Code of Civil Procedure, 1908 / Order XXI

Order XXI Rule 84 CPC: 25% Deposit by Auction Purchaser and Resale on Default

Order XXI Rule 84 of the Code of Civil Procedure, 1908 (CPC) governs the initial deposit payable by a successful purchaser at a court auction of immovable property in execution of a decree. Ordinarily, the purchaser must deposit 25% of the purchase money immediately after being declared the purchaser. Failure to do so requires the property to be resold forthwith.

What Order XXI Rule 84 provides

Rule 84(1) - Deposit and resale

On every sale of immovable property, the person declared to be the purchaser must, immediately after the declaration, pay a deposit of twenty-five per cent of the purchase money to the officer or other person conducting the sale. If the deposit is not made, the property must be resold forthwith.

Rule 84(2) - Exception for decree-holder purchasers

Where the decree-holder purchases the property and is entitled to set off the purchase money under Order XXI Rule 72, the court may dispense with the deposit requirement under Rule 84.

Meaning of important legal terms

Decree-holder: Under Section 2(3) CPC, a person in whose favour a decree has been passed or an order capable of execution has been made.
Judgment-debtor: Under Section 2(10) CPC, a person against whom a decree has been passed or an order capable of execution has been made.
Immovable property: Property such as land and buildings; its treatment in execution is subject to the applicable statutory provisions.
Set-off of purchase money: Where permitted by Order XXI Rule 72, the decree-holder purchaser may credit the relevant decree amount against the purchase price, subject to the court's directions and the rule's conditions.

How the deposit rule operates

The court conducts an execution sale of immovable property and declares the successful bidder.
The successful bidder must immediately deposit 25% of the purchase price with the officer or person conducting the sale.
If the bidder fails to make that deposit, Rule 84(1) requires immediate resale of the property.
Where the purchaser is the decree-holder and qualifies under Rule 72, the court has discretion to waive the Rule 84 deposit.
The remaining purchase money is dealt with separately under Order XXI Rule 85, including its prescribed deadline; the initial 25% deposit is not payment of the full price.

Illustration

If a bidder is declared the purchaser of immovable property for Rs. 20,00,000 at a court auction, the ordinary immediate deposit under Rule 84(1) is Rs. 5,00,000 (25%). If the bidder fails to pay this amount immediately, the property must be resold. The separate requirements for payment of the balance remain applicable.

Order XXI Rule 72: governs bidding or purchase by a decree-holder, including leave of court and set-off in the circumstances permitted by the rule. Rule 85: concerns payment of the balance of the purchase money. Rule 86: addresses consequences of default in paying the balance, including possible forfeiture of the deposit and resale. These rules should be read together with Rule 84.

Official legal source

Consult the Code of Civil Procedure, 1908 on India Code for the legislation and its schedules. Court-specific amendments, applicable High Court rules and subsequent legal developments should also be checked before relying on the provision in a proceeding.

This article explains the general central CPC framework and is not a substitute for advice on the facts of a particular execution case.