University Institute of Legal Studies

Panjab University, Chandigarh

Project on sale of attached property

Submitted to: Dr. Karan Jawanda
Submitted by: Riya Soni
99/20
Sec-B
B.A.L.L.B. (hons.)
8th Sem
 Acknowledgement

I would like to express my profound gratitude to

Dr. Karan Jawanda of UILS department, for their
contributions to the completion of my project.
I would like to express my special thanks to her for her
time and efforts she provided throughout the semester.
Your useful advice and suggestions were really helpful to
me during the project’s completion. In this aspect, I am
eternally grateful to you.
Secondly, I would like to thanks my classmates and
friends who helped me.
I would like to acknowledge that this project was
completed entirely by me and not by someone else.
 Index

Sr. no topic page no.

1. Introduction 4
2. Sale Generally 5-7
3. Sale of movable property 8-11
4. Sale of immovable property 12-14
5. Setting aside sale 15-17
6. When sale become absolute 17-18
7. Bibliography 19
 Introduction
Execution is the most important aspect of Civil justice. Success or
failure of system of civil justice depends on success in executing decrees
of Civil Courts. In India, Order XXI of code of civil procedure consists
several rules i.e Rules 1 to 106. Besides that the execution proceedings
deal with various sections and the High Courts Amendments. Order XXI
provides several issues such as '' Courts executing decrees, Payment
under decrees, Application and process for execution, Mode of
execution, Stay of execution, arrest and detention in Civil Prison,
Attachment of property, Adjudication of claims and objections, Sale
generally, Sale of movable property, Sale of immovable property.

A decree may also be executed on the application of the decree-holder

by attachment and sale without attachment of property. The Code
recognizes the right of the decree-holder to attach the property of the
judgment-debtor in execution proceedings and lays down the procedure
to effect attachment. The provisions relating to sale of property in an
execution proceeding are Rules 64 to 94 of the Order XXI. Rule 64-73
tells the general procedure, sale of movable property is under rule 74-78,
rule 82-88 deals with sale of immovable property and rule 89-94 deals
with setting aside of sale and tells when sale become absolute.

Sale Generally (Rule 64-73)

Power of court

Rule 64: Any Court executing a decree may order that any property
attached by it and liable to sale, or such portion thereof as may seem
necessary to satisfy the decree, shall be sold, and that the proceeds of
such sale, or a sufficient portion thereof, shall be paid to the party
entitled under the decree to receive the same.
A duty is thus cast upon the court to sell such property or portion thereof
as necessary to satisfy the decree. It is the mandate of legislature which
cannot be ignored. This is not just a discretion but an obligation and a
mandate of the legislature The sale held in contravention of this
mandatory requirement is illegal and without jurisdiction1

Rule 65: Save as otherwise prescribed, every sale in execution of a

decree shall be conducted by an officer of the Court or by such other
person as the Court may appoint in this behalf, and shall be made by
public auction in manner prescribed.
Appointment of officer by the court shall be done who will be charged to
sell the property. Officer will be the representative of the court and will
sell the property for execution of decree in public auction.

_____________________________________________________________________________________
1. Ambati Narasayya v. M Subba Rao, 1989 Supp(2) SCC 693

Proclamation of sale (Rule 66-67)

It is a kind of order or declaration. It operates as a public notice
regarding the sale. It’s says that people can participate in auction and
sale. After the property is attached and ordered to be sold by the public
auction, the first step to be taken by the court is to cause a proclamation
of the intended sale to be made in the language of the court.
Proclamation can be in writing or by customary mode.
Contents of proclamation:-
1) Time and place of sale
2) Property to be sold
3) Revenue, if any, assessed upon the property
4) Encumbrance, if any, to which property is liable
5) Amount to be recovered
6) Details relating to property, such as title deed, length etc.
Where the Court so directs, such proclamation shall also be published in
the Official Gazette or in a local newspaper, or in both, and the costs of
such publication shall be deemed to be costs of the sale.

