IN THE HIGH COURT OF KERALA AT ERNAKULAM
WA.No. 2216 of 2007(B)
1. CHANDRAMONY, THAVOOT HOUSE,
... Petitioner
Vs
1. M/S.S.R.CASHEWS (P) LIMITED
... Respondent
2. THE ASSISTANT COMMISSIONER (ASSMT)
3. THE TAHSILDAR (REVENUE RECOVERY)
4. THE VILLAGE OFFICER, VADAKKEVILA,
5. THE INDIAN OVERSEAS BANK, KOLLAM.
6. THE DISTRICT COLLECTOR,KOLLAM.
7. STATE OF KERALA, REPRESENTED BY THE
8. P. RAMACHANDRAN, KIRAN STEEL INDUSTRIES
For Petitioner :SRI.KRB.KAIMAL (SR.)
For Respondent :SRI.ARIKKAT VIJAYAN MENON
The Hon'ble the Acting Chief Justice MR.J.B.KOSHY
The Hon'ble MR. Justice V.GIRI
Dated :23/01/2009
O R D E R
J.B. KOSHY, Ag.C.J. &
V.GIRI, J.
-------------------------
W.A.No.2216 of 2007,
W.P.(C)Nos.9642 & 10045 of 2008
-------------------------
Dated this the 23th day of January, 2009.
JUDGMENT
GIRI, J.
The issues involved in these cases are
connected and the parties are also common.
Therefore, they have heard together and are
disposed of by this common judgment.
2. The 5th respondent in W.P.(C)No.16045/07
is the appellant in the writ appeal. The writ
petitioners committed default in payment of sales
tax arrears as also arrears due to the 4th
respondent bank. In revenue sale, a property
belonging to the defaulter firm was purchased by
the appellant for an amount of Rs.19.90 lakhs. The
sale was held on 25.4.2007 and the purchaser
remitted the amount within the due date on
22.5.2007. The 8th respondent impleaded in the writ
petition affirmed before the learned single Judge
that he has a right to purchase the property for a
price of Rs.10 lakhs in excess of the price quoted
by the appellant/auction purchaser. The learned
single Judge had stayed the confirmation of the
W.A.No.2216 of 2007 & con. cases
:: 2 ::
sale and proceeded to pass an order setting aside
the sale in favour of the 5th respondent, on the
additional 8th respondent paying to the appellant
the entire amount in terms of Section 52 of the
Revenue Recovery Act {for short ‘the Act’},
within a period three weeks from the date of the
judgment. There was a further direction to the
additional 8th respondent to deposit the balance
amount of the sale price of Rs.29 lakhs before
the Tahsildar. The Tahsildar was directed to
make appropriate appropriations of the amount so
remitted to the sales tax arrears in the first
instance and make out the balance to the 4th
respondent bank. The bank was permitted to
proceed against the defaulter for recovery of the
balance amount.
3. The auction purchaser the 5th
respondent in the writ petition has filed the
appeal and the Bench proceeded to pass an interim
stay of further proceedings on 10.9.2007.
4. In the meanwhile, taking note of the
application filed by the defaulter under Section
53 of the Act in respect of the revenue sale held
on 25.4.2007, the collector proceeded to pass an
W.A.No.2216 of 2007 & con. cases
:: 3 ::
order on 12.2.2008 setting aside the auction sale
conducted on 25.4.2007. The collector proceeded
to note from the files forwarded to him as also
from the report of the Tahsildar (RR) that a
valuation of the property which was brought to
sale is not seen to have been done prior to the
auction. Collector went on to express his
opinion that it is doubtful whether the auction
process has been conducted impartially and the
whole proceedings were not transparent. The
collector took note of the offer made by the
additional 8th respondent in W.P.(C)No.16045/07
for purchase at Rs.10 lakhs above the price
quoted by the appellant.
5. For all those reasons, among others,
the collector proceeded to set aside the auction
sale conducted on 25.4.2007 as per Section 53 of
the Act. The collector also issued a direction
to the Tahsildar (RR) to conduct a re-auction.
This order passed by the Collector has been
challenged in W.P.(C)No.10045/08 by the appellant
in W.A.No.2216/07, and in W.P.(C)No.9642/08, by
the additional 8th respondent in W.P.(C)
No.16045/07.
