Research › Search › Judgment

Allahabad High Court · body

2013 DIGILAW 584 (ALL)

RAM BHAROSEY v. STATE OF U. P.

2013-02-20

SABHAJEET YADAV

body2013
JUDGMENT Hon’ble Sabhajeet Yadav, J.—Heard Sri C.K. Jha for the petitioner and Sri Ashok Bhatnagar appearing for respondent No. 6-Bank of India, Civil Lines, Bareilly. The respondent No. 5 is represented by Sri H.A. Kumar. Inspite of service of notice upon respondent No. 7, no one has turned up either to file counter-affidavit or appeared for argument when the case is taken up for hearing. 2. By this petition, the petitioner has challenged the orders dated 15.3.2002 and 26.11.1999 passed by respondent Nos. 2 and 3 respectively to this petition. Further a relief in the nature of mandamus is sought for commanding the respondents not to hand over the possession of the land to the auction purchaser-respondent No. 7 Pradeep Kumar son of Sri Krishna R/o Mohalla Pakka Katra Aonla, Bareilly. 3. The brief facts leading to the case are that the petitioner is agriculturist. The respondent No. 5 Wimco Limited is a company incorporated under the Indian Company Act and is engaged in the business of manufacturing of match boxes and match sticks. For the purpose of carrying out the aforesaid business the company has floated its scheme in the area amongst the farmers to grow poplar plants, which was assured to be purchased by the company. The Company has also assured the farmers that it will ensure that for plantation of poplar plants they will get loan from the Nationalised Banks with the help of the Company. In order to execute the said scheme the Company has entered into an agreement with the petitioner on 31.12.1989 whereby the petitioner has authorised the company to receive payment directly from the bank as a cost of the poplar plants which was to be supplied by Wimco Ltd. to the petitioner (agriculturist/farmer). Thereafter, it appears that Bank of India has advanced a loan of Rs. 72,600/- in the name of petitioner and price of poplar plants was directly paid to the Company by bank from the loan advanced to the petitioner. The loan was sanctioned by the bank to the petitioner on 20.3.1990 by an agreement entered into by the bank with the petitioner. The aforesaid agreement is on record as Annexure C.A.-2 to the counter-affidavit filed by the bank. The aforesaid loan advanced to the petitioner by the Bank as cash-credit-facility to the petitioner and was liable to be recovered by 31.12.1997. 4. The aforesaid agreement is on record as Annexure C.A.-2 to the counter-affidavit filed by the bank. The aforesaid loan advanced to the petitioner by the Bank as cash-credit-facility to the petitioner and was liable to be recovered by 31.12.1997. 4. The petitioner has stated that without waiting the period for re-payment of aforesaid loan, a recovery certificate has been issued by the bank in the year 1996 demanding a sum of Rs. 72,600/- as stipulated in the agreement for realising the amount of loan advanced to the petitioner alongwith interest thereon. It is further stated that the Wimco Ltd. did not purchase the poplar trees grown by the petitioner as earlier assured by the said company but bank has issued recovery certificate for realising of the loan advanced granted to the petitioner alongwith interest thereon. Thereafter a sale proclamation was issued by the Collector under Sections 284 and 286 on 24.4.1997 in Z.A. Form No. 74, stipulating that the sale of plot No. 593 area 1.818 Hectare of Khata No. 622 of village Manuna Tehsil Aonla, District Bareilly belonging to the petitioner shall be held on 26.5.1997 through a public auction. It is stated that the aforesaid sale proclamation was neither served upon the petitioner nor he was any way informed about the said proceeding of auction sale and said auction was held on aforesaid schedule date by Tehsildar for a sum of Rs. 2,40,000/-. 5. It is further stated that the petitioner has moved an application to the Collector, Bareilly and Additional District Magistrate, Finance under Rule 285-H of U.P.Z.A. & L.R. Rules on 24.6.1997 that he is ready to pay entire amount of arrears plus five percent purchase money and costs of auction sale, which is on record as Annexure-9 to the writ petition. It is stated that the Collector, Bareilly has taken no action on the said application of the petitioner. Thereafter finding no alternative, the petitioner has filed objection against the order of auction sale dated 26.5.1997 before Commissioner, Bareilly Division, Bareilly, which was registered as Objection No. 53 of 1997 Ram Bharosey Lal v. State and others. The said objection was rejected by the Commissioner vide order dated 26.11.1999, which is on record as Annexure-10 to the writ petition. Thereafter finding no alternative, the petitioner has filed objection against the order of auction sale dated 26.5.1997 before Commissioner, Bareilly Division, Bareilly, which was registered as Objection No. 53 of 1997 Ram Bharosey Lal v. State and others. The said objection was rejected by the Commissioner vide order dated 26.11.1999, which is on record as Annexure-10 to the writ petition. Against the order passed by the Commissioner, Bareilly Division, Bareilly the petitioner has preferred revision before the Board of Revenue, Uttar Pradesh at Lucknow, which was registered as Revision No. 14 (Sale) of 1999-2000 District-Bareilly and was ultimately rejected by the Board on 15.3.2002 by affirming the order of the Commissioner The aforesaid order is on record as Annexure-11 to the writ petition, hence this petition. 6. The aforesaid auction proceeding has been challenged by the petitioner on the grounds mentioned in the writ petition as well as incorporated through the amendment in the writ petition. At the strength of aforesaid pleadings in the writ petition learned counsel for the petitioner has submitted that Rule 285-A of U.P.Z.A. & L.R. Rules postulates that the sale shall be made either by Collector in person or by Assistant Collector specially appointed by him in his behalf but in the present case the auction sale has been held by the Tehsildar who was not specially appointed by the Collector for conducting the sale. Thus, the provisions of the aforesaid rules are violated while holding the said auction. He has further submitted that proclamation for sale was neither served upon the petitioner nor estimated value of the land sought to be sold was shown in the sale proclamation nor any proper publication was made before auction nor estimated value of land was determined on the basis of report of valuer before issuance of sale proclamation in lots as contemplated by Rules 281(2-A) and 283 of the U.P.Z.A.& L.R. Rules rather auction was held in utter violation of aforesaid rules and procedure for auction sale of immovable property. His further submission is that according to Rule 285-J of U.P.Z.A. & L.R. Rules an order of confirming the sale shall be made by the Collector only after satisfying himself that on account of auction sale of the land the bidder shall not contravene the provisions of Section 154 of U.P.Z.A. & L.R. Act. His further submission is that according to Rule 285-J of U.P.Z.A. & L.R. Rules an order of confirming the sale shall be made by the Collector only after satisfying himself that on account of auction sale of the land the bidder shall not contravene the provisions of Section 154 of U.P.Z.A. & L.R. Act. But in the present case while confirming of sale the Commissioner has not recorded his satisfaction that the provisions of Section 154 of U.P.Z.A.