Sanwar Pal Singh & Others vs Addl. Commissioner, Saharanpur & ...
2017 Latest Caselaw 2807 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

Reserved
 
A.F.R.
 

 
Court No. - 26
 

 
Case :- WRIT - C No. - 16892 of 1999
 

 
Petitioner :- Sanwar Pal Singh & Others
 
Respondent :- Addl. Commissioner, Saharanpur & Others
 
Counsel for Petitioner :- R.K.Asthana,Anurag Asthana
 
Counsel for Respondent :- C.S.C.
 

 
Hon'ble Siddhartha Varma,J.

When Hardiya, son of Rama, failed to repay a loan he had taken from the Bank of Baroda, Haroda, Saharanpur, the Bank issued a recovery certificate whereupon the Tehsil Authorities embarked upon the process of selling his security by auctioning it. The auction was preceded by a publication whereby it was advertised that the property was to be sold in auction on 1.1.1997. The petitioners made their bid and quoted their price as Rs. 1,80,200/-. After the bid of the petitioners was found to be the highest, the petitioners deposited the entire money within 15 days. However, despite there being no objection from the erstwhile owner Hardiya, the auction sale was questioned by the Collector, Saharanpur and suo motu on 1.4.1997, the Collector cancelled it. The cancellation was question by the petitioners by filing an objection on 17.4.1997, which was rejected by the Collector on 17.10.1997. Thereafter, the revision as was filed by the petitioners was also dismissed by the Additional Commissioner, Saharanpur on 16.3.1999.

Aggrieved by the order dated 17.10.1997 by which the Collector had rejected the application of the petitioners for recalling of the order dated 1.4.1997 and against the order dated 16.3.1999 by which the revision of the petitioners was rejected, the instant writ petition has been filed.

Heard the learned counsel for the petitioners Sri Anurag Asthana and the learned Standing Counsel for the State.

The counsel for the petitioners has submitted that sale by auction of immovable property could be resorted to by the Collector under the relevant provisions under the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 (hereinafter referred to as ' the 1950 Act') and if the person whose land is sold in auction is dissatisfied by the auction sale then he and he alone can take recourse to Rule 285 (H) and Rule 285 (I) of the Uttar Pradesh Zamindari & Land Reforms Rules, 1952 (hereinafter referred to as 'the 1952 Rules') framed under the 1950 Act. The 1952 Rules placed by the petitioners are also being reproduced here as under:-

285-H.(i) Any person whose holding or other immovable property has been sold under the Act may, at any time within thirty days from the date of sale, apply to have the sale set aside on his depositing in the Collector's office -

(a) for payment to the purchaser, a sum equal to 5 per cent of the purchase money; and

(b) For payment on account of the area, the amount specified in the proclamation in Z.A. Form 74 as that for the recovery of which the sale proclamation of sale, have been paid on that account; and

(c) the costs of the sale.

On the making of such deposit, the Collector shall pass an order setting aside the sale:

Provided that if a person applies under rule 285-I to set aside such sale, he shall not be entitled to make an application under this rule.

285-I (i) At any time within thirty days from the date of the sale, application may be made to the Commissioner to set aside the sale on the ground of some material irregularity or mistake in publishing or conducting it; but no sale shall be set aside on such ground unless the applicant proves to the satisfaction of the commissioner that he has sustained substantial injury by reason of such irregularity or mistake.

(ii)

(iii) The order of the commissioner passed under this rule shall be final.

Learned counsel has thereafter submitted that the facility for setting aside an auction is available only to the original owner and that the auction could be set aside only if the original owner within 30 days from the date of sale applies to the Collector to set aside the sale on the ground that some material irregularity or mistake had occurred in the publication of the advertisement or that there had been any irregularity or mistake when the auction sale was being conducted. While questioning the sale it would have to be seen by the Collector that the applicants had actually sustained substantial injury by reason of any such irregularity or mistake which the erstwhile owner points out.

In the instant case, learned counsel for the petitioners has pointed out that when the order dated 1.4.1997 was passed by the Collector, no opportunity of hearing was afforded to the petitioners and when his objection was filed to set aside the order dated 1.4.1997, the Collector in a most arbitrary manner stated in his order dated 17.10.1997 that the auction sale was cancelled as the price which had been quoted by the petitioners in their bid was lesser than the circle/market rate. In Revision also the Commissioner in his order dated 15.3.1999 only mentioned that the order dated 1.4.1997 was correct as the auction bid of the petitioners was lesser than the market/circle rate; and that the Collector had only taken recourse to the provision of the "terms and conditions" as were published before the auction sale. The Collector and the Commissioner both relied upon condition no. 5 of the "terms and conditions" of the auction sale. The condition no. 5 reads as follows:-

5. नीलामी स्वीकृत या अस्वीकृत करने का पूर्ण अधिकार उपजिलाधिकारी महोदय को है

Learned counsel further stated that there was no provision in the whole of the 1950 Act and the 1952 Rules which gives power to the Collector to cancel an auction in the absence of any objection from the actual owner. In this regard, learned counsel has cited a decision rendered in 1993 RD 494 ( Hari Singh v. State of U.P. And others) and specifically pointed to the paragraph which is being reproduced here as under:-

Rule 285-I (i) provides that at any time within thirty days from the date of the sale, application may be made to the Commissioner to set aside the sale on the ground of some material irregularity or mistake in publishing or conducting it; but no sale shall be set aside on such ground unless the applicant proves to the satisfaction of the commissioner that he has sustained substantial injury by reason of such irregularity or mistake.

