1. Judgment-debtors Suit No. 157 of 1969, decided on 10th August, 1981.
(a) Civil Procedure Code (V of 1908)-
0. XXI, rr. 85, 86 & 90 read with Ss. 148 & 151-Provision with regard to payment of 75 % of balance purchase money contained in r. 85-Mandatory and not merely directory-Non-compliance of such provision renders sale void-Court under obligation in such circum--stances to order resale of property in terms of r. 86-Non-payment of balance of purchase money-Not an irregularity in connection with "publishing and conducting of the sale" so as to attract provisions of r. 90- Application for resale of property either by decree-holder or judgment-debtor-Not necessary and Court itself bound to order for resale-Court, held, not empowered under S. 148 or 151 of Civil Procedure Code, 1908 to extend time fixed under rules for payment of balance of sale price.
2. Manilal Mohanlal v. Syed Ahmed AIR 1954 SC 349; Bheemsingh v. Sooransingh 16 Cal. 33; Dawar v.
3. Jhandaram AIR 1938 Lab. 198; - Munshi Muhammad Ali v. Kibria Khatoon 15 C W N 350; Anna Purna Dasi v. Bazley Karimi Mian AIR 1941 Cal. 85; Nawal Kishore v. Buttumal AIR 1935 All. 243; Haji Inamullah v. Muhammad 1dris AIR 1943 All. 282 and Bashir Ahmed v. Rashid Ehsan PLD 1979 Lab.
4. 125 ref.
5. Nathumal v. Malawa Mal AIR 1931 Lab. 15 and Abdur Rashid v. New Bank of India Ltd. PLD 1959 Lab.
6. 224 distinguished.
(b) Maxim ---"Actus curiae neminem gravabit" (act of Court should prejudice no man)-Application-Maxim, held, applies to cases where party shown in first place to have acted bona fide on order of Court and in no way responsible for passing of such order and in second place shown to have been in a position to meet his obligations under law but non-compliance resulted due to orders of Court.
7. Mansoorul Arfin for the Decree-holders.
8. A. I. Chundrigar and Z. U. Ahmad for the=Judgment-debtors.
9. Iqbal Ahmad for Auction-Purchaser.
10. This order will dispose of C. M. As. No. 239/78, 121/ 79 and 122/79. The first mentioned application under Order XXI, rules 84 to 86 read with section 151 and Order XLVII, rule 1(b), C. P. C. Has been filed by defendant/ judgment-debtor No. 1, while the last-mentioned two applications have been filed by judgment-debtor No. 3 under Order XXI, rules 84 to 86 read with section 151 and Order XLVII, rule 1(b), C. P. C., and under section 47 read with section 151, C. P. C. In substance the prayer in all the three above-mentioned applications is that the order dated 16-12-1978 which was passed by a learned Single Judge of this Court without notice to judgment-debtors be recalled and that the auction dated 30-11-1978 held by the Court pursuant to a proclamation of Sale issued on 29-11-1978 be held to be void and the property be re-sold in auction.
11. I have heard Mr. A. I. Chundrigar and Mr. Z. U. Ahmad, the learned counsel for judgment-debtors No. 1 and 3 respectively, Mr. Iqbal Ahmad, the learned counsel for auction-purchaser and Mr. Muhammad Salim, the learned Advocate for the decree-holders.