& L.R. Act has not been violated by said auction. He has further submitted that the finding of the Commissioner that sale proclamation was attempted to be served on the wife of the petitioner but on whose refusal to accept the proclamation, it was affixed on outer door of the house of the petitioner in presence of two witnesses is also without any factual basis. According to the petitioner the auction notice ought to have been published in widely circulated newspapers and every effort should have been made for wide publication so that the property may fetch best price but all the authorities concerned did not consider the aforesaid aspect of the matter in right perspective. 7. Besides this, learned counsel for the petitioner has also submitted that the land which was subject-matter of auction sale was of area 1.818 hectare which is equal to 7 Bighas and according to circle rate fixed by the Collector of said area the minimum value of the land would come to more than 6 lacs on the date of auction sale excluding value of poplar trees standing thereon but the aforesaid land has been auctioned for very meagre amount of Rs. 2,40,000/-, as such on this count alone the auction proceeding was liable to be quashed. Learned counsel for the petitioner has submitted that although while deciding the objection of the petitioner under Rule 285-I the Commissioner, Bareilly Division, Bareilly has noticed that the minimum value of the said land was more than Rs. 6 lacs without adding the value of poplar plants standing thereon. But ultimately by calculating the value of land on the basis of land revenue he has held that the estimated value of land could be calculated merely for Rs. 66,400/- whereas the auction has been held for Rs. 2,40,000/-. 6 lacs without adding the value of poplar plants standing thereon. But ultimately by calculating the value of land on the basis of land revenue he has held that the estimated value of land could be calculated merely for Rs. 66,400/- whereas the auction has been held for Rs. 2,40,000/-. Thus, he could not find any fault in the auction proceeding on that count and the order passed by the Commissioner has been affirmed by the Board of Revenue. Thus, the impugned orders passed by both the authorities cannot be sustained. 8. Apart from it, learned counsel for the petitioner has also submitted that since the loan has been advanced as Cash Credit facility to the petitioner for the purpose of growing poplar trees for commercial purpose and the scheme was neither sponsored by the Government nor the agreement entered into between the petitioner and the Bank was statutory agreement, therefore, the amount of loan advanced to the petitioner by the Bank could not be realised from him as arrears of land revenue and accordingly, the auction proceeding held against the petitioner for realising the aforesaid amount of loan advanced to him a arrears of land revenue is wholly without jurisdiction and is not sustainable in the eye of law. 9. Sri Ashok Bhatnagar, learned counsel appearing for the Bank has submitted that while taking the loan the petitioner has made a declaration under Section 6 (1) of U.P. Agricultural Credit Act, 1973 on 22.3.1990 contained in Annexure CA-2 of the counter-affidavit, wherein it has been declared that the loan has been advanced for agricultural purposes under the provisions of aforesaid Act and thus on default of any repayment of the loan the Bank could realise the aforesaid money from the petitioner as arrears of land revenue. Therefore, no default can be found on that count while realising the loan advanced to the petitioner as arrears of land revenue. He has also submitted that in pursuance of aforesaid auction proceeding the revenue authorities have realised the money from the petitioner by auction sale of the land in question and has also deposited a sum of Rs. 2,05,083/- in the Bank account of the petitioner and thereafter the aforesaid Bank account of the petitioner has been closed after satisfaction of the loan amount. 10. 2,05,083/- in the Bank account of the petitioner and thereafter the aforesaid Bank account of the petitioner has been closed after satisfaction of the loan amount. 10. Having considered rival submissions of learned counsel for the parties and on perusal of record, I am of considered opinion, that this writ petition can be decided merely on the question, as to whether the auction held by respondents for selling the immovable property of the petitioner was in accordance with law or not. And it is not necessary for this Court to decide the question as to whether the loan advanced to the petitioner by the bank concerned could be realised from him as arrears of land revenue or not. 11. In order to decide the question as to whether the immovable property of the petitioner sold by public auction held on 26.5.1997, confirmed by the Commissioner vide order dated 26.11.1999 was in accordance with the provisions of law or not, it is to be noted that manner and method for recovery of arrears of land revenue have been provided under Section 279 of the U.P. Zamindari Abolition & Land Reforms Act, 1950, which inter alia provides for attachment and sale of moveable property including the produce and attachment, lease and sale of holding in respect of which the arrear is due and further attachment and sale of other immovable property of the defaulter. 12. Since the immovable property of the petitioner was sold by public auction dated 26.5.1997, therefore, it is necessary to deal with the provisions relating thereto. 13. Section 284 of the Act deals with the attachment, lease and sale of holding of defaulter, which provides that Collector may in addition to or instead of any other processes hereinbefore specified, either of his own motion or on the application of the Land Management Committee, attach the holding in respect of which an arrear is due. Section 286 of the Act provides procedure and power to proceed against the interest of defaulter in other immovable property, which provides that if any arrears of land revenue cannot be recovered by any of the process mentioned in clauses (a) to (e) of Section 279, the Collector may realize the same by attachment and sale of interest of defaulter in any other immovable property of the defaulter. 14. 14. Rule 281 of U.P.Z.A. & L.R. Rules, 1952 deals with procedure and power of sale of immovable property which inter alia provides that process for sale of holding under Section 284 and other immovable property under Section 286 shall be issued by the Collector. Rule 281 (2-A) of the said Rules provides that in the case of sale of a holding the Collector shall auction the holding in lots of 1.26 Hectares (3.125 acres) to 5.04 Hectares (12.50 acres) after working out and announcing the land revenue and the estimated value of each lot. It should also be made clear that only those persons would bid in the auction, acquisition of land by whom would not contravene the provisions of Section 154. 15. For ready reference Rule 281 of the U.P.Z.A. &.L.R. Rules is quoted as under: “281. Section 284.