Allahabad High Court
Darshan Singh vs State Of U.P. And Others on 10 July, 2019
Author: Ajay Bhanot
Bench: Ajay Bhanot
HIGH COURT OF JUDICATURE AT ALLAHABAD
AFR
Court No. - 7
Case :- WRIT - C No. - 61899 of 2011
Petitioner :- Darshan Singh
Respondent :- State Of U.P. And Others
Counsel for Petitioner :- S.K. Chaturvedi
Counsel for Respondent :- C.S.C.,Awadhesh Prasad Pandey,Rajeev Pandey,S.K. Purwar
Hon'ble Ajay Bhanot,J.
1. By the order, dated 14.10.2011, passed by the learned Commissioner, Jhansi Division, Jhansi, in Revision No.40 of 2010-2011, (Darshan Singh Vs. Jagdish Singh and others), the order passed by the learned Commissioner, Jhansi Division, Jhansi in like proceedings, on 20.6.2011, has been recalled, and the matter has been remitted to the trial court for fresh adjudication.
2. The petitioner, is aggrieved by the order dated 14.10.2011, passed by the learned Commissioner, Jhansi Division, Jhansi, in Revision No.40 of 2010-2011, (Darshan Singh Vs. Jagdish Singh and others), and has assailed the said order, in the instant writ petition.
3. Sri S.K. Chaturvedi, learned counsel for the petitioner, in support of the writ petition, submits that the Collector, does not have the jurisdiction to recall the order, passed by the learned Revisional Court, on an earlier occasion. Secondly, the guarantor, at whose instance, the recall order was passed, does not have any locus standi, to question the auction, and challenge the order, passed by the learned Commissioner, Jhansi Division, Jhansi. The auction, was conducted in accordance with law. The petitioner, was the auction purchaser, and pursuant to said auction, sale certificate was issued in favour of the petitioner. He further submits, that the conditions precedent for setting aside the auction, framed under the rules of U.P. Zamindari Abolition & Land Reforms Rules, 1952, were not satisfied, in the instant case.
4. Sri Awdhesh Prasad Pandey, learned counsel and Sri Vinod Kumar, learned counsel or the respondent No.3, submit that the respondent No.3 being the guarantor, has the locus standi, to institute the recall application, since he has to deposit the remaining amount due, from the borrower.
5. Heard the learned counsel for the parties.
6. Certain facts, relevant to adjudication of the controversy, are beyond the pale of dispute. One Jagdish Singh, had taken a loan, from the Central Bank of India. He, defaulted in the payment of loan amount. Distraint proceedings, were drawn by the bank, for recovery of the loan amount, under the U.P. Zamindari Abolition & Land Reforms Rules, 1952.
7. In the aforesaid recovery proceedings, the property of the borrower/defaulter Jagdish @ Narain, was put to auction. The auction, was conducted on 03.01.2011. At the fall of the hammer, the petitioner raised a bid of Rs.4 Lakhs. The petitioner, was the highest bidder. The petitioner, honoured his bid, and deposited the entire bid amount in two instalments, on 03.01.2011, and 17.01.2011 respectively. The sale certificate, was issued by the competent authority, in favour of the petitioner, on 15.09.2011.
8. The Tehsildar submitted a report on 10.02.2011, before the Paragana Magistrate, recording certain irregularities in the auction, and recommending the cancellation of the auction proceedings. The Paragana Magistrate, by cryptic order dated 24.02.2011, affirmed the recommendation of the Tehsildar. The order, passed by the Paragana Magistrate dated 24.02.2011, simply recorded "allowed as proposed", and thus cancelled the auction.
9. The petitioner, claiming to be a bona-fide auction purchaser, took the order passed by the Paragana Magistrate, in revision before the learned Commissioner, Jhansi Division, Jhansi. The revision, was registered as Revision No.40 of 2010-2011 (Darshan Singh Vs. Jagdish Singh and others).
