An auction sale cannot be overturned without evidence of fraud or material irregularities, prioritizing trust property protection and proper auction procedures.

JUDGMENT :

Dr. ANITA SUMANTH., J

O.S.A.Nos. 213 and 193 of 2025 have been filed by the Everwin Group of Schools and Businesses (in short, ‘Everwin’), the former challenging order dated 05.09.2024 and the latter challenging order dated 24.04.2025.

2. O.S.A.Nos. 179, 200, 201, 199 & 187 of 2025 have been filed by those who have not participated in the auction conducted on 23.04.2025 and who are aggrieved by the process of auction.

3. The background in which these appeals arise is as follows. At the heart of the matter lies 51.87 acres of land at Ayyanambakkam Village, Chennai 95, belonging to the trust estate of Mr.C.Kandasamy Naidu. The aforesaid property is referred to hereinafter as (‘property’/ ‘subject property’) and is presently under the administration of the Administrative General and Official Trustee of Tamil Nadu (AG&OT).

4. In order to maximize the revenue for the Trust, the AG&OT has been approaching this Court regularly seeking permission to sell the lands. One such attempt was in 2022 when, after obtaining permission from this Court, paper publication had been effected on 17.06.2022 in Dinamalar. The upset rent had been fixed at a sum of Rs.20 lakhs per annum. A sum of Rs. 60 lakhs was deposited as Earnest Money. The date of auction was 10.08.2022 and Everwin had participated, making a bid of Rs.4,40,00,000/-. It was declared as the successful bidder and the AG&OT filed an application to seek confirmation of the Court on 12.08.2022. The auction was confirmed on 26.08.2022. This was round one of the auction (Round 1).

5. As Everwin was aggrieved with the respondent/AG&OT demanding three years annual rental advance, it had approached this Court by filing four applications:

(i) O.A.No.645 of 2022 seeking the grant of interim injunction restraining the Respondent from demanding the three years annual rent of Rs.13,20,00,000/- as advance and also restraining the Respondent from forfeiting the EMD amount till the disposal of main application.

(ii) A.No.4422 of 2022 seeking a direction to the Respondent to enter into the lease agreement with the Applicant Trust with respect to the subject property by receiving 3 months’ rent as advance and 7 months’ rent as security deposit in total 10 months’ rent as advance as per clause 19 of the terms and conditions.

(iii) A.No.4423 of 2022 seeking a direction to the Respondent to enter into the lease agreement with the Applicant Trust with respect to the subject property for a longer period namely for 20 years as per the clause 21 of the terms and conditions (2022) and

(iv) O.A.No.225 of 2023 seeking the grant of injunction restraining the Respondent from opening the tender on 27.03.2023 with respect to Item No.59 namely the subject property or any further date and granting Lease to any intending bidder pending disposal of A.Nos.4422 of 2022 and 4423 of 2022 pending before this Hon'ble Court.

6. By order dated 01.07.2024, the Court set aside the auction directing the AG&OT to conduct a fresh auction by following the procedures mandated for the same. The operative portion of this order is as below:-

'. . . .2.3 While so, on 15.09.2022, the applicant was demanded by the respondent to pay a sum of Rs.13.20 crores towards rental advance of three years rent as per order dated 26.08.2022 passed by this Court in A.No.3472 of 2022 for execution of tenancy agreement for a period of one year, on or before 28.09.2022, which is claimed as against clause 19 of the terms and conditions, as per which, only 10 months rent has to be paid towards advance and security deposit, and also as against Clause 21, ibid., as per which, the tenancy will be for a longer period. The applicant was further informed that failure to make such payment will result in forfeiture of the Earnest Money Deposit.

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2.5. When things stood thus, after obtaining permission from this Court, by effecting publication in the 19.02.2023 issue of Dinamalar, the respondent brought the land for open tender fixing the date for op