—{((1) Recourse can only be had to the sale of the holding under Section 284 when the process specified in clause (a), (b), (c) and (d) of Section 279 would be insufficient for the recovery of the arrear. {(2) Process for sale of holding under Section 284 and of other immovable property under Section 286 shall be issued by the Collector. (2-A)—In the case of sale of a holding the Collector shall auction the holding in lots of 1.26 hectares (3.125 acres) to 5.04 hectares (12.50 acres) after working out and announcing the land revenue and the estimated value of each lot. It should also be made clear that only those persons would bid in the auction, acquisition of land by whom would not contravene the provisions of Section 154.} {(3) * * *}” 16. Rule 282 of said Rules provides that proclamation for sale shall be in Z.A. Form 74. Rule 283 provides that in proclamation for sale under Section 286, the Collector shall state the amount of the annual demand and the estimated value of the property calculated in accordance with the rules in Chapter XV of the Revenue Manual. For ready reference the provisions of Rules 282 and 283 are quoted as under: “282. Section 286.—The proclamation for sale shall be in Z.A. Form 74. 283. In proclamation for sale under Section 286, the Collector shall state the amount of the annual demand and the estimated value of the property calculated in accordance with the rules in Chapter XV of the Revenue Manual.” 17. Section 286.—The proclamation for sale shall be in Z.A. Form 74. 283. In proclamation for sale under Section 286, the Collector shall state the amount of the annual demand and the estimated value of the property calculated in accordance with the rules in Chapter XV of the Revenue Manual.” 17. Rule 285-A provides the officer authorised and time frame for holding auction sale as under: “285-A. Every sale under Sections 284 and 286 shall be made either by the Collector in person or by an Assistant Collector specially appointed by him in this behalf. No such sale shall take place on a Sunday or other gazetted holiday, or until after the expiration of at least thirty days from the date on which the proclamation under Rule 282 was issued. The Collector may from time to time postpone that sale.” 18. Rules 285-H, 285-I, 285-J and 285-K deal with the grounds and procedure for setting aside the sale and confirmation of sale, as under: “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 purchaser 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 applied under Rule 258-I to set aside such sale he shall not be entitled to make an application under this rule. (2) {* * * *}. 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. 285-J. On the expiration of thirty days from the date of the sale if no such application as is mentioned in Rule 285-H or Rule 285-I, has been made or if such application has been made and rejected by the Collector or the Commissioner, the Collector shall pass an order confirming the sale after satisfying himself that the purchase of land in question by the bidder would not be in contravention of the provisions of Section 154. Every order passed under this rule shall be final.” 285-K. If no application under Rule 285-I is made within the time allowed therefor, all claims on the ground of irregularity or mistake in publishing or conducting the sale shall be barred: Provided nothing contained in this rule shall bar the institution of a suit in the Civil Court for the purpose of setting aside a sale on the ground of fraud.” 19. Before dealing with rival contentions of parties, it would be useful to refer some decisions of the Apex Court, having material bearing on the question in controversy in involved in the case, hereinafter. 20. In the case of Union Bank of India v. Official Liquidator, 2000 (5) SCC 274 , the Apex Court has observed as under : “In auction-sale of the property of the company which is ordered to be wound up, the Company Court acts as a custodian for the interest of the Company and its creditors. It is the duty of the Company Court to satisfy itself as to reasonableness of price by disclosing valuation report to secured creditors of the company and other interested persons. It was further held that the Court should exercise judicial discretion to ensure that sale of property should fetch adequate price. For deciding what would be reasonable price, valuation report of an expert is essential. The Company Judge himself must apply his mind to the valuation report. The Court observed that the High Court did not interfere with the auction-sale on the ground of sympathy for the workers which was not proper. The auction-sale was, therefore, set aside by this Court and the Official Liquidator was directed to resell the property after obtaining fresh valuation report and after furnishing copy of such report to secured creditors.” 21. The Court observed that the High Court did not interfere with the auction-sale on the ground of sympathy for the workers which was not proper. The auction-sale was, therefore, set aside by this Court and the Official Liquidator was directed to resell the property after obtaining fresh valuation report and after furnishing copy of such report to secured creditors.” 21. In Divya Manufacturing Company (P) Ltd. and another v. Union of India and others, AIR 2000 SC 2346 , the Apex Court held that in appropriate cases, even the confirmed sale can be set aside. 22. In Gajraj Jain v. State of Bihar and others, (2004) 7 SCC 151 , the Apex Court held that in absence of valuation report and reserve price, the auction sale becomes only a pretence and if there is no proper mechanism and if the intending purchasers are not able to know the details of the assets or intemised valuation, the auction-sale cannot be said to be in accordance with law. If publicity and maximum participation is to be attained, all bidders must know the details of the assets and the valuation thereof. 23. In State of Uttar Pradesh and others v. Swadeshi Polytex Limited and others, (2008) 12 SCC 596 , the sale proclamation had been issued on 1.4.2005 without any valuation of properties and only the area of vacant land had been specified therein and it was this notice that had been served on the chowkidar on 21.4.2005 and publication had been made in newspaper on 22.4.2005.The auction was held on 2.5.2005. In backdrop of this case, it was found that there was clear violation of Rules 282 and 283 of U.P.Z.A. & L.R. Rules. The Apex Court further held that the question of valuation is of the utmost importance as it is designed to ensure the best price for the property and it is essential in this circumstance that wide publication and notice of the proposed sale should be given as per Rule 285-A of the Rules. The pertinent observations made by Apex Court in paras 31 and 37 of the aforesaid decision are quoted as under : 31. Rule 283 provides for the estimated value of the property to be determined under the provisions contained in Chapter XV of the Revenue Manual. The said Chapter specifies the procedure for valuation of the property in terms of other similar properties. Rule 283 provides for the estimated value of the property to be determined under the provisions contained in Chapter XV of the Revenue Manual. The said Chapter specifies the procedure for valuation of the property in terms of other similar properties. It is, however, clear from the record that the figure Rs. 27 crores, the value of the property which is mentioned in the advertisement in Amar Ujala, appears to have picked up without any basis as it is not the case of UPSIDC that the property had been valued in accordance with the provisions of the Revenue Manual or by a valuer or expert in the field. 