Rule 285-J provides that if no such application as mentioned in Rule 285-H or Rule 285-I has been made after the expiry of thirty days from the date of sale, or if such application has been made and has been rejected by the Collector or the Commissioner, then the Collector shall pass an order confirming the sale after satisfying himself that the purchase of land in question by the bidder has not been done in contravention of the provisions of Section 154. This rule clearly goes to show that once the objection has been dismissed, the Collector has to confirm the sale if he is satisfied that the provisions of Section 154 have not been contravened.

He has further pointed out that condition no. 5 as has been given out in the "terms and conditions" of the auction sale gave unbridled of unfettered power to the Auctioning Authorities to cancel the sale which was made in auction and brought to the attention of the Court, the decisions rendered in AIR 1967 SC 1373 (Maneklal Chhotalal & Ors vs M. G. Makwana & Ors) and AIR 1990 SC 40 (A.N. Parasuraman etc. v. State of Tamil Nadu). They decry the endowment of unfettered powers on any authority. Paragraph 46 of the judgement rendered in 1967 SC 1373 (supra) was specially read out by the learned counsel and so is being reproduced here as under:-

Such restrictions on the exercise of a fundamental right shall not be arbitrary, or excessive, or beyond what is required in the interest of the general public. The reasonableness of a restriction shall be tested both from substantive and procedural aspects. If an uncontrolled or unguided power is conferred, without any reasonable and proper standards or limits being laid down in the enactment, the statute may be challenged as discriminatory.

Similar was the view of the Supreme Court in AIR 1990 SC 40 (A.N. Parasuraman etc. v. State of Tamil Nadu).

In reply, the learned Standing Counsel has submitted that term no. 5 of the "terms and conditions" of the auction sale had given wide enough powers to the Collector to set aside the auction sale. Since it was found that the bid was lesser than the circle/market rate, the auction had to be set aside. He further submitted that term no. 5 of the "terms and conditions", in fact, vested in the Collector more powers than had been provided by the 1950 Act and the 1952 Rules framed thereunder.

Upon having heard, the learned counsel for the petitioners Sri Anurag Asthana and learned Standing Counsel, I am of the view that the auction sale could not have been be set aside by the order dated 1.4.1997. In fact, there was no option with the Collector, in the absence of any objection from the actual owner, but to have actually confirmed the auction sale.

From a bare perusal of Rules 285 - H & I of the 1952 Rules, it becomes clear that any sale in auction could be set aside only at the instance of the erstwhile owner and the price which is paid by the auction purchaser cannot be questioned by the Collector or anybody else. In 2011 (2) SCC 246 (Executive Engineer, Karnataka Housing Board v. Land Acquisition Officer, Gadag and Org.), the Supreme Court in paragraph no. 6 has stated:-

"thus in a well advertised open auction sale, where a large number of bidders participate, there is always a tendency for the price of the auctioned property to go up considerably. On the other hand, where the auction sale is by banks or financial institutions, courts etc. to recover dues, there is an element of distress, a cloud regarding title, and a chance of litigation, which have the effect of dampening the enthusiasm of bidders and making them cautious, thereby depressing the price"

Therefore, not much leeway has been given to the State Authorities to set aside any sale by auction if the auction bid was lesser than the circle/market rate.

Thus, respondent no. 2 could not have simply set aside the auction on the condition that the sale price as was paid by the petitioners was lesser than the circle/market rate.

I have also gone through the condition no. 5 of the "terms and conditions" of the auction and hold that it gave unguided and unfettered powers to the Collector. Rules 285 - H &I of the 1952 Rules alone give powers to the Collector to set aside an Auction Sale. No power over and above these Rules could have been vested in the Collector and, thus, the Collector or for that matter none of the State Authorities could have taken recourse to Rule 5 of the "terms and conditions" of the auction sale to set aside the Auction Sale. Rule No. 5, therefore, is being struck down, it being absolutely arbitrary, in view of what has been stated above.

Under such circumstances, I set aside the orders dated 16.3.1999, 17.10.1997 and 1.4.1997 and direct the Collector to confirm the auction sale which had taken place on 1.1.1997.

For the reasons stated above, the writ petition is allowed.

Order Date :- 31.7.2017

praveen.