Holding

Order 34 Rule 5 of the CPC is applicable to a sale of mortgaged property under Section 32 of the State Financial Corporations Act, and the mortgagor’s right of redemption remains enforceable until the sale becomes final.

Summary

Maganlal mortgaged his property to M.P. State Financial Corporation. When the loan defaulted, the corporation invoked Sections 31 and 32 of the State Financial Corporations Act, 1951 to attach and sell the property. The first purchaser (Jaiswal Industries) obtained the sale, which was set aside, re‑sold to a second purchaser, and the High Court later confirmed the first sale while allowing the second purchaser’s appeal. Maganlal filed an application under Order 34 Rule 5 of the Code of Civil Procedure seeking redemption, arguing that the pending appeals kept the sale from becoming absolute and that the provision applied even to a sale under the Act. The Court held that the provisions of Order 34 Rule 5 are attracted to a sale made under Section 32 of the Act, that the mortgagor’s right of redemption under Section 60 of the Transfer of Property Act remains alive until extinguished, and that a pending appeal prevents the sale from becoming final. Consequently, Maganlal’s application was allowed, the High Court’s order was set aside, the second sale was cancelled, and the mortgage deed was returned to Maganlal.

Issues considered

Whether Order 34 Rule 5 of the Code of Civil Procedure applies to a sale of mortgaged property effected under Section 32 of the State Financial Corporations Act, 1951.
Whether an application under Section 31 of the Act can be treated as a suit for sale of mortgaged property for purposes of the Code.
Whether the mortgagor's right of redemption under Section 60 of the Transfer of Property Act is extinguished by a sale under the Act.
Whether the pendency of an appeal against the confirmation of sale prevents the sale from becoming absolute and thus affects the applicability of Order 34 Rule 5.
Interpretation of the expressions ‘as far as practicable’ and the legal fiction in Section 32(8) of the Act.

Legislation cited

Code of Civil Procedure, 1898s. Order 21, s. Order 21 Rule 90, s. Order 21 Rule 92, s. Order 34 Rule 5
Limitation Act, 1908s. Art. 180
State Financial Corporations Act, 1951s. 31, s. 32, s. 46B
Transfer of Property Act, 1882s. 60

Subjects

mortgageright of redemptionOrder 34 Rule 5State Financial Corporations Actsale of mortgaged propertylegal fictionpending appealexecution of decree

Judgment

•'
Ii

•
A
MAGANLAL ETC.
v.
JAISWAL INDUSTRIES NEEMACH & ORS.
'
;..,. i
.

AUGUST 7, 1989

B [N.D. OJHA AND K.N. SAIKlA, JJ.]
•
y
Code of Civil Procedure, 1898: Order 34 Rule 5-Whether ap-
plicable to sale of property mortgaged under State Financial Corpora-
tion Act, 1951.

c State Financial Corporations Act, 1951: Sections 31 and 32-Satf
of property mortgaged under the Act-Whether provisions or Order 34
1
Rule 5 CPC are attracted. ,~ -

Maganlal executed a mortgage in favour of M.P. State Financial
Corporation as security for a loan. The amount of loan not having been
D paid, the Corporation initiated proceedings before the District Judge
under section 31 of the State Financial Corporations Act, 1951 for
attachment and sale of the mortgaged property, which was ultimately
auctioned and purchased by M/s Jaiswal Industries, the fU"St purchaser
Maganlal made an application under Order 21 Rule 90 of the Code of
Civil Procedure with the result that the sale was set aside by the }-·
E Additional District Judge. The first purchaser preferred an appeal
against the order setting aside the sale and also sought stay of further
proceedings for re-sale. The High Court did not grant stay but only
ordered that the fresh sale shall not he confll'llled till the disposal of
the appeal. Fresh auction was held and sale was knocked down in
favour of Ramnarayan, the second purchaser. The appeal of the fU"St ,
F purchaser was subsequently allowed by the High Court and the first -I
sale in his favour was confirmed. Both Maganlal and Ramnarayan /
have filed twa separate appeals in this Court challenging the order of
the High Court.

Maganlal made an application before this Court under Order 34
G Rule 5 of the Code, being C.M.P. No. 9940 of 1982, for redemption of
the mortgage, and bas urged that in case C.M.P. No. 9940 of 1982 is
allowed, it would not he necessary for him to press the merits of the ~
appeal. This contention has not been seriously disputed by the first and '
the second purchasers. They have however opposed this application on
the ground that: (i) an order of sale of the mortgaged property passed
H
696
; ' ··"'11'
.,.

MAGANLAL v. JAISWAL INDUSTRIES 697

by the District Judge under section 32 ~f the Act after affecting an A
attachment under section 31 thereof will not come within the purview of
a final decree for sale of mortgaged property contemplated by Order 34
Rule 5 of the' Code and as such the benefit of that provision could not be
extended to Maganlal; (ii) the High Court having confirmed the sale in
first purchaser's favour, an application under Order 34 Rule 5 of the
Code is not maintainable inasmuch as the said provision contemplates B
payment 'on or before the day fixed or at any time before the. confir-
mation of a sale'; and (iii) section 32(8) of the State Finance Cor-
l poration Act makes the manner provided in the Code applicable only
'\~"as far as practicable" and there was neither a decree nor was the
Financial Corporation a decree holder in a suit fQr sale it was only
deemed to be a decree holder by legal fiction because of the expression C
"in execution of a decree as if the Financial Corporation were the
decree-holder".

On the other hand, it is contended on behalf of Maganlal that
;(i) Order 34 Rule 5 of the Code is attracted even to an order of sale of
mortgaged property passed under section 32 of the Act and since the D
right of redemption which vests in Maganlal has not yet extinguished in
·view of the pendency of these appeals, there is no Impediment in the
'\ relief contemplated by Order 34 Rule 5 of the Code being granted. and
"'1 (ii) in view of sub-section (8) of section 32 of the Act the applicability of

•
.,.
the provisions of Order 34 Rule 5 of the Code cannot be denied to the
facts of the instant case. E

.• Allowing the CMP and the appeal filed by Maganlal and grant-
. ing consequential reliefs to the first and the second purchasers, this
Court.
.. .
,, HELD: (1) .In case the provisions of Order 34 Rule 5 of the F
. Code are held to be. applicable to the facts o(tiie instant case, ap-
propriate ..relief can be granted thereunder. as the order of confirma-
tion of the sale passed .by the High Court in favour of the first pur-
,chaser has not. become absolute due to the pendency of these appeals
against that order nor has the right of redemption of Maganlal yet
extinguished. [707F-G) • G

.Chandra Mani v. Anarjan Bibi, A.I.R. 1934 P.C. 134; Nilayam
,Ramkrishan Rao v. Kandokari Che/layamma & Anr., [1950) S.C.R.
''·806; S. V. Ramalingam & Ors. v. K.E. Rajagopa/an & Ors., [1975)
2 M.L.J. 494; M. Sevugan Chettiar v. V.A. Narayana.Raja, A.I.R ..
1.984 Mad 334; Raghunath Singh & Ors. v. Pt. Hansraj Kunwar & H
• j;i. '.

