Mortgagee not to bid at sale without the leave of the Court
Full Text
(1) Notwithstanding anything contained in rule 72, a mortgagee of immovable property shall not bid for or purchase property sold in execution of a decree on the mortgage unless the Court grants him leave to bid for or purchase the property.
(2) If leave to bid is granted to such mortgagee, then the Court shall fix a reserve price as regards the mortgagee, and unless the Court otherwise directs, the reserve price shall be—
(a) not less than the amount then due for principal, interest and costs in respect of the mortgage if the property is sold in one lot; and
(b) in the case of any property sold in lots, not less than such sum as shall appear to the Court to be properly attributable to each lot in relation to the amount then due for principal, interest and costs on the mortgage.
(3) In other respects, the provisions of sub-rules (2) and (3) of rule 72 shall apply in relation to purchase by the decree-holder under that rule.
Plain English Summary
Prohibits mortgagees from bidding in mortgage execution sales without express leave of court, mandating the executing court to fix a statutory Reserve Price equal to the full mortgage debt and costs to protect the mortgagor from predatory underbidding.
Key Legal Elements
- Non-obstante Clause: Overrides general Rule 72 for mortgage decree executions.
- Mandatory Reserve Price (Sub-rule 2): Court must fix minimum reserve price equal to mortgage debt + costs.
- Protection of Mortgagor Equity: Prevents mortgagee banks from buying mortgaged lands at throwaway prices.
- Proportionality for Multiple Lots: Reserve price allocated proportionately across lots.
Practical Note
The Mortgagor's Armor Against Undervalued Foreclosure: 1. Statutory Purpose: Rule 72A (inserted by Act 104 of 1976) stops financial institutions and mortgagees from acquiring high-value mortgaged estates for a pittance. The reserve price must cover the entire mortgage claim. 2. Challenging Mortgagee Bids: If a bank bids without the court fixing a reserve price under Rule 72A(2), the sale is illegal and liable to be set aside.
हिंदी पाठ
(1) नियम 72 में किसी बात के होते हुए भी, स्थावर संपत्ति का कोई बंधकदार (Mortgagee) बंधक विषयक डिक्री के निष्पादन में बेची जाने वाली संपत्ति के लिए तब तक न तो बोली लगाएगा और न ही उसे खरीदेगा जब तक कि न्यायालय उसे बोली लगाने या खरीदने की इजाजत (Leave) न दे दे।
(2) यदि ऐसे बंधकदार को बोली लगाने की इजाजत दी जाती है, तो न्यायालय बंधकदार के संबंध में एक आरक्षित मूल्य (Reserve Price) नियत करेगा, जो बंधक के मूलधन, ब्याज और खर्चों की शोध्य राशि से कम नहीं होगा।
(3) अन्य बातों में नियम 72 के उप-नियम (2) और (3) के उपबंध बंधकदार द्वारा खरीद के संबंध में लागू होंगे।