37. The question of valuation is to our mind of the utmost importance as it is designed to ensure the best price for the property and it is essential in this circumstance that wide publication and notice of the proposed sale should be given as per Rule 285-A which postulates a notice of 30 days between the date of issuance of the sale proclamation and the date of auction. It can hardly be overemphasised that the proper valuation of the property and wide publicity of the proposed auction is intimately linked with the price that the auction fetches. As already mentioned above, the auction had been held on 2.5.2005. The sale proclamation had been issued on 1.4.2005, and served on the chowkidar on 21.4.2005, the publication made in Amar Ujala on 22.4.2005 whereas Rule 285-A itself postulates a notice period of 30 days to be counted from the date of issuance of the sale proclamation. While dealing with a similar situation, this is what this Court had to say in S.J.S. Business Enterprises (P) Ltd. v. State of Bihar, 2004 (7) SCC 166 (SCC 175-76, paras 17-18) “17. We are of the view that the sale effected in favour of Respondent 6 cannot be sustained. It is axiomatic that the statutory powers vested in State financial corporation under the State Financial Corporations Act, must be exercised bona fide. The presumption that public officials will discharge their duties honestly and in accordance with the law may be rebutted by establishing circumstances which reasonably probabilise the abuse of that power. In such event it is for the officer concerned to explain the circumstances which are set up against him. The presumption that public officials will discharge their duties honestly and in accordance with the law may be rebutted by establishing circumstances which reasonably probabilise the abuse of that power. In such event it is for the officer concerned to explain the circumstances which are set up against him. If there is no credible explanation forthcoming the Court can assume that the impugned action was improper. (See Pannalal Binjraj v. Union of India, AIR a p. 409) Doubtless some of the restrictions placed on State financial corporations exercising their powers under Section 29 of the State Financial Corporations Act, as prescribed in Mahesh Chandra v. U.P. Financial Corpn., are no longer in place in view of the subsequent decision in Haryana Financial Corpn. v. Jagdamba Oil Mills. However, in overruling the decision in Mahesh Chandra this Court has affirmed the view taken in SIPCOT v. Contromix (P) Ltd., 1995 (4) SCC 595 and said that in the matter of sale under Section 29, State financial corporations must act in accordance with the statute and must not act unfairly i.e. unreasonably. If they do, their action can be called into question under Article 226. Reasonableness is to be tested against the dominant consideration to secure the best price for the property to be sold. ‘12. ...... This can be achieved only when there is maximum public participation in the process of sale and everybody has an opportunity of making an offer. Public auction after adequate publicity ensures participation of every person who is interested in purchasing the property and generally secures the best price.’ (SIPCOT case, SCC p. 601, para 12) 18. Adequate publicity to ensure maximum participation of bidders in turn requires that fair and practical period of time must be given to purchasers to effectively participate in the sale. Unless the subject-matter of sale is of such a nature which requires immediate disposal, an opportunity must be given to the possible purchaser who is required to purchase the property on ‘as-is-where-is basis’ to inspect it and to give a considered offer with the necessary financial support to deposit the earnest money and pay the offered amount, if required.” We must, therefore, repel Mr Dwidedi’s argument that as SPL had suffered not prejudice in the auction proceedings, the sale should not be interfered with. 24. 24. Thus, on a close analysis of the aforesaid decisions it is clear that in Union Bank of India v. Official Liquidator (supra) the Apex Court has held that in auction sale of property of company which is ordered to be wound up, the Company Court acts as custodian for the interest of company and its creditors. It is the duty of the Company Court to satisfy itself as to reasonableness of price by disclosing valuation report to secured creditors of the company and other interested persons. The Court should exercise judicial discretion to ensure that sale of property should fetch adequate price. For deciding what would be reasonable price, valuation report of an expert is essential. In Gajraj Jain v. State of Bihar and others (supra) it was held that in absence of valuation report and reserved price the auction sale becomes only a pretence and if there is no proper mechanism and if intending purchasers are not able to know the details of the asset or itemised valuation, the auction sale cannot be said to be in accordance with law. If publicity and maximum participation is to be attained, all the bidders must know the details of asset and valuation thereof. In State of Uttar Pradesh and others v. Swadeshi Polytex Ltd. (supra) the Apex Court has held that the question of valuation is of utmost importance as it is designed to ensure the best price for the property and it is essential that wide publication and notice of proposed sale should be given as per Rules 285-A of the Rules. In SIPCOT v. Contromix (P) Ltd., 1995 (4) SCC 595 , it was held by the Apex Court that reasonableness is to be tested against dominant consideration to secure best price for the property to be sold. The Apex Court further held that this can be achieved only when there is maximum public participation in the process of sale and everybody has opportunity of making offer. Public auction after adequate publicity ensures participation of every person who is interested in purchasing the property and generally secures the best price. It was further observed that adequate publicity to ensure maximum participation of bidders in turn requires that fair and practical period of the time must be given to purchasers to effectively participate in the sale. Public auction after adequate publicity ensures participation of every person who is interested in purchasing the property and generally secures the best price. It was further observed that adequate publicity to ensure maximum participation of bidders in turn requires that fair and practical period of the time must be given to purchasers to effectively participate in the sale. Unless the subject-matter of sale is of such a nature which requires immediate disposal, an opportunity must be given to the possible purchaser who is required to purchase the property on ‘as-is-where-is basis’ to inspect it and to give a considered offer with the necessary financial support to deposit the earnest money and pay the offered amount, if required. 