~.:.~
:Ii
698 SUPREME COURT REPORTS (1989] 3 S.C.R.

Ors., A.I.R. 1934 P.C. ~OS and Mhadagonda Ramgonda Patil &
v
A \•
Ors. v. Shripal Ba/want Rainade & Ors., (1980] 3 S.C.C. 298, referred
to.

(2) An application under section 31(1) of the Act cannot be put on
par to a suit for enforcement of a mortgage nor the order passed ' r
B thereon under section 32 of the Act be put on par as if it was an order in
a suit between a mortgagee and the mortgagor for sale of mortgaged
property. On the other band, the substantive relief in ao application
under section.31(1) is something akin lo an application for attachment
of property in execution of a decree at a stage posterior lo the passing of~
the decree. [710E-F]
c Gujarat State Financial Corporation v. Mis Natson Manufactur- ~-
ing Co. (P) Ltd., [1979] 1 S.C.R. 372 and Mis Everest Industrial Im
Corporation & Ors. v. Gujarat State Financial Corporation, [1987] 3
S.C.C. 597, referred to.

D (3) The purpose of enacting sections 31 and 32 of the Act was
apparently to provide for a speedy remedy for recovery of the dues of
the Financial Corporation. This.purpose however was, in cases covered
by clause (a) of sub-section (1) of section 31, conf"med to the stage of }..-
obtaining ao order akin to a decree in a suit, in execution whereof "the
property pledged, mortgaged, hypotbecated or assigned to the Finan- ~
E cial Corporation as security for the loan or advance" could be sold.
Sections 31 and 32 of the Act cut across and dispense with the provisions
of the Code from the stage of filing a suit to the stage of obtaining a
decree in execution whereof such properties as are referred to in clause
(a) of sub-section (1) of section 31 could be sold. After this stage I

F
was reached, sale in execution of ao order ·under section 32 of the
Act was for purposes of execution put at par with sale in execution 1
of a decree obtained in a suit, by enacting sub-section (8) .of section
32 of the Act. [711H-712B]

(4) If in its anxiety to ensure speedy recovery of the dues of the
Financial Corporation Parliament had intended also to cut across ~nd
G dispense with the procedure contained in the Code for execution of a
decree for sale of such properties as are referred to in clause (a) of ,..:f..
sub-section (1) of section 31 of the Act, it would have made some provi-
sion analogous to provjsions contained in the enactments for revenue
recovery. But that was not done. Instead, sub-section (8) was incor~
porated in section 32 of the Act. [712F]
H
(5) As is apparent from the plain language of section 32(8) of the
MAGANLAL v. JAISWAL INDUSTRIES 699

Act, the legal fiction wais er kd for * pm pw of neadin& an order
under section 32 of the Act fer sale of~ property as if such order A
was a decree in a suit for sale and ·the llnucial Corporation was the
decree holder whereas the delJtor was the judgment debtor. (7 I 4B]

~ It is settUed law that a legal fiction is to be llmlted to the purpose
for which it was created and should not be extended beyond the legit!- B
mate field. (713H]

:.-..,,,.. ~ The Bengal Immunity Company Ltd. •. The State of Bihar &
'f . ·ors., (1955] 2 S.C.R. 603; East End Dwellings Company Ltd. •· Fins-
,, bury Borough Council, (1952] Appeal Cases 109; The Commissioner of
"'» Income-tax, Bombay•· Amarchand N. Shroff, (1963] Supp. I S.C.R.
' 699; Commissioner of Income Tax, Gujarat v. Vedilal Lallubhai, c
(1973] 3 S.C.C. 17 and National Sewing Tfiread Co. Ltd. v. Jamesh
Chadwick & Bros. Ltd., (1953] S.C.R. 1028, referred to.

(6) The provisions of the Code of Civil Procedure with regard to
execution of a decree for sale of mortgaged property contained in Order D
21 of the Code including the right to file an appeal against such orders
pas..ed during the course of execution which are appealable shall apply
mutatis mutandis to provisions of an order under section 32 of the Act
unless such provision is not practicable to be appl!ed· (714C)

(7) Since, in the instant case, the equity of redemption has not E
extinguished, there is no good ground to take the view that even though
all the remaining provisions with regard to execution of a decree for sale
of mortgaged property will apply to execution of an order under sec-
l lion 32 of the Act, the provision contained in Order J4 Rule 5 of
. . the Code shall not apply. Nothing has been brought to 'the notice of
the Court as to how and why it is not practicable to apply the said
provision. (714F) F

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.
2990-91 of 1980.

From the Judgment and Order dated 20.9.1979 & 11.9.79 of the G
Madhya Pradesh High Court in Misc. Appeal No. 113 of 1976.

Shiv Dayal Srivastava, T.S. KrishnaMoorthy Iyer, D.N. Mishra,
R.P. Srivastava, S. Sukumaran and H.K. Puri, Harish N. Salve, K.K.
Mohan, A.K. Sanghi, S.K. Agnihotri, Ashok Singh, H.K. Puri and
H
700 SUPREME COURT REPORTS [19891 3 S.C.R.

A S, K. Gambir for appearing parties.

