2022 Supreme(SC) 151

SUPREME COURT OF INDIA
(From the High Court of Andhra Pradesh at Amaravati)
M.R. Shah, B.V. Nagarathna, JJ.
K. Kumara Gupta – Appellant
Versus
Sri. Markendaya and Sri. Omkareswara Swamy Temple & Ors. - Respondents
Civil Appeal Nos. 791-792 of 2022
Decided On : 18-02-2022

IMPORTANT POINTS
(1) Auction Sale of Land – After public auction is held and highest bid is received and property is sold in a public auction in favour of a highest bidder, such a sale cannot be set aside on the basis of some offer made by third parties subsequently.
(2) Auction sale of land of Temple – Valuation as on date of auction is relevant consideration and not value after so many years and over two decades after conducting auction and confirming sale.

Headnote:

(A) Property Law – Auction Sale of Land – Unless there is concrete material and it is established that there was any fraud and/or collusion or land in question was sold at a throw away price, sale pursuant to public auction cannot be set aside at instance of strangers to auction Proceeding – Sale pursuant to public auction can be set aside in an eventuality where it is found on the basis of material on record that property had been sold away at a throw away price and/or on a wholly inadequate consideration because of fraud and/or collusion and/or after any material irregularity and/or illegality is found in conducing/holding public auction – After public auction is held and highest bid is received and property is sold in a public auction in favour of a highest bidder, such a sale cannot be set aside on the basis of some offer made by third parties subsequently and that too when they did not participate in auction proceedings and made any offer and/or offer is made only for sake of making it and without any serious intent – Under normal circumstances, unless there are allegations of fraud and/or collusion and/or cartel and/or any other material irregularity or illegality, highest offer received in public auction may be accepted as a fair value – Otherwise, there shall not be any sanctity of a public auction. (Paras 8.2 and 8.8)

(B) Endowments Act, 1987 – Section 93 – Auction sale of land of Temple – Direction for re-auction of entire land by fixing upset price higher than what had been fixed earlier – Once appellant was found to be highest bidder in a public auction in which 45 persons had participated and thereafter when sale was confirmed in his favour and even sale deed was executed, unless and until it was found that there was any material irregularity and/or illegality in holding public auction and/or auction/sale was vitiated by any fraud or collusion, it is not open to set aside auction or sale in favour of a highest bidder on the basis of some representations made by third parties, who did not even participate in auction proceedings and did not make any offer – Sale was confirmed in favour of appellant by Commissioner, Endowments Department after obtaining report of Assistant Commissioner – High Court ought not to have ordered re-auction of land in question after a period of 23 years of confirmation of sale and execution of sale deed in favour of auction purchaser by observing that value of property might have been much more, otherwise, object and purpose of holding public auction and sanctity of public auction will be frustrated – If there was any error in decision-making process adopted by authority, remedy available was to question sale deed in an appropriate proceeding available under law and not by filing a petition under Article 226 of Constitution of India. (Paras 8.1, 8.2 and 8.3)

(C) Endowments Act, 1987 – Section 93 – Auction sale of land of Temple – Direction for re-auction of entire land by fixing upset price higher than what had been fixed earlier – Division Bench of High Court ought not to have passed impugned judgment and order in an appeal preferred by Temple Trust for simple reason that it was Executive Officer of Temple Trust, who had conducted auction; it was Executive Officer, who had obtained Clearance Certificate from Income Tax department and who executed sale deed in favour of highest bidder-appellant herein – At no point of time till judgment and order was passed by Single Judge, Temple Trust had challenged auction/sale on the ground that amount realized was inadequate – Temple Trust could not have challenged their own decision which they had never challenged earlier – Division Bench of High Court ought not to have passed an order for re-auction of property after a period of 23 years from date of auction/sale to detriment of rights of appellant who was successful bidder in auction sale – Valuation as on date of auction is relevant consideration and not value after so many years and over two decades after conducting auction and confirming sale – Impugned judgment and order passed by Division Bench of High Court is unsustainable and accordingly quashed and set aside – Judgment and order passed by Single Judge in Writ Petition No.25407 of 1999 ordered to be restored. (Paras 8.10, 8.12, 8.13 and 9)

Facts of the case:

Feeling aggrieved and dissatisfied with the impugned judgment and order dated 18.09.2019 passed by the High Court of Andhra Pradesh at Amaravati in Writ Appeal Nos.790 and 1069 of 2018 by which High Court has allowed the said writ appeals and has directed authorities concerned to conduct a re-auction of the entire properties by fixing the upset price higher than what has been fixed earlier, the auction purchaser, who purchased the property in question in the year 1998, has preferred the present appeals.

Finding of Court:

After a period of 20-23 years, the prices of lands are bound to increase. The auction was conducted and held in the year 1998 and was sold in favour of the appellant then on payment of the full sale consideration as per the highest bid offered by him. Therefore, valuation as on the date of auction is the relevant consideration and not value after so many years and over two decades after conducting auction and confirming the sale.

Result : Appeals allowed.