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PETITIONER: MAGANLAL ETC.

       Vs.

RESPONDENT: JAISWAL INDUSTRIES NEEMACH & ORS.

DATE OF JUDGMENT07/08/1989

BENCH: OJHA, N.D. (J) BENCH: OJHA, N.D. (J) SAIKIA, K.N. (J)

CITATION:  1989 AIR 2113            1989 SCR  (3) 696  1989 SCC  (4) 344        JT 1989 (3)   415  1989 SCALE  (2)208

ACT:     Code of Civil Procedure, 1898: Order 34 Rule  5--Whether applicable to sale of property mortgaged under State  Finan- cial Corporation Act, 1951.     State Financial Corporations Act, 1951: Sections 31  and 32--Sale of property mortgaged under the Act--Whether provi- sions or Order 34 Rule 5 CPC are attracted.

HEADNOTE:     Maganlal  executed  a mortgage in favour of  M.P.  State Financial Corporation as security for a loan. The amount  of loan  not having been paid, the Corporation  initiated  pro- ceedings  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  auc- tioned  and purchased by M/s Jaiswal Industries,  the  first 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  set- ting aside the sale and also sought stay of further proceed- ings for re-sale. The High Court did not grant stay but only ordered that the fresh sale shall not be confirmed 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 first purchaser was subsequently  allowed by  the  High  Court and the first sale in  his  favour  was confirmed.  Both  Maganlal  and Ramnarayan  have  filed  two 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 has urged that in  case C.M.P-  No. 9940 of 1982 is allowed, it would not be  neces- sary for him to press the merits of the appeal. This conten- tion  has not been seriously disputed by the first  and  the second  purchasers. They have however opposed this  applica- tion  on the ground that: (i) an order of sale of the  mort- gaged property passed 697 by  the  District Judge under section 32 of  the  Act  after

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affecting  an attachment under section 31 thereof  will  not come within the purview of a final decree for sale of  mort- gaged 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 payment ’on or  before  the day fixed or at any time before the confirmation of a sale’; and (iii) section 32(8) of the State Finance Corporation 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 for sale it  was only deemed to be a decree holder by  legal  fiction because  of the expression "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 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  contem- plated  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.     Allowing  the CMP and the appeal filed by  Maganlal  and granting  consequential reliefs to the first and the  second purchasers, this Court.     HELD:  (1) In case the provisions of Order 34 Rule 5  of the  Code  are  held to be applicable to the  facts  of  the instant  case, appropriate relief can be granted  thereunder as the order of confirmation of the sale passed by the  High Court in favour of the first purchaser has not become  abso- lute due to the pendency of these appeals against that order nor  has  the  right of redemption of  Maganlal  yet  extin- guished. [707F-G]     Chandra  Mani  v. Anarjan Bibi, A.I.R.  1934  P.C.  134; Nilayam  Ramkrishan  Rao v. Kandokari  Chellayamma  &  Anr., [1950] S.C.R. 806; S.V. Ramalingam & Ors. v. K.E.  Rajagopa- lan & Ors., [1975] 2 M.L.J. 494; M. Sevugan Chettiar v. V.A. Narayana  Raja, A.I.R. 1984 Mad 334; Raghunath Singh &  Ors. v. Pt. Hansraj Kunwar & 698 Ors.,  A.I.R. 1934 P.C. 205 and Mhadagonda Ramgonda Patil  & Ors. v. Shripal Balwant Rainade & Ors., [1980] 3 S.C.C. 298, referred to.     (2) An application under section 31(1) of the Act cannot be  put on par to a suit for enforcement of a  mortgage  nor the order passed thereon under section 32 of the Act be  put on  par as if it was an order in a suit between a  mortgagee and  the  mortgagor for sale of mortgaged property.  On  the other  hand, the substantive relief in an application  under section.31(1)  is something akin to an application  for  at- tachment  of  property in execution of a decree at  a  stage posterior to the passing of the decree. [710E-F]     Gujarat State Financial Corporation v. M/s Natson  Manu- facturing Co. (P) Ltd., [1979] 1 S.C.R. 372 and M/s  Everest Industrial  Corporation  & Ors. v. Gujarat  State  Financial Corporation, [1987] 3 S.C.C. 597, referred to.     (3)  The purpose of enacting sections 31 and 32  of  the Act was apparently to provide for a speedy remedy for recov- ery  of the dues of the Financial Corporation. This  purpose however  was, in cases covered by clause (a) of  sub-section (1)  of  section 31, confined to the stage of  obtaining  an

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order  asking  to a decree in a suit, in  execution  whereof "the  property pledged, mortgaged, hypothecated or  assigned to  the  Financial Corporation as security for the  loan  or advance"  could be sold. Sections 31 and 32 of the  Act  cut across and dispense with the provisions of the Code from the stage of filing a suit to the stage of obtaining a decree in execution  whereof  such properties as are  referred  to  in clause  (a) of sub-section (1) of section 31 could he  sold. After this stage was reached, sale in execution of an  order under  section 32 of the Act was for purposes  of  execution put at par with sale in execution of a decree obtained in  a suit, by enacting sub-section (8) of section 32 of the  Act. [711H-7 12B]     (4)  If in its anxiety to ensure speedy recovery of  the dues  of the Financial Corporation Parliament  had  intended also to cut across and dispense with the procedure contained in  the  Code  for execution of a decree for  sale  of  such properties  as are referred to in clause (a) of  sub-section (1) of section 31 of the Act, it would have made some provi- sion analogous to provisions contained in the enactments for revenue  recovery. But that was not done. Instead,  sub-sec- tion (8) was incorporated in section 32 of the Act. [712F] (5) As is apparent from the plain language of section  32(8) of the 699 Act,  the legal fiction was created for the purpose of  exe- cuting  an  order under section 32 of the Act Tim’  sale  of attached  property as if such order was a decree in  a  suit for sale and the financial Corporation was the decree holder whereas the debtor was the judgment debtor. [714B]     It is settled law that a legal fiction is to he  limited to  the purpose for which it was created and should  not  he extended beyond the legitimate field. [713H]     The Bengal Immunity Company Ltd. v. The State of Bihar & Ors.,  [1955] 2 S.C.R. 603; East End Dwellings Company  Ltd. v.  Finsbury Borough Council, [1952] Appeal Cames  109;  The Commissioner  of Income-tax, Bombay v. Amarchand N.  Shroff, [1963]  Supp.  1  S.C.R. 699; Commissioner  of  Income  Tax, Gujarat v. Vedilal Lallubhai, [1973] 3 S.C.C. 17 and Nation- al  Sewing Thread Co. Ltd. v. Jamesh Chadwick & Bros.  Ltd., [1953] S.C.R. 1028, referred to.     (6)  The provisions of the Code of Civil Procedure  with regard  to  execution  of a decree  for  sale  of  mortgaged property  contained  in Order 21 of the Code  including  the right  to file an appeal against Such orders  passed  during the  course  of execution which are appealable  shall  apply mutasis mutandis to provisions of an order under section  32 of  the Act unless such provision is not practicable  to  he applied. [714C]     (7) Since, in the instant case, the equity of redemption has  not extinguished, there is no good ground to  take  the view  that  even though all the  remaining  provisions  with regard  to  execution  of a decree  for  sale  of  mortgaged property  will apply to execution of an order under  section 32 of the Act, the provision contained in Order 34 Rule 5 of the  Code shall not apply. Nothing has been brought  to  the notice of the Court as to how and why it is not  practicable to apply the said provision. [7 14F]