25. Now coming to the contentions of parties at touchstone provisions of law stated herein before it is to be noted that after said auction proceeding the petitioner has moved an application under Rule 285-H of U.P.Z.A. & L.R. Rules before Collector, Bareilly on 24.6.1997 tendering his offer for depositing five percent purchase money for payment to the purchaser and for payment on account of arrear specified in Z.A. form 74 for recovery of which sale was ordered and costs of sale but no order has been passed by the Collector on the aforesaid application permitting the petitioner to deposit aforesaid amount. The aforesaid facts stated in para-13 of the writ petition have not been denied in the counter affidavit filed by the Tehsildar on behalf of the State respondents. Thus, in this backdrop of the case, in my opinion, if the Collector would have passed an order permitting the petitioner to deposit the aforesaid amount as prayed for, in the said application of the petitioner on depositing said amount by him the auction sale would have been set aside by the Collector under Rule 285-H of the Rules. But on account of inaction of Collector, the petitioner was compelled to move objection under Rule 285-I for setting aside the sale before the Commissioner, Bareilly Division, Bareilly. 26. While issuing sale proclamation in Z.A. from 74 the Collector has not stated the estimated value of the property sought to be auctioned, as such controvened the provisions of Rules 281(2-A) and 283 of U.P.Z.A. & L.R. Rules. 26. While issuing sale proclamation in Z.A. from 74 the Collector has not stated the estimated value of the property sought to be auctioned, as such controvened the provisions of Rules 281(2-A) and 283 of U.P.Z.A. & L.R. Rules. This facts has been noticed by the Commissioner in the impugned order dated 26.11.1999 passed by him, while dealing with the objection of the petitioner moved under Rule 285-I of the U.P. Z. A. & L.R. Rules, but has rejected the said contention on the ground that no substantial injury was caused on that count as auction sale was held for adequate price of Rs 2,40000/-. In this connection it is to be noted that under Rule 281 (2-A) of the U.P.Z.A. & L.R. Rules in the case of sale of a holding the Collector is required to auction the holding in lots after working out and announcing the land revenue i.e arrears as land revenue and estimated value of each lot and under Rule 283 of the said Rules, he is required to state the annual demand and the estimated value of the property calculated in accordance with the Rules in Chapter XV of the Revenue Manual in proclamation for sale, which makes it clear that before issue of sale proclamation the Collector is required to determine the estimated value of the holding ordered for auction sale and without undertaking this exercise earlier to issue of sale proclamation, he would not be capable to state estimated value of the property ordered to be sold in sale proclamation. In instant case sale proclamation was issued on 24.4.1997, auction was held on 26.5.1997 and for determination of estimated value of the land, valuer has submitted his report on 30.6.1997 after expiry of one month four days from the date of auction sale. In my opinion, such material irregularity goes to the root of the case, by violating the mandatory provisions of Rules 281(2-A) and 283 of the U.P.Z.A. & L.R. Rules, as such, auction sale cannot be sustained. It is also well-settled legal position that any action taken in violation of the mandatory statutory provision, is nullity, non-est and as such is of no legal consequence. Therefore, view taken by the Commissioner in this regard, in my considered opinion is wholly erroneous and cannot be sustained. 27. It is also well-settled legal position that any action taken in violation of the mandatory statutory provision, is nullity, non-est and as such is of no legal consequence. Therefore, view taken by the Commissioner in this regard, in my considered opinion is wholly erroneous and cannot be sustained. 27. While dealing with the said objection of the petitioner although the Commissioner, has noticed that, the sale proclamation was not served upon the petitioner personally as required under, said Rules instead there of it was pasted at door of house of the petitioner in presence of two witness but without indicating their names and address, as such I am of the considered opinion that sale proclamation was not served upon the petitioner. In case by serving sale proclamation upon the petitioner, he would have been provided opportunity, in that eventuality he could have managed for deposit of loan advanced to him for realisation of which sale of his property was ordered. Thus, in my view, the denial of aforesaid opportunity to the petitioners caused serious prejudice to him, and materially affects the sale proceeding, but while dealing with the said objection of petitioner Commissioner has failed to consider this aspect of the matter in correct perspective. 28. The Commissioner has further noticed that area of land which was subject-matter of auction sale was 1.118 Hectare= 7.263 Bigha and this land is merely 1 km. away from Nagar Palika. According to circle rate fixed by District Magistrate the value of land would not be less than Rs. six lacs and according to the valuer’s report dated 30.6.1997 admittedly submitted after after one month four days of the auction sale, the market value of land in question has been determined as Rs. 3,95,000/-. But by computing the market value of land on the basis of land revenue, and by multiplying the land revenue from 1000 and it was determined merely to the tune of Rs. 66,400/- and held that since auction sale was held for Rs. 2,40,000/-, therefore, no substantial injury was caused to the petitioner. In this connection It is to be noted that circle rate of particular area is fixed by the Collector for the purpose of payment of stamp duty on the instruments of sale etc., which is minimum price of land for said area. 2,40,000/-, therefore, no substantial injury was caused to the petitioner. In this connection It is to be noted that circle rate of particular area is fixed by the Collector for the purpose of payment of stamp duty on the instruments of sale etc., which is minimum price of land for said area. Such price of land is not actual market value of the land and actual price of land in open sale comes to more than minimum price fixed by the Collector. Admittedly the minimum price of land of the petitioner fixed by the Collector was Rs. 6 lacs without adding the costs or value of poplar trees standing on the said land. Therefore, in my opinion, in case the proper publicity of proposed sale would have been made, the auctioned land would have fetched more price even over and above Rs. 6 lacs, as such it cannot be held that the land of the petitioner was sold for adequate price. Accordingly, the auction sale dated 26.5.1997 cannot be sustained merely on this ground alone. 