The Judgment of the Court was delivered by

OJHA, J. These two appeals by special leave raise an interesting · y-
B question as to whether the provisions amtained in Order 34 Rule 5 of
the Code of Civil Procedure (hereinafter referred to as the Code) arc
attracted during the course of execution of an order of sale of mort-
gaged property passed under section 32 of the State Financial Corpo-
ration Act, 1951 (hereinafter referred to as the Act). Necessary facts in.,..;
order to appreciate the context in which this question arises may be
stated in brief. Maganlal who is the appellant in Civil Appeal No. 2990
C of 1980 executed a mortgage on July 16, 1965 in favour of M.P. State
Financial Corporation (hereinafter referred to as the Corporation) as
security for a loan taken by him from the Corporation. The amount of
loan not having been paid by Maganlal the Corporation initiated pro-
ceedings under section 31 of the Act for recovery of Rs.51,799, which
D according to it was the amount due, by attachment and sale of the
mortgaged property. This application was made as contemplated by
Section 31 of the Act before the District Judge. After adopting the
procedure contemplated by section 31 of the Act the District Judge· ~
passed an order for sale of the property which was ultimately sold for
Rs.53,000 in an auction. Mis Jaiswal Industries (hereinafter referred
E to as the first purchaser) was the highest bidder. Maganlal made an
application under Order 21 Rule 90 of the Code for setting aside the
sale. This application was allowed by the Additional District Judge and
the sale was set aside. Aggrieved by that order the first purchaser
preferred a miscellaneous appeal in the High Court and also made an
application for staying further proceedings for re-sale. The High .,J
F Court, however, did not stay further proceedings for re-sale but only '•,
ordered that the fresh sale should not be confirmed till the disposal of
the appeal. Fresh auction accordingly took place and the sale was
knocked down in favour of Ramnarayan and others (hereinafter refer-
red to as the second purchaser) who are the appellants in Civil Appeal
No. 2991 of 1980. The appeal of the first purchaser was subsequently
G allowed by the High Court. The application made by Maganlal under
Order 21 Rule 90 of the Code was dismissed and the sale in favour of ~
the first purchaser was confirmed. It is this order which has been
challenged in Civil Appeal No. 2990 of 1980 by Maganlal and by the
second purchaser in Civil Appeal No. 2991 of 1980, as already indi-
cated above.
H
Maganlal has made an application before this Court under order
MAGANLAL v. JAISWAL INDUSTRIES (OJHA, J.] 701

34 Rule 5 of the Code being C.M.P. No. 9940 of 1982 to which an
objection has been filed. This application was orderd to be put up at
the time of the hearing of the appeal. Subsequent events and proceed-
ings of the court below oit the basis whereof this application has been
made as stated therein are these.

A sum of Rs.65,000 was paid by Maganlal to the Corporation on B
December 3, 1988 in full and final settlement of its claim and the
Corporation acknowledged it by granting a receipt. Certification of the
adjustment thus made was recoi'ded by the District Judge on April 6,
\..., 1981. An application purporting to be under Order 34 Rule 5 of the
·code was made on November 20, 1981 by Maganlal for depositing
Rs.2,650 equivalent of 5% of Rs.53,000 which was the highest bid of C
-) the first purchaser and a further sum of Rs. 7 ,300, that is, 5% of
Rs. 1,46,000 which was the highest bid of the second purchaser. The
prayer which was made in this application was that the aforesaid sums
may be paid to the first and second purchasers respectively and a final
( decree be passed in his favour in accordance with Order 34 Rufe 5 of
the Code. The Additional District Judge by his order dated November D
27, 19S 1 permitted Maganlal to deposit the two amounts separately at
his risk and we are informed by his learned counsel that these amounts
were deposited in pursuance of the said permission. According to
learned counsel for Maganlal no final orders were passed on the
aforesaid application by the Additional District Judge in view of the
pendency of these appeals.in this Court and it was as such that C.M.P. E
No. 9940 of 1982 referred to above was filed in this Court.

It was urged by learnd counsel for Maganlal that in case C.M.P.
No. 9940 of 1982 is allowed it will not be necessary for him to press the
merits of the appeals and it is only in the event of the said application
being dismissed that merits of the appeal will have to be pressed. He, F
therefore, made a request that the said applicatio!.1- may be decided
first. Learned counsel for the first and the second purchasers did not
seriously dispute the above contention. We have accordingly heard
learned counsel for the parties on the said application and have not
heard them on the merits of the appeals at this stage.
G
The aforesaid application has been opposed by learned counsel
for the first and second purchasers on the ground that an order of sale
of the mortgaged property passed by the District Judge under Section
32 of the Act after affecting an attachment under section 31 thereof
will not come within the purview of a final decree for sale-of mortgaged
property contemplated by Order 34 Rule 5 of the Code and as such the H
702 SUPREME COURT REPORTS I1989] 3 S.C.R.

A benefit of that provision could not be extended to Maganlal. Accord-
ing to learned counsel for the purchasers Order 34 Rule 5 of the Code
could be applied only if in a suit instituted in this behalf on the basis of
a mortgage deed a final decree for sale was obtained and the property
was put to auction in pursuance of such decree. The other submission
which was made by them was that in any view of the matter the High
B Court after allowing the appeal filed by the first purchaser having y-
confirmed the sale in his favour, an application under Order 34 Rule 5
of the Code was not maintainable inasmuch as the said provision con-
templated payment "on or before the day fixed or at any time before
the confirmation of a sale".

Learned counsel for Maganlal on the otherhand urged that
c notwithstanding an order of confirmation of sale in favour of the first
purchaser having been passed by the High Court Order 34 Rule 5
of the Code would still be attracted inasmuch as these appeals have been.
filed against the said order and till these appeals are decided the sale in
favour of the first purchaser cannot become absolute. As regards the
D second purchaser he pointed out that while permitting fresh sale dur-
ing the pendency of the appeal by the first purchaser the High Court
had specifically directed that the fresh sale which may take place shall
not be confirmed. He also urged that Order 34 Rule 5 of the Code·was
attracted even to an order of sale of mortgaged property passed under
section 32 of the Act and since the right of redemption which vests in
E Maganlal has not yet extinguished in view of the pend'ency of these
appeals there was no impediment in the relief contemplated by Order
34 Rule 5 of the Code being granted.

We shall first deal with the question with regard to the effect of
an appeal being pending against an order dismissing an application I
F under Order 21 Rule 90 of the Code. In Chandra Mani v. Anarjan
Bibi, A.LR. 1934 P.C. Page 134 in execution of two final mortgage
1
decrees for sale, the mortgaged properties were sold by auction. The
judgment debtors filed applications under Order 21 Rule 90 of the
Code which were dismissed and the sales were confirmed in pursuance
of Order 21 Rule 92 on April 22, 1924. Appeals were filed against this
G order by some of the judgment debtors in the High Court which were
dismissed on March 17, 1927. Sale certificates were thereafter granted
to the two auction purchasers on May 19, 1928 and June 6, 1928
respectively, who thereupon applied on September 10, 1928 for pos-
session of the properties purchased by them. These applications were
objected to by the judgment debtors on the ground that they were
H barred by limitation under Article 180 of the Limitation Act, 1908
MAGAN.LAL v. JAISWAL INDUSTRIES IOJHA, J.) 703

which provided that such an. application must be made within three A
years from the time when the sale becomes absolute. The Subordinate
Judge overruled the objection on the ground that in view of the
pendency of the appeals filed by the judgment debtors against the
order dismissing their applications under Order 21 Rule 90 of the Code
time did not begin to run until March 17, 1927 when the said appeals
were dismissed. by the High Court. On appeal by the judgment debtors B
the High Court took the view that the sale became absolute on April
22, 1924 when the Subordinate Judge confirmed the sales. On further
appeal by the auction purchasers the order of the High Court was
\_,,,,reversed by the Privy Council and it was held:

"Upon consideration of the sections and orders of the c
Code, their Lordships are of opinion that in construing the
meaning of the words "when the sale becomes absolute" in
Art. 180, Lim. Act, regard must be had not only to the
provisions of 0.21, R. 92(1) of the schedule to the Civil
Procedure Code, but also to the other material sections and
orders of the Code, including those which relate to appeals D
from orders made under 0.21, R.92(1). The result is that
where there is an appeal from an order of the Subordinate
Judge, disallowing the application to set aside the sale, the
sale will not become absolute within the meaning of Art.
180, Lim. Act, until the disposal of the appeal, even though
the Subordinate Judge may have confirmed the sale, as he E
was bound to do, when he decided to disallow the above
mentioned application.

Their Lordships therefure are of opinion that on the

l' facts of this case the sales did not become absolute within
the meaning of Art. 180, Lim. Act, until 17th March 1927,
and that the applications for possession of the properties
F

purchased at the auction sales were not barred by the Limi-
tation Act."

A similar view was taken by this Court in Sri Ranga Nilayam
Ramkrishan Rao v. Kandokari Chellayamma and another, [1950] G
...., .~.C.R. 806 where it was held that when an appeal is filed against
1' an order refusing to set aside an execution sale under Order 21 Rule
90 of the Code no finality can be attached to the order confirming
the sale until the appeal is decided. In S. V~ Rama/ingam & others v.
K.E. Rajagopalan and other, [1975] 2 M.L.J. Page 494 the question
came up directly in connection with the applicability of Order 34 Rule H
704 SUPREME COURT REPORTS I 1989) 3 S.C.R.

A 5 itself which contemplates payment into court "on or before the day
fixed or at any time before the confi=ation of a sale". In that case too
in pursuance of a final decree passed in this behalf the mortgaged
property was sold and the applications made by the mortgagors for
setting aside the sale were dismissed and the sale was confirmed and
the sale certificate was also engrossed on stamp papers. The mort-
B gagors filed an appeal against that order before the High Court and
y-
during the pendency of the appeal an application under Order 34 Rule
5 was filed for redemption of the mortgage. This application was
opposed inter alia on the ground that such an application could not lie
• after the sale had been confirmed by the lower court. While repelling)'
the objection of the auction purchaser and holding that the judgment ·
debtors were entitled to the benefit of Order 34 Rule 5 of the Code it
c was held by Mr. Justice S. Natarajan (as His Lordship then was):

"The confirmation of a sale subsequent to the dismissal of a
petition under Order 21, rule 90 cannot, in reality, alter the .t,
situation when the mortgagor-judgment-debtor has prefer- ~·
D red within time an appeal against the dismissal of his peti-
tion under Order 21 Rule 90. Though the confirmation of
the sale does take the auetion-purchaser a step further than
before the confirmation of the sale, the confirmation by
itself, isin one sense, inchoate. The confirmation gives the )"--
sale only viability but does not render the sale an indefeasi-
E ble one, till such time as the appeal preferred by the mort-
gagor against the validity of the sale remains unclisposed.
In that sense, the confirmation effected by the executing
Court may become final as far as the executing Court is
concerned, but it certainly does not stamp the transaction
with irrevocable finality when alone tlie righsts of parties _J
F get crystallised beyond retracement. Consequently, the · I
appeal preferred by the judgment-debtor has the effect of
rendering a sale and its confirmation fluidal and nebulous.
It, therefore, follows that the finality of the sale is rendered
at large before the appellate Court in appeal and as such,
the petitioners will be entitled to exercise the right confer-
G red on them under Order 34, rule 5 to redeem the
mortgage." .\

The same view was reiterated in almost an identical ease by a
Bench of the Madras High Court in M. Sevugan Chettiar v. V.A.
Narayana Raja, A.LR. 1984 Madras Page_334, It was held that so long
H as there Is no confirmation of sale in the eye of law and n.atter was sub-
I
MAGANLAL v. JAISWAL INDUSTRIES [OJHA, J.J 705
~
judice in appeal time was available for the judgment debtor to make
A
the deposit under Order 34 Rule 5 of the Code and the process of
deposit .could be worked out until the confirmation of sale reaches the
finality,

) Section 60 of the Transfer of Property Act confers on the mort-
gagor a right to redeem a mortgage. In so far as it is relevant for the B
purpose of these appeals the said section reads as hereunder:

"60. Right of mortgagor to redeem.-At any time after the
"-.. principal money has become due, the mortgagor has a
right, on.payment or tender, at a proper time and place, of
the mortgage-money, to require the mortgagee (a) to
-f deliver to the mortgagor the mortgage-deed and all docu- c
men ts relating to the mortgaged property which are in the
possession or power of the mortgagee, (b) where the mort-
gagee is in possession of the mortgaged property, to deliver
possession thereof to the mortgagor, and (c) at the cost of
the mortgagor either to re-transfer the mortgaged property D
to him or to such third person as he may direct, or to
execute and (where the mortgage has been effected by a
registered instrument) to have registered an acknowledg-
~ ment in writing that any right in derogation of his interest
transferred to the mortgagee has been extinguished:
E
Provided that the right conferred by this section has
not been extinguished by act of the parties or by decree of a
Court."
<'

l In Raghunath Singh and others v. Pt. Hans raj Kun war and
others, A.1.R. 1934 P .C. Page 205 in a suit filed for redemption of a F
mortgage a decree was passed containing the provision that in case of
default by the plaintiff in payment his case will stand dismissed. Pay-
ment as contemplated by the decree was, however, not made and
a
subsequently second suit for redemption was filed. It was contested
inter alia on the ground that in view of the non-payment of the decretal
amount the previous suit stood dismissed and on account of the dismis- G
)- sal of that suit the subsequent suit was not maintainable inasmuch as
right of.redemption stood extinguished. The Privy CounCil after mak-
ing reference to the proviso to section 60 of the Transfer of Property
Act rejected the aforesaid objection and held,:

"The right to redeem is a right conferred upon the H
mortgagor by enact'llent, of which be can only be deprived
·~·
706 SUPREME COURT REPORTS [1989) 3 S.C.R.

by means and in manner enacted for that purpose, and
A strictly complied with. In the present case the only basis for
the rlaim that the right to redeem has been extinguished in
S. 60; but in their Lordships' view the old decree cannot
properly be construed as doing that which it does not
purport to do, viz., as extinguishing the right to redeem."
B
This question came up very recently before this Court in
M hadagonda Ramgonda Patil and others v. Shripal Ba/want Rainade ·
and others, [1988) 3 S.C.C. Page 298. The mortgagors in that case filed
a suit for redemption and obtained a final decree for sale of the
mortgaged property. They, however, did not execute that decree and
allowed the same to be time barred. Subsequently, a second suit for
redemption wa~ filed claiming that the mortgage still subsisted and the
mortgagors were entitled to redeem the same and get possession of the
mortgaged property. The suit was contested inter alia on the ground
that as the mortgagors did not pay the decretal dues under the decree
passed in the previous suit their right of redemption had been extin-
D guished. The aforesaid plea raised ·in defence was repelled by the trial
court and the suit for redemption was decreed. The defendants prefer-
red an appeal against that decree before the High Court and raised a
similar contention as was their defence in the trial court. It was held by
the High Court that in spite of the fact that in the earlier suit a preli-
minary decree and final decree were passed and the mortgagors did
..,.
E not redeem the mortgages by despositing the decretal dues, still the
right of redemption was not extinguished. The findings of the High
Court aforesaid with regard to the maintainability of the second suit
for redemption were challenged by the defendants before this Court
and it was reiterated by their learned counsel that second suit was not
maintainable. While repelling this submission and interpreting the
provisions to section 60 of the Transfer of Property Act it was held:
f
"It is thus manifestly clear that the right of redemption will
be extinguished ( 1) by the act of the parties or (2) by the
decree of a court. We are not concerned with the question
of extinguishment of the right of redemption by the act of
the parties. The question is whether by the preliminary
G decree or final decrees passed in the earlier .suit, the right
of the respondents to redeem the mortgages has been extin-
guished. The decree that is referred to in the proviso to
Section 60 of the Transfer of Property Act is a final decree
in a suit for foreclosure, as provided in sub-rule (2) of Rule
3 of Order 34 and a final decree in a redemption suit as
H
708 SUPREME COURT REPORTS [1989] 3 S.C.R.

agreement, makes any default in repayment of any loan or
A
advance or any instalm~nt thereof or in meeting its obliga-
tions in relation to any guarantee given by the Corporation
or otherwise fails to comply with the terms of its agreement
with the Financial Corporation or where the Financial
Corporation requires an industrial Cl>ncern to make ·y-
B immediate repayment of any loan or advance under section
30 and the industrial concern fails to make such repayment,
then without prejudice to the provisions of section 29 of
this Act and of section 69 of the Transfer of Property Act,
1882 any officer of the Financial Corporation, generally or_;
specially authorised by the Board in this behalf, may apply
to the district judge within the limits of whose jurisdiction _-4.. _
c the industrial concern carries on the whole or a substantial
part of its business for one or more of the following reliefs,
namely:

(a) for an order for the sale of the property pledged,
D mortgaged, hypothecated or assigned to the Financial
Corporation as security for the loan or advance; or
"

Sub-section (1) of section 32 of the Act provides:

E "32. ( 1) When the application is f!Jr the reliefs mentioned
in clauses (a) and (c) of sub-section (1) of section 31, the
district judge shall pass an ad interim order attaching the
security, or so much of the property of the industrial con-
cern as would on being sold realise in his estimate an 1
amount equivalent in value to the outstanding liability of ~
F the industrial concern to the Financial Corporation,
together with the costs of the proceedings taken under sec-
tion 31, with or without an ad interim injunction restraining
the industrial concern from transferring or removing its
machinery, plant or equipment."

Sub-section (4) of seetion 32 contemplates issue of a notice to the
G
industrial concern in the manner stated therein. Sub'section (5) inter ,.\
alia contemplates that if no cause is shown on or before the date
specified in the notice the District Judge shall forthwith make the ad
interim order absolute and direct the sale of the attached property.
Sub-section (6) on the other hand contains the procedure to be fol-
H lowed by the District Judge if cause is shown by the industrial concern
MAGANLAL v. JAISWAL INDUSTRIES [OJHA, J.] 709
~- on receipt of the notice and provides that after making an investigation A
as contemplated the District Judge.may inter.alia confirm the order of
attachment and direct the sale of the attached property. Sub-section
(8) of section 32 provides:

-'"(" "(8) An order of attachment or sale of property under this
section shall be carried into effect as far as practicable in B
the manner provided in the Code of Civil Procedure, 1908
for the attachment or sale of property in execution of a
decree as if the Financial Corporation were the decree-
~ holder."

In Gujarat State Financial Corporation v. Mis. Natson Manu- c
~ facturing Co. (P) Ltd. & Ors., [1979] 1 S.C.R. Page 372 the question
as to what was the nature of proceedings under Sections 31 and 32 of
the Act came up for consideration before this Court in connection with
an objection about payment of court fee on an application under sec-
tion 31(1). It was held that the form of the application, the nature of
the relief, the compulsion to make interim order, the limited inquiry D
contemplated by sub-section (6) of section 32 and the nature of relief
that can be granted and the manner of execution clearly show that the
application iinder section 31(1) is neither a plaint as contemplated by
~ Article 1 of Schedule 1 nor an application in the nature of a plaint as
contemplated by Article 7 of the Court Fees Act, 1870. It was also held
that section 31( 1) of the Act prescribes a special procedure for E
enforcement of the claims of the Financial Corporation and.it is not
even something .akin to a suit of a mortgagee to recover mortgage
money by sale of mortgaged property. It was pointed out that the
distinguishing features noticeable between a suit for recovery of mort-
~ gage money by sale of mortgaged property and an application under
section 31 for one or more reliefs specified therein are that even if the F
Corporation-applii:ant so chooses it cannot in the application pray for
a preliminary decree for accounts or final decree for payment of
money ndr can it seek to enforce any personal liability even if such one
is incurred under the contract of mortgage. The Corporation .cannot
pray for a decree of its outstanding dues and can make an application
for one of the three reliefs mentioned in section 31( 1), none of which if G
..,__ granted results in a money decree or decree for re.covery of outstand-
ing loans or advance. It was further held that a substantive relief in an
application under section 31(1) "is something akin to an application
for attachment of property in execution of'll decree at a stage posterior
to the passing of the decree". With regard to the scope of sub-section
( 6) of section 32 it was held that it has to be read in the context in H
710 SUPREME COURT REPORTS (1989) 3 S.C.R.