JUDGMENT:     CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.  2990-91 of 1980.     From  the Judgment and Order dated 20.9. 1979 &  11.9.79

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of the Madhya Pradesh High Court in Misc. Appeal No. 113  of 1976.     Shiv  Dayal Srivastava, T.S. Krishna Moorthy lyer,  D.N. Mishra, R.P. Srivastava, S. Sukumaran and H.K. Puri,  Harish N.  Salve,  K.K. Mohan, A.K. Sanghi, S.K.  Agnihotri,  Ashok Singh, H.K. Puri and 700 S.K. Gambir for appearing parties. The Judgment of the Court was delivered by     OJHA,  J.  These two appeals by special leave  raise  an interesting question as to whether the provisions  contained in Order 34 Rule 5 of the Code of Civil Procedure (hereinaf- ter referred to as the Code) are attracted during the course of  execution  of  an order of sale  of  mortgaged  property passed  under section 32 of the State Financial  Corporation Act,  1951 (hereinafter referred to as the  Act).  Necessary facts  in  order  to appreciate the context  in  which  this question arises may be stated in brief. Maganlal who is  the appellant in Civil Appeal No. 2990 of 1980 executed a  mort- gage  on  July 16, 1965 in favour of  M.P.  State  Financial Corporation (hereinafter referred to as the Corporation)  as security  for a loan taken by him from the Corporation.  The amount of loan not having been paid by Maganlal the Corpora- tion  initiated proceedings under section 31 of the Act  for recovery of Rs.51,799, which according to it was the  amount due, by attachment and sale of the mortgaged property.  This application  was made as contemplated by Section 31  of  the Act before the District Judge. After adopting the  procedure contemplated  by  section 31 of the Act the  District  Judge passed an order for sale of the property which was ultimate- ly sold for Rs.53,000 in an auction. M/s Jaiswal  Industries (hereinafter  referred  to as the first purchaser)  was  the highest bidder. Magahlal made an application under Order  21 Rule 90 of the Code for setting aside the sale. This  appli- cation was allowed by the Additional District Judge and  the sale  was set aside. Aggrieved by that order the first  pur- chaser  preferred a miscellaneous appeal in the  High  Court and also made an application for staying further proceedings for  re-sale. The High Court, however, did not stay  further proceedings for re-sale but only ordered that the fresh sale should  not  be confirmed till the disposal of  the  appeal. Fresh  auction  accordingly  took place  and  the  sale  was knocked down in favour of Ramnarayan and others (hereinafter referred to as the second purchaser) who are the  appellants in  Civil Appeal No. 2991 of 1980. The appeal of  the  first purchaser  was subsequently allowed by the High  Court.  The application  made by Maganlal under Order 21 Rule 90 of  the Code  was  dismissed  and the sale in favour  of  the  first purchaser  was  confirmed. It is this order which  has  been challenged in Civil Appeal No. 2990 of 1980 by Maganlal  and by the second purchaser in Civil Appeal No. 2991 of 1980, as already indicated above. Maganlal  has  made an application before this  Court  under order 701 34 Rule 5 of the Code being C.M.P. No. 9940 of 1982 to which an objection has been filed. This application was ordered to be  put up at the time of the hearing of the appeal.  Subse- quent events and proceedings of the court below on the basis whereof this application has been made as stated therein are these.     A sum of Rs.65,000 was paid by Maganlal to the  Corpora- tion on December 3, 1988 in full and final settlement of its claim  and  the Corporation acknowledged it  by  granting  a receipt.  Certification  of  the adjustment  thus  made  was

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recorded by the District Judge on April 6, 1981. An applica- tion purporting to be under Order 34 Rule 5 of the Code  was made  on  November  20,  1981  by  Maganlal  for  depositing Rs.2,650 equivalent of 5% of Rs.53,000 which was the highest bid  of the first purchaser and a further sum  of  Rs.7,300, that is, 5% of Rs. 1,46,000 which was the highest bid of the second purchaser. The prayer which was made in this applica- tion  was that the aforesaid sums may be paid to  the  first and  second  purchasers respectively and a final  decree  be passed  in his favour in accordance with Order 34 Rule 5  of the  Code. The Additional District Judge by his order  dated November  27,  1981 permitted Maganlal to  deposit  the  two amounts  separately at his risk and we are informed  by  his learned counsel that these amounts were deposited in  pursu- ance  of the said permission. According to  learned  counsel for  Maganlal no final orders were passed on  the  aforesaid application by the Additional District Judge in view of  the pendency  of these appeals in this Court and it was as  such that C.M.P. No. 9940 of 1982 referred to above was filed  in this Court.     It  was  urged by learned counsel for Maganlal  that  in case  C.M.P.  No.  9940 of 1982 is allowed it  will  not  be necessary for him to press the merits of the appeals and  it is only in the event of the said application being dismissed that  merits  of  the appeal will have to  be  pressed.  He, therefore,  made a request that the said application may  be decided first. Learned counsel for the first and the  second purchasers  did not seriously dispute the above  contention. We have accordingly heard learned counsel for the parties on the  said application and have not heard them on the  merits of the appeals at this stage.     The  aforesaid application has been opposed  by  learned counsel  for the first and second purchasers on  the  ground that  an order of sale of the mortgaged property  passed  by the District Judge under Section 32 of the Act after affect- ing  an  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 702 benefit of that provision could not be extended to Maganlal. According  to  learned counsel for the purchasers  Order  34 Rule 5 of the Code could be applied only if in a suit insti- tuted in this behalf on the basis of a mortgage deed a final decree  for  sale was obtained and the property was  put  to auction  in pursuance of such decree. The  other  submission which  was made by them was that in any view of  the  matter the High Court after allowing the appeal filed by the  first purchaser having confirmed the sale in his favour, an appli- cation  under Order 34 Rule 5 of the Code was not  maintain- able inasmuch as the said provision contemplated payment "on or before the day fixed or at any time before the  confirma- tion of a sale".     Learned  counsel  for Maganlal on the other  hand  urged that  notwithstanding  an order of confirmation of  sale  in favour of the first purchaser having been passed by the High Court  Order 34 Rule 5 of the Code would still be  attracted inasmuch  as these appeals have been filed against the  said order and till these appeals are decided the sale in  favour of  the first purchaser cannot become absolute.  As  regards the  second purchaser he pointed out that  while  permitting fresh  sale during the pendency of the appeal by  the  first purchaser the High Court had specifically directed that  the fresh  sale which may take place shall not be confirmed.  He also  urged that Order 34 Rule 5 of the Code  was  attracted

