Seth Hira Lal v. State Of Uttar Pradesh Through Its Chief Secretary Secretariate, Lucknow
1978-05-08
R.C.SHRIVASTAVA
body1978
DigiLaw.ai
JUDGMENT K. N. Singh, J. 1. (FOR self and FOR. R. C. Srivastava, J.) :-These are two petitions which raise common questions of fact and law. We consider it necessary to dispose both these petitions by a common order. 2. SETH Banarasi Dass was the owner of 94,320 equity shares having face value of Rs. 10/- each and 2260 preference shares of the face value of Rs. 100/-each in Messers Jaswant Sugar Mills Limited, Meerut. SETH Banarasi Dass was in arrears of taxes and other dues, a certificate for recovery of the amount due was issued against him. The Collector, Meerut took steps to recover an amount of Rs, 61,48,624.21 as arrears of land revenue from SETH Banarasi Dass. The Collector attached the aforesaid equity and preference shares held by SETH Banarasi Dass and issued sale proclamation for the sale of the said shares and appointed the Sub-Divisional Officer of Meerut as the Sale Officer. Several dates were fixed for the sale of the shares but inspite of due publicity through news papers nobody turned up to purchase the shares. Ultimately the Sale Officer fixed 2nd January, 1974 for the auction sale of the shares. The time, date and place fixed for the sale was duly publicised. The auction sale was conducted by the Sub-Divisional Officer, Meerut on 2-1-1974 and a number of persons participated in the bid. SETH Hira Lal and Shiv Raj Gupta who made bits jointly were the highest . bidders, the amount of their bid was Rs. 2,90,000/-. The Sale Officer accepted their bid and finalised the sale in their favour. SETH Hira Lal and Shiv Raj Gupta desposited a sum of Rs. 75,000/- on 2-1-1974 and a receipt was issued to them which was signed by the Officer concerned. The highest bidders deposited the remaining amount in the sub-treasury of Meerut Tahsil on 7-1-1974 after obtaining the order of the Sale Officer and a receipt was issued to them. SETH Banarasi Dass made an application to the Collector on 11-1-1974 raising objections against the auction sale with a prayer that the auction sale held on 2-1-1974 be set aside. The Collector after obtaining opinion from the District Government Counsel (Civil) set aside the auction sale by his order dated 16th January, 1974 and directed the Sub-Divisional Officer to hold the auction sale afresh.
The Collector after obtaining opinion from the District Government Counsel (Civil) set aside the auction sale by his order dated 16th January, 1974 and directed the Sub-Divisional Officer to hold the auction sale afresh. SETH Hira Lal and Shiv Raj Gupta thereupon filed writ petition No. 879 of 1974 ohallenging the order of the Collector dated 16th January, 1974. Under the interim order of this Court impugned order of the Collector was stayed. During the pendency of the aforesaid writ petition No. 879 of 1974, the Collector appears to have realised the mistake committed by him as he issued notice to Seth Banarasi Dass as well as to auction purchasers, namely, Hira Lal and Shiv Raj Gupta to appear before him on 13-8-1974 for hearing in relation to the auction sale held on 2-1-1974. Both the parties were directed to put up their case before the Collector. The Collector heared the parties on 13th and 20th August, 1974 and he fixed 24th August, 1974 for final orders. But before the Collector could pass orders, Seth Banarasi Dass filed writ petition No. 4963 of 1974 before this Court on 23rd August, 1974 which was admitted and connected with the writ petition No. 879 of 1974 filed by the auction purchasers. This Court issued an interim order on 23-8-1974 restraining the Collector from reviewing or recalling his order dated 16-1-1974. 3. THE learned counsel for the auction purchasers contended that on the deposit of the entire sale money the sale became absolute and the Collector had no jurisdiction to set aside the same. On the conclusion of the sale an interest in the property had accrued in favour of the auction purchasers. The Collector had no authority in law to set aside auction sale without hearing or giving any opportunity to the auction purchasers. The order of the Collector dated 16-1-1974 is null and void as it was passed in voilation of natural justice. We find considerable force in the contention raised on behalf of auction purchasers. It is admitted case of the parties that the recovery proceedings were held for the recovery of the dues from Seth Banarasi Dass as arrears of land revenue under the provisions of U. P. Zamindari Abolition and Land Reforms Act, 1951.
