Court Dismisses Petition Challenging Land Auction, Upholds Procedure

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Case Name:

Bachan Singh vs Commissioner Lko (High Court of Allahabad)

Misc. Single No. 574 of 1993

Date: 16th July 2012

Key Takeaways:

1. The court emphasized the importance of following proper procedures in land auctions.

2. False claims in petitions can seriously undermine a case.

3. The Zamindari Abolition and Land Reforms Rules provide specific protections for property owners in auctions.

4. Not every irregularity in a sale process is grounds for setting it aside.

Issue: 

The main question here was: Did the authorities follow the proper legal procedure when auctioning the petitioners' land, and should the sale be set aside?

Facts:

1. The petitioners took a loan of Rs.45,000 from the State Bank of India to buy a tractor.

2. They didn't pay back the loan as agreed, only managing to repay Rs.5,400.

3. The bank decided to auction off the land that was mortgaged for the loan.

4. On February 12, 1992, the land was auctioned and bought by Smt. Bittu Devi.

5. The petitioners claimed they filed an application under Rule 285-H to stop the sale, but it wasn't considered.

6. They then filed another application under Rule 285-I, which was rejected on February 9, 1993.

7. Unhappy with this, they filed a writ petition in the High Court.

Arguments:

The petitioners said:

1. They filed an application under Rule 285-H that wasn't considered.

2. The proper procedure wasn't followed before the auction.

3. The land was sold for less than its value.

The respondents (the other side) argued:

1. No application under Rule 285-H was ever filed.

2. All proper procedures were followed for the auction.

3. The petitioners' objections were considered and rejected fairly.

Key Legal Precedents:

This case didn't rely heavily on previous judgments, but it did reference several important rules:

1. Sections 284 and 286 of the U.P. Zamindari Abolition and Land Reforms Act, which govern the sale of attached property.

2. Rules 285-A, 285-D, 285-E, 285-H, 285-I, and 285-J of the U.P. Zamindari Abolition and Land Reforms Rules, 1952, which detail the auction process and safeguards for property owners.

Judgement:

The court sided with the respondents and dismissed the petition. Here's why:

1. They found no evidence that the petitioners had filed an application under Rule 285-H as claimed.

2. The court confirmed that proper procedures were followed, including issuing a proclamation in Form 74, which the petitioner received and signed.

3. The auction was conducted in the Tehsil campus as required.

4. The court found the petitioners' claims about improper procedure and undervaluation to be "perverse in nature and contrary to the facts."

FAQs:

1. Q: What could the petitioners have done differently?

  A: They could have ensured they had proof of filing the Rule 285-H application if they actually did so. Also, being honest in their petition would have helped their credibility.

2. Q: What protections exist for property owners in such auctions?

  A: The Zamindari Abolition and Land Reforms Rules provide several safeguards, including the ability to set aside a sale within 30 days by paying the arrears and certain costs.

3. Q: Can any irregularity in the auction process lead to cancellation of the sale?

  A: No, the person challenging the sale must prove that they suffered substantial injury due to the irregularity.

4. Q: What's the takeaway for people taking loans against property?

  A: It's crucial to repay loans on time. If facing difficulties, it's important to engage with the lender and be aware of your rights and the legal processes involved in property auctions.

Heard Shri N. N. Jaiswal, learned counsel for the petitioners, learned State Counsel and perused the record.

Facts in brief of the present case are that the petitioners for purchasing a tractor in order to facilitate the farming had taken a loan of Rs.45,000/- from the opposite party no.3/State Bank of India,. Branch at Mishrikh, Distt- Sitapur.

In addition to the aforesaid loan, the petitioners have also taken a loan from U.P. Gramin Vikas Ltd. The loan taken by the petitioner from opposite party no.3 was not paid up as per the installment due and only a sum of Rs.5400/- has been paid, so the opposite party no.3 in order to recover the loan amount proceeded to auction the petitioners' land which was mortgaged for taking a loan. Thereafter, on 12.2.1992, the land of the petitioners has been auctioned and the same was purchased by opposite party no.4/Smt. Bittu Devi.

