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PETITIONER: RAO MAHMOOD AHMED KHAN THROUGH THEIR L.R.

       Vs.

RESPONDENT: SHRI RANBIR SINGH & ORS.

DATE OF JUDGMENT22/02/1995

BENCH: FAIZAN UDDIN (J) BENCH: FAIZAN UDDIN (J) AGRAWAL, S.C. (J)

CITATION:  1995 AIR 2195            1995 SCC  Supl.  (4) 275  JT 1995 (2)   383        1995 SCALE  (1)842

ACT:

HEADNOTE:

JUDGMENT: 1.   Leave granted. 2.   Learned counsel for parties arc heard. 3.   The short question that arises for our consideration in this  appeal  is whether the payment of one  fourth  of  the amount  of auction-sale by cheque is a valid  tender  within the  meaning of Rule 285-D of U.P. Zamindari  Abolition  and Land Reforms Rules, 1952. 4.  The facts in brief leading to the filing of this  appeal may  be  stated  thus :The deceased  respondent  No.  1  Rao Mahmood Ahmad Khan being the defaulter of Government dues to the  extent of Rs. 23026.37 paise was proceeded against  for recovery  of the said amount as arrears of land revenue  and in   pursuance  of  recovery  proceedings   the   Collector, Saharanpur  on  15.11.1986 attached  his  agricultural  land bearing Khasra No. 162, Mohalla Ismail Khan, Khewat No.  1/2 situated in Village Palhanpur, Tehsil & District Saharanpur. The  said  land  was  put to  auction  sale  on  18.10.1973. Raghubir  Singh, the respondent No. 1 herein was one of  the bidders  and his bid being highest for Rs. 31500/-,  it  was knocked down in his favour.  The Sale Officer taking the bid made  by  respondent  No. 1 to be  adequate  and  reasonable accepted  the  same  and directed the respondent  No.  1  to deposit  25  per  cent of the bid amount  at  once  and  the balance of the sale amount within IS days by his order dated 18.10.1973.  The respondent No. 1, auction purchaser  depos- ited  a  sum  of  Rs. 8000/- by  means  of  a  cheque  dated 18.10.1973  which was encashed and accounted for  in  Tehsil account on 22.10.1973 and the balance of the bid amount  Rs. 23500/- was deposited in cash on 30.10.1973 well within  the time  stipulated  by  Rule 285-E of  the  said  rules.   The deceased  Rao  Mahmood  Ahmad Khan  filed  an  objection  on 17.11.1973 for setting aside the auction sale, inter-alia on the  grounds that 1/4th of the bid amount was not  deposited as  required by law and that the auction was fictitious  and collusive,  for the reason that the very same property  when

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put  to auction, earlier in 1969 the highest bid  offer  was Rs.  50,000/  but  same was rejected  by  the  sale  officer Saharanpur on the ground that 386 the bid money was inadequate as compared to the value of the property  whereas  the  subsequent  auction  sale  held   on 18.10.1973 could fetch only Rs. 31500/- as the highest price which was accepted to be adequate price in collusion of  the Tehsil authorities with the auction purchaser respondent No. 11herein. 5.   The  aforesaid objection filed by deceased Rao  Mahmood Ahmad  Khan was rejected and the sale held on 18.10.1973  in favour  of Ranbir Singh, respondent No. 1 was  confirmed  by the  Collector  by his order dated  9.5.1974.  The  revision filed  against  the  said  order  was  recommended  by   the Commissioner,  Meerut  Division,  Meerut  to  the  Board  of Revenue for dismissal but the Board of Revenue by its  order dated  31.5.1977 remanded the case back to the  Commissioner for  deciding  the  revision  himself  On  remand  the  Com- missioner,  Meerut dismissed the revision on merits  by  his order  dated 25.5.1978. The Commissioner took the view  that no  material  irregularity was committed in the  conduct  of auction sale nor it was proved that the deceased Rao Mahmood Ahmad Khan had suffered any substantial injury by reason  of any  of  the alleged irregularities or mistakes.   The  said order of the Commissioner dated 25.5.1978 was, however,  set aside  by  the Board of Revenue in revision by  order  dated 12.4.1985 on the ground that the deposit of 1/4th of the bid money by means of cheque was not a valid deposit within  the meaning of Rule 285-D of the rules and the auction sale  was therefore  void.  The said decision of the Board of  Revenue was  challenged  by Shri Ranbir  Singh,  auction  purchaser, respondent  No. 1 herein before the High Court of  Allahabad in  Civil  Miscellaneous Writ Petition No.  9589/1985  under Article 226 of the Constitution of India.  The High Court by the  impugned  judgment  dated 22.1.1992  allowed  the  writ petition  filed  by respondent No. 1, by setting  aside  the aforesaid  order of the Board of Revenue dated 12.4.1985  by holding that the confirmation of the auction sale in  favour of respondent No. 1 was valid as the deposit of 25 per  cent of  the  bid amount by cheque was a valid  deposit  for  the purposes of Rule 285-D of the rules.  It is this decision of the  High Court which has been challenged by the  appellants in this appeal who are the legal representatives of deceased Rao Mahmood Ahmad Khan. 6.   Learned  counsel  for  the appellants  urged  that  the provisions  contained  in Rule 285-D of the  U.P.  Zamindari Abolition and Land Reforms Rules, 1952 (hereinafter referred to  as  the  Rules) are mandatory and have  to  be  strictly applied  in so far as the requirement of deposit of  25  per cent of the amount of bid immediately after the  declaration of  the  person  to  be the purchaser  of  the  property  is concerned  and  on his failure to do so the sale  becomes  a nullity.  He submitted that in the present case the sale was knocked down in favour of the respondent No. 1 on 18.10.1973 and,  therefore, it was obligatory on him to deposit 25  per cent of the bid amount immediately on 18.10.1973 itself  but he  did not do so.  On the contrary the respondent No. 1  is said  to  have  delivered a cheque of 25  per  cent  of  the purchase  money  on 18.10.1973 which is said  to  have  been encashed  on 22.10.1973 which under the provisions  of  Rule 285-D could not be said to be a valid deposit.  The  learned counsel  for  the appellants, therefore,  strenuously  urged that  the  High Court had fallen in grave error  of  law  in accepting  the deposit of 25 per cent of the bid  amount  by

