Code of Civil Procedure, 1908 (CPC)
Sale of Attached Property in Execution: Proclamation, Auction and Setting Aside
Attachment freezes property; sale turns it into money. Order XXI Rules 64 to 94 of the Code of Civil Procedure, 1908 govern the sale of attached property in execution: the proclamation that precedes it, the conduct of the auction, the deposit and payment of the purchase money, and the three routes by which a completed sale may be set aside, under Rules 89, 90 and 91. Where none succeeds, the sale is confirmed and a sale certificate issues. These notes cover the whole sequence.
The execution sale, and the three routes by which it may be undone
1. Before the Sale: Rules 64 to 66
i. Rule 64: only so much as is necessary. The court may order that any property attached, or such portion thereof as shall seem necessary to satisfy the decree, shall be sold. The rule is a real constraint: selling an estate to realise a small decree is an excess, and a sale of property manifestly in excess of the decree is open to challenge.
ii. Rule 65: who conducts the sale. Every sale in execution shall be conducted by an officer of the court or by such other person as the court may appoint, and shall be made by public auction in the manner prescribed.
iii. Rule 66: the proclamation. Where property is ordered to be sold, the court shall cause a proclamation of the intended sale to be made in the language of the court, drawn up after notice to the decree-holder and the judgment-debtor, and stating the time and place of sale and specifying as fairly and accurately as possible: the property to be sold; any encumbrance to which it is liable; the amount for the recovery of which the sale is ordered; and every other thing which the court considers material for a purchaser to know in order to judge the nature and value of the property.
iv. Rule 67: mode of making the proclamation. Proclamation is made by beat of drum or other customary mode, and by affixing a copy at a conspicuous part of the property and of the court house, with publication in a newspaper where the court so directs.
§ Why the proclamation matters The proclamation is the document on which bidders act. A proclamation that understates encumbrances, misdescribes the property, or omits material particulars affects the price, and it is the commonest foundation for an application under Rule 90 to set aside the sale for material irregularity. The requirement of notice to both parties before the proclamation is drawn up is therefore substantive, not formal: it is the judgment-debtor's opportunity to see that his property is accurately described and correctly valued before it is offered for sale. |
2. The Sale: Rules 68 to 73 and 84 to 87
Step | Rule | Requirement |
|---|---|---|
Time between proclamation and sale | Rule 68 | No sale without the judgment-debtor's consent before thirty days from the proclamation for immovable property, or fifteen days for movable property |
Adjournment | Rule 69 | The sale may be adjourned; where it is adjourned for more than thirty days, a fresh proclamation is required unless the judgment-debtor consents |
Who may not bid | Rule 72 and 73 | The decree-holder may not bid or purchase without the express permission of the court; no officer having any duty to perform in connection with the sale may bid, and such a purchase is liable to be set aside |
Deposit by the purchaser | Rule 84 | On immovable property being declared sold, the purchaser must immediately deposit twenty-five per cent of the purchase money, failing which the property is resold forthwith |
Payment of the balance | Rule 85 | The balance is paid within fifteen days from the date of sale |
Default in payment | Rule 86 | On default, the deposit may be forfeited to the Government after defraying the expenses of the sale, and the property is resold |
Resale | Rule 87 | Fresh proclamation and publication are required for a resale, in the manner and within the time originally prescribed |
3. Setting Aside the Sale: The Three Routes
Rule 89: deposit
§ Order XXI Rule 89 (in substance) Where immovable property has been sold in execution of a decree, any person claiming an interest in the property sold at the time of the sale or at the time of making the application, or acting for or in the interest of such a person, may apply to have the sale set aside on his depositing in Court — (a) for payment to the purchaser, a sum equal to five per cent of the purchase money; and (b) for payment to the decree-holder, the amount specified in the proclamation of sale as that for the recovery of which the sale was ordered, less any amount received by the decree-holder since the proclamation. Sub-rule (2): where a person applies under Rule 90 to set aside the sale, he shall not, unless he withdraws that application, be entitled to make or prosecute an application under this rule. |
Rule 89 is a right to redeem, not a complaint. The applicant need show no fault in the sale; he simply pays what the sale was meant to realise, together with a solatium of five per cent for the disappointed purchaser, and the property comes back. It is available to the judgment-debtor and to anyone with an interest in the property, such as a mortgagee or a co-owner, and it is the most effective of the three routes where money can be found.
