CPC - Setting Aside of Sale

PROJECT REPORT ON SETTING ASIDE OF SALE

TABLE OF CONTENTS

TABLE OF CASES......................................................................................................2

SYNOPSIS...................................................................................................................3

Abstract.....................................................................................................................3

Research Questions...................................................................................................3

Research Methodology.............................................................................................3

Topic Scheme............................................................................................................3

INTRODUCTION........................................................................................................4

SETTING ASIDE OF SALE ON DEPOSIT................................................................4

Nature and Scope......................................................................................................5

Conditions.................................................................................................................6

Limitation Period......................................................................................................7

SETTING ASIDE SALE ON GROUNDS OF IRREGULARITY OR FRAUD..........9

Nature and Scope......................................................................................................9

Conditions...............................................................................................................10

Limitation Period....................................................................................................14

SETTING ASIDE SALE WHEN JUDGMENT-DEBTOR HAS NO SALEABLE INTEREST.................................................................................................................15

Nature and Scope....................................................................................................15

Saleable interest......................................................................................................16

Limitation Period....................................................................................................16

CONFIRMATION OF SALE....................................................................................16

Nature and Scope....................................................................................................17

Notice......................................................................................................................18

CONCLUSION..........................................................................................................19

BIBLIOGRAPHY......................................................................................................20

Books & Statutes.....................................................................................................20

Articles....................................................................................................................20

Weblinks.................................................................................................................20

CODE OF CIVIL PROCEDURE, 1908 Page 1


TABLE OF CASES

Dadi Jagannadham v. Jammulu Ramulu, 2001(4) RCR (Civil) 267.......................8

Desh Bandhu Gupta v. N. L. Anand, (1994) 1 SCC 131......................................12

Ganesh Pillai v. Sudevan, AIR 2013 CC 1982.....................................................18

Ganpat Singh v. Kailash Shankar, AIR 1987 SC 1443...........................................4

Guttikonda Venkataramaiah v. Godavarthy Venkateswarlu,

AIR 2014 SCW 6196 SC......................................................................................12

Kadiala Rama Rao v. Butala Kahna Rao, (2000)3 SCC 87..................................10

Kayjay Industries (P) Ltd. v. Asnew Drums (P) Ltd., (1974) 2 SCC 213.............18

Kumarasami Chetti v. T.R. Subramania, AIR 1958 Mad 671..............................15

Lalla Bunseedhur v. Koonwar Bindeseree Dutt, (1866)10 Moo IA 454 (PC)......13

Laxmi Devi v. Mukand Kanwar, AIR 1965 SC 834.............................................10

Mobarak Ali v. Dinabandhu Sahu, AIR 1953 Ori 296.........................................12

Mohan Manucha v. Manzoor Ahmad, AIR 1943 PC 29.........................................5

N. G. George v. Shirley Varkey, 2010(7) R.C.R. (Civil) 467...............................14

Nani Gopal Paul v. T. Prasad Singh, (1995) 3 SCC 579........................................7

Ouseph Ouseph v. Devasia Chacko, AIR 1953 Trav-Co 619...............................16

P.K. Unni v. Nirmala Industries, (1990) 2 SCC 378...............................................7

Ram Karan Gupta v. J. S. Exim Ltd, AIR 2013 SC 24...........................................8

Ram Rijhan v. Razia Begum, AIR 1943 Pat 88....................................................13

Saheb Khan v. Mohd. Yusufuddin, AIR 2006 SC 1871.......................................13

Satish Chandra v. Kumar Satish Kantha, AIR 1923 PC 73..................................13

Shyam v. Shyam Behari, (1970) 2 SCC 405.........................................................14

T. L. Jagannatha v. B. H. Krishna, AIR 1962 Mad 99........................................5, 7

Tribhuvandas Purshottamdas Thakur v. Ratilal Motilal Patel,

1968 AIR (SC) 372.............................................................................................6, 7



SYNOPSIS

Abstract

Order 21 of the Code of Civil Procedure deals with the solemn act of

execution of the decrees passed by the Courts from grassroots to the top. Order 21

can be divided into various categories out of which Rules 89 to 92 deals with the

category of setting aside of sale. When a property is sold in execution of a decree, an

application for setting aside sale may be made under these provisions by the persons

affected and the grounds mentioned therein within the prescribed period of limitation.