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cheque 387 as  a  ’valid  deposit  by  taking  a  view  contrary  to  a Division Bench decision of the Allahabad High Court rendered in Hira Lal v. Mst.  Champa [ A.I.R 1955 Allahabad 226].  It was,  therefore, submitted that the impugned  judgment/order of the High Court of Allahabad is contrary to the  mandatory rule and deserves to be set aside. 7.   With  a view to appreciate the submissions made by  the learned counsel for the appellants it would -be appropriate- at  this  stage to examine the relevant  provisions  of  the rules  in  question.  For the purposes of disposal  of  this appeal, Rules 285-D, 285-E, 285-F and 285-G are the relevant rules which are reproduced for ready reference hereunder               285-D.   The  person declared to be  the  pur-               chaser  shall  be required  to  deposit  imme-               diately twenty five per cent of the amount  of               his  bid, and in default of such  deposit  the               land shall forthwith be again put up and  sold               and  such  person  shall  be  liable  for  the               expenses  attending  the first  sale  and  any               deficiency of price which may occur on the re-               sale  which may be recovered from him  by  the               Collector  as if same were an arrear  of  land               revenue.               285-E.   The  full amount  of  purchase  money               shall  be paid by the purchaser on  or  before               the fifteenth day from the date of the sale at               the district treasury or any sub-treasury  and               in  case  of default the  deposit,  after  the               expenses of sale have been defrayed therefrom,               shall  be  forfeited  to  Government  and  the               property  shall  be  Id  and  the   defaulting               purchaser  shall  forfeit all  claims  to  the               property, or to any part of the sum for  which               it may be subsequently sold.               285-F.   If the proceeds of the sale which  is               eventually made are less than Om price bid  by               such  defaulting  purchaser,  the   difference               shall be recoverable from him as of it were an               arrear of the revenue.               285-G.  No sale after postponement under  Rule               285-A, 285-D or 285-E in default of payment of               the purchase money shall be made until a fresh               proclamation has been issued as prescribed for               the original sale. 8.It  may be noted that similar provisions are contained  in the  Code of Civil Procedure, 1908 also.  Order 21, Rule  84 of the Code is almost similar in terms to Rule 285-D of  the Rules in question which provides for deposit of 25 per  cent of  the bid amount immediately and on failure to do  so  re- sale of the property forthwith.  Order 21, Rule 85 and 86 of the Code arc similar to Rule 285-E of the Land Reforms Rules requiring  the purchaser payment of the full amount  of  the purchase money before the court closes on the 15th day  from the date of sale of property and in the event of default  to do   so  the  property  shall  be  re-sold  with  the   only distinction that in the case of default under Order 21, Rule 86 the Court has the discretion to forfeit to the Government 25 per cent of the bid amount deposited on the date of  sale while  in the case of default under Rule 285-E of  the  Land Reforms  Rules there is no such discretion but in the  event of default to deposit the full amount of purchase money,  25 per  cent  deposit has to be forfeited after  defraying  the expenses of re-sale.  Similarly the provisions contained  in