Rule 90: material irregularity or fraud
§ Order XXI Rule 90 (in substance) (1) Where any immovable property has been sold in execution of a decree, the decree-holder, or the purchaser, or any other person entitled to share in a rateable distribution of assets, or whose interests are affected by the sale, may apply to the Court to set aside the sale on the ground of a material irregularity or fraud in publishing or conducting it. (2) No sale shall be set aside on the ground of irregularity or fraud in publishing or conducting it unless, upon the facts proved, the Court is satisfied that the applicant has sustained substantial injury by reason of such irregularity or fraud. (3) No application to set aside a sale under this rule shall be entertained upon any ground which the applicant could have taken on or before the date on which the proclamation of sale was drawn up. |
§ The three hurdles under Rule 90 An applicant must clear all three: • A material irregularity or fraud, and it must be in the publishing or conducting of the sale, not in the earlier stages of the execution or in the decree itself. • Substantial injury sustained by reason of it. This is a separate fact to be proved, and it is where most applications fail: an irregularity that made no difference to the price or to the applicant's position is not enough, however clear it is. • The ground must not have been available earlier. By sub-rule (3), no ground may be taken which the applicant could have raised on or before the date the proclamation was drawn up, which is why the notice before the proclamation matters so much. |
Rule 91: no saleable interest
Rule 91 allows the purchaser to apply to set aside the sale on the ground that the judgment-debtor had no saleable interest in the property sold. The rule protects the auction purchaser, who bids on the faith of the proclamation and should not be left with nothing for his money; on the sale being set aside, the purchase money is repaid to him under Rule 93. The application lies at the instance of the purchaser alone, since it is his bargain that has failed.
§ Limitation: Article 127 An application under Rules 89, 90 or 91 must be made within sixty days from the date of the sale, under Article 127 of the Limitation Act, 1963. The period was raised from thirty days to sixty days by the Amendment Act of 2002, and it runs from the date of the sale, not from knowledge of it, except where fraud is established and the general principles as to concealment apply. |
4. Confirmation of the Sale and the Sale Certificate
§ Order XXI Rules 92 and 94 Rule 92(1). Where no application is made under Rules 89, 90 or 91, or where such an application is made and disallowed, the Court shall make an order confirming the sale, and thereupon the sale shall become absolute. Rule 92(2). Where such an 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 sixty days from the date of sale, 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. Rule 94. Where a sale of immovable property has become absolute, the Court shall grant a certificate specifying the property sold and the name of the person declared at the time of sale to be the purchaser. Such certificate shall bear the date of the day on which the sale became absolute. |
§ What confirmation achieves Title vests, and relates back. By Rule 94 the certificate bears the date on which the sale became absolute, but the purchaser's title is treated as vesting from the date of the sale itself, so intervening dealings by the judgment-debtor do not affect him. The sale becomes unassailable in execution. Once confirmed, the sale can no longer be attacked under Rules 89 to 91, and a challenge must be founded on fraud or on a ground that goes to the jurisdiction of the court. Delivery follows. The purchaser applies for delivery of possession, which is given under Rule 95 where the property was in the judgment-debtor's occupancy, and under Rule 96 symbolically where a tenant is in occupancy. Resistance to delivery is dealt with under Rules 97 to 103. |
5. Resistance by the Judgment-Debtor and Obstruction by a Third Person
Where the auction purchaser or the decree-holder seeks possession and is met with resistance, the Code supplies a complete code of its own in Order XXI Rules 97 to 103, treated fully in the companion topic in this series. In outline: a decree-holder or purchaser resisted or obstructed applies under Rule 97, and the court adjudicates under Rule 98; a person other than the judgment-debtor who is dispossessed applies under Rule 99, and the court adjudicates under Rule 100; by Rule 101 all questions of right, title and interest between the parties to such an application are determined by the executing court itself, and not by a separate suit; Rule 102 denies relief to a transferee pendente lite; and by Rule 103 every such determination has the force of a decree.
