K. Kumara Gupta vs Sri Markendaya and Sri Omkareswara Swamy Temple

K. Kumara Gupta vs Sri Markendaya and Sri Omkareswara Swamy Temple

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 791-792 OF 2022

K. Kumara Gupta ...Appellant(s)

Versus

Sri Markendaya and

Sri Omkareswara Swamy Temple & Ors. ...Respondent(s)

J U D G M E N T

M.R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned judgment

and order dated 18.09.2019 passed by the High Court of Andhra

Pradesh at Amaravati in Writ Appeal Nos.790 and 1069 of 2018 by which

the High Court has allowed the said writ appeals and has directed the

authorities concerned to conduct a re-auction of the entire properties by

fixing the upset price higher than what has been fixed earlier, the auction

purchaser, who purchased the property in question in the year 1998, has

preferred the present appeals.

2. The facts leading to the present appeals and the chronological

dates and events are as under:-

1

2.1 That a proposal was published by the office of Commissioner,

Endowments Department to auction the land in question belonging to Sri

Markendaya and Omkareswara Swamy Devasthanam, Eluru, which was

published in the newspaper on 10.03.1997. Notification to sell the

subject land was published in the Andhra Pradesh Gazette on

22.05.1997. Nobody raised any objection against the said proposal.

That the probable expected price of the land was fixed at Rs. 4,00,000/-

per acre and the total extent of land was about 1.81 acre. That

thereafter the Commissioner of Endowments Department granted

permission to sell the land in question on 13.11.1997. The Executive

Officer of the Temple Trust issued tender/public notice to sell the land in

question by way of an open auction in the presence of the Deputy

Commissioner, Endowments on 22.05.1998. As per the notice, the date

and time of the open auction was 24.06.1998 at 11.00 AM and the

interested participants had to deposit Rs.20,000/- as EMD. Forty-five

persons participated including the appellant herein – K. Kumara Gupta.

At this stage, it is required to be noted that Shri L. Kantha Rao, original

writ petitioner did not participate in the auction and nor did he deposit the

EMD of Rs.20,000/-.

2.2 Thereafter the auction took place on 24.06.1998 in which 45

people participated. The appellant herein was declared as the highest

bidder quoting price of Rs.5,55,000/- per acre against the expected price

2

of Rs.4,00,000/-. However, thereafter, the highest offer of the appellant

was Rs.13,01,000/- per acre as per the bid submitted by the appellant

herein. Thus, the appellant became the highest bidder fixing the price at

Rs.13,01,000/- per acre. The appellant deposited Rs.7,85,000/- being

1/3rd of the bid amount immediately as per the tender conditions. It

appears that thereafter the first round of litigation started at the instance

of one Shri Jagat Kumar, who as such did not participate in the auction

which was held on 24.06.1998. He made a representation on

20.07.1998 that the subject land has a potential of getting more money.

Though, initially he had shown his readiness and willingness to pay the

higher price but did not deposit the money. On the contrary, he

expressed his willingness to buy only 1200 square yards but not the

entire land put to auction. On the representation of the said Shri Jagat

Kumar, the auction came to be cancelled vide order dated 24.07.1998.

The appellant filed the revision under Section 93 of the Endowments Act,

1987 (hereinafter referred to as the “Act of 1987”) against the order

dated 24.07.1998 cancelling the auction. However, thereafter by order

dated 22.12.1998, the order confirming the sale was issued by the Office

of the Commissioner, Endowments Department in favour of the

appellant. The Executive Officer of the Temple was directed to get the

sale deed registered in the name of the highest bidder.

3

2.3 That thereafter the appellant deposited balance amount of

Rs.15,69,810/- vide four banker cheques dated 30.12.1998. The sale

deed was executed in favour of the appellant by Executive Officer on

behalf of the Temple vide Sale Deed dated 31.12.1998. As mentioned in

the sale deed, the physical possession of the land in question was also

delivered to the appellant.

2.4 That at the relevant time, the sale deed could not be registered

because of the non-availability of the Clearance Certificate from the

Income Tax department. The sale deed was presented for registration

before the Sub-Registrar, Eluru on 01.01.1999. On 01.01.1999, the

Executive Officer of the Temple/Devasthanam filed an affidavit before the

Income Tax Office for Clearance Certificate so that the sale deed could

be registered. The Clearance Certificate was granted to the Executive

Officer on 12.01.1999. Thus, the first round of litigation ended there.

2.5 However, the second round of litigation begun at the instance of

one Shri L. Kantha Rao, the original writ petitioner before the High Court,

and one of the respondents in these appeals, who as such and as

observed hereinabove did not even participate in the public auction

proceedings. The said Shri L. Kantha Rao filed a Writ Petition No. 41 of

1999 before the High Court to direct the Executive Officer/ the Temple

Committee not to execute the sale deed in respect of the auctioned land.

