The Andhra Pradesh High Court has held that failure to deposit the prescribed stamp duty within 15 days of an auction renders the sale void, and the executing court cannot extend the deadline by invoking its inherent powers under Section 151 of the Code of Civil Procedure (CPC).

It further observed that under Order XXI Rule 85 CPC, as applicable in Andhra Pradesh, the auction purchaser must deposit the full purchase money and the prescribed stamp duty within 15 days of the sale.

The Court also emphasised that an order affecting a party's rights cannot be passed without giving the affected party an opportunity of hearing and recording reasons.

Under Order XXI Rule 85 CPC, the auction purchaser must deposit the full purchase money and the amount required for the general stamp on the sale certificate within 15 days of the sale. Rule 86 prescribes the consequences of default, including resale of the property.

The case arose from two civil revision petitions challenging two orders of the executing court: the first permitted the decree holder to deposit the stamp duty and registration charges beyond the prescribed 15-day period, while the second confirmed the auction sale.

A Single Judge Bench of Justice Subba Reddy Satti observed:

“... the non-deposit of the stamp duty within 15 days from the date of sale, i.e., by 20.11.2025, results in the sale dated 05.11.2025 as a nullity. Once the sale is rendered nullity by operation of law, the Executing Court had no other option but to proceed with re-sale of the property under Rule 86. The Executing Court had no jurisdiction whatsoever, by invoking Section 151 C.P.C., to permit the decree holder to deposit the stamp duty and registration charges beyond the said period.

Thus, as seen from the precedential jurisprudence vis-à-vis Order XXI Rules 85 and 86, this Court holds that deposit of the total purchase money and the general stamp duty is mandatory but not directory. The failure of such deposit vitiates the sale without reference to any application by the judgment debtor.”

The dispute originated from a suit seeking specific performance of an agreement of sale or, alternatively, a refund of the sale consideration. The court granted the alternative relief, directing the judgment debtors to pay ₹2.90 crore with interest and costs to the decree holder.

As the decree remained unsatisfied, the decree holder initiated execution proceedings to recover the amount through the sale of immovable property. During these proceedings, the judgment debtors made part payments totalling ₹2.40 crore.

The property was subsequently auctioned, and the decree holder obtained permission to participate in the auction and purchased it for ₹7.50 crore. However, the stamp duty required for the sale certificate was not deposited within the prescribed 15-day period.

The decree holder then approached the executing court under Section 151 CPC, seeking permission to deposit the stamp duty and registration charges belatedly. The executing court allowed the application without issuing notice to the judgment debtors or recording reasons. By a subsequent order, it confirmed the auction sale and directed the issuance of a sale certificate.

Challenging these orders, the judgment debtors argued that failure to deposit stamp duty within the prescribed period invalidated the auction sale and that the executing court had no power under Section 151 CPC to extend the deadline. They further contended that the property had to be resold in accordance with Order XXI Rule 86 CPC.

In response, the decree holder argued that the delay was caused by a bona fide mistake and that the requirement was directory. It was submitted that the executing court could permit the delayed deposit by exercising its inherent powers.

On examining the rival submissions, the High Court held that the requirement to deposit the full purchase money and the general stamp duty within 15 days was mandatory. It also applied the doctrine of 'consequence prescribed', under which non-compliance attracts the consequences expressly provided by law.

Accordingly, the executing court could not extend the deadline by invoking Section 151 CPC, and the failure to comply with the prescribed requirement rendered the sale void. A separate application by the judgment debtor was not necessary to invalidate the sale.

The Court further held that a separate application by the judgment debtor was not necessary to invalidate the sale. It also found fault with the executing court's decision to permit the delayed deposit without notice to the judgment debtors or recording reasons. Reiterating that reasons are the “heartbeat of every judicial order”, it stressed that a party likely to be adversely affected must be given an opportunity of hearing.

During the proceedings before the High Court, the judgment debtor agreed to pay ₹2.95 crore towards full and final settlement, in addition to the amounts already paid. The decree holder accepted the proposal, and the agreed amount was transferred in two instalments.

In view of the settlement, the High Court set aside both orders of the executing court—one permitting the delayed deposit of stamp duty and the other confirming the auction sale.

It recorded full satisfaction of the decree and permitted the decree holder to withdraw the amount deposited in the execution proceedings, except the poundage. The civil revision petitions were disposed of without costs.

Counsel for Petitioners: Sri O. Manohar Reddy and Anup Koushik Karavadi

Counsel for Respondent: P. Veera Reddy and V. Siva Prasad Reddy