Time of sale
Rule 68: No sale without the consent in writing of the judgment-debtor
can take place before fifteen days in case of immovable property and
before 7 days in case of movable property from the date of proclamation
in the courthouse. A sell can be conducted immediately if the property is
of perishable nature.
Adjournment of sale
Rule 69: If the judgment-debtor after the issue of proclamation and
before seller has paid the amount, or has partly promised to pay on the
given date before completion of public order, if there is any justified
reason, in those circumstances, court has discretionary power to
postpone the sale. If it has been postponed for period of 30 days, fresh
proclamation has to be issued and again the process of Rule 67, 68 and
69 will follow. Sale cannot be postponed where judgment-debtor dies
before the date of sell or after the issue of proclamation, or on the date of
auction.
Rule 71: Any deficiency of price on re-sale by reason of the purchaser’s
default, be recoverable from the defaulting purchaser. This provision is
intended to provide an expeditious remedy.

Restriction to bid: Rule 72-73

A decree-holder cannot, without the express permission of the court,
purchase the property sold in execution of his own decree. A mortgagee
of immovable property cannot, without the leave of the court, purchase
the property sold in execution of decree on the mortgage. Any officer or
other person having any duty to perform in connection with the
execution sale cannot either directly or indirectly, acquire or any attempt
to acquire any interest in the property sold in execution.

Sale of movable property

Rules 74 to 78 deal with sale of movable property and rules 74 to 75
relate to sale of agricultural produce and growing crops. Section 2(13)
states that "movable property" includes growing crops. There can be
no doubt that the Code intended that a sale should ordinarily be held at
some place within the jurisdiction of the Court ordering the sale. Good
and sufficient reasons ought to be shown for directing otherwise. This
was held in Lakshmibai Widow Of Sidhojirao v. Santapa Revapa2
Agricultural Produce
Rule 74: In the case of agricultural produce, the sale shall be held on or
near the land on which the crop is standing or where the crop has been
harvested, at or near the place where the crop is lying. The court may
however direct the sale to be held at the nearest place of public resort, if
it is of the opinion that the produce may fetch a better price. Such sale
shall be postponed by the court if,
(i) fair price is not offered or
(ii) the owner thereof applies for such postponement.
As held in Lakshmibai v. Santapa a mere contention that a higher price
is likely to be offered at some other place, is not a good and sufficient
reason

2. 1889 ILR 13 Bom 22

Rule 75: Where the property to be sold is growing crop, no sale shall be
held until the crop is harvested. Where such crop cannot be stored, the
purchaser may enter the field for cutting and harvesting it.

Negotiable Instruments and shares

Rule 76: Where the property to be sold is a negotiable instrument or a
share in a corporation, the Court may, instead of directing the sale to be
made by public auction, authorize the sale of such instrument or share
through a broker. A court sale of shares of a private limited company
restrictions against their registration in favour of a person who is not an
existing share-holder.
The relevant question is whether the judgment-debtor has saleable
interest in such shares or not and whether the auction- purchaser can
have their transfer recognized by the directors of the company.
Sale by Public Auction
Rule 77: Where the movable property is sold by public auction then this
rule would not apply to negotiable instruments or share sold through a
broker under Rule 76 as held in Wala v. Hira3
Confirmation of sale by the court is not necessary as in the case of
immovable property. Also, in case of resale, the defaulting purchaser
would be liable for the deficiency in price on such resale.
______________________________________________________
3. (1885) 9 Bom 518
In an auction sale of property of company attached towards recovery of
arrears of Employees Provident Fund, the defaulter company had itself
agreed for sale of property and never filed any objection. Subsequent
objections challenging auction sale by the company and the bank is any
objection. Subsequent objections challenging auction sale by the
company and the bank is not maintainable in absence of bona fide.
The officer holding the sale has the discretion to allow the price to be
paid at a reasonable time after the sale. Officer conducting the sale has
the power to grant time to pay the price. In the absence of such facility
being given, the auction- purchaser must pay the full price at the time of
the sale, otherwise the property is liable to be resold. This was held in
the case of Seth Banarsi Dass v. District Magistrate and Collector4

When sale becomes absolute in movable property:

On the payment of the purchase money the officer shall grant a receipt
for the same, and the sale shall become absolute.
In case movable property is a share in goods belonging to the judgment
debtor and a co-owner, the bid of the Co-owner shall prevail for such
property or for any lot as against a stranger.

