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2004 DIGILAW 332 (ALL)

KAJAL RESTAURANT AND BAR AND AGRA v. STATE OF U P

2004-02-20

MARKANDEY KATJU, R.S.TRIPATHI

body2004
M. KATJU, J. This writ petition has been filed for quashing of the auction held on 4-8-2003 (Annexure 9 to the writ petition) in which the highest bid of Rs. 13. 60 lacs offered by respondent No. 8 Kishore Kumar Agarwal was accepted by the responndent auctioning authority. The petitioners have also prayed for quashing the impugned recovery certificate dated 15-7-2001 and 4-7-2003 Annexure Nos. 2 and 7 to the writ petition. 2. The petitioners took a loan of Rs. 9,76,6000 from U. P. Financial Corporation which was sanctioned on 29-8-1996 after completing the necessary formalities. The petitioners did not repay the loan amount as per the terms and conditions of the loan agreement and hence penal interest was imposed by the Financial Corporation and the demand was made. Apart from the principal loan amount of Rs. 9,76,700 interest of Rs. 11,21,626. 03 had accrued and hence a total amount of Rs. 20,98,386. 03 was demanded by the U. P. Financial Corporation in the recovery certificate dated 15-7-2001. The Collector, Agra initiated the recovery proceedings on 8-1-2002 and the Tehsildar was deputed to take necessary action to recover the amounts mentioned in the recovery certificate. 3. The recovery authority issued the sale proclamation under Rule 282 of U. P. Zamindari Abolition and Land Reforms Rules and fixed the date to deposit the amount mentioned in the said Citation Certificate. The property which was hypothecated by the petitioners to the Financial Corporation was also mentioned alongwith its boundary in the said Sale proclamation. The said notice was received on 16-7- 2003 by the husband of the petitioner No. 1. However, the petitioners did not deposit the said amount. Thereafter on 22-7-2003, notice for auction was published by the auctioning authority/tehsildar Agra in the notice Board as well as in the Daily Newspaper "dainik Jagran" on 1-8-2003. The date for auction of the property which had been mortgaged was fixed by the auctioning authority on 4-8-2003. Seven persons participated in the auction proceedings and the highest bid of the respondent No. 8 (Rs. 13,60,000) was accepted out of 7 participants. The answering respondent No. 8 deposited 1/4th of the amount of Rs. 3,40,000 on 4-8-2003 and the remaining amount of Rs. 10,20,000 was deposited by him on 18-8-2003 which was within time. 4. The auction authority communicated to the Collector that the entire auction amount sum of Rs. 13,60,000) was accepted out of 7 participants. The answering respondent No. 8 deposited 1/4th of the amount of Rs. 3,40,000 on 4-8-2003 and the remaining amount of Rs. 10,20,000 was deposited by him on 18-8-2003 which was within time. 4. The auction authority communicated to the Collector that the entire auction amount sum of Rs. 13,60,000 has been deposited by the respondent No. 8 within time. 5. The petitioners filed the writ petition with the allegation that the house of the petitioner has been auctioned for Rs. 13. 6 lacs, while its market value is more than Rs. 30 lacs and proper notice has not been given to the petitioners before fixing the date of auction, etc. 6. A short counter affidavit has been filed by the auction purchaser and we have perused the same. In para 6 it is stated that the petitioner No. 2 had mortgaged her house forgetting the loan. In pursuance of the recovery proceedings auction notice was issued on 4-7-2003 fixing 4-8-2003 as the auction date. The petitioners were fully aware of the auction as well as the fact that the property was valued by the respondents as per the rules before the auction notice. The auctioning authority has given the notice to the petitioners and the same was received by the husband of the proprietor of the petitioner No. 1 Firm. Hence false averments have made by the petitioners in the writ petition. A true copy of the auction notice served on the husband of petitioner No. 2 on 16-7-2003 and bearing his signature is Annexure 1 to the counter affidavit. 7. The respondent No. 8 was not arrayed as a respondent initially in the writ petition though it is alleged that the petitioners had full knowledge that the highest bid was submitted by the respondent No. 8 in the auction held on 4-8-2003 and the entire money as required, had been deposited by the respondent No. 8 on 18-8-2003. By concealing these facts the writ petition was filed and an interim order was obtained by the petitioners on 21-8-2003. When the respondent No. 8 came to know about the interim order dated 21-8-2003 passed by this Honble Court he immediately filed an impleadment application and short counter affidavit. The impleadment application has been allowed and now the auction purchaser is respondent No. 8 in the petition. 