The provisions of Rules 89 to 91 of Order 21 as to setting aside execution sale are

exhaustive.

Research Questions

1. What are various legal provision provided for setting aside of sale in the Code of Civil Procedure, 1908?

2. What are the objectives of instituting such provisions in the Code and what is their scope?

Research Methodology

A descriptive and doctrinal research methodology was used for this project.

Concerned statute and books of renowned authors were looked into for the

compilation of the present study. Several websites were looked into for

understanding the concept of present study. Moreover various articles and case laws

were referred inorder to clear the law point at the present time. Referring to all the

primary and secondary material mentioned above, the present study has been

compiled and presented to the concerned.

Topic Scheme

Topic 1 – Setting aside of sale on depositTopic 2 – Setting aside of sale on grounds of irregularity or fraudTopic 3 – Setting aside of sale when judgment debtor has no saleable interest



Topic 4 – Confirmation of sale



INTRODUCTION

Order 21 of the Code of Civil Procedure deals with the solemn act of

execution of the decrees passed by the Courts from grassroots to the top. Ultimately,

after the judgment attains finality or where there is no stay in the execution by any

Appellate or Revisional Court, it is the Court of original jurisdiction which performs

this sacred act of implementation of the execution. It has been often seen that in view

of less number of units prescribed for execution of the decree, the executions are not

given that much time and importance as required and desired. As such, the decrees

are required to be executed with force, so that the Decree Holder having a document

containing declaration of his rights may not feel cheated or helpless having earned no

fruits of the lis got settled by him from the Court even after spending decades

altogether.1

Order 21 can be divided into various categories out of which Rules 89 to 92

deals with the category of setting aside of sale. When a property is sold in execution

of a decree, an application for setting aside sale may be made under these provisions

by the persons affected and the grounds mentioned therein. Such an application has

to be made within the prescribed period of limitation i.e. 60 days as provided for in

Art. 127 of The Limitation Act, 1963. But an application to set aside sale of

immovable property cannot be made on any other ground not covered by Rules 89 to

91.2 In other words, the provisions of Rules 89 to 91 of Order 21 as to setting aside

execution sale are exhaustive.

SETTING ASIDE OF SALE ON DEPOSIT

Rule 89 Order of the Code reads as:

89. Application to set aside sale on deposit.- (1) Where immovable property

has been sold in execution of a decree, any person claiming an interest in the 1 Adv. Niraj Jagtap, “Execution”, < https://nirajjagtap.wordpress.com/tag/movable-property> as accessed on 09/04/2015 at 2:00 P.M.2 Ganpat Singh v. Kailash Shankar, AIR 1987 SC 1443 at p. 1449.



property sold at the time of the sale or at the time of making the application,

or acting for or in the interest of such person, may apply to have the sale set

aside on his depositing in court,—

(a) for payment to the purchaser, a sum equal to five per cent of the purchase

money, and

(b) for payment to the decree holder, the amount specified in the proclamation

of sale as that for the recovery of which the sale was ordered, less any amount

which may, since the date of such proclamation of sale, have been received by

the decree holder.

(2) Where a person applies under rule 90 to set aside the sale of his

immovable property, he shall not, unless he withdraws his application, be

entitled to make or prosecute an application under this rule.

(3) Nothing in this rule shall relieve the judgment debtor from any liability he

may be under in respect of costs and interest not covered by the proclamation

of sale.

