When Does Limitation For Application Under Order XXI Rule 95 CPC Start? Supreme Court Refers To Larger Bench, Doubts '96 Precedent

The Supreme Court recently referred a pertinent question of law for reconsideration by a larger bench. The court grappled with the question of determining the starting point of limitation for filing an application under Rule 95 of Order XXI of CPC, 1908. These provisions relate to a situation where property of a person is sold through public auction to satisfy a decree passed by the court.

In the present case Bhasker & Anr. v. Ayodhya Jewellers, the Court referred to a co-ordinate bench decision in Pattam Khader Khan v. Pattam Sardar Khan & Anr (1996) 5 SCC 48 which held that it is not necessary for auction purchaser to file sale certificate along with the application under Rule 95 of Order 21. But the Court disagreed with such interpretation since Rule 95 clearly states that unless a certificate of sale is granted under Rule 94 of Order XXI, the auction­ purchaser does not get a right to apply for delivery of possession by invoking Rule 95 of Order XXI.

“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", the Court held.

The Supreme Court bench comprising Justices Abhay S. Oka and Justice Rajesh Bindal was hearing an appeal against a Kerala High Court judgment which dismissed the revision application by holding that the starting point of limitation for making an application under Rule 95 of Order XXI was the date on which the sale certificate was issued by the Executing Court.

The heart of the matter revolves around the order of confirmation of sale, outlined in sub-rule (1) of Rule 92 of Order XXI of CPC. The question at hand is whether this confirmation provides a cause of action for an auction-purchaser to apply for possession under Rule 95 of Order XXI, or if such an application can only be made after the issuance of a sale certificate by the Executing Court.

The court opined that while the law mandates the issuance of a sale certificate, it surprisingly remains silent on a specific timeframe within which this certificate must be provided. It observed that in practice, there is substantial delay in issuing sale certificate by the Executing Court. In this case delay was of 6 months without any fault of auction purchaser.

The court further pointed out that even if the Executing Court is responsible for the delay in issuing a sale certificate, this delay cannot be a valid ground for condoning the delay in filing an application under Rule 95 of Order XXI since Section 5 of limitation Act does not apply to applications filed under Order XXI.

The court was also grappled with an apparent inconsistency between Rule 95, Order 21 CPC and Art 134, Limitation Act. Rule 95 seemingly requires a sale certificate before an application can be filed, while Article 134 of Limitation Act seemingly allows for a cause of action based on the order of confirmation of sale itself. As per Article 134, the limitation period for filing application under Order XXI Rule 95 is one year from the time "when the sale becomes absolute".

The court observed “Though CPC does not permit an application under Rule 95 of Order XXI to be filed before the sale certificate is issued, Article 134 of the Limitation Act proceeds on the footing that cause of action becomes available to the auction purchaser to apply for possession on the basis of the order of confirmation of sale made under sub­rule (1) of Rule 92 of Order XXI of CPC.”

The Court further pondered if interpretative approach can be used to address the inconsistencies and anomalies present in this context. The Court tried to shed light on the Legislature's intention of incorporating the requirement of the issuance of sale certificate under Rule 94. The court opined that the certificate is the tangible evidence that an auction sale has been confirmed by the Executing Court.

It added, “The very fact that Rule 94 of Order XXI incorporates a requirement of issuing a sale certificate shows that the Legislature was of the view that mere order of confirmation of auction may not be sufficient.The certificate is ultimately the evidence of the fact that the auction in favour of the person to whom a certificate is issued, has been confirmed by the Executing Court.”

The court was of the opinion that it could reconcile Art 134, Limitation Act and Rule 95 of CPC by considering the issuance of the sale certificate as the starting point for making an application under Rule 95.

The court held “Prima facie, it appears to us that the only way of avoiding inconsistency between Rule 95 of Order XXI of CPC and Article 134 of the Limitation Act is to read into Article 134 that the starting point for making an application under Rule 95 of Order XXI of CPC is the date on which a certificate recording confirmation of auction sale is actually issued to the purchaser. Such interpretation will satisfy the three tests laid down in the case of Inco Europe Limited & Ors”

Case title: Bhasker & Anr. v. Ayodhya Jewellers

Citation: 2023 LiveLaw (SC) 658

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