________________________________________________________
4. AIR 1996 SC 2311
Irregularities in sale
Rule 78: No irregularity in publishing or conducting the sale of movable
property shall vitiate the sale, but any person sustaining any injury by
reason of such irregularity at the hand of any other person may institute
a suit against him for compensation or (if such other person is the
purchaser) for the recovery of the specific property and for
compensation in default of such recovery.
A sale of movable property in execution of a decree cannot be set aside
on the ground of irregularity in publishing or conducting the sale.
Violation of provisions relating to the sale of movable property does not
ipso facto make the sale void. The petitioner has to show that substantial
injury has been sustained by him. But where objections have been raised
by the judgment-debtor which may go to the root of the matter, they
must be decided prior to the holding of the auction sale. Failure to do so
would vitiate the sale.
An application to set aside a sale of movable property lies where the
court had no jurisdiction to order the sale. Similarly, the provision does
not curtail inherent powers of the court where it is satisfied that the
orders had been obtained by practicing fraud on the court.
Where the movable property is not belonging to the judgment debtor is
sold at the instance of the decree- holder, the real owner may sue the
decree-holder for the value of the property.
 Sale of immovable property
Conducting of Sale of immovable property is a great task. The procedure
for sale of immovable property creates some confusion.
Rules 82-94 relates to the rule of sale of immovable property.
Rule 82 enables the executing court to postpone the sale to enable the
judgement debtor to raise decretal dues by private alienation.
Rule 84 and 85 provide for payment of purchase money. Rule 86 covers
cases of default by auction-purchaser in making requisite payment and
resale of property.
A. Courts competent to order sales (rule 82)
Any Court other than a Court of Small Causes may order sale of
immovable property in execution of a decree.
B. Postponement of Sale (rule 83)
The court may postpone the sale to enable the judgment debtor to raise
the decretal amount by private alienation, such as sale, mortgage,
charge, lease, etc. The chief aim of this provision is to prevent the sale of
immovable property of the judgment debtor in cases where the decree
can be satisfied by the private alienation of such property. It takes place
at the discretion of the court and cannot be claimed by the judgment
debtor as a matter of right5

________________________________________________________
5. K.T. Thomas v. Indian bank 1984 SCC 713
Thus, where he has sufficient time or where the decree shall not be
satisfied in full by the private alienation of the property, this application
won't be allowed. But, this postponement should only be for a
reasonable period and not afterwards and nevertheless, a private sale is
not a complete transaction unless and until it is sanctioned and
confirmed by the court.
C. Deposit by Purchaser and Re-sale on Default (rule 84)
Immediately after the sale of immovable property, the purchaser must
deposit 25% of the purchase money, unless such requirement is
dispensed with by the court. The balance of the purchase money must be
paid by the purchaser within 15 (fifteen) days from the date of the sale.
In case of default, the amount of deposit can be forfeited and property
shall be resold after issuing fresh proclamation.
Failure to deposit the purchase price is not a mere irregularity in the sale
and it cannot be averted on the plea that such shortfall had been
occasioned by a mistake of the Court in calculating the amount.
The rules do not contemplate that there can be any sale in favour of a
purchaser without depositing 25% 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. Thus it can be concluded that these rules are
mandatory and non-compliance with the same vitiates the sale.

D. Notification on re-sale (rule 87)

Every re-sale of immovable property, in default of payment of the
purchase-money within the period allowed for such payment, shall be
made after the issue of fresh proclamation in the manner and for the
period hereinbefore prescribed for the sale.

E. Bid by Co-owner (Rule 88)

Where the property sold is a share of undivided immovable property and

two or more persons, including co-sharer, bid the same sum for it, the
co-sharer has a right of pre-emption which means the bid of the co-
sharer shall prevail. The object is to enable the co-sharers in the
undivided immovable property to keep strangers out if they so desire.
 Setting aside sale

Rules 89 to 92 deal with setting aside of sale. When a property is sold

in execution of decree, an application for setting aside may be made on
any ground covered by Rules 89-92 and no other ground, in other words
the rules as to setting aside execution sale are exhaustive. Such an
application must be made within the prescribed period of limitation (60
days).