As per version of the petitioners, after the auction the petitioners moved an application under Rule 285-H of U.P. Zamindari Abolition and Land Reforms Rules, 1952 (hereinafter referred to as Rules). However, the said application was not considered and decided by the opposite party no.2/Collector, Sitapur, so he moved another application dated 2.6.1992 (Annexure No.4) under Rule 285 I of the Rules 1954, rejected by order dated 9.2.1993 (Annexure No.5) by respondent no.1. Hence for redressal of his grievances, the present writ petition has been filed by the petitioners. On behalf of auction purchaser Smt. Bittu Devi, a counter affidavit has been filed inter alia stating therein that the land in question has been purchased by her in the open auction on 12.2.1992. As a matter of fact on record, petitioners have not moved any application under Rule 285 H as alleged by him and only an application for objection has been filed by him which was rejected by opposite party no.1 on merit after hearing learned counsel for the parties by the impugned order dated 9.2.1992.

During the pendency of the present writ petition, petitioner no.1 namely Bachhan Singh died, as such, he has been substituted by his legal representatives Sri Dinesh Pratap Singh and Shri Akhilesh Kumar Singh as petitioner nos.1/1 and 1/2 respectively.

In view of the abovesaid factual background, Sri N. N. Jaiswal, learned counsel for the petitioners has challenged the impugned order on the ground that once the petitioners have moved an application under Rule 285 H of the Rules, it is incumbent upon the opposite party no.2 to decide the same but the said action has not been taken by the said authority, so the entire action as well as the order under challenge in the present writ petition are without jurisdiction, liable to be set aside. Shri N. N. Jaiswal, learned counsel for the petitioners further argued that in the present case no procedure has been followed prior to auction on 12.2.1992 and the land of the petitioners which has been mortgaged to the opposite party no.3 has been auctioned for a lesser amount, hence the impugned order be set aside and writ petition be allowed.

On behalf of the respondents, it has been argued that in the present case no application whatsoever has been moved on behalf of the petitioners under Rule 285 H, as such the submission made on behalf of the petitioners that the Collector, Sitapur has not decided the application dated 26.2.1992 moved by the petitioners under Rule 285 H Rules is totally incorrect rather contrary to the facts on record. It is also argued that in the present case after following due procedure, the auction took place on 12.2.1992 in the campus of Tahsil. Thereafter, the objection filed by the petitioners under Rule 285 I has been considered and rejected by order dated 9.2.1993. Hence, the writ petition lacks merit and be dismissed.

I have hear learned counsel for the parties and gone through the records. There are two provisions in the Zamindari Abolition and Land Reforms Rules, 1952 under which the attached property is sold. These are Section 284 and Section 286 of the Z. A. & L. R. Act. Further Rule 285 A of the Rules provides that every sale under Sections 284 and 286 shall be made either by the Collector in person or by an Assistant Collector specially appointed by him in this behalf. It goes to show that the sale under both the above sections 284 and 286 of the Zamindari Abolition and Land Reforms Act, is to be conducted by the Collector in person or by an Assistant Collector specially appointed by him in this behalf.

After the sale is held then the person who has purchased the property i.e. the auction purchaser shall have to deposit 25% of the amount of the bid forthwith and if that amount is not deposited then the sale is to take place again. This provision is made in Rule 285-D of the Zamindari Abolition and Land Reforms Rules. The entire amount of the purchase money is to be deposited within 15 days of the sale by the purchaser in the district treasury or sub-treasury and in case of default in deposit of the amount, the amount of 25% which was initially deposited at the fall of the hammer shall stand forfeited to Government and the property shall be re-sold. This provision is made under Rule 285-E of the Zamindari Abolition and Land Reforms Rules. Thereafter the provisions of Rule 285-H is there to safeguard the interest of the person whose property has been sold. It provides that any person whose holding or other immovable property has been sold under the Act may, at any time, within thirty days from the date of sale, apply to have the sale set aside on his depositing in the Collector's office the payment on account of the arrear, the amount specified in the proclamation in Z. A. Form 74, for the recovery of which the sale was ordered, the costs of the sale and a sum equal to 5 percent of the purchase money, for payment to the purchaser, less any amount which might have been deposited.