Nature and Scope

Rule 89 deals with the setting aside of sale on the deposit of the amount

specified in the proclamation of sale. The underlying object of this rule is to give a

judgment-debtor the "last chance" of getting the sale set aside before it is confirmed

by the court.3 It is intended to afford an opportunity to the judgment-debtor, even

after the property is sold, to satisfy the claim of the decree-holder and to compensate

the auction-purchaser by paying him five per cent of the purchase money. The rule

being in the nature of a concession must be strictly compiled with.4

The point that needs to be dealt with is that who can apply for setting aside the

sale. It is to be noted that any person claiming any interest as existing in the time of

the sale or at the time of making an application may avail the benefit of Rule 89. The

expression "interest" has a very wide import and should be construed liberally so as

3 Mohan Manucha v. Manzoor Ahmad, AIR 1943 PC 29 at p. 31.4 T. L. Jagannatha v. B. H. Krishna, AIR 1962 Mad 99.



to enable a party having any inchoate right to apply under this rule. Thus, following

persons are entitled to apply under Rule 89:

1. a judgment-debtor;

2. a co-sharer in the property;

3. a member of a Joint Hindu Family;

4. receiver;

5. a creditor of judgment-debtor;

6. a beneficial owner;

7. a lessee;

8. a mortgagee;

9. a person in possession of the property;

10. a benamidar, transferee, etc.

Conditions

Rule 89 provides for setting aside the execution sale on payment of five per

cent of the purchase price to the auction-purchaser and the entire amount specified in

the proclamation for sale to the decree-holder. In Tribhuvandas Purshottamdas

Thakur v. Ratilal Motilal Patel,5 the Supreme Court held that provisions of Rule 89

are not intended to defeat the claim of the decree-holder or the auction-purchaser

unless the decree is simultaneously satisfied. Rule 89, therefore, requires that two

primary conditions relating to deposit must be fulfilled, namely, (i) the applicant

must deposit in the Court five per cent of the purchase money for payment to the

auction purchaser, and (ii) he must also deposit the amount specified in the

proclamation of sale, less any amount received by the decree-holder since the date of

proclamation of sale for payment to the decree-holder.

The provision of the rule regarding the two deposits is mandatory and in case

of failure to comply with any of them no sale can be set aside.6 Such deposit must be

unconditional and not under protest. Further, it must be in cash and not by cheque or

Government promissory note.7 When the judgment creditor agrees to extend the time 5 1968 AIR (SC) 372.6 Ibid.7 T. L. Jagannatha v. B. H. Krishna, AIR 1962 Mad 99.



for payment of the amount for a specified period and in the meanwhile agrees to

receive interest accruing due on the amount of the decree, the condition requiring the

judgment debtor to deposit in Court for payment to the decree holder the amount

specified in the proclamation of sale for the recovery of which the sale was ordered

cannot be deemed to be complied with.8 It is sufficient to observe that an order

setting aside a court sale, in execution of a mortgage decree cannot be obtained,

under Order 21 Rule 89 of the Code of Civil Procedure by merely depositing five

percent of the purchase money for payment to the auction purchaser and persuading

the decree-holder to abandon the execution proceedings. Furthermore, in case of

manifest illegality in conducting the sale, the court may take proceedings suo motu

and set aside the sale even after the expiry of the period of limitation prescribed

therefore.9

Limitation Period

An application to set aside a sale must be made within a period of sixty days

from the date of the sale as per Art. 127 of Limitation Act, 1963. The executing court

has no jurisdiction to entertain an application for setting aside a sale after the

prescribed period by invoking Section 148 of the Code or by applying Section 5 of

the Limitation Act.

It has to be noted that, earlier, the period for making an application for setting

aside the sale was thirty days under Article 127, Limitation Act, 1963. In 1974, the

Limitation Act was amended to extend the period of Limitation to file an application

for setting aside sale was extended from 30 day to 60 days.10 However, In P.K. Unni

v. Nirmala Industries,11 the Supreme Court held that the limitation period for making

deposit in an application for setting aside a sale under Rule 89, Order 21 is 30 days

from the date of sale as prescribed under Rule 92(2) Order 21 of the Code.

8 Tribhuvandas Purshottamdas Thakur v. Ratilal Motilal Patel, 1968 AIR (SC) 372.9 Nani Gopal Paul v. T. Prasad Singh, (1995) 3 SCC 579.10 Justice A. N. Jindal, “Executions”, < http://cja.gov.in/data/Executions.pdf> as accessed on 09/04/2015 at 4:15 P.M.11 (1990) 2 SCC 378.



