Whether court can treat sale as nullity if auction purchaser fails to deposit value of stamp duty for drafting sale certificate along with purchase money?

 In Manilal Mohanlal Shah and others v. Sardar Sayed Ahmed Sayed Mohamad and others, MANU/SC/0005/1954 : AIR 1954 SC 349, the Apex Court observed thus:

"Having examined the language of the relevant rules and the judicial decisions bearing upon the subject we are of opinion that the provisions of the rules requiring the deposit of 25 per cent of the purchase-money immediately on the person being declared as a purchaser and the payment of the balance within 15 days of the sale are mandatory and upon non-compliance with these provisions there is no sale at all. The rules do not contemplate that there can be any sale in favour of a purchaser without depositing 25 per cent of the purchase-money in the first instance and the balance within 15 days. When there is no sale within the contemplation of these rules, there can be no question of material irregularity in the conduct of the sale. Non-payment of the price on the part of the defaulting purchaser renders the sale proceedings as a complete nullity. The very fact that the Court is bound to re-sell the property in the event of a default shows that the previous proceedings for sale are completely wiped out as if they do not exist in the eye of law. We hold, therefore, that in the circumstances of the present case there was no sale and the purchasers acquired. No rights at all."

15. (a) In Uttamchand Milapchand v. Balkrishna Ramnath, MANU/MH/0053/1961 : AIR 1961 Bom. 224, referring to Manilal Mohanlal Shah and others case (supra), the Bombay High Court expressed the similar view holding thus:

In Para No. 4 xxx....... In view of these observations of the Supreme Court it is clear that the provisions of Order 21 Rule 85 as well as Rule 86 are mandatory in the sense that in the event of the auction purchaser failing to deposit the full purchase price within 15 days from the date of the auction sale the Court will have no option but to order a re-sale of the property. This necessarily implies that the Court has no jurisdiction whatever to extend the time for the payment of the balance of the purchase price as fixed under Order 21 Rule 85 of the Code. Either the purchaser pays the price within 15 days of the sale or he does not. If he pays, the sale would be complete; if he does not pay then, as pointed out by the Supreme Court in the aforesaid decision, there is no sale at all and all the proceedings in respect of the auction sale would be a nullity. Applying the ratio of that decision to the facts of this case, it is clear that as auction purchaser, who is the applicant in the present revision application, failed to pay the full purchase price within 15 days of the auction sale, there was no sale at all in his favour and, therefore, there was no question of any irregularity in such a sale being waived on account of the consent of the judgment-debtor to the time being extended in favour of the auction purchaser. Following upon the default in the payment of the purchase price as required under Order 21 Rule 85 the Court had straightaway to order re-sale of the property which the learned Judge in the Court below has done in this case. Accordingly, in my opinion, the order passed by the learned Judge ordering re-sale of the property is perfectly valid.

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI

CRP No. 6528 of 2018

Decided On: 18.03.2019

 G. Venkata Ramana Naidu Vs.  K. Venkataramana Reddy and Ors.

Hon'ble Judges/Coram:

U. Durga Prasad Rao, J.

Citation: AIR 2019 AP 21

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Whether right to redemption exists after issuance of sale certificate to auction purchaser?

 In Mhadagonda Ramgonda Patil (supra), it was observed that the mortgagor has a right of redemption even after sale has taken place pursuant to the final decree, but before the confirmation of sale.

23. The aforesaid discussion leads to the conclusion that the Plaintiffs lost the right to sue for redemption of the mortgaged property by virtue of the proviso to Section 60 of the Act, no sooner that the mortgaged property was put to auction sale in a suit for foreclosure and sale certificate was issued in favour of Defendant No. 2. There remained no property mortgaged to be redeemed. The right to redemption could not be claimed in the abstract.

IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 2763-2764 of 2008

Decided On: 19.06.2017

 Allokam Peddabbayya and Ors.

Vs.

 Allahabad Bank and Ors.

Hon'ble Judges/Coram:

Ranjan Gogoi and Navin Sinha, JJ.

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Whether auction purchaser can refuse to pay balance amount in auction sale on the ground that part of allotted land is encroached?

