Molly Alex v. SMT. Kunjumol Xavier & Others (WA No. 879 of 2008)

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR & THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE** ## **FRIDAY, THE 13TH DAY OF DECEMBER 2013/22ND AGRAHAYANA, 1935** ## **WA.No. 879 of 2008** **--------------------------------AGAINST THE JUDGMENT IN WP(C) NO.4665/2004 OF HIGH COURT OF KERALA DATED 29-02-2008 ....** **APPELLANT(S)/7TH RESPONDENT::** **-------------------------------------------------------MOLLY ALEX, W/O. ALEX MANUEL, CHARANAMKUNNEL, AMBARANIRAPPEL P.O., KOTTAYAM, NOW RESIDING AT ELAPPUMKAL, ERATTUPETTA.** **BY SRI.M.K.DAMODARAN,SENIOR ADVOCATE ADVS.SRI.ALAN PAPALI** **SRI.GILBERT GEORGE CORREYA SRI.NISHIL.P.S. SRI.P.S.PRADEEP** ## **RESPONDENT(S)/PETITIONER & RESPONDENTS 1 TO 6::** **----------------------------------------------------------------------------------------------** ## **1. SMT. KUNJUMOL XAVIER,** **W/O. LATE XAVIER THOMAS, VATTUVAYALIL, AMBARANIRAPPEL P.O., BHARANANGANAM, MEENACHIL.** ## **2. STATE OF KERALA,** - **REPRESENTED BY SECRETARY, DEPARTMENT OF REVENUE, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM.** **3. COMMISSIONER OF LAND REVENUE, PUBLIC OFFICE BUILDING, MUSEUM JUNCTION, THIRUVANANTHAPURAM.** **4. DISTRICT COLLECTOR, KOTTAYAM.** ## **5. REVENUE DIVISIONAL OFFICER, PALA, KOTTAYAM.** ## **6. TAHSILDAR, REVENUE RECOVERY, MEENACHIL, KOTTAYAM.** ## **7. VILLAGE OFFICER, KONDOOR VILLAGE, KOTTAYAM.** **R1 BY ADV. SRI.BECHU KURIAN THOMAS R2 TO R7 BY GOVERNMENT PLEADER SRI. GEORGE MECHERIL** ## **THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 13-12-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **Kss** ## **MANJULA CHELLUR, C.J. & A.M.SHAFFIQUE, J. -----------------------------W.A.No.879 OF 2008** **------------------------------Dated this the 13[th] day of December, 2013** **J U D G M E N T ~~~~~~~~~~~** ## **Manjula Chellur, C.J.** The present appeal is directed against the judgment of the learned Single Judge dated 29.2.2008 in W.P.(C) No.4665/2004. 2. The brief facts that led to the filing of the present case are as under: The husband of the party respondent became due certain amounts towards the sales tax. Therefore, property measuring about 30 cents belonging to the assessee was sought to be sold under the Kerala Revenue Recovery Act. In pursuance of such request from the Sales Tax Department, the Tahsildar initiated recovery proceedings. W.A.No.879/2008 2 The auction notice dated 21.4.2001 was issued indicating auction to be held on 25.5.2001. It is also not in dispute that the appellant herein was the auction purchaser of the property in question for a sum of Rs.95,000/-. At that stage, a challenge to the sale proceedings became the subject matter of litigation before this Court by filing a Writ Petition and later a Writ Appeal. In pursuance to the judgment of the Division Bench, as per Ext.P8, the Land Revenue Commissioner was directed to consider the matter afresh by taking into consideration objections of the revision petitioner, which was pending before the Land Revenue Commissioner. Land Revenue Commissioner by his order under Ext.P10 rejected the Revision Petition. Aggrieved by the same, the present Writ Petition came to be filed by the party respondent in the appeal. 3. The writ petitioner raised several contentions before this Court mainly non-receipt of the auction W.A.No.879/2008 3 notice dated 21.4.2001 in time and further contended, the value of the property was worth more than Rs.3,00,000/- but, the same was sold for a song, i.e, Rs.95,000/-. Several irregularities exist in the procedure adopted by the Tahsildar for conducting the auction, therefore, the sale vitiates. Hence, orders on the Revision Petition rejecting the revision is illegal and deserves to be set aside. As a matter of fact, they also raised contention that there was no proper publicity so far as auction is concerned. With these averments the Writ Petition came to be filed. 4. The learned Single Judge, after referring to the details of the sale notice, proceeds to consider the matter on the factual situation as to what happened subsequent to sale in favour of the appellant herein. The learned Single Judge was persuaded by fact of payment of Rs.30,000/- made by the writ petitioner subsequent to grant of interim stay which came to be W.A.No.879/2008 4 deposited by the owner on 24.8.2001. He also opined that on account of litigation pending before the Courts, that is Writ Petition and then Writ Appeal and again another Writ Petition, there was justification for the owner of the property to approach the Court seeking cancellation of the same. Without referring to any of the contentions raised, learned Single Judge proceeded to consider the matter taking into consideration readyness of the petitioner to pay more than the sale amount. Accordingly opining a sum of Rs.4,00,000/- in the year 2008 as against the sale consideration of Rs.95,000/- in the year 2001 would be just and proper compensation to be paid to the auction purchaser, allowed the Writ Petition. According to learned Single Judge, this arrangement would satisfy the claim of the writ petitioner as he would be able to retain the property and so also the auction purchaser would be getting money three times more than the amount he had parted with in the W.A.No.879/2008 5 