Considering the view in P. K. Unni’s case, the Apex Court in Dadi

Jagannadham v. Jammulu Ramulu,12 stated as under:-

“18. Having given our careful consideration to the question, we are of the

opinion that there is no anomaly and that there are no different periods of

limitation for making deposits and/or filing an application for setting aside

the sale. It is by virtue of Order 21 Rule 89 CPC that an application for

setting aside a sale and a deposit can be made. Order 21 Rule 89 CPC does

not prescribe any period within which the application is to be made or deposit

is to be made. All that Order 21 Rule 92 (2) provides is that if the deposit is

made within 30 days from the date of sale and an application is filed then the

Court would have no discretion but to set aside the sale. That does not mean

that if the deposit is made after 30 days the Court could not entertain the

application. If the deposit is made beyond the period of 30 days, but within the

period 60 days, then it will be within the discretion of the Court whether or

not to grant the application. Thus an application can be made within the

period prescribed under Article 127, Limitation Act. As an application can be

made within 60 days and, as stated above, no period for making a deposit is

prescribed under Order 21 Rule 91 (2) the deposit can also be made within 60

days. In our view, therefore, the view expressed in P.K. Unni's case that Order

21 Rule 92(2) CPC prescribes a period of limitation for making a deposit is

not correct.”

In the recent matter of Ram Karan Gupta v. J. S. Exim Ltd.,13 it was held by

the Supreme Court that on setting aside the sale, amount must be paid by the

judgment debtor within a period specified in the rule and if the deposit is made after

the time limit, the application must be dismissed. The deposit made under Rule 89

Order 21, C.P.C. should be unconditional and unqualified and the decree holder or

the auction purchaser should be able to get the money at once.

12 2001(4) RCR (Civil) 26713 AIR 2013 SC 24



SETTING ASIDE SALE ON GROUNDS OF IRREGULARITY

OR FRAUD

Rule 90 Order 21 of the Code reads as:

90. Application to set aside sale on ground of irregularity or fraud.- (1)

Where any immovable property has been sold in execution of a decree, the

decree holder, or the purchaser, or any other 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.

(2) No sale shall be set aside on the ground of irregularity or fraud in

publishing or conducting it unless, upon the facts proved, the court is satisfied

that the applicant has sustained substantial injury by reason of such

irregularity or fraud.

(3) No application to set aside a sale under this rule shall be entertained upon

any ground which the applicant could have taken on or before the date on

which the proclamation of sale was drawn up.

Explanation : The mere absence of, or defect in, attachment of the property

sold shall not, by itself, be a ground for setting aside a sale under this rule.

Nature and Scope

A sale of immovable property in execution can be set aside on the ground of

material irregularity or fraud in publishing or conducting the sale, provided the

applicant proves that he has sustained substantial injury by reason of such irregularity

or fraud. The pre-sale illegalities committed in the execution are amenable to the

remedy under Section 47.14 Post-sale irregularities causing substantial injury to the

judgment-debtor are covered under Rule 90 of Order 21. The following persons have

been judicially held entitled to apply under this rule:

14 < http://www.shareyouressays.com/114379/legal-provisions-of-section-64-of-code-of-civil-procedure-1908-c-p-c-india > as accessed on 09/04/2015 at 3:30 P.M.



1. the decree-holder;

2. the auction-purchaser;

3. any person entitled to share in a rateable distribution of assets

4. any person whose interests are affected by the sale, e.g. a judgment-debtor,

legal representatives of a deceased judgment debtor, a real owner of the

property sold in execution of a decree against his benamidar; where the

judgment-debtor is a minor, his guardian; where the judgment-debtor is a

ward of court, court wards; a purchaser from the judgment-debtor pendente

lite, etc.

Conditions

In Kadiala Rama Rao v. Butala Kahna Rao,15 the Supreme Court held on a

plain reading of Rule 90, Order 21 of the Code that three factor should be taken into

account in a matter relating to the setting aside of the sale of an immovable property

in execution: (i) Material irregularity and fraud in publishing or conducting the sale,

(ii) The satisfaction of the Court dealing with such an application that the applicant

has sustained substantial injury by reason of such irregularity or fraud. (iii) No

entertainment of an application on a ground which the applicant could have taken on

or before the date of drawing up the proclamation for sale.