10. The respondent No.3, was the guarantor in the aforesaid loan agreement. The guarantor/respondent No.3, also tendered his application, before the learned Commissioner, Jhansi Division, Jhansi, in the revision proceedings, registered as Revision No.40 of 2010-2011.
11. The order dated 03.09.2011 of the learned Commissioner, Jhansi Division, Jhansi, in the Revision No.40 of 2010-2011, (Darshan Singh Vs. Jagdish Singh and others), records, that the respondent No.3, Ram Babu was duly heard. The submissions, made on behalf of the respondent No.3 by his counsel, were recorded by the learned Commissioner, Jhansi Division, Jhansi. The respondent No.3, had submitted, that he had made an application, for correction of the recovery certificate, and was prepared to deposit the entire amount. Thereafter, upon a detailed consideration of the submissions of all parties, including respondent No.3-Ram Babu Shiv Hare, the learned Revisional Court found, that the auction was made in accordance with law, and there was no cause to interdict the aforesaid auction proceedings. On this foot, the revision filed by the petitioner, was allowed by order dated 20.06.2011.
12. The application for recall of the aforesaid order dated 20.06.2011, was submitted on behalf of the respondent No.3, on 03.09.2011 and was decided on 14.10.2011. The learned Commissioner, Jhansi Division, Jhansi, by order dated 14.10.2011, recalled the order dated 20.06.2011, solely on the foot that the respondent No.3, was not heard by the learned Commissioner, Jhansi Division, Jhansi, in the earlier proceedings. The delay in filing the recall application was also condoned.
13. The order, dated 14.10.2011, passed by the learned Commissioner, Jhansi Division, Jhansi, which is assailed, records findings that are contrary to the record. The finding in the order dated 14.10.2011, that the respondent No.3, was not heard by the learned Commissioner, Jhansi Division, Jhansi, is perverse. The order of the learned Commissioner, Jhansi Division, Jhansi, dated 20.06.2011, specifically records, the submissions made on behalf of the respondent No.3, and returns his findings thereon. The recall application, was clearly misconceived, and was liable to be dismissed, on this ground alone.
14. But the matter, does not rest here. There are other contentions, raised by the learned counsel for the respondents, which in the interest of upholding the law, need to be gone into.
15. There is a sanctity, attached to the auction proceedings, taken out under the U.P. Zamindari Abolition & Land Reforms Rules, 1952 (hereinafter referred to U.P.Z.A.L.R. Rules, 1952). Auctions under the U.P.Z.A.L.R. Rules, 1952 cannot be lightly interfered with. It would be against the public interest and the statutory scheme. The best bids would not come forward for fear of uncertainty, and lack of finality of the auction.
16. It would be apposite, to reinforce the narrative with judicial authority in point. The Hon'ble Supreme Court, in the case of Executive Engineer, Karnataka Housing Board v. LAO, reported at 2011 (2) SCC 24 enumerated factors which depressed the bids in a public auction, by holding thus:
"6. But auction-sales stand on a different footing. When purchasers start bidding for a property in an auction, an element of competition enters into the auction. Human ego, and desire to do better and excel over other competitors, leads to competitive bidding, each trying to outbid the others. Thus in a well advertised open auction-sale, where a large number of bidders participate, there is always a tendency for the price of the auctioned property to go up considerably. On the other hand, where the auction-sale is by banks or financial institutions, courts, etc. to recover dues, there is an element of distress, a cloud regarding title, and a chance of litigation, which have the effect of dampening the enthusiasm of bidders and making them cautious, thereby depressing the price. There is therefore every likelihood of auction price being either higher or lower than the real market price, depending upon the nature of sale. As a result, courts are wary of relying upon auction-sale transactions when other regular traditional sale transactions are available while determining the market value of the acquired land. This Court in Raj Kumar v. Haryana State [(2007) 7 SCC 609] observed that the element of competition in auction-sales makes them unsafe guides for determining the market value."