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even to an order of sale of mortgaged property passed  under section  32  of the Act and since the  right  of  redemption which vests in Maganlal has not yet extinguished in view  of the pendency of these appeals there was no impediment in the relief  contemplated  by Order 34 Rule 5 of the  Code  being granted.     We shall first deal with the question with regard to the effect of an appeal being pending against an order  dismiss- ing  an application under Order 21 Rule 90 of the  Code.  In Chandra  Mani v. Anarjan Bibi, A.I.R. 1934 P.C. Page 134  in execution of two final mortgage decrees for sale, the  mort- gaged properties were sold by auction. The judgment  debtors filed applications under Order 21 Rule 90 of the Code  which were dismissed and the sales were confirmed in pursuance  of Order  21  Rule  92 on April 22, 1924.  Appeals  were  filed against  this order by some of the judgment debtors  in  the High  Court  which were dismissed on March  17,  1927.  Sale certificates  were  thereafter granted to  the  two  auction purchasers  on May 19, 1928 and June 6,  1928  respectively, who  thereupon applied on September 10, 1928 for  possession of the properties purchased by them. These applications were objected to by the judgment debtors on the ground that  they were  barred by limitation under Article 180 of the  Limita- tion Act, 1908 703 which provided that such an application must be made  within three  years from the time when the sale  becomes  absolute. The Subordinate Judge overruled the objection on the  ground that  in  view of the pendency of the appeals filed  by  the judgment debtors against the order dismissing their applica- tions under Order 21 Rule 90 of the Code time did not  begin to  run  until  March 17, 1927 when the  said  appeals  were dismissed  by  the  High Court. On appeal  by  the  judgment debtors  the High Court took the view that the  sale  became absolute  on April 22, 1924 when the Subordinate Judge  con- firmed the sales. On further appeal by the auction  purchas- ers  the order of the High Court was reversed by  the  Privy Council and it was held:               "Upon consideration of the sections and orders               of  the Code, their Lordships are  of  opinion               that  in construing the meaning of  the  words               "when the sale becomes absolute" in Act.  180,               Tim.  Act, regard must be had not only to  the               provisions  of 0.21, R. 92(1) of the  schedule               to  the Civil Procedure Code, but also to  the               other  material  sections and  orders  of  the               Code, including those which relate to  appeals               from  orders  made under  0.21,  R.92(1).  The               result  is that where there is an appeal  from               an order of the Subordinate Judge, disallowing               the  application  to set aside the  sale,  the               sale  will  not  become  absolute  within  the               meaning  of  Art.  180, Lim.  Act,  until  the               disposal of the appeal, even though the Subor-               dinate  Judge may have confirmed the sale,  as               he was bound to do, when he decided to  disal-               low the above mentioned application.                         Their  Lordships  therefore  are  of               opinion  that  on the facts of this  case  the               sales  did  not  become  absolute  within  the               meaning  of  Art. 180, Lim.  Act,  until  17th               March  1927,  and that  the  applications  for               possession of the properties purchased at  the               auction  sales were not barred by the  Limita-               tion Act."

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   A  similar  view was taken by this Court  in  Sri  Ranga Nilayam Ramkrishan Rao v. Kandokari Chellayamma and another, [1950]  S.C.R. 806 where it was held that when an appeal  is filed  against an order refusing to set aside  an  execution sale  under Order 21 Rule 90 of the Code no finality can  be attached  to the order confirming the sale until the  appeal is decided. In S.V. Ramalingam & others v. K.E.  Rajagopalan and  other,  [1975] 2 M.L.J. Page 494 the question  came  up directly  in connection with the applicability of  Order  34 Rule 704 5 itself which contemplates payment into court "on or before the  day fixed or at any time before the confirmation  of  a sale".  In  that  case too in pursuance of  a  final  decree passed  in this behalf the mortgaged property was  sold  and the  applications made by the mortgagors for  setting  aside the  sale were dismissed and the sale was confirmed and  the sale  certificate  was also engrossed on stamp  papers.  The mortgagors  filed  an appeal against that order  before  the High Court and during the pendency of the appeal an applica- tion  under Order 34 Rule 5 was filed for redemption of  the mortgage.  This  application was opposed inter alia  on  the ground that such an application could not lie after the sale had  been confirmed by the lower court. While repelling  the objection  of  the auction purchaser and  holding  that  the judgment  debtors were entitled to the benefit of  Order  34 Rule  5 of the Code it was held by Mr. Justice S.  Natarajan (as His Lordship then was):               "The confirmation of a sale subsequent to  the               dismissal  of a petition under Order 21,  rule               90  cannot,  in reality, alter  the  situation               when  the mortgagor-judgment-debtor  has  pre-               ferred  within  time  an  appeal  against  the               dismissal of his petition under Order 21  Rule               90.  Though the confirmation of the sale  does               take the auction-purchaser a step further than               before  the  confirmation  of  the  sale,  the               confirmation  by  itself,  is  in  one  sense,               inchoate. The confirmation gives the sale only               viability  but  does not render  the  sale  an               indefeasible one, till such time as the appeal               preferred by the mortgagor against the validi-               ty  of  the sale remains undisposed.  In  that               sense,  the confirmation effected by the  exe-               cuting  Court may become final as far  as  the               executing Court is concerned, but it certainly               does not stamp the transaction with  irrevoca-               ble finality when alone the rights of  parties               get  crystallised beyond  retracement.  Conse-               quently,   the   appeal   preferred   by   the               judgment-debtor has the effect of rendering  a               sale  and its confirmation fluidal  and  nebu-               lous. It, therefore, follows that the finality               of  the sale is rendered at large  before  the               appellate  Court  in appeal and as  such,  the               petitioners  will be entitled to exercise  the               right conferred on them under Order 34, rule 5               to redeem the mortgage."     The same view was reiterated in almost an identical case by  a Bench of the Madras High Court in M. Sevugan  Chettiar v.  V.A. Narayana Raja, A.I.R. 1984 Madras Page 334. It  was held  that so long  as there is no confirmation of  sale  in the eye of law and matter was sub- 705 judice in appeal time was available for the judgment  debtor

