Decree holder not to bid for or buy property without permission
Full Text
(1) No holder of a decree in execution of which property is sold shall, without the express permission of the Court, bid for or purchase the property.
(2) Where decree-holder purchases, amount of decree may be taken as payment.—Where a decree-holder purchases with such permission, the purchase-money and the amount due on the decree may, subject to the provisions of section 73, be set off against one another, and the Court executing the decree shall enter up satisfaction of the decree in whole or in part accordingly.
(3) Where a decree-holder purchases, by himself or through another person, without such permission, the Court may, if it thinks fit, on the application of the judgment-debtor or any other person whose interests are affected by the sale, by order set aside the sale; and the costs of such application and order, and any deficiency of price which may happen on the re-sale and all expenses attending it, shall be paid by the decree-holder.
Plain English Summary
Prohibits the decree-holder from bidding or purchasing attached property without express prior leave of the court, permits set-off of purchase money against the decretal debt upon grant of leave, and empowers the court to set aside clandestine unauthorized purchases.
Key Legal Elements
- Prior Express Permission Mandatory: Decree-holder barred from bidding without formal court leave.
- Set-off of Decretal Amount (Sub-rule 2): Relieves decree-holder from depositing cash except surplus above decretal claim.
- Section 73 Rateable Distribution Caveat: Set-off subject to claims of other competing decree-holders.
- Setting Aside Unauthorized Sale (Sub-rule 3): Discretionary annulment upon application of debtor/interested person.
- Benami Purchases Covered: Ban applies whether decree-holder bids directly or through a front/proxy.
Practical Note
Obtaining Leave to Bid & Set-Off: 1. Procedure for Decree-Holders: Never bid at the court auction without first moving an application under Order XXI Rule 72(1) praying for 'Leave to Bid and Set-Off'. In the application, aver that past auctions attracted no outside bidders and that bidding is necessary to realize the debt. 2. Landmark Authorities - Laxmi Devi v. Mukand Kanwar (1965) 1 SCR 726 & Jaswantlal Natvarlal Thakkar (1991) Supp (2) SCC 691: An unauthorized purchase by the decree-holder is voidable (not void ab initio). The debtor must file an application under Rule 72(3) to set it aside and show prejudice.
हिंदी पाठ
(1) जिस डिक्री के निष्पादन में संपत्ति बेची जाती है उसका कोई भी धारक (डिक्रीदार) न्यायालय की स्पष्ट अनुमति के बिना संपत्ति के लिए न तो बोली लगाएगा और न ही उसे खरीदेगा।
(2) जहां डिक्रीदार खरीदता है वहां डिक्री की रकम संदाय के रूप में मानी जा सकेगी (मुजराई / Set-off)— जहां डिक्रीदार ऐसी अनुमति से खरीदता है, वहां क्रय-धन और डिक्री के अधीन शोध्य रकम धारा 73 के उपबंधों के अधीन रहते हुए एक-दूसरे के विरुद्ध मुजरा (Set off) की जा सकेगी और निष्पादन न्यायालय तदनुसार डिक्री की पूर्ण या आंशिक तुष्टि दर्ज करेगा।
(3) जहां डिक्रीदार ऐसी अनुमति के बिना स्वयं या बेनामीदार द्वारा खरीदता है, वहां न्यायालय निर्णय-ऋणी या हितबद्ध व्यक्ति के आवेदन पर विक्रय को अपास्त (Set aside) कर सकेगा; और आवेदन के खर्चे तथा पुनः विक्रय में होने वाले किसी घाटे का भुगतान डिक्रीदार द्वारा किया जाएगा।