The crux here is that before a sale can be set aside under this rule, the

following conditions must be satisfied:

(1) There has been a material irregularity or fraud in publishing and conducting

the sale;

(2) Substantial injury has been caused to the applicant.16

Material Irregularity

The expression "material irregularity" in Rule 90 refers to an irregularity on

the part of the court or its officers in the procedure to be followed before the property

is put up for sale. The following irregularities have been held to be material

irregularities within the meaning of Rule 90:15 (2000)3 SCC 87.16 Laxmi Devi v. Mukand Kanwar, AIR 1965 SC 834 at p. 837



(i) omission to issue notice under Rule 22;

(ii) omission to publish sale proclamation under Rule 66;

(iii) omission to mention prior encumbrances in proclamation under Rule

66;

(iv) omission to state the revenue or rent payable on the land;

(v) omission to beat drum;

(vi) omission to give survey number of the property;

(vii) omission to hold sale at stated time and place;

(viii) sale after an order of stay of execution;

(ix) sale after satisfaction of the decree;

(x) default in payment of deposit under Rule 84 or balance of purchase

price under Rule 85, etc.

Further, the following irregularities have been held not to be material

irregularities under Rule 90:

(i) absence of, or defect in attachment;17

(ii) omission to mention exact time of sale in sale proclamation;

(iii) omission to record reasons for adjournment of sale;

(iv) omission to specify share of the judgment-debtor in the property;

(v) omission to give notice to a receiver when he is not in possession of

property;

(vi) omission to send a copy of the decree to the executing court;

(vii) misdescription of the property in sale proclamation when the parties knew

the property to be sold;

(viii) omission to mention value of the property;

(ix) omission to issue a fresh proclamation after sale is adjourned;

(x) any other ground which the applicant could have taken on or before the

sale proclamation was drawn up, etc.

There is a distinction between irregularity and material irregularity in

conducting the sale and it must be established that by reason of illegality or

17 Explanation to Rule 99.



irregularity in conducting the sale, the judgment-debtor has sustained substantial

injury.18

Rule 22-A of Order 21 declares that where any property is sold in execution

of a decree, the sale shall not be set aside merely on the ground that the judgment-

debtor had died between the date of issuance of proclamation of sale and the date of

sale and the legal representatives of such judgment-debtor were not brought on

record. The court may, however, set aside such sale if it is satisfied that the legal

representatives of the judgment-debtor were prejudiced.19

In the recent matter of Guttikonda Venkataramaiah v. Godavarthy

Venkateswarlu,20 there was a suit for recovery of money. Decree was passed against

respondent and the decrial amount was 3.55 lakhs. Entire land of the respondent was

put to auction in execution of decree and the auction fetched Rs. 13.05 lakhs. After

auction, judgment debtor raised an objection that auction of all his land was invalid

as auction of part of land could have fetch the decrial amount. It was held by the

Hon’ble Supreme Court that appellant ought to have raised his objection at the stage

when property in question was to be sold by an auction. Thus, objection could not be

allowed to be raised after auction.

Fraud

“Fraud” means that “which is dishonest and morally wrong”. Such fraud must

be in publishing or conducting the sale. Fraud must be established beyond reasonable

doubt by clear and cogent evidence; general and vague allegations and suspicious

circumstances are not enough. Though the onus of proving fraud is on the party

alleging it, it is open to a court to draw an inference of fraud from the established

facts taken together as a whole.

It is, however, not necessary that the auction-purchaser should also be a party

to the fraud. It is sufficient if fraud on the part of the decree-holder is established. A

mere understanding between intending purchasers agreeing not to bid against one

another is not by itself objectionable and unlawful. But if such an agreement has been

18 Desh Bandhu Gupta v. N. L. Anand, (1994) 1 SCC 131.19 Mobarak Ali v. Dinabandhu Sahu, AIR 1953 Ori 296.20 AIR 2014 SCW 6196 SC



arrived at with a dishonest intention and oblique motive with a view to prevent the

best price from being obtained, it would be fraudulent and invalid.21

As held by the Privy Council in earlier decisions, wherever a sale is

impeached on the ground of fraud, a difference must be made between an innocent

purchaser and one tainted by fraud which has brought about the execution sale. The

question is, in the former case, which of the two innocent parties shall suffer; in the

latter, whether he who has wronged the other party shall be allowed to enjoy the

fruits of his wrongdoing? In this context, it was held in Lalla Bunseedhur v.

