Valley Iron & Steel Company Ltd vs Rt on 20 October, 2016

[Cites 43, Cited by 0]

Himachal Pradesh High Court

Valley Iron & Steel Company Ltd vs Rt on 20 October, 2016

Bench: Chief Justice, Sandeep Sharma

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

.
CWP No. 1689 of 2016

Reserved on: 01.09.2016

Decided on: 20.10.2016

of
Valley Iron & Steel Company Ltd. ...Petitioner.

Versus
rt
State of Himachal Pradesh and others ...Respondents.

Coram
The Hon'ble Mr. Justice Mansoor Ahmad Mir, Chief Justice.

The Hon'ble Mr. Justice Sandeep Sharma, Judge.

Whether approved for reporting? Yes.

For the petitioner: Ms. Jyotsna Rewal Dua, Senior

Advocate, with Ms. Charu Bhatnagar,
Advocate.

For the respondents: Mr. Shrawan Dogra, Advocate General,
with Mr. Anup Rattan, Mr. Romesh
Verma & Mr. Varun Chandel,
Additional Advocate Generals, and Mr.
Kush Sharma, Deputy Advocate
General, for respondents No. 1 to 4.

Mr. Sanjeev Kuthiala, Advocate, for
respondent No. 5.

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Mansoor Ahmad Mir, Chief Justice.

By the medium of this writ petition, the writ

petitioner has sought the following reliefs amongst others on

the grounds taken in the memo of the writ petition:

"That in view of the submissions made
hereto before, it is therefore respectfully
prayed that an appropriate writ, order or

of
direction may kindly be issued to the
respondents to the following effect:

i)
rt For holding that sale deed is not required
to be registered in respect of land
comprised in khata No. 106, khatauni No.
200, khasra Nos. 42, 43, 44, 45, 47, 56, 57,

58, 59, 67; kita 10 measuring 021380
hectare situated in Mahal Ban Atarian
Tehsil Indora District Kangra, of which,
sale certificate stands issued in favour of

the petitioner/auction purchaser by the
Official Liquidator pursuant to
conformation of sale in favour of the

petitioner/auction purchaser by this
Hon'ble Court and to direct the

respondents to enter the name of the
petitioner as owner in the revenue record
on the basis of sale certificate.

OR in the Alternative to above:

a) for directing the respondents to register
the sale deed of the property mentioned in
relief clause No. i) in a time bound
schedule without insisting upon
compliance of procedure detailed under Ss.
118 of the HP Tenancy and Land Reforms
Act, Rules, and Instructions framed there
under and

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b) For directing the respondents to register
the sale deed of the property mentioned in
relief clause No. i), without insisting upon
the petitioner to seek permission to

.
purchase the property under Ss. 118 of the

HP Tenancy and Land Reforms Act and
Rules and Instructions framed there under
and to hold that provisions of Ss. 118 of

the Act are not applicable to the Court
Auction Purchaser or in the Alternative to
direct the respondents to grant such

of
permission straightaway without insisting
upon completion of any other
formality/procedure required under the
Act ibid/Rules and Instructions framed
thereunder, in view of the petitioner being
rt Court Auction Purchaser.

ii) For directing the respondents to exempt the
petitioner from applicability of Ss. 118 of
HP Tenancy and Land Reforms Act for the
purpose of directly selling the land in
question, in favour of third

parties/Himachalis, in whose favour the
sale deed of the land in question, can then
be registered directly."

2. Respondents No. 1 to 4 have filed the reply and

have contended that Section 118 of the H.P. Tenancy and

Land Reforms Act, 1972 (for short "the Act") is mandatory in

nature and the writ petitioner has to seek permission as

required in terms of Section 118 of the Act.

3. It has been averred in the writ petition that the

writ petitioner participated in the auction proceedings with

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respect to the assets of M/s HIM Ispat Ltd. (in liquidation)

Village Kandrori, Tehsil Indora, District Kangra, H.P.,

which were initiated in terms of the orders made by this

Court and being the highest bidder, paid ₹ 14.52 crore,

which was accepted and confirmed by this Court vide order,

of
dated 28th September, 2011 (Annexure P5). Thereafter, a

direction was passed by this Court in Company Petition No.
rt
7 of 2001, titled as IFCI Ltd. versus Him Ispat Ltd. and

another, vide order, dated 18th March, 2013, in Company

Application No. 54 of 2012 to the concerned authority to

execute the sale deed in favour of the auction purchaser, i.e.

writ petitioner. In compliance to order, dated 18 th March,

2013 (supra), sale certificate was issued by the Registrar of

CompaniescumOfficial Liquidator, Himachal Pradesh,

Chandigarh, on 25th June, 2014 (Annexure P8), perusal of

which does disclose that the possession was handed over to

the writ petitioner on 11th November, 2011. It would be

profitable to reproduce the sale certificate herein:

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"TO WHOM SO EVER IT MAY CONCERN

.
In pursuance to the order dated

28/09/2011 passed by the Hon'ble High
Court of Himachal Pradesh, it is
certified that M/s. Valley Iron & Steel

Co. Ltd. is the successful auction
purchaser of the assets of M/s HIM
Ispat Ltd. (in liquidation), Village

of
Kandrori, Tehsil Indora, District HP
and the same has been confirmed by the
Hon'ble bench of Hon'ble High Court of
rt Himachal Pradesh vide order dated
28/09/2011. The auction purchaser has
been given the possession of the movable
and immovable assets of the company by

us on 11/11/2011.
Sd/
(D.P. OJHA)
Registrar of Companies cum Official Liquidator

Himachal Pradesh, Chandigarh."

4. The writ petitioner approached the concerned

authorities for recording necessary entries in the revenue

record, which they have not made so far and made it to run

from pillar to post and post to pillar without there being any

fault on its part.

5. The auction notice/terms and conditions of sale

find place at pages No. 78 to 82 of the paper book. The writ

petitioner, after noticing the auction notice and the terms

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and conditions, participated in the auction proceedings. The

auction notice nowhere contains any such condition whereby

it was made known to public that in order to have

registration of the sale deed, the successful bidder has to

obtain necessary permission in terms of Section 118 of the

of
Act. The writ petitioner bonafidely participated in the

auction proceedings and became the highest bidder, rather
rt
successful bidder. After depositing the bid amount to the

tune of ₹ 14.52 crore, the writ petitioner has not been able

to reap the fruits. Registration is yet to be made. It appears

that the writ petitioner has been made to suffer due to the

act of the Court without there being any fault on its part.

6. The question, which arises for consideration in

this writ petition, is - whether a bona fide auction

purchaser has to obtain necessary permission in terms of

Section 118 of the Act in order to have registration of the

sale certificate?

7. It is profitable to notice the relevant provisions

of the Acts applicable and the judgments occupying the field.

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8. It is apt to reproduce relevant portion of Section

118 of the Act herein:

118. Transfer of land to
nonagriculturists barred.
(1) Notwithstanding anything to the

contrary contained in any law, contract,
agreement, custom or usage for the time
being in force otherwise provided in this
Chapter, no transfer of land (including

of
sales in execution of a decree of a civil
court or for the arrears of land revenue),
by way of sale, gift, exchange, lease,
rt mortgage with possession or creation of a
tenancy shall be valid in favour on a
person who is not an agriculturist.

xxx xxx xxx

(3) No Registrar or the SubRegistrar
appointed under the Indian Registration

Act, 1908 shall register any document
pertaining to a transfer of land, which is
contravention to subsection (1).

Provided that the Registrar or the Sub

Registrar may register any transfer

(i) where the lease is made in relation to a
part or whole of a building; or

(ii) where the mortgage is made for
procuring the loans for construction or
improvements over the land either from the
Government or from any other financial
institution constituted or established under
any law for the time being in force or
recognised by the State Government.

xxx xxx xxx

(4). ..............

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ExplanationI For the purpose of this
section, the expression "land" shall include

(i) land recorded as "Gairmumkin", "Gair

.
mumkin Makan" or any other Gaimumkin

land, by whatever name called in the
revenue records; and

(ii) land which is a site of a building in a
town or a village and is occupied or let out
not for agricultural purposes or purposes
subservient to agriculture but shall not

of
include a builtup area in the municipal
area."

9. Section 118 of the Act contains the word decree
rt
and other modes of alienation/transfer. A bona fide auction

purchaser does not fall within the said definition. The

moment sale is confirmed, his title becomes perfect and

there is no need to have registration of the said sale. It is

beaten law of the land that mutation does not confer title, is

for recording entries in the record.

10. The Allahabad High Court in a case titled as Mt.

Ram Sri versus Jai Lal, reported in AIR (34) 1947

Allahabad 171, held that on confirmation of the sale, title

passes to the auction purchaser and the said title is perfect.

It is apt to reproduce para 2 of the judgment herein:

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"2. Learned counsel for the appellants has
raised the point that it was clear from the
judgment of the trial Court that though
the sale was confirmed on 31.7.1934, the

.
plaintiff did not apply for a sale certificate

and he has urged that without a sale
certificate the title in the trees did not pass
to the plaintiff. Learned counsel has

relied on the decision of their Lordships of
the Judicial Committee in 48. I. A. 155 in
which it was held that a certificate of sale

of
was a document of title. It is no doubt a
document of title and the rules make it
perfectly clear that this is to be treated as
such and then property may be situate
with the object of having a note made in
rt
the necessary registers, whether the title to
the property can or cannot pass till the

issue of the sale certificate. Under O. 22,
R. 92, Civil P.C., where no application is
made under R. 89, R. 90 or 91, or where
such application is made and disallowed,

the Court shall make an order confirming
the sale, and thereupon the sale shall
become absolute. Under S. 65 of the Code
where immovable property is become

absolute, the property shall be deemed to
have vested in the purchased from the

time when the property is sold and not
from the time when the sale becomes
absolute. These sections make it perfectly

clear that it is the confirmation of the sale
that passes the title of the property from
the date of the sale. Under O. 21, R. 94,
Civil P.C., it is the duty of the Court to
grant a certificate specifying the property
sold and the name of the person who at
the time of the sale is declared to be the
purchaser, but such certificate shall bear
date the day on which the sale became
absolute. The vesting of time is not make
dependant on the issue of the sale
certificate. To my mind, the law on the

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point is perfectly clear that the property
vested in the plaintiff after the auction
sale was confirmed from the date of the
said sale and there was therefore no title

.
left in the judgmentdebtor which the

defendants could purchase in the year
1940. The decision of the lower appellate
Court is, therefore, correct and I dismiss

this appeal with costs."

