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2025 Supreme(SC) 1573

SUPREME COURT OF INDIA
J.B. PARDIWALA AND K.V. VISWANATHAN, JJ.
Azam Khan – Appellant
Versus.
Divisional Commissioner Faizabad And Others – Respondent
Petition for Special Leave to Appeal (C) Nos.22676-22677 of 2022 [Arising out of impugned final judgment and order dated 09-11-2021 in CMA No. 79089/2020 and order dated 24-02-2020 in MS No. 1186/1994 passed by the High Court of Judicature at Allahabad, Lucknow Bench]
Decided on : 02-04-2025

Headnote:(A) U.P. Zamindari Abolition Act and Land Reforms Rules, 1952 - Rule 285L - Auction proceedings declared bad due to procedural irregularities - The petitioner, who was the highest bidder, entitled only to refund of auction price with limited interest as per Rule 285L, but court granted higher interest of 9% due to peculiar circumstances. (Paras 12-20)

(B) Writ jurisdiction - Courts can intervene if auction process is not transparent or fair, ensuring justice is upheld. (Paras 12)

Facts of the case:
The appellant participated in an auction in 1992 but faced challenges to the auction proceedings, leading to a high court ruling that set aside the auction.

Findings of Court:
The auction was set aside but the appellant was entitled to a refund of the amount deposited with interest, exceeding what was prescribed under the Rules due to the prolonged delay.

Issues: Whether the auction proceedings were conducted fairly and what relief should be granted to the highest bidder.

Ratio Decidendi: The court clarified that under the rules, though the petitioner was primarily entitled to a minimal refund, the unique aspects of the case warranted a higher interest compensation for fairness.

Result: Special Leave Petitions stand disposed of, directing payment of Rs.70,000/- with 9% interest.

Table of Content
1. background facts of the auction process. (Para 1 , 5 , 6 , 7)
2. court's approach to the appeal. (Para 2 , 3 , 4)
3. legal challenges to the auction sale. (Para 8 , 10 , 11 , 12)
4. legal interpretation regarding rule 285l. (Para 15 , 16 , 17 , 18)
5. final ruling on the refund of auction money. (Para 20 , 21 , 22 , 23)

ORDER :

1. These petitions arise from the judgment and order passed by the High Court of Judicature at Allahabad, Lucknow Bench dated 24-2-2020 in Misc. Single No.1186/1994, by which the High Court allowed the Writ Petition filed by the father of the Respondent Nos. 4 to 6 respectively - herein (original petitioners) and thereby setting aside the order passed by the Board of Revenue and the order dated 9-11-2021 passed in Civil Miscellaneous Application No.79089/2020 (Review Application) filed by the petitioner whereby the Review Application was dismissed.

2. We need not delve much into the facts of this litigation as we propose to dispose of these petitions by passing a short order.

3. We take notice of the order passed by a coordinate Bench of this Court dated 2-12-2022 which reads thus:-

    'Delay condoned.

    Issue notice confined to the question as to the appropriate compensation on damages which can be paid to the petitioner on the facts of the case, returnable in four weeks.'

4. Thus, it is evident that notice was issued confined only to the question whether the petitioner - herein should be compensated appropriately by way of damages in the facts and circumstances of the case.

5. It appears from the materials on record that the father of the Respondent Nos.4 to 6 respectively herein had obtained loan from a Bank. The father defaulted in repayment of the loan.

6. In such circumstances, the land in question was put to auction by the Collector sometime in 1992.

7. The petitioner - herein participated in the auction and was declared the highest bidder. His bid of Rs.70,000/- for the subject - land was accepted and finalized.

8. However, before any Sale Certificate could be issued and the auction proceedings could attain finality, the private respondents - herein challenged the legality and validity of the auction first before the Commissioner.

9. The Commissioner declined to grant any relief.

10. The order of the Commissioner was challenged before the Board of Revenue. The Board of Revenue also declined to interfere.

11. In such circumstances, referred to above, the private respondents went before the High Court. The High Court allowed the writ petition filed by the private respondents - herein holding as under:-

    '(12) The auction sale dated 14.08.1992 having not followed the prescribed procedure is set aside. The order dated 04.03.1993 passed by the Commissioner in Appeal and the order dated 08.04.1994 passed by the Board of Revenue in the Revision both are set aside. The petitioner has expressed his willingness to clear that loan amount alongwith interest and recovery charges upto date of auction sale i.e. 14.08.1992, it is admitted by the State-respondents that Rs.53,000/- and odd was due, the petitioner shall deposit the said amount in the office of the opposite party no.3 and the opposite party no.3 shall direct the return of Rs.70,000/- deposited by the respondent no.4 now represented through his legal heirs and representatives to the said legal heirs and representatives alongwith admissible interest as per Rule 285 to the legal heirs and representatives of the respondent no.4 within a period two months from the date a certified copy of the order is produced before him.

    (13) Learned counsel for the respondent no.4 says that Rs.70,000/- was deposited by them in the Treasury in 1992 and more than 28 years have passed if such amount had been deposited any Bank, the respondents would have earned interest thereon.

    (14) Learned Standing Counsel for the State-respondents has pointed out from the affidavit filed by the State-respondents that the amount was tried to be returned to the respondent no.4 and his legal he

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