IN THE HIGH COURT OF KARNATAKA
Alok Aradhe, S. Vishwajith Shetty, JJ.
C. Rajamallaiah – Appellant
Versus
State of Karnataka – Respondent
W.A. No. 639 of 2009 (KLR-RES)
Decided On : 13-01-2023
AUCTION VALIDITY - Karnataka Land Revenue Act, 1964 - Sections 168, 169, 174, 175, 176, 177; Rule 124 - The court discussed the procedures for auction sales under the Karnataka Land Revenue Act, emphasizing the necessity of proper notice and compliance with deposit requirements. It highlighted that failure to serve notice and misdescription of property dimensions constituted legal infirmities that invalidated the auction. The court concluded that the auction was not conducted in accordance with the law, leading to its annulment.
Fact of the Case:
The appeal arose from a judgment dismissing a writ petition challenging the auction of property belonging to an excise contractor who had significant arrears. The auction was conducted despite ongoing litigation regarding the contractor's debts and the validity of the auction notice was contested due to misdescription of the property and failure to serve notice.
Finding of the Court:
The court found that the auction was invalid due to violations of the Karnataka Land Revenue Act, including failure to serve the auction notice and misdescription of the property. The court emphasized that the auction purchaser did not comply with the deposit requirements, which warranted the annulment of the sale.
Issues: The primary issue was whether the auction sale was valid given the alleged procedural irregularities, including the failure to serve notice and the misdescription of the property.
Ratio Decidendi: The court held that compliance with statutory provisions regarding auction sales is mandatory. The failure to serve notice as required under Section 168(2) and the misdescription of property dimensions constituted material irregularities that invalidated the auction.
Final Decision: The court quashed the orders confirming the auction and directed the State Government to decide the contractor's pending application under the waiver scheme, allowing for the recovery of any outstanding amounts thereafter.
JUDGMENT
ALOK ARADHE, J.
This intra court appeal arises out of judgment dtd. 13/2/2009 passed by learned Single Judge by which the writ petition preferred by the appellants has been dismissed and order dtd. 31/8/2006 passed by the Karnataka Appellate Tribunal (hereinafter referred to as 'the Tribunal' for short), upholding the sale proclamation dtd. 22/3/2006 issued by Tahsildar, Mandya, has been upheld.
FACTS:
2. In order to appreciate the grievance of the appellants, relevant facts need mention. Late C.Rajamallaiah (hereinafter referred to as 'the Contractor' for short) was father of the appellant and was an excise contractor who had purchased rights to sell toddy in retail in Mandya District. The Contractor was in arrears on account of monthly rentals amounting to Rs.57, 06, 350.00 with interest during the year 1982-83 and 83-84. The Deputy Commissioner passed an order on 22/11/1984 directing recovery of the aforesaid amount along with interest. The Contractor challenged the order passed by the Deputy Commissioner in a writ petition viz., W.P.No.17754/1983 in which an interim order of stay was granted. The said writ petition was dismissed by an order dtd. 31/5/1985 and the order passed by the learned Single Judge was upheld by a division bench of this court in a writ appeal.
3. The Tahsildar, Mandya issued a notice on 15/3/1988 for recovery of arrears of rentals as arrears of land revenue. Thereupon the son of the Contractor filed a suit viz., O.S.No.149/1988 seeking the relief of permanent injunction. In the said civil suit, an interim order of injunction was passed on 19/4/1988. The said civil suit was dismissed on 7/2/1994 and the judgment and decree passed by the trial court was upheld in an appeal vide judgment and decree dtd. 19/9/1998 passed in R.A.No.94/1994. The aforesaid judgment and decree was upheld by learned Single Judge of this court in RSA No.30/1999 vide judgment and decree dtd. 1/3/1999.
4. Thereafter, notices dtd. 20/11/1998 and 10/11/2000 were issued to the Contractor under Rule 113 and 124 of Karnataka Land Revenue Rules, 1966 (hereinafter referred to as 'the Rules' for short) demanding a sum of Rs.2, 33, 23, 343.00. The State Government by an order dtd. 2/9/2002 introduced Karsamadhan Scheme (hereinafter referred to as 'the scheme' for short) which was in vogue for a period from 1/10/2002 till 29/12/2002.Thereafter, another notice dtd. 22/3/2006 was issued under Rule 113 and Rule 124 of the Rules for recovery of an amount of Rs.2, 86, 59, 234.00 by auction of the property of the contractor. The land in question, which was put for auction was described as land measuring 100x60 ft surrounded by the boundaries mentioned in the notice. The auction was scheduled to be held on 3/4/2006.
5. In pursuance of the aforesaid auction notice, an auction was held on 3/4/2006, in which the bid of respondent No.4 (hereinafter referred to as 'the auction purchaser' for short) for an amount of Rs.65, 50, 000.00 was found to be highest.
6. The Contractor submitted a representation on 5/4/2006 to the Deputy Commissioner, Mandya not to confirm the auction held on 3/4/2006. The auction purchaser deposited an amount of Rs.10.00 Lakhs by cheque and deposited the amount of Rs.6, 37, 500.00 by way of cash being 25% of the amount. The auction purchaser was required to deposit the balance 75% of the bid amount within a period of 15 days. The auction purchaser tendered the balance amount of Rs.49, 12, 500.00 by way of cheque on 21/4/2006. The Contractor thereafter submitted representations dtd. 2/5/2006 and 21/6/2006
7. On the basis of the representations issued by the contractor, a notice was issued to the contractor. The contractor appeared in the proceeding before the Deputy Commissioner through a power of attorney and submitted written submissions on 27/6/2006. The deputy Commissioner by an order dtd. 10/7/2006 decided the representations submitted by the contractor and upheld the auction held on 3/4/2006. The Deputy Commissiner
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