11. It would also be profitable to reproduce para 19

of
of the judgment rendered by the Apex Court in the case

titled as S.M. Jakati and another versus S.M. Borkar
rt
and others, reported in AIR (46) 1959 Supreme Court

282, herein:

"19. In cases where the sons do not

challenge the liability of their interest in
the execution of the decree against the
father and the Court after attachment and

proper notice of sale sells the whole estate
and the auctionpurchaser purchases and

pays for the whole estate, the mere fact
that the sons were eo nomine not brought
on the record would not be sufficient to

defeat the rights of the auctionpurchaser
or put an end to the pious obligation of the
sons. As was pointed out by Lord
Hobhouse in Malkarjan v. Narhari, 27
Ind App 216 at p. 225 (PC ) :

"Their Lordships agree with the view
of the learned Chief Justice that a
purchaser cannot possibly judge of
such matters, even if he knows the
facts; and that if he is to be held
bound to enquire into the accuracy of

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the Court's conduct of its own
business, no purchaser at a Court
sale would be safe. Strangers to a
suit are justified inbelieving that the

.
Court has done that which by the

directions of the Court it ought to
do."

In 13 Ind App 1 (PC) Lord Hobhouse said
at p. 18 :

"But If the fact be that the purchaser

of
has bargained and paid for the
entirety, he may clearly defend his
title to it upon any ground which
would have justified a sale if the sons
rt
had been brought in to oppose the
executing proceedings."

The question which assumes importance
in an auction sale of this kind therefore is
what did the Court intend to sell and did
sell and what did the auction purchaser

purport to buy and did buy and what did
he pay for. One track of decision of which
Simbhu Nath v. Golap Singh, 14 Ind App

77 (PC) is an instance, shows when the
father's share alone passes. In that case

the father alone was made a party to the
proceedings. The mortgage, the suit of the
creditor and the decree and the sale
certificate all purported to affect the rights

of the father and his interest alone. It was
therefore held that whatever the nature of
the debt, only the father's right and
interest was intended to pass to the
auctionpurchaser. In Minakshi Nayudu
v. Immudi Kanaka Ramya Gounden, 16
Ind App 1 (PC) which represents the other
track of decision the Privy Council held
that upon the documents the Court
intended to sell and did sell the whole of
the coparcenary interest and not any
partial interest. The query in decided

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cases has been as to what was put up for
sale and was sold and what the purchaser
had reason to think he was buying in
execution of the decree. 13 Ind App 1 (PC)

.
(Supra), Bhagabut Pershad v. Mt. Girja

Koer, 15 Ind App 99 (PC), 16 Ind App 1
(PC) and Mahabir Persad v. Rai
Markunda Nath Sahai, 17 Ind App 11 at

p. 16 (PC ) and Daulat Ram v. Mehar
Chand, 14 Ind App 187 (PC)."

12. The Apex Court in the case titled as M/s.

of
Ouchterloney Valley Estates Ltd. Versus State of
rt
Kerala, reported in (1965) 1 Supreme Court Reports

803, held that the title to the goods passed to the buyer as

soon as the sale was completed. It is apt to reproduce

relevant portion of the judgment herein:

"We have carefully considered all the rules

under which sales in question have been
held by public auction, and we are

satisfied that title to the goods passed to
the buyer under s. 64(2) of the Act as soon
as the sale was completed by the

auctioneer announcing its completion by
the fall of the hammer. The initial
auction cannot, in our opinion, be treated
as an executory contract which became a
conditional contract on the fall of the
hammer. The auction was an auction sale
in respect of ascertained goods and it was
concluded in every case on the fall of the
hammer. On that view of the matter, we
must hold that the High Court was in
error in coming to the conclusion that the
Salestax authorities were justified in

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imposing salestax against the appellants
in regard to the transactions which have
given rise to the present appeals."

.
13. In the case titled as Sagar Mahila Vidyalaya,

Sagar versus Pandit Sadashiv Rao Harshe and others,

reported in (1991) 3 Supreme Court Cases 588, the Apex

of
Court has held that once an order confirming the sale has

been made, thereafter, the title in the property vests in the
rt
auction purchaser. It is apt to reproduce para 14 of the

judgment herein:

"14. The High Court while dealing with
the question of limitation held that the

plaintiff in this case was not required to
file a suit for getting the sale set aside
when he is pleading that the sale itself is
void. A void sale could be ignored by a

true owner and it did not affect his title.
The High Court in our view was totally

wrong in holding that it was a case of void
sale. It may be noted that Govind Rao
Harshe had already taken steps for getting

the sale set aside by moving a petition
under Order XXI Rule 90 CPC and his
sons had filed a suit for declaration but
all those proceedings finally terminated
against them. Even if for argument's sake
the objection now raised in the present
suit is considered, it is only in respect of
the salecertificate being wrongly issued in
favour of Mahila Vidyalaya. So far as the
sale in favour of Gopal Rao Mutatkar is
concerned, there is no illegality and the
sale was rightly confirmed in his favour

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under Order XXI Rule 92 CPC by order
dated 10th April, 1943. It may be noted
that once an order was made under Order
XXI Rule 92 confirming the sale, the title

.
of the auctionpurchaser related back to

the date of sale as provided under Section
65 CPC. The title in the property
thereafter vests in the auctionpurchaser

and not in the judgmentdebtor. The issue
of sale certificate under Order XXI Rule
94 CPC in favour of the auctionpurchaser

of
though mandatory but the granting of
certificate is a ministerial act and not
judicial. Thus looking into the matter
from this angle also it is clear that no
right or title remained with Govind Rao
rt
Harshe after confirmation of sale in
favour of Gopal Rao Mutatkar which

related back to the date of sale i.e. 20 th
August, 1942. Thus there is no question of
holding that it was a case of a void sale
which could be ignored by a true owner

and it did not affect his title. Govind Rao
Harshe and as such the respondents who
are his legal representatives were not
entitled to take the stand that they were

true owner as the sale itself was void and
they were not required to file a suit for

getting the sale set aside. With the risk of
repetition it is held that it was not a case
of the sale being void and in any case so

far as issue of sale certificate in favour of
Mahila Vidyalaya is concerned, the same
was determined by a judicial order dated
26th February, 1944 and the executing
Court was competent to pass such order,
such order cannot be held to be void on the
ground of being without jurisdiction as
determined by the High Court and it was
necessary to challenge the said order
within limitation. Even if the residuary
Article 120 of the Limitation Act, 1908 is
applied, it should have been challenged

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within 6 years and as such the present
suit filed on 26th November, 1960 was
hopelessly barred by time."
(Emphasis added)

14. The Apex Court in the case titled as

Nellikkottu Kolleriyil Madhavi versus Kavakkalathil

Kalikutty and others, reported in (1997) 1 Supreme

of
Court Cases 749, held that a person, who purchases the

property in a court auctionsale, gets title to the property by
rt
issuance of sale certificate as true owner. It is apt to

reproduce para 3 of the judgment herein:

"3. This appeal by special leave arises

from the judgment and decree of the
Kerala High Court dated 24/5/1993,
made in SA No. 368 of 1989. The
respondents had purchased the Plaint

Schedule property in execution of the
decrees in OS No. 262 of 1955 on the file

of the court of the District Munsif,
Parappanangadi. The sale certificate,
Exh. A2 dated 28/1/1958 was given to

the respondents. They had also filed an
application for delivery of possession of
the property which had come to be
delivered under Exh. A3 dated
21/7/1961. After taking delivery of the
possession on 20/10/1961, they assigned
the Plaint Schedule property to the
plaintiff. Under those circumstances, the
question arises whether they are entitled
to a decree of perpetual injunction
restraining the appellant from interfering
with his possession. Though the trial court

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and the appellate court had accepted the
case of the appellant, the High court has
pointed out that aforesaid documents are
material for deciding the controversy and

.
the courts below had not considered those

documents in proper perspective.
Accordingly, in second appeal, the High
court has gone into that question. It is

settled law that the person who purchases
the property in a court auctionsale, gets
title to the property by sale certificate

of
issued by the court as true owner and after
confirmation of the sale, he gets possession
thereof. In view of the fact that Plaint
Schedule property was delivered to
Sankaran under Exh. A3 on 21/7/1961,
rt he lawfully came into possession and the
same was delivered in turn to the

plaintiffs. Nonconsideration of the
material evidence is a substantial
question of law."
(Emphasis added)

15. As discussed hereinabove, the terms and

conditions of sale contained in the auction notice were read

by the writ petitioner and was not supposed to go beyond

the same. It was the duty of the State and the authorities,

who conducted the auction, to record all the terms and

conditions in the auction notice. How can it lie in the mouth

of the State that the auction purchaser has to do something

more after making payment of such a huge amount.

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16. It is profitable to reproduce paras 12 and 13 of

the judgment rendered by the Apex Court in the case titled

as The Ahmedabad Municipal Corporation of the City

of Ahmedabad versus Haji Abdulgafur Haji

Hussenbhai, reported in 1971 (1) Supreme Court Cases

of
757, herein:

rt "12. Adverting now to the case before us,
as already noticed, the property in
question had vested in the receivers in
insolvency proceedings since March, 1949

by an interim order, and in October, 1950
the original owner was adjudicated as an
insolvent and the property finally vested
in the receivers in insolvency. The

Plaintiff purchased the property in
November, 1954 and in our opinion it
could not have reasonably been expected

by him that the receivers would not have
paid to the municipal corporation, since
1949 the taxes and other dues which were

charged on this property by statute.
According to Section 61 of the Provincial
Insolvency Act, 1920 the debts due to a

local authority are given priority, being
bracketed along with the debts due to the
State. Merely because these taxes are
charged on the property could not
constitute a valid ground for the official
receiver not to discharge this liability. In
fact we find from the record that on
January 15, 1951 the receivers had
submitted a report to the insolvency Court
about their having received bills for Rs.
62830 in respect of municipal taxes of
the insolvent's property and leave of the

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Court was sought for transferring the said
property to the names of the receivers in
the municipal and Government records.
The Court recorded an order on February

.
8, 1951 that the municipal taxes had to be

paid. On the receivers stating that they
did not possess sufficient funds the Court
gave notice to the counsel for the opposite

party and on February 24, 1951 made the
following order :

"Mr. Pandya absent. The taxes have

of
to be paid. The Receivers state that
they can pay only by sale of some
properties of the insolvent from which
they want Sanctioned. The property
rt
in which the insolvent stays should
first be disposed of. The terms are

accordingly so authorised."

