-1- IN THE HIGH COURT OF BOMBAY AT GOA APPEAL FROM ORDER NO. 64 OF 2009 Vilas Atmaram Bandodkar Son of Atmaram Bandodkar Major of age, Permanent resident of Block No. 9, 2nd Floor, Manu Mahal, Opp. Maheshwari Odhyan King's circle, Bombay 400 019. …... Appellant (Cabeca de Casal) V e r s u s Atmaram P. Bandodkar …... Deceased 1. Baburao M. Karekar 2. Bina B. Karekar, Both residents of H. No. 92, Gaunsavaddo, Mapusa, Goa. .….. Respondents (Auction Purchasers) Mr. S. S. Kakodkar, Advocate for the Appellant. Mr. Rohit Bras De Sa, Advocate for the Respondents. CORAM: A. H. JOSHI, J. DATE : 8 th October, 2009. JUDGMENT 1. Parties were put to notice by observation contained in this Court's Order dated 04.09.2009 that the appeal will be taken up for final -2- disposal at the stage of admission hearing. 2. In view of above, Rule. Rule is called out for hearing. 3. Heard learned Advocates at length. 4. Case proceeds from following admitted facts : (a) Appellant herein is Cabeca de Casal. (b) Appellant's share has been auctioned in a sum of Rs.18,80,378/-. (c) Appellant did not serve on the Respondents the notice demanding the auction money. (d) Respondents submitted an application on 14.01.2008 expressing willingness to deposit the amount and demanded that they be put in possession of the share purchased in auction from possession of appellant herein. (e) Present appellant filed reply to respondents' application dated 14.01.2008. (f) On 26.06.2008, appellant also filed an affidavit in support of the application dated 14.08.2008. (g) Respondents have tendered an application on 15.10.2008. Along with said application, the respondents have tendered two demand drafts totaling to -3- Rs.18,80,378/-. (h) By said application dated 15.10.2008 the respondent herein have prayed that the amount be paid to Cabeca de Casal Atmaram Bandodkar and his wife, and that they be put in possession. (i) The appellant herein has filed application seeking declaration that the auction be declared null and void and not binding on account of the failure of the purchaser in depositing the amount within three days from the date of demand in view of Article 1417 of Portuguese Code of Civil Procedure. (j) Respondents' application for delivery of possession / execution has been allowed and appellant's application for declaring the auction ineffective, has been rejected by a common Order dated 20.07.2009, the annexure A to the Appeal. 5. In the present Appeal, exception is taken to the impugned Order. The finding recorded in Para 10 of impugned which is under challenge is quoted below : “10. The above provision therefore shows that when owelty money is not paid, interest accrues thereon, from the date of final Judgment of partition until payment is liable to be paid and the creditor so-called -4- namely the person who is entitled to receive the money, may register a hypothecation over the property or properties adjudicated upon the debtor, namely the person who is liable to pay the owelty. It therefore shows that for failure to pay owelty money, the creditor is entitled to legal interest from the date of Judgment, until recovery. It is therefore clear that failure to pay money does not bring about the reversion of the property, but in case where the demand is made by the person who is entitled to receive owelty and if the same is not paid within three days of the notice of demand, the allotment becomes ineffective and the property could be put to re- auction.” 6. Grounds of challenge raised before the Court are as follows : (a) Owelty money is payable on demand. (b) No oral or written demand was made. (c) Owelty amount was voluntarily deposited. (d) Failure to pay is attached with penal consequence therefore Article 1417 (c) be construed strictly. (e) The demand must be proved by strict proof. 7. Parties have placed reliance on one and the same reported Judgments of this Court namely : 1. 1991(2) Goa L.T. 11 (Fernando Jorge Colaco vs. State of Goa) -5- 2. 1996 (3) ALL MR 522 (Shri Damodar Ramnath Alve vs. Shri Gokuldas Ramnath Alve & Ors.) 3. 1999 (1) Goa L.T. 167 (Shri Victor de Graca Pinto & anr. vs. Smt. Lourdes de Graca Pinto e Nazareth & anr. 4. 