29. The Commissioner has further noticed that sale proclamation was published by beating the drum on 23.5.1997 which was only three days earlier to the date of auction. In my opinion, in view of legal position stated by the Apex Court from time to time wide publication of sale proclamation has direct nexus with the best price which the property may fetch in auction sale. In absence of wide publicity of sale proclamation sufficient number of willing purchaser may not come to participate in bidding. In instant case, since the auction was held on 26.5.1997 and publicity of sale proclamation was done by beating drum on 23.5.1997 merely two days earlier to the date of auction and only six persons have participated in the bidding, therefore, in my opinion, it cannot be said that willing purchasers were given reasonable opportunity to participate in the auction proceeding and land of the petitioner sold in the auction proceeding fetched reasonable price. 30. While rejecting the objection moved by petitioner, no satisfaction has been recorded by the Commissioner that after adding the purchased land in the land already held by the auction purchaser there would not be contravention of the provisions of Section 154 of U.P.Z.A. & L.R. Act. 30. While rejecting the objection moved by petitioner, no satisfaction has been recorded by the Commissioner that after adding the purchased land in the land already held by the auction purchaser there would not be contravention of the provisions of Section 154 of U.P.Z.A. & L.R. Act. In Smt. Shanti Devi v. State of U.P. and others, AIR 1997 SC 3541 , while dealing with the issue with reference to Rule 285-K of U.P.Z.A. & L.R. Rules it was held that the objection that sale was confirmed in violation of Section 154 of U.P.Z.A. & L.R. Act does not relate to irregularity or mistake in publishing or in conducting the sale, therefore, such objection is not barred by Rule 285-K of U.P.Z.A. & L.R. Rules and such objection can be raised and corrected even in the writ jurisdiction under Articles 226 and 32 of the Constitution of India and Apex Court has further found that the failure of authority to satisfy itself as to compliance of Section 154 of U.P.Z.A. & L.R. Act vitiates the confirmation of sale. The pertinent observations made by Apex Court in paras 15, 16, 17, 18, 19, 23 and 24 of the aforesaid decision are quoted as under : “15. It is clear that a statutory duty is cast on the Collector to keep Section 154 in mind at the stage of confirmation of sale. If it is an objection as to non application of mind to a provision statutorily relevant at the stage of confirmation, the objection cannot be treated as an objection relating to the irregularity or mistake at or before the stage of sale. That is why Rule 285-K will not come in the way. 16. The question also arises that if no objection was filed within 30 days of sale under Rule 285-I or J, then no other application could have been filed before the Commissioner after the confirmation. Assuming it to be so, we are of the view that the writ petition filed by the appellant can be treated as a challenge to the order of the Assistant Collector’s order that he did not apply relevant factors which he was bound to take into account while confirming the order. The point raised under Section 154 (1) does not refer to ‘fraud’ and therefore, remedy of suit mentioned in proviso to Rule 285-K is not attached. 17. The point raised under Section 154 (1) does not refer to ‘fraud’ and therefore, remedy of suit mentioned in proviso to Rule 285-K is not attached. 17. Once the above hurdle is crossed, the next question is whether such an issue relevant to Section 154 can be raised in relation to execution sales. Section 154 of the Act deals with restrictions on transfer by a bhumidar. It reads as follows: “Section 154. Restrictions on transfer by a bhumidar.—(1) Save as provided in sub-section (2), no bhumidar shall have a right to transfer by sale or gift, any land other than tea gardens to any person where the transferee shall, as a result of such sale or gift, become entitled to land which together with land, if any, held by his family will in the aggregate, ‘ exceed 5.0586 hectares. (12.50 acres) in Uttar Pradesh.” 18. No doubt, there is not definition of sale in Section 3 of the Act which deals with the meaning of several words. But, it has to be noticed that Rule 285-I requires the Collector to ‘satisfy’ himself whether the purchase of land in question by the bidder would not be in contravention of the provisions of Section 154. Obviously, it is intended that those who purchase in revenue sale should not have a greater advantage over those who obtain property by transfers inter-vivos. 19. In our view, therefore, the High Court was wrong in thinking that the provisions of Section 154 were not applicable to Court sales. If the ruling in Gaon Sabha v. Dy. Director of Consolidation, Lucknow, 1968 Rev. Dec. 168, relied upon by the High Court expressed such a view, then it must be held to be not correct in law in view of the express reference to Section 154 in Rule 285-J. Obviously, the attention of the High Court in the present case was not drawn to Rule 285-J. 23. The question then is whether the Assistant Collector was ‘satisfied’ on the material before him that the purchaser did not contravene Section 154 (1). In our view, the statement in the confirmation order by the Collector that the affidavit of the purchaser that she will not, after purchase, exceed Ac. The question then is whether the Assistant Collector was ‘satisfied’ on the material before him that the purchaser did not contravene Section 154 (1). In our view, the statement in the confirmation order by the Collector that the affidavit of the purchaser that she will not, after purchase, exceed Ac. 12.50 is “attached” to the confirmation order, does not amount to ‘satisfaction’ of the officer, which was to be arrived at, on an examination of the relevant revenue records of the area or village concerned. The mere statement of fact by the purchaser by an affidavit before the Collector that the purchaser did not exceed AC. 12.50 does not held. The word ‘satisfied’ means that there must be evidence of application of mind by the authority concerned. Merely attaching the affidavit of the purchaser, in our view, does not amount to application of mind but on the other hand, amounts to non-application of mind. As already stated, the Commissioner merely referred to the contention of purchaser that her holding, after purchase, did not exceed Ac. 12.50. The Commissioner, also referred to the appellant’s contention to the contrary. He did not give any finding on this behalf. The High Court’s attention, as already stated, was not drawn to the express language of Rule 285-J which refers to Section 154. The High Court therefore proceeded on the assumption that Section 154 did not apply to involuntary sales and it also though that it was for the Gaon Sabha to intervene. It did not enter any finding regarding the ‘satisfaction’ of the Assistant Collector as required by Rule 285-J. As stated earlier, even if the appellant’s application before the Commissioner is to be treated as not maintainable, it is open to the appellant to challenge the order of Confirmation dated 2.8.1982 on the ground of violation of the requirement of Section 154 and we can read the said order and quash it inasmuch as we are not dealing with irregularity or mistake in the proclamation or conduct of sale or with fraud in the conduct of sale. We are only dealing with an illegality arising out of the confirmation order passed under Section 285-J in not noticing Section 154(1) and this can be corrected directly in writ jurisdiction. 