12. The property in this case, which is a factory situated on Plot No. S/16 measuring 1.47 acres, S. I. T. E., Mauripur Road, Karachi, together with all the structures, construction, machinery, fittings and fixtures was ordered to be sold in realization 'of the dues amounting to Rs.7,03,497.03 in the above execution application filed by the plaintiff/decree-holders. The procla--mation of sale dated 29-11- 1978 putting the above property to sale on 30-11-1978 was made under the orders of the learned Single Judge dated 25-11-1978. The auction purchaser gave the highest bid of Rs.8,80,000 in the auction held on 30-11-1978 which was accepted by the Nazir of this Court and upon 'acceptance of the bid the auction-purchaser paid a sum of Rs.2,20,000 being the 1/4 of the auction price. There was some dispute with regard to the date of payment of this amount as the official receipt of this amount issued by the Nazarat is dated 2-12-1978, but Mr. Iqbal Ahmad, the learned counsel for the auction-purchaser produced before me the original datcha receipt issued to the auction- purchaser on 30-11-1978 immediately after auction by the Nazir of this Court acknow--ledging receipt of the sum of Rs.2,20,000. This receipt produced by the learned counsel for the auction- purchaser further mentioned that the regular pucca receipt will be issued on 2-12-1978 as 1-12-1978 is Friday. After seeing the original katcha receipt dated 30-11-1978, which I have kept on record, the learned counsel for the judgment-debtors did not press their objection that 25 per cent of the bid money was not paid on acceptance of the bid by the Nazir. It appears that the auction-purchaser was unable to deposit the balance of the sale consideration amounting to Rs.6,60,000 within fifteen days of the auction in Court, as required under Order XXI, rule 85, C. P. C. And as such on 14-12-1978, which was the last day for deposit of this balance, he filed an application (C. M. A. No. 729/78) under section 148 read with section 151, C. P. C. Praying that he may be permitted to deposit only a sum of Rs.2,20,000 towards the balance of sale price, which he was able to arrange and for payment of the remaining amount he requested for extension of time for a period of one month.
13. This application of the auction-purchaser was called in Court for orders before the learned Single Judge on 16-12-1978 and was granted on the following terms :- "16-12-1978 Mr. Iqbal Ahmad for the Auction-Purchaser.
14. Nemo for the Decree-holders.
15. Application is granted as prayed."
16. As the above application of auction-purchaser was granted by the learned Single ,fudge without notice to judgment-debtors; on 21-12-1978 judgment --debtor No. 1 filed C. M. A. No. 239/78 contending that order granting time to auction-purchaser was a nullity as it was passed without notice to him and that the Court had no jurisdiction to extend the time for, pay--ment of the balance amount which could be paid upto the 15th day from the date of auction, under the law.
17. Besides, objection was also raised that the proclamation of sale was published in the local newspaper on 29-11-1978 while the auction was fixed on 30-11-1978 and since the period allowed between the publication of proclamation and the auction sale was so short, there was no opportunity for the intending bidders to inspect the property and machinery and therefore, the property which was worth more than Rs.20,00,000 was sold for a paltry sum of Rs.8,80,000. This application of judgment-debtor No. 1 was followed by C. M. A. No. 121/79 dated 21-2-1979 and C. M.
18. A. No. 122/79 dated 20-2-1979 both filed by defendant/judgment --debtor No. 3 in which similar contentions as were raised by judgment-- debtor No. 1 in his application C. M. A. No. 239/78, were urged.
19. At the hearing of these applications the learned counsel for the defendant/judgment-debtors did not press their prayers for review of the order dated 16-12-1978 and confined their objection to the validity of sale on account of failure of auction-purchaser to pay the balance 75 per cent of the auction price within the period allowed under Order XXI, rule 85, C. P. C.
