The court confirmed that auction sales are valid if proper procedure is adhered to, even when the bid amount decreases, provided that no statutory requirements are violated.

JUDGMENT :

Saurabh Shyam Shamshery, J.

1. Heard Sri Shashi Nandan, learned Senior Counsel assisted by Sri Sudhanshu Pandey, learned counsel for the petitioners and Sri H.N.Singh, learned Senior Counsel assisted by Sri Abhishek Dwivedi, learned counsel for the contesting respondent no.8.

2. In the present case, a recovery proceedings of about Rs.34 lakhs as arrears of land revenue was initiated against the petitioners by putting the cold storage on auction.

3. Initial, three attempts for auction were failed on 18.5.1989, 28.5.1989 and 8.6.1989 respectively either on ground of insufficient bid or highest bidder failed to deposit requisite 1/4th of bid amount within the stipulated time.

4. During these proceedings, highest bid was about Rs.22 lakhs. Fourth sale proclamation was issued on 20.2.1990 (allegedly on 2.2.1990) and bids were invited on 6.3.1990. Highest bid offered was of Rs.16.80 Lakhs i.e. less than the earlier bids amount. Highest bid was of contesting respondent no.8.

5. Twenty five percent amount of said bid was deposited on the same day, by way of a cheque encashed on same day also as shown from records of the Bank.

6. At this stage, petitioners i.e. auction debtors have filed objections before the Sub Divisional Magistrate, under Rule 285 (1) of Uttar Pradesh Zamindari Abolition and Land Reforms Rules,1952 (hereinafter called the ‘Rules 1952’) on 19.4.1990.

7. During the pendency of said application on 8.5.1990, auction sale was confirmed. On 27.4.1991/7.5.1991, Commissioner, Kanpur has rejected the aforesaid objections. Relevant paragraphs being Nos.11 to 14 of the order is reproduced hereinafter:

8. Aforesaid order was challenged at behest of the petitioners before the Board of Revenue, which was dismissed vide order dated 10.4.1996 and relevant part thereof is mentioned hereinafter:

285-(D)-

"The person declared to be the purchaser shall be required to deposit immediately twenty five percent of the amount of his bid, and in default of such deposit the land shall forthwith be again put up and sold and such person shall be liable for the expenses attending the first sale and any deficiency of price which may occur on the re-sale which may be recovered from him by the Collector as if same were an arrear of Land Revenue."

285(E)- "The full amount of purchase money shall be Paid by the purchaser on or before the fifteenth day from the date of the sale --------- which may be subsequently sold."

9. Aforesaid orders are impugned in the present writ petition.

10. Sri Shashi Nandan learned Senior Counsel assisted by Sri Sudhanshu Pandey appearing on behalf of petitioners has submitted that objections filed by the petitioners to auction sale were not considered and despite violation of procedure prescribed for conducting the auction proceedings, objections were rejected by the Commissioner as well as by the Board of Revenue. He further referred Rule 285 (D) of Rules, 1952 that auction purchaser was mandatorily required to deposit immediately twenty five percent of the amount of accepted bid. However, since cheque deposited on the date of auction was encashed later on, therefore, it was a violation of said provision. He further submitted that default of deposit of 1/4th amount of auction bid has a serious consequence as aforesaid provision provides that on default of such deposit, the land shall forthwith be again put up and sold and such person shall be liable for the expenses attending the first sale and any deficiency of price which may occur on the re-sale which may be recovered from him by the Collector. For reference, Rule