Supreme Court

Gas Point Petroleum India Limited Vs. Rajendra Marothi and Ors.

MANU/SC/0114/2023

10.02.2023

Civil

Deposit of 25% of the amount by the auction purchaser is mandatory and full amount of the purchase money must be paid within fifteen days from the date of the sale

The original Respondent No. 1 - objector before the Executing Court has preferred the present appeal, feeling aggrieved with the impugned judgment passed by the High Court by which, the High Court has set aside the order passed by the lower Appellate Court and has restored the order passed by the Executing Court with respect to the property in question.

As per Order 21 Rule 84 of Code of Civil Procedure, 1908 (CPC) on every sale of immovable property the person declared to be the purchaser shall pay immediately after such declaration deposit of twenty-five per cent on the amount of his purchase-money and in default of such deposit, the property shall forthwith be resold.

As per Order 21 Rule 85, the full amount of purchase-money payable shall be paid by the purchaser into Court before the Court closes on the fifteenth day from the sale of the property. Thus, the purchaser has to deposit 25% of the sale amount immediately on declaring to be the purchaser and the full amount of the purchase-money shall have to be paid by the purchaser into the Court before the Court closes on fifteenth day from the sale of the property.

In the present case admittedly the purchaser - Respondent No. 1 deposited 25% of the amount on 03.11.2011 and did not deposit 25% of the amount as required under Order 21 Rule 84 of CPC immediately. The auction purchaser was required to deposit 25% of the amount the day on which he was declared purchaser i.e., 18.10.2011. Even the balance 75% of the amount has not been deposited as required under Order 21 Rule 85 of CPC. The full amount of the purchase-money in the present case has been deposited after the period prescribed/provided under Order 21 Rule 85. Therefore, there is non-compliance of Order 21 Rule 84 and Rule 85 of CPC.

In the case of Manilal Mohanlal Shah and Ors. v. Sardar Sayed Ahmed Sayed Mahamad and Ors., it is observed and held that the provision regarding the deposit of 25% of the amount by the purchaser other than the decree-holder is mandatory and the full amount of the purchase money must be paid within fifteen days from the date of the sale. If the payment is not made within the period of fifteen days, the Court has the discretion to forfeit the deposit, and there the discretion ends but the obligation of the Court to resell the property is imperative.

There is non-compliance of mandatory provisions of Order 21 Rule 84 and Order 21 Rule 85 and therefore, the sale was vitiated. The impugned judgment and order passed by the High Court is set aside. The order passed by the lower Appellate Court is restored. It will be open for Respondent No. 1 to get back the amount deposited by him, lying with the Executing Court. Appeal allowed.

Tags : Sale Non-compliance Mandatory provisions

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