It is not known what happened thereafter.
It is, however, difficult to appreciate why
after having secured the necessary order

from the Court municipal taxes were not
paid off by the receivers and why the
Municipal Corporation did not pursue the

matter and secure payment of the taxes
due May be that the Municipal

Corporation thought that since these dues
were a charge on the property they need
not pursue the matter with the receivers

and also need not approach the insolvency
Court. If so, then this, in our opinion, was
not a proper attitude to adopt. In any
event the plaintiff could not reasonably
have thought that the Municipal
Corporation had not cared to secure
payment of the taxes due since, 1949. On
the facts and circumstances of this case,
therefore, we cannot hold that the plaintiff
as a prudent and reasonable man was
bound in enquire from the Municipal
Corporation about the existence of any

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arrears of taxes due from the receivers. It
appears from the record, however, that he
did in fact make enquiries from the
receivers but they did not give any

.
intimation. The p1aintiff made a

statement on oath that when he purchased
the building in question it was occupied
by the tenants and the rant used to be

recovered by the receivers. There is no
rebuttal to this evidence. Now, if the
receivers were receiving rent from the

of
tenants, the reasonable assumption would
be that the Municipal taxes which were a
charge on the property and which were
also given priority under Section 61 of the
Provincial Insolvency Act. 1920, had been
rt
duly paid by the receivers out of the rental
income. The plaintiff could have no

reasonable ground for assuming that they
were in arrears. From the plaintiff's
testimony it is clear that he did
nevertheless make enquiries from the

receivers if there were any dues against
the property though the enquiry was not
made specifically about Municipal dues.
Apparently he was not informed about the

arrears of Municipal taxes. This seems to
us explainable on the ground that the

receivers had, after securing appropriate
orders, for some reason not clear on the
record, omitted to pay the arrears of

Municipal taxes and they were, therefore,
reluctant to disclose this lapse on their
part. On these facts and circumstances we
do not think that the plaintiff could
reasonably be fixed with any constructive
notice of the arrears of Municipal taxes
since 1949. So far as the legal position is
concerned we are inclined to agree with
the reasoning adopted by the Allahabad
High Court in Roop Chand Jain's case.
ILR 1940 All 669 : AIR 1940 All 456
(supra) in preference, to the reasoning of

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the Full Bench of that Court in Nawal
Kishore's case, ILR 1943 All 453 (supra)
or of the Division Bench of Oudh Chief
Court in Ramji Lal's case. ILR 1916 (16)

.
Luck 607 : AIR 1941 Oudh 305 (supra).

We do not think there is any principle or
firm rule of law as suggested in Nawal
Kishore's case, ILR 1943 All 453 (supra)

imputing to all intending purchasers of
property in Municipal area where
Municipal taxes are a charge on the

of
property, constructive knowledge of the
existence of such Municipal taxes and of
the reasonable possibility of those taxes
being in arrears. The question of
constructive knowledge or notice has to be
rt
determined on the facts and circumstances
of each case. According to the Full Bench

decision in Nawal Kishore's case, ILR
1943 All 453 (supra) also the question of
constructive notice is a question of fact
and we do not find that the material on

the present record justifies that the
plaintiff should be fixed with any
constructive notice of the arrears of
Municipal taxes.

13. We may add before concluding that as

the question of constructive notice has to
be approached from equitable
consideration we feel that the Municipal

Corporation in the present case was far
more negligent and blameworthy than the
plaintiff. We have, therefore, no hesitation
in holding that the High Court took the
correct view of the legal position with the
result that this appeal must fail and is
dismissed. As there is no representation on
behalf of the respondent there will be no
order as to costs."

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17. The Apex Court in the case titled as

Chinnammal and others versus P. Arumugham and

another, reported in (1990) 1 Supreme Court Cases 513,

has made the distinction between bona fide auction

purchaser and decree holder and held that if a person is

of
decree holder, he is bound to restore the property when the

decree is reversed or modified, but if a person is not a decree
rt
holder, is a stranger auction purchaser, he does not lose title

to the property and cannot be divested with. It is apt to

reproduce para 10 of the judgment herein:

"10. There is thus a distinction
maintained between the decree holder who
purchases the property in execution of his

own decree which is afterwards modified
or reversed, and an auction purchaser

who is not party to the decree. Where the
purchaser is the decree holder, he is bound
to restore the property to the judgment

debtor byway of restitution but not a
stranger auction purchaser. The latter
remains unaffected and does not lose title
to the property by subsequent reversal or
modification of the decree. The Courts
have held that he could retain the property
since he is a bona fide purchaser. This
principle is also based on the premise that
he is not bound to enquire into correctness
of the judgment or decree sought to be
executed. He is thus distinguished from an
eo nomine party to the litigation."

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18. A question arose before the Apex Court in the

.
cases titled as Gurjoginder Singh versus Jaswant Kaur

(Smt.) and another, reported in (1994) 2 Supreme Court

Cases 368; Padanathil Ruqmini Amma versus P.K.

Abdulla, reported in (1996) 7 Supreme Court Cases 668;

of
Ashwin S. Mehta and another versus Custodian and
rt
others, reported in (2006) 2 Supreme Court Cases 385;

and Janatha Textiles and others versus Tax Recovery

Officer and another, reported in (2008) 12 Supreme

Court Cases 582, as to what is the status of a bona fide

purchaser and a tenant inducted by the landlord. It has

been held that the status of a bona fide purchaser in an

auction sale stands on a distinct and different footing from

that of a tenant. Further held that the stranger auction

purchaser does not derive his title from either the decree

holder or the judgment debtor and restitution cannot be

granted against him and the rights of the auction purchaser

cannot be defeated. It is profitable to reproduce paras 18

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23

and 20 of the judgment in Janatha Textiles case (supra)

herein:

"18. It is an established principle of law
that in a third party auction purchaser's
interest in the auctioned property

continues to be protected notwithstanding
that the underlying decree is subsequently
set aside or otherwise. This principle has
been stated and reaffirmed in a number

of
of judicial pronouncements by the Privy
Council and this court. Reliance has been
placed on the following decisions:
rt (i) The Privy Council in Nawab ZainUl
Abdin Khan v. Muhammad Asghar Ali
Khan, (188788) 15 IA 12, for the first

time crystallized the law on this point,
wherein a three Judge Bench held as
follows: (IA p. 16)

"A great distinction has been made
between the case of bona fide purchasers
who are not parties to a decree at a sale

under execution and the decreeholders
themselves. In Bacon's Abridgment,titi.
'Error' it is laid down, citing old

authorities, that "if a man recovers
damages, and hath execution by fieri
facias, and upon the fieri facias the sheriff

sells to a stranger a term for years, and
after the judgment is reversed, the party
shall be restored only to the money for
which the term was sold, and not to the
term itself, because the sheriff had sold it
by the command of the writ of fieri facias."
... So in this case, those bona fide
purchasers who were no parties to the
decree which was then valid and in force,
had nothing to do further than to look to
the decree and to the order of sale."

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(ii) In Janak Raj v. Gurdial Singh,
AIR1967 SC 608 : (1967) w2 SCR 77, the
Division Bench comprising Wanchoo. J.
and Mitter, J. held that in the facts of the

.
said case the appellant auctionpurchaser

was entitled to a confirmation of the sale
notwithstanding the fact that after the
holding of the sale, the decree was set

aside. It was observed: (AIR p. 613, para
24)

of
"24. ... The policy of the Legislature seems
to be that unless a stranger auction
purchaser is protected against the
vicissitudes of the fortunes of the suit,
sales in execution would not attract
rt
customers and it would be to the
detriment of the interest of the borrower

and the creditor alike if sales were
allowed to be impugned merely because
the decree was ultimately set aside or
modified."

(iii) In Gurjoginder Singh v. Jaswant
Kaur, (1994) 2 SCC 368, this Court
relying on the judgment rendered by the

Privy Council held that the status of a
bona fide purchaser in an auction sale in

execution of a decree to which he was not a
party stood on a distinct and different
footing from that of a person who was

inducted as a tenant by a decreeholder
landlord. It was held as follows: (SCC p.
370, para 3)

"3. ....... A stranger auction purchaser
does not derive his title from either the
decreeholder or the judgmentdebtor and
therefore restitution may not be granted
against him but a tenant who obtains
possession from the decreeholder
landlord cannot avail of the same right as

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his possession as a tenant is derived from
the landlord."

(iv) In Padanathil Ruqmini Amma v. P.

.
K. Abdulla, (1996) 7 SCC 668, this Court

in para 11 observed as under: (SCC p.
672)

"11. In the present case, as the ex parte
decree was set aside, the judgmentdebtor
was entitled to seek restitution of the

of
property which had been sold in court
auction in execution of the ex parte decree.
There is no doubt that when the decree
holder himself is the auctionpurchaser in
a court auction sale held in execution of a
rt
decree which is subsequently set aside,
restitution of the property can be ordered

in favour of the judgmentdebtor. The
decreeholder auctionpurchaser is bound
to return the property. It is equally well
settled that if at a court auction sale in

execution of a decree, the properties are
purchased by a bona fide purchaser who
is a stranger to the court proceedings, the
sale in his favour is protected and he

cannot be asked to restitute the property to
the judgmentdebtor if the decree is set

aside. The ratio behind this distinction
between a sale to a decreeholder and a
sale to a stranger is that the court, as a

matter of policy, will protect honest
outsider purchasers at sales held in the
execution of its decrees, although the sales
may be subsequently set aside, when such
purchasers are not parties to the suit. But
for such protection, the properties which
are sold in court auctions would not fetch
a proper price and the decree holder
himself would suffer. The same
consideration does not apply when the
decree holder is himself the purchaser
and the decree in his favour is set aside.

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26

He is a party to the litigation and is very
much aware of the vicissitudes of
litigation and needs no protection."

.
In Para 16, the Court further elaborated

the distinction between the decreeholder
auction purchaser and a stranger who is a
bona fide purchaser in auction. Para 16

reads as under: (P.K. Abdulla case, (1996)
7 SCC 668, p. 674)

of
"16. The distinction between a stranger
who purchases at an auction sale and an
assignee from a decreeholder purchaser
at an auction sale is quite clear. Persons
who purchase at a court auction who are
rt
strangers to the decree are afforded
protection by the court because they are

not in any way connected with the decree.
Unless they are assured of title; the court
auction would not fetch a good price and
would be detrimental to the decree holder.

The policy, therefore, is to protect such
purchasers. This policy cannot extend to
those outsiders who do not purchase at a
court auction. When outsiders purchase

from a decreeholder who is an auction
purchaser clearly their title is dependent

upon the title of decreeholder auction
purchaser. It is a defeasible title liable to
be defeated if the decree is set aside. A

person who takes an assignment of the
property from such a purchaser is expected
to be aware of the defeasibility of the title
of his assignor. He has not purchased the
property through the court at all. There is,
therefore, no question of the court
extending any protection to him. The
doctrine of a bona fide purchaser for value
also cannot extend to such an outsider
who derives his title through a decree
holder auctionpurchaser. He is aware or
is expected to be aware of the nature of the

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27

title derived by his seller who is a decree
holder auction purchaser."

(v) In Ashwin S. Mehta v. Custodian,

.
(2006) 2 SCC 385, this Court whilst

relying upon the aforementioned two
judgments stated the principle in the
following words: (SCC p. 407), para 70)

"70. ......... In any event, ordinarily, a bona
fide purchaser for value in an auction sale

of
is treated differently than a decree holder
purchasing such properties. In the former
event, even if such a decree is set aside, the
interest of the bona fide purchaser in an
auction sale is saved."
rt 19. ...............

