a petition for revision of an order of the learned District Judge of Shahabad affirming an order of the learned Munsif of Sasaram dismissing-, the petitioner's application to set aside a certain auction sale which was held on 4th August 1936. The petition came in the first place, before Wort J., who referred it to a larger Bench. James and Agarwala, JJ. being of opinion that the points involved were of considerable importance, referred the matter for the constitution of a larger Bench. Accordingly the petition was heard by this Full Bench of five Judges. The application to set aside the sale, which is-dated 2nd September 1936, was made by Brij Behari Lal who was a person entitled to share in a rateable distribution of the sale proceeds and was an application under O. 21, R. 90 of the CPC. The application was registered in the Court of the learned Munsif as a miscellaneous case, and notices-were served on the opposite party. On 14th October 1936, the petitioner Brij Behari Lal deposited in Court a sum amounting to 12½ per cent, of the sale proceeds, and on 25th May 1937, the application came on, for hearing before the learned Munsif. The opposite parties took a preliminary objection that as no sum was deposited with the application to set aside the sale as required by the Rule within 30 days from the date of the sale, the application was barred by time. The learned Munsif upheld this preliminary objection and on appeal the learned District Judge affirmed the decision of the Court below and dismissed the application. It has been contended before this Court that in dismissing the application the Courts below were clearly wrong and that this is a case in which revision lies. As I have stated, the application to set aside the sale was one under O. 21, R. 90 of the CPC. This Rule has been amended by this Court, and the amended Rule, under which the application was made, is in these terms:
(1) Where any immovable property has been sold in execution of a decree, the decree-holder, or any person entitled to share in a rateable distribution of assets, or whose interests are affected by the sale, may apply to the Court to set aside the sale on the ground of a material irregularity or fraud in publishing or conducting it:
(i) Provided that no application to set aside a sale shall be admitted unless
(a) it discloses a ground which could not have been put forward by the applicant before the sale was concluded, and
(b) the applicant deposits with his application such amount not exceeding 12½ per cent: of the sum realized by the sale or such other security as the Court may in its discretion fix, unless the Court, for reasons to be recorded, dispenses with the deposit.
(ii) Provided further that no sale shall be set aside on the ground of irregularity or fraud unless upon the facts proved the Court is satisfied that the applicant has sustained substantial Injury by reason of such irregularity or fraud.
(2) In case the application is unsuccessful the costs of the opposite party shall be a first charge upon the deposit referred to in Proviso (i)(b), if any.
2. The present Provisos have been substituted by this Court for the original Proviso to the Rule. It will be seen that by reason of Proviso (i)(b) no application to set aside a sale is to be admitted unless the applicant deposits with his application, such an amount not exceeding 12½ per cent, of the proceeds of the sale or such other security as the Court in its discretion may fix unless the Court dispenses with the deposit altogether. In the present case the petitioner deposited neither a sum of money nor gave any security nor did he on or before making the application apply to the Court to dispense with the deposit. On 10th October 1936 however the petitioner applied to the Court to accept a deposit of 12½ per cent, of the sum realized by the sale, and upon this application the Court made an order to issue a chalan. On 14th October 1936 the sum was actually deposited in Court. An application to set aside a sale must be made within thirty days from the date of the sale: see Limitation Act, 1908, Sch. 1, Article 166. The sale took place on 4th August 1936, and as the application to set aside the sale was made on 2nd September 1936, it was within thirty days of the sale. The deposit however was not made until 14th October 1936, which was long after the expiry of the period of thirty days from the date of sale. It was urged by the opposite parties in the Courts below that where the deposit had not been dispensed with by the Court, an application accompanied by no deposit was no application at all within amended O. 21, R. 90, and that the defect in the application could not be cured by a deposit made on 14th October 1936, because an application on that date was clearly barred by limitation. As I have stated, the Courts below accepted this contention and dismissed the application. Counsel for the petitioner has contended before us that the application to set aside the sale in this case was within time and should have been decided on the merits. Alternatively, he has contended that the amendment made by this Court to O. 21, R. 90 of the CPC requiring a deposit is ultra vires the rule making power of the Court and therefore void. If Proviso (i)(b) which is part of the amendment made by this Court is void, then clearly the application was within time, as the Rule as it originally stood required no deposit to be made with the application.
