IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR
NUPUR BHATI, J.
Parmaram @ Parmanaram S/o Ramnarayan Jat – Appellant
Versus
Prescribed Authority-Cum-Sub Divisional Officer, Bikaner – Respondent
S.B. Civil Writ Petition No. 9986 of 2021
Decided on : 04-10-2023
Writ Petition - Recovery of Agricultural Loan - Rajasthan Agricultural Credit Operations (Removal of Difficulties) Act, 1974 - Section 13(1) - Section 13(2) - Section 247 of the Rajasthan Land Revenue Act, 1956 - The court quashed the sale declaration and order due to non-compliance with mandatory provisions of the Act of 1956, allowing the writ petition.
Fact of the Case:
The petitioner took an agricultural loan from a bank and failed to repay it. The bank initiated proceedings for recovery of the loan, leading to the auction of the petitioner's land. The petitioner filed a writ petition challenging the sale declaration and order.
Finding of the Court:
The court found that the sale declaration and order did not comply with the mandatory provisions of the Act of 1956, specifically Section 239, which requires a 30-day notice period for auction. The court also noted the petitioner's failure to repay the loan despite a conditional interim order.
Issues: Non-compliance with mandatory provisions of the Act of 1956, failure to repay the loan despite a conditional interim order.
Ratio Decidendi: The court held that the sale declaration and order were quashed due to non-compliance with the mandatory provisions of the Act of 1956, specifically Section 239, which requires a 30-day notice period for auction.
Final Decision: The court allowed the writ petition and quashed the sale declaration and order, along with all consequential proceedings initiated in light of such sale declaration and order.
JUDGMENT :
1. Though the matter is listed under ‘Orders’ category but with the joint consent of the counsels for both the parties, the matter is being finally heard and decided today itself.
2. The instant writ petition is preferred under Article 226 of the Constitution of India, claiming following reliefs:
i. The impugned sale declaration dated 10.3.2021 (Annex.8) and impugned order dated 10.3.2021 (Annex.3) may kindly be quashed and set aside;
ii. The entire proceedings initiated against the humble petitioner may kindly be ordered to be dropped;
iii. The respondents may kindly be directed to grant time to the humble petitioner to deposit the debt amount as per the provisions of the Act of 1974 and the auction proceedings which have been undertaken by the respondents may kindly be ordered to be quashed and set aside;
iv. Any other order or direction, which this Hon'ble Court deems fit and proper in the facts and circumstances of the present case may kindly be passed in the favour of humble petitioner.”
3. The brief facts which gave emergance to the instant writ petition are that the petitioner took agricultural loan amounting Rs. 27 Lakhs in the year 2012 from Punjab National Bank, Bikaner (hereinafter referred to as ‘Respondent No. 2’), while mortgaging his land situated at Khasra No. 647, 885/1, 888 admeasuring 10.40 hectares in total.
4. The petitioner could not repay the loan amount within time, due to which the Respondent No. 2 preferred an application dated 06.09.2018 (Annexure-1) under Section 13 (1) of the Rajasthan Agricultural Credit Operations (Removal of Difficulties) Act, 1974 (hereinafter referred to as 'the Act of 1974') for recovery of the amount of Rs.31,21,847/-.
5. Then the petitioner submitted an application dated 22.09.2020 (Annexure-2) for depositing the loan amount.
6. The attachment warrant dated 30.12.2019 (Annexure-4) was issued by the Sub-Divisional Officer, Bikaner (hereinafter referred to as ‘Respondent No. 1’), in which, the measurement of land was mentioned as 10.40 hectares and thereafter, in pursuance of the attachment warrant dated 30.12.2019 issued by Respondent No. 1, the Tehsildar, Revenue, Bikaner (hereinafter referred to as ‘Respondent No. 3’), submitted the report dated 05.03.2020 (Annexure-5) which showed the measurement of land as 16.28 hectares.
7. The Respondent No. 1 vide order dated 07.09.2020 (Annexure- 6) issued a sale declaration of land measuring 10.40 hectares. Subsequently, an application dated 02.03.2021 (Annexure-7) was submitted by Respondent No.2 to Respondent No. 1, requesting the change in land measurement as 16.28 hectares instead of 10.40 hectares, upon which the Respondent No. 1 vide order dated 10.03.2021 (Annexure-8) issued a sale declaration of land measuring 16.28 hectares.
8. The petitioner thereafter submitted a legal notice dated 16.06.2021 (Annexure-9) after he came to know about this development of increasing the measurement of land.
9. The land was auctioned by Respondent No. 3 on 26.03.2021 in pursuance of the sale declaration dated 10.03.2021 (Annexure-8) and the report of auction proceedings (Annexure-10) was submitted by Respondent No.3.
10. Hence aggrieved by the sale declaration dated 10.03.2021, the petitioner has preferred the instant writ petition.
11. The learned counsel for the private respondent – Respondent No.4 raised preliminary objection that the petitioner has an efficacious statutory alternate remedy available under Section 13 (2) of the Act of 1974, which reads as under:
Auction sales of mortgaged properties must comply with statutory requirements; failure to do so, especially under false pretense, allows for judicial intervention to set aside such sales.
Compliance with statutory notice requirements is imperative in mortgage auctions; failures may invalidate the sale, preserving the mortgagor's right of redemption until formal sale registration.
Mandatory compliance with procedural requirements under the SARFAESI Act is essential; failure to adhere prejudices borrowers' rights and invalidates auction proceedings.
The court emphasized that auction sales must adhere to statutory requirements and principles of natural justice, ruling that collusion invalidates the auction process.
The court reinforced that compliance with statutory notice requirements and fair valuation is essential in property auctions under the SARFAESI Act to protect borrower rights.
Confirmed auction sales cannot be set aside for alleged inadequacy of price or lack of publicity without proof of fraud or substantial injury.
Court agree with her argument that service of notice as envisaged under Section 13(2) of Act and Security Interest Enforcement Rules are mandatory and any infraction in issuance and publication of no....
Failure to comply with the provisions of Section 13(8) of the SARFAESI Act, 2002 and the availability of an alternative remedy before the Debts Recovery Tribunal rendered the writ petition not mainta....
The main legal point established in the judgment is the interpretation of Rule 9(4) and 9(5) of the Security Interest (Enforcement) Rules, 2002, highlighting the requirement for the purchaser to pay ....
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