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Report No. 27

Order XXI, rule 84 (2)

1. Under rule 84(1), the purchaser has to deposit 25 per cent, of the purchase money. This requirement can be dispensed with by the Court under rule 84(2), where the decree-holder is the purchaser. The Allahabad Amendment provides, that the court shall not dispense with this requirement where there is an application for rateable distribution of assets. In this connection, reference may be made to Order XXI, rule 72 (2), under which the setting off of the purchase-money and the amount due on the decree is to be "subject to the provisions of section 73".

2. This raises an interesting question, namely, how far a decree-holder, who is a purchaser and purchases with the court's permission under rule 72 is bound to deposit 25 per cent.

3. The matter may be considered under two situations. The first is, where there is no question of rateable distribution. In such a case it has been held that an express order exempting the decree-holder from depositing 25 per cent. is not necessary1. As has been pointed out2, in such a case, to insist on his depositing the amount would be meaningless.

4. The next situation is, where there is a rateable distribution. Here the interests of the other decree-holders are involved; and therefore, even if the decree-holder is the auction purchaser, he should deposit the 25 per cent. of the purchase-money. The Allahabad Amendment makes an express provision on the subject. But, as has been pointed out by the Madras High Court3, even in such a case the decree-holder cannot be compelled to bring into the court the entire purchase price. Where the. purchase price is equal to or less than the decretal amount, the decree-holder's right to set off is controlled only to this extent, namely, that he is bound to biing into court such sums alone as are due to those decree-holders whose applications in execution were pending on the date of the sale. Accordingly, in the Madras case, even the literal wording of rule 199 of the Madras Civil Rules of Practice was held not to come in the way of the right to set-off.

That, rule ran as follows:-

"Provided that if there are several decree-holders entitled to rateable distribution, the purchase-money shall be paid into court."

The court held, that to the extent to which rule 199 of the Madras Civil Rules was inconsistent with the provisions in the First Schedule, it was ultra vires under section 157 of the Civil Procedure Code which saved old rules only to the extent to which they were consistent with the Code4.

5. If would, thus, appear that how far the decree-holder should be required .to deposit the 25 per cent. is a matter depending on-

(i) whether there is any likelihood of rateable distribution, and

(ii) what is the extent of that distribution.

A categorical provision would not, therefore, be helpful.

1. Nurdin v. Bulaqi Mal, AIR 1931 Lah 78 (Tapp J.).

2. Kanhaiya Lal v. Sans Mal, AIR 1956 Raj 18 (19) (Wanchoo C.J. and Dave J.) (reviews the case-law).

3. Murugappa v. Ramasami, AIR 1935 Mad. 893 (894) (right-hand) (Venkatasubba • Rao J.).

4. As to the balance payable under rule 85, see discussion in Vara1akshmamma v. Jannayya, AIR 1943 Mad. 318.

Code of Civil Procedure, 1908 Back

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