An immovable property is put to auction in execution of an ex parte decree and is purchased by a third party. The ex parte decree is set aside before confirmation of sale. Is the auction purchaser entitled to get the sale confirmed?

Question: An immovable property is put to auction in execution of an ex parte decree and is purchased by a third party. The ex parte decree is set aside under Order IX, Rule 13, C.P.C. before confirmation of sale. Is the auction purchaser entitled to get the sale confirmed?

Find the answer to the mains question only on Legal Bites. [An immovable property is put to auction in execution of an ex parte decree and is purchased by a third party. The ex parte decree is set aside before confirmation of sale. Is the auction purchaser entitled to get the sale confirmed?]

Answer

In the leading case of Janak Raj v. Gurdial Singh And Anr [1967 AIR 608] before the Hon’ble Supreme Court, the appellant, a stranger to the suit, was the auction-purchaser of the judgment-debtor’s immovable property in execution of an ex parte money decree.

On the question of whether he was entitled to a confirmation of the sale, under O.XXI, r. 92, Civil Procedure Code, notwithstanding the fact that after the holding of the sale the ex parte decree was set aside. The court held that the sale should be confirmed.

So far as sales of immovable property are concerned, there are some special provisions in O.XXI beginning with r. 82 and ending with r. 103. If a sale had been validly held, an application for setting the same aside can only be made under the provisions of rr. 89 to 91 of O.XXI. The law makes ample provision for the protection of the interests of the judgment-debtor when his property is sold in execution. He can file an application for setting aside the sale under the provisions of O.XXI, rr. 89 and 90.

As is well-known, r. 89 gives a judgment-debtor the right to have the sale set aside on his depositing in, court a sum equal to five per cent of the purchase money fetched at the sale besides 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 sale, have been received by the decree-holder.

Under sub-rule (2) of r. 92 the court is obliged to make an order setting aside the sale if a proper application under r. 89 is made accompanied by a deposit within 30 days from the date of sale. Apart from the provision of r. 89, the judgment-debtor has the right to apply to the court to set aside the sale on the ground of a material irregularity or fraud in publishing or conducting it provided he can satisfy the court that he has sustained substantial injury by reason of such irregularity or fraud.

Under r. 91 it is open to the purchaser to apply to the court to set aside the sale on the ground that the judgment-debtor had no saleable interest in the property sold. Rule 92 provides that where no application is made under any of the rules just now mentioned or where such application is made and disallowed the court shall make an order confirming the sale and thereupon the sale shall become absolute.

Moreover, Section 65 of the Code of Civil Procedure lays down that where the immovable property is sold in execution of a decree and such sale has become absolute, the property shall be deemed to have vested in the purchaser from the time when it is sold and not from the time when the sale becomes absolute. The result is that the purchaser’s title relates back to the date of sale and not the confirmation of sale.

As early as in 1902, in the case of Chitambar Shrinivasbhat v. Krishnappa (1902) 26 Bom 543) there was an ex parte decree which was found to have been fraudulently obtained by the first defendant against the plaintiff and in execution, thereof certain lands belonging to the plaintiff had been sold by auction and purchased by the second defendant.

The plaintiff sued to set aside the sale and to recover possession of the land. It was found that although the decree was obtained by fraud, the property was sold at a considerable undervalue and the purchaser had no knowledge of the fraud. It was held by the Bombay High Court that a purchaser for valuable consideration without notice of the fraud was not liable to have the sale in his favour set aside.

Thus, applying the above provisions of CPC and rationale of the leading cases to the present case at hand, the auction purchaser is entitled to get the sale confirmed under O.XXI, r. 92 of the CPC.

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