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Allahabad High Court · body

2006 DIGILAW 895 (ALL)

KEWLA PRASAD v. BANK OF BARODA

2006-03-31

A.P.SAHI, R.P.MISRA

body2006
JUDGMENT Honble A.P. Sahi, J.—The petitioner, a villager and a farmer has filed this writ petition to save his prized possession of a small parcel of land by filing this writ petition, challenging the auction proceedings in favour of the respondent No. 6 Rama Kant Patel, which property had been auctioned against a loan advanced by the Bank of Baroda to the petitioner for the purchase of a vehicle (make trekker of Hindustan Motors Ltd.) bearing Registration No. UGV 521 way back in the year 1986. 2. The loan was approximately Rs. 70,000/- which the petitioner attempted to return by making certain initial deposits, but later on defaulted as a result whereof the respondent bank proceeded to issue a recovery certificate addressed to the Collector for recovery of unpaid dues from the petitioner as arrears of land revenue under the provisions of U.P. Zamindari Abolition and Land Reforms Act, 1950. The recovery appears to have been initiated as per the terms of the agreement with the bank. 3. The agricultural land of the petitioner appears to have been mortgaged with the bank being plot No. 212 area 0.656 hectares and plot No. 898 area 0.113 hectares situated in Village Badhwa Tahsil Meja district Allahabad. According to the records which have been produced before the Court pertaining to the auction proceeding, plot No. 898 is situate beside the road and is a prime land. 4. The default appears to have been made way back in the year 1994 whereupon the certificate of recovery was issued by the bank on 7th January, 1994 for a sum of Rs. 1,56,990/- 5. The revenue authorities after receipt of the aforesaid certificate of recovery from the bank issued the relevant proclamations contained in Zamindari Abolition Form Nos. 69, 70, 73 and 74 on 6.2.97, 11.2.97, 1.3.97 and 12.3.97 respectively whereby the aforesaid two plots of the petitioner were proposed to be auctioned. The auction was to be held in terms of Section 284 of the U.P. Zamindari Abolition and Land Reforms Act, read with Rules 281 to 285-E. Rule 282 contains the provisions for issuance of proclamation of sale in Z.A. Form No. 74. Rule 283 clearly provides that the Collector shall state the estimated value of the property to be calculated in terms of the revenue manual. 6. Rule 283 clearly provides that the Collector shall state the estimated value of the property to be calculated in terms of the revenue manual. 6. After the proclamation of sale had been issued it appears that the petitioner filed a suit being Suit No. 629 of 1997 as a result whereof the auction came to be postponed but the suit was ultimately dismissed on 15.9.98 and the appeal preferred by the petitioner is also indicated to have been dismissed. The date of auction thereafter was fixed on 22.7.98. The respondent No. 6 Rama Kant Patel was indicated as the higher bidder as his bid was of Rs. 1,23,000/-. It appears certain objections were raised with regard to the inadequacy of the bid amount and certain reports were called for, which indicated the inadequacy of the amount, as a result whereof the bid of Rama Kant Patel was rejected on 26.8.98. The petitioner it appears found some breathing time and subsequently utilized the same by making good the deposits which were due against him in order to avoid any further trouble of auction. From the records and from the affidavits exchanged between the parties it appears that the petitioner deposited a sum of Rs. 1,15,000/- on 31.8.98 and a further sum of Rs. 10,000/- on 26.9.98. 7. Thereafter it appears, that since the amount due against the petitioner stood reduced up to the aforesaid extent, a fresh auction notice was issued against the petitioner on 29.10.98 which indicated a realization of the principal amount of Rs. 32,990/- plus interest and recovery charges. 8. From the records there appears to be some difference in the amount as projected by the bank. However from the note sheet of the records maintained by the Sub Divisional Officer and the Tehsildar Meja it appears that out of the total balance of Rs. 1,57,990/- an adjustment was made of the amount deposited by the petitioner referred to herein above which was Rs. 1,25,000/- and the balance of Rs. 32,990/- was sought to be recovered through the auction. This is evident from the orders contained on record dated 31.8.98 and 26.9.98. By the order dated 26.9.98 the next date for auction was fixed as 29.10.98. A very strange noting appears in the file below the order dated 26.9.98. 