MAGANLAL ETC. versus JAISWAL INDUSTRIES NEEMACH & ORS.

Citation: [1989] 3 S.C.R. 696 · Decided: 07-08-1989 · Supreme Court of India · Bench: N.D. OJHA · Disposal: Appeal(s) allowed

Cited by 3 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

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A 
MAGANLAL ETC. 
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B 
v. 
JAISWAL INDUSTRIES NEEMACH & ORS. 
AUGUST 7, 1989 
[N.D. OJHA AND K.N. SAIKlA, JJ.] 
Code of Civil Procedure, 1898: Order 34 Rule 5-Whether ap-
plicable to sale of property mortgaged under State Financial Corpora-
tion Act, 1951. 
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State Financial Corporations Act, 1951: Sections 31 and 32-Satf 1
of property mortgaged under the Act-Whether provisions or Order 34 
Rule 5 CPC are attracted. 
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Maganlal executed a mortgage in favour of M.P. State Financial 
Corporation as security for a loan. The amount of loan not having been 
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paid, the Corporation initiated proceedings before the District Judge 
under section 31 of the State Financial Corporations Act, 1951 for 
attachment and sale of the mortgaged property, which was ultimately 
auctioned and purchased by M/s Jaiswal Industries, the fU"St purchaser 
Maganlal made an application under Order 21 Rule 90 of the Code of 
Civil Procedure with the result that the sale was set aside by the }-· 
Additional District Judge. The first purchaser preferred an appeal 
against the order setting aside the sale and also sought stay of further 
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proceedings for re-sale. The High Court did not grant stay but only 
ordered that the fresh sale shall not he confll'llled till the disposal of 
the appeal. Fresh auction was held and sale was knocked down in 
favour of Ramnarayan, the second purchaser. The appeal of the fU"St 
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purchaser was subsequently allowed by the High Court and the first -I 
sale in his favour was confirmed. Both Maganlal and Ramnarayan / 
have filed twa separate appeals in this Court challenging the order of 
the High Court. 
Maganlal made an application before this Court under Order 34 
Rule 5 of the Code, being C.M.P. No. 9940 of 1982, for redemption of 
the mortgage, and bas urged that in case C.M.P. No. 9940 of 1982 is 
allowed, it would not he necessary for him to press the merits of the ~ 
appeal. This contention has not been seriously disputed by the first and 
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the second purchasers. They have however opposed this application on 
the ground that: (i) an order of sale of the mortgaged property passed 
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MAGANLAL v. JAISWAL INDUSTRIES 
697 
by the District Judge under section 32 ~f the Act after affecting an A 
attachment under section 31 thereof will not come within the purview of 
a final decree for sale of mortgaged property contemplated by Order 34 
Rule 5 of the' Code and as such the benefit of that provision could not be 
extended to Maganlal; (ii) the High Court having confirmed the sale in 
first purchaser's favour, an application under Order 34 Rule 5 of the 
Code is not maintainable inasmuch as the said provision contemplates B 
payment 'on or before the day fixed or at any time before the. confir-
mation of a sale'; and (iii) section 32(8) of the State Finance Cor-
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poration Act makes the manner provided in the Code applicable only 
'\~"as far as practicable" and there was neither a decree nor was the 
Financial Corporation a decree holder in a suit fQr sale it was only 
deemed to be a decree holder by legal fiction because of the expression 
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"in execution of a decree as if the Financial Corporation were the 
decree-holder". 
On the other hand, it is contended on behalf of Maganlal that 
;(i) Order 34 Rule 5 of the Code is attracted even to an order of sale of 
mortgaged property passed under section 32 of the Act and since the D 
right of redemption which vests in Maganlal has not yet extinguished in 
·view of the pendency of these appeals, there is no Impediment in the 
relief contemplated by Order 34 Rule 5 of the Code being granted. and 
(ii) in view of sub-section (8) of section 32 of the Act the applicability of 
the provisions of Order 34 Rule 5 of the Code cannot be denied to the 
facts of the instant case. 
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Allowing the CMP and the appeal filed by Maganlal and grant-
. ing consequential reliefs to the first and the second purchasers, this 
Court. 
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,, HELD: (1) .In case the provisions of Order 34 Rule 5 of the F 
. Code are held to be. applicable to the facts o(tiie instant case, ap-
propriate .. relief can be granted thereunder. as the order of confirma-
tion of the sale passed .by the High Court in favour of the first pur-
,chaser has not. become absolute due to the pendency of these appeals 
against that order nor has the right of redemption of Maganlal yet 
extinguished. [707F-G) 
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.Chandra Mani v. Anarjan Bibi, A.I.R. 19

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