3. In the first place, I shall deal with the contention that the present application complied with the provisions of amended O. 21, R. 90 of the CPC and was within limitation. At the outset it must be observed that the substituted Proviso (i) to sub-rule (1) of O. 21, R. 90 of the CPC places conditions not upon the presentation of an application to set aside a sale but upon its admission. The words of the substituted Proviso are “provided that no application to set aside a sale shall be admitted unless…” Admission of the application presumably means the stage when the Court decides to issue notice upon such application to the opposite parties concerned. By the terms of the substituted Proviso such application cannot be admitted unless the provisions of sub-cls. (a) and (b) of Proviso (i) are complied with. In my view this substituted Proviso contemplates that after an application to set aside a sale has been presented, an inquiry must be made by the Court, because the Proviso directs that (a) no such application shall be admitted unless it discloses a ground which could not have been put forward by the applicant before the sale, and (b) the application must be accompanied with a deposit of 12½ per cent, or such less sum or other security as the Court may direct, unless, for reasons to be recorded, the Court has dispensed with security. It appears to me that an application cannot therefore be admitted until some inquiry, no matter how perfunctory, has been made by the Court. If a deposit of 12½ per cent, has been made at the time of presentation of the application, the Court must admit the application provided Proviso (i)(a) has been complied with. If, on the other hand, the application has not been accompanied by any deposit, must the Court refuse forthwith to admit it and accordingly reject it, or should the Court direct, unless it dispenses with the security altogether, a deposit to be made or security to be given before a date fixed for admission? In my view the Court must follow this latter course. Substituted Proviso (i)(b) requires that no application shall be admitted unless the applicant deposits with the application such amount not exceeding 12½ per cent, of the proceeds of the sale or such other security as the Court may fix unless the Court dispenses altogether with any such deposit. Do the words “unless the applicant deposits with his application such amount….” mean that the applicant must deposit the amount at the time he makes his application or do they mean that at some stage or another, unless the Court dispenses with the deposit, a sum must be deposited with the application which has already been made? The learned District Judge appears to have thought that Proviso (i)(b) is very similar to the provisions of the Proviso to the amended Section 17(1) of the Provincial Small Cause Courts Act. That Proviso is in these terms:
Provided that an application for an order to set aside a decree passed ex parte, or for a review of judgment, shall, at the time of presenting his application, either deposit in the Court the amount due from him under the decree or in pursuance of the judgment, or give such security for the performance of the decree or compliance with the judgment as the Court may, on a previous application made by him in this behalf, have directed.
4. By the terms of this Proviso it is clear that the deposit must be made at the time the application is presented, because it is expressly stated that such must be the case. Further, it is expressly provided that if the applicant wishes to give security instead of depositing money, a previous application must be made to the Court in this behalf and the applicant must deposit such security as the Court directs when presenting his application. It is to be observed that no such express words appear in the substituted Proviso (i)(b) to O. 21, R. 90 of the CPC. It has been contended that the wording of this substituted Proviso (i)(b) contemplates a deposit of 12½ per cent, of the sale proceeds with the application unless the Court has directed on a previous application that a deposit be dispensed with or that a smaller deposit or some other security be given. The terms of the substituted Proviso however do not make it clear that an application to dispense with the deposit or for leave to deposit less than 12½ per cent, of the sale proceeds or to give some other security must be made before the application to set aside the sale is made. It must be inferred, if such contention be sound, that the words “unless the applicant deposits with his application such amount &c.” mean unless the applicant deposits at the time he makes his application 12½ per cent, of the sale proceeds or such other sum or such other security as the Court has previously directed. I am not prepared to place such a construction upon these words. In my view the applicant can be said to deposit with his application a sum of money or other security even if he does it after he has presented the application. In my judgment if a sum of money or other security is deposited with a view to ensuring the admission of an application, such can be said to be deposited with the application, provided such deposit is made before the date of admission. The learned Munsif appears to have thought that the deposit need not be made at the time the application is presented. In his view if no deposit is made at the time of presentation of the application to set aside the sale, then a further application to dispense with the deposit or for leave to deposit a smaller sum or other security should accompany the application to set aside the sale. Further, he was clearly of opinion that an application to set aside a sale unaccompanied by a deposit was a defective application and that such defect could not be cured unless a deposit was made within 30 days of the sale. In his view admission of the application was bound to take place within the period of limitation.