1,25,000/- and the balance of Rs. 32,990/- was sought to be recovered through the auction. This is evident from the orders contained on record dated 31.8.98 and 26.9.98. By the order dated 26.9.98 the next date for auction was fixed as 29.10.98. A very strange noting appears in the file below the order dated 26.9.98. The said noting appears to have been prepared by some official which states that today i.e. on 29.10.98 inspite of repeated announcements being made no one turned up and as such the next date fixed for auction was 2.12.98. From a perusal of the records which have been produced by the learned Standing Counsel, it is evident that the order was issued on 26.9.98 under the signature of the Sub Divisional Officer, Meja and countersigned by the Tehsildar Meja fixing 29.10.98 as the date of auction and the auction officer, who was to conduct the auction .was also nominated, namely the Naib Tahsildar Lal Tara. The note which has been prepared by the said auction officer and referred to herein above, postponing the date of auction to 2.12.98, does not indicate any approval from the Sub Divisional Magistrate or Tehsildar as was done in the past and the date endorsed by the said auction officer in the aforesaid note is 26.9.98. The aforesaid note, therefore, appears to have been manipulated and the date 26.9.98 clearly indicates that the note was manipulated with some motive inasmuch as if the note was being prepared on 29.10.98, the signature below the said note could not have been made on 26.9.98. There is a separate sheet of paper, thereafter in records which is an order of the Sub Divisional Magistrate and Tehsildar dated 29.10.98 fixing date of auction on 2.12.98. The manner in which the order sheet has been maintained causes a serious doubt on the procedure adopted by the respondents in view of the facts indicated herein above and the auction cannot be said to have been conducted fairly. The aforesaid apprehension is reaffirmed on account of the fact that on the date of fresh auction i.e. on 2.12.98 the same Rama Kant Patel again turned up to be the highest bidder who offered a sum of Rs. 2,18,000/- which bid came to be accepted and has given rise to the present proceedings. 9. The aforesaid apprehension is reaffirmed on account of the fact that on the date of fresh auction i.e. on 2.12.98 the same Rama Kant Patel again turned up to be the highest bidder who offered a sum of Rs. 2,18,000/- which bid came to be accepted and has given rise to the present proceedings. 9. The petition was initially filed with a prayer of mandamus directing the respondents to permit the petitioner to deposit the entire amount which was due against him under Rule 285-H but later on the petition was amended for quashing of the order dated 4.1.99 passed by the respondent No. 3 Sub Divisional Officer, rejecting the application of the petitioner for making the deposit under Rule 285-H and also simultaneously confirming the auction in favour of the respondent No. 6. 10. All the respondents have filed their counter affidavits to which a reply has been filed by the petitioner. 11. We have heard Shri Radhey Shyam learned counsel for the petitioner, learned Standing Counsel for the respondent Nos. 2 to 5 and the learned counsel for the respondent No. 6. 12. We have also perused the counter affidavit filed on behalf of the bank on whose behalf Shri V.B. Singh had appeared on earlier occasions but nobody turned up on its behalf when the matter was finally heard on the date when judgment was reserved. 13. Shri Radhey Shyam learned counsel for the petitioner has urged that the order dated 4.1.99 is erroneous in law inasmuch as the same is in violation of the provisions of Rule 285-H of the Z.A. and L.R. Rules, 1951. He further contends that the entire recovery proceedings stands vitiated in view of the recent pronouncement of the apex Court to the effect that unless and until the money advanced by the bank is under a State Sponsored Scheme, the same could not be realized as arrears of land revenue. He further contends that the respondents without disposing of the application and permitting the petitioner to deposit the entire amount under a fresh auction notice dated 29.10.98, they could not have proceeded to confirm the auction in favour of the respondent No. 6. He further contends that the respondents without disposing of the application and permitting the petitioner to deposit the entire amount under a fresh auction notice dated 29.10.98, they could not have proceeded to confirm the auction in favour of the respondent No. 6. He further submits that the auction has been confirmed without recording any satisfaction as contemplated under Rule 285-J and lastly that the respondents have proceeded to sell the entire property mortgaged when it was not necessary in view of the fact that the petitioner had bonafidely deposited a major part of the amount sought to be recovered as a result whereof a sum of Rs. 32,990/- plus other expenses was only required to be recovered. According to Shri Radhey Shyam even if it was necessary to proceed with the auction then the respondent revenue authorities ought to have considered this aspect of this matter before issuing a fresh proclamation on 29.10.98. 