20. Law makes a clear distinction between
a stranger who is a bona fide purchaser of
the property at an auction sale and a

decree holder purchaser at a court
auction. The strangers to the decree are
afforded protection by the court because
they are not connected with the decree.

Unless the protection is extended to them
the court sales would not fetch market

value or fair price of the property."

19. The purpose of conducting auction is to enable

the decree holder and the bona fide purchaser, who is a

stranger, to reap its fruits on taking steps in pursuance of

the terms and conditions contained in the auction notice. It

is the duty of the Court to provide and afford protection to

such purchaser. In case, the Court will not protect such

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28

bona fide purchaser, nobody will come forward to

participate in the auction proceedings. Viewed thus, the

interest of a third party auction purchaser is to be

protected notwithstanding that the decree is subsequently

set aside.

of
20. The Apex Court in a case titled as Sadashiv

Prasad Singh versus Harendar Singh and others,
rt
reported in (2015) 5 Supreme Court Cases 574, held that

the rights of a third party bona fide auction purchaser in the

property purchased by him in a sale in compliance with a

court order cannot be extinguished except in cases where

the said purchase can be assailed on grounds of fraud or

collusion. It would be profitable to reproduce paras 17 to 19

and 23.6 of the judgment herein:

"17. The learned counsel for the auction
purchaser Sadashiv Prasad Singh, in the
first instance vehemently contended, that
in terms of the law declared by this Court,
property purchased by a third party
auction purchaser, in compliance of a court
order, cannot be interfered with on the
basis of the success or failure of parties to
a proceeding, if auction purchaser had
bonafidely purchased the property. In
order to substantiate his aforesaid

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29

contention, learned counsel representing
Sadashiv Prasad Singh placed emphatic
reliance, firstly, on a judgment rendered
by this Court in Ashwin S. Mehta & Anr.

.
vs. Custodian, (2006) 2 SCC 385. Our

attention was drawn to the following
observations recorded therein : (SCC p.
407, para 70)

"70. In that view of the matter,
evidently, creation of any thirdparty
interest is no longer in dispute nor

of
the same is subject to any order of
this Court. In any event, ordinarily, a
bona fide purchaser for value in an
auctionsale is treated differently than
rt
a decreeholder purchasing such
properties. In the former event, even if

such a decree is set aside, the interest
of the bona fide purchaser in an
auctionsale is saved. (See Nawab
ZainulAbdin Khan v. Mohd. Asghar
Ali Khan, (188788) 15 IA 12.) The

said decision has been affirmed by
this Court in Gurjoginder Singh v.
Jaswant Kaur, 1994 2 SCC 368)."

(emphasis supplied)

18. On the same subject, and to the same
end, learned counsel placed reliance on
another judgment rendered by this Court
in Janatha Textiles & Ors. vs. Tax

Recovery Officer, (2008) 12 SCC 582,
wherein the conclusions drawn in Ashwin
S. Mehta's case, (2006) 2 SCC 385, came to
be reiterated. In the above judgment, this
Court relied upon the decisions of the
Privy Council and of this Court in Nawab
ZainUlAbdin Khan v. Mohd. Asghar Ali
Khan, 1(188788) 15 IA 12; Janak Raj vs.
Gurdial Singh, AIR 1967 SC 608;
Gurjoginder Singh vs. Jaswant Kaur,
(1994) 2 SCC 368; Padanathil Ruqmini
Amma vs. P.K. Abdulla, (1996) 7 SCC 668,

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30

as also, on Ashwin S. Mehta in order to
conclude, that: (Janatha Textiles case,
(2008) 12 SCC 582, SCC p. 586, para 18)

.
"18. It is an established principle of

law, that a third party auction
purchaser's interest, in the auctioned
property continues to be protected,

notwithstanding that the underlying
decree is subsequently set aside or
otherwise."
It is, therefore, that this Court in its

of
ultimate analysis observed as under:
(Janatha Textiles case,(2008) 12 SCC 582,
SCC p. 58889, para 20)
rt
"20. Law makes a clear distinction
between a stranger who is a bona fide

purchaser of the property at an
auctionsale and a decreeholder
purchaser at a court auction. The
strangers to the decree are afforded
protection by the court because they

are not connected with the decree.
Unless the protection is extended to
them the court sales would not fetch

market value or fair price of the
property."

(emphasis supplied)

On the issue as has been dealt with in the
foregoing paragraph, this Court has

carved out one exception. The aforesaid
exception came to be recorded in Velji
Khimji and Co. vs. Official Liquidator of
Hindustan Nitro Product (Gujarat) Ltd.,
(2008) 9 SCC 299, wherein it was held as
under : (SCC p. 305, paras 3031)

"30. In the first case mentioned above
i.e. where the auction is not subject to
confirmation by any authority, the
auction is complete on the fall of the
hammer, and certain rights accrue in

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favour of the auctionpurchaser.
However, where the auction is subject
to subsequent confirmation by some
authority (under a statute or terms of

.
the auction) the auction is not

complete and no rights accrue until
the sale is confirmed by the said
authority. Once, however, the sale is

confirmed by that authority, certain
rights accrue in favour of the auction
purchaser, and these rights cannot be

of
extinguished except in exceptional
cases such as fraud.

31. In the present case, the auction
having been confirmed on 30.7.2003
rt
by the Court it cannot be set aside
unless some fraud or collusion has

been proved. We are satisfied that no
fraud or collusion has been
established by anyone in this case."
(emphasis supplied)

19. It is, therefore, apparent that the
rights of an auctionpurchaser in the
property purchased by him cannot be

extinguished except in cases where the
said purchase can be assailed on grounds

of fraud or collusion.

xxx xxx xxx

23.6. Finally, the public auction under
reference was held on 28.8.2008.
Thereafter the same was confirmed on
22.09.2008. Possession of the property was
handed over to the auctionpurchaser
Sadashiv Prasad Sinha on 11.3.2009. The
auctionpurchaser initiated mutation
proceedings in respect of the property in
question. Harender Singh did not raise
any objections in the said mutation
proceedings. The said mutation
proceedings were also finalized in favour

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32

of Sadashiv Prasad Sinha. Harender Singh
approached the High Court through CWJC
No.16485 of 209 only on 27.11.2009. We
are of the view that the challenged raised

.
by Harender Singh ought to have been

rejected on the grounds of delay and
latches, especially because third party
rights had emerged in the meantime. More

so, because the auction purchaser was a
bona fide purchaser for consideration,
having purchased the property in
furtherance of a duly publicized public

of
auction, interference by the High Court
even on ground of equity was clearly
uncalled for."

21.
rt
Applying the tests to the instant case, the writ

petitioner has participated in the auction proceedings, has

deposited a huge amount and is still wandering for

registration of sale documents and to conduct resale of the

property.

22. The authorities have defeated the purpose of

conducting the auction. Not only the purpose of conducting

the auction has been defeated, but the writ petitioner has

been made to understand and believe as to how the

authorities can defeat the Court proceedings and orders. It

is a glaring example of injustice where the Court should step

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in and pass appropriate directions, as required in the

interest of justice.

23. The Apex Court in the case titled as Bai

Dosabai versus Mathurdas Govinddas and others,

reported in (1980) 3 Supreme Court Cases 545, held that

of
right of decree holder/auction purchaser cannot be defeated

by pressing into service any other law. It is apt to reproduce
rt
relevant portion of para 15 of the judgment herein:

"15. Shri Vakil finally submitted that the
contract had become impossible of
performance as a result of the enactment of
the Urban Land (Ceiling and Regulation)

Act, 1976. It is true that Section 5 (3) of the
Act prohibits every person holding vacant
land in excess of the ceiling limit before the

commencement of the Act from
transferring such land or part thereof by

way of sale, mortgage, gift, lease or
otherwise until he has furnished a
statement as prescribed by the Act and a

notification has been published after the
prescribed procedure has been gone
through. The Act came into force
subsequent to the passing of the decree by
the High Court. The question for our
consideration is what is the effect of the
Urban Land (Ceiling and Regulation) Act,
1976 on the decree passed by the High
Court. While it is true that events and
changes in the law occurring during the
pendency of an appeal are required to be
taken into consideration in order to do

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complete justice between parties and so
that a futile decree may not be passed. It is
also right and necessary that the decree
should be so moulded as to accord with the

.
changed statutory situation. The right

obtained by a party under a decree cannot
be allowed to be defeated by delay in the
disposal of the appeal against the decree, if

it is possible to save the decree by
moulding it to conform to the statutes
subsequently coming into force. ...."

of
24. Learned Senior Counsel appearing on behalf of

the writ petitioner argued that the authorities concerned
rt
have refused to register the sale and make the entries in the

revenue records on the ground that the necessary

permission was to be obtained as per the mandate of Section

118 of the Act.

25. It is also contended that the sale certificate and

the confirmation of sale issued by the authorities, i.e.

Annexures P6 and P8, are necessary to be registered

before the authority concerned in terms of the mandate of

Section 17 of the Registration Act, 1908 (for short "the

Registration Act"), which is not legally correct.

26. Section 17 of the Registration Act, though

mandatory in nature, provides which of the documents are

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35

compulsory to be registered. It does not include sale by

auction and sale certificate issued by the concerned

authorities including confirmation of sale, which are

outcome of the auction proceedings conducted in terms of

Court orders. The provision is speaking one and without

of
any ambiguity. Thus, registration was not required.

27. The Apex Court in the case titled as B. Arvind
rt
Kumar versus Govt. of India and others, reported in

(2007) 5 Supreme Court Cases 745, held that a sale

certificate issued by a Court or an officer authorized by the

Court does not require registration. It is apt to reproduce

para 12 of the judgment herein:

"12. The plaintiff has produced the original
registered sale certificate dated 29.8.1941
executed by the Official Receiver, Civil Station,

Bangalore. The said deed certifies that
Bhowrilal (father of plaintiff) was the highest
bidder at an auction sale held on 22.8.1941, in
respect of the right, title, interest of the
insolvent Anraj Sankla, namely the leasehold
right in the property described in the schedule
to the certificate (suit property), that his bid of
Rs. 8,350.00 was accepted and the sale was
confirmed by the District Judge, Civil and
Military Station, Bangalore on 25.8.1941. The
sale certificate declared Bhowrilal to be the
owner of the leasehold right in respect of the
suit property. When a property is sold by

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36

public auction in pursuance of an order of the
court and the bid is accepted and the sale is
confirmed by the court in favour of the
purchaser, the sale becomes absolute and the

.
title vests in the purchaser. A sale certificate is

issued to the purchaser only when the sale
becomes absolute. The sale certificate is merely
the evidence of such title. It is well settled that

when an auction purchaser derives title on
confirmation of sale in his favour, and a sale
certificate is issued evidencing such sale and
title, no further deed of transfer from the court

of
is contemplated or required. In this case, the
sale certificate itself was registered, though
such a sale certificate issued by a court or an
rt officer authorized by the court, does not
require registration. Section 17(2)(xii) of the
Registration Act, 1908 specifically provides
that a certificate of sale granted to any

purchaser of any property sold by a public
auction by a civil or revenue officer does not
fall under the category of non testamentary
documents which require registration under

subsec. (b) and (c) of sec. 17(1) of the said Act.
We therefore hold that the High Court
committed a serious error in holding that the
sale certificate did not convey any right, title

or interest to plaintiff's father for want of a
registered deed of transfer."

