Rosali
Vs. V. Taico Bank & Ors [2007] Insc 66 (23 January 2007)
S.B.
Sinha & Markandey Katju S.B. Sinha, J.
A
judgment and order dated 8.01.1999 passed by the High Court of Karnataka at
Bangalore in CRP No. 3528 of 1998 is in question before us, which arises in the
following factual matrix.
M/s. Nellai
Small Match Producers Service Industrial Co-op. Society Ltd. filed a suit
against N. Dharmaraj, Respondent No. 2 herein in the Court of Principal Subordiante
Judge in the State of Tamil Nadu for realization of some amount owing and due
to it. The said suit was decreed. The said decree was transferred for execution
to the Court of City Civil Judge, Bangalore. The matter ultimately was transferred to the Court of the 17th
Additional City Civil Judge, Banaglore.
A
proclamation of sale of immovable property bearing No. 1138/8, II Main Road, Vijaynagar, Bangalore was issued on 21.10.1988 whereupon
the auction sale was held. In the said auction sale Smt. Mahadevi S.
Havannavar
became the highest bidder having given a bid for a sum of Rs.
3,25,000/-.
The said deal was accepted by the learned Executing Court on 26.10.1988. It is stated that the said sale was
conducted at about 4.00
p.m.
on the
said date and keeping in view of the fact that the banks at that time were
closed, the court directed the auction purchaser to deposit the amount by the
next day in the following terms:
"Sale proclamation and warrant not served at spot.
TRD
files vakalath for the bidder did accepted (sic), permitted to deposit 25% of
the sale amount by tomorrow. Property is free from encumbrances as it stands
for balance of consideration by 11.11." It is not in dispute that pursuant
to or in furtherance of the said direction, the auction purchaser deposited the
amount of 25% of the sale amount on 27.10.1988 and deposited the balance amount
on 11.11.1988.
Smt. Leelavathi,
Respondent No. 3 herein, in the meanwhile, had instituted a suit in the Court
of Addl. City Civil Judge Bangalore being O.S.
No.
2493 of 1981 on 17.08.1981 for specific performance of contract against
Respondent No. 2 in respect of the self-same property wherefor a sum of Rs.
1,05,000/-
said to have been paid by way of advance. The said suit was decreed by the said
Civil Judge by a judgment and order dated 20.04.1985.
An appeal
was preferred thereagainst before the High Court which was dismissed by an
order dated 6/8.03.1996.
After
the auction sale was confirmed, Respondent No. 3 appears to have filed an
application purported to be under Order XXI Rule 97 of the Code of Civil
Procedure (Code). It is not in dispute that by an order dated 11.11.1988 as no
objection was filed and the entire amount had been deposited, the sale was
confirmed and the sale certificate was directed to be issued to the auction
purchaser. Sale certificate on a stamp paper, which
had been furnished in the meanwhile, was issued by the Court on 17.11.1988.
It is
also stated that the property in question had been allotted by the Bangalore
Development Authority to the original owner. The Bangalore Development
Authority by a registered deed of sale dated 16.01.1990 transferred the
property in favour of Shri Sangamesh G. Havannavar, husband of the auction
purchaser Smt. Mahadevi S. Havannavar as in the meantime she had died.
On or
about 5.02.1992, the said Shri Sangamesh G. Havannavar transferred his right,
title and interest in the said property in favour of the appellant herein in
terms of a registered deed of sale dated 5.02.1992.
It is
contended that the appellant obtained licence from the appropriate authority
for renovation of the existing ground floor and for construction of the first
floor and pursuant to grant of sanction in this behalf had made constructions
upon incurring a cost of Rs. 8,00,000/- therefor. He is said to have been
residing therein.
Appellant
herein was not impleaded as a party in the said execution proceedings.
Respondent No. 3, however, obtained warrant of delivery of possession of the
said property in execution of the decree of specific performance passed in her favour.
On or about 01.08.1998, the appellant obstructed in taking possession pursuant
to the said warrant of delivery of possession and eventually filed an
application under Order XXI Rule 97, 98, 100 and 101 of the Code. From the
objection filed by Respondent No. 3, it transpired that the auction sale had
allegedly been set aside at the instance of the decree holder on the premise
that the sale was void as it was confirmed before expiry of 30 days from the
date of acceptance of the bid and other litigations by an order dated
27.09.1996 which is to the following effect:
"Dhr.