4

Vide interim order dated 05.01.1999, the High Court granted interim stay

of all further proceedings subject to the condition that he furnishes a

bank guarantee of a sum of Rs.30 lakhs within two weeks from the date

of the said interim order. That during the pendency of the aforesaid writ

petition and in light of the interim order passed by the High Court in the

aforesaid writ petition, being Writ Petition No. 41 of 1999, the office of

the Commissioner, Endowments Department unilaterally passed an

order dated 10.02.1999 cancelling the auction held on 24.06.1998. The

Executive Officer of the Temple was instructed to conduct a re-auction

for the land in question keeping the upset price of Rs.30 lakhs. As the

order dated 10.02.1999 was passed without hearing the appellant, the

appellant preferred revision before the Government under Section 93 of

Act of 1987. The Government stayed the order dated 10.02.1999 of the

Commissioner vide its order dated 08.03.1999. Questioning the order of

the Government dated 08.03.1999 staying the order of the

Commissioner dated 10.02.1999, the said Shri L. Kantha Rao filed

another Writ Petition No. 11552 of 1999 before the High Court. That by

order dated 11.03.1999, the Commissioner himself revoked his order

dated 10.02.1999. That by order dated 09.07.1999, the High Court

disposed of both the writ petitions, i.e., Writ Petition No. 41 of 1999 and

Writ Petition No. 11552 of 1999. It appears that the High Court while

disposing of the aforesaid writ petitions observed that as the

5

Commissioner had revoked the order dated 10.02.1999, the revision

filed against the same had become infructuous and Government was not

required to decide the issue on merits unless suo moto revision was

taken up by the Government. However, liberty was granted to the said

Shri L. Kantha Rao to file a revision against the original order passed by

the Commissioner dated 22.12.1998 confirming the sale in favour of the

appellant. The second round of litigation ended there.

2.6 Then the third round of litigation began. On the basis of the liberty

granted by the High Court, the said Shri L. Kantha Rao filed a revision

before the Government challenging the order dated 22.12.1998 although

he was not a participant in the auction in which appellant herein was

declared the highest bidder. By order dated 26.11.1999, the said

revision came to be allowed quashing and setting aside the order dated

22.12.1998 and directing the Commissioner to refund the amount paid

by the appellant and to conduct a re-auction. Even the said order dated

26.11.1999 was passed without hearing the appellant. The appellant

filed Writ Petition No. 25407 of 1999 before the High Court challenging

the order dated 26.11.1999. By a detailed judgment and order dated

02.02.2018, the learned Single Judge allowed the Writ Petition No.25407

of 1999 (which shall be dealt with hereinbelow). The said Shri L. Kantha

Rao died on 01.03.2018. That the respondent No.1 herein – the Temple

through its Executive Officer filed Writ Appeal No.790 of 2018 before the

6

Division Bench challenging the judgment and order dated 02.02.2018

passed in Writ Petition No.25407 of 1999 on 16.03.2018. The wife of

Shri L. Kantha Rao also filed Writ Appeal No. 1069 of 2018 challenging

the judgment and order passed by the Learned Single Judge in Writ

Petition No.25407 of 1999.

2.7 By the impugned common judgment and order, the Division Bench

of the High Court has allowed the said appeals and has set aside the

judgment and order passed by the learned Single Judge passed in Writ

Petition No.25407 of 1999 and has directed the authorities concerned to

conduct the re-auction of the entire land by fixing the upset price higher

than what had been fixed earlier by observing that since more than

twenty years had elapsed from the date of issuance of GO Rt. No. 1808

dated 26.11.1999 and price of the land in question had risen. The

Division Bench of the High Court has further observed that as the

appellant has agreed and even the learned Single Judge had directed

the appellant to pay Rs.30 lakhs as the said Shri L. Kantha Rao

furnished a bank guarantee of Rs. 30 lakhs and therefore, the Temple

would get more than Rs.30 lakhs. While passing the impugned

judgment and order, the Division Bench of the High Court has also

observed that the writ petitioner as well as the appellant shall also be

allowed to participate in the re-auction, if they are otherwise eligible.

7

2.8 Feeling aggrieved and dissatisfied with the impugned common

judgment and order passed by the Division Bench of the High Court, the

original respondent No.4 before the High Court, the auction purchaser

has preferred the present appeals.

3. Shri Harin P. Raval, learned Senior Advocate has appeared on

behalf of the appellant, Shri S. Niranjan Reddy, learned Senior Advocate

has appeared on behalf of the respondent – Temple Trust and Shri

Siddhartha Dave, learned Senior Advocate has appeared on behalf of

the wife of Shri L. Kantha Rao – the original writ petitioner.

4. Shri Harin P. Raval, learned Senior Advocate appearing on behalf

of the appellant has vehemently submitted that in the facts and

circumstances of the case the Division Bench of the High Court has

committed a grave error in setting aside the auction/sale in favour of the

appellant, which was held in the year 1998.

4.1 It is submitted that as such the auction sale was conducted after

wide publicity in the well-known newspapers and in fact, 45 people

participated in the auction. It is submitted that the appellant was found

to be the highest bidder and therefore the sale in favour of the appellant

was confirmed and the appellant paid the full sale consideration and

even the sale deed was also executed in favour of the appellant on

31.12.1998. It is submitted that as there was no illegality in conducting

8

the auction, therefore, the Division Bench of the High Court ought not to

have set aside such a sale after a period of approximately twenty years

from the date of conducting the public auction and the sale that too at

the instance of a person, who never participated in the auction.