Koonwar Bindeseree Dutt,22 that “A Court exercising equitable jurisdiction may

withhold its hands in the one case and yet set aside the sale with or without terms in

the other.” Further, in a leading case of Satish Chandra v. Kumar Satish Kantha23,

the Privy Council rightly observed: “Charges of fraud and collusion... must, no

doubt, be proved by those who make them, proved by established facts or inferences

legitimately drawn from those facts taken together as a whole. Suspicions and sur-

mises and conjectures are not permissible substitutes for those facts or those

inferences, but that by no means requires that every puzzling article or contrivance

resorted to by one accused of fraud must necessarily be completely unraveled and

cleared up and made plain before a verdict can be properly found against him. If this

were not so, many a clever and dexterous knave would escape.”

Substantial Injury

Merely establishing irregularity or fraud is not sufficient to set aside the sale.

The applicant must establish that material irregularity or fraud has resulted in

substantial injury to the applicant. In Saheb Khan v. Mohd. Yusufuddin,24 the

Hon'ble Apex Court has further observed that “setting aside sale by merely

establishing a material irregularity or fraud will not do. The applicant must go

further and establish to the satisfaction of the Court that the material irregularity or

fraud has resulted in substantial injury to the applicant. Conversely even if the

applicant has suffered substantial injury by reason of the sale, this would not be

21 Ram Rijhan v. Razia Begum, AIR 1943 Pat 88 at p. 96.22 (1866)10 Moo IA 454 (PC)23 AIR 1923 PC 73.24 AIR 2006 SC 1871.



sufficient to set the sale aside unless substantial injury has been occasioned by a

material irregularity or fraud in publishing or conducting the sale.”

Mere loss is not enough, it must be substantial. Mere inadequacy of price is

not a good ground to set aside a sale. A court sale is a forced sale and,

notwithstanding the competitive element of public auction, the best price is often not

forthcoming. The judge must keep a certain margin for this factor. The court must

apply its mind to all material factors bearing on the reasonableness of the price and

conduct the sale. If the price is substantially inadequate, there is both material

irregularity and injury. Since the burden of proving substantial injury is on the

applicant, it should be alleged in the application.25

Sometimes, however, there may not be express allegations and the same may

appear to be implicit from all the facts and circumstances alleged. Whether or not the

injury suffered by the applicant is substantial depends upon the facts of each case. It

should not be confined to pecuniary loss and, therefore, mere inadequacy of price is

no proof of substantial injury though it is one of the relevant factors to be

considered.26

In N. G. George v. Shirley Varkey,27 material irregularity and fraud was found

in the sale while execution of decree and the same was challenged. The same was

dismissed as the person filling the application under Rule 90 Order 21 of the code

was a mere shareholder and there was no Locus Standi and thus, the person was

adjudged incompetent to challenge the same.

Limitation Period

The Period of limitation is same as provided for Rule 89 of Order 21 of the

Code in Art. 127 of the Limitation Act, 1963 i.e. 60 days. It has to be noted that the

advantage of increased period of limitation was also extended to Rule 90 and 91 of

Order 21 of the Code to set aside a sale in execution of a decree. In view of the

25 Justice A. N. Jindal, “Executions”, < http://cja.gov.in/data/Executions.pdf> as accessed on 10/04/2015 at 5:00 P.M.26 Radhey Shyam v. Shyam Behari, (1970) 2 SCC 405.27 2010(7) R.C.R. (Civil) 467.



increased period of limitation, confirmation of the sale will have to await the expiry

of the increased period of limitation.

SETTING ASIDE SALE WHEN JUDGMENT-DEBTOR HAS

NO SALEABLE INTEREST


91. Application by purchaser to set aside sale on ground of judgment debtor

having no saleable interest.- The purchaser at any such sale in execution of a

decree may apply to the court to set aside the sale, on the ground that the

judgment debtor had no saleable interest in the property sold.