8. When the respondent No. 8 came to know about the interim order dated 21-8-2003 passed by this Honble Court he immediately filed an impleadment application and short counter affidavit. The impleadment application has been allowed and now the auction purchaser is respondent No. 8 in the petition. 8. The respondent No. 8 has filed the documentary evidence in his short counter affidavit in support of his pleas. Copy of notice of sale proclamation alongwith receiving endorsement is Annexure CA-1, copy of auction notice dated 22-7-2003 is Annexure C. A. 2 Dainik Jagran Notice publication dated 1-8-2003 is Annexure C. A. 3 and the certificate of the auctioning authority dated 8-8-2003 whereby he verified that the entire amount sum of Rs. 13,60,000 has been deposited by the respondent No. 8 within time, is Annexure CA-4 to the short counter affidavit. Annexure CA-4 showing deposit of balance amount by respondent No. 8 is Annexure CA-5. 9. The respondent No. 8 has also filed the supplementary counter affidavit to which is Annexed as Annexure S-1 photo copy of the report of the auction proceedings, being the auction Fard in which the proceedings have been written and the names of 7 participants in the auction have been mentioned by the auctioning authority. Annexure SA-2 is the valuation report of the property mortgaged and presently in dispute in this writ petition showing its value at Rs. 11. 3 lacs. The highest bid of Rs. 13,60,000 was submitted by the respondent No. 8 and the same has been accepted by the auctioning authority in the presence of other officers, who have also endorsed their signatures. The participants have also made the signatures in the said auction Fard, which shows that the auction was held publicly after due notice to the public at large and notice had been published not only in the Collectors Notice Board but it also was published in the widely circulated daily newspaper dainik Jagran on 1-8-2003 whereby the date of auction of the disputed property was fixed. 10. The valuation report, which was sent by the Deputy Senior Manager Technical of the Financial Corporation is Annexure SA-2 to the supplementary counter affidavit. It assessed the value of the property including the land and building etc. at Rs. 11. 30 lacs. Hence it is evident that the allegation of the petitioner that the property was worth over Rs. 30 lacs is not correct. It assessed the value of the property including the land and building etc. at Rs. 11. 30 lacs. Hence it is evident that the allegation of the petitioner that the property was worth over Rs. 30 lacs is not correct. 11. From the facts of the case it is evident that the petitioners Firm was a permanent defaulter and the property was put to auction by the Financial Corporation when all the modes to realise the amount failed. The auctioning authority sent the sale proclamation notice to the petitioners and the same was received on 16-7-2003. Thereafter the auction notice has been published and the auction has been finally held. 12. In our opinion from the facts it is evident that the petitioners have wrongly stated that they had no knowledge of the auction proceedings and before holding the auction no notice was issued to them. No offer was made by the petitioners before the auction. 13. In our opinion the present writ petition is also not maintainable because the petitioners have not come with clean hands as they have concealed and suppressed material facts to obtain an ex parte interim order. Hence we are not inclined to exercise our extra-ordinary jurisdiction under Article 226 of the Constitution of India in this case. The petitioners suppressed various facts in the writ petition. They had full knowledge that the respondent No. 8 has deposited the entire bid amount but they did not initially make him a party, obviously with a view to get a stay order. The petitioners being a chronic defaulter are in our opinion not entitled to get any relief from this Court in exercise of our discretionary jurisdiction under Article 226. In our opinion the respondent No. 8 is a bona fide purchaser, who deposited a sum of Rs. 13,60,000 in two instalments 1/4th i. e. 3,40,000 on 4-8-2003 and finally 3/4th amount of Rs. 10,20,000 on 18-8-2003. There is no force in this writ petition. The writ petition is dismissed. With costs. .