5. In my judgment there is no justification for this view as there is nothing in the Rule to suggest that admissions must take place within the period of limitation. Further, the wording of the substituted Proviso in no way suggests that in the event of no deposit being made at the time the application is presented, the application should be accompanied by a further one to dispense with the deposit or for leave to deposit a lesser sum or other security. The view of the learned Munsif that admission must take place within the period of limitation is further open to a very grave objection. The point of time when the application is admitted depends upon the Court, and if admission must be within limitation, an applicant might find his application dismissed by reason of the failure of the Court to deal with it within 30 days of the sale. Such can never have been the intention of the framers of this Rule. The learned District Judge appears to have thought that the substituted Proviso contemplated a deposit of 12½ per cent, in every case at the time when the application to set aside the sale was presented. In his view, if the applicant desired that the deposit should be dispensed with or that he should be permitted to deposit a lesser sum or other security, an application should be made to the Court to that effect. In other words, the learned District Judge appears to have thought that 12½ per cent, of the proceeds must first be deposited and then an application made for leave to dispense entirely with the deposit or to reduce the amount of such deposit or to substitute some other security for it. In my judgment this view also cannot be sustained. Obviously, the framers of the substituted Proviso contemplated that nothing need be deposited in cases in which the Court thought that no deposit was necessary and that a lesser sum or other security could be deposited when the circumstances warranted the Court taking that view. Clearly, the framers of the Rule never contemplated that in every case a deposit of 12½ per cent, should first be made and then steps should be taken to have such deposit dispensed with or reduced.
6. Unless the view which I have expressed of the meaning of the words “deposits with his application” is accepted, extraordinary results might ensue. If the substituted Proviso means that the applicant must in every case deposit at the time he makes his application 12½ per cent, of the proceeds or such other sum or security as the Court may direct, then if an application is made without any deposit and a deposit of 12½ per cent, is subsequently made within thirty days of the sale and before admission, such application would have to be rejected, because the deposit was not made at the time the application was presented. In my view, if a deposit of 12½ per cent, is made after the application is filed but within thirty days of the sale, such would clearly be a deposit made with the application. Why, therefore, should not a deposit, made after thirty days of the sale but before admission be a deposit made with the application? In my judgment all that this substituted Proviso requires is that before admission the necessary sum of money or security unless dispensed with must be deposited; The applicant can then be said to have deposited with his application such deposit or security within the meaning of the substituted Proviso.
7. The Limitation Act only requires that the application be made within thirty days of the sale, and in my view there is nothing in the substituted Proviso to suggest that the money or other security must be deposited within limitation. The substituted Proviso is complied if such is made before actual admission and the date of admission cannot be governed by the Limitation Act. As I have stated earlier in this judgment, this application was registered as a miscellaneous case immediately upon presentation, and it has been argued that rightly or wrongly the application was admitted and that it was not open to the learned Munsif at a later stage to question his own order. There is some force in this contention; but it is unnecessary to decide the point because at a later stage the trial Court actually accepted a deposit of 12½ per cent; on 10th October 1936, the present petitioner applied for leave to deposit a sum equal to 12½ per cent, of the sale proceeds and the Court issued a chalan and the money was actually deposited. Even if the original admission of this application could not be justified, the acceptance of this deposit and the subsequent proceedings clearly show that the application was properly admitted at the date of the deposit and the Court was bound thereafter to adjudicate upon it.
8. For the reasons which I have given, I am satisfied that where no deposit accompanies an application to set aside a sale, the Court has no power to reject such application forthwith. On the other hand, it must give the applicant an opportunity to urge that the deposit should be dispensed with or to deposit the full or lesser amount or other security before some date fixed for admission. If the orders of the Court are complied, with, the application must be admitted and heard upon the merits provided that it complies also with the substituted Proviso (i)(a). In the present case the Courts below should have exercised the jurisdiction vested in them and heard this application upon its merits. Having regard to the view which I have taken, it is unnecessary for me to consider the second contention of the petitioner, namely that the amendment made by this Court to O. 21, R. 90 of the CPC is ultra vires the rule-making powers of this Court, as the question does not arise. Counsel for the petitioner relied upon a Full Bench case of the Bangoon High Court in ILR (1937) Rang 268.1 For the reasons which I have given, I prefer to leave the consideration of this question open and to decide the matter in a case where the decision of such point is essential. The result therefore is that I would allow this petition, set aside the orders of the Courts below and remand the case to the Court of the learned Munsif through the Court of the District Judge with a direction that the application should be heard and determined on the merits according to law.
Wort, J.:— I agree.
James, J.:— I agree.
Agarwala, J.:— I agree.
Manohar Lall, J.:— I agree.
N.S/R.K
9. Petition allowed.
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