Case: Manilal Mohanlal Shah And Others Vs. Sardar Sayed Ahmed Sayed Mahmad And Another

court to re-sell the property is imperative. A further consequence of non-payment is that the defaulting purchaser forfeits all claim to the property ... (Rule 86).9. It is not denied that the purchasers had not obtained any decree on foot of their mortgage and the claim of Rs. 1,20,000 which they put forward before the execution court had not been adjudicated upon or determined. The mortgagees, one of whom is a Pleader, applied on the day of the sale claiming a set off on foot of the mortgage. The Court without applying its mind to the question immediately passed the order allowing the set-off. This claim was obviously not admissible under the provisions of rule 84 which applies only to the decree-holder. The court had clearly no jurisdiction to allow a set off. The appellants misled the court into passing a wrong order and obtaining the advantage of a set-off while they know perfectly well that they had got no decree on foot of the mortgage and their claim was undetermined,There was default in depositing 25 percent of the purchase money and further there was no payment of the full amount of the purchase money within fifteen days from the date if the sale. Both the deposit and the payment of the purchase money being mandatory under the combined effect of rules 84 and 85, the Court has the discretion to forfeit the deposit but it was bound to re-sell the property with the result that on default the purchaser forfeited all claim to the property. These provisions leave no doubt that unless the deposit and the payment are made as required by the mandatory provisions of the rules there is no sale in the eye of law in favour of the defaulting purchaser and no right to own and possess the property accrues to him.10. In two cases decided by Calcutta High Court, viz., --- Munshi Md. Ali v. Kibria Khatun, 15, Cal WN 350 (B) and --- Sm. Annapurna Dasi v. Bazely Karim Mia, AIR 1941 Cal 85 (C) the sale was held to be no sale where the purchaser had failed to deposit the balance of the purchase money as required by rule 85. A similar view was taken by a Division Bench of the Allahabad High Court in------: Nawal Kishore v. Butta Mal, AIR 1935 All 243 (D). The provisions of rule 86 were held to be mandatory in another decision of the same Court --- "Haji Inam Ullah v. Mohamad Idris, AIR 1943 All 282 (E) and it was held that the court was bound to re-sell the property upon default irrespective of any application being made by any party to the proceedings.The case of ---Bhim Singh v. Sarwan Singh 16 Cal 33 (F) was a case of failure to make a deposit as required by Section 306 of the Code of 1882 (corresponding to rule 85 of the present Code). The court treated it as a material irregularity in conducting the sale which must be enquired into upon the application under Section 311, (corresponding to rule 90 of the present Code), and not by a separate suit to set aside the sale. The Court did not apply its mind to the question whether the provisions of Section 306 being mandatory sale should not be treated as a nullity for non-compliance with those provisions.The decision of a single Judge (app J.) in --- Nathu Mal v. Malawa Mal, AIR 1931 Lah 15 (G) is distinguishable upon its facts. There the auction-purchaser had actually tendered the money but the payment was postponed by consent of parties pending the disposal of the objection by the judgment-debtor. We do not agree with the remark made in that case that the provisions of rule 85 are intended "to be directory only and not absolutely mandatory". A Division Bench of the same court (Tek Chand and Abdul Rashid JJ.) held in --- A. R. Davar v. Jhinda Ram;, AIR 1938 Lah 198 (H) that the court had no jurisdiction to extend the time for the payment of the balance of the purchase money under rule 85 and must order resale under rule 86.11. Having examined the language of the relevant rules and the judicial decisions bearing upon the subject we are of opinion that the provisions of the rules requiring the deposit of 25 per cent. of the purchase money immediately on the person being declared as a purchaser and the payment of the balance within 15 days of the sale are mandatory and upon non-compliance with these provisions there is no sale at all. The rules do not contemplate that there can be any sale in favour of a purchaser without depositing 25 per cent of the purchase money in the first instance and the balance within 15 days. When there is no-sale within the contemplation of these rules, there can be no question of material irregularly in the conduct of the sale. Non-payment of the price of the part of the defaulting purchaser renders the sale proceedings as a complete nullity. The very fact that the court is bound to re-sell the property in the event of a default shows that the previous proceedings for sale are completely wiped out as if they do not exist in the eye of law. We hold, therefore, that in the circumstances of the present case there was no sale and the purchasers acquired no rights at all.12. It was urged before us that the court could allow a set-off in execution proceedings under its inherent powers apart from the provisions of Order 21, rule 19 of the Civil Procedure Code. We do not think that the inherent powers of the Court could be invoked to circumvent the mandatory provisions of the Code and relive the purchasers of their obligation to make the deposit. The appellant by misleading the court want to benefit by the mistake to which they themselves contributed. They cannot be allowed to take advantage of their own wrong.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 0

Reasoning from the judgment:
0[ds]ut for the mistake we are of opinion that both the contentions are devoid of substance.It is not denied that the purchasers had not obtained any decree on foot of their mortgage and the claim of Rs. 1,20,000 which they put forward before the execution court had not been adjudicated upon or determined. The mortgagees, one of whom is a Pleader, applied on the day of the sale claiming a set off on foot of the mortgage. The Court without applying its mind to the question immediately passed the order allowing the set-off. This claim was obviously not admissible under the provisions of rule 84 which applies only to the decree-holder. The court had clearly no jurisdiction to allow a set off. The appellants misled the court into passing a wrong order and obtaining the advantage of a set-off while they know perfectly well that they had got no decree on foot of the mortgage and their claim was undetermined,There was default in depositing 25 percent of the purchase money and further there was no payment of the full amount of the purchase money within fifteen days from the date if the sale. Both the deposit and the payment of the purchase money being mandatory under the combined effect of rules 84 and 85, the Court has the discretion to forfeit the deposit but it was bound to re-sell the property with the result that on default the purchaser forfeited all claim to the property. These provisions leave no doubt that unless the deposit and the payment are made as required by the mandatory provisions of the rules there is no sale in the eye of law in favour of the defaulting purchaser and no right to own and possess the property accrues to him.Having examined the language of the relevant rules and the judicial decisions bearing upon the subject we are of opinion that the provisions of the rules requiring the deposit of 25 per cent. of the purchase money immediately on the person being declared as a purchaser and the payment of the balance within 15 days of the sale are mandatory and upon non-compliance with these provisions there is no sale at all. The rules do not contemplate that there can be any sale in favour of a purchaser without depositing 25 per cent of the purchase money in the first instance and the balance within 15 days. When there is no-sale within the contemplation of these rules, there can be no question of material irregularly in the conduct of the sale. Non-payment of the price of the part of the defaulting purchaser renders the sale proceedings as a complete nullity. The very fact that the court is bound to re-sell the property in the event of a default shows that the previous proceedings for sale are completely wiped out as if they do not exist in the eye of law. We hold, therefore, that in the circumstances of the present case there was no sale and the purchasers acquired no rights atdo not think that the inherent powers of the Court could be invoked to circumvent the mandatory provisions of the Code and relive the purchasers of their obligation to make the deposit. The appellant by misleading the court want to benefit by the mistake to which they themselves contributed. They cannot be allowed to take advantage of their own wrong.