4.2 It is submitted that Division Bench of the High Court ought to have

appreciated that as the said Shri L. Kantha Rao did not even participate

in the public auction and did not submit any offer, thereafter, he had no

locus to challenge the public auction and/or the sale in favour of the

appellant, who was found to be the highest bidder.

4.3 It is submitted that the Division Bench of the High Court ought to

have appreciated that merely because somebody, subsequently to the

completion of the public auction and the sale deed has been executed in

the favour of the highest bidder states that he is ready and willing to pay

a higher amount than the highest bid amount, would frustrate the object

and purpose of holding the public auction, if at such a person’s instance,

the auction/sale is interfered with in any manner. It is submitted that the

Division Bench of the High Court ought to have appreciated that at the

relevant time, nobody restrained the said Shri L. Kantha Rao from

participating in the public auction and submit his offer.

4.4 It is further submitted by Shri Raval, learned Senior Advocate

appearing on behalf of the appellant that as such the Division Bench of

9

the High Court has not at all observed and/or held that the auction was

illegal and/or there was any illegality in holding the public auction. It is

submitted that the Division Bench of the High Court has passed the

impugned judgment and order and has directed for re-auction solely on

the ground that subsequently the said Shri L. Kantha Rao offered Rs. 30

lakhs, which was higher than the amount paid by the appellant even

when the learned Single Judge had also directed the appellant to pay a

total sum of Rs.30 lakhs, which the appellant had agreed; therefore, the

Division Bench of the High Court has presumed that the value of the

land would have been much more than Rs.30 lakhs at the time when it

was put up for auction/sale. It is submitted that the High Court has not

at all appreciated the fact that as such the said L. Kantha Rao had no

locus to challenge the sale in favour of the appellant, who was the

highest bidder firstly, on the ground that he did not participate in the

public auction.

4.5 It is submitted that the Division Bench of the High Court has not

properly appreciated the fact that the proceedings initiated by Shri L.

Kantha Rao were by way of “Public Interest Litigation (PIL)” and

therefore after his death, his wife could not have continued the PIL

proceedings by way of writ petition before the High Court as a private

litigation. It is submitted by learned Senior Advocate for the appellant

that the entire litigation was at the instance of the second highest bidder

10

namely, Shri M.M. Gupta, brother-in-law of Shri L. Kantha Rao, who had

purchased the nearby lands to the auctioned land in the name of his

family members at Rs.7,50,000/- per acre on 28.07.1998 and

22.09.1998 and who had an eye on the land in question.

4.6 It is submitted by Shri Raval, learned Senior Advocate appearing

on behalf of the appellant that filing of objections and entertaining the

same after the conclusion of the auction and after execution of the sale

deed cannot be permitted at the instance of a stranger to the auction

proceeding. It is submitted that in the present case, the sale deed was

executed in favour of the appellant herein being the highest bidder in the

public auction in which 45 persons had participated and therefore to

maintain the sanctity of the public auction, the objections ought not to

have been entertained that too by a person, who never participated in

the public auction, more particularly, when no allegation of fraud was

even pleaded, much less established or proved by the respondents.

Reliance is placed on the decision of this Court in the case of Valji

Khimji and Company Vs. Official Liquidator of Hindustan Nitro

Product (Gujarat) Limited and Others, (2008) 9 SCC 299 (paras 11,

12, 25 and 28).

4.7 It is further submitted by Shri Raval that as such the wife of the

deceased Shri L. Kantha Rao could not have preferred an appeal as an

11

heir of Shri L. Kantha Rao, a petitioner, who had filed the petition as a

Public Interest Litigation. It is submitted that as such the litigation

initiated on behalf of Shri M.M. Gupta the second highest bidder by Shri

L. Kantha Rao, was in fact a private interest litigation only in the guise of

a Public Interest Litigation to thwart the auction sale. It is submitted that

the learned Single Judge had rightly reached to the conclusion that the

respondents – writ petitioners had no locus standi to raise the objection

as well as to file the writ petitions before the High Court as admittedly

they did not participate in the auction.

4.8 It is further submitted that the Temple Trust never objected at any

stage of auction or after the auction until the order/judgment dated

02.02.2018 was rendered by the learned Single Judge. It is submitted

that the Executive officer of the Temple, who was aware of the entire

proceedings including conducting of the public auction and after

receiving the full and total consideration could not have challenged the

judgment and order passed by the learned Single Judge rendered on

02.02.2018 at a belated stage, i.e., almost after twenty years from the

date of the execution of the sale deed. It is submitted that filing of an

appeal by the Temple Trust against the judgment and order dated

02.02.2018 before the Division Bench without any allegation of fraud or

collusion against it reeks of mala fides and collusion, which ought not to

have been allowed. In fact, the Division Bench of the High Court ought

12

not to have entertained the same, is the submission.

4.9 Making the above submissions, it is urged that the Division Bench

of the High Court has committed a grave error in quashing and setting

aside the sale in favour of the appellant after a period of 23 years and

when the appellant had paid the entire sale consideration on 30.12.1998

and was put in the