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Order 21, Rule 87 of the Code are similar to the  provisions contained in Rule 285-G of the Land Reforms Rules. 9.   A perusal of the language employed in Rule 285-D  would go to show that it  requires the person declared to be. 388 purchaser  to deposit immediately 25 per cent of the  amount of  his  bid, and in default of such  deposit  the  property shall  be  resold forthwith and such person  who  failed  to deposit  25 per cent of the bid amount shall be  liable  for the  expenses incurred in the first sale and the  deficiency of  price, if any, which may occur on the re-sale  would  be recovered from such defaulting purchaser as arrears of  land revenue.  The use of the word ’immediately’ in depositing 25 per cent of the bid amount and the expression re-sale of the property ’forthwith’ are equally meaningful and significant. Strictly speaking the requirement of deposit of 25 per  cent immediately, by the person declared to be the purchaser  may not mean the deposit on fall of hammer within twinkle of  an eye and without affording the -purchaser even the reasonable time to enable him to make the deposit.  According to us the word  ’immediately’  connotes and implies that  the  deposit should   be  made  without  undue  delay  and  within   such convenient  time  as is reasonably requisite for  doing  the thing  same  day  with all convenient  speed  excluding  the possibility of rendering the other associated  corresponding act  and  performance of duty as nugatory.  Here  the  other associated   corresponding  act  and  duty  cast  upon   the officer/authority  conducting the sale as envisaged by  Rule 285-D  is to put up the property for re-sale ’forthwith’  on the failure of the declared purchaser to deposit 25 per cent of  the  bid  amount.   The  word  "immediately"  therefore, connotes proximity in time to comply and proximity in taking steps  to  re-sell on failure to comply the  requirement  of deposit  as  first condition that is to  take  place  within relatively  short-interval  of time and  without  any  other intervening  recurrence.   But it has to be noted  that  the meaning of the word immediately has to, be determined by the context in which it has been used and the purpose for  which the  statute using the word was enacted.  That being  so  it goes without saying that in the instant case the rule  casts an obligation on the purchaser to deposit 25 per cent of the bid amount immediately and if he fails to do so the property shall be re-sold forthwith. 10.  Further the Rule 285-D provides resale of the  property forthwith on the failure of the purchaser to deposit 25  per cent of the bid amount.  The meaning of the word ’forthwith’ is  synonymous of the word immediately which means with  all reasonable  quickness and within a reasonably  prompt  time. It, therefore, necessarily follows that the intention of the Legislature  is  that as soon as it becomes known  that  the purchaser  has  failed to deposit 25  per  cent  immediately after he is declared as purchaser, the property shall be put to   re-sale   forthwith  without  any  loss  of   time   or postponement of the date of re-sale.  The provision has been made  mandatory  because  if the property is  not  re-  sold forthwith  and on the same day but later on after a  day  or two,  the  sufficient  number  of  purchasers  may  not   be forthcoming and the property may not fetch adequate and fair price to the prejudice of the judgment debtor.  There is yet another reason for making this provision mandatory and it is this  that if on the failure of the purchaser to deposit  25 per  cent of the bid amount immediately and on the  day  the person  is  declared to be purchaser then the  sale  of  the property  will have to be postponed to some other  date  and according  to  the  provisions contained in  Rule  25-G  re-

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produced  in  para 6 above, no sale after  the  postponement under Rule 285-D in default of 389 payment  of the purchase money shall be made until  a  fresh proclamation has been issued as prescribed for the  original sale.  it  is to avoid this situation and the delay  in  the sale  that  a  provision  under Rule  285-D  has  been  made mandatory  and on the failure of compliance of the same  the sale becomes a nullity. 11.The controversy whether the provisions of Order 21,  Rule 84,  85 and 86 are mandatory or not has been set at rest  by this Court.  The provisions of Order. Rule 84, 85 and 86  of the  Code  of Civil Procedure, as said earlier,  are  almost similar  in terms to the provisions contained in Rule  285-D and 285-E of the Land Re-form Rules. This court in the  case of   Mani Lal Mohan Lal v. Syed Ahmad A.I.R. 1954  S.C.  349 ruled as under:-               "Having examined the language of the  relevant               rules and the judicial decisions bearing  upon               the  subject  we are of the 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 was no sale and  of  the               present  case  there  was  no  sale  and   the               purchasers acquired no rights at all." 12, Thus, it is settled law that the Provisions of Order 21, Rule 84, 85 and 86 of the Code of Civil Procedure are manda- tory  and  the provisions of Rules 285- D  and  285-E  being similar   in  terms  of  the  aforementioned   corresponding provisions of the Code of Civil Procedure and in view of the aforesaid  discussion there is no escape from declaring  the sale a nullity if Rule 285-D is not complied with. 13.  The  question now remains to be considered  is  whether the  deposit  of  25  per cent of  the  bid  amount  by  the purchaser respondent No. 1 herein by cheque instead of  cash would be a valid deposit within the meaning of Rule 285-D of the  Rules.   Admittedly the respondent No. 1  was  declared purchaser  of  the  property  in  question  on   18.10.1973. According to the learned counsel for the appellants  neither the  deposit  of 25 per cent of the bid amount was  made  in cash nor by cheque on 18.10.1973   as    the   cheque    was encashed  on  22.10.1973.  While according  to  the  learned counsel appearing for the auction purchaser respondent No. 1 the  cheque  was  tendered on 18.10.1973  itself  which  was encashed  on 22.10.1973 and the amount was deposited in  the