We find considerable force in the contention raised on behalf of auction purchasers. It is admitted case of the parties that the recovery proceedings were held for the recovery of the dues from Seth Banarasi Dass as arrears of land revenue under the provisions of U. P. Zamindari Abolition and Land Reforms Act, 1951. Section 282 of the said Act lays down that the attachment and sale of moveable property for recovery of the arrears as land revenue is to be made according to the law in force for the time being for attachment and sale of moveable property in execution of a decree of a Civil Court under Section 281 of the Act. The provisions of the Code of Civil Procedure regulating the attachment and sale of moveable property in execution of a decree of Civil Court are, therefore, applicable. Order 21 Rule 77 clause (1) of the CPC lays down that :- "Where moveable property is sold by public auction the price of each lot shall be paid at the time of sale or as soon after as the Officer or other person holding the sale directs, and in default of payment the property shall forthwith be re-sold." Clause (2) of the rule further lays, down that :- "On payment of the purchase-money, the Officer or other person holding the sale shall grant a receipt for the same, and the sale shall become absolute." 4. THE provisions contained in Rule 77 of the CPC make it amply clear that if the price is paid at the time of sale or afterwards with the permission of the Officer holding the sale and a receipt is issued to the auction purchaser the sale shall become absolute No order of any other authority is necessary for confirming the sale in case of moveable property. The Officer conducting the sale is empowered to grant time to the purchaser to desposit the purchase-money within the specified period. In default of payment the property shall be resold but if the purchaser deposits the purchase-money and a receipt is issued to him, the sale would become absolute and no further order or step would be necessary to be taken.
In default of payment the property shall be resold but if the purchaser deposits the purchase-money and a receipt is issued to him, the sale would become absolute and no further order or step would be necessary to be taken. In Lokman Chhabilal Jain Bani v. Motilal Tulsiram Agarwal, AIR 1939 Nagpur 269 a Division Bench interpreted Order 21 Rule 77 of the CPC and held that :- "It appears clear from those provisions that so far as the sale of moveable property is concerned it is the Officer who is holding the sale who concludes the matter by saying who has purchased, within what time the purchase price must be paid, by receiving purchase-money and by granting a receipt. Thereupon the sale becomes complete, property passes and the matter is over." We are in respectful agreement with the view taken by Nagpur High Court. A similar view was taken by Calcutta High Court while interpreting Order 21 Rule 77 of the CPC (67, Calcutta Weekly Notes 350). 5. IN the instant case the Collector appears to have set aside the auction sale on the opinion of the District Government Counsel (Civil), a copy of which has been filed as annexure 7 to the writ petition (Writ No. 879 of 1974). The District Government Counsel (Civil) opined that a mistake had been committed in finalising the auction sale. It was vitiated as the purchasers had failed to pay the entire purchase-money at the time of the auction sale. He further pointed out that two objections filed by Seth Banarasi Dass had not been decided before the auction sale took place. Relying upon the opinion of the District Government Counsel (Civil), the Collector passed a short order saying that the Sale Officer should have observed correct procedure and thereupon he set aside the auction sale held on 2-1-1974 and directed for holding the auction afresh. Order 21 Rule 77 of the CPC does not require that the entire purchase money should be deposited by the purchaser immediately on the conclusion of the bids. As noticed earlier, Rule 77 contemplates that the sale money shall be paid at the time of the sale or as soon after as the officer holding the sale may direct. The Officer conducting the sale has, therefore, power to grant time to the purchaser to deposit the purchase money.