17. Keeping this in mind, the legislature, has laid most onerous conditions, for conduct and setting aside of a public auction, under the U.P. Zamindari Abolition & Land Reforms Rules, 1952. The said rules being relevant are extracted hereunder:
"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 purchase, a sum equal to 5 per cent of the purchase money; and
(b) for payment on account of the arrears, 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.
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.
285-K. If no application under Rule 215-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 that 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."
18. The aforesaid provisions, cast a fetter and condition the challenge to a public auction, under the U.P.Z.A.& L.R. Rules, 1952. The conditions are essential pre-requisites, which have to be followed, before a challenge to the auction is entertained. The provisions, are mandatory.
19. The borrower never came forward, to challenge the aforesaid auction. Only the property of the borrower, was put to auction. The respondent No.3, is not the borrower, nor was his property, put to auction under Section 285H of the U.P.Z.A.& L.R. Rules, 1952. The respondent No.3-Ram Babu Shiv Hare, does not fall in the category of persons created under the U.P. Zamindari Abolition & Land Reforms Rules, 1952, who are eligible, to put an auction sale to challenge, before the competent authority.
20. In the wake of the preceding narrative, the petitioner does not have the locus standi to apply to set aside the sale. A similar view, was taken by this court, in the case of Sanwar Pal Singh Vs. Additional Commissioner, Saharanpur and others, reported at 2017 (8) ADJ 550.
21. The scheme of the auctions and the provisions to set aside the auction sale under the U.P.Z.A. & L.R. Rules, 1952, has been extracted in the preceding paragraphs. The provisions are a complete code. The limited set of persons, who are entitled to challenge an auction sale, are clearly defined. The procedure to make a challenge to such auction sale, is specifically prescribed. The authorities, to decide the validity of such challenge, have also been duly identified.
22. The facts of this case, as disclosed from the records, and confirmed by submission of the parties, establish the fact that the challenge to the auction sale was not instituted, before the competent authority, created under Rule 285(I) of the U.P. Zamindari Abolition & Land Reforms Rules, 1952 by an eligible person. The competent authority, to entertain the challenge to the auction, is the learned Commissioner, Jhansi Division, Jhansi, in terms of the U.P.Z.A. & L.R. Rules, 1952. The person, whose property was auctioned, is eligible to assail the auction under the U.P.Z.A. & L.R. Rules, 1952.
23. Further, a pre-deposit of the amount, as contemplated, under Rule 285(H) of the U.P.Z.A. & L.R. Rules, 1952, for entertaining such application, has not been made. Nothing has been brought in the record or pointed out by the learned counsel, to evidence such pre-deposit, contemplated under Rule 285(H) of the U.P.Z.A. & L.R. Rules, 1952.
24. The records and details of proceedings, before the competent authority, under Rule 285(I) of the U.P. Zamindari Abolition & Land Reforms Rules, 1952, have also not been brought in the record. Nor has anything to this effect been pointed out by the learned counsel. No pleadings, in regard to satisfaction of pre-requisites, to challenge the auction sale, under the U.P.Z.A. & L.R. Rules, 1952 have been taken by the respondent No.3, in the counter affidavit. In any case, the order impugned, does not arise from such proceedings.
25. The proceedings, initiated, at the behest of the Naib Tehsildar, were clearly in the teeth of the provisions of the rules, framed under the U.P. Zamindari Abolition & Land Reforms Rules, 1952. No fault in the order dated 20.06.2011, passed by the learned Commissioner, Jhansi Division, Jhansi, could be pin pointed by the learned counsel for the respondents.
26. The order dated 14.10.2011 passed by the learned Commissioner, Jhansi Division, Jhansi is arbitrary and illegal. The order dated 14.10.2011 is beyond jurisdiction. The order dated 14.10.2011 cannot stand. The order, dated 14.10.2011, passed by the learned Commissioner, Jhansi Division, Jhansi, is quashed.
27. The order dated 20.06.2011, passed by the learned Commissioner, Jhansi Division, Jhansi, is affirmed.
28. The writ petition, is allowed.
Order Date :- 10.7.2019 Ashish Tripathi