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to  make the deposit under Order 34 Rule 5 of the  Code  and the process of deposit could be worked out until the confir- mation of sale reaches the finality.     Section  60 of the Transfer of Property Act  confers  on the mortgagor a right to redeem a mortgage. In so far as  it is  relevant for the purpose of these appeals the said  sec- tion reads as hereunder:               "60.  Right of mortgagor to redeem  .--At  any               time after the principal money has become due,               the  mortgagor  has  a right,  on  payment  or               tender,  at  a proper time and place,  of  the               mortgage-money,  to require the mortgagee  (a)               to deliver to the mortgagor the  mortgage-deed               and  all documents relating to  the  mortgaged               property which are in the possession or  power               of  the mortgagee, (b) where the mortgagee  is               in  possession of the mortgaged  property,  to               deliver  possession thereof to the  mortgagor,               and (c) at the cost of the mortgagor either to               re-transfer  the mortgaged.property to him  or               to  such third person as he may direct, or  to               execute  and  (where  the  mortgage  has  been               effected  by a registered instrument) to  have               registered  an acknowledgment in writing  that               any right in derogation of his interest trans-               ferred to the mortgagee has been extinguished:                         Provided that the right conferred by               this section has not been extinguished by  act               of the parties or by decree of a Court."     In Raghunath Singh and others v. Pt. Hansraj Kunwar  and others,  A.I.R. 1934 P.C. Page 205 in a suit filed  for  re- demption  of a mortgage a decree was passed  containing  the provision  that  in  case of  default by  the  plaintiff  in payment  his case will stand dismissed. Payment  as  contem- plated by the decree was, however, not made and subsequently a  second  suit for redemption was filed. It  was  contested inter alia on the ground that in view of the non-payment  of the decretal amount the previous suit stood dismissed and on account  of the dismissal of that suit the  subsequent  suit was  not maintainable inasmuch as right of redemption  stood extinguished.  The Privy Council after making  reference  to the  proviso to section 60 of the Transfer of  Property  Act rejected the aforesaid objection and held:                         "The  right  to redeem  is  a  right               conferred upon the mortgagor by enactment,  of               which he can only be deprived               706               by  means and in manner enacted for that  pur-               pose,  and  strictly  complied  with.  In  the               present case the only basis for the claim that               the  right to redeem has been extinguished  in               S.  60; but in their Lordships’ view  the  old               decree  cannot properly be construed as  doing               that which it does not purport to do, viz., as               extinguishing the fight to redeem."     This question came up very recently before this Court in Mhadagonda  Ramgonda  Patil and others  v.  Shripal  Balwant Rainade and others, [1988] 3 S.C.C. Page 298. The mortgagors in  that  case filed a suit for redemption  and  obtained  a final  decree  for  sale of the  mortgaged  property.  They, however, did not execute that decree and allowed the same to be  time barred. Subsequently, a second suit for  redemption was,  filed claiming that the mortgage still  subsisted  and the  mortgagors  were entitled to redeem the  same  and  get possession of the mortgaged property. The suit was contested

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inter alia on the ground that as the mortgagors did not  pay the  decretal dues under the decree passed in  the  previous suit  their right of redemption had been  extinguished.  The aforesaid  plea raised in defence was repelled by the  trial court  and the suit for redemption was decreed. The  defend- ants preferred an appeal against that decree before the High Court  and raised a similar contention as was their  defence in  the trial court. It was held by the High Court  that  in spite  of  the fact that in the earlier suit  a  preliminary decree  and final decree were passed and the mortgagors  did not  redeem the mortgages by depositing the  decretal  dues, still  the  right of redemption was  not  extinguished.  The findings  of  the High Court aforesaid with  regard  to  the maintainability  of  the  second suit  for  redemption  were challenged  by the defendants before this Court and  it  was reiterated by their learned counsel that second suit was not maintainable. While repelling this submission and interpret- ing the provisions to section 60 of the Transfer of Property Act it was held:               "It is thus manifestly clear that the right of               redemption will be extinguished (1) by the act               of  the  parties  or (2) by the  decree  of  a               court. We are not concerned with the  question               of  extinguishment of the right of  redemption               by  the  act of the parties. The  question  is               whether  by  the preliminary decree  or  final               decrees passed in the earlier suit, the  right               of the respondents to redeem the mortgages has               been extinguished. The decree that is referred               to in the proviso to Section 60 of the  Trans-               fer  of  Property Act is a final decree  in  a               suit for foreclosure, as provided in  sub-rule               (2)  of Rule 3 of Order 34 and a final  decree               in a redemption suit as               707               provided in Order 34, Rule 8(3)(a) of the Code               of  Civil Procedure. Sub-rule (2) of Rule  34,               inter  alia,  provides that where  payment  in               accordance  with  sub-rule (1)  has  not  been               made, the court shall, on an application  made               by the plaintiff in this behalf, pass a  final               decree  declaring that the defendant  and  all               persons  claiming  through or  under  him  are               debarred  from all right to redeem  the  mort-               gaged property and also, if necessary,  order-               ing  the  defendant to put  the  plaintiff  in               possession  of the property. Thus, in a  final               decree  in  a  suit for  foreclosure,  on  the               failure  of the defendant to pay  all  amounts               due,  the extinguishment of the right  of  re-               demption  has  to  be  specifically  declared.               Again, in a final decree in a suit for redemp-               tion  of mortgage by conditional sale  or  for               redemption  of  an  anomalous  mortgage,   the               extinguishment of the right of redemption  has               to  be specifically declared, as  provided  in               clause (a) if sub-rule (3) of Rule 8 of  Order               34  of the Code of Civil Procedure. These  are               the two circumstances--(1) a final decree in a               suit  for  foreclosure under  Order  34,  Rule               3(2);  and  (2) a final decree in a  suit  for               redemption under Order 34, Rule 8(3)(a) of the               Code  of  Civil Procedure--When the  right  of               redemption is extinguished."     It  was further held that in a suit for redemption of  a