A which it is placed and it does not expand the context in the application
as if it is a suit between a mortgagee and the mortgagor for sale of
"'°"
\
mortgaged property. The relief claimed under section 31(1) was held
. not to be a· substantive relief which can be valued in terms of the
··monetary gain or prev!;'ntion of monetary loss. It was pointed out that
.. the cJ3.im of the Corporation in an application under section 31(1) was·
8 that there is a breach of agreement or default in making repayment of
loan or advance or instalment thereof and, therefore, the mortgaged
property cciuld be sold ..

.. .In Mis. Everest Industrial Corporation and others v. Gujarat State
Financial Corporation, (1987) 3 S.C.C. Page 597 a question arose as to
c whether an order under section 34 of the Code could be passed in
proceedings under section 31(1) of the Act. After referring to the
decision in the case of Gujarat State Financial Corporation (supra) it
was held that if as held by this Court in that case the proceeding
in~tituted under section 31(1) of the Act is something akin to an appli-
cation for attachment of proferty in execution of a decree at a stage
D posterior to the passing of the decree no question of passing any other
under section· 34 of the Code would arise since that section could be
applicable only at·the stage of the passing of the decree and not to any
stage posterior to the decree.

In view of these two decisions the law seems to be settled thai an
E application under section 31( 1) of the Act cannot be put on par to--a
suit for enforcement of a mortgage nor the order passed thereon under
·section 32 of the Act be put on par as if it was an order in a stiit
· · between a mortgagee and the mortgagor for sale of mortgaged prO:
· · perty. On the other hand the substantive relief in an application sec-
tion 31( 1) is something akin to an application for attachment of prop-
·., F,, erty in execution of a decree at a stage posterior to the passing of the
decree. ' _ ·

'
. . We now tum to the crucial question as to whether the relief
contc:mplated by Order 3.4 Rut~ 5 of the Code which in substance is· t~
G . ~ermtt redemption of the mortgage during the course of executic,,,.~f a·
fmal decree for sale of mortgaged property can be granted even after
. the property which was mortgaged as.security for loan taken from the
--. .Corporation has, in execution of an Order under Section 32 of the Act
p~sse_d on an applicat~on under Section ·31( I) thereof, been sold by the
Dtstnct Judge following the ·procedure contemplated by Sub-section
H (8) of Section 32 of the Act. · · ·
MAGANLAL v. JAISWAL INDUSTRIES [OJHA, J.] 711

In this connection, it is relevant to note that in neither of the two A
cases namely, Gujarat State Financial Corporation and Mis Everest
India Corporation, (supra) Sub-section (8) of the Section 32 of the Act
came up for consideration. Section 46-B of the Act reads as hereunder:

"46B. The provisions of this Act and of any rules or orders
made thereunder shall have effect notwithstanding anyth- B
ing inconsistent therewith contained in any other law for
the time being in force or in the memorandum or articles of
association of an industrial concern or in any other instru-
ment having effect by virtue of any law other than this Act,
but save as aforesaid, the provisions of this Act shall be in
addition to, and not in derogation of, any other law for the C
time bemg applicable to an industrial concern."

No provision in the Act or any Rule or Order made thereunder
has been brought to our notice stating that the effect of any action
taken thereunder including the passing or orders of attachment and
sale under Sections 31 and 32 thereof, is to extinguish the right of D
redemption. In other words, there is nothing in the Act or in any Rule
or Order made thereunder which may be inconsistent with Section 60
of the Transfer of Property Act particularly the proviso thereto. Con·
sequently no provision in the Act can be read "in derogation" of the ,
said Section 60.
E
It is true that under the Code it is not necessary to attach the
mortgaged property before putting it to sale but Section 31 of the Act
contemplates attachment of even the mortgaged property and Section
32 thereof speaks of an Order of sale of the attached property, but that
alone can by no stretch of imagination have the effect of extinguishing
the equity of redemption. Such attachment does not have that effect F
either under the proviso to Section 60 ofthe Transfer of Property Act
or under any provision of the Act, or Rule or Order made thereunder.
Sections 31 and 32 of the Act in so far as they contain the requirement
of attaching the mortgaged property before its sale and ordering sale
of the attached property read with Sub-section (8) of Section 32 of the
Act will, therefore, have the only effect that the said requirement G
"shall be in addition to, and not in derogation of" the provisipns
contained in the Code for sale of mortgaged property.

The purpose of enacting Sectons 31 and 32 of the Act was appa-
rently to provide for a speedy remedy for recovery of the dues of the
Financial Corporation. This purpose however was, in cases covered by Ir!
712 SUPREME COURT REPORTS [1989] 3 S.C.R.

A clause (a) of Sub-section (1) of Section 31 confined to the stage of H
obtaining an Order akin to a decree in a suit, in execution whereof
"the property pledged, mortgaged, hypothecated or assigned to the
Financial Corporation as security for the loan or advance" could be
-sold. Sections 31 and 32 of the Act cut across and dispense with the
provisions of the Code from the stage of filing a suit to the stage of
B obtaining a decree in execution whereof such properties as are refer- 't-
red to in clause (a) of Sub-section (1) of Section 31 could be sold. After
this stage was reached sale in execution of an Order under Section 32
of the Act was for purposes ·of execution put at par with sale in execu-
tion of a decree obtained in a suit, by enacting Sub-section (8) of I
Section 32 of the Act. This Sub-section as noted earlier provides that an-y"'
order of attachement or sale of property under this section shall be
C ~arried into effect as far as practicable in the manner provided in the _~
Code of Civil Procedure, 1908 for the attachment or sale of property in
execution of a decree as if the Financial Corporation were the decree-
holder.

D Expressions "as far as practicable" and "in execution of a decree
as if the Financial Corporation were the decree-holder" are the only
expressions which qualify the "manner provided" for "sale of property
in execution of a decree", as contained not only in some specific provi-
sion of the Code e.g. Order 21 thereof but "in the Code of Civil
Procedure, 1908" namely, all the provisions in the Code in this ragard
E wherever they may be.

