Auction Purchaser In Possession Need Not Prove Delivery Of Possession To Seek Injunction Against Interference: Supreme Court

The Supreme Court has held that an auction purchaser who is already in possession of the property is not required to prove a formal delivery of possession under Order XXI Rule 95 of the Code of Civil Procedure, 1908 in order to seek an injunction against interference.

“It is trite law that title in immovable property vests in the auction purchaser on confirmation of sale. No doubt, Order 21 Rule 95 CPC provides for the procedure to take possession by an auction purchaser but if the auction purchaser gets possession and is in possession on the date of institution of the suit, in our view, he cannot be denied injunction against a non-title holder seeking to interfere with his possession.”, observed a bench of Justices Manoj Misra and Manmohan, while setting aside the Madras High Court's decision, which had dismissed the appellant's injunction suit on the ground that there had been no formal delivery of possession following the auction sale under Order XXI Rule 95 of the Code of Civil Procedure, 1908, and therefore the appellant could not claim a valid title to seek an injunction.

The dispute arose from competing claims over a property in Tamil Nadu. The property originally belonged to one Ganapathy, against whom a money decree had been passed. In execution of the decree, the property was sold through a court auction to Ramasamy, who later sold it to the appellant, through a registered sale deed dated October 15, 1991.

Meanwhile, the respondent claimed ownership on the basis of a registered will allegedly executed by Ganapathy prior to his death. Both parties instituted suits seeking permanent injunction against each other, asserting possession over the property.

The trial court decreed Appellant's suit and dismissed Respondent's claim, holding that the appellant had established possession through documentary evidence. The first appellate court affirmed the trial court's view, relying on various records including revenue entries, tax receipts, electricity payment records, and documents relating to a tapioca mill functioning on the property in Appellant's name.

However, the Madras High Court in a second appeal, partly allowed the challenge and dismissed both injunction suits. It held that although the title had vested in Appellant by virtue of the registered sale deed executed by the auction purchaser, there was no proof that possession had been lawfully delivered through the mechanism provided under Order XXI Rule 95 CPC.

Aggrieved by the High Court's decision, the auction purchaser moved to the Supreme Court.

Disagreeing with the High Court's view, the Court held that formal delivery of possession as per Order XXI Rule 95 CPC becomes irrelevant when the auction purchaser was already in possession of the auctioned property. It added that if the auction purchaser is in possession on the date of the suit, he cannot be denied injunctive relief against a person who does not have a better title merely because the possession was not obtained through the formal procedure prescribed under the CPC.

Applying the law, the Court held that the appellant's title over the auctioned property became valid from the moment the auction sale was confirmed, entitling him to seek an injunction. It was therefore not necessary for him to establish formal delivery of possession under the CPC.

Since, the High Court did not frame any substantial question of law concerning the correctness of the concurrent findings on possession returned by the courts below, nor did it examine the documentary evidence relied upon by the first appellate court, the Court set aside the impugned judgment and remanded the matter for fresh consideration, thereby restoring the second appeal to the file of the High Court.

Headnote

Civil Procedure Code, 1908 – Section 100 – Second Appeal – Scope of Interference with Concurrent Findings of Fact – Possession and Injunction – The Supreme Court set aside a High Court judgment that had dismissed a suit for permanent prohibitory injunction despite concurrent findings of possession in favor of the appellant by the Trial Court and First Appellate Court – Noted that the High Court failed to frame a specific substantial question of law regarding the correctness or validity of the findings on possession returned by the lower courts - The Supreme Court held that interference with concurrent findings of fact under Section 100 CPC is permissible only on limited grounds, such as perversity, misreading of evidence, or consideration of inadmissible evidence.

Possession of Auction Purchaser – Supreme Court observed that while Order 21 Rule 95 CPC provides a procedure for an auction purchaser to take possession, if the purchaser actually gains possession and maintains it on the date of the suit's institution, they cannot be denied an injunction against a party with no title who seeks to interfere - Even if a specific issue on possession was not formally framed by the Trial Court, since the parties went to trial fully aware that the issue was central and led evidence accordingly, they cannot later claim prejudice - Held – The High Court erred by not considering the extensive documentary evidence (e.g., revenue records, factory registrations, tax payments) relied upon by the First Appellate Court to establish the appellant's possession - The matter was remanded to the High Court for fresh consideration within the scope of Section 100 CPC. [Relied on Nagubai Ammal and Others v. B. Shama Rao & Ors., (1956) 1 SCC 698; B. Arvind Kumar v. Govt. of India & Ors., (2007) 5 SCC 745; Paras 19-25]

Cause Title: P. ELAIYAPPAN VERSUS NATARAJAN & ORS.

Citation : 2026 LiveLaw (SC) 219

Click here to download order

Appearance:

For Petitioner(s) : M/S. Ksn & Co., AOR Mr. V Balachandran, Adv. Mr. Siddharth Naidu, Adv. Mr. Saurabh Bharadwaj, Adv.

For Respondent(s) : Mrs. Malavika Jayanth, AOR Ms. Isha Singh, Adv.