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mortgage  other  than a mortgage by conditional sale  or  an anomalous mortgage, the mortgagor has a right of  redemption even  after the sale has taken place pursuant to  the  final decree, but before the confirmation of such sale. In view of these  provisions the question of merger of mortage-debt  in the decretal-debt does not arise at all.     In this view of the matter we are of the opinion that in case the provisions of Order 34 Rule 5 of the Code are  held to be applicable to the facts of the instant case  appropri- ate relief can be granted thereunder as the order of confir- mation of the sale passed by the High Court in favour of the first purchaser has not become absolute due to the  pendency of  these  appeals against that order nor has the  right  of redemption of Maganlal yet extinguished.     We  shall now advert to the question as to what  is  the nature  of an order passed by the District Judge under  sec- tions 31 and 32 of the Act. Clause (a) of sub-section (1) of Section  31 of the Act which is relevant for the purpose  of these appeals reads:               "31.  (1)  Where  an  industrial  concern,  in               breach of any               708               agreement,  makes any default in repayment  of               any loan or advance or any instalment  thereof               or  in meeting its obligations in relation  to               any  guarantee  given by  the  Corporation  or               otherwise  fails to comply with the  terms  of               its  agreement with the Financial  Corporation               or where the Financial Corporation requires an               industrial concern to make immediate repayment               of  any loan or advance under section  30  and               the  industrial  concern fails  to  make  such               repayment,  then  without  prejudice  to   the               provisions  of section 29 of this Act  and  of               section  69 of the Transfer of  Property  Act,               1882 any officer of the Financial Corporation,               generally or specially authorised by the Board               in  this  behalf, may apply  to  the  district               judge within the limits of whose  jurisdiction               the industrial concern carries on the whole or               a substantial part of its business for one  or               more of the following reliefs, namely:                         (a) for an order for the sale of the               property  pledged, mortgaged, hypothecated  or               assigned  to  the  Financial  Corporation   as               security for the loan or advance; or               Sub-section  (1)  of  section 32  of  the  Act               provides:               "32.  (1)  When  the application  is  for  the               reliefs  mentioned in clauses (a) and  (c)  of               sub-section  (1) of section 31,  the  district               judge shall pass an ad interim order attaching               the  security, or so much of the  property  of               the industrial concern as would on being  sold               realise  in his estimate an amount  equivalent               in  value to the outstanding liability of  the               industrial  concern to the Financial  Corpora-               tion, together with the costs of the  proceed-               ings  taken under section 31, with or  without               an  ad  interim  injunction  restraining   the               industrial concern from transferring or remov-               ing its machinery, plant or equipment."     Sub-section  (4) of section 32 contemplates issue  of  a notice to the industrial concern in the manner stated there- in. Sub-section (5) inter alia contemplates that if no cause

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is  shown on or before the date specified in the notice  the District  Judge  shall forthwith make the ad  interim  order absolute and direct the sale of the attached property.  Sub- section  (6) on the other hand contains the procedure to  be followed  by  the District Judge if cause is  shown  by  the industrial concern 709 on  receipt of the notice and provides that after making  an investigation  as contemplated the District Judge may  inter alia confirm the order of attachment and direct the sale  of the  attached property. Sub-section (8) of section  32  pro- vides:               "(8) An order of attachment or sale of proper-               ty  under this section shall be  carried  into               effect  as  far as practicable in  the  manner               provided in the Code of Civil Procedure,  1908               for  the  attachment or sale  of  property  in               execution  of  a decree as  if  the  Financial               Corporation were the decreeholder."     In  Gujarat State Financial Corporation v.  M/s.  Natson Manufacturing Co. (P) Ltd. & Ors., [1979] 1 S.C.R. Page  372 the question as to what was the nature of proceedings  under Sections  31  and 32 of the Act came  up  for  consideration before  this  Court in connection with  an  objection  about payment of court fee on an application under section  31(1). It was held that the form of the application, the nature  of the relief, the compulsion to make interim order, the limit- ed inquiry contemplated by sub-section (6) of section 32 and the  nature of relief that can be granted and the manner  of execution  clearly show that the application  under  section 31(1)  is neither a plaint as contemplated by Article  1  of Schedule  1 nor an application in the nature of a plaint  as contemplated by Article 7 of the Court Fees Act, 1870.1t was also held that section 31(1) of the Act prescribes a special procedure  for  enforcement of the claims of  the  Financial Corporation and it is not even something akin to a suit of a mortgagee  to  recover mortgage money by sale  of  mortgaged property.  It was pointed out that the  distinguishing  fea- tures  noticeable  between a suit for recovery  of  mortgage money by sale of mortgaged property and an application under section  31  for one or more reliefs specified  therein  are that even if the Corporation-applicant so chooses it  cannot in  the  application pray for a preliminary decree  for  ac- counts or final decree for payment of money nor can it  seek to  enforce any personal liability even if such one  is  in- curred  under  the  contract of  mortgage.  The  Corporation cannot  pray  for a decree of its outstanding dues  and  can make  an application for one of the three reliefs  mentioned in  section  31(1), none of which if granted  results  in  a money decree or decree for recovery of outstanding loans  or advance. It was further held that a substantive relief in an application  under  section 31(1) "is something akin  to  an application  for  attachment of property in execution  of  a decree  at a stage posterior to the passing of the  decree". With regard to the scope of sub-section (6) of section 32 it was held that it has to be read in the context in 710 which it is placed and it does not expand the context in the application  as if it is a suit between a mortgagee and  the mortgagor for sale of mortgaged property. The relief claimed under section 31(1) was held not to be a substantive  relief which can be valued in terms of the monetary gain or preven- tion of monetary loss. It was pointed out that the claim  of the  Corporation in an application under section  31(1)  was that  there  is a breach of agreement or default  in  making

