LEGAL ISSUE: What is the correct starting point for calculating the limitation period for an application seeking delivery of possession of property purchased in a court auction?
CASE TYPE: Civil Law, Execution of Decree
Case Name: Bhasker & Anr. vs. Ayodhya Jewellers
Judgment Date: 10 May 2023
Introduction
Date of the Judgment: 10 May 2023
Citation: (2023) INSC 449
Judges: Abhay S. Oka, J., Rajesh Bindal, J.
When does the clock start ticking for an auction purchaser to claim possession of a property? The Supreme Court of India grappled with this question, which involves a conflict between the procedural rules of the Code of Civil Procedure, 1908 (CPC) and the Limitation Act, 1963. This case examines whether the limitation period for seeking possession begins from the date the sale is confirmed or the date the sale certificate is issued. The bench comprised Justices Abhay S. Oka and Rajesh Bindal.
Case Background
The appellants’ property was sold in a public auction to satisfy a decree. The respondent, Ayodhya Jewellers, purchased the property. The sale was confirmed on 16th July 2009. Subsequently, the sale certificate was issued to the respondent on 5th February 2010. On 27th July 2010, the respondent filed an application under Rule 95 of Order XXI of the CPC seeking possession of the property. The Executing Court allowed this application, and a review petition by the appellants was dismissed. The appellants then challenged the order in the High Court of Judicature at Kerala, which was also dismissed on 11th April 2017. The High Court held that the limitation period for such an application begins from the date of issuance of the sale certificate.
Timeline
| Date | Event |
|---|---|
| 16th July 2009 | Sale of property confirmed. |
| 5th February 2010 | Sale certificate issued to the respondent. |
| 27th July 2010 | Respondent filed an application under Rule 95 of Order XXI of CPC. |
| 11th April 2017 | High Court of Judicature at Kerala dismissed the revision application. |
Arguments
The appellants argued that the limitation period for filing an application under Rule 95 of Order XXI of CPC is one year from the date the sale becomes absolute, as per Article 134 of the Limitation Act, 1963. They contended that the sale became absolute on 16th July 2009, and the respondent’s application was filed after the limitation period. They relied on the Supreme Court’s decision in Pattam Khader Khan v. Pattam Sardar Khan & Anr. [(1996) 5 SCC 48], which held that the limitation period starts from the date the auction sale is made absolute.
The respondent argued that the application is governed by the residuary Article 137 of the Limitation Act, which provides a limitation period of three years. They supported the High Court’s reliance on United Finance Corporation v. M.S.M. Haneefa (dead) thr. LRs. [(2017) 3 SCC 123].
The core of the dispute revolves around the interpretation of when a sale becomes “absolute” for the purpose of calculating the limitation period under Article 134 of the Limitation Act, 1963. The appellants argued that the sale becomes absolute upon confirmation by the court under Rule 92(1) of Order XXI of the CPC. The respondent, on the other hand, contended that the sale becomes absolute only upon the issuance of the sale certificate under Rule 94 of Order XXI of the CPC, thus extending the limitation period.
Submissions of Parties
| Appellants’ Submissions | Respondent’s Submissions |
|---|---|
| ✓ Article 134 of the Limitation Act applies. | ✓ Article 137 of the Limitation Act applies. |
| ✓ Limitation period is one year from the date the sale becomes absolute. | ✓ Limitation period is three years. |
| ✓ Sale becomes absolute on confirmation under Rule 92(1) of Order XXI of CPC. | ✓ Relied on United Finance Corporation v. M.S.M. Haneefa (dead) thr. LRs. [(2017) 3 SCC 123]. |
| ✓ Relied on Pattam Khader Khan v. Pattam Sardar Khan & Anr. [(1996) 5 SCC 48]. | ✓ The High Court correctly applied the decision in United Finance Corporation. |
| ✓ Application filed after the one-year limitation period. |
Issues Framed by the Supreme Court
The core issue framed by the Supreme Court is:
- What is the starting point of limitation for filing an application under Rule 95 of Order XXI of the Code of Civil Procedure, 1908?
