P L D 1977 Lahore 542 (PLP)

Dates of hearing : 7th, 13th July; 30th September and 27th October 1976. The facts relevant to this Execution First Appeal are that respon dent No. 1 obtained an ex parte decree against the appellant on the 24th of November 1964, for recovery of a sum of R.s. 60,476.33 from the Civil Court at Lyallpur. On an application for execution of this decree, a precept was issued by the Lyallpur Court to the civil Courts at Lahore on the 13th of March 1965, to attach some property. This petition having been dismissed, a new application for execution was submitted in October 1965. and this time a Bungalow No. 4-L Gulberg-II. Lahore was attached. Some application for stay was submitted by the appellant on the 23rd of June 1973. However, the Bungalow was put to sale through auction on the 1st of December 1973. The highest bid was given by respondent No. 2 for a sum of Rs. 70,

000. He did not, however, deposit 25 % of this bid as required by Order XXI, rule 84 which makes it obligatory upon the auction purchaser of immovable property to pay immediately after the declaration of purchase in his name a deposit of 25 %. of the amount of his purchase money to the Officer or other person conducting the sale. It further provides that in default of such deposit the property shall forthwith be resold.

2. At the time of sale, an objection petition of the National Bank of Pakistan was pending before the executing Court in regard to a claim about the property being subject to mortgage. On the 3rd of December 1973, the auction-purchaser submitted an application for permission to deposit the full value of auction sale amounting to Rs. 70,

000. The learned Senior' Civil Judge passed a strange order which is contrary not only to rule 84 of Order XXI, but also rules 85 arid 86 thereof. Rule 85 provides that full amount of purchase money payable shall be paid by the purchaser into the Court before the Court closes on the 15th day from the sale of the property. Rule 86 is about default of payment within the period mentioned' in rule 85, and provides that in such case the deposit may, if the Court thinks fit, after defraying the difference of the sale, be forfeited to the Government and the property shall be resold. It further provides that the defaulting purchaser shall forfeit any claim to the property or to any part of the sum for which it may subsequently be sold. Ignoring the provisions of rules 84 to 86 and without issuing notice to the persons who were affected by his order, the learned Senior Civil Judge held that since the auction still remained to be confirmed and an objection of the National Bank of Pakistan was also pending. no order could be passed for deposit of auction money. He directed this matter to be fixed for hearing with the Execution case on the 14th of December 1973, which incidentally was the date fixed for the hearing of the objection petition of the National Bank of Pakistan.

3. The objection petition of the National Bank of Pakistan was dismissed on the 26th of November 1975. The auction-purchaser did not make any deposit even within 15 days therefrom. On the 9th of December 1975, an application was submitted by the decree-holder (respon dent No. 1) praying for confirmation of the sale and for a direction to the purchaser to deposit the purchase money in Court. A notice was issued on this application only to the auction-purchaser. The matter came up before the Court on the 10th of December 1975, on which date the learned Court first confirmed the auction without any payment and then directed the auction-purchaser to make the deposit by the 20th of February 1976, on which date the deposit was made. It is unnecessary to make a reference to any other objection. The material objection petition is the one dated 19th February 1976, submitted by the appellant under Order XXI, rule

90. C. P. C. This application was dismissed by the impugned order dated 27-3-1976. The ground for dismissing the application was inter alia that the petition was, moved after confirmation of the sale and deposit of Rs. 70,000 as auction money. It was further held that rule 90 can apply only to either an application by the decree-holder or such an application by any person entitled to a share in a rateable distribution of assets to set aside the salo on ground of material irregularities and fraud; this rule does not allow a judgment-debtor to present such a petition. It was urged before the Executing Court that the auction had taken place in violation of the stay order dated 22-6-1973, but this argument was repelled on the ground that since the same officer who had passed the stay order had ordered the sale to be conducted, the order dated 22-6-1973 would be deemed to have been vacated. It was also argued that a stay order dated 2Q-11-1973 passed on the objection petition of the National Bank of Pakistan had ;also been violated. This argument was also held to be untenable for the reason that' the stay order in favour of the Bank was subject to the communication of" the order to the auctioneer by a dastl robkar, but there was no proof that the order was ever brought to the notice of the auctioneer. An objection was also taken to the failure of the auction-purchaser to deposit the auction money within 15 days from the sale of the property, but this was not allowed to be urged since the point was not taken specifically in the objection petition. It was further observed that this objection had not been raised by the judgment-debtor before the deposit of the auction money and it was not, therefore, competent.