(Emphasis added)

28. The same principle has been laid down by the

Apex Court in the case titled as Som Dev and others

versus Rati Ram and another, reported in (2006) 10

Supreme Court Cases 788. It would be profitable to

reproduce para 15 of the judgment herein:

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37

"15. Almost the whole of the argument on
behalf of the appellants here, is based on
the ratio of the decision of this Court in
Bhoop Singh v. Ram Singh Major, (1995)

.
5 SCC 709 : 1995 Supp (3) SCR 466,

(supra). It was held in that case that
exception under clause (vi) of Section 17(2)
of the Act is meant to cover that decree or

order of a Court including the decree or
order expressed to be made on a
compromise which declares the pre

of
existing right and does not by itself create
new right, title or interest in praesenti in
immovable property of the value of
Rs.100/ or upwards. Any other view
would find the mischief of avoidance of
rt
registration which requires payment of
stamp duty embedded in the decree or

order. It would, therefore, be the duty of
the Court to examine in each case whether
the parties had preexisting right to the
immovable property or whether under the

order or decree of the Court one party
having right, title or interest therein
agreed or suffered to extinguish the same
and created a right in praesenti in

immovable property of the value of
Rs.100/ or upwards in favour of the other

party for the first time either by
compromise or pretended consent. If latter
be the position, the document is

compulsorily registrable. Their Lordships
referred to the decisions of this Court in
regard to the family arrangements and
whether such family arrangements require
to be compulsorily registered and also the
decision relating to an award. With
respect, we may point out that an award
does not come within the exception
contained in clause (vi) of Section 17(2) of
the Registration act and the exception
therein is confined to decrees or orders of a
Court. Understood in the context of the

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decision in Hemanta Kumari Debi v.
Midnapur Zamindari Co. Ltd., (191819)
46 IA 240 : AIR 1919 PC 79 : ILR (1920)
47 Cal 485 (supra) and the subsequent

.
amendment brought about in the

provision, the position that emerges is that
a decree or order of a court is exempted
from registration even if clauses (b)and (c)

of Section 17(1) of the Registration Act are
attracted, and even a compromise decree
comes under the exception, unless, of

of
course, it takes in any immovable property
that is not the subject matter of the suit."

(Emphasis added)

29.
rt
A question arose before the Madras High Court

in a case titled as K. Chidambara Manickam versus

Shakeena & Ors., reported in AIR 2008 Madras 108,

whether the sale of secured assets in public auction which

ended in issuance of a sale certificate is a complete and

absolute sale or whether the sale would become final only on

the registration of the sale certificate? It has been held that

the sale becomes final when it is confirmed in favour of the

auction purchaser, he is vested with rights in relation to the

property purchased in auction on issuance of the sale

certificate and becomes the absolute owner of the property.

The sale certificate does not require any registration. It is

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apt to reproduce paras 10.13, 10.14, 10.17 and 10.18 of the

judgment herein:

"10.13 PartIII of the Registration Act
speaks of the Registration of documents.
Section 17(1) of the Registration Act

enumerates the documents which require
compulsory Registration. However, sub
section (2) of Section 10 sets out the
documents to which clause (b) and (c) of

of
subsection (1) of Section 17 do not apply.
Clause (xii) of subsection (2) of Section 17
of the Registration Act reads as under:
rt "Section 17(2)(xii) - any certificate of
sale granted to the purchaser of any
property sold by public auction by a

Civil or Revenue Officer."

10.14 A Division Bench of this Court in
Arumugham, S. v. C.K. Venugopal Chetty,

1994 (1) LW 491, held that the property
transferred by Official Assignee, under
order of Court, does not require

registration under Section 17 of the
Registration Act. The Division Bench has

held as follows:

"Under Ex. D7, the Court permitted
the Official Assignee to transfer to the

guarantor the assets of the insolvent
that are in excess. Being a transfer
by order of Court, the document does
not require registration under S. 54
of the Transfer of Property Act, since
S. 2(d) of the Transfer of Property Act
says that nothing in the Act (except S.
57 and Chapter IV) applies to
transfers by orders of Court. The
document in question does not
require registration and there was a

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valid conveyance of the 2nd
defendant's 1/4th share to G."

xxx xxx xxx

10.17 The ratio laid down by the Division
Bench of this Court in Arumugham, S. v.
C.K. Venugopal Chetty and the Supreme

Court in B. Arvind Kumar v. Government
of India, referred supra, squarely applies
to the case on hand and we, therefore, have

of
no incertitude to hold that the sale which
took place on 19122005 has become final
when it is confirmed in favour of the
auction purchaser and the auction
purchaser is vested with rights in relation
rt tot he property purchased in auction on
issuance of the sale certificate and he has

become the absolute owner of the property.
Further, as held by the Division Bench of
this Court in Arumugham, S. v. C.K.
Venugopal Chetty and the Supreme Court

in B. Arvind Kumar v. Government of
India, referred supra, the sale certificate
issued in favour of the appellant does not
require any registration in view of Section

17(2)(xii) of the Registration Act as the
same has been granted pursuant to the

sale held in public auction by the
authorised officer under SARFAESI Act.

10.18 The finding of the learned single
Judge that the sale is not complete without
registration of sale certificate, therefore,
not sustainable in law and the same is
liable to be set aside."

30. Learned Advocate General argued that the

validity of Section 118 of the Act was questioned and upheld

by this Court in a case tiled as Smt. Sudarshna Devi

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41

versus Union of India and another, reported in ILR

1978 H.P. 355, and thereafter in the case titled as Som

Kirti alias Som K. Nath and others versus State of

H.P. and others, reported in Latest HLJ 2013 (HP) 1223,

is mandatory in nature, thus, the writ petitioner has to seek

of
permission as required in terms of Section 118 of the Act.

31. The argument, though attractive, is devoid of
rt
any force for the reason that in the cases (supra) the

constitutional validity of Section 118 of the Act was

questioned. The validity of Section 118 of the Act is not

involved in this lis, but, what is the subject matter of the lis

is interpretation and applicability of the said provision.

32. While going through Section 118 of the Act, one

comes to an inescapable conclusion that the word 'decree'

does not include bona fide auction purchaser. It is an act of

the Court, not the act of an individual and the act of the

Court should not cause prejudice to any person.

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42

33. The action of the Court or Court order/

judgment/decree or any action drawn in sequel to the order/

judgment/decree cannot cause any prejudice to any person.

34. It is beaten law of land that no person should be

prejudiced by the act of the Court based on latin maxim 'actus

of
curiae neminem gravabit'.

35. The High Court of Jammu and Kashmir, while
rt
dealing with the issue of the similar nature in the case titled

as Raja Sahib of Poonch versus Kirpa Ram, reported in

AIR 1954 Jammu & Kashmir 23, held that the Court has

inherent power to amend the decree in terms of Sections 151

and 152 CPC. It is apt to reproduce para 10 of the judgment

herein:

"10. The appellant did not take the two
proceedings for the execution of the

decree and for its amendment
simultaneously. The application for
amendment of the decree was made
after the application for execution of the
decree was finally rejected by the High
Court. It is also unfortunate that the
District Judge in exercise of his
appellate jurisdiction after he had
interpreted the operative part of his
judgment as laying down no time limit
for the payment of the increased amount
and that the decree was executable, did

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43

not exercise his inherent jurisdiction to
amend the decree so as to bring it in
conformity with the judgment. And his
order directing the execution of the

.
decree simpliciter without amending the

decree led the High Court to set aside
his order on the ground that the
executing Court could not go behind the

decree. Whether something could not be
done by the District Judge or by the
High Court in the exercise of their

of
inherent jurisdiction to prevent this
unnecessary litigation, it is now
unnecessary to consider and in the
events that have happened it is not
necessary to disturb the decree of the
rt High Court dated Maghar 28, 2002.
(Emphasis added)"

36. In the case titled as State of Gujarat & Ors.

versus Essar Oil Limited and Anr., reported in 2012 AIR

SCW 1008, the Apex Court has laid down the same principle.

It is apt to reproduce paras 70 and 71 of the judgment herein:

"70. The second principle that an act
of court cannot prejudice anyone,
based on latin maxim "actus curiae

neminem gravabit" is also
encompassed partly within the
doctrine of restitution. This actus
curiae principle is founded upon
justice and good sense and is a guide
for the administration of law.

71. The aforesaid principle of "actus
curiae" was applied in the case of A.R.
Antulay v. R.S. Nayak & another,
1988 2 SCC 602, wherein Sabyasachi
Mukharji, J (as his lordship then was)

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44

giving the majority judgment for the
Constitution Bench of this Court,
explained its concept and application
in para 83, page 672 of the report. His

.
lordship quoted the observation of

Lord Cairns in Rodger v. Comptoir D
escompte De Paris,1871 3 LR 465
which is set out below:

"Now, their Lordships are of
opinion, that one of the first and

of
highest duties of all Courts is to
take care that the act of the Court
does no injury to any of the
Suitors, and when the expression
'the act of the Court' is used, it
rt does not mean merely the act of
the Primary Court, or of any

intermediate Court of appeal, but
the act of the Court as a whole,
from the lowest Court which
entertains jurisdiction over the

matter up to the highest Court
which finally disposes of the
case. It is the duty of the
aggregate of those Tribunals, if I

may use the expression, to take
care that no act of the Court in

the course of the whole of the
proceedings does an injury to the
suitors in the Court."

37. The next question, which arises for

determination in this petition, is - whether rigour of Section

118 of the Act is applicable to the case in hand?

38. The word used in Section 118 of the Act is 'land'.

Section 2 (7) of the Act defines 'land' as under:

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45

"2. ...........

(7) "land" means land which is not occupied as
the site of any building in a town or village and

.
is occupied or has been let for agricultural

purposes or for purposes subservient to
agriculture, or for pasture and includes

(a) the sites of buildings and other structures
on such land,

of
(b) orchards,

(d) banjar land, and
rt
(e) private forests."

39. It provides that the land, which is occupied as

site of building in a town or village, does not fall within the

ambit of Section 118 of the Act, but the land which is not

occupied or has been let for agricultural purposes or for

purposes subservient to agriculture or for pasture comes in

the rigours of Section 118 of the Act.

40. The plain reading of this Section suggests that a

property, which is not agricultural land, but is a site of any

building or machinery, does not fall within the definition of

land.

