RAM KARAN GUPTA versus J.S. EXIM LTD. AND ORS.

Citation: [2012] 12 S.C.R. 683 · Decided: 03-12-2012 · Supreme Court of India · Bench: K.S. RADHAKRISHNAN · Disposal: Dismissed
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Judgment (excerpt)

[2012) 12 S.C.R. 683 
RAM KARAN GUPTA 
V. 
J.S. EXIM LTD. AND ORS. 
(Civil Appeal No. 8652 of 2012) 
DECEMBER 03, 2012 
[K.S. RADHAKRISHNAN AND DIPAK MISRA, JJ.] 
Code of Civil Procedure, 1908 - Or.21, rr.84 and 85 -
Auction sale - Auction running into crores of rupees - Held: 
A 
B 
In such a situation, auction purchaser not expected to pay the C 
amount in cash on the fall of the hammer. 
Code of Civil Procedure, 1908 - Or.21, r.89 - Object, 
applicability and effect of- Held: Or.21 r.89 CPC gives a final 
opportunity to the judgment debtor to save his property by D 
setting the sale aside before confirmation upon satisfying the 
decretal debt and by paying compensation to the auction 
purchaser - Or.21 r.89 CPC is intended to (i) to save the 
judgment debtor from the threatened deprivation of his 
property, (ii) to satisfy the claim of the decree holder and (iii) 
E 
to compensate the auction purchaser- Clause (a) of Sub-rule 
(1) of r.89 of Or.21 requires the applicant to deposit in Court 
5% of the purchase money for payment to the auction 
purchaser - Deposit of the requisite amount in the Court is a 
condition precedent or a sine qua non to an application for 
setting aside the execution of sale and such amount must be 
F 
paid within a period specified in the rule and if deposit is made 
after the time limit, the application must be dismissed -
Deposit made ulr.89 of Or.21 CPC should be unconditional 
and unqualified and the decree holder or the auction 
purchaser should be able to get the amount at once - The 
G 
rule is in the nature of a concession shown to the judgment 
debtor, so he has to strictly comply with the requirements 
thereof and a sale will not be set aside unless the entire 
683 
H 
684 
SUPREME COURT REPORTS 
[2012] 12 S.C.R. 
A amount specified in rub-rule (1) is deposited within 60 days 
from the date of the sale and, if it is beyond 60 days, the Court 
cannot allow the application. 
In a suit for partition, the suit property was ordered 
B to be sold in public auction and the sale proceeds 
directed to be distributed among the shareholders. 
Auction was held on 8-10-20.10. The 1st respondent was 
found to be the highest bidder for a bid amount of Rs.9.60 
crores. The auction purchaser (1st respondent) 
deposited Rs.2.40 crores by way of 27 demand drafts of 
C even date towards 25% of the bid amount. Later, the 
auction purchaser moved an application for depositing 
the remaining 75% of the sale price/bid amount of the suit 
property and the application was allowed and 75% of the 
sale amount was deposited by the auction purchaser on ,, 
D 23.10.2010. Subsequently the auction purchaser moved · 
an application under Order 21 Rules 94 and 95 of CPC 
for confirmation of sale. The appellant/judgment debtor· 
then sought for cancellation of the auction held on 
8.10.2010 stating that it was vitiated due to violation of the 
E mandatory provisions of Order 21 Rule 84 and 85 CPC. 
F 
The Executing Court rejected the objection raised by the 
appellant/judgment debtor and confirmed the auction. In 
appeal, the High Court upheld the order, and therefore 
th.e instant appeal. 
The appellant submitted that the auction purchaser 
had not complied with the mandatory provisions of Order 
21 Rules 84 and 85 CPC, inasmuch as he did not deposit 
25% of the bid amount "immediately" on the fall of the 
hammer; that on 1.12.2010 (i.e. within 60 days of the date 
G of sale), the appellant had preferred an application before 
the Executing Court to allow him to deposit the entire 
amount of the sale, after deduction of his one-forth share 
. in the property, and handover the possession to him; 
that though the application was filed before confirmation 
H 
RAM KARAN GUPTA v. J.S. EXIM LTD. 
685 
of sale, but it was not considered by the Executing Court A 
which committed an error in confirming the sale before 
entertaining the said application; and that even now the 
appellant is willing to pay the entire amount deposited by 
the auction purchaser including interest and willing even 
to pay Rs.1 crore more so that he can save the property B 
where he is residing. 
Dismissing the appeal, the Court 
HELD:1.1. In the instant case, the auction purchaser 
had deposited 25% of the amount on 8.10.2010. When the C 
auction i~ for such a large amount, running in crores of 
rupees, nobody can expect the auction purchaser to pay 
the amount in cash on the fall of the hammer. In the 
instant case, the auction purchaser had p
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