4. After part of the arguments had been heard, the National Bank of Pakistan applied by an application C. M. 5825-C/1976 for being impleaded as a respondent in the case. I allowed this petition on the 27th of October 1976, and gave a hearing to the learned counsel for the Bank also.

5. The learned counsel for the appellant argued inter alia that the deposit having not been made as required by rules 84 and 85, the auction was a nullity and the property can at the most be put to afresh auction. He also argued that although the value of the property was fixed by the Court at a sum of Rs. 3,00,000, but the same was sold by an illegal suction for a sum of Rs. 70,000 only and despite this the auction has been confirmed. Reference was also made to the stay orders against auction which were violated in this case.

6. The learned counsel for respondents Nos. 1 and 2 on the other hand argued that the point about the applicability of rules 84 and 85 had not been taken in the objection petition and could not be allowed to be raised either before the learned Senior Civil Judge or before this Court. They also argued that non-compliance with these provisions was at the most an irregularity and did not vitiate the auction. The locus standi of the appellant to apply under rule 90 was also attacked. It was further argued that the objection application was barred by time. In this connection it was urged that although the learned counsel for the appellant had inspected the file in May 1974, but the appellant did not raise any objection within a reasonable time thereafter.

7. The learned counsel for the Bank only urged that the sale in favour of respondent No. 2 should be treated to be a sale subject to the charge of mortgage.

8. There is much force in what the learned counsel for the appellant urged but in my view the matter can be decided on consideration of the provisions of rules 84 and

85. There is some divergence of opinion on the question whether the non-compliance with the provisions of rule 84 and non-payment of 25 per cent. of the purchase money by the auction-purchaser to the Officer conducting the auction is only an irregularity. In All Muhammad v. Alia Khanam A I R 1915 Oudh 140 it was held that non-deposit of 25 per cent. vitiates the sale. But this authority was dissented from in Jangli Bakhsh Singh v. Budhan Lal and others A I R 1933 Oudh 345 in which reliance was placed upon Ahmad Bakhsh v. Lalla Prasad I L R 28 All. 238, Behari Lal v. Ram Chand (1928) 110 I C 773, Bhim Singh v. Sarwan Singh I L R 16 Cal. 38 and Venkata v. Shama I L R 14 Mad. 227.

9. The Supreme Court of India has now taken the view that non-com pliance even with rule 84 vitiates the sale since the provision about deposit of 25 per cent. is mandatory. Manilal Mohanlal Shah and others v. Sardar Sayed Ahmed Sayed Mahmad and another AIR 1954 S C

349. It appears from the authorities produced at the bar that the Lahore High Court held this defect as an irregularity only. Ch. Muhammad Ali v. Ram Das A I R 1937 Lah.

113. In Mathura Das Prabhu Dayal v. Brij Rani and others A I R 1929 Lah. 492 it was held that the payment of 25 per cent. must be made as provided in rule 84 unless dispensed with by the Court. This dispensation may be express or implied. In Punjab National Bank Ltd. v. Sundar Singh and others A I R 1929 Lah. 673 it was held that if the bid is not finally accepted by the Court, the auction-purchaser cannot be called upon to deposit 1/4th of the purchase money unless be is declared by the Court to be an auction-purchaser. In Feroz Khan v. The Province of West Pakistan and others P L D 1959 Quetta 4 the deposit under rule 84 was treated to be only a deposit in the nature of an advance or earnest money. The view that violation of rule 84 is merely an irregularity may be justified on these grounds. In Boota Mal Charandas v. Nand Ram Santo Mal A I R 1939 Pesh. 36 also the same view is taken.