W.A.No.2216 of 2007 & con. cases
:: 4 ::
6. It is necessary to take note of another
development which took place in the meanwhile.
The defaulter, the petitioner in W.P.(C)
No.16045/07 proceeded to discharge the entire
sales tax arrears due to the Government under the
amnesty scheme, 2008. Thereupon, the
requisitioning authority issued a communication
to the Revenue Recovery authority, to lift the
attachment on the premise that there are no
outstanding arrears due from the defaulter.
7. We heard learned counsel on both sides.
8. The direction issued by the learned
single Judge in W.P.(C)No.16045/07 for re-auction
is not necessary at this stage in circumstances
where the defaulter had later discharged the
arrears due to the Government. Even apart from
the direction issued by the learned single Judge,
which is the subject matter of the writ appeal,
the Collector has proceeded to set aside the
auction held on 25.4.2007 and set aside the
proceedings under Section 53 of the Act as per
the order dated 12.2.2008 impugned in W.P.(C)
No.9642/08 and 1004/08. What now survives for
consideration is whether any grounds have been
W.A.No.2216 of 2007 & con. cases
:: 5 ::
made out for interference with the order passed
by the District Collector. We have perused the
order and we take note of the fact that the
defaulter was prompt in approaching the District
Collector on 30.4.2007, to set aside the sale
held on 25.4.2007. We also take note of the fact
that the collector has entered a specific finding
that an evaluation does not seen to have been
done prior to the auction. Collector had rightly
taken note of the fact that a better price was
reported for the property on an earlier occasion.
The collector has the jurisdiction to confirm the
auction or set aside the sale under Section 53 of
the Act. If the collector finds from the
materials available that a better price could
have been obtained for the property, had
appropriate steps been taken by the auctioning
officer in that regard, then he has the power to
set aside the sale and direct re-auction. From a
reading of the order and from the attendant
circumstances, we find that the Collector has
exercised his power in a proper and legal manner.
We also take note of the fact that in the
meanwhile the defaulter had actually remitted the
W.A.No.2216 of 2007 & con. cases
:: 6 ::
amount due to the Government. Therefore, at any
rate, it would not be fair to permit a stranger
auction purchaser to proceed to purchase the
property or permit another stranger to bid for
the property. We find no grounds to interfere
with the order passed by the District Collector
on 12.2.2008 setting aside held on 25.4.2007.
9. But we take note of the fact that
auction purchaser namely the appellant has been
put to certain trouble and as a matter of fact he
had remitted the amount due within the time
prescribed. He has been deprived of the use of
the money deposited by him. In the facts and
circumstances of the case, we are of the view
that he is eligible to be compensated.
10. Accordingly, we direct the petitioner
in W.P.(C)No.16045/07 viz., the 1st respondent in
the writ appeal, to pay the appellant an amount
equivalent to interest at the rate 12%, from
22.5.2007, on the amount deposited by the
appellant in the auction sale held on 25.4.2007.
Such amount by way of interest shall be paid
within two months from today. The interest shall
be payable from 22.5.2007 till the date of
W.A.No.2216 of 2007 & con. cases
:: 7 ::
payment. The State shall also refund the amount
deposited by the appellant as the bid amount,
within two months from today. It is made clear
that if there is any delay on the part of the
State in refunding the amount to the appellant,
the same shall carry interest at the rate of 12%
from the date on which the refund becomes due
till the date of payment. In the facts and
circumstances of the case, we are of the view
that the 1st respondent in the appeal shall also
pay an amount of Rs.1 lakh to the appellant, as
compensation and also to cover the expenses
incurred by the appellant. The said amount of
Rs.1 lakh shall also be paid within the
aforementioned period of two months from today.
The writ appeal is disposed of, subject to the
above directions.
11. For the reasons stated above, W.P.(C)
No.9642/08 and 10045/08 shall stand dismissed,
subject to the modification that the revenue
officers shall not proceed with the re-auction of
the property, on the basis of the direction
issued by the District Collector. But, this
shall be without prejudice to their right to act
W.A.No.2216 of 2007 & con. cases
:: 8 ::
upon a fresh recovery certificate, if any, issued
by the competent authority.
Writ appeal and the writ petitions are
disposed of as above.
Sd/-
(J.B. KOSHY)
ACTING CHIEF JUSTICE
Sd/-
(V.GIRI)
JUDGE
sk/
//true copy//