KAB Jdr. SGK To hear Dhr. and to produce copy of orders in RFA.
Sri
MRG for Dhr submits that the sale is void in view of the confirmation before 30
days and other litigations. Hence sale is set aside for these reasons."
The said order appears to be vague. No reason has been assigned in support
thereof. On what ground the decree holder was permitted to raise the said
contention was not disclosed.
A
revision application was filed by the appellant herein before the High Court
which by reason of the impugned judgment has been dismissed.
It
appears that the vendor of the appellant had also filed a revision application
and the same was also disposed of by reason of the said judgment.
The
High Court in its impugned judgment, however, opined that in view of the fact
that the 25% of the bid amount was not deposited on 26.10.1988 and was
deposited on 27.10.1988, the provision of Order XXI Rule 84 was not complied
with and in that view of the matter the auction sale was bad in law. For
arriving at the said finding, reliance was placed upon a decision of this Court
in Manilal Mohanlal Shah and Ors. v. Sardar Sayed Ahmed Sayed Mahamad and Anr. [AIR
1954 SC 349].
Mr.
T.L. Viswanath Iyer, learned senior counsel appearing on behalf of the
appellant, would submit that the the predecessor of the appellant having
deposited the 25% amount on 27.10.1988 pursuant to or in furtherance of the
order passed by the learned Judge himself, the same cannot be said to be in
contravention of the provisions of Order XXI Rule 84 of the Code.
It was
submitted that had an opportunity of hearing been given to the appellant, he
could have shown that the bid having been accepted at 4 O'Clock, there was no
other way to deposit the 25% of the bid amount in the bank and only with a view
to obviate the same, the learned Judge directed the auction purchaser to
deposit the said amount on the next day.
Mr. Iyer
would urge that, in any event, non-compliance of Order XXI Rule 84 of the Code
having not been raised by the decree holder, the High Court committed a
manifest error in relying thereupon as also the decision of this Court in Manilal
Mohanlal Shah (supra).
Mr.
S.S. Javali, learned senior counsel appearing on behalf of the respondents,
however, would submit that the judgment debtor and Respondent No. 2 herein had
colluded with the auction purchaser with a view to defeat the decree of
specific performance of contract. The learned counsel argued that in the first
appeal preferred by Respondent No. 2 against the judgment and decree dated
20.04.1985 passed in favour of Respondent No. 3, Respondent No. 2 had
undertaken not to sell or transfer the said property. The learned counsel
contended that the auction sale being mala fide, this Court should not
interfere with the impugned judgment.
In
view of the rival contentions of the parties, as noticed hereinbefore, the
questions which would arise for our consideration are:
-
What would be
the meaning of the term "immediately" occurring in Order XXI Rule 84
of the Code, in view of the peculiar facts and circumstances of this case?
-
Whether the sale was void only because it was confirmed before expiry of the
period of 30 days.
Order
XXI Rule 84(1) of the Code reads as under:
"84.
Deposit by purchaser and re-sale on default.—
-
On every sale of
immovable properly the person declared to be the purchaser shall pay
immediately after such declaration a deposit of twenty-five per cent on the
amount of his purchase-money to the officer or other person conducting the
sale, and in default of such deposit, the property shall forthwith be
re-sold." What would be the meaning of the term "immediately"
came up for consideration before this Court, as noticed hereinbefore, in Manilal
Mohanlal Shah (supra) wherein it was held:
"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 irregularity
in the conduct of the sale. Non-payment of the price on 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." We are, however, in this case, faced with a different
situation.
Having
regard to the fact that the appellant had explained that it was not possible
for his predecessor in interest to deposit the 25% of the amount immediately
after such declaration, as the banks, at that point of time, were closed and
furthermore having regard to the fact that presumably the court in that view of
the matter had directed the auction purchaser to deposit the amount on the next
day, we are of the opinion that it satisfies the requirements of law.