6. Landmark Points on Execution Sales
- Order XXI Rule 64. Only so much property as is necessary to satisfy the decree may be sold.
- Order XXI Rule 66. The proclamation is drawn up after notice to both parties and must state the property, the encumbrances, the amount to be recovered and every material particular.
- Order XXI Rule 68. Thirty days must elapse between proclamation and sale for immovable property, fifteen for movable, unless the judgment-debtor consents.
- Order XXI Rules 84 to 86. Twenty-five per cent deposit immediately, the balance within fifteen days, and forfeiture and resale on default.
- Order XXI Rule 90(2) and (3). No sale is set aside for irregularity or fraud unless substantial injury by reason of it is proved, and no ground may be taken that was available on or before the drawing up of the proclamation.
- Order XXI Rules 92 and 94. Confirmation makes the sale absolute, and the certificate bears the date on which it became absolute, the purchaser's title relating back to the sale.
- Article 127, Limitation Act, 1963. Thirty days to apply under Rules 89, 90 or 91, from the date of the sale.
7. Frequently Asked Questions
What must a sale proclamation contain?
Under Order XXI Rule 66, the time and place of sale, and as fairly and accurately as possible the property to be sold, any encumbrance to which it is liable, the amount for the recovery of which the sale is ordered, and every other thing the court considers material for a purchaser to know in order to judge the nature and value of the property. It is drawn up after notice to both parties.
How long after the proclamation can the sale take place?
Not before thirty days for immovable property, or fifteen days for movable property, from the date on which the copy of the proclamation was affixed at the court house, unless the judgment-debtor consents in writing to an earlier sale.
Can the decree-holder bid at the auction?
Only with the express permission of the court, under Order XXI Rule 72. A purchase made by him without permission is liable to be set aside on the judgment-debtor's application, and no officer having any duty to perform in connection with the sale may bid at all.
What deposit must an auction purchaser make?
Twenty-five per cent of the purchase money immediately on being declared the purchaser of immovable property, under Rule 84, failing which the property is resold forthwith; the balance is payable within fifteen days under Rule 85, and default leads to forfeiture and resale under Rule 86.
How can a sale be set aside on deposit under Rule 89?
Any person claiming an interest in the property may apply, depositing for the purchaser five per cent of the purchase money and for the decree-holder the amount specified in the proclamation as that for the recovery of which the sale was ordered, less anything received since. No irregularity need be shown; it is in substance a right to redeem.
What must be proved under Order XXI Rule 90?
A material irregularity or fraud in publishing or conducting the sale, and, as a separate fact, that the applicant sustained substantial injury by reason of it. By sub-rule (3), no ground may be taken which the applicant could have raised on or before the date the proclamation was drawn up.
Who may apply under Rule 91?
The purchaser alone, on the ground that the judgment-debtor had no saleable interest in the property sold. The rule protects the auction purchaser, and on the sale being set aside the purchase money is repaid to him under Rule 93.
When does a sale become absolute?
Where no application under Rules 89, 90 or 91 is made, or where one is made and disallowed, the court confirms the sale under Rule 92 and it becomes absolute. A certificate then issues under Rule 94 bearing the date the sale became absolute, and the purchaser's title relates back to the date of the sale.
8. Related Topics in This CPC Series
- Attachment in Execution: Sections 60 to 64 and Order XXI
- Order XXI Rules 97 to 103: Resistance, Obstruction and Third-Party Claims
- Modes of Execution under Section 51
- Execution of Decrees: Sections 36 to 74 and Order XXI