If in its anxiety to ensure speedy recovery of the dues of the
Financial Corporation Parliament had intended also to cut 'across and
dispense with the procedure contained in the Code-for execution of a
decree for sale of such properties. as are referred to in clause (a) of
F Sub-section ( 1) of Section 31 of the Act, it would have made some
provision analogous to provisions contained in the enactments for
revenue recovery. But that was not done. Instead, Sub-section (8) was
incorporated in Section 32 of the Act. It is in thi~ background that the
question whether provisions of Order 34 Rule 5 of the Code will be
attracted or not te the facts of the instant case has to.be considered.
G
Relying on a decision of the Kamataka High Court in Mis Hotel
Natraj v. Karnataka State Financial ,Corporation, A.LR. 1989
Karnataka 90 it was urged by learned counsel for Maganlal that in view
of sub-section (8) of section 32 of the Act the applicability of the
provisions of Order 34 Rule 5 of the Code cannot be denied to the facts
H of the instant case. Learned counsel for the purchasers on the other
MAGANLAL v. JAISWAL INDUSTRIES [OJHA, J.J 713

hand urged that section 32(8) of the Act made the manner provided in A
the Code Applicable only "as far as practicable" and there was neither
a decree nor was the Financial Corporation as decree ho\der in a suit
for sale but was only deemed to be a decree holder by legal fiction
because of the expressic.1 "in execution of a decree as if the Financial
Corporation were the decree-holder"
B
We shall first deal with the scope and import of the expression
"as far as practicable" and "in execution of a decree as if the Financial
Corporation were the decree-holder" used in sub-section (8) of section
"' .32 of the Act. Without anything more the expression "as far as practic-
,· able" will mean that the manner provided in the Code for attachment
or sale of property in execution of a decree shall be applicable in its C
·--:'f entirety except such provision therein which may not be practicable to
be applied. It will be for the person asserting that a particular provi-
sion with regard tQ__execution of a decree for sale of an immovable
property contained in the Code of Civil Procedure will not apply to
execution of an order under section 32 of the Act on the ground that it
was not practicable to show as to how and why it was not practicable. D
As regards the second expression namely "in executiion of a decree as
if the Financial Corporation were the de.cree-holder" it may be
pointed out that even though an order under section 32 as seen above
~ is not a decree stricto sensu as defined in section 2(2) of the Code and
the Financial Corporation would not as such be called the decree hol-
der, section 32( 6) of the Act .imports a legal fiction whereby the order E
under section 30 of the Act for purposes of execution would be a
decree and the Financial Corporation a decree holder. Apparently,
the person against whom such decree has been executed namely the
debtor of the Financial Corporation would be the judgment debtor. In
\-, East End Dwellings Company Limited v. Finsbury Borough Council, ·
[ 1952] Appeal Cases 109 Lord Asquith at page 132 observed "if you F
are bidden to treat an imaginary state of affairs as real, you must
surely, unless prohibited from doing so, also imagine as teal the conse-
quences and incidents which, if the putative state of affairs had in fact
existed, must inevitably have flowed from or accompanied it. . ....
The Statute says that you must imagine a certain state of affairs; it does
n?t say that having done so, you must cause or permit your imagina· G
•· · ··Il tion to boggle when it comes to the inevitable corollaries of the state of
# - affairs"

It is .also settled law that a legal fiction is to be limited to the
purpose for which it was created and should not be extended beyond
!he legitinlate field. Reference for the proposition may be made to the H
714 SUPREME COURT REPORTS [1989] 3 S.C.R.

A decisions of this Court in The Bengal Immunity Company Limited v.
The State of Bihar and others, [1955] 2 S.C.R. Page 603; The Commis-
sioner of Income-Tax, Bombay City I, Bombay v. Amarchand N.
Shroff, [1963) Supp. 1 S.C.R. Page 699 and Commissioner of Income
Tax, Gujarat v. Vadilal Lallubhai, etc. etc., [1973] 3 S.C.C. Page 17.

B As is apparent from the plain language of section 32(8) of the
Act the legal fiction was created for the purpose of executing an order
under section 32 of the Act for sale of attached property as if such
order was a decree in a suit for sale and the Financial Corporation was ,
the decree holder whereas the debtor was the judgment debtor. Con--/
seq uently, the provisions of the Code of Civil Procedure with regard to
C execution of a decree for sale of mortgaged property contained in l
Order 21 of the Code including the right to file an appeal against such ~~..,.
orders passed during the course of execution which are appealable,
shall apply mutatis mutandis to execution of an order under section 32
of the Act unless some provision is not practicable to be applied. It
cannot be disputed that the provisions contained in Order 34 Rule 5 of
D the Code are attracted as is apparent from the plain language thereof
during the proceedings in execution of a final decree for sale and are
thus provisions contained in the Code with regard to and having a
material bearing on the execution of a decree as aforesaid. As seen ~-...
above, the provisions contained in Order 34 Rule 5 of the Code in ,-
substance permit the judgment debtor to redeem the mortgage even at
E the stage contemplated by Order 34 rule 5 unless the equity of redemp-
tion has got extinguished. Since the contingency whereunder an equity
of redemption gets extinguished is contained in the proviso to section
60 of the Transfer of Property Act and since as indicated above, in the
instant case the equity of redemption has not extinguished we find no
good ground to take the view that even though all the remaining provi- ..../
F sions with regard to execution of a decree for sale of mortgaged pro-
per(y will apply to execution of an order under section 32 of the Act,
the provision contained in Order 34 Rule 5 of the Code shall not apply.
Nothing has been brought to our notice as to how and why it is not
practicable to apply the said prov.ision. As already pointed out earlier
it has been held by this Court in the case of Mhadagonda Ramgonda
G Patil, (supra) that in a suit for redemption of as mortgage other than a
jj •
mortgage by conditional sale or an anomalous mortgage, the mort- ~
gagor has a right of redemption even after the sale has taken place
pursuant to the final decree but before the confirmation of such sale
and that in view of these provis;ons the question of mergerof mortgage
debt in the decretal debt does 1 at at all arise. We again do not find any
H good ground for holding that t e said principle will not be attracted to
MAGANLAL v. JAISWAL INDUSTRIES [OJHA, J.] 715
~
a sale which has taken place pursuant to an order under section 32 of A
the Act in so far as the provisions in the Code with regard to execution
of a decree are concered. Of course, in view of the liDiited scope of
legal fiction as indicated above the 'provisions in the Code shall be
applicable to an order of sale under the Act only with regard to execu-
tion of that order as if it was a decree in a suit and the Financial
1r: Corporation was a decree holder and the debtor a judgment ·debtor B
and this legal fiction will not be capable _of being extended so as to
treat an order of sale passed under the Act to be a decree in a suit for
any other purpose for instance applying section 34 of the Code as was
~ sought to be done in the case of M /s Everest Industrial_ Corporation,
(supra) nor could it be extended for treating the application made
under section 31(1) of the Act as a plaint for purposes of payment of c
~ court fee as was sought to be done in the case of Gujarat State Financial
Corporation, (supra).