Nature and Scope

Rule 91 enables the auction-purchaser to apply for setting aside the sale on the

ground that the judgment-debtor had no saleable interest in the property. In court

auction sales, there is no warranty of title and the sale carries with it no guarantee that

the property is the property of the judgment-debtor. The auction purchaser takes the

risk and bears the loss. His only remedy is to apply under this rule for setting aside

the sale. This provision is an exception to the general rule of caveat emptor (let the

buyer beware). The rule is intended for the protection of an innocent auction-

purchaser and it cannot, therefore, be invoked where the purchaser knew at the time

of sale that the judgment-debtor had no saleable interest in the property.28 Further, it

is only the auction purchaser who can apply under this rule.29 A decree-holder

auction-purchaser can also apply. A judgment-debtor cannot apply under this rule.

Saleable interest

The expression "no saleable interest" means no saleable interest at all. Hence,

where the judgment-debtor has some saleable interest, however small it may be, this

28 Kumarasami Chetti v. T.R. Subramania, AIR 1958 Mad 67129 Ibid.



rule does not apply and the sale cannot be set aside on the ground that the judgment-

debtor did not have full saleable interest in the property.30

Limitation Period

The Period of limitation is same as provided for Rule 89 and 90 of Order 21

of the Code in Art. 127 of the Limitation Act, 1963 i.e. 60 days. Similar to the law

provided for in other two rules, confirmation of the sale will have to wait till the

expiry of the increased period of limitation.

CONFIRMATION OF SALE


92. Sale when to become absolute or be set aside.- (1) Where no application

is made under rule 89, rule 90 or rule 91, or where such application is made

and disallowed, the court shall make an Order confirming the sale, and

thereupon the sale shall become absolute:

Provided that, where any property is sold in execution of a decree pending the

final disposal of any claim to, or any objection to the attachment of, such

property, the court shall not confirm such sale until the final disposal of such

claim or objection.

(2) Where such application is made and allowed, and where, in the case of an

application under rule 89, the deposit required by that rule is made within

[sixty days] from the date of sale, or in cases where the amount deposited

under rule 89 is found to be deficient owing to any clerical or arithmetical

mistake on the part of the depositor and such deficiency has been made good

within such time as may be fixed by the court, the court shall make an Order

setting aside the sale:

Provided that no Order shall be made unless notice of the application has

been given to all persons affected thereby:30 Ouseph Ouseph v. Devasia Chacko, AIR 1953 Trav-Co 619



Provided further that the deposit under this sub-rule may be made within sixty

days in all such cases where the period of thirty days, within which the deposit

had to be made, has not expired before the commencement of the Code of

Civil Procedure (Amendment) Act, 2002.

(3) No suit to set aside an Order made under this rule shall be brought by any

person against whom such Order is made.

(4) Where a third party challenges the judgment debtor title by filing a suit

against the auction purchaser, the decree holder and the judgment debtor

shall be necessary parties to the suit.

(5) If the suit referred to in sub-rule (4) is decreed, the court shall direct the

decree holder to refund the money to the auction purchaser, and where such

an Order is passed the execution proceeding in which the sale had been held

shall, unless the court otherwise directs, be revived at the stage at which the

sale was ordered.

Nature and Scope

The above mentioned rule states that no sale of immovable property shall

become absolute until it is confirmed by the court. Where no application to set aside

the sale is made under Rule 89, 90 or 91 or where such application is made and is

disallowed by the court, the court shall make an order confirming the sale, and

thereupon the sale shall become absolute.31 Once the order is made under Rule 92

confirming the sale, the title of the auction-purchaser relates back to the date of sale.32

In the recent matter of Ganesh Pillai v. Sudevan,33 it was observed that in the

event of there being no application files as provided in Rule 89-91, then law

specifically provides for a third challenge to judgment debtor’s title by filling a suit

against auction purchaser, decree holder and judgment debtor by Sub rule (4) of Rule

92 of Order 21 of the Civil Procedure Code.