Further Rule 285-I gives a remedy to the person, whose property has been sold, to apply to the Commissioner within a period of 30 days to get the sale set aside on the ground of some material irregularity or mistake in publishing or conducting it. It further provides that no sale shall be set aside on such ground unless the applicant proves to the satisfaction of the Commissioner that he has sustained substantial injury by reason of such irregularity or mistake.

This shows that every irregularity or mistake in publishing or conducting the sale is not a valid ground for setting aside the sale and besides satisfying the Commissioner that some material irregularity or mistake has been committed in publishing and conducting the sale the person has further to satisfy the Commissioner that he has suffered some substantial injury by reason of such irregularity or mistake and if no substantial injury has been sustained by the person whose property has been sold then he cannot ask the Commissioner to set aside the sale and the Commissioner has no jurisdiction to set aside the sale on these grounds unless he is satisfied that the person whose property has been sold has sustained substantial injury by the irregularity or the mistake committed in publishing or conducting the sale. Rule 285-J of the Zamindari Abolition and Land Reforms Rules provides that after the expiration of thirty days from the date of the sale if no such application as is mentioned in Rule 285-H or Rule 285-I, has been made or if such application has been made and rejected by the Collector or the Commissioner, the Collector shall pass an order confirming the sale after satisfying himself that the purchase of land in question by the bidder would not be in contravention of the provisions of Section 154 of the U.P. Zamindari Abolition and Land Reforms Act.

Now reverting to the present case, this Court in order to decide the issue that whether the any application under Section 285 H dated 26.2.1992 as alleged by the petitioner has been moved before the respondent no.2. In pursuance to the said order, learned State Counsel has produced the relevant record pertaining to the matter in issue. The said record was perused by the Court as well as learned counsel for the parties.

After going through the document on records, the position which emerge out is to the effect that it is totally incorrect on the part of the petitioners to submit that the application under Rule 285 H of the Rules dated 26.2.1992 has been moved by him before the respondent no.2. The said fact has also not been disputed by Shri N. N. Jaiswal, learned counsel for the petitioner after going through the record. Thus, in view of the abovesaid facts, the submission made on behalf of the petitioners that the application under Rule 285 H of the Rules has not been decided, is misconceived and incorrect fact rather they stated wrong facts with oblique, motive and purpose to carve out the case in their favour.

So far as argument advanced by learned counsel for the petitioners that prior to proceedings of sale no procedure has been followed as per rules which governs the field is also incorrect because from the perusal of the document on record as well as the order dated 19.2.1993 passed by respondent no.1 it is clearly established that the procedure for the said purpose has been followed as the proclamation in Form 74 has been issued which was received by the petitioner on 21.1.1992 duly signed by one witness Shri Rajendra Singh and in this regard Mustahri has also been done in Bajar Dharmapur, Majre Gonda in the presence of the witness, thereafter the sale auction has taken place in the campus of Tehsil Misrikh, District-Sitapur on 12.2.1992. Further the respondent no.1 while passing the order dated 9.2.1993 has given categorical findings that the petitioners have knowledge of the entire facts and the procedure which has taken place prior to auction on the basis of the said pleadings and document on records that the argument advanced by learned counsel for the petitioners, no procedure followed as laid down for auction of the property and the same has auctioned for less value is incorrect rather an argument which is perverse in nature and contrary to the facts of the present case, so rejected.

For the foregoing reasons, I do not find any infirmity or illegality in the impugned order which is under challenge in the present writ petition. In the result, the writ petition lacks merit and is dismissed.

No order as to costs.

Order Date :- 16.7.2012

Mahesh