[O.21 R.95] Buyers Of Property From Auction Purchaser Can Make Application Before Executing Court To Obtain Possession: Karnataka HC

The Karnataka High Court has held that purchasers of a property from the auction purchaser can make an application before the executing court for obtaining possession of the properties from the owners/occupants.

A division bench of Justice Sreenivas Harish Kumar and Justice J M Khazi held thus while allowing an appeal filed by Nayamat Ali Khan and others. The Court set aside the order of the trial court and allowed their applications made under Order 21 Rule 95 of CPC, directing the executing court to issue delivery warrants.

The court said “The appellants are purchasers from the auction purchaser. There was no transfer of decree in favour of appellants in order that they could have exercised their right to execute under Order 21 Rule 16 (application for execution by transferee of decree), but their right to take possession under Order 21 Rule 95 is not impeded in as much they derive right under section 146 of CPC.”

Background

A suit for partition was instituted by Gowramma and others against T.G.Harinath and others. In the final decree proceeding, it was found that Upadhyaya Building was not feasible for division by metes and bounds and thus was decided to be sold and accordingly it was auctioned. The bid of one Siraj Ahmed for Rs.4,52,00,000, was accepted.

The sale was confirmed on 21.02.2014 and the sale certificate was issued to the purchaser on 19.03.2014. Upadhyaya building consisted of a number of shops. Siraj Ahmed did not obtain possession of the entire building. However, he sold portions of the building to several people, including the appellants.

Thereafter the appellants initiated execution proceedings seeking possession. The executing court, by order dated 05.10.2015, dismissed the applications on the ground that the respondents were not the judgment debtors inasmuch as the property was not sold in execution of a decree and therefore the appellants could not avail remedy under Order 21 Rule 95 CPC.

Appellants argued that they being the purchasers from the auction purchaser can very much maintain an application under Order 21 Rule 95 CPC inasmuch as they stepped into the shoes of the auction purchaser.

Moreover, a lawful purchaser of immovable property is to be put in possession or else there is no meaning to sale. Since the sale was through the intervention of the court in the final decree proceeding, there was no need to file a separate suit to take possession of the property from the occupants of the building. Referring to Section 146 of CPC it was said that it permits the purchasers to initiate execution proceedings.

The respondents contended that since the appellants are purchasers from the auction purchaser, they cannot take possession under Order 21 Rule 95 CPC as this rule only enables an auction purchaser to take possession.

Findings:

The bench noted that no doubt an immovable property is to be first attached before it is sold in auction. But attachment of an immovable property does not arise when it is ordered to be sold in a proceeding for a final decree pursuant to a preliminary decree in a partition suit.

It said “As per section 2 of the Partition Act, what is required is an order to sell the property in auction if none of the shareholders comes forward to purchase the moiety of others. Once the court passes an order to sell the property, other rules relating to sale of immovable property of Order 21 are to be followed and sale is to be confirmed under Rule 92 followed by issuance of sale certificate under Rule 94 in favour of the auction purchaser.”

It referred to Section 8 of the Partition Act which provides that a purchaser becomes entitled to take possession by making an application either under Rule 95 or Rule 96 of Order 21 as the case may be. If the purchaser wants to take actual possession, he can make an application under Order 21 Rule 95 within one year from the date of confirmation of sale.

The court observed, “An auction purchaser can sell or alienate the property that he purchases once a sale certificate is issued to him, for alienation is his right.”

In view of explanation II to section 47 which states that the purchaser in an auction is deemed to be a decree-holder, the court held “The sale was confirmed i.e., made absolute on 21.02.2014. Sale certificate was issued on 19.03.2014. Two sale deeds were executed by the auction purchaser on 12.9.2014. Another sale deed was executed on 26.09.2014. All the purchasers filed applications under Order 21 Rule 95 of CPC on 02.01.2015 which date is within one year from 21.02.2014. Therefore these applications are very much maintainable.”

Accordingly, it allowed the appeals.

Appearance: Senior Advocate S.Sriranga, for Advocate Sumana Naganand, for Appellants.

Advocate B.S.Ravindra, for Respondents.

Citation No: 2024 LiveLaw (Kar) 341

Case Title: Nayamat Ali Khan & ANR AND M Sadananda & Others

Case No: REGULAR FIRST APPEAL NO. 557 OF 2016 C/W REGULAR FIRST APPEAL NO. 558 OF 2016

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