31 <http://mja.gov.in/Site/Upload/GR/Material%20on%20Execution%20of%20Decrees.pdf> as accessed on 10/04/2015 at 6:30 P.M.32 Section 65 of the Code of Civil Procedure, 1908.33 AIR 2013 CC 1982.



While confirming a sale, the court must adopt a practical and realistic

approach. It may consider the fair value of the property, the general economic trends,

the large sum required to be produced by the bidder, the formation of a syndicate, the

futility of postponements and the possibility of litigation and several other factors

dependent on the facts of each case. No speaking order is necessary. “If the Court has

fairly, even if silently, applied its mind to the relevant considerations before it while

accepting the final bid, no probe in retrospect is permissible. Otherwise a new threat

to a certainty of court sales will be introduced.” 34

Further, while looking at the bare provision, it must be noted that Proviso to

sub-rule (1) of Rule 92, as added by the Amendment Act of 1976, enacts that where a

claim against an attachment in execution of a decree has been made but the property

attached has been sold pending the determination of such claim, the sale should not

be confirmed by the court before the final disposal of such claim.35 Furthermore, an

order setting aside a sale or refusing to set aside a sale under Rule 92 is appealable.

Notice

As per Proviso to sub-rule (2) of Rule 92, a notice of the application must be

given to all persons likely to be affected by the order thereon before an order for

setting aside a sale is made. Since the object of giving notice is to give an opportunity

of hearing to the interested party, if he is aware of the application, then the absence of

a formal notice does not vitiate the proceedings.

CONCLUSION

In order to conclude, researcher observes that when a property is sold in

execution of a decree, an application for setting aside sale may be made under the

above mentioned provisions by the persons affected and the grounds mentioned

therein within the prescribed period of limitation. Referring to the bare provisions of

Order 21, it can be concluded that if a sale of immovable property has been set aside,

the purchaser is entitled to refund of the purchase money paid by him with or without

34 Kayjay Industries (P) Ltd. v. Asnew Drums (P) Ltd., (1974) 2 SCC 213 at p. 220.35 Statement of Objects and Reasons, 54th Law Commission Report at p. 207.



interest as ordered by the court.36 An application under this rule can be filed within

three years from the date of the order setting aside the sale. Whereas if the sale has

become absolute, the Court shall grant a certificate in favour of the purchaser which

shall bear the date on which the sale became absolute and also specify the property

sold and the name of the purchaser.37 Issuance of certificate is merely a formal

declaration by the court and neither extinguishes nor creates any title. The object of

such a certificate is to avoid any controversy regarding the identity of the property

sold and the purchaser thereof. It is just a ministerial act.

36 Rule 93 Order 21 of the Code of 1908.37 Rule 94 Order 21 of the Code of 1908.



BIBLIOGRAPHY

Books & Statutes

Tandon M. P., The Code of Civil Procedure, 1908, 26th ed., Allahabad Law Agency,

Faridabad, 2008.

Takwani C. K., Civil Procedure, 7th ed., Eastern Book Company, Lucknow, 2014.

Das Jatindra Kumar, Code of Civil Procedure, Eastern Economy Edition, PHI

Learning Private Ltd., New Delhi, 2014.

Mulla, The Code of Civil Procedure, 17th ed., LexisNexis Butterworths Publications,

Delhi, 2007.

Sarkar, Code of Civil Procedure, 11th ed., Wadhawa Publications, Nagpur, 2006.

The Code of Civil Procedure, 1908.

Articles

Adv. Niraj Jagtap, “Execution”, < https://nirajjagtap.wordpress.com/tag/movable-property>

Justice A. N. Jindal, “Executions”, < http://cja.gov.in/data/Executions.pdf>

Weblinks

http://mja.gov.in/Site/Upload/GR/Material%20on%20Execution%20of%20Decrees.pdf

http://www.shareyouressays.com/114379/legal-provisions-of-section-64-of-code-of-civil-procedure-1908-c-p-c-india

http://www.nolo.com/legal-encyclopedia/setting-aside-sale.html

http://www.legalservicesindia.com/article/article/sale-of-immovable-property-1591-1.html

www.indiankanoon.org

www.manupatra.com




Documents

CPC - Setting Aside of Sale