10. In regard to the violation of rule 85, however, there is almost a consensus that the provisions therein are mandatory. I have already referred to Manilal Mohanlal Shah etc. v. Sardar Sayed Ahmad Sayed Mahmad etc. a case decided by the Supreme Court of India, in which rule 85 was held to be mandatory and violation of that rule was held to have the effect of rendering the sale nugatory. This view was followed in Kishan Lal v. Har Prasad AIR1963Al1.319. This view is not new. It was taken in Munshi Muhammad Ali v. Kibriya Khatun 15CWN350, Shirimati Amra Purna Dasi v. Bizle Karim Mian A I R 1941 Cal. 85, Nawal Kishore arid others v. Buttu Mal and another A 1 R 1935 All.

243. Haji Inam Ullah v. Muhammad . Idris A I R 1943 All. 282, A. R. Davar v. Jhinda Rapp A I R 1938 Lah. 198, Feroze Din Faiz v. Chaman Lal and others P L D 1953 Lah. 83 and Feroz Khan v. The Province of West Pakistan and others. 10-A. There are some authorities in which it has been held that it is open to the judgment-debtor to waive the objection on the basis of rule

85. In Nathu Mal v. Malawa Mal and others A I R 1931. Lah. 15 it was observed that the auction purchaser had no control over the Court au regards money and in such circumstances it may be held that the provisions of rule 85 were intended to be directory. It was, however, observed that the time for deposit cannot be extended without the consent of the decree-holder and judgment debtor. If it is so extended, the case would be one of material irregularity within the meaning of rule

90. Such cases were noticed in A. R. Davar v. Jhinda Ram also but despite this it was held that the provisions of rule 85 are mandatory. In A. R. Diva, v. Jhirula Ram. Feroze Din Faiz v. Chaman Lal and others and diandal Mohanlal Shah etc. v. Sardar Sayed Ahmad Sired Mahmad etc. it was held that the Court has no jurisdiction to depart from the provisions of rule

85. The implication is clear that even the order of the Court would be without jurisdiction. There is one case however, i.e. Ch. Abdul Rashid and others v. The New Bank of India Ltd. and others P L D 1959 Lah. 224 where it was held that if the auction-purchaser can establish that the judgment-debtor and the decree-holder had agreed that the balance of the sale price may be deposited at a time fixed by Order XXI. rule 86. or that the auction-purchaser acted on the order of the Court which extended time fixed by Order XXI, rule 86 and the deposit was made within the period fixed by the Court, the provisions contained in rule 86 would become inoperative on the principle that the act of the Court should not prejudice the party concerned. The view that provisions of rules 85 and 86 are mandatory was not dissented from in this case also.

11. It is clear from these authorities that the provisions of rules 851 and 86 are mandatory and a waiver of these provisions, is possible only if the decree-holder and the judgment-debtor both agree to extension of A time In such a case as observed in A. R. Davar v. Jhinda Ram on the basis of Kalipada Mukerji v. Basonta Kumar 1 L R 59 Cal. 117 and Subramanyam Nanbudri v. Y. Kamathi A I R 1923 Mad. 48 that the waiver will amount to agreeing to the old sale being treated as a new sale. It is however, difficult to agree with the proposition that an order passed by the Court without any notice to the judgment-debtor B and the decree-holder, without giving them an opportunity of being heard and contrary to the provisions of rules 85 and 86 can bind them or can attract the principle that a party should not be prejudiced for the acts of the Court.

12. In the present case it is clear that no such notice was ever given to the judgment-debtor or even a decree-holder when the order was passed C for putting off the deposit on the 3rd of December 1973. No notice was issued to the judgment-debtor on the application of the decree-holder on which the order dated 10-1-1976 confirming the auction was passed. in these circumstances the question of waiver will not at all arise. On the other band if once it is conceded that any departure from the provisions of rules 84 to 86 can be made only after notice, the order passed without such notice to any interested party would be a nullity.

13. In the present case the learned executing Court does not appear to be cognisant either of the provisions of rules 84 to 86 or the provisions of rule