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46

41. The same question arose before the Punjab and

Haryana High Court in the case titled as Nemi Chand

Jain versus The Financial Commissioner, Punjab and

another, reported in 1963 PLJ 137, wherein the word

'land' came to be interpreted. It is apt to reproduce paras 4

of
to 6 herein:

"4. According to Section 2(8) of the Act, the
rt word "land" shall have the same meaning
as is assigned to it in the Punjab Tenancy
Act of 1887. The definition of the word

"land" as given in Section 4(1) of the
Punjab Tenancy Act is as under:

"Land means land which is not occupied

as the site of any building in a town or
village and is occupied or has been let for
agricultural purposes or for purposes
subservient to agriculture, or for pasture,

and includes the sites of buildings and
other structures on such land."

It would appear from the above definition
that before land can fall under the

definition of the land as given above, two
factors are essential to be proved:

(1) that it should not be land which is
occupied as the site of any building in a
town or village, and

(2) is occupied or has been let for
agricultural purposes or for purposes
subservient to agriculture, or for pasture.

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The first part of the definition is obviously
not applicable as the land in question is
not occupied as the site of any building in
a town or village. The second part of the

.
definition, in my, opinion, also does not

cover the land in question because it has
not been shown that the land is occupied
or has been let for agricultural purpose or

for purposes subservient to agriculture or
for pasture. On the contrary the fact that
the land is banjar jadid or banjar qadim

of
goes to show that it has not been occupied
or let for agricultural purposes or for
purposes subservient to agriculture or for
pasture. According to Land Revenue
Assessment Rules of 1929 uncultivated
rt
land, which has remained unsown for
four successive harvests, is classified as

banjar jadid land, while the land, which
has remained unsown for eight successive
harvests, is described as banjar qadim. As
such the banjar jadid or banjar qadim

land cannot be held to answer to the
description of the word "land" as given in
the Act.

5. Land was also defined in Section 2(3) of
the Punjab Alienation of Land Act, 1900,

and the definition read as under:

"the expression "land" means land which

is not occupied as the site of any building
in a town or village and is occupied or let
for agricultural purposes or for purposes
subservient to agriculture or for pasture,
and includes

(a) the sites of buildings and other
structures on such land;
(b) a share in the profits of an estate or
holding:

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48

(c) any dues or any fixed percentage of the
landrevenue payable by an inferior
landowner to a superior landowner;
(d) a right to receive rent,

.
(e) any right to water enjoyed by the owner

or occupier of land as such;
(f) any right of occupancy;
(g) all trees standing on such land."

Although the definition of the word "land"
as given in the Punjab Alienation of Land

of
Act, 1900, had a wider scope because of
the addition of the clauses (a) to (g) in the
definition, the comparison of the two
definitions would go to show that but for
the addition of those clauses the definition
rt
was identical. While dealing with the
above definition of the word "land", as

given in the Punjab Alienation of Land
Act, it was held in Gopi Mal v.
Muhammad Yasin, (A.I.R. 1924 Lahore
657), that where the land had not been

used for agricultural purposes for the six
years preceding the sale and was
subsequently sold as a building site, the
land was not covered by that definition.

The above case was followed in Mandir
Gita Bhawan Sri Kurukshetra v. Sadhu

Ram, (A.I.R. 1939 Lahore 554), and it was
hold that where the land had not been
used for agricultural purposes or for

purposes subservient to agriculture for a
period of twenty years but had been lying
uncultivated except for one year, when
there was a garden on a small portion of
it, it could not be said to fall within the
definition of the word "land". The above
authorities clearly lay down the principle
that the noncultivation of land for a
number of years goes to show that it does
not answer to the definition of the word
"land".

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49

6. Learned Additional Advocate General
has argued that even though the land in
question is banjar jadid or banjar qadim,
the possibility of its being brought under

.
cultivation in future cannot be ruled out,

and when the land is so brought under
cultivation it would fall within the
definition of the word "land". This

contention is however, devoid of force
because the definition of the word "land",
as given in the Punjab Tenancy Act, looks

of
to the actual state of the land and the use
to which it has been put and not to its
future potentialities."

42. Viewed thus, it is held that the land, which is not
rt
used for agricultural purpose or the purpose subservient to

agriculture, does not fall within the purview of Section 118

of the Act.

43. The Apex Court in a case titled as Munshi Ram

and others versus Financial Commissioner, Haryana

and others, reported in (1979) 1 Supreme Court Cases

471, laid down the same principle. It is apt to reproduce

paras 16, 17 and 20 of the judgment herein:

"16. According to subsection (8) of Section
2 of the Act 'land' shall have the same
meaning as is assigned to it in the Punjab
Tenancy Act, 1887. Sec. 2 (c) of that Act
defines 'land' to mean 'land which is not
occupied as the site of any building in a
town or village and is occupied or has been

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50

let for agricultural purposes or for
purposes subservient to agriculture, or for
pasture, and includes the sites of buildings
and other structures on such land'.

17. In Nemi Chand Jain v. Financial
Commissioner, Punjab, AIR 1964 Punj
373: (1964) 66 PLR 278, H. R. Khanna, J.

speaking for a Division Bench of the High Court, held that Banjar Qadim and Banjar Jadid land cannot be taken into of account while computing the surplus area, under the Act, because not being occupied or let for agricultural purposes or purposes subservient to agriculture, it does not fall within the purview of 'land' under the Act. rt This ruling has been consistently followed by the High Court in its subsequent decisions, some of which are reported as Sadhu Ram v. Punjab State, 1965 Pun LJ 84; Amolak Rai v. Financial Commissioner, Planning, Punjab, (1966) 45 Lah LT 195; Jaggu v. Punjab State, (1967) 46 Lah LT 64 : 1967 Pun LJ 248 and Jiwan Singh v. State of Punjab, AIR 1972 P & H 430 : 1971 Punj LJ 65.

18. In our opinion, this view taken by the High Court proceeds on a correct interpretation of the statutory provisions as it stood at the relevant time.

19. ..............

20. We will, therefore, while upholding the view taken by the High Court in regard to the interpretation and application of Section 2 (3) Proviso (ii) of the Act, allow this appeal and set aside the decision of the High Court and the impugned orders of the Assistant Collector, Collector, and the Commissioner and remit the case to the Collector concerned of Hissar District with ::: Downloaded on - 15/04/2017 21:24:22 :::HCHP 51 the direction that he should ascertain the extent of the Banjar Qadim and Banjar Jadid and Gair Mumkin land of the appellantsallottees at the relevant date .

and recompute their permissible area after excluding such Banjar and Gair Mumkin land; and then dispose of the applications of the appellants under S. 9 (1) (i) afresh.

In the circumstances of the case, there will be no order as to costs."

44. The word 'land' also came to be interpreted by a Division Bench of this Court in a case titled as The State of rt Himachal Pradesh versus Maharani Kam Sundri, reported in ILR 1984 HP 397. It would be profitable to reproduce paras 21 and 38 of the judgment herein:

"21. These two decisions, in our opinion, which have a direct bearing on the statutory construction, have correctly apprehended the true scope and meaning of the expression "land" as defined. In order to be covered by the main part of the definition contained in Section 2(5), "land" must satisfy two conditions: first, it must not have been occupied as the site of any building in a town or village and, secondly, it must have been occupied or let for agricultural purposes, or for purposes subservient to agriculture, or for pasture. By virtue of the inclusive part of the definition, however, sites of buildings and other structures, which are not situate in a town or village but form part of the "land"

which is occupied or has been let for agricultural purposes, or for purposes subservient to agriculture, or for pasture, ::: Downloaded on - 15/04/2017 21:24:22 :::HCHP 52 would constitute "land" within the meaning of the Act. So far as orchards and ghasnis are concerned, they would be "land" within the meaning of the Act, .

whether or not they satisfy the conditions prescribed in the main part of the definition. The question whether the suit land is "land" within the meaning of the Act will require determination against the aforesaid background.





                         of
                  xxx        xxx              xxx

         38.           The    question     may     be

examined form another angle. Under Section 11(1) of the Act, a tenant is rt entitled to acquire "the right, title and interest of the landowner in the land of the tenancy held by him under the landowner. The right conferred by Section 11(1) is thus exercisable in respect of the "land of the tenancy" held by a tenant. The two material words "land" and "tenancy have both been defined. The true meaning and content of the definition whether the suit land comprising several Khasra numbers if "land" within the meaning of the definition has been determined on the basis of evidence pertaining to the actual user of each Khasra number on the material date. However, having regard to the fact that in Section 11(1) of the Act, the word "land" occurs in conjunction with the words "of the tenancy" held by a tenant, it would be more appropriate to determine the real nature and character of the occupation with reference to the land as a whole by treating it as a single unit. The word "tenancy" is defined in Section 2(19) of the Act to mean "a parcel of land held by a tenant of a landlord under one lease or one set of conditions". This definition clearly indicates that the land ::: Downloaded on - 15/04/2017 21:24:22 :::HCHP 53 in respect of which the proprietary rights are claimable should be a piece or parcel of land held by a tenant under one lease or one set of conditions. Even if the land so .

held is divided into several subdivisions (Khasra numbers) by the revenue authorities with references to its actual user, the tenancy is not consequently split up and, in the eyes of law, the tenant can not be regarded as holding each of such subdivisions (Khasra numbers) under a of separate lease or under a separate set of conditions. The contract of tenancy is a single and indivision contract, and in the absence of any statutory provisions to that effect, it is not open to divide it into two or rt more contracts. (See: Miss S. Sanyal v. Gian Chand, AIR 1968 SC 438). For the purpose of determining whether the tenant can claim proprietary rights in respect of the land held by him under the landowner, therefore, what has to be seen is whether the entire piece or parcel of land held by a tenant under the landowner is covered by the definition given in Section 2(5) of the Act. In a case, therefore, where the purpose of letting is not ascertainable, but the land or a substantial part thereof is not occupied as the site of any building in a town or village and is occupied for agricultural purposes, or for purposes subservient thereto, or for pasture, or for any of the purposes set out in the inclusive part of the definition, the land would be regarded as one to which the provisions of section 11(1) of the Act are applicable. Even if a small portion of such land is found to have been used by the tenant incidently for an ancillary or even for an alien purpose, his entitlement to a claim proprietary rights in respect of whole land is not thereby affected and it would not be ::: Downloaded on - 15/04/2017 21:24:22 :::HCHP 54 proper or permissible to dissect the tenancy and to confine the conferment of proprietary rights to that portion of the land of the tenancy held by him which is .

actually used for the stated purposes and to reject the claim qua that small portion which is incidently used for ancillary or even alien purposes. Approaching the case in hand from that view point, it is manifest that a predominant or substantial portion of the suit land (29 of Bighas 10 Biswas) out of 32 Bighas 7 Biswas is actually occupied for the purposes mentioned in Section 2(5). Since predominant or substantial portion of land consists of Ghasni, Orchard, open rt land with planted trees and land under actual cultivation incidental or ancillary use of a small portion of such land for the purpose of residence, road, Mali quarters and Cowshed, etc. cannot defeat the claim of the respondent to the conferment of proprietary rights in respect of whole of the suit land. The decision of the learned single Judge, therefore, is eminently correct, even if it is examined from this different angle. In fact, on the aforesaid reasoning, the respondent ought to have been held entitled to the conferment of proprietary rights even in respect of Khasra No. 19/1 and, to that extent, the learned single Judge's decision may be regarded as not being in conformity with law. There being no appeal by the respondent, however, against that part of the decision of the learned single Judge, no relief can be granted to her on that score."