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Government  treasury on 22.10.1973. The question is  whether such  a  payment  by cheque could be  regarded  as  a  valid deposit  within  the, meaning of Rule 285-D.   As  discussed above  Rule 285-D is a mandatory rule according to which  if 25  per cent of the bid amount is not deposited  immediately the land shall forthwith be again put up and sold.  In other words on the failure of the purchaser to deposit 25 per cent of  the  bid amount immediately the land shall be  re-  sold immediately the land shall be re- sold imme- 390 diatety  after  such  failure the very  same  day.   If  for instance  the 25 per cent of the bid amount is  accepted  by cheque  and subsequently the purchaser changes his mind  and advises  his banker not to encash the cheque or there is  no amount  in the account of the purchaser in the bank and  the cheque  is  bounced,  the  purpose  of  Rule285-D  would  be frustrated  and  thus  the  mandatory  provision  would   be rendered  nugatory.   The result would be that  neither  the authorities would be in a position to forfeit any amount  of the  purchaser nor the authority would be in a  position  to defray the expenses of the sale as contemplated by Rule 285- E.   The other consequence that will follow is that the  re- sale   of  land  will  have  to  be  delayed  and  a   fresh proclamation  for sale has to be issued as provided by  Rule 285-G.   It, therefore, appears to us that Rule  285-D  does not contemplate any payment by cheque but a cash deposit  of 25  per cent of the bid amount has to be made in  accordance with the requirement of the rule, otherwise the very purpose of the mandatory rule 285-D would be frustrated and rendered nugatory.   In these facts and circumstances we are  of  the view that deposit of 25 per cent of the bid amount by cheque will  not be a valid tender within the meaning of the  rule. This  was  also the view taken by a Division  Bench  of  the Allahabad High Court in the case of Hira Lal (supra) and the Learned Single Judge was not right in ignoring the said view by  observing that it was obiter.  The High Court of  Madhya Pradesh in MI s. Progressive Industrial Enterprises v.  Bank of  Baroda  - A.I.R. 1989 M.P. 177 also expressed  the  view that  deposit  of 25 per cent of the bid  amount  by  cheque which  was not encashed on the date on which the person  was declared  purchaser  but  on  a later  date,  there  was  no compliance of Order 21 Rule 84 (C) C.P.C. 14.The learned counsel for the auction purchaser, respondent No.  1 placing his reliance on Kirloskar Bros.  Ltd. v.  LT. Commissioner - A.I.R. 1952 Bombay 306; A.I.R 1954 S.C. 429 - LT.   Commissioner  v.  M/s.   Ogale  Glass  Work  Limited;; A.I.R.1966  Madras 435 - Mohidden Bi v. Khatoon Bi and  some other decisions vehemently urged that deposit of 25 per cent of the bid amount made by cheque was a valid deposit and  in compliance  of Rule 285-D.  We have carefully  gone  through the  decisions  relied  on by the learned  counsel  for  the respondent No. land find that the same do not relate to  the consideration  of the provisions of Rule 285-D or any  other provision which may be regarded as pari-materia to Rule 285- D.   The  said decisions do not cover the situation  at  all with  which we are concerned in the present appeal  and  the same are quite distinguishable on facts a.-, well as on law. The  said  decisions  are, therefore,  not  helpful  in  the present case. 15.In  the  facts  and  circumstances  discussed  above  the impugned  order  of the High Court could not  be  sustained. The  appeal is therefore allowed, The impugned order of  the High  Court  dated 2.1.1992 passed in C.M.W.P. No.  9589  of 1985 is set aside and the sale is declared as nullity.   The parties arc left to -bear their respective costs.

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