As noticed earlier, Rule 77 contemplates that the sale money shall be paid at the time of the sale or as soon after as the officer holding the sale may direct. The Officer conducting the sale has, therefore, power to grant time to the purchaser to deposit the purchase money. If the Sub-Divisional Officer granted time to the petitioners for depositing the remaining amount within seven days he did not commit any illegality. 6. IN the instant case the auction purchasers had deposited Rs.75,000/- on the date of sale itself and they deposited the remaining amount on 7-1-1974. The petitioners have clearly asserted that the Sub-Divisional Officer had granted them one week's time to deposit the entire purchase money and in pursuance of that direction they made an application on 5-1-1974 before the Sub-Divisional Officer for a direction as to where the auction purchasers should deposit the remaining amount, namely, in the treasury or in the Bank. The Sub-Divisional Officer, according to the petitioners, directed the purchasers to deposit the remaining amount in the treasury. Thereupon the auction purchasers deposited a sum of Rs. 2,12,000/- in the Sub-Treasury of Tahsil, Meerut, on 7-1-1974 and a receipt was issued to them by the Sub-Divisional Officer. Seth Banarasi Dass had, however, disputed the petitioners assertion According to his affidavit the Sub-Divisional Officer had not granted any time to the petitioners. He has further asserted that since the purchasers failed to deposit the entire amount on the date of sale, the auction sale did not become final and the Collector was justified in setting aside the sale. This is a disputed question of fact which the Collector may determine. We would like to make it clear that the Collector has no jurisdiction to set aside the sale on the ground of any irregularity in publicising or conducting the sale as provided by Order 21 Rule 78 CPC. in Nanak Chand v. Chheda Lal, AIR 1927 Alld.
This is a disputed question of fact which the Collector may determine. We would like to make it clear that the Collector has no jurisdiction to set aside the sale on the ground of any irregularity in publicising or conducting the sale as provided by Order 21 Rule 78 CPC. in Nanak Chand v. Chheda Lal, AIR 1927 Alld. 41 a Division Bench of this Court held that : "Under Order 21 Rule 78, a sale of immoveable property, however, irregular, cannot be set aside, but any person sustaining an injury by reason of the same at the hand of any other person is entitled to sue the latter for compensation or if such person is the purchaser, for the recovery of the specific property and for compensation in default of such recovery." The sale of immoveable property which may have become absolute under Rule 77 of the CPC cannot be set aside on any irregularity which may have occurred in publicising or conducting the sale of immoveable property. 7. THE Collector did not afford any opportunity of hearing to the purchasers who had deposited the entire sale money before he set aside the auction sale on 16-1-1974. Since the auction purchasers had deposited the entire sale money and a receipt had been issued to them and they had acquired property rights in the shares which were sold at the public auction on 2-1-1974. The effect of the Collector's order dated 16-1- 1974 was that the purchasers were deprived of the property to which they had acquired legal right. Natural justice required that the Collector should have given opportunity of hearing to the auction purchasers before setting aside the sale. This was, however, not done. The Collector's order was passed in violation of principles of natural justice which adversely affected the purchasers' right in the property, therefore the order of the Collector dated 16-1-1974 setting aside the sale is null and void. 8. IT was contended on behalf of Seth Banarasi Dass that the auction sale was wholly illegal as no amount was due against him and a number of objections filed by him were pending before the Collector and the property could not be put to auction sale before those objections were disposed of.