year 2001. Aggrieved by the said judgment, the appellant is before us. 5. According to the appellant, learned Single Judge opined that the writ petitioner has not proved the contentions. According to appellant equity tilts in favour of auction purchaser, who is totally a stranger to the dispute in question, rather than the owner of the property who failed to discharge his liability to the State Government. To substantiate her contentions, she relies upon **Janak Raj v. Gurdial Singh and another** [AIR 1967 (SC 608] which reads in paragraph 24 as under; _“24. For the reasons already given and the decisions noticed, it must be held that the appellant - auction purchaser was entitled to a confirmation of the sale notwithstanding the fact that after the holding of the sale the decree had been set aside. The policy of the Legislature seems to be that_ W.A.No.879/2008 6 _unless a stranger auction purchaser is protected against the vicissitudes of the fortunes of the suit, sales in execution would not attract 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. The Code of Civil Procedure of 1908 makes ample provision for the protection of the interest of the judgment debtor who feels that the decree ought not to have been passed against him. On the facts of this case, it is difficult to see why the judgmentdebtor did not take resort to the provisions of O.XXI, R. 89. The decree was for a small amount and he could have easily deposited the decretal amount besides 5 per cent of the purchase money and thus_ W.A.No.879/2008 7 _have the sale set aside. For reasons which are not known to us he did not do so.”_ 6. Appellant also relies upon (AIR 1982 SC989) in the case of **Sardar Govindrao Mahadik and another v. Devi Sahai and others** which reads in paragraph 60 as under: _“60. Ordinarily, if the auction purchaser is an outsider or a stranger and if the execution of the decree was not stayed of which he may have assured himself by appropriate enquiry, the court auction held and sale confirmed and resultant sale certificate having been issued would protect him even if the decree in execution of which the auction sale has been held is set aside. This proceeds on the footing that the equity in favour of the stranger should be protected and the situation is occasionally reached_ W.A.No.879/2008 8 _on account of default on the part of the judgment debtor not obtaining stay of the execution of the decree during the pendency of the appeal.”_ The principles laid down in the above two cases and its applicability to the facts of the present appeal will be discussed later with reference to the context. 7. Coming to the stand of the party respondents, the consistent stand of the assessee during his life time and after his death the stand of the LRs is to the effect that the very sale proceedings and the consequential sale deserves to be set aside for non-compliance of procedure contemplated under Section 49 of the Kerala Revenue Recovery Act for the following reasons; _i) Want of required notice of 30 days under Section 49._ _ii) Want of proper publication of sale as indicated in Section 49 and in-sufficiency of sale consideration offered by the auction purchaser_ W.A.No.879/2008 9 _as against the market value of 3,00,000/- and above for the property in question; iii) Pendency of his objections raised regarding the sale at Exts.P3 and P4 which were not considered before confirmation of sale as contemplated under Section 54 of the above enactment.”_ 8. He also places reliance on decision reported in **Gopalakrishnan v. State of Kerala** [ILR 2006(2) 102] to contend that in the absence of paper publication notifying the date of auction to be held with sufficient notice, the sale deserves to be set aside by confirming the orders of the learned Single Judge. According to him, he did not file appeal challenging the observation of the learned Single Judge that the contentions raised by the writ petitioner are not established for the simple W.A.No.879/2008 10 reason that the writ petitioner did not oppose the opinion of the learned Single Judge directing payment of compensation of Rs.4,00,000/- as he is under the impression the said amount would satisfy the hardship or inconvenience caused to the auction purchaser for having parted with his money way back in 2001. He also intends not to precipitate the matter by prolonging the litigation. 9. The stand of the learned Government Pleader is, so far as the arrears of sales tax, in the auction notice, in the Schedule the Tahsildar has clearly mentioned the actual dues as Rs.68,720/- to be recovered with up-to-date interest as on the date of auction sale. Therefore, anyone, who came across the notification including the auction purchaser, knew that the property they were purchasing was towards payment of sales tax and the up-to-date interest due on the said sales tax. According to him, subsequent to the W.A.No.879/2008 11 auction sale, assessee has repaid the entire amounts of sales tax and they have no claim whatsoever so far as the sales tax is concerned. 