14. He has supplemented the aforesaid arguments by further stating that Rama Kant Patel respondent No. 6 was a long time political rival of the petitioner on account of the contest to the election of the office of Village Pradhan and was trying to corner the petitioner by humiliating him and seeking to usurp the petitioner’s property by motivating and manipulating the auction in his favour. 15. From a perusal of the counter affidavit of the bank it appears that the bank is pressing for the amount which according to them has again swelled up and as such it was urged on behalf of the bank that the amount realized from fresh auction proceedings be remitted to it without any further delay in order to clear all the dues outstanding against the petitioner. 16. We have also perused the entire records of the auction proceedings in respect of the property in dispute as produced by the learned Standing Counsel. We have also perused the counter affidavit of Ram Datt filed on behalf of the respondent Nos. 2 to 5. 17. Learned Standing Counsel for the respondents has urged that since the petitioner failed to make the deposits as required under Rule 285-H therefore, the auction proceedings cannot be set aside and as such have been rightly confirmed. 18. We have also perused the counter affidavit of Ram Datt filed on behalf of the respondent Nos. 2 to 5. 17. Learned Standing Counsel for the respondents has urged that since the petitioner failed to make the deposits as required under Rule 285-H therefore, the auction proceedings cannot be set aside and as such have been rightly confirmed. 18. Learned Standing Counsel has pointed out that an undated application is on record stated to have been signed by the petitioner praying for setting aside the sale on which an order was endorsed on 17.12.90 by the S.D.M. Meja. 19. We have perused the said order endorsed on the said application. The application is undated. 20. Shri Radhey Shyam learned counsel for the petitioner has outrightly denied the moving of any such application on behalf of the petitioner and it has been urged that it bears the forged signatures of the petitioner. 21. Even assuming for the sake of arguments that such an application was moved, the order endorsed thereon dated 17.12.98 by the Sub Divisional Officer indicates that the application shall be kept on record and the details of account shall be obtained from the bank by the concerned official who had been called upon by the Sub Divisional Officer to do so. Neither the order sheet nor the records indicate any attempt made by the official to have complied with the aforesaid order stated to have been endorsed on 17.12.98. 22. The petitioner contends that the only application moved by him for setting aside the certificate under Rule 285-H was on 21.12.98 before the District Magistrate who marked the said application to the A.D.M. (Finance) which in turn was marked to the Sub Divisional Magistrate, Meja respondent No. 3 to take appropriate action in the matter. The Sub Divisional Magistrate appears to have directed the officer subordinate to him to place the said application on record on 22.12.98. 23. The date of auction was 2.12.98 and as such both the applications referred to herein above were well within the time prescribed under Rule 285-H. A perusal of the endorsement made on both these applications do not indicate any direction or any order by the Sub Divisional Magistrate or the Tehsildar directing the petitioner or permitting him to deposit the amount referred to therein. 24. 24. The contention of the learned Standing Counsel and the learned counsel for the respondent No. 6 is that both the applications stood rightly rejected by the order dated 4.1.99 as no deposits had been made by the petitioner nor the receipt of any such deposit accompanied the said application as required under Rule 285-H. In these circumstances, it has been urged that the non-deposit of the amount under Rule 285-H disentitles the petitioner to get his claim considered for setting aside the sale. 25. In order to appreciate the aforesaid contention, Rule 285-H is quoted herein below : “285-H.(1) 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 arrear, the amount specified in the proclamation in Z.A. Form 74 as that for the recovery of which the sale was ordered, less any amount which may, since the date of such 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 the 285-I to set aside such sale, he shall not be entitled to make an application under this rule.” 26. A perusal of the said rules, leaves no room for doubt that the certificate of sale will be set aside only after the amount referred to therein is deposited. However, the rule requires moving of an application followed by deposit to be made as indicated therein. 