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repayment  of  loan or advance or  instalment  thereof  and, therefore, the mortgaged property could be sold.     In  M/s.  Everest Industrial Corporation and  others  v. Gujarat  State Financial Corporation, [1987] 3  S.C.C.  Page 597 a question arose as to whether an order under section 34 of  the  Code could be passed in proceedings  under  section 31(1)  of  the Act. After referring to the decision  in  the case  of Gujarat State Financial Corporation (supra) it  was held that if as held by this Court in that case the proceed- ing  instituted under section 31(1) of the Act is  something akin to an application for attachment of property in  execu- tion of a decree at a stage posterior to the passing of  the decree no question of passing any other under section 34  of the Code would arise since that section could be  applicable only  at the stage of the passing of the decree and  not  to any stage posterior to the decree.     In  view  of  these two decisions the law  seems  to  be settled  that an application under section 31(1) of the  Act cannot be put on par to a suit for enforcement of a mortgage nor the order passed thereon under section 32 of the Act  be put on par as if it was an order in a suit between a mortga- gee and the mortgagor for sale of mortgaged property. On the other hand the substantive relief in an application  section 31(1) is something akin to an application for attachment  of property  in execution of a decree at a stage  posterior  to the passing of the decree.     We  now turn to the crucial question as to  whether  the relief contemplated by Order 34 Rule 5 of the Code which  in substance is to permit redemption of the mortgage during the course of executing of a final decree for sale of  mortgaged property  can be granted even after the property  which  was mortgaged  as security for loan taken from  the  Corporation has,  in execution of an Order under Section 32 of  the  Act passed  on an application under Section 31(1) thereof,  been sold  by the District Judge following the procedure  contem- plated by Sub-section (8) of Section 32 of the Act. 711     In  this  connection,  it is relevant to  note  that  in neither  of  the two cases namely, Gujarat  State  Financial Corporation and M/s Everest India Corporation, (supra)  Sub- section (8) of the Section 32 of the Act came up for consid- eration. Section 46-B of the Act reads as hereunder:               "46B.  The provisions of this Act and  of  any               rules  or  orders made thereunder  shall  have               effect  notwithstanding anything  inconsistent               therewith  contained in any other law for  the               time  being in force or in the  memorandum  or               articles  of  association  of  an   industrial               concern  or  in any  other  instrument  having               effect  by virtue of any law other  than  this               Act, but save as aforesaid, the provisions  of               this  Act shall be in addition to, and not  in               derogation  of,  any other law  for  the  time               being applicable to an industrial concern."     No provision in the Act or any Rule or Order made there- under has been brought to our notice stating that the effect of  any  action taken thereunder including  the  passing  or orders  of  attachment  and sale under Sections  31  and  32 thereof, is to extinguish the right of redemption. In  other words,  there is nothing in the Act or in any Rule or  Order made thereunder which may be inconsistent with Section 60 of the Transfer of Property Act particularly the proviso there- to.  Consequently  no provision in the Act can be  read  "in derogation" of the . said Section 60.     It  is true that under the Code it is not  necessary  to

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attach the mortgaged property before putting it to sale  but Section  31 of the Act contemplates attachment of  even  the mortgaged property and Section 32 thereof speaks of an Order of  sale of the attached property, but that alone can by  no stretch of imagination have the effect of extinguishing  the equity  of  redemption. Such attachment does not  have  that effect either under the proviso to Section 60 of the  Trans- fer  of Property Act or under any provision of the  Act,  or Rule or Order made thereunder Sections 31 and 32 of the  Act in  so far as they contain the requirement of attaching  the mortgaged property before its sale and ordering sale of  the attached property read with Sub-section (8) of Section 32 of the Act will, therefore, have the only effect that the  said requirement "shall be in addition to, and not in  derogation of"  the provisions contained in the Code for sale of  mort- gaged property.      The  purpose of enacting Sections 31 and 32 of the  Act was  apparently to provide for a speedy remedy for  recovery of  the  dues  of the Financial  Corporation.  This  purpose however was, in cases covered by 712 clause (a) of Sub-section (1) of Section 31 confined to  the stage  of obtaining an Order akin to a decree in a suit,  in execution whereof "the property pledged, mortgaged, hypothe- cated  or assigned to the Financial Corporation as  security for  the loan or advance" could be sold. Sections 31 and  32 of  the Act cut across and dispense with the  provisions  of the  Code  from the stage of filing a suit to the  stage  of obtaining  a decree in execution whereof such properties  as are referred to in clause (a) of Sub-section (1) of  Section 31  could  be  sold. After this stage was  reached  sale  in execution  of an Order under Section 32 of the Act  was  for purposes ’of execution put at par with sale in execution  of a decree obtained in a suit, by enacting Sub-section (8)  of Section  32  of the Act. This Sub-section as  noted  earlier provides  that  an order of attachment or sale  of  property under  this section shall be carried into effect as  far  as practicable  in  the manner provided in the  Code  of  Civil Procedure,  1908 for the attachment or sale of  property  in execution  of a decree as if the Financial Corporation  were the decreeholder.     Expressions "as far as practicable" and "in execution of a  decree as if the Financial Corporation were  the  decree- holder"  are the only expressions which qualify the  "manner provided"  for "sale of property in execution of a  decree", as contained not only in some specific provision of the Code e.g.  Order 21 thereof but "in the Code of Civil  Procedure, 1908" namely, all the provisions in the Code in this  regard ’ wherever they may be.     If in its anxiety to ensure speedy recovery of the  dues of the Financial Corporation Parliament had intended also to cut across and dispense with the procedure contained in  the Code-for execution of a decree for sale of such  properties. as  are  referred  to in clause (a) of  Sub-section  (1)  of Section  31  of the Act, it would have made  some  provision analogous  to  provisions contained in  the  enactments  for revenue  recovery. But that was not done. Instead,  Sub-sec- tion (8) was incorporated in Section 32 of the Act. It is in this  background  that the question  whether  provisions  of Order 34 Rule 5 of the Code will be attracted or not to  the facts of the instant case has to be considered.     Relying on a decision of the Karnataka High Court in M/s Hotel  Natraj   v.  Karnataka State  Financial  Corporation, A.I.R.   1989 Karnataka 90 it was urged by  learned  counsel for  Maganlal that in view of sub-section (8) of section  32