24. We are only dealing with an illegality arising out of the confirmation order passed under Section 285-J in not noticing Section 154(1) and this can be corrected directly in writ jurisdiction. 24. In the result, we hold that the confirmation of sale order dated 2.8.1982 passed by the Assistant Collector and the order of the Commissioner dated 26.9.1983 rejecting the objections of the appellant are vitiated. The judgment of the High Court, for the reasons given above, is also set aside.” 31. In view of aforesaid legal position stated by Apex Court, in my opinion, while deciding the objection of the petitioner the Commissioner was required to be satisfied about the violation of provisions of Section 154 of U.P.Z.A. & L.R. Act as to whether after adding the purchased land through auction sale in the land earlier held by the auction purchaser there would be contravention of the provisions of Section 154 of U.P.Z.A. & L.R. Act or not, in other words after adding the land purchased through auction sale in the land earlier held by the auction purchaser, his land would not exceed the area of 12.50 acres. But the Commissioner has failed to record his satisfaction on the said issue in the impugned order dated 26.11.1999 passed by him while disposing of the objection filed by the petitioner. As such, the order of Commissioner cannot be sustained on this ground also. 32. In view of foregoing discussions I am of the considered opinion that auction sale of petitioner’s property referred herein before held on 26.5.1997 cannot be sustained and the same is accordingly hereby quashed. And for the same reason the impugned order dated 26.11.1999 passed by the Commissioner, Bareilly Division, Bareilly in Objection No. 53 of 1997 Ram Bharosey Lal v. State of U.P. and order dated 15.3.2002 passed by the Board of Revenue affirming the order passed by the Commissioner, Bareilly Division, Bareilly can also not be sustained, therefore, these orders are also hereby quashed. 33. It is not in dispute that after said auction proceeding the petitioner is still continuing in possession over the land in dispute and land in fact has not been transferred and recorded in the name of auction purchaser respondent No. 7. 33. It is not in dispute that after said auction proceeding the petitioner is still continuing in possession over the land in dispute and land in fact has not been transferred and recorded in the name of auction purchaser respondent No. 7. Since as stated by Sri Ashok Bhatnagar, learned counsel for the Bank that the bank has already received the loan amount advanced to the petitioner alongwith interest thereon after auction of the said land of the petitioner and the account of the petitioner has been closed, therefore, I do not find any necessity to direct that the aforesaid money should again be deposited by the petitioner before the bank in view of express provisions contained under Rule 285-L of the U.P.Z.A. & L.R. Rules, which provides that whenever the sale of any holding or other immovable property is set aside under Rule 285-H or Rule 185-I of the Rules, the purchaser shall be entitled to receive back his purchase money plus an amount not exceeding five per cent of the purchase money as the Collector or the Commissioner, as the case may be, may determine. For ready reference thereafter Rule 285-L is quoted as under : “285-L. Whenever the sale of any holding or other immovable property is set aside under Rule 285-H or Rule 285-I, the purchaser shall be entitled to receive back his purchase money plus an amount not exceeding 5% of the purchase money as the Collector or the Commissioner, as the case may be may determine.” 34. Thus, in view of aforesaid provisions of the Rules, I direct the petitioner to deposit with the Collector a sum of Rs. 2,40,000/- plus five per cent purchase money within a period of three months from today. Thereupon the Collector shall refund the aforesaid amount to the auction purchaser within another period of one month. However, it shall be open for the petitioner to claim any debt relief provided by the Government before said deposit. In case any such relief is claimed by the petitioner within one month from today, the Collector shall pass appropriate order thereon and if any relief is admissible to the petitioner then such amount shall be deducted from total amount referred herein before, before such amount is deposited. 35. In case any such relief is claimed by the petitioner within one month from today, the Collector shall pass appropriate order thereon and if any relief is admissible to the petitioner then such amount shall be deducted from total amount referred herein before, before such amount is deposited. 35. Before I part with the record, I must notice that in Rakesh Kumar Goel and others v. Uttar Pradesh State Industrial Development Corporation Ltd. and others, (2010) 8 SCC 263, the Apex Court has pointed out number of anomalies under the provisions of U.P.Z.A. & L.R. Act and Rules framed thereunder pertaining to the auction proceeding and it was observed that existing provisions of U.P.Z.A. & L.R. Act and Rules are out of date by three quarters of a century. Those were designed to deal with agricultural holdings in a rural area. Even for that purpose the provisions appear far from satisfactory. Now they have become completely deficient for dealing with landholdings and other immovable properties in highly urbanised and industrialised regions of the State. Therefore, the Apex Court expressed an urgent need to update the law either by framing fresh Act and Rules or by thoroughly amending the existing ones. The pertinent observations made by Apex Court in para 26, 27, 28 and 49 of the aforesaid decision are quoted as under : “26. It is, thus, to be seen that under the Rules the only mode for advertisement of auction-sale is by affixation of the sale proclamation at a conspicuous place in the village where the property is located and by beat of drum. There is no provision of advertisement in the newspapers or by any other means to spread the information about the proposed auction on a large scale. Form ZA 73 (under Rule 273) and Form ZA 73-D (under Rule 273-A) only provide any description of the type of the property and plot/house number and boundaries of the immovable property; Form 74 (Rule 282) does not provide any description of the type of property (e.g. agricultural, homestead, industrial, etc.) or type of rights (e.g. lease and its term or freehold, etc.). 27.There is no provision in the Act or the Rules for fixation of reserve price before the property is put up for auction-sale. We were, however, informed that the Collector of the district regularly notifies “circle rate” for different types of land and different locations. 27.There is no provision in the Act or the Rules for fixation of reserve price before the property is put up for auction-sale. We were, however, informed that the Collector of the district regularly notifies “circle rate” for different types of land and different locations. this circle rate is primarily used for computation of stamp duty for registration of document. We were informed that in 2007 instructions were given to confirm sale only above the market price. There is also no provision enabling the authorities to bar someone with a criminal record or against whom there are tax dues or Government dues or any other kinds from taking part in the sale of land by the Government. 