20. The admitted position in the case is that the auction took place on 30-11-1978 and on the same day 25 % of the auction price was deposited, 15th day from the date of auction expired on 14-I2-1978 and it is common ground between the parties that on 14-11-1978 out of the balance 75 of auction price amounting to Rs.6,60,000 only a sum of Rs.2,20,000 was deposited by auction-purchaser in Court and the remaining balance amoun--ting to Ra. 4,40,000 was deposited after expiry of the period allowed under rule 86 of Order XXI, C. P. C. But within the extension allowed by the Court on 16-12-1978. I may mention here that the learned counsel for the judgment --debtors had initially disputed that this balance amount of Rs.4,40,000 was deposited/paid by the auction-purchaser within the time allowed by the Court but when Mr. Iqbal Ahmad, the learned counsel for the auction-- purchaser produced in Court the original receipt passed on to auction purchaser by the Nazir of this Court on 13-1-1979 acknowledging receipt of two pay orders in the sum of Rs.3,00,000 and Rs.1,40,000 respectively, the learned counsel for judgment-debtors did not press further this objection. The original receipt produced by Mr. Lqbal Ahmad is kept on record. The questions therefore, which need determination in this case are: (1) Whether the Court had the jurisdiction to extend the time for payment of the balance 75 % of the auction price in view of the provision of Order XXI, rule 85, C. P. C. And (2) whether the sale in favour of the auction --purchaser became null and void on account of failure to deposit the balance of the purchase money on the 15th day from the date of auction and therefore the Court was bound to resell the property in term of the provisions of rule 86 of Order XXI, C. P. C. The contention of the learned counsel for the auction- purchaser is that the time having been extended by the Court rightly or wrongly and the auction- purchaser having complied with the same, he should not be made to suffer on the maxim actus curiae neminem gravobil (no one should be prejudiced by the act of Court). The further contention of the learned counsel for the auction-purchaser is that the extension of time by the Court in disregard of the provision of Order XXI, rule 85, C. P. C. Is at best an irregularity and therefore before an auction sale is set aside on the ground of such irregularity the defendant/ judgment debtor must satisfy the Court that they have suffered substantial injury on account of that irregularity. The learned counsel for the auction purchaser, in support of his contention, has relied upon the case of Nathumal v. Malawa Mal (AIR 1931 Lah.15), in which Tapp, J. Sitting singly, held that the provisions of Order XXI, rule 85 are directory in nature and not absolutely mandatory. The facts of this case are, however, quite distinguishable as the auction --purchaser did tender the 3/4 of the purchase money within the period prescribed by law but it was not accepted by the Court and the time was extended on account of the pendency of the objection to the sale. It was in these circumstances that the Court refused to set aside the sale when an objection was taken that the balance of the purchase money was not deposited by the auction-purchaser within the time. I may also mention here that the observation of the Tapp. J. In the above case with regard to the directory nature of Order XXI, rule 85 were not approved by the Supreme Court of India in the case of Mandal Mohanlal v. Syed Ahmad (AIR 1954 SC 349). The view expressed in the case of Bheemsingh v. Sooransingh (16 Cal. 33) by the Court that extension of time granted by the Court for deposit of balance of sale price in disregard of the provisions of Order XXI, rule 86, C. P. C. Was a material irregularity was also not approved by the Supreme Court of India in the case of Manilal Mohanlal. The view expressed by another Bench of Lahore High Court in case of Dawar v. Jhandaram (AIR 1938 Lab. 198), was however, quoted with approval by the Indian Supreme Court in the case of Manilal Mobanlal. The view expressed in Dawar's case by the Lahore High Court was that the Court had no jurisdiction to extend the time for the payment of balance of the purchase money under Order XXI, rule 85, C. P. C.
21. And in case of default re-sale must be ordered. Manilal Mohanlal's case also approved the decisions in the cases of Munshi Muhammad Ali v. Kibria Khatoon (15 C W N 350), Anna Purna Dasi v. Bazley Karimi Mian (AIR 1941 Cal. 85), Nawal Kishore v. Buttumal (AIR 1935 All. 243) and Haji lnamullah v. Muhammad 1dris (AIR 1943 All. 282). In all these cases approved by the Supreme Court of India the Courts in India took the view that the provisions contained in Order XXI, rule 85 were mandatory in nature and violation thereof rendered the sale void and that the Court in such an event was under an obligation to order resale of the property and no application to the Court in that behalf was necessary by any party. The learned counsel for the auction-purchaser also relied on the case of Abdur Rashid v. New Bank of India Ltd. (PLD 1959 Lab. 224), to contend that where a party acted upon the order of Court extending the time for payment of balance of sale price, the sale should not be set aside. The facts of Abdur Rashid's case are, however, quite distinguishable.