27. Shri Radhey Shyam learned counsel for the petitioner relying on the decision of this Court in the case of Ghanshyam v. Addl. Commissioner, 1991 RD 203 has urged that the condition precedent is that an application has to be moved within 30 days of the date of auction. He further contends that the aforesaid decision clearly holds that the actual deposit need not be made within 30 days. 28. We have perused the aforesaid judgment of the learned Single Judge and we clearly find that the view expressed therein is in conformity with law. He further contends that the aforesaid decision clearly holds that the actual deposit need not be made within 30 days. 28. We have perused the aforesaid judgment of the learned Single Judge and we clearly find that the view expressed therein is in conformity with law. The decision in para 6 states thus “....the person can only express willingness and make offer to deposit but no deposit can be made unless an order to that effect is passed by the Collector.” 29. The court went on to hold that a person cannot be allowed to suffer because of inaction or mistake of the authorities. 30. Learned Standing Counsel and the learned counsel for the respondent No. 6 could not point out any order having been passed by the Sub-Divisional Magistrate or any other authority for that matter, directing the petitioner and permitting him to deposit the amount as required under Rule 285-H. The respondents, therefore, have failed to comply with the provisions of law and it appears that the same was done deliberately in order to allow the period of 30 days to lapse in order to confirm the sale in favour of the respondent No. 6. The procedure therefore, having not been followed and the petitioner having been not allowed to make the deposit by a specific order, it was not open to the Sub Divisional Officer to have rejected the application of the petitioner after the expiry of 30 days on 4.1.99. The Sub Divisional Magistrate has nowhere indicated any reason for not having allowed the petitioner to have deposited the amount either in the alleged order dated 17.12.98 or in the order dated 4.1.99. There is no explanation coming forth in the counter affidavit of the respondent Nos. 2 to 5 as to why the petitioner’s application had not been disposed of before the expiry of 30 days. In the absence of any such explanation the only inference which can be drawn is that the petitioner was denied the right to get the sale set aside even though he had filed the application well within time. The inaction on the part of the respondent revenue authorities by not passing any order permitting the petitioner to deposit the amount with the respondents clearly indicates a clear lapse on their part for which the petitioner cannot be penalized. 31. The inaction on the part of the respondent revenue authorities by not passing any order permitting the petitioner to deposit the amount with the respondents clearly indicates a clear lapse on their part for which the petitioner cannot be penalized. 31. The non-disposal of the petitioner’s application within 30 days, therefore, appears to be a malafide act on the part of the respondent Nos. 2 to 5 who some how the other wanted to confirm the auction in favour of the respondent No. 6. The process adopted by the respondent nos. 2 to 5 was, therefore, untenable and is contrary to the law laid down in the case of Ghanshyam (supra) and which squarely applies on the facts of this case. 32. The stand taken by the respondents, however, that the petitioner did not make the deposit cannot be accepted as the petitioner was clearly denied the aforesaid opportunity by a deliberate inaction on the part of the respondent Nos. 2 to 5. 33. The next issue raised by Shri Radhey Shyam is that no satisfaction was recorded by the Sub Divisional Magistrate as per Rule 285-J before proceeding to confirm the auction in favour of the respondent No. 6 on 4.1.99. A perusal of the order dated 4.1.99 which is endorsed on the file in the records produced before us does not indicate any such deliberation by the Sub Divisional Magistrate. The order, therefore, confirming the auction in favour of the respondent No. 6, cannot be sustained in view of law laid down by this Court in the case of Thakurji Maharaj v. Collector, 1991 RD 203 (Hindi Section). The aforesaid view has been further endorsed by the apex Court in the case of Smt. Shanti Devi v. State of U.P., 1997 RD 583. A perusal of the two decisions clearly indicate that an auction cannot be confirmed unless and until the Sub Divisional Magistrate records a clear finding