10. As against this, learned counsel appearing for the appellant contends, in the absence of Sales Tax Department being a party to the proceedings, the Government Pleader cannot report satisfaction of entire sales tax dues as they are only representing the Tahsildar, who acted under Kerala Revenue Recovery proceedings and not the Sales Tax Department. With these arguments at our command we proceed to consider the contentions raised before us. 11. On going through the judgment of the learned Single Judge we do note that learned Single Judge did not advert to the merits of the challenges raised by the writ petitioner except in one sentence which reads as under: W.A.No.879/2008 12 “ _regarding the alleged mala fides and favouritism in confirmation of sale, that is, I do not think the same stand proved_ ”. 12. None of the contentions with reference to the Revenue Recovery Act were discussed and no opinion whatsoever on merits was expressed. Only taking into consideration, the offer by the assessee that he is ready to pay more than the amount the auction purchaser has offered, learned Single Judge held in the interest of justice and equity, the property should be restored to the writ petitioner but on payment of adequate compensation to the 7[th] respondent, that is appellant before us, ultimately opined Rs.4,00,000/- would be just and proper compensation to be paid. Be as it may, the fact remains, the owners of the property can always rely on the procedural aspect to support their contentions raised in the Writ Petition supporting the judgment of the learned Single Judge. Therefore, non-filing of an W.A.No.879/2008 13 appeal by the writ petitioner would not come in the way of referring to the merits of the case that all the contentions and challenge in the Writ Petition were mainly with regard to the procedural aspect as contemplated under Revenue Recovery Act especially with reference to Section 49 and 54 of the Act. 13. Section 49 of the Revenue Recovery Act refers to procedure for sale of immovable property. It contains sub sections (1) to (6). So far as the present appeal, the relevant provision is 49(2) with sub clauses (i) to (vi) which read as under: _“49(2): Previous to the sale, the Collector or the authorised officer, as the case may be, shall issue a notice thereof in English and in Malayalam and also in the language of the locality where such language is not Malayalam, specifying, -_ _(i) the name of the defaulter; (ii) the position and extent of_ W.A.No.879/2008 14 _the land and of his buildings and other known improvements thereon;_ _(iii) the amount of revenue assessed on the land, or upon its different sections;_ _(iv) the amount for the recovery of which the sale is ordered;_ _(v) the proportion of the public revenue due during the remainder of the current financial year; and_ _(vi) the time, place and conditions of sale.”_ 14. At the end of sub section (2) it clearly indicates, the notice shall be duly served and published at least 30 days before the date of sale. It is the categorical stand of the owner of the property that the auction notice dated 21.4.2001 was served on him on 16.5.2001 and, immediately, on 7.6.2001, he filed objections followed by another objection statement at Ext.P4 dated 25.6.2001. This is purely a question of W.A.No.879/2008 15 fact. Neither the Land Revenue Commissioner nor the learned Single Judge have gone into said controversy. Even otherwise, no material is placed before us to show on what date exactly the notice was served on him, that is, the auction notice. Even if we presume that the notice was served within one month, whether other procedural aspects contemplated under Section 49 was complied with or not has to be seen. It is not in dispute that the amount to be recovered from the sale of property towards arrears of tax and the uptodate interest was about 1,90,000/- and odd. This was known to the auction purchaser, public and also Tahsildar who was conducting the sale. If the property was sold for Rs.95,000/- it was very much within the knowledge of Tahsildar who conducted the sale that it would not clear the dues of sales tax etc. to the Government. It was open to the Tahsildar not to proceed with the sale and re-auction the property for higher price. This would be W.A.No.879/2008 16 purely in the interest of safeguarding the revenue of the State. Unfortunately, such a recourse was not opted out by the officer concerned. Even otherwise, when property were to be sold in public auction, though there is no mandate to fix the upset price as bench mark for auction sale, the officer who was in-charge of auction proceedings must take care to see what would be the market value of the property if it was sold in the regular course of business when compared to the offer made by the auction purchaser. This would serve the purpose of safeguarding the interest of the owner of the property as in public auction people tend to quote as less price as possible in order to make benefit for themselves. The officer in-charge of the auction proceedings must take care to see that the owner of the property should not be deprived of the proper price for the property and so also the Government should not loose the revenue by selling the property for a meager amount. However, from this W.A.No.879/2008 17 angle, there was no thinking at all on the part of the officer conducting the sale. 15. Then coming to the publication of auction notice as contended by the writ petitioner, the judgment relied upon by the learned counsel reported in **Gopalakrishnan's case** pertains to a case where on several occasions the sale was conducted and no purchaser came forward to purchase the property and therefore their Lordships held, having regard to the facts and circumstances of each case the officer who is incharge of sale proceedings must give wide publicity even by paper publication. In the present case, though similar situation is not faced by the officer in-charge of the sale but other reasons could have persuaded him not to accept the offer made by the auction purchaser as indicated above. 