1. Auction sale of property for land revenue arrears under Maharashtra Land Revenue Code, 1966 — Challenge to legality of auction proceedings and confirmation of sale. (Para 4 , 5 , 6 )
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2024 Supreme(SC) 564
SUPREME COURT OF INDIA
J.B. PARDIWALA, MANOJ MISRA, JJ.
M/s AL-CAN Export Pvt. Ltd. – Appellant
Versus
Prestige H.M. Polycontainers Ltd. & Ors. – Respondents
Civil Appeal No. 7254 of 2024 (Arising Out of SLP(C) No. 29334 of 2016) with Civil Appeal No. 7255 of 2024 (Arising Out of SLP(C) No. 29335 of 2016)
Decided On : 09-07-2024
Important Points
The auction sale was declared illegal due to non-compliance with mandatory notice requirements, emphasizing the necessity of adhering to statutory procedures in public auctions.
Subject
Property Law - Auction and Sale Procedures
Act Referred
CIVIL PROCEDURE CODE: O.21 R.54(2), O.21 R.67, O.21 R.90, S.141
CONSTITUTION OF INDIA: Art.225, Art.226, Art.227
LIMITATION ACT: Art.137
MAHARASHTRA LAND REVENUE CODE: S.178, S.193, S.194, S.207, S.208, S.210, S.212, S.247
MAHARASHTRA REALISATION OF LAND REVENUE RULES: R.12(2)(a), R.13, R.14(a), R.5(1)
CONSTITUTION OF INDIA: Art.225, Art.226, Art.227
LIMITATION ACT: Art.137
MAHARASHTRA LAND REVENUE CODE: S.178, S.193, S.194, S.207, S.208, S.210, S.212, S.247
MAHARASHTRA REALISATION OF LAND REVENUE RULES: R.12(2)(a), R.13, R.14(a), R.5(1)
Headnote
(A) Maharashtra Land Revenue Code, 1966 - Sections 193, 194, 195, 208, and 247 - Auction sale of property - The court found that the auction was conducted in violation of mandatory provisions, specifically that the sale occurred before the expiration of the required 30-day notice period, rendering the sale illegal - The High Court affirmed the Additional Commissioner's order setting aside the auction sale due to procedural irregularities and lack of jurisdiction by the Tahsildar - The appellant was directed to deposit a specified amount to retain possession of the property. (Paras 56, 75, 76)
(B) Jurisdiction - The court held that the Additional Commissioner had jurisdiction to hear appeals under Section 247 despite the appellant's claims of lack of jurisdiction, as the remedy under Section 210 was rendered illusory. (Paras 68, 72)
Facts of the case:
The appellant purchased property at auction conducted by the Tahsildar, which was challenged by the original owner and a financial institution due to alleged procedural violations and lack of proper notice. (Paras 4, 6)
Findings of Court:
The auction sale was set aside due to non-compliance with statutory requirements, and the appellant was given a chance to retain the property by depositing a specified amount. (Paras 75, 76)
Issues: The main issues included whether the auction sale was valid under the Revenue Code and whether the Additional Commissioner had jurisdiction to hear the appeals. (Paras 26, 68)
Ratio Decidendi: The court emphasized the importance of adhering to statutory procedures in public auctions and ruled that the failure to comply with mandatory provisions rendered the auction sale illegal. (Paras 56, 60)
Result: Appeals allowed in part; the appellant must deposit Rs. 4,00,00,000/- to retain possession of the property. (Paras 76, 78)
(B) Jurisdiction - The court held that the Additional Commissioner had jurisdiction to hear appeals under Section 247 despite the appellant's claims of lack of jurisdiction, as the remedy under Section 210 was rendered illusory. (Paras 68, 72)
Facts of the case:
The appellant purchased property at auction conducted by the Tahsildar, which was challenged by the original owner and a financial institution due to alleged procedural violations and lack of proper notice. (Paras 4, 6)
Findings of Court:
The auction sale was set aside due to non-compliance with statutory requirements, and the appellant was given a chance to retain the property by depositing a specified amount. (Paras 75, 76)
Issues: The main issues included whether the auction sale was valid under the Revenue Code and whether the Additional Commissioner had jurisdiction to hear the appeals. (Paras 26, 68)
Ratio Decidendi: The court emphasized the importance of adhering to statutory procedures in public auctions and ruled that the failure to comply with mandatory provisions rendered the auction sale illegal. (Paras 56, 60)
Result: Appeals allowed in part; the appellant must deposit Rs. 4,00,00,000/- to retain possession of the property. (Paras 76, 78)
Judgement Key Points
Key Points: - (!) - (!) - (!) - (!) - (!) - (!) - (!) - (!) - (!) - (!)