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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.  Learned counsel for the  purchasers  on  the other 713 hand  urged  that section 32(8) of the Act made  the  manner provided in the Code Applicable only "as far as practicable" and there was neither a decree nor was the Financial  Corpo- ration  as  decree holder in a suit for sale  but  was  only deemed to be a decree holder by legal fiction because of the expression  in  execution of a decree as  if  the  Financial Corporation were the decree-holder" We shall first deal with the scope and import of the expres- sion far as practicable" and "in execution of a decree as if the  Financial Corporation were the decree-holder"  used  in sub-section  (8) of section 32 of the Act. Without  anything more  the expression "as far as practicable" will mean  that the  manner provided in the Code for attachment or  sale  of property in execution of a decree shall be applicable in its entirety  except  such provision therein which  may  not  be practicable to be applied. It will be for the person assert- ing that a particular provision with regard to execution  of a decree for sale of an immovable property contained in  the Code  of Civil Procedure will not apply to execution  of  an order under section 32 of the Act on the ground that it  was not  practicable to show as to how and why it was not  prac- ticable. As regards the second expression namely "in  execu- tion  of a decree as if the Financial Corporation  were  the decree-holder"  it  may be pointed out that even  though  an order under section 32 as seen above is not a decree stricto sensu as defined in section 2(2) of the Code and the  Finan- cial  Corporation  would not as such be  called  the  decree holder,  section  32(6) of the Act imports a  legal  fiction whereby  the order under section 30 of the Act for  purposes of execution would be a decree and the Financial Corporation a  decree holder. Apparently, the person against  whom  such decree has been executed namely the debtor of the  Financial Corporation would be the judgment debtor. In East End Dwell- ings  Company  Limited v. Finsbury Borough  Council,  [1952] Appeal  Cases 109 Lord Asquith at page 132 observed "if  you are  bidden to treat an imaginary state of affairs as  real, you  must  surely,  unless prohibited from  doing  so,  also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevita- bly have flowed from or accompanied it  ...... The  Statute says that you must imagine a certain  state  of affairs; it does not say that having done so, you must cause or  permit your imagination to boggle when it comes  to  the inevitable corollaries of the state of affairs"     It  is  also settled law that a legal fiction is  to  be limited  to the purpose for which it was created and  should not  be extended beyond the legitimate field. Reference  for the proposition may be made to the 714 decisions  of  this  Court in The  Bengal  Immunity  Company Limited  v. The State of Bihar and others, [1955]  2  S.C.R. Page  603;  The Commissioner of Income-Tax, Bombay  City  1, Bombay  v. Amarchand N. Shroff, [1963] Supp. 1  S.C.R.  Page 699 and Commissioner of Income Tax. Gujarat v. VadilaI  Lal- lubhai, etc. etc., [1973] 3S.C.C. Page 17.     As is apparent from the plain language of section  32(8) of the Act the legal fiction was created for the purpose  of executing  an order under section 32 of the Act for sale  of attached  property as if such order was a decree in  a  suit for sale and the Financial Corporation was the decree holder

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whereas  the debtor was the judgment  debtor.  Consequently, the provisions of the Code of Civil Procedure with regard to execution  of a decree for sale of mortgaged  property  con- tained  in Order 21 of the Code including the right to  file an  appeal against such orders passed during the  course  of execution which are appealable, shall apply mutatis mutandis to execution of an order under section 32 of the Act  unless some  provision is not practicable to be applied. It  cannot be disputed that the provisions contained in Order 34 Rule 5 of  the  Code are attracted as is apparent  from  the  plain language  thereof during the proceedings in execution  of  a final  decree for sale and are thus provisions contained  in the Code with regard to and having a material beating on the execution  of  a  decree as aforesaid. As  seen  above,  the provisions  contained  in  Order 34 Rule 5 of  the  Code  in substance permit the judgment debtor to redeem the  mortgage even at the stage contemplated by Order 34 rule 5 unless the equity of redemption has got extinguished. Since the contin- gency  whereunder an equity of redemption gets  extinguished is contained in the proviso to section 60 of the Transfer of Property  Act and since as indicated above, in  the  instant case  the equity of redemption has not extinguished we  find no  good  ground to take the view that even though  all  the remaining  provisions with regard to execution of  a  decree for sale of mortgaged property will apply to execution of an order  under section 32 of the Act, the provision  contained in Order 34 Rule 5 of the Code shall not apply. Nothing  has been  brought  to  our notice as to how and why  it  is  not practicable to apply the said provision. As already  pointed out  earlier it has been held by this Court in the  case  of Mhadagonda  Ramgonda Patil, (supra) that in a suit  for  re- demption of as mortgage other than a mortgage by conditional sale or an anomalous mortgage, the mortgagor has a right  of redemption  even after the sale has taken place pursuant  to the  final decree but before the confirmation of  such  sale and that in view of these provisions the question of merger- of mortgage debt in the decretal debt does not at all arise. We  again do not find any good ground for holding  that   he said principle will not be attracted to 715 a  sale  which has taken place pursuant to  an  order  under section  32  of the Act in so far as the provisions  in  the Code with regard to execution of a decree are concerned.  Of course,  in  view of the limited scope of legal  fiction  as indicated above the provisions in the Code shall be applica- ble  to an order of sale under the Act only with  regard  to execution of that order as if it was a decree in a suit  and the Financial Corporation was a decree holder and the debtor a judgment debtor and this legal fiction will not be capable of  being  extended so as to treat an order of  sale  passed under the Act to be a decree in a suit for any other purpose for  instance applying section 34 of the Code as was  sought to  be done in the case of M/s Everest  Industrial  Corpora- tion,  (supra)  nor could it be extended  for  treating  the application made under section 31(1) of the Act as a  plaint for  purposes  of payment of court fee as was sought  to  be done  in  the case of Gujarat State  Financial  Corporation, (supra).     That the provisions of the Code with regard to execution of  a decree for sale of mortgaged property would  apply  to execution  of an order under section 32 of the Act is  clear from section 32(8) of the Act and the reasons stated  above. It  would  also be so inasmuch as even  otherwise  once  the order  under  section 32 for sale is made  executable  by  a District  Judge  in his capacity as District Judge  and  not