Be that as it may, we do not find any good reason to interfere in this Special Appeal, as the appellant has not deposited the amount of his highest bid, either in terms of the conditions of sale or in pursuance to the interim direction, as granted by this Court. The explanation that 100 sq.yards of the land out of 2056.32 sq.meters is under encroachment, and further, no development was made appears to be an excuse, as the details of encroachment or the failure of development or any reminders, or any representation, to this extent, was not brought on record, nor pleaded before learned Single Judge.
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN
AT JAIPUR BENCH, JAIPUR


D.B. SPECIAL APPEAL No.1784/2014
M/s.High Image Developers (P) Limited 
Vs.
The State of Rajasthan & Anr.
Dated;13.02.2015
HON'BLE THE ACTING CHIEF JUSTICE MR. SUNIL AMBWANI
HON'BLE MR. JUSTICE PRAKASH GUPTA
Reportable
Citation; AIR 2015(NOC)1167 RAJ

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Whether auction purchaser of vehicle is liable to pay tax and penalty for pre auction period?

In view of the analysis being made, this Court is of the considered opinion that for the period the vehicle was in custody of the enforcement agency and subsequently, following a confiscation proceeding the auction purchaser having purchased the same free from all encumbrances by making a harmonious consideration of the provisions contained in Sections 3 ,10,12 of the 1975 Act read with Section 56 and Section 64(2) of the 1972 Act, the auction purchaser is not liable to pay the tax and penalty demanded by the Transport Authority for the pre auction period. From the date auction purchaser purchased the vehicle and possessed the same, the tax can be leviable in conformity with the provisions of 1975 Act. The question no.(i) is answered accordingly.

Orissa High Court

Ishwar Chandra Prusti vs R.T.O. Sambalpur And Others on 5 February, 2015

Citation; AIR 2015 Orissa 82

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Remedies to auction purchaser who purchases property in court auction

Whether an auction purchaser who purchased the property in execution of a decree of a civil court could file a separate suit for delivery of vacant possession of immovable property or whether his remedy is limited to an application under O.21, R.95, Civil Procedure code is an important issue where unfortunately one could find conflicting views among different benches of the Hon’ble Supreme Court of India.

Section 47 of the Civil Procedure code provides that all questions arising between the parties to the suit in which the decree was passed, or their representatives, and relating to the execution, discharge or satisfaction of the decree, shall be determined by the court executing the decree and not by separate suit. By virtue of explanations to S.47 as it stands now, a purchaser of property at a sale in execution of a decree shall be deemed to be a party to the suit in which the decree is passed so also all questions relating to delivery of possession of such property to such purchaser or his representative shall be deemed to be a question relating to the execution, discharge or satisfaction of the decree within the meaning of S.47.

The object of S.47 is to preclude the unnecessary expense and delay that fresh trials entail. Obviously Section 47 would bar a suit when the same relief could be obtained by an application therein. 

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Why court should pass order for attachment of property before judgment?

The object behind the order levying an attachment before judgment is to give an assurance to the plaintiff that his decree, if made, would be satisfied. Where an attachment has been made, any private transfer or delivery of the property attached would be void as against all claims enforceable under the attachment. What is claimed enforceable is claim for which the decree is made. A dismissal of the suit may terminate the attachment and would not be revived even if the suit is restored As a corollary, if attachment before judgment is obtained in a suit which ends in a decree but if in appeal the decree is set aside, the attachment of necessity must fall. It at an intermediate stage pursuant to the decree of the trial Court the attached property is sold at a Court auction and where an appeal is preferred, an attempt should be made to obtain stay of the execution of the decree of the trial court. If the execution proceeds and the property is

sold at a court auction before the appeal is disposed of, the equity in favour of a person as a auction purchaser may come into existence. In such a case if the auction purchaser is an outsider and if the execution of the decree was not stayed, the auction purchaser would be protected even if the decree in execution of which the auction sale had been held is set aside because the equity in favour of the stranger should be protected. 1

Supreme Court of India

Sardar Govindrao Mahadik & Anr vs Devi Sahai & Ors on 15 December, 1981

Equivalent citations: 1982 AIR 989, 1982 SCR (2) 186

Bench: Desai, D.A.

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