What is... How to determine whether the Additional Commissioner had jurisdiction under Section 247 of the Maharashtra Land Revenue Code to hear appeals challenging a revenue sale?
What is... What are the standards for fairness and compliance with mandatory notice provisions in public auctions conducted by revenue authorities under the Maharashtra Land Revenue Code?
What is... How to reconcile the applicability of Order XXI Rule 90 CPC to writ proceedings under Article 226 in the context of revenue auctions and the controls needed to ensure legality and non-arbitrariness?
Legal Category Hierarchy
- constitutional law
- administrative law
- land revenue law
- practice and procedure
Advocates Appeared:
For the Appellant(s) : Mr. P.S. Patwalia, Sr. Adv., Mr. Abhay Kumar, AOR, Mr. Janak R. Shah, Adv., Mr. Shagun Ruhil, Adv., Mr. Saurabh Mishra, Adv., Ms. Neetu Jain Gautam, Adv., Mr. Tirupati Gaurav Shahi, Adv.
For the Respondent(s): Mr. Sachin Patil, Adv., Mr. Siddharth Dharmadhikari, Adv., Mr. Aaditya Aniruddha Pande, AOR, Mr. Bharat Bagla, Adv., Mr. Sourav Singh, Adv., Mr. Aditya Krishna, Adv., Ms. Preet S. Phanse, Adv., Mr. Adarsh Dubey, Adv., Mr. Geo Joseph, Adv., Mr. Risvi Muhammed, Adv., Mr. Durgesh Gupta, Adv., Mr. Mukesh Kumar Maroria, AOR. Mr. Amar Dave, Adv., Mr. Amar Dave, Sr. Adv., Ms. Amrita Narayan, Adv., Mr. Mohit D. Ram, AOR, Mr. Rajul Shrivastav, Adv., Ms. Monisha Handa, Adv., Mr. Ashwin Rakesh, Adv., Mr. Madhav Sharma, Adv.
For the Appellant(s) : Mr. P.S. Patwalia, Sr. Adv., Mr. Abhay Kumar, AOR, Mr. Janak R. Shah, Adv., Mr. Shagun Ruhil, Adv., Mr. Saurabh Mishra, Adv., Ms. Neetu Jain Gautam, Adv., Mr. Tirupati Gaurav Shahi, Adv.
For the Respondent(s): Mr. Sachin Patil, Adv., Mr. Siddharth Dharmadhikari, Adv., Mr. Aaditya Aniruddha Pande, AOR, Mr. Bharat Bagla, Adv., Mr. Sourav Singh, Adv., Mr. Aditya Krishna, Adv., Ms. Preet S. Phanse, Adv., Mr. Adarsh Dubey, Adv., Mr. Geo Joseph, Adv., Mr. Risvi Muhammed, Adv., Mr. Durgesh Gupta, Adv., Mr. Mukesh Kumar Maroria, AOR. Mr. Amar Dave, Adv., Mr. Amar Dave, Sr. Adv., Ms. Amrita Narayan, Adv., Mr. Mohit D. Ram, AOR, Mr. Rajul Shrivastav, Adv., Ms. Monisha Handa, Adv., Mr. Ashwin Rakesh, Adv., Mr. Madhav Sharma, Adv.
Table of Contents
2. Applicability of Order XXI Rule 90 CPC regarding substantial injury — Jurisdiction of appellate authority under Section 247 of Revenue Code — Validity of auction notice and confirmation process. (Para 12 , 13 , 14 , 15 , 17 , 18 , 23 )
3. Mandatory 30-day notice and post-confirmation possession requirements violated — Suppression of objections from the confirming authority — Action found arbitrary and illegal rather than merely irregular. (Para 49 , 51 , 55 , 56 , 58 , 59 , 60 , 62 , 63 , 64 )
4. Order XXI Rule 90 CPC is inapplicable to Article 226 writ proceedings — Mandatory statutory auction procedures must be strictly followed to prevent arbitrariness and ensure transparency. (Para 46 , 48 , 49 , 55 )
5. High Court judgment affirmed — Appellant granted option to retain property upon payment of settlement amount to the mortgage holder. (Para 77 , 78 )
6. Does Order XXI Rule 90 of the Code of Civil Procedure apply to writ proceedings under Article 226 of the Constitution?
No. The Explanation to Section 141 of the CPC explicitly excludes proceedings under Article 226. Writ courts exercise extraordinary original jurisdiction and are not compelled to follow the procedural requirements of the CPC. (Para 44 , 46 , 48 , 49 )
7. What is the legal consequence of failing to provide the mandatory 30-day notice in a revenue auction under the Maharashtra Land Revenue Code?