Rule 89 requires that two primary conditions relating to deposit must be

satisfied, namely, (i) the applicant must deposit in the court for payment
to the auction purchaser 5% of the purchase money; and ii) he must also
deposit the amount specified in the proclamation of sale, less any
amount received by the decree-holder since the date of proclamation of
sale for payment to the decree-holder.
The intention of Rule 89 of Order XXI is to provide simple procedure
where at last moment a judgment-debtor may come and deposit without
condition the full decretal amount and 5% penalty. The making of
deposit is a pre condition to the making of application under this rule.
The deposit has to be made for payment to the decree holder the amount
specified in the proclamation of sale. 5% deposit has to be paid as
compensation for the purchaser who suffers the loss on account of sale
being set aside and not confirmed in his favour.
If a person has applied under Rule 90 to set aside the sale, then unless he
has withdrawn his application, he is not entitled to make and prosecute
an application under Rule 89.

On irregularity or Fraud
Rule 90: A sale of immovable property in execution can be set aside
also on the ground of material irregularity or fraud in publishing or
conducting the sale, provided the applicant proves that he has sustained
substantial injury by reason of such irregularity or fraud. The pre-sale
illegalities committed in the execution are amenable to the remedy under
section 47 and post-sale irregularities causing substantial injury to the
judgment debtor are covered under Rule 90 of Oder 21.
Grounds:
a) There has been material irregularity or fraud in publishing and
conducting the sale;
b) substantial injury has been caused to the applicant.
The rule speaks of irregularity and not illegality, for if the act
complained of is illegal, the sale is void altogether and no substantial
injury need be proved as is necessary in the case of material irregularity.
The purchaser at any such sale in execution of a decree-may apply to the
Court to set aside the sale, on the ground that the judgment-debtor had
no saleable interest in the property sold.
Rule 91: The purchaser at any such sale in execution of a decree may
apply to the Court to set aside the sale, on the ground that the judgment-
debtor had no saleable interest in the property sold.

When sale becomes absolute

(1) Where no application is made rule 89, rule 90 or rule 91, or where
such application is made and disallowed, the Court shall make an order
confirming the sale, and thereupon the sale shall become absolute:
Provided that, where any property is sold in execution of a decree
pending the final disposal of any claim to, or any objection to the
attachment of, such property, the Court shall not confirm such sale until
the final disposal of such claim or objection.

(2) Where such application is made and allowed, and where in the case
of an application under rule 89, the deposit required by that rule is made
within thirty days from the date of sale, or in cases where the amount of
the deposited under rule 89 is found to be deficient owing to any clerical
or arithmetical mistake on the part of the depositor and such deficiency
has been made good within such time as way be fixed by the Court, the
Court shall make an order setting aside the sale.
Provided that no order shall be made unless notice of the application has
been given to all persons affected thereby.
(3) No suit to set aside an order made under this rule shall be brought by
any person against whom such order is made.

(4) Where a third party challenges the judgment-doubter's title by filing

a suit against the auction-purchaser, the decree-holder and the judgment-
debtor shaft be necessary parties to the suit.

(5) if the suit referred to in sub-rule (4) is decreed, the Court shall direct
the decree-holder to refund the money to the auction-purchaser, and
where such an order is passed the execution proceeding in which sale the
had been held shall, unless the Court otherwise directs, be revived at the
stage at which the sale was ordered.

No Sale of immovable property shall become absolute until it is

confirmed by the court. Where no application to set aside the sale is
made under Rule 89, 90 and 90 or where such application is made and is
disallowed by the Court, the Court shall make an order confirming the
sale, and thereupon the sale shall become absolute. Once the order is
made under Rule 92 confirming the sale, the title of the auction
purchaser relates back to the date of sale.
 Bibliography
Books referred:
1. C.K. TAKWANI, CIVIL PROCEDURE WITH LIMITATION ACT,
1963 (8th ed. E. Book 2017).
2. D.N. MATHUR, CODE OF CIVIL PROCEDURE (3rd ed. Cent. Law
Publishers 2015).

Sites referred:
1. [Link]
2. [Link]
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4. [Link]