LI Network
Published on: 18 August 2023 at 12:53 IST
The Supreme Court has recently directed a critical legal issue for reconsideration by a larger bench.
The issue revolves around determining the commencement point for the limitation period in filing an application under Rule 95 of Order XXI of the Code of Civil Procedure (CPC), 1908.
This rule pertains to situations where property owned by an individual is auctioned publicly to satisfy a court-issued decree.
In the case at hand, Bhasker & Anr. V. Ayodhya Jewellers, the Court referred to a previous decision in Pattam Khader Khan v. Pattam Sardar Khan & Anr (1996) by a co-ordinate bench.
This precedent asserted that it wasn’t obligatory for an auction purchaser to accompany their application under Rule 95 of Order XXI with a sale certificate.
However, the present Court disagreed with this interpretation. Rule 95 explicitly mandates that unless a certificate of sale is issued in compliance with Rule 94 of Order XXI, the auction purchaser does not acquire the right to invoke Rule 95 for delivery of possession.
The Court held, “Therefore, in our considered view, the decision of the Coordinate Bench in the case of Pattam Khader Khan and especially, what is held in paragraph 11, requires reconsideration by the larger Bench. The larger Bench will have to decide the issue relating to the starting point of limitation for making an application under Rule 95 of Order XXI of CPC.”
In this case, the Supreme Court bench comprised Justices Abhay S. Oka and Rajesh Bindal. The appeal was against a Kerala High Court ruling that the commencement of the limitation period for filing an application under Rule 95 of Order XXI starts from the date on which the sale certificate is issued by the Executing Court.
The central issue revolves around the confirmation of sale order, detailed in sub-rule (1) of Rule 92 of Order XXI of CPC.
The key question is whether this confirmation establishes a cause of action for an auction purchaser to seek possession under Rule 95 of Order XXI, or if such an application can only be made after the Executing Court issues a sale certificate.
While acknowledging the legal requirement for a sale certificate, the Court noted that it does not specify a specific timeframe for its issuance.
It highlighted that the issuance of a sale certificate often experiences considerable delays, such as the six-month delay faced in this case without any fault on the part of the auction purchaser.
The Court emphasized that the delay in issuing the sale certificate, even if attributed to the Executing Court, cannot serve as valid grounds for extending the limitation period for filing an application under Rule 95, since Section 5 of the Limitation Act does not apply to applications under Order XXI.
The Court also grappled with the seeming incongruity between Rule 95 of Order 21 CPC and Article 134 of the Limitation Act. While Rule 95 seems to necessitate a sale certificate before filing an application, Article 134 seems to allow for a cause of action based on the confirmation of sale order itself.
The Court noted that even though CPC doesn’t permit applications under Rule 95 before a sale certificate is issued, Article 134 assumes that the auction purchaser’s cause of action arises from the confirmation order as outlined in sub-rule (1) of Rule 92 of Order XXI of CPC.
The Court also pondered the potential of interpretative approaches to address the inconsistencies and discrepancies in this context. It considered the Legislature’s intent in incorporating the requirement for a sale certificate under Rule 94.
The Court suggested that the certificate serves as tangible proof that an auction sale has been confirmed by the Executing Court.
In conclusion, the Court proposed reconciling Article 134 of the Limitation Act and Rule 95 of CPC by deeming the issuance of the sale certificate as the initiation point for filing an application under Rule 95.