Introduction
In a significant ruling clarifying the law on execution proceedings and auction sales, the Supreme Court of India has held that once an auction sale is confirmed under Order XXI Rule 92(1) of the Code of Civil Procedure, 1908 (CPC), a separate civil suit challenging such confirmation is expressly barred under Order XXI Rule 92(3). The Court further clarified that the only permissible remedy in such cases lies under Section 47 CPC, and even that remedy is narrowly confined to cases involving lack of jurisdiction or nullity of the sale.
The judgment was delivered by a Bench comprising Justice J.B. Pardiwala and Justice R. Mahadevan in Danesh Singh & Ors. v. Har Pyari (Dead) through LRs & Ors., reported as 2025 LiveLaw (SC) 1211.
Factual Background
The dispute originated from a mortgage transaction dating back to 1970, where one Duli Chand mortgaged agricultural land in favour of New Bank of India (now merged with another bank) to secure a tractor loan. Upon default, the bank obtained an ex parte decree in 1984.
During the pendency of the suit and even after the decree, Respondents Nos. 1 and 2 purchased portions of the mortgaged property in 1985 from one of the judgment-debtors. Subsequently, in execution proceedings, the entire mortgaged property was auctioned in 1988.
The Appellants, who were sons of a judgment-debtor, emerged as the highest bidders for ₹35,000. The auction sale was confirmed in August 1988, and possession was delivered in June 1989.
In July 1989, the purchasers (Respondents Nos. 1 and 2) instituted a separate civil suit seeking a declaration that the auction sale, insofar as it affected their purchased land, was void due to fraud and material irregularities.
Proceedings Before Lower Courts
The Trial Court, First Appellate Court, and the Punjab & Haryana High Court all ruled in favour of the respondents, holding that the auction sale was not binding on them and granting joint possession.
Aggrieved by these concurrent findings, the auction purchasers approached the Supreme Court.
Supreme Court’s Key Findings
The Supreme Court set aside all the impugned judgments, holding that the separate suit itself was not maintainable in law.
1. Bar Under Order XXI Rule 92(3) CPC
The Court held that Order XXI Rule 92(3) CPC expressly bars the institution of a separate suit by any person against whom an order confirming or setting aside a sale has been passed.
Since:
- the auction sale was confirmed under Rule 92(1), and
- no application was filed under Rules 89, 90 or 91 to set aside the sale,
the respondents were statutorily barred from challenging the sale through a separate civil suit.
2. Section 47 CPC: Exclusive Remedy
The Court further held that Section 47 CPC mandates that all questions relating to execution, discharge or satisfaction of a decree must be decided by the executing court alone and not by a separate suit.
As the dispute related directly to:
- the execution of the decree, and
- the validity of the auction sale,
the respondents’ remedy, if any, lay only under Section 47 CPC.
When Is a Section 47 Application Maintainable After Sale Confirmation?
Justice Pardiwala, speaking for the Bench, clarified an important doctrinal distinction:
- A Section 47 application can survive even after confirmation of sale, but
- only where the execution sale is alleged to be without jurisdiction or a nullity.
The Court illustrated this with a hypothetical example:
If a judgment-debtor has already paid the decretal amount, yet his property is auctioned and the sale is confirmed, the sale would be a nullity, and a Section 47 application would still be maintainable.
Thus, Rule 92(3) and Section 47 CPC operate together to:
- bar separate suits, but
- allow a limited Section 47 challenge in cases of jurisdictional nullity.
No Circumvention of Limitation Under Article 127
The Court issued a stern caution against misuse of Section 47 CPC to bypass limitation periods.
It held that:
- If a Section 47 application is substantively based on grounds falling under Rules 89, 90 or 91,
- the executing court must treat it as an application under those rules, irrespective of its label.
Once so treated, the application would be governed by Article 127 of the Limitation Act, 1963, and would fail if filed beyond the prescribed limitation.
In clear terms, the Court ruled:
Section 47 CPC cannot be used as a device to revive time-barred challenges to an execution sale.
Narrow Scope for Separate Suits
While reiterating the general bar, the Court acknowledged a very narrow exception where a separate suit may still lie:
- Only where the entire execution proceedings and sale are without jurisdiction, and
- The plaintiff is not a party to the original decree or their representative.
Even in such cases, courts must exercise heightened vigilance to ensure that Section 47 CPC is not rendered otiose.
Conclusion
The Supreme Court’s ruling brings much-needed clarity to the interplay between Order XXI Rule 92(3) CPC and Section 47 CPC. It reinforces the principle that execution proceedings must attain finality, and litigants cannot be permitted to reopen concluded auction sales through collateral suits.
By narrowing the scope of post-confirmation challenges to cases of jurisdictional nullity alone, the judgment strengthens the certainty and sanctity of court-conducted auctions, while simultaneously preserving a limited safety valve against patently illegal execution proceedings.
This decision will have far-reaching implications for auction purchasers, judgment-debtors, and third-party claimants, and serves as a crucial precedent on the law governing execution sales under the CPC.
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