That the provisions of the Code with regard to execution of a
decree for sale of mortgaged property would apply to execution of an
order under section 32 of the Act is clear from section 32(8) of the Act D
and the reasons stated above. It would also be so inasmuch as even
otherwise once the order under section 32 for sale is made executable
by a District Judge in his capacity as District Judge and not persona
~~ designata the provisions of the Code which are exercisable by the
District Judge in execution of a decree for sale of mortgaged property
would get attracted. E

In National Sewing Thread Co. Ltd. v. James Chadwick & Bros.
Ltd., [1953] S.C.R. Page 1028 an appeal was filed before a Single

·-~
Judge of the Bombay High Court under section 76(1) of the Trade
Marks Act, 1940 which provides that an appeal shall lie from any
decision of the Registrar· under the Act or the rules made thereunder F
to the High Court having jurisdiction. The Trade Marks Act, however,
did not make any provision with regard to the procedure to be fol-
lowed by the High Court in the apppeal or as to whether the order of
the High Court was appealable. Against the judgment of the Single
Judge an appeal was preferred u11der clause 15 of the Letters Patent.
That appeal was allowed and the judgment of the Single Judge was G
i reversed. Before the Supreme Court an objection was raised that the
Letters Patent appeal was not maintainable. While repelling the said
objection it was held:

"Obviously after the appeal had reached the High Court it
has to be determined according to the rules of practice and H
716 SUPREME COURT REPORTS I1989] 3 S.C.R.
procedure of that Court and in accordance with the provi- )l,tl
A sions of the charter under which that Court is constituted
and which confers on it power in respect to the method and
manner of exercising that jurisdiction. The rule is well set-
tled that when a statute directs that an appeal shall lie to a
Court already established, then that appeal must be
B regulated by the practice and procedure of that Court. This Y
rule was very succinctly stated by Viscount Haldane L.C. in
National Telephone Co., Ltd. v. Po$tmDs/er-General,
[1913] A.C. 546, in these terms:-

"When a question is stated to be referred to an__)
established Court without more, it, in my opinion, imports
c that the ordinary incidents of the procedure of that Court --~
are to attach, and also that any general right of appeal from
its decision likewise attaches."

The same view was expressed by their Lordships of
D the Privy Council in R.M.A.R. KLA. Adaikappa Chettiar
v. Ra. Chandrasek.hara Thevar, [1974] 74IA 264, wherein it
was said:

"Where a legal right is in dispute and the on\inary
Co.urts of the country are seized of such dispute the Courts
E are governed by the ordinary rules of procedure applicable
thereto and an appeal lies if authorised by such rules,
notwithstanding that the legal right claimed arises under a
special statute which does not, in temts confer a right of
appeal."

Again in Secretary of State for India v. Chellikani
F
Rama Rao, [1916] I.L.R. 39 Mad 617, when dealing with
the case under the Madras Forest Act their Lordships ob-
served as follows:

"Jt, was <:0ntended on behalf of the appellant that all
further proceedings in Courts in India or by way of appeal
G
were incompetent, these being excluded by the terms of the
statute just quoted. In their Lordships' opinion this objec-
tion is not well-founded. Their view is that when proceed-
ings of this character reach the District Court, that Court is
appealed to as one of the ordinary Courts of the country, ·
with regard to whose procedure, orders, and decrees the
H
MAGANLAL v. JAISWAL INDUSTRIES (OJHA, J.) 717

" ordinary rules of the Civil Procedure Code apply."

Though the facts of the cases laying down the above
rule were not exactly similar to the facts of the present case,
the principle enunciated therein is one of general applica-
A

tion and has an apposit application to the facts and cir-
cumstances of the present case. Section 76 of the Trade B
Marks Act confers a right of appeal to the High Court and
says nothing more about it. That being so, the High Court
being seized as such of the appellate jurisdiction conferred
l by section 76 it has to exercise the jurisdiction in the same
manner as it exercises its other appellate jurisdiction and

~
when such jurisdiction is exercised by a'single Judge, his
.
judgment becomes subject to appeal under clause 15 of the
c
Letters Patent there being nothing to the contrary in the
Trade Marks Act."

·In view ofthe foregoing discussion we are of the opinion that the
application made by Maganlal under Order'34 Rule 5 of the Code is D
,
maintainable and the requirements of the said provision having been
satisfied the application deserves to be allowed.

-~ In the result, while C.M.P. No. 19760 of 1984 which is for initial-
ing contempt proceedings is dismissed,.C.M.P. No. 9940i>f 1982 under
Order 34 Rule 5 of the Code filed by Maganlal is allowed. Accordingly· E
Civil Appeal No. 2990 of 1980 filed by Maganlal as also the application
made by him under Order 21 Rule 90' of the Code are allowed. The ·
order appealed against passed by the High Court is set aside and the

l order passed by the Additional District Judge setting aside the auction
sale in favour of the first purchaser is restored. Civil Appeal No. 2991
of 1980 filed by the second purchaser is also allowed in so far as it prays F
for the setting aside of the order of the High Court. However, on the
view we have taken the subsequent auction sale held in favour of the
second purchaser cannot be sustained and is also hereby set aside. As a
consequence we direct that since the Corporation in the instant case
has accepted Rs.65,000 in full and final satisfaction of its claim, it shall
return the mortgage deed executed by Maganlal to him. The Addi- G
) tional District Judge in whose court the application under Order 34
Rule 5 of the Code was made as stated earlier shall strike off the
execution in full and final satisfaction. The sum of Rs.53,000 deposited
by the first purchaser together with Rs.2,650 representing 5% of the
said sum deposited by Maganlal and interest which may have accrued
on these amounts shall be paid over the first purchaser. Likewise, the H
718 SUPREME COURT REPORTS [1989] 3 S.C.R.

A sum of Rs.1,46,000 deposited by the second purchaser together with ~
Rs. 7 ,300 representing 5% of the said sum deposited by Maganlal and
the interest which may have accrued on these amounts shall be paid
over to the second purchaser. There shall be no order as to costs.

R.S.S. Appeals allowed.
B