It is
a well-settled principle of interpretation of a statute that where literal
meaning leads to anomaly and absurdity, it should be avoided. [See Raghunath Rai
Bareja and Another v. Punjab National Bank and Others 2006 (13) SCALE 511] It
is equally well-settled that the Parliament must be held to have intended to
lay down a reasonable statute unless a plain meaning of the Act leads to
different conclusion. It is trite that a statute must be read reasonably. [See Ashok
Lanka and Another v. Rishi Dixit and Others (2005) 5 SCC 598] In Lalit Mohan Pandey
v. Pooran Singh and Ors. [(2004) 6 SCC 626], this Court opined:
"A
statute must be construed having regard to the legislative intent. It has to be
meaningful. A construction which leads to manifest absurdity must not be
preferred to a construction which would fulfill the object and purport of the
legislative intent." [See also State of Himachal Pradesh and Ors. v. Surinder Singh Banolta, 2006 (12) SCALE 571] It
is the duty of the court to accept a construction which promotes the object of a
legislation. [Sanjay Dutt v. State through CBI Bombay (II) (1994) 5 SCC 410] It
is also a well-settled principle of law that common sense construction rule
should be taken recourse to in certain cases.
In Halsbury's
Laws of England (Fourth Edition) Volume 44(1)
(Reissue), it is stated:
"1392.
Commonsense Construction Rule. It is a rule of the common law, which may be
referred to as the commonsense construction rule, that when considering, in
relation to the facts of the instant case, which of the opposing constructions
of the enactment would give effect to the legislative intention, the court
should presume that the legislator intended common sense to be used in
construing the enactment.
1477.
Nature of presumption against absurdity. It is presumed that Parliament intend
that the court, when considering, in relation to the facts of the instant case,
which of the opposing constructions of an enactment corresponds to its legal
meaning, should find against a construction which produces an absurd result,
since this is unlikely to have been intended by Parliament. Here 'absurd' means
contrary to sense and reason, so in this context the term 'absurd' is used to
include a result which is unworkable or impracticable, inconvenient, anomalous
or illogical, futile or pointless, artificial or productive of a
disproportionate counter- mischief.
1480.
Presumption against anomalous or illogical result. It is presumed that
Parliament intends that the Court, when considering, in relation to the facts
of the instant case, which of the opposing constructions of an enactment
corresponds to its legal meaning, should find against a construction that
creates an anomaly or otherwise produces an irrational or illogical result. The
presumption may be applicable where on one construction a benefit is not available
in like cases, or a detriment is not imposed in like cases, or the decision
would turn on an immaterial distinction or an anomaly would be created in legal
doctrine. Where each of the constructions contended for involves some anomaly
then, in so far as the court uses anomaly as a test, it has to balance the
effect of each construction and determine which anomaly is greater. It may be
possible to avoid the anomaly by the exercise of a discretion. It may be,
however, that the anomaly is clearly intended, when effect must be given to the
intention. The court will pay little attention to a proclaimed anomaly if it is
purely hypothetical, and unlikely to arise in practice." In Bombay Dyeing & Mfg. Co. Ltd. (3) v.
Bombay Environmental Action Group and Others [(2006) 3 SCC 434], this Court
observed:
"It
is also a fundamental proposition of construction that the effect of deletion
of words must receive serious consideration while interpreting a statute as
this has been repeatedly affirmed by this Court in a series of judgments"
While applying the principles of interpretation, the courts are also required
to keep in mind the following two well-settled principles of law:
(i) Actus
Curiae neminem gravabit (an act of Court shall prejudice no man) [See Satyabrata
Biswas and Others v. Kalyan Kumar Kisku and Others (1994) 2 SCC 266 Ram Chandra
Singh v. Savitri Devi and Ors., (2003) 8 SCC 319, Board of Control For Cricket
in India and Union of India v. Pramod Gupta (D) By LRs. and Ors. (2005) 12 SCC
1]; and (ii) lex non cogit ad impossibilia (the law does not compel a man to do
that what he cannot possibly perform) [See Ram Chandra Singh (supra) and Board
of Control For Cricket in India (supra)]
The term "immediately", therefore, must be construed having regard to
the aforementioned principles. The term has two meanings. One, indicating the
relation of cause and effect and the other, the absence of time between two
events. In the former sense, it means proximately, without intervention of
anything, as opposed to "mediately". In the latter sense, it means
instantaneously.