92. Although rule 84 of Order XXI, provides for deposit of 25 % immediately after a declaration of the auction-purchaser as such purchaser, and although it is not disputed that respondent No. 2 was considered by the Court to be an auction-purchaser before the application dated 3rd of December 1973, was submitted, yet a deposit of 25 per cent. of the sale money was never made or insisted upon to be made. Rule 85 provides full amount of purchase money to be deposited before the Court closes on 15th day from the sale of the property. In cane of non-deposit there is no discretion with the Court to extend the period of deposit since rule 86 directs that in default the property shall be resold. The only direction with the Court is to forfeit the money already deposited or to decline to forfeit it. The fixation of a period of time in rule 85 and the penalty for non-deposit within that period which is couched in mandatory terms, leaves no manner of doubt that the provisions about such deposit are mandatory in character. Notwithstanding this the learned executing Court passed an order deferring the deposit till after the decision o; the objection petition of the National Bank of Pakistan. Even if it is assumed that the Court could pass such order or that the auction-purchaser should not be penalised for the action of the Court, the principle of reasonable time must apply to the case and it would clearly be the duty of the auction-purchaser tot make deposit of the purchase money within a reasonable time from the date of dismissal of the objection petition, on which account the deposit was not allowed to be made. If this principle is applied. the sale having been effected on the 1st of December 1973, and the order of the Court declining to allow the auction-purchaser to make the deposit having been passed two days later on the 3rd of December 1973, respondent No. 2 had thirteen days more left for making the deposit from the date of dismissal of the objection petition of the National Bank of Pakistan. If the matter is considered from this point of view, the deposit should have been made by the auction purchaser on or before the 9th of December 1975. The property should thereafter have been resold through auction.

14. The principle of reasonable time was enunciated by their Lordships of the Supreme Court in Shah Wali v. Ghulam Din P L D 1966 S C 983, Messrs Ansari Brothers, Radio Dealers, Lahore v. Holy Trinity Church Trust, Lahore P L D 1971 S C 700 and SyeJ Ghulam Shah Bokhari v. Muhammad Saeed 1972 S C M R

428. A reference may be made only to the facts in the case of Messrs Ansari Brothers. The case relates, to section 13(6) of the West Pakistan Urban Rent Restriction Ordinance, 1959 which provides that the Rent Controller shall direct the tenant to d,-posit. the arrears of rent by the date fixed by him and to deposit future monthly rent before the 5th day of each month. The penalty for default in making the deposit within the time fixed is the striking off the defence of' the tenant and passing of an order of ejectment. In the case before their Lordships of the Supreme Court by an order dated 3-12-1959, the Rent Controller directed the tenant to make the deposit up to the 6th of January 1960. Thus be was given 34 days. This order of the Rent Controller was suspended by the District Judge on appeal on the 4th of January 1960. He, however, dismissed the appeal on the 2nd of April 1960 Applying the principle of reasonable time their Lordships held that since the tenant could claim at the most a period of 34 days for deposit out of which 31 days had already elapsed between the order of the Rent Controller dated 3-12-1959 and the stay order of the appellate Court dated 4-1-1960, there were three days more left for making the deposit after the dismissal of the appeal, as such all the deposit should have been made within those three days. On this formula the deposit should have been made by the auction-purchaser by the 9th of December 1975. Thereafter he could not take advantage of the principle of immunity from loss arising out of action of the Court relied upon in Ch. Abdul Rashid etc. v. The New Bank of India Ltd. etc. P L D 1959 Lah.

201. On account of the non-deposit by the closing hours of 9th of December 1975, the sale became ineffective and a resale must have been ordered by the Court on the 10th of December 1975. The order passed on that date allowing the auction-purchaser another period of about 41 days to make the deposit is not justifiable under any provision of law, much less rule 85 which allows only 15 days for such deposit.

15. It is also clear from the sequence of rules 84 to 86 and 92 that an order of confirmation of sale cannot precede the deposit of value for which B the property is sold. It must follow the deposit. The order confirming the sale before the deposit was also without jurisdiction.

16. The order of the executing Court extending the time of deposit and confirming the sale prior to such deposit was clearly without jurisdiction and must be treated as a nullity, consequently there was no sale. In view of this finding it is unnecessary to consider the question whether rule 90 is applicable to such cases. The learned executing Court could not dispose of the poins about the sale being a nullity on the ground that it was not taken in the petition under rule

90. A request could be made orally to treat the sale as non-existing, void or nullity. It is also not necessary to consider the arguments of the learned. counsel for the National Bank of Pakistan in view of the Order I propose to make. I, therefore, allow this appeal and hold that there is no auction in favour of respondent No.

2. However, I leave the parties to bear their own costs. S. A. H. Appeal allowed.