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persona  designata  the  provisions of the  Code  which  are exercisable  by the District Judge in execution of a  decree for sale of mortgaged property would get attracted.     In  National Sewing Thread Co. Ltd. v. James Chadwick  & Bros.  Ltd.,  [1953] S.C.R. Page 1028 an  appeal  was  filed before a Single Judge of the Bombay High Court under section 76(1)  of the Trade Marks Act, 1940 which provides  that  an appeal  shall lie from any decision of the  Registrar  under the  Act  or  the rules made thereunder to  the  High  Court having  jurisdiction. The Trade Marks Act, however, did  not make  any provision with regard to the procedure to be  fol- lowed  by the High Court in the appeal or as to whether  the order of the High Court was appealable. Against the judgment of the Single Judge an appeal was preferred under clause  15 of  the  Letters  Patent. That appeal was  allowed  and  the judgment  of the Single Judge was reversed. Before  the  Su- preme Court an objection was raised that the Letters  Patent appeal was not maintainable. While repelling the said objec- tion it was held:               "Obviously  after the appeal had  reached  the               High  Court it has to be determined  according               to the rules of practice and               716               procedure of that Court and in accordance with               the provisions of the charter under which that               Court  is constituted and which confers on  it               power  in respect to the method and manner  of               exercising that jurisdiction. The rule is well               settled  that when a statute directs  that  an               appeal  shall  lie to a Court  already  estab-               lished, then that appeal must be regulated  by               the practice and procedure of that Court. This               rule  was very succinctly stated  by  Viscount               Haldane  L.C.  in  National   Telephone   Co.,               Ltd.   v.   Postmaster-General, [19  13]  A.C.               546, in these terms:-                        "When  a  question is  stated  to  be               referred to an established Court without more,               it,  in my opinion, imports that the  ordinary               incidents  of the procedure of that Court  are               to attach, and also that any general right  of               appeal from its decision likewise attaches."                        The same view was expressed by  their               Lordships  of  the Privy Council  in  R.M.A.R.               KLA. Adaikappa Chettiar v. Ra.  Chandrasekhara               Thevar, [1974] 741A 264, wherein it was said:                        "Where  a legal right is  in  dispute               and  the  ordinary Courts of the  country  are               seized of such dispute the Courts are governed               by the ordinary rules of procedure  applicable               thereto  and an appeal lies if  authorised  by               such  rules,  notwithstanding that  the  legal               right  claimed arises under a special  statute               which  does  not, in terms confer a  fight  of               appeal."                        Again in Secretary of State for India               v.  Chellikani Rama Rao, [1916] I.L.R. 39  Mad               617,  when  dealing with the  case  under  the               Madras Forest Act their Lordships observed  as               follows:                        "It  was contended on behalf  of  the               appellant  that  all  further  proceedings  in               Courts  in  India  or by way  of  appeal  were               incompetent, these being excluded by the terms               of  the  statute just quoted. In  their  Lord-

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             ships’  opinion  this objection is  not  well-               founded.  Their view is that when  proceedings               of  this character reach the  District  Court,               that Court is appealed to as one of the  ordi-               nary  Courts  of the country, with  regard  to               whose procedure, orders, and decrees the               717               ordinary  rules  of the Civil  Procedure  Code               apply."                        Though the facts of the cases  laying               down  the above rule were not exactly  similar               to the facts of the present case, the  princi-               ple  enunciated  therein  is  one  of  general               application and has an apposit application  to               the  facts  and circumstances of  the  present               case.  Section 76 of the Trade Marks Act  con-               fers  a right of appeal to the High Court  and               says nothing more about it. That being so, the               High Court being seized as such of the  appel-               late  jurisdiction conferred by section 76  it               has  to exercise the jurisdiction in the  same               manner  as  it exercises its  other  appellate               jurisdiction  and  when such  jurisdiction  is               exercised  by  a single  Judge,  his  judgment               becomes  subject to appeal under clause 15  of               the Letters Patent there being nothing to  the               contrary in the Trade Marks Act."     In view of the foregoing discussion we are of the  opin- ion  that  the application made by Maganlal  under  Order’34 Rule  5 of the Code is maintainable and the requirements  of the  said  provision having been satisfied  the  application deserves to be allowed.     In  the result, while C.M.P. No. 19760 of 1984 which  is for initiating contempt proceedings is dismissed, C.M.P. No. 99409 1982 under Order 34 Rule 5 of the Code filed by Magan- lal  is allowed. Accordingly Civil Appeal No. 2990  of  1980 filed by Maganlal as also the application made by him  under Order 21 Rule 90 of the Code are allowed. The order appealed against passed by the High Court is set aside and the  order passed  by the Additional District Judge setting  aside  the auction  sale in favour of the first purchaser is  restored. Civil Appeal No. 2991 of 1980 filed by the second  purchaser is also allowed in so far as it prays for the setting  aside of the order of the High Court. However, on the view we have taken  the  subsequent auction sale held in  favour  of  the second purchaser cannot be sustained and is also hereby  set aside. As a consequence we direct that since the Corporation in the instant case has accepted Rs.65,000 in full and final satisfaction of its claim, it shall return the mortgage deed executed  by Maganlal to him. The Additional District  Judge in whose court the application under Order 34 Rule 5 of  the Code was made as stated earlier shall strike off the  execu- tion  in full and final satisfaction. The sum  of  Rs.53,000 deposited  by  the first purchaser  together  with  Rs.2,650 representing  5% of the said sum deposited by  Maganlal  and interest  which may have accrued on these amounts  shall  be paid over the first purchaser. Likewise, the 718 sum  of Rs. 1,46,000 deposited by the second  purchaser  to- gether with Rs.7,300 representing 5% of the said sum  depos- ited by Maganlal and the interest which may have accrued  on these  amounts shall be paid over to the  second  purchaser. There shall be no order as to costs. R.S.S.                                               Appeals allowed.

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