28. It is, thus, evident that the law under which the auction-sale proceedings were held was itself quite deficient. But the enumeration of the shortcomings and the lacunae in the provisions of an archaic law is not to say that the auction proceedings of the two plots were otherwise fair and proper and suffered from some irregularities only due to the flaws in the law. On the contrary, we have no doubt in our mind that auction-sale of the two plots was illegal, fraudulent and collusive and the appellants and their abettors in the Revenue Department of the State Government fully exploited the weaknesses of the law to their advantage. This would be evident as the facts of the case further unfold. 49. Before parting with the records we feel obliged to say that the existing provisions of the U.P.ZALR Act and the U.P.ZALR Rules are out of date by three quarters of a century. Those were designed to deal with agricultural holdings in a rural area. Even for that purpose the provisions appear far from satisfactory. But they have become woefully inequitable and completely deficient for dealing with landholdings and other immovable properties in highly urbanised and industrialised regions of the State. There is, therefore, an urgent need to update the law either by framing fresh Act and Rules or by thoroughly amending the existing ones.” 36. Thus, on account of number of anomalies, shortcomings and deficiency under the provisions of U.P.Z.A. & L.R. Act and Rules framed thereunder in respect of provisions relating to auction sale of immovable property of defaulter, the land grabbers and manipulators are taking advantage of weakness of law. Thus, on account of number of anomalies, shortcomings and deficiency under the provisions of U.P.Z.A. & L.R. Act and Rules framed thereunder in respect of provisions relating to auction sale of immovable property of defaulter, the land grabbers and manipulators are taking advantage of weakness of law. Rampant corruption in public life and public administration also adds fuel in the fire. It is also to be noted that this Court cannot issue writ of mandamus to the State Legislature or State Government to enact a law or frame a rule in a particular manner as the same is within the sole domain of Legislature and State Government to frame new rule or amend the existing Rules. But till the fresh Act and Rules are not made or till the existing provisions of the U.P.Z.A. & L.R. Act and Rules made in this regard are not thoroughly amended, this Court cannot sit idle and shirk from its Constitutional duties leaving the interest of public and poor farmers unprotected whose lands are sold by auction under the aforesaid provisions of law, which suffers from various shortcomings and anomalies, as the Government has not taken any care of the direction given by Apex Court in Rakesh Kumar Goel’s case more than two years back on 8th July, 2010. In my opinion, during interregnum, till the aforesaid direction of Apex Court is carried out, this Court must evolve a mechanism under which the observations made by Apex Court in various decisions referred herein before should be read down under existing provisions of U.P.Z.A. & L.R. Act and Rules till necessary amendments are made in the said Act and Rules and any violation thereof would ensue dual consequences; one would invalidate the auction proceeding and another would give rise cause of complaint against erring officers of the State Government for initiating contempt proceeding against them. 37. 37. Thus, I feel it necessary in the larger public interest and in the interest of justice that so long as shortcomings and lacunae in existing provisions of the U.P.Z.A. & L.R. Act and Rules framed thereunder pertaining to auction sale of land of rural areas, pursuant to recovery as arrears of land revenue are not removed and law in this regard is not updated either by enacting fresh Act and Rules or by thoroughly amending the existing law, the following directions shall be read into the existing provisions of U.P.Z.A. & L.R. Act and Rules framed thereunder in addition thereto and not in derogation of existing provisions pertaining to procedure for recovery of arrears of land revenue by sale of holding and other immovable property of defaulter through public auction : “(i) Before issuing sale proclamation in case of sale of a holding the Collector shall work out estimated value of land or property ordered for sale by seeking report from valuer and by taking notice of current circle rate of said property fixed by the Collector while working out the estimated value of the property. In case it is found that the valuer’s report is lesser than the circle rate fixed by the Collector of the said land, the estimated value of holding/land sought to be auctioned shall be calculated on the basis of current circle rate of the land fixed by the Collector of the District. (ii) The estimated value of land sought to be auctioned calculated in aforesaid manner shall be treated to be reserve price of holding/property sought to be auctioned and the property shall not be auctioned below such reserve price. (iii) The estimated value of the property/reserve price so determined shall be stated in the sale proclamation issued by the Collector. The Collector shall also state full description and details of property including its location and nature in the said proclamation for sale. (iv) The publication of sale proclamation shall be made besides the mode prescribed under Rule in two daily newspapers having wide circulation in the locality immediately after issuance of sale proclamation in addition to traditional mode of publicity provided under the Rules so that willing purchaser may get reasonable opportunity to participate in the auction proceedings. (iv) The publication of sale proclamation shall be made besides the mode prescribed under Rule in two daily newspapers having wide circulation in the locality immediately after issuance of sale proclamation in addition to traditional mode of publicity provided under the Rules so that willing purchaser may get reasonable opportunity to participate in the auction proceedings. (v) In breach of any of the aforesaid directions would give rise cause for; (i) invalidating the auction sale and also (ii) cause of complaint against the erring officers responsible for issuance of proclamation for sale, publishing and conducting the sale for initiating contempt proceeding against them. (vi) However, part (ii) the direction No. (v) shall apply prospectively from today and not earlier to it.” 38. The Registrar General is directed to communicate this order to the Principal Secretary, Revenue Department, Government of Uttar Pradesh, through FAX forthwith, who in turn is directed to communicate the same to the Collectors of all districts of State of Uttar Pradesh and they shall ensure the compliance of the aforesaid directions given by this Court. 39. Office is directed to handover a copy of this order to the learned standing counsel free of cost forthwith, who in turn will send the same to the Principal Secretary, Revenue Department, Government of Uttar Pradesh for compliance and necessary action. 40. With the aforesaid observations and directions, writ petition succeeds and is allowed. ——————