2009 (1) ALL MR 259 (Shri Damodar Ramnath Alve vs Janakibai Ramnath Alve (deceased) 8. Text of Article 1417 of Portuguese Civil Code, is quoted in paragraph 9 of the impugned Order. The correctness of the text is not in dispute. It is not necessary to refer to the entire text. It would be suffice to refer to clause (c) thereof which is quoted herein below : “... 1417 (c) (c) Those who have not taken the properties in licitation and who are to be allotted the owelty money due by those who were successful in the licitation, shall be notified to demand within three days the payment, if they so desire. If the demand is made the successful bidder shall be notified to deposit the amount failing which the licitation will be of no effect.” 9. Second sentence of the quoted portion of Article 1417 which is underlined is the decisive provision. It clearly indicates that the auction will be of “no effect” if the amount is not deposited or paid within three days of notifying the demand. 10. Construction of the period of three days being mandatory is -6- reiterated in Judgment of this Court reported in 2009 (1) ALL MR 259 (Shri Damodar Ramnath Alve vs Janakibai Ramnath Alve (deceased), by reproducing and relying in approval, earlier case Smt. Motibai Sarvotham Pai Cano vs. Smt. Maria Elsa do Perpetuo Sucorro Mota, reported in 1994(2) Bom. C.R. 628. 11. Thus it is settled law that the non payment within three days from the date of notice renders the auction void, ineffective, and property is liable to be put to fresh auction and during such re-auction, the defaulting party is not allowed to participate. 12. In present case, the dispute is on facts, as to whether a notice was given by the appellant to the respondents claiming the owelty money. 13. The factual aspect needs to be analyzed on admitted facts noted herein before as herein below : 1. A notice in writing directly addressing it to the respondents demanding payment of deposit of auction money is admittedly not served. 2. It is pertinent to note that on 14.01.2008, by application, respondents offered willingness to deposit. -7- 3. The actual deposit was not made or tendered with the application dated 14.01.2008. 4. Present appellant's reply dated 26.06.2008 to present respondents' application dated 14.01.2008, is a matter of record. 5. In said reply by appellant dated 26.06.2008, the appellant herein has levelled imputations against the purchaser alleging that there is willful and deliberate failure in making payment. 6. It is not disputed by respondents that he has received copy of reply dated 26.06.2008. 7. On 14.08.2008, appellant herein has filed an affidavit in support of application in reply i.e. 26.06.2008. 8. Receipt of copy of this affidavit dated 14.08.2008 is not denied or disputed. 14. It is thus clear that the amount ought to have been deposited within three days i.e. on or before 29.06.2008. 15. Deposit is made or tendered on 15.10.2008 which is beyond period of limitation prescribed by clause (c) of Article 1417 aforesaid. 16. In the process of hearing, learned Advocate Mr. S. S. Kakodkar has made a statement based on instructions from appellant that the appellant -8- has no objection if the respondents participate in fresh auction and are allowed to do so. 17. In view of the aforesaid position, this Court holds that : (a) The amount of owelty was demanded by the appellant by way of filling written reply on 26.06.2008 and affidavit in support on 14.08.2008, receipt where of is not disputed by respondents. (b) Inspite of written demand placed on record in the proceedings in the Inventory Court, which constitutes sufficient notice, the purchaser has not deposited the owelty amount within three days. (c) The property has, therefore, become liable for re- auction, as earlier auction has become ineffective under Article 1417 of Portuguese Code of Civil Procedure. (d) In view of the concession given by the appellant's Advocate, upon instructions, present respondents would not be precluded rather would be entitled to offer bid in the fresh auction. 18. In the result, appellant succeeds as follows : -9- (a) Rule is made absolute in terms of prayer clause (a) and foregoing Para 17. (b) The amount deposited by the respondents in the Trial Court be invested in fixed deposit in a Nationalized Bank for six month and fixed deposit be renewed from time to time for such term, as the Trial Court may direct. (c) In the circumstances, the parties are directed to bear their own costs. A. H. JOSHI, J. arp/*