45. It would also be profitable to reproduce para 11 of the judgment rendered by a Division Bench of this Court ::: Downloaded on - 15/04/2017 21:24:22 :::HCHP 55 in the case titled as Mrs. Peter Butt and others versus Sister Roseline Kokara, reported in 1992 (2) .

Sim.L.C.124, herein:

"11. In view of what has been stated above, in order to determine as to whether the land is agricultural land as defined in the Act or not, what is required to be seen is of the main and primary purpose for which it was or had been let out or taken. In case where the purpose of letting is rt ascertainable, the question has to be decided on the basis of main and primary purpose for which it was let out. In case the land was or had been let out for a purpose which cannot be said to be agricultural purpose or purpose subservient to agriculture, the same will not fall within the definition of 'land' under the Act and in such a situation, the court will be precluded from considering the use of the land to which it has subsequently been put. A person should not be permitted by any action of his to take undue advantage of the situation by himself changing the main and primary purpose for which the land is let out. In other words, what is to be seen is the character and nature of the land and the purpose for which it had been let out, when such a purpose is ascertainable from the evidence or material on record and not the use of the property to which it has subsequently been put. But where the purpose of letting the same is not ascertainable from the evidence and material on record and the land, substantial part whereof, is not used or occupied as the site of any building in a town or village and is used or occupied for ::: Downloaded on - 15/04/2017 21:24:22 :::HCHP 56 agricultural purpose, or for purpose subservient thereto then it will fall within the definition of 'land'. What are the purposes subservient to agriculture can be .

ascertained from the definition part as the same have been set out in the inclusive part of it. The words 'is occupied' and 'has been let' occurring in the definition of 'land' in Subsection (7) of Section 2 of the Act are indicative of two different situations. Firstly, when the purpose is of ascertainable, that is the purpose of letting was agricultural or subservient to agriculture, then it is that purpose alone which would be seen but when the purpose is not ascertainable then it is the use to rt which the property is found to be put which will be taken into consideration."

46. Another Division Bench of this Court in a case titled as Nirmal Singh versus Randhir Sharma, reported in 1994 (2) Sim.L.C. 255, while considering the constitutional validity of Section 118 of the Act held as to which 'land' falls within the ambit of Section 118 of the Act.

It is worthwhile to reproduce paras 10, 11, 13, 17 and 18 of the judgment herein:

"10. For the first time, a provision was made in this State for control or transfer of agricultural land to a nonagriculturist, when in Chapter X(sic) of the Act Section 118 was included under the heading "Transfer of Land to NonAgriculturists Barred". The constitutional validity of Section 118 was upheld by a Division ::: Downloaded on - 15/04/2017 21:24:22 :::HCHP 57 Bench of this Court in Smt. Sudarshna Devi v. Union of India and another,ILR 1978 HP 355.

.

11. Section 118 prohibits transfer of land by any mode including sale in execution of a decree of a civil court or for recovery of arrears of land revenue, by way of sale, gift, exchange, lease, mortgage with possession or creation of tenancy, in favour of a person, who is not an agriculturist.

of This prohibition is subject to the provisions of Subsection (2) of Section 118, wherein certain transfers are made permissible. The prohibition in Subsection (1) extends to the transfer of 'land'. Land rt in the Act has been defined under Clause (7) of Section 2 to mean land which is not occupied as a site of any building in a town or a village and is occupied or has been let for agricultural purposes or purposes subservient to agriculture or for pasture. It includes sites of buildings and Ors. structures on such land, orchards, ghasnies, banjar land, and private forests within the definition of 'land'.

12. ..........

13. On the one hand, Clause (7) of Section 2 excludes from the definition of 'land' all categories of land, which are not occupied as the site of any building in a town or a village, Except the one which are occupied or has been let for agricultural purposes or for purposes subservient to agriculture or for pasture, but in Clause (iii) to Explanation in Section 118, it expressly includes the same within the expression 'land'. A site of a building in a town, which is occupied or has been let or even a site of a building in a village which is occupied or has been let for any purpose, is ::: Downloaded on - 15/04/2017 21:24:22 :::HCHP 58 included in the expression 'land'. Reading Clause (iii) to explanation to Section 118 alongwith Clause (7) of Section 2 of the Act would make the intention of legislature .

abundantly clear and unambiguous that any site of a building whether in a town or village and occupied or let for any purpose including agricultural purpose or purpose subservient to agriculture is included in the expression 'land' for the purpose of prohibition contained in Section 118 of the of Act.

14 to 16. ..............

17. Reading of the three clauses collectively rt alongwith Clause (7) of Section 2 of the Act would make it clear that all type of land situate in Himachal Pradesh including sites and Ors. structures on such lands, whether let for agricultural purposes or for the purpose of subservient to agriculture including orchards, Ghasnis, Banjar lands and private forests are included within the expression 'land', for the purposes of Section 118 of the Act. The only category of land, which is excluded from the operation of Section 118 is that land or area which is constructed but which is not subservient to agriculture. Even an area, if recorded in revenue records as "Gairmumkin" or "Gairmumkin Makaan", the same would be included in the expression of land irrespective of the purpose for which the same is occupied or let out, except a constructed area which is not subservient to agriculture. In Ors. words, prohibition contained in Section 118 of the Act will not apply to a constructed area which is not subservient to agriculture.

18. Since the property in suit is the 'constructed area', which admittedly is not ::: Downloaded on - 15/04/2017 21:24:22 :::HCHP 59 subservient to agriculture, there is no ground to interfere with the findings recorded by the learned Single Judge that the property is not covered by the definition .

of land within the ambit of Section 118 of the Act."

47. In a case titled as Krishan Singh (Shri) & Anr. Versus Smt. Krishna & Ors., reported in 2006 (2) of Current Law Journal 203, the Financial Commissioner (Appeals), Himachal Pradesh, being the Head of the rt Revenue Department and exercising the powers of revisional authority, held that the land which is not being used for agricultural purpose and is not subservient to agriculture purposes is not 'land' in terms of Section 2 (7) of the Act and does not fall within the scope of Section 118 of the Act. It is apt to reproduce paras 9 and 10 of the judgment herein:

"9. The property that was the subject of sale transaction by which Smt Krishna acquired interest in the area is in Muhal Swarg Ashram, Nurpur town and is clearly not subservient to agriculture. It is also notable that as per the description of land in the copy of the sale deed which is available on the record of the collector, Distt. Kangra, built up area has been sold to Smt Krishna. Besides the classification ::: Downloaded on - 15/04/2017 21:24:22 :::HCHP 60 of land as per jamabandi for the year 199192 also available on record further proves that the land in question in which Smt. Krishna has 2/3 share comprises .

mainly of built up area with some 'sehan'.

The complainant is a coowner in the same and perhaps has intention in opposing the sale is to claim the entire area by preventing the respondent No. 1 from enjoying her legal rights upon the same.

of

10. Having heard the learned counsel for the parties and in view of the above discussion, it is clearly established that the area that was the subject of sale rt transaction in whcih Smt Krishna was the purchaser is not 'land' as per the definition in section 2(7) of the H.P. Tenancy and Land Reforms act as the same is not being used for agriculture purpose and is not subservient to agriculture. Therefore the sale transaction by which Smt Krishna acquired land in Khasra No. 283, 284, 285, 286 and 287 to the extent of 2/3rd share was not in violation of Section 118 of the H.P. Tenancy and Land Reforms Act, 1972 as the provisions of Section 188

(c) do not apply in this case."

48. The Apex Court in the case titled as K.N. Farms Industries (Pvt.) Ltd. versus State of Bihar & Ors., reported in 2009 AIR SCW 4869, while making a distinction, came to the conclusion as to what is 'land' and held that the Courts, while interpreting the provisions of ::: Downloaded on - 15/04/2017 21:24:22 :::HCHP 61 any Act should, no doubt, adopt an object oriented approach keeping in mind the principle that legislative futility is to be .

avoided so long as interpretative possibility permits. But, at the same time, the Courts will have to keep in mind that the object oriented approach cannot be carried to the extent of of doing violence to the plain language used in the statue, by rewriting the words of a statute in place of the actual words used.

49. Coming to the case in hand, it is to be seen what was the subject matter of the auction proceedings, whether it was 'land' or building and machinery, which was sold.

50. The sale notices, dated 15th November, 2010 and 25th April, 2011 (Annexure P2) contain the description of the property. It is apt to reproduce relevant portion of sale notice, dated 15th November 2010, herein:

Lot No. Description of Property Earnest Money I. LAND & BUILDING: Land : 25 Kanal and 6 Rs. 22 lacs Marlas Building : Office/ADM Block RCC frame type structure with RCC Silab roofing, Work Sheds have brick masonry & M. Steel Pillars with ACC sheet roofing on M. Steel trusses, Water ::: Downloaded on - 15/04/2017 21:24:22 :::HCHP 62 Softening Plant is RCC frame structure typed building etc. II. PLANT & MACHINERIES: Freehold : Steel Rs. 34 lacs .

rolling Mill Complete SECID IMIR (1973), 4 No. Bell Annealing Furnaces and 4 colling hoods, Picking Line 6000 TPA, HR slitting line, CR slitting Mill Skin Pass Mill, 20 Mt Crane, 30 MT capacity Crane 15 M span 1 No. III. Scrap in the Unit 800 MT (Approx.) & Misc. Rs. 27 lacs Assets of IV. Leased Machinery : S. Rolling Mill complete Rs. 9 lacs (IFCI Finance) V. Composite Lot Rs. 92 lacs rt

51. While going through the same, it is crystal clear that the land in question has not been let for agricultural purpose or purposes subservient to agriculture, but consists of a constructed building and machinery. Thus, on the face of it, the rigours, fetters and restrictions contained in Section 118 of the Act are not applicable.

52. Our this view is also fortified by para 18 of the judgment rendered by the Division Bench of this Court in Nirmal Singh's case (supra), as quoted hereinabove.

53. It is also apt to record herein that the perusal of the record does disclose that there was some litigation qua ::: Downloaded on - 15/04/2017 21:24:22 :::HCHP 63 the auction proceedings vizaviz the property, subject matter of this writ petition, i.e. Co. Appeal No. 3 of 2011 .

