Captain v. District Collector — 1996 DIGILAW 423 (KER)

Judgment :- K.S, Radhakrishnan, J. Tahsildar, Aluva, under the provisions of the Kerala Revenue Recovery Act attached 13 cents of land in Sy. No. 635/2 of Chowara Village, which belonged to A.G. Sasidharan, Anakkattil Veedu, Chowara Village. The property was attached in order to realise an amount of Rs. 22,594.50 being the principal and interest due towards toddy workers welfare fund. Auction was earlier conducted on 9.3.1994 and the highest bid amount in that auction was Rs. 5,500/-Authorised officer who conducted the auction reported that considering the importance of the locality and nearby road, there is a possibility of getting higher amount. It was also cleared that minimum cent age market value of the land in that locality is Rs. 2.000/-and recommended to conduct re-auction. 2. Accordingly, a reaction was conducted on 23.9.1994, in which petitioner bid the property for Rs. 10,350/-, which is only Rs. 796.15 per cent. On reading of the report of the Authorised officer, who conducted auction on 9.3.1994 that the minimum centage market value of the land in the locality is Rs. 2,000/-, it is stated the bid amount fetched in the auction conducted on 23.9.1994 is very low. It. is also found that the amount due from Sasidharan could not be realised, if the second auction is confirmed. Therefore, the auction conducted on 23.9.1994 was cancelled by the Sub Collector vide his order dated. 30.3.1995. Tahsildar, Aluva was then directed to conduct reauction at a early date fixing the upset value of the land at Rs. 2,000/- percent, as reported by the Authorised Officer. A communication was issued to the petitioner by the Tahsildar vide his letter dated 5.7.1996 stating the reason for conducting a reauction, and that the amount deposited by tine petitioner would be returned. Aggrieved by the same, petitioner has approached this Court challenging Exts. P5 and P6 proceedings. 3. Main contention raised by counsel for the petitioner was that since petitioner being the highest bidder in the auction conducted on 23.9.1994, respondents are duty bound to confirm the auction in favour of the petitioner. It was also pointed out that there was no objection filed by anybody to set aside the sale. Petitioner also submitted that before conducting a reauction no notice was issued to him. It was also contended inadequacy of sale price is not a ground to set aside the sale. It was also pointed out that there was no objection filed by anybody to set aside the sale. Petitioner also submitted that before conducting a reauction no notice was issued to him. It was also contended inadequacy of sale price is not a ground to set aside the sale. Reference was made to the decision of this Court in Subaida Sulaiman v. Hamsa,1991 (2) KLT 158 (DB) stating that mere inadequacy of the price fetched at the sale would not by itself be a sufficient ground to set aside the sale. It was also contended that Collector has no jurisdiction to set aside the earlier sale, alter a period of 30 days. According to counsel, in the absence of any objection, the auction ought to have been confirmed in favour of the petitioner. 4. The decision to conduct a reauction was made by the District Collector as early as on 30.5.1995 after having found that the market value of the land in the locality is around Rs. 2,000/- percent. In the auction conducted on 23.9.1994, the highest offer made was Rs. 796.15 per cent, which was found to be inadequate. Since the amount fetched was inadequate Sub Collector decided to conduct a reauction fixing the upset price of the land at Rs. 2,000/- per cent. Decision was also communicated to the petitioner. It is in pursuance of Ext. P6, that Tahsildar has issued Ext. P5 proceedings stating that it was decided to conduct reauction and that amount deposited by the petitioner would be returned to him. 5. In the instant case, auction was not confirmed in favour of the petitioner. Only if the auction is confirmed, petitioner gets a legal right. Under S.54 of the Kerala Revenue Recovery Act, on expiration 30 days from the date of sale, if no application to have the sale set aside is made under S.52 or S.53, or if any such application has been made and rejected, the Collector shall make an order confirming the sale. It cannot be contended that Collector has no jurisdiction to set aside a sale after a period of 30 days from the date of sale. On the expiry of 30 days from the date of sale, the sale does not become confirmed automatically in case there is no application for setting aside the sale. Only if the Collector makes an order, question of confirmation arises. On the expiry of 30 days from the date of sale, the sale does not become confirmed automatically in case there is no application for setting aside the sale. Only if the Collector makes an order, question