22. The property in that case was sold in auction on 17-11-1956. The balance of the purchase money was to be paid on 3-12-1956. Before the auction the judgment-debtor had applied on 29-10-1956 for stay of the sale on the ground that the property was being treated as evacuee property. On the 30-11-1956 when the matter came up before the Court the auction-purchaser, in view of the pendency of the objection. Of judgment-debtor, made an oral request to the Court that as the property was being treated as an evacuee property the time for payment of balance of the sale price may be extended until decision on the objections of judgment-debtor. This request by the auction-purchaser for extension of time was made in presence of the counsel for judgment debtor and decree-holders who did not object to the request of auction-- purchaser. On 14-12-1956 the judgment-debtor filed an application contending that the order dated 30-11-1956 granting extension of time to auction purchaser to pay the balance of sale price was without jurisdiction and the executing Court agreeing with this contention held the sale as void and ordered resale of the property. It was in these circumstances the learned Judges of the Division Bench in Abdur Rashid's case held that the confirma--tion of sale in such circumstances should not be refused. In my humble view the decision in the above Lahore case appears at page 228 & 229 of the report in paragraph 7, which is as follows :- "7. Considering the matter from all aspects I have arrived at the conclusion that though the provisions contained in Order XXI, rule 85 of the Code of Civil Procedure to the effect that unpaid balance of the sale-price of property sold in execution of a decree be paid within the time specified are mandatory in their terms, yet if the persons for whose benefit that provision has been made agree to the extension of time, the order of the executing Court extending the time cannot be considered to be a nullity. Though not a case under Order XXI, rule 86 of the Code of Civil Procedure, yet Ch. Muhammad Ali v. L. Ram Dass (1) supports my view because therein it was held that if after the auction sale finishes the auction-purchaser does not deposit 114th of the sale price with the person conducting the auction because the judgment-debtor agrees that the money may be put in later, the deposit could not be deemed to contravene any provision of law. I am further clear in my mind that if the provisions contained in Order XXI, rule 86 of the Code of Civil Procedure are not complied with by an auction-purchaser because the Court had extended the time during which the balance of the sale-price may be deposited in Court, the auction-purchaser may deposit the -money after the time fixed by Order XXI, rule 86 but within the time fixed by the execu- -ting Court and non-compliance with the provisions of Order XXI, rule 86 in cases of that type cannot be visited with the penalty prescribed by Order XXI, rule 86 of C. P. C."
23. I may further state here that the learned Judges in Abdur Rashid's case referred to the decision in the case of A. R. Dawar v. Jhanda Ram which was approved by Supreme Court of India in Manilal Mohanlal's case but did not dissent from it and distinguished it by making the following observation which appears at page 228 of the report:--- "I am, however, doubtful whether the decision would have been same if the judgment-debtor and decree-holder bad appeared before the Court and agreed to the time for depositing the balance of sale price being extended."
24. The decision in Abdur Rashid's case was considered by another Division Bench of Lahore High Court in a later case reported as Bashir Ahmed v. Rashld Ehsan (PLD 1979 Lab. 125) and the learned Judges made the following observations with regard to the decision in Abdur Rashid's case at page 125 of the report :-- "The decision in Ch. Abdur Rashid and others v. The New Bank of India Ltd. Concerns an identical provision of law viz. Order XXI. Rule 86. The balance of the auction price was to be paid by 3rd December, 1956 but was actually despoiled on 30th January, 1957. Three factors intervened, a request by the auction-purchaser for extension of time, the Court doing so, and the omission of the judgment-debtor to object to it although the first two events took place in his presence. The position of the learned counsel for the judgment-debtors was that though no objection had been raised to the request of the auction-purchasers for extension of time, there was no consent by the judgment-debtors or their counsel, and, therefore, the mandatory provisions of Order XXI, rule 86 of C. P. C. Must have full effect with the result that the property must be resold. The Court repelled this contention observing his silence when the request was made and even when the executing _ Court passed an order extending the time speaks volumes and it the omission to object is construed to amount to consent the judgment-debtors have none but themselves to thank for it."
25. The operative part of the decision in Bashir Ahmad's ease which appears at page 126 of the report is, however, in these terms "The upshot of the entire discussion is that agreeing with the learned Judge in Chamber that non- compliance with provisions of Order XXI, rule 85 renders the sale void, we hold further that in this case the non-compliance was occasioned entirely by the act of the Collector which was with jurisdiction but erroneous in law. The Collector while executing a decree under section 141, Land Revenue Act, 1887, acts as a statutory functionary of the Court and his mistakes are fully covered by the maxim. These two appeals are, therefore, allowed with costs and the judgment under appeal is set aside and the applications filed by the judgment-debtors under Order XXI, rule 85, C.
26. P. C. Over eight years after the confirmation of sale are dismissed."
27. I accordingly hold that the sale in favour of the auction-purchaser was rendered void as a result of non-payment of the balance of auction rice on 14-12-1978 in terms of the provisions of Order XXI, rule 85, C. P. C. And the property is, therefore, ordered to be put to re-sale in accordance with the law. However, keeping in view the circumstances of the case, the auction-purchaser will not be liable to the penalty of forfeiture of any part of his deposit as contemplated under Order XXI, rule 86, C. P. C., which shall be returned to him forthwith. The three applications filed by the judgment- debtors are disposed of accordingly.