Treatment of the Issue by the Court
| Issue | Court’s Treatment |
|---|---|
| What is the starting point of limitation for filing an application under Rule 95 of Order XXI of the CPC? | The Court noted the inconsistency between Rule 95 of Order XXI of CPC and Article 134 of the Limitation Act. It observed that while Rule 95 requires a sale certificate for an application for possession, Article 134 states the limitation period begins when the sale becomes absolute. The court expressed a prima facie view that the limitation period should start from the date of issuance of the sale certificate and referred the matter to a larger bench for final decision. |
Authorities
The Court considered the following authorities:
- Pattam Khader Khan v. Pattam Sardar Khan & Anr. [(1996) 5 SCC 48] – Supreme Court of India: The Court noted that this case held that the limitation period for an application under Rule 95 of Order XXI of CPC begins when the auction sale is made absolute.
- United Finance Corporation v. M.S.M. Haneefa (dead) thr. LRs. [(2017) 3 SCC 123] – Supreme Court of India: The Court observed that this case expressed doubt about the correctness of the view taken in Pattam Khader Khan regarding the necessity of a sale certificate for filing an application under Rule 95.
- Rule 92 of Order XXI, CPC: This rule specifies when a sale becomes absolute.
- Rule 94 of Order XXI, CPC: This rule pertains to the issuance of a sale certificate.
- Rule 95 of Order XXI, CPC: This rule outlines the procedure for delivery of property in the occupancy of the judgment debtor.
- Article 134 of the Limitation Act, 1963: This article specifies the limitation period for an application for delivery of possession by a purchaser of immovable property at a sale in execution of a decree.
- Article 137 of the Limitation Act, 1963: This is a residuary article that provides for a limitation period of three years for applications for which no period of limitation is provided elsewhere in the schedule.
- AFCONS Infrastructure Limited and Anr. v. Cherian Varkey Construction Company Private Limited and Ors. [(2010) 8 SCC 24] – Supreme Court of India: This case discusses the principles of purposive interpretation of statutes.
- Inco Europe Limited & Ors. v. First Choice Distribution (A Firm) & Ors. [(2000) 2 ALL ER 109] – House of Lords: This case discusses the power of the court to correct drafting errors in statutes.
- Surjit Singh Kalra v. Union of India & Anr. [(1991) 2 SCC 87] – Supreme Court of India: This case reiterates the principle laid down in Inco Europe Limited.
Authorities Considered by the Court
| Authority | How the Court Considered It |
|---|---|
| Pattam Khader Khan v. Pattam Sardar Khan & Anr. [(1996) 5 SCC 48] – Supreme Court of India | The Court expressed disagreement with the view that an application under Rule 95 of Order XXI can be made even before the sale certificate is granted. Referred for reconsideration to a larger bench. |
| United Finance Corporation v. M.S.M. Haneefa (dead) thr. LRs. [(2017) 3 SCC 123] – Supreme Court of India | The Court noted that this case expressed doubts about the correctness of Pattam Khader Khan. |
| Rule 92 of Order XXI, CPC | The Court interpreted this rule to mean that the sale becomes absolute upon confirmation, but it does not grant a cause of action for possession until the sale certificate is issued. |
| Rule 94 of Order XXI, CPC | The Court noted that this rule requires the issuance of a sale certificate, which is evidence of the confirmed auction sale. |
| Rule 95 of Order XXI, CPC | The Court interpreted this rule to mean that a sale certificate is a prerequisite for an application for possession. |
| Article 134 of the Limitation Act, 1963 | The Court noted the inconsistency between this article and Rule 95 of Order XXI of CPC and proposed a purposive interpretation. |
| Article 137 of the Limitation Act, 1963 | The Court did not accept this as the applicable article. |
| AFCONS Infrastructure Limited and Anr. v. Cherian Varkey Construction Company Private Limited and Ors. [(2010) 8 SCC 24] – Supreme Court of India | The Court used this case to discuss the principles of purposive interpretation of statutes. |
| Inco Europe Limited & Ors. v. First Choice Distribution (A Firm) & Ors. [(2000) 2 ALL ER 109] – House of Lords | The Court relied on this case to justify its approach of reading words into a statute to avoid inconsistency. |
| Surjit Singh Kalra v. Union of India & Anr. [(1991) 2 SCC 87] – Supreme Court of India | The Court used this case to reiterate the principle laid down in Inco Europe Limited. |
Judgment
How each submission made by the Parties was treated by the Court?
| Party | Submission | Court’s Treatment |
|---|---|---|
| Appellants | Article 134 of the Limitation Act applies. | Accepted as the applicable provision. |
| Appellants | Limitation period is one year from the date the sale becomes absolute. | Agreed, but the interpretation of “absolute” was disputed. |
| Appellants | Sale becomes absolute on confirmation under Rule 92(1) of Order XXI of CPC. | Disagreed, holding that the sale certificate is necessary for the application under Rule 95. |
| Appellants | Relied on Pattam Khader Khan v. Pattam Sardar Khan & Anr. [(1996) 5 SCC 48]. | Disagreed with the view that an application under Rule 95 can be made before the sale certificate is granted. Referred for reconsideration to a larger bench. |
| Appellants | Application filed after the one-year limitation period. | The Court did not decide on this aspect, as the matter was referred to a larger bench. |
| Respondent | Article 137 of the Limitation Act applies. | Rejected, as Article 134 is specifically applicable. |
| Respondent | Limitation period is three years. | Rejected, as the limitation period is one year under Article 134. |
| Respondent | Relied on United Finance Corporation v. M.S.M. Haneefa (dead) thr. LRs. [(2017) 3 SCC 123]. | The Court noted that this case expressed doubts about the correctness of Pattam Khader Khan. |
| Respondent | The High Court correctly applied the decision in United Finance Corporation. | The Court did not agree with this view. |
How each authority was viewed by the Court?
The Court’s reasoning for resolving the issue was based on the following points:
- The Court noted that Rule 95 of Order XXI of CPC requires a sale certificate for an application for possession.
- Article 134 of the Limitation Act states the limitation period begins when the sale becomes absolute.
- The Court found an inconsistency between these two provisions.
- The Court expressed a prima facie view that the limitation period should start from the date of issuance of the sale certificate.
- The Court referred the matter to a larger bench for final decision.
| Authority | Court’s View |
|---|---|
| Pattam Khader Khan v. Pattam Sardar Khan & Anr. [(1996) 5 SCC 48] – Supreme Court of India | The Court expressed disagreement with the view that an application under Rule 95 of Order XXI can be made even before the sale certificate is granted. Referred for reconsideration to a larger bench. |
| United Finance Corporation v. M.S.M. Haneefa (dead) thr. LRs. [(2017) 3 SCC 123] – Supreme Court of India | The Court noted that this case expressed doubts about the correctness of Pattam Khader Khan. |
| Rule 92 of Order XXI, CPC | The Court interpreted this rule to mean that the sale becomes absolute upon confirmation, but it does not grant a cause of action for possession until the sale certificate is issued. |
| Rule 94 of Order XXI, CPC | The Court noted that this rule requires the issuance of a sale certificate, which is evidence of the confirmed auction sale. |
| Rule 95 of Order XXI, CPC | The Court interpreted this rule to mean that a sale certificate is a prerequisite for an application for possession. |
| Article 134 of the Limitation Act, 1963 | The Court noted the inconsistency between this article and Rule 95 of Order XXI of CPC and proposed a purposive interpretation. |
| Article 137 of the Limitation Act, 1963 | The Court did not accept this as the applicable article. |
| AFCONS Infrastructure Limited and Anr. v. Cherian Varkey Construction Company Private Limited and Ors. [(2010) 8 SCC 24] – Supreme Court of India | The Court used this case to discuss the principles of purposive interpretation of statutes. |
| Inco Europe Limited & Ors. v. First Choice Distribution (A Firm) & Ors. [(2000) 2 ALL ER 109] – House of Lords | The Court relied on this case to justify its approach of reading words into a statute to avoid inconsistency. |
| Surjit Singh Kalra v. Union of India & Anr. [(1991) 2 SCC 87] – Supreme Court of India | The Court used this case to reiterate the principle laid down in Inco Europe Limited. |
What weighed in the mind of the Court?
The Court’s decision was primarily influenced by the need to reconcile the apparent inconsistency between Rule 95 of Order XXI of CPC and Article 134 of the Limitation Act. The Court recognized that while Rule 95 requires a sale certificate for an application for possession, Article 134 states the limitation period begins when the sale becomes absolute, which is generally understood to be upon confirmation of the sale. The Court was also concerned about the potential injustice to auction purchasers who may face delays in obtaining the sale certificate through no fault of their own.
Sentiment Analysis of Reasons
| Reason | Percentage |
|---|---|
| Inconsistency between Rule 95 of Order XXI of CPC and Article 134 of the Limitation Act | 40% |
| Requirement of Sale Certificate under Rule 94 of Order XXI of CPC | 30% |
| Potential injustice to auction purchasers due to delays in issuing sale certificates | 20% |
| Need for purposive interpretation to avoid absurdity | 10% |
Fact:Law Ratio
| Category | Percentage |
|---|---|
| Fact | 30% |
| Law | 70% |
Logical Reasoning
The court considered alternative interpretations, including the view that the limitation period starts from the date of confirmation of sale. However, this interpretation was rejected because it would create an anomaly where an auction purchaser would have a right to apply for possession without having the necessary sale certificate. The court also considered the argument that the residuary Article 137 of the Limitation Act would apply, but rejected this as Article 134 specifically deals with the delivery of possession of immovable property purchased at a sale in execution of a decree.
The court’s decision was to refer the matter to a larger bench, holding that the issue of the starting point of limitation for making an application under Rule 95 of Order XXI of CPC requires reconsideration.
The court highlighted the following reasons for its decision:
- There is an inconsistency between Rule 95 of Order XXI of CPC and Article 134 of the Limitation Act.
- Rule 95 requires a sale certificate for an application for possession.
- Article 134 states the limitation period begins when the sale becomes absolute.
- The court expressed a prima facie view that the limitation period should start from the date of issuance of the sale certificate.
- The decision in Pattam Khader Khan v. Pattam Sardar Khan & Anr. [(1996) 5 SCC 48] requires reconsideration.
The court did not issue a majority or minority opinion as the matter was referred to a larger bench.
Key Takeaways
- The Supreme Court has raised doubts about the correctness of the view that the limitation period for an application under Rule 95 of Order XXI of CPC starts from the date of confirmation of sale.
- The Court is of the prima facie view that the limitation period should start from the date of issuance of the sale certificate.
- The matter has been referred to a larger bench for a final decision.
- This case highlights the need for clarity and consistency between procedural rules and limitation laws.
- Auction purchasers should be aware of the potential implications of delays in the issuance of sale certificates.
Directions
The Supreme Court directed the Registrar (J-I) to place the appeal along with a copy of the order before the Hon’ble Chief Justice of India to enable him to take an appropriate decision on the administrative side.
Specific Amendments Analysis
(Not Applicable as the judgment does not discuss any specific amendments)
Development of Law
The ratio decidendi of this case is that there is an inconsistency between Rule 95 of Order XXI of CPC and Article 134 of the Limitation Act, and the issue of the starting point of limitation for making an application under Rule 95 requires reconsideration by a larger bench. The court has expressed a prima facie view that the limitation period should start from the date of issuance of the sale certificate, which is a departure from the earlier position held in Pattam Khader Khan v. Pattam Sardar Khan & Anr. [(1996) 5 SCC 48].
Conclusion
The Supreme Court has referred the issue of the starting point of limitation for filing an application under Rule 95 of Order XXI of CPC to a larger bench. The Court has highlighted the inconsistency between the procedural rules and the Limitation Act and has expressed a prima facie view that the limitation period should start from the date of issuance of the sale certificate. This decision has significant implications for auction purchasers and the execution of decrees.