of confirmation arises. There cannot be any automatic confirmation under S.54, unless the Collector makes an order confirming the sale. If the Collector has not made an order confirming the sale, it cannot be said that confirmation is automatic which is never the intention of S.54. As held by the Supreme Court in LICA (P) Ltd, v. Official Liquidator (No. 1), (1996) 85 Com Case 788, the condition of confirmation by the Court operates as a safeguard against the property being sold at an inadequate price whether or not it is a consequence of any irregularity or fraud in the conduct of the sale. Therefore, question of adequacy, or inadequacy, of price is one of the relevant criteria to be taken note of by the revenue authorities when a property is brought to sale. The purpose of an open auction is to get the most remunerative price. It is the duty of the court to keep the auction open so that intending bidders would be free to participate and offer higher prices. If that path were to be closed, the possibility of fraud or underbidding would loom large. Therefore, contention of counsel for the petitioner that whatever might be the sale price, after the expiry of 30 days from the date of sale, sale has automatically become confirmed cannot be sustained. 6. It was contended by counsel for the petitioner that before conducting a reauction, notice ought to have been given to him. I am of the view that since auction was not confirmed in favour of the petitioner, there is no necessity of giving any notice to the petitioner to show cause why a reauction be not conducted. In the instant case, decision of the Sub Collector was already communicated to the petitioner by the Tahsildar, Aluva, which is evident from Ext. P6. Another communication was also issued to the petitioner evidenced by Ext. P5. This is sufficient notice to the petitioner informing him that auction in favour of the petitioner has not been confirmed and revenue authorities have decided to conduct a reauction. 7. P6. Another communication was also issued to the petitioner evidenced by Ext. P5. This is sufficient notice to the petitioner informing him that auction in favour of the petitioner has not been confirmed and revenue authorities have decided to conduct a reauction. 7. Decision of this Court in Subaida Sulaiman v. Hamsa,1991 (2) KLT158, cited by the petitioner, is not applicable to the facts of this case. In that case, a Division Bench of this Court was considering the scope of Ss.53 and 54 of the Revenue Recovery Act. It was held reading Ss.53 and 54 together, and it appears to us that the provision being a part of the scheme in the matter of setting aside the sale, they have to be read together, the picture becomes clear and the Collector can set aside the sale under the proviso to S.54, only if he has reason to think that the sale ought to be set aside for the reasons mentioned in S.53. De hors the reasons mentioned in S.53, the Collector has no jurisdiction either under S.53 or under the proviso to S.54. Therefore, the Division Bench held that decision of Ms Court in Joseph v. Tahsildar, South Wynad,1980 KLT S.N. 35 did not lay down the correct law. 8. The principle laid down by the Division Bench in Subaida Sulaiman's case, has to be considered in the light of facts of that case. That was a case where sale has already been confirmed by the District Collector. Application was filed to set aside the sale. In the instant case, sale has not been confirmed. Since sale has not been confirmed as per S.53 Collector has to make an order confirming the sale. As held by the Supreme Court in LICA (P) Ltd. 's case (supra) the condition of confirmation operates as a safeguard against the property being sold at an inadequate price whether or not it is a consequence of any irregularity or fraud in the conduct of the sale. Therefore, in a case where sale has not been confirmed, as held by the Supreme Court in the above mentioned case, it is always open to the Collector to look into the question whether the price fetched is inadequate or not. If the District Collector is satisfied that the price fetched is inadequate, he can set aside the sale. Therefore, in a case where sale has not been confirmed, as held by the Supreme Court in the above mentioned case, it is always open to the Collector to look into the question whether the price fetched is inadequate or not. If the District Collector is satisfied that the price fetched is inadequate, he can set aside the sale. In the instant case, since the Collector never confirmed the sale, I am of the view that going by the Supreme Court decision adequacy of the sale price is one of the relevant criteria to be taken note of by the District Collector. Under the above mentioned circumstances, I do not find any illegality or irregularity in Exts. P5 and P6. Original Petition is accordingly dismissed.