8. IT was contended on behalf of Seth Banarasi Dass that the auction sale was wholly illegal as no amount was due against him and a number of objections filed by him were pending before the Collector and the property could not be put to auction sale before those objections were disposed of. We do not consider it necessary to express any opinion on these questions as the Collector has himself afforded opportunity to Seth Banarasi Dass to hear and dispose of his objections. The objections of Seth Banarasi Dass are under consideration before the Collector and we are of the opinion that he should decide the same in accordance with law in the light of the observations made by us. The sole grievance of Seth Banarasi Dass in Writ Petition No. 4963 of 1974 is that once the Collector had set aside the auction sale by his order dated 16-1-1974 he had no jurisdiction to review the same. We do not find any merit in the contention. If an order is passed by a mistake or due to some bona fide error it is always open to the authority to rectify the same. In the instant case, however, it is not necessary to decide the question as to whether the Collector had any authority to review his earlier order as we have held earlier that the Collector's order setting aside the auction sale was null and void, and therefore, Seth Banarasi Dass could not acquire any right under the said order, in view of the earlier discussion we are of the opinion that the petition filed by Seth Banarasi Dass is devoid of any merit and he is not entitled to any relief. 9. LASTLY it was contended on behalf of Seth Banarasi Dass that in view of clause (3) of Article 226 of the Constitution, this Court has no jurisdiction to interfere with the order of the Collector dated 16-1-1974 as auction purchasers have a right of appeal against that order.
9. LASTLY it was contended on behalf of Seth Banarasi Dass that in view of clause (3) of Article 226 of the Constitution, this Court has no jurisdiction to interfere with the order of the Collector dated 16-1-1974 as auction purchasers have a right of appeal against that order. Clause (3) of Article 226 of the Constitution lays down that "no petition for the redress of any injury referred to in sub-clause (b) or subclause (c) of clause (1) shall be entertained if any other remedy for such redress is provided for by or under any other law for the time being in force." Clause (1) of Article 226 of the Constitution has three sub-clauses setting out matters in respect of which High Court has power to issue writs Under subclause (a) writ for the enforcement of fundamental rights conferred by Part III of the Constitution can be issued. Under sub-clause (b) a writ for the redress of any injury of a substantial nature by reason of the contravention of any other provision of the Constitution or any provision of any enactment or Ordinance or any order, rule, regulation, bye-law or other instrument made thereunder can be issued. Under subclause (c) the High Court is empowered to issue writ for the redress of any injury caused to the petitioner by reason of any illegality in any proceedings where such illegality may have resulted in substantial failure of justice. The existence of alternative remedy is a bar against the issue of writ under subclause (b) and (c) but there is no such bar to the issue of writ for the enforcement of any of the rights conferred by Part III of the Constitution. If a petitioner invokes the jurisdiction of the High Court for the enforcement of any of his fundamental right including right to property the bar of alternative remedy as contained in clause (3) to the Article 226 of the Constitution cannot be invoked and the High Court would be acting within the constitutional limits in granting relief to the petitioner. In our opinion clause (3) to Article 226 of the Constitution is not attracted at all in a case where a petitioner approaches this Court for enforcement of his fundamental rights. 10. IN the instant case the auction purchasers purchased the shares belonging to Seth Banarasi Dass at auction sale and deposited the entire purchase-money.
In our opinion clause (3) to Article 226 of the Constitution is not attracted at all in a case where a petitioner approaches this Court for enforcement of his fundamental rights. 10. IN the instant case the auction purchasers purchased the shares belonging to Seth Banarasi Dass at auction sale and deposited the entire purchase-money. As discussed earlier, the sale became absolute and they acquired property right in the shares, their right to that property could not be taken away without the authority of law. Article 31 of the Constitution protects a citizen's right to property, it lays down that no person shall be deprived of his property save by authority of law. The purchasers have invoked the jurisdiction of this Court under Article 226 of the Constitution for the redress of their grievance that they are being deprived of their right of property in the shares purchased by them by the Collector without any authority of law. In our opinion, the grievance raised by the purchasers clearly falls within Article 226 (1) (a) of the Constitution. Consequently the bar of alternative remedy as contained in clause (3) to the Article 220 of the Constitution is not attracted and the petition at the instance of auction purchasers is maintainable. For these reasons we do not find any merit in the contention raised on behalf of Seth Banarasi Dass. In view of the above discussion, we allow writ petition No. 879 of 1974 and dismiss the petition No. 4963 of 1974. The parties shall bear their own costs. Ordered accordingly.