Mandatory Deposit in Setting Aside Sale – Legal Analysis

Explore the nuances of the court’s legal analysis on mandatory deposit requirements in setting aside a sale. The case delves into the interpretation of Section 28 of the Act and the significance of timely deposits when seeking relief in certificate proceedings. Stay informed about the legal procedures and judicial insights presented in this impactful ruling.


  • Sadhu Sharan Yadav defaulted in the payment of a loan taken from the Land Development Bank by mortgaging his agricultural land.
  • A certificate case was initiated for the realization of the loan amount as Sadhu Sharan Yadav had defaulted in payment.
  • The objectors-writ petitioners were permitted to deposit the required amount along with penalty and interest by the Certificate Officer.
  • The objectors-writ petitioners filed various applications and revisions to set aside the sale of the mortgaged land.
  • The auction purchaser and the Collector were involved in the proceedings regarding the sale of the land.
  • Controversy arose regarding the section under which the application was filed, but all authorities proceeded based on the premise that it was under Section 28 of the Act.
  • The High Court of Patna dismissed the case stating that the deposit was not made within the prescribed time.
  • The civil appeal is filed by the aggrieved appellants against the judgment of the High Court of Patna.
  • The High Court allowed the Writ Petition and restored the order of the Certificate Officer, setting aside the sale.
  • The order of the learned Single Judge was confirmed in the Letters Patent Appeal filed by the appellants.
  • The Division Bench of the High Court dismissed the appeal of the appellants in the impugned order.

Also Read: Interpretation of Will Clauses in Property Dispute


  • The appellants’ counsel argued that the Certificate Officer had no authority to extend the time for deposit or entertain the application for setting aside the sale without the required deposit.
  • The Single Judge and Division Bench misinterpreted Section 28 of the Act in their rulings.
  • The respondent-writ petitioners failed to make the mandatory deposit along with their application as required by Section 28 of the Act.
  • Since the deposit is a mandatory requirement for such applications, the sale could not have been set aside without it.
  • The Collector and Board of Revenue correctly intervened to uphold the requirement for the deposit in setting aside the sale.
  • The respondent-writ petitioners have deposited the auction amount along with the penalty amount, totaling to a sum equal to 10% of the purchase money and 6 ΒΌ% interest.
  • The original owners had sold the land by registered sale deeds for a valuable consideration even before the mortgage.
  • The learned Single Judge of the High Court and the Division Bench have thoroughly considered the matter, leading to the confirmation of the order.
  • Under Section 28 of the Act, the Certificate Officer has the authority to extend the time for deposit when the application is filed within the specified timeframe.

Also Read: Preservation of Open Spaces in Development Plans


  • The application to set-aside the sale must be supported by a deposit of money as per Section 28 of the Act.
  • The stipulated time for making an application is thirty days from the date of sale.
  • The High Court rejected the appeal stating that the extension of time is a judicial discretion that was not exercised erroneously.
  • Section 28 requires the deposit of the auction amount within thirty days from the date of sale, making this period mandatory.
  • Failure to deposit the specified amount within the thirty-day period will result in the sale not being set-aside.
  • Allowing deposits after the thirty-day period would contradict the purpose of Section 28.
  • The certifying officer does not have the jurisdiction to extend the deposit time beyond thirty days.
  • The deposit must be made either before or simultaneously with the application within the thirty-day period from the date of sale.
  • In this case, the purchase money along with penalty was not deposited within the thirty-day period.
  • The mortgaged land was sold in auction on 15.06.1983 in certificate proceedings.
  • Section 28 of the Act allows the certificate-debtor or any affected person to apply to set aside the sale within thirty days of the sale date.
  • The application must be accompanied by the amount specified in the sale proclamation, with interest and a penalty of ten percent of the purchase money.
  • The application should be made by depositing the required amount within the specified time frame.
  • When a Section mandates filing an application by making a deposit within a specified time, there is no discretion left to extend the time.
  • Respondent-writ petitioners claimed to be bona fide purchasers by registered sale deeds from the original owners before the auction, and had deposited the purchase money along with 10% penalty.
  • No acceptable submission was made by the counsel for the respondent-writ petitioners to entertain an application not supported by the required deposit under Section 28 of the Act.
  • The civil appeal is allowed, the impugned order is set aside, and the order of the Board of Revenue is confirmed.

Also Read: Jurisdictional Limits and Statutory Compliance in Development Planning


  • Respondent-writ petitioners are entitled for refund of money deposited before the Certificate Officer.
  • Application filed by respondent-writ petitioners under Section 28 of the Bihar & Orissa Public Demands Recovery Act, 1914 stands rejected.


Case Number: C.A. No.-009173-009173 / 2010

Click here to read/download original judgement

Leave a Reply

Your email address will not be published. Required fields are marked *