16. Then coming to the consideration of objections raised, Section 54 of the Act creates a W.A.No.879/2008 18 mandate that confirmation of sale can be made only if no application under Section 52 or 53 was pending consideration and has been rejected which reads as under: _“54: Order confirming or setting aside sale: On the expiration of thirty days from the date of the sale, if no application to have the sale set aside is made under Section 52 or Section 53 or if any such application has been made and rejected, the Collector shall make an order confirming the sale:_ _Provided that if the Collector has reason to think that the sale ought to be set aside notwithstanding that no such application has been made or on grounds other than those alleged in any application which has been made and rejected, he may, after_ W.A.No.879/2008 19 _recording his reasons in writing, set aside the sale.”_ 17. Apparently, Exts.P3 and P4 were in existence as on the date of confirmation of sale and these two objections dated 7.6.2001 and 25.6.2001 clearly indicates all the procedural lapses so also insufficiency of the sale price were raised at the earliest point of time by the owner of the property. Once the procedure contemplated under Section 54 for confirmation of sale is not adopted by the officer in question, it amounts to procedural lapse violating the mandate under the Statute. 18. The two judgments referred to by the learned counsel for appellant pertain to auction sales conducted in the execution of decrees under Order XXI of the Code of Civil Procedure, we are concerned with the procedure that has to be adopted under Kerala Revenue Recovery proceedings as per the provisions indicated above. We W.A.No.879/2008 20 have referred to those provisions and are of the opinion that Tahsildar failed to discharge his duty and obligation to see that maximum price is secured for the property in question at least which covers the dues of the revenue. In the absence of the same, we are of the opinion that there was no application of mind to proceed further so far as the Tahsildar is concerned. 19. Then coming to the confirmation of sale it is done by Revenue Divisional Officer totally ignoring Section 54 mandate that an application to set aside the sale made under Section 53 complaining material irregularity was pending and was not considered as on the date of confirmation of sale, but the sale was confirmed. This is in clear violation of the mandate. 20. So far as pendency of such applications, there is categorical statement on behalf of the writ petitioner not only in the Writ Petition but also in the averments of Revision Petition that came to be decided as per orders W.A.No.879/2008 21 under Ext.P10 by the Land Revenue Commissioner. There is no denial of this fact by the appellant herein or the State that no such application was pending when the sale was confirmed. In the absence of such material, we have to accept the stand of the writ petitioner that objections or application under Section 53 was pending as on the date of confirmation of sale. 21. Then coming to the opinion of the learned Single Judge, without referring to any of the above legal issues he proceeded on the grounds of equity. Therefore, none of the above aspects were dealt with. Even otherwise, the property was sold in public auction for Rs.95,000/- in 2001 and the compensation that was to be paid in 2008, after seven years, was Rs.4,00,000/-, little more than three times the amount he purchased the property in public auction. Even if the amounts were to be kept in a Nationalised or a Scheduled Bank, he would not have earned more than W.A.No.879/2008 22 double the amount of Rs.95,000/-. He was getting three times the amount he has paid. Therefore, even looking from the angle of equity, we are of the opinion that the amount of Rs.4,00,000/- was good compensation in 2008. 22. Then coming to the actual payment of Rs.4,00,000/- though the amount was ordered to be paid on or before 15.4.2008, according to the writ petitioner, within the time he offered the amount but the appellant/auction purchaser did not receive the same. If that was so, in the light of stay of the judgment of the learned Single Judge, he could not have done anything else. However, the fact remains, we are in 2013, lapse of more than 5 years. In the interest of justice, we are of the opinion that Rs.4,00,000/- together with interest at 9% from 15.4.2008 till the date of deposit would be just and proper amount. W.A.No.879/2008 23 We direct the party respondents to deposit said amount of 4,00,000/- together with interest till the date of deposit within two months from today. The appellant is entitled to withdraw the same on proper identification. Writ Appeal is disposed of as above. Sd/- **MANJULA CHELLUR,** **CHIEF JUSTICE.** **Sd/-** **A.M.SHAFFIQUE, JUDGE.** ps/16/12