(Annexure P4) and the writ petitioner was also a party to that lis. This Court has passed the directions to conduct the auction and accepted the bid of the writ petitioner. The of description of the said property is also given in the Company Appeal and the judgment, dated 19th September, 2011. By rt no stretch of imagination, it can be said that it is the 'land' as defined in Section 2 (7) of the Act, which can be said to be agricultural land or subservient to agricultural land.

54. Learned Advocate General argued that the latest Division Bench judgment of this Court in the case titled as Som Kirti alias Som K. Nath and others versus State of H.P. and others, reported in Latest HLJ 2013 (HP) 1223, will prevail wherein it has been held that Section 118 of the Act includes buildings also.

55. The argument is not tenable for the following reasons:

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56. It is apt to reproduce paras 53 and 80 of the judgment (supra) herein:

.

"53. After amendments carried out in the Act in the year 1987 onwards, the Act is now no more an agrarian reforms legislation. The 'land; has been defined in section 2 (7) of the Act but in explanationI to sub section (4) of Section 118, the land which is site of a building in a town or a of village and is occupied or let out not for agricultural purpose or purpose subservient to agriculture has also been rt included. Thus, practically every type of land is covered by the Act, and therefore, the Act cannot be termed an agrarian reform legislation. The amendments carried out in the Act are not included in 9th Schedule of the Constitution.

xxx xxx xxx

80. The legislature with a purpose has used the expression 'land' in ExplanationI to Section 118. The Section 2 of the Act opens with; "in this Act, unless there is anything repugnant in the subject or context". The expression 'land' used in Section 118 is to be understood and interpreted in the manner expression 'land' has been explained in ExplanationI to Section 118 where it has been used for specific purpose as against the definition of land given in the definition clause to be applied for other purposes in the Act if not specifically explained or used otherwise. The specific purpose for which expression 'land' has been used in ExplanationI will override the general purpose for which expression land has been defined in Section 2 (7) of the Act. Therefore, there is no force in the contention of the petitioners ::: Downloaded on - 15/04/2017 21:24:22 :::HCHP 65 that the term 'land' used in ExplanationI to Section 118 is illegal in presence of definition of land in sub section 7 of Section 2 of the Act. There is no absolute .

bar for purchasing land by non agriculturist under Section 118. A non agriculturist still can purchase land with the permission of State Government under Section 118. The Section 118 of the Act as enacted is within the legislative competence of State Legislature referable of to entry 18, ListII of Seventh Schedule."

57. The Division Bench in Som Kirti's case rt (supra) has not discussed the judgment made by the Division Bench in Nirmal Singh's case (supra), wherein it has been specifically held in para 17, quoted hereinabove, that the land or area which is constructed and is not subservient to agriculture is not 'land' within the meaning of Section 118 of the Act.

58. The Division Bench in Nirmal Singh's case (supra) has upheld the judgment made by a learned Single Judge of this Court in Civil Suit No. 88 of 1990, titled as Randhir Sharma versus Nirmal Singh, whereby the learned Single Judge has made threadbare discussion of Sections 2 (7) and 118 of the Act. It is apt to reproduce ::: Downloaded on - 15/04/2017 21:24:22 :::HCHP 66 relevant portion of the judgment in Civil Suit No. 88 of 1990, which has been upheld by the Division Bench in .

Nirmal Singh's case (supra), herein:

".........The suit property in this case constitutes of constructed area being put to residential as also commercial use, which is admittedly not subservient to of agriculture as I apparent from the entries in the jamabnandi for the year 198182 annexed with the plaint and reference to which has also been made in the agreement (Ex. P1). Thus, the aforesaid rt suit property is not included in the definition of land as envisaged in the aforesaid Section. In other words, there is no bar with respect to the transfer of the suit property in this case by the defendant to the plaintiff. In that view of the matter, a lawful decree can be passed in favour of the plaintiff and against the defendant............"

59. We are also of the view that the judgment made by the learned Single Judge in Civil Suit No. 88 of 1990 (supra), which has been upheld by the Division Bench in Nirmal Singh's case (supra) is in accordance with the judgments made by the apex Court and also in view of the aim, object and scope of Section 118 of the Act read with the Act, as discussed hereinabove.

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60. The next significant and important question is -

what was the aim, object and scope of Section 118 of the .

Act?

61. This Court in the case titled as Sudarshana Devi versus Union of India, reported in ILR 1978 HP of 355, has highlighted the aim of inserting the said provision in the Act. It is apt to reproduce relevant portion of para 39 rt of the judgment herein:

"39. The statement of objects and reasons (quoted above) makes a further reference to restrictions imposed on purchase of land by nonagriculturists with a view to avoid. Concentration of wealth in the hands of nonagriculturists moneyed class. It is obvious that the agricultural land in the State like Himachal Pradesh would be very much limited in view of its mountainous terrain. If this land is allowed to go indiscriminately in the hands of those who can over bid an usual customer, it is very obvious that ultimately the very object for which the Act was enacted would be lost. Nonagriculturists, who have not evinced any interest in the agriculture uptil now, would, by the sheer strength of their money power be able to over bid the agriculturists, and a class of society would emerge which would be interested not so much in the improvement of agriculture but in the investment of un used, and in some cases, undisclosed, finances. Such an incentive would be more ::: Downloaded on - 15/04/2017 21:24:22 :::HCHP 68 to them in view of the fact that income from agriculture is exempt from Income Tax. Therefore, if one of the objects of the legislature was to prevent the limited land .

resources of the State from going in the hands of financial sharks, it cannot be said that that objective was purposeless. ............. "

62. It appears that the basic foundation of the of insertion of the said provision in the Act is that the land should not go into the hands of the persons who are not rt bonafide Himachalis. Meaning thereby, it was just to boost the Himachalis and in order to prevent vanishing of the small holdings of the State of Himachal Pradesh.

63. It would also be profitable to reproduce relevant portion of para 68 and para 122 of the judgment rendered by this Court in another case titled as Society for Preservation of Kasauli and its Environs versus State of Himachal Pradesh and others, reported in 1994 (Suppl.) Sim. L.C. 450, herein:

"68. The object of section 118 of the H.P. Tenancy and Land Reforms Act, 1972 is that the local population should have opportunity to utilise the land for their benefits and outsiders are not permitted to ::: Downloaded on - 15/04/2017 21:24:22 :::HCHP 69 encroach upon the rights of the sons of the soil....."

                            xxx         xxx              xxx




                                                                 .

122. The reason for placing restrictions on the transfer of land in favour of non agriculturists in the Act was to avoid concentration of wealth in the hands of nonagriculturists moneyedclass. Agricultural land in Himachal Pradesh is of very limited in view of mountainous terrain and in case it is allowed to pass indiscriminately into the hands of this class by sheer strength of money power, utilising the same through remote control rt by use of black money in agriculture sector and avoid payment of tax, the small land holdings of the poor people of the State would vanish and the object of the land reforms legislation becoming totally inconsequential and purposeless. In order to check this problem, particularly in rural areas, the transfer of land in favour of nonagriculturists was, therefore, prohibited. Exception has been created in favour of certain cases described in Sub section (2) of Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972."

64. Thus, the classification was made only to prevent the persons, who are moneyedclass and who, on the sheer strength of their money power, are in a position to purchase the land from poor land owners at the throwaway prices and that will have effect of doing away with the economy of the State. It was also noticed at that time that so many rich ::: Downloaded on - 15/04/2017 21:24:22 :::HCHP 70 people had started purchasing land in order to raise orchards in the entire State of Himachal Pradesh. Thus, the .

only object is to prevent the outsiders to come in, to save the Himachali land owners/holders and it creates a right in their favour.

65. Viewed thus, it can be safely held that a bona fide auction purchaser, who has purchased the land in the rt auction proceedings pursuant to the Court directions, cannot be deprived of the said property. The rigour is not applicable to the case in hand.

66. It is also apt to record herein that the writ petitioner, in the alternative, has prayed that if, at all, the rigour of Section 118 of the Act is applicable, it may be permitted to sell the said property to a Bonafide Himachali.

If only this prayer is granted, that will strictly be as per the mandate of Section 118 of the Act and will also achieve the purpose. But, how can it lie in the mouth of the respondents not to grant permission or not to allow the writ petitioner to sell the property, for the reason that the writ petitioner is a ::: Downloaded on - 15/04/2017 21:24:22 :::HCHP 71 bona fide auction purchaser and had bonafidely made the payment of ₹ 14.52 crore, is waiting for the day to come .

enabling it to reap the fruits, was not allowed to do so, is really a travesty of justice.

67. Having said so, the writ petitioner has made out of a case for interference.

68. The question is - what direction is to be made in rt the given circumstances of the case in order to redress the grievance of the writ petitioner, who is suffering because of the auction conducted in terms of the Court orders and has been made to part with money, that too, a huge amount to the tune of ₹ 14.52 crore?

69. Admittedly, it was not prescribed in the auction notice or it was not made known in the auction proceedings that the successful bidder has to follow the rigour and mandate of Section 118 of the Act in order to have the registration and no mutation can be effected without obtaining the permission.

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70. It is also not contained in the auction notice that the person/auction purchaser, who is an outsider, non .

Himachali or a nonagriculturist, cannot participate in the auction proceedings and cannot conduct resale of the property.

71. Much water has flown down and there is no chance that the bid amount can be paid back to the writ petitioner.

rt Even otherwise, that will not redress the grievance of the writ petitioner for the reason that the inflation rate has gone very high and had the writ petitioner invested the said amount in business or somewhere else for the period of these five years, he would have earned a considerable amount, may be, in crores.

72. Keeping in view the facts and circumstances of the case read with the discussions made hereinabove, we make the following commands/directions in the interest of justice:

(i) That in the given circumstances of the case, rigour of Section 118 of the Act is not applicable to the case in hand;

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(ii) That petitioner is the absolute owner of the property, subject matter of the lis;

(iii) That the revenue record is not the proof of title, is just for collection of rent and will not change the status of the petitioner as owner of the said of property in any way;

(iv) That petitioner, being the absolute rt owner of the said property, is within its rights, power and competence to sell the property in favour of any Bonafide Himachali;

(v) That the Registering Authority to register the said sale deed without asking for any permission or registration of sale deed executed in favour of the petitioner as auction purchaser;

(vi) That the Revenue authorities to attest the mutation in favour of Bonafide Himachali in terms of direction (iv) supra;

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(vii) That this order will not confer any rights upon the petitioner of being .

Bonafide Himachali.

73. The writ petition is disposed of, as indicated hereinabove, alongwith all pending applications.


                                             (Mansoor Ahmad Mir)




                                        of
                                                 Chief Justice


                                                (Sandeep Sharma)
                        rt                           Judge
    October 20, 2016

          ( rajni )








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Himachal Pradesh High Court

Valley Iron & Steel Company Ltd vs Rt on 20 October, 2016

Bench: Chief Justice, Sandeep Sharma