Important Point
Where procedure for sale had not been followed, auction sale was held to be vitiated and not maintainable.

Judgment

Harjit Singh Bedi, J. —

1.Leave granted.

2.Respondent No.1, M/s. Swadeshi Polytex Limited (hereinafter referred to as “SPL”) a company registered under the Companies Act, 1956 and presently a sick unit has its registered Office at Kavi Nagar, Industrial Area, Ghaziabad. Concededly approximately 33% of the shares of the SPL are held by Swadeshi Cotton Mills Limited, Kanpur (a unit of the National Textile Corporation, a Government Enterprise) about 28% and 15% by M/s. Paharpur Cooling Towers Limited and some financial institutions respectively, and the remaining 23% or so by the general public. It is on record that the CMD of the National Textile Corporation Ltd. is holding the charge of SPL and steps are underway for the rehabilitation of the company. It appears that till year 1996-97, SPL was doing reasonably well whereafter a financial crisis seems to have set in, forcing its closure on 30th September 1998. As SPL was unable to pay the wages due to its employees, several applications were filed by its workmen under the provisions of the Uttar Pradesh Industrial Peace (Timely Payment of Wages) Act, 1978 (hereinafter called the 1978 Act). A recovery certificate was thereafter issued under sub-section (1) of Section 3 of the 1978 Act and pursuant thereto, the Company was called upon to make good the wages due to the workmen and on its inability to do so, the authorities proceeded to recover the amounts due as arrears of land revenue. A report was thereafter submitted by the Amin on 7th January 2005 which was endorsed by the Sub-Divisional Magistrate, Ghaziabad in his communication dated 10th February 2005, whereupon an attachment notice in Form 73-D was issued and a proclamation for the sale of the property on 23rd February 2005 was also Ordered. The proclamation was however cancelled by the SDM, Ghaziabad and on re-consideration, an Order dated 1st April 2005 was passed and the Tehsildar, Ghaziabad was directed to hold the auction on 2nd May 2005 after giving wide publicity and after the properties had been properly valued. A fresh proclamation was accordingly issued by the Sub-Divisional Magistrate, Ghaziabad on 1st April 2005 itself, without disclosing the details of the properties or their estimated value as also the date of the auction. An auction notice was, however, published in “Amar Ujala” on the 22nd April 2005 indicating that the estimate value of the properties was about 27 Crores and that the transfer of the property pursuant to the auction would be made on the terms and conditions stipulated by the U.P. State Industrial Development Corporation (hereinafter called the UPSIDC) the present appellant. It is also the case of the appellant herein that the personal service of the sale proclamation was also made on the Chowkidar of the SPL on 21st April 2005. The auction was in fact held on the stipulated day i.e. 2nd May 2005 and the UPSIDC was found to be the highest bidder. The recovery certificate issued by the Deputy Labour Commissioner and the auction notice dated 22nd April 2005 was challenged by SPL by way of Writ Petition No. 35005 of 2005 referring to the irregularities in the issuance of the sale proclamation and the auction notice and it was prayed that the proceedings be quashed. A reply was filed in response to the Writ Petition but the petition was ultimately dismissed with the observation that repeated attempts to recover the dues had failed on account of the recalcitrant attitude of SPL and that the procedural defects which had been pointed out could be challenged by filing objections under Rule 285 (i) of the Uttar Pradesh Zamindari Abolition & Land Reforms Rules, 1952 (hereinafter called the “Rules”). Several objections were accordingly filed with respect to the auction and the preceding events, but the Commissioner, Meerut Division, in his Order dated 24th June 2005 dismissed the objections. Aggrieved by the Order dated 24th June 2005, SPL preferred a revision petition before the Board of Revenue