about the satisfaction in respect of the compliance or otherwise of the provisions of Section 154. In the instant case, there is no such satisfaction recorded and therefore, the order confirming the sale on 4.1.99 is unsustainable on this score as well. 34. The third issue raised by Shri Radhey Shyam also deserves consideration which is that the respondents after having taken a decision to issue a fresh auction notice upon a deposit of Rs. In the instant case, there is no such satisfaction recorded and therefore, the order confirming the sale on 4.1.99 is unsustainable on this score as well. 34. The third issue raised by Shri Radhey Shyam also deserves consideration which is that the respondents after having taken a decision to issue a fresh auction notice upon a deposit of Rs. 1,25,000/- having been made by the petitioner, the same could have been proceeded after a consideration of the fact as to whether it was necessary to put to auction the entire mortgaged property for satisfying the reduced amount. It is evident that the amount according to the fresh auction notice stood considerably reduced as is evident from a perusal of the Z.A. form No. 74 dated 29.10.98. 35. Shri Radhey Shyam learned counsel for the petitioner is right in his submission by placing reliance on the decision of the apex Court in the case of A. Narriya v. M. Subbarao, AIR 1990 SC 219. The apex Court in the said decision has clearly indicated that the tendency to blind foldedly sell the entire property mortgaged without assessing the necessity of doing so, would be sufficient to set aside the sale proceedings. The said decision clearly supports the stand taken by the petitioner in the facts of the present case as well, inasmuch as once the amount was considerably reduced on account of the bonafide attempts made by the petitioner in depositing a substantial amount of money as is evident from the records then the respondents should have assessed the necessity of putting the entire property to auction before issuing of fresh auction notice. The aforesaid exercise does not appear to have been undertaken and the fresh auction notice was again issued in a cyclostyled fashion which action cannot be sustained in law. 36. The writ petition, therefore, deserves to succeed on this ground as well. 37. The last submission made by Shri Radhey Shyam has also to be countenanced. Relying on the decision of the apex Court in the case of Ekbal Nasir Usmani v. C.B.I., 2006 (2) Allahabad Daily Judgments 603 it has been urged that the loan which had been advanced to the petitioner was not under any State Sponsored Scheme and therefore, it could not be recovered as arrears of land revenue. Relying on the decision of the apex Court in the case of Ekbal Nasir Usmani v. C.B.I., 2006 (2) Allahabad Daily Judgments 603 it has been urged that the loan which had been advanced to the petitioner was not under any State Sponsored Scheme and therefore, it could not be recovered as arrears of land revenue. The decision relied on by the learned counsel for the petitioner clearly supports his submission and therefore, the writ petition even otherwise can succeed on this ground as well. The loan was admittedly advanced for the purchase of a vehicle which was not an agricultural loan and appears to be according to the facts disclosed in the counter affidavit of the bank , not a loan under any State Sponsored Scheme. 38. Thus on all scores it is evident that the auction of the petitioner’s agricultural land was carried out unfairly and was in violation of law as recorded herein above. 39. The writ petition, therefore, must succeed and accordingly the order rejecting the application of the petitioner for depositing the amount as required under Rule 285-H as also the order confirming the auction in favour of the respondent No. 6 dated 4.1.99 is quashed. 40. The writ petition succeeds and is allowed. Since we have found the auction proceedings to be in violation of law, therefore, the same also stands set aside. The respondent No. 6 shall be entitled to the refund of the amount deposited by him under rules. 41. However, before parting with the case we would observe that the petitioner should immediately approach the respondent bank and negotiate to clear all the entire dues outstanding against the petitioner so that the petitioner’s property may again not receive the same fate at the hands of the respondents as has happened in the past. However, in the event the petitioner fails to clear all the dues then it shall be open to the respondent bank to recover the amount keeping in view of the law referred to herein above in the case of Ekbal Nasir Usmani v. C.B.I., (supra) and the other decisions in this respect pronounced by the apex Court. 42. Writ petition is allowed. No order as to costs. Petition Allowed. ———