Under Section 194, no sale can occur until 30 days after the latest notice is affixed. Failure to adhere to this mandatory period is a gross illegality that renders the state action arbitrary and void. (Para 56 , 63 )
8. At what stage can a purchaser be put in possession of property sold under the Revenue Code?
Pursuant to Section 212, the purchaser can only be put into possession after the sale has been confirmed by the Collector and the sale certificate has been handed over to the purchaser. (Para 58 , 59 , 63 )
9. How does the law distinguish between a nullity and an irregularity in legal proceedings?
An irregularity is a deviation from a rule of law that does not remove the foundation of authority for the proceeding. A nullity is a proceeding taken without any foundation or so essentially defective that it is void. (Para 64 , 65 , 66 )
JUDGMENT :
J.B. Pardiwala, J.
For the convenience of exposition, this judgment is divided into the following parts:
| INDEX |
| A. FACTUAL MATRIX |
| B. SUBMISSIONS ON BEHALF OF THE APPELLANT |
| C. SUBMISSIONS ON BEHALF OF THE RESPONDENT NO. 6/Asset Reconstruction Co. (India) Ltd. (ARCIL) |
| D. ISSUES FOR DETERMINATION |
| E. RELEVANT STATUTORY PROVISIONS OF THE REVENUE CODE |
| F. ANALYSIS |
| i. Whether the provisions of Order XXI Rule 90 of the Code of Civil Procedure would apply to the writ proceedings under Article 226 of the Constitution? |
| a. Difference between the auction sale conducted by the court in the execution proceedings initiated by the decree holder and the auction proceedings conducted by the State through its revenue authorities like Tahsildar, etc. |
| ii. Whether the Additional Commissioner, Konkan Division, Maharashtra had the jurisdiction to decide the two appeals filed by the respondent nos. 1 and 6 respectively under Section 247 of the Maharashtra Land Revenue Code, 1966? |
| G. CONCLUSION |
i. Whether the provisions of Order XXI Rule 90 of the Code of Civil Procedure would apply to the writ proceedings under Article 226 of the Constitution?
a. Difference between the auction sale conducted by the court in the execution proceedings initiated by the decree holder and the auction proceedings conducted by the State through its revenue authorities like Tahsildar, etc.
ii. Whether the Additional Commissioner, Konkan Division, Maharashtra had the jurisdiction to decide the two appeals filed by the respondent nos. 1 and 6 respectively under Section 247 of the Maharashtra Land Revenue Code, 1966?
G. CONCLUSION
1. Leave granted.
2. Since the issues raised in both the captioned appeals are the same; the subject-matter also being the same; the parties are also same and the challenge is also to the self-same judgment and order passed by the High Court, those were taken up for hearing analogously and are being disposed of by this common judgment and order.
3. The captioned appeals arise from the common judgment and order passed by the High Court of Judicature at Bombay dated 9.12.2015 in Writ Petition (C) No. 415 of 2011 with Writ Petition (C) No. 418 of 2011 respectively filed by the appellant herein by which the High Court rejected both the writ petitions and thereby affirmed the common order dated 18.02.2010 passed by the Additional Commissioner, Konkan Division, Mumbai setting aside the order of sale passed by the Tahsildar, Talasari dated 3.12.2008 as affirmed by the Additional Collector, Thane dated 15.01.2009 passed in favour of the appellant herein.
4. The subject-matter of the present litigation relates to the legality, validity and propriety of the auction proceedings conducted by the Tahsildar, Talasari of the subject property which was originally owned by the respondent No. 1 herein, namely, Prestige H.M. Polycontainers Limited.
5. The subject property owned by the respondent no. 1 herein was put to auction under the provisions of the Maharashtra Land Revenue Code, 1966 (hereinafter referred to as "the Revenue Code"). In the said auction proceedings, the appellant herein was declared as the successful bidder and ultimately, sale certificate was issued by the Additional Collector, Thane in favour of the appellant.
A. FACTUAL MATRIX
6. This litigation has a chequered history and therefore, it is necessary for this Court to look into the events that occurred over a period of time giving rise to the present two appeals before us:
a. The respondent no. 1, M/s Prestige H.M. Polycontainers, executed necessary loan and security documents in favour of the State Bank of India thereby mortgaging its property situated at Village Vadavali, Taluka Talsari, District Thane (Now District Palaghar), Maharashtra (hereinafter referred to as "the property") bearing Survey No. 87/11, admeasuring 13,978 sq. mts. Subsequently, the State Bank of India by an assignment agreement assigned the debts due and payable