The
term "immediately", is, thus, required to be construed as meaning
with all reasonable speed, considering the circumstances of the case. [See Halsbury's
Laws of England, 4th Edition, Vol. 23, para 1618, p. 1178] In a given
situation, the term "immediately" may mean "within reasonable
time. Where an act is to be done within reasonable time, it must be done
immediately. [See M/s. Gangavishan Heeralal v. M/s. Gopal Digambar Jain and
Others, AIR 1980 MP 119 at 123, Keshava S. Jamkhandi v. Ramachandra S. Jamkhandi,
AIR 1981 Kar 97 at 101, Ramnarayan v.
State
of M.P., AIR 1962 MP 93 at 98, R. v. Inspector of Taxes, (1971) 3 All ER 394 at
398 and R. v. HU Inspector of Taxes, (1972) 1 All ER 545 at 555] In Bombay
Dyeing (supra), this Court observed:
"In
'The Interpretation and Application of Statutes', Reed Dickerson, at p.135
discussed the subject while dealing with the importance of context of the
statute in the following terms:
"...
The essence of the language is to reflect, express, and perhaps even affect the
conceptual matrix of established ideas and values that identifies the culture
to which it belongs. For this reason, language has been called "conceptual
map of human experience"." In K.S. Muthu v. T. Govindarajulu and Anr.
[2000 (4) SCALE 175], this Court opined:
"In
the circumstances when the Appellant was not in a position to perform the
direction given by the Court in view of the holiday, the Court cannot expect
the Appellant to perform what is impossible..." In Crawford on Statutory
Construction at page 539, it is stated :
"271.
Miscellaneous Implied Exceptions from the Requirements of Mandatory Statutes,
In General.- Even where a statute is clearly mandatory or prohibitory, yet, in
many instances, the courts will regard certain conduct beyond the prohibition
of the statute through the use of various devices or principles. Most, if not
all of these devices find their jurisdiction in considerations of justice. It
is a well known fact that often to enforce the law to its letter produces
manifest injustice, for frequently equitable and humane considerations, and
other considerations of a closely related nature, would seem to be of a
sufficient caliber to excuse or justify a technical violation of the law."
[See also Dove Investments Pvt. Ltd. and Ors. v. Gujarat Industrial Inv.
Corporation Ltd. and Anr. (2006) 2 SCC 619].
We,
therefore, are clearly of the opinion that the High Court was not correct in
holding that in the facts and circumstances of the case, the provisions of
Order XXI Rule 84 had not been complied with.
It is
interesting to note that in Dakshayani v. Branch Manager & Others [ILR 1997
Kar. 1940], interpreting Order XXI, Rule 84, the Karnataka High Court itself
held "4. On that basis if we interpret the law though there is no power in
the Court to extend the time fixed by the statute still the expression
immediately is capable of taking within its sweep a situation where an act is
impossible of performance on the day on which the auction is held as it
happened in Savithramma's case when the bank itself was on strike and no
deposit could have been made in the bank or in the event the auction sale is
held after Court hours, a receipt order in that regard cannot be obtained for
deposit of such an amount. Such amount could be deposited only after obtaining
a receipt Order. If next day also happens to be a holiday, the day immediately
thereafter coming up which is a working day will be the day on which such act
will have to be performed. If any other interpretation is given it would
stultify the very object of law" We may consider another aspect of the
matter. With a view to consider the question as to whether he intended to abide
by the provisions of a statute or the order of a court, his conduct is
relevant. If one intended to comply with order of a court but by reason of
fortuitous circumstances, he is not in a position to do so, the statute would
not be held to be operating harshly in such a case.
We,
therefore, are of the opinion that having regard to the order of the court and
the other circumstances stated by the appellant, his predecessor-in- interest
not being able to deposit the 25% of the bid amount upon acceptance of bid did
not render the auction sale void, as was opined by the High Court.
We may
also notice that the auction purchaser had deposited the full purchase money
within the time stipulated in terms of Order XXI Rule 85 of the Code.
We do
not know under what circumstances the decree holder himself filed an
application for setting aside the sale. Only because the sale was confirmed
within a period of 30 days from the date of acceptance of the bid, the same by
itself, in our opinion, was not decisive to set aside the sale after 8 years.
We, therefore, are unable to agree with the findings of the Executing Court or the High Court.
The
impugned orders are set aside. However, we make it clear that we have not gone
into the other contentions raised by the respondents herein.
All
other contentions, therefore, may be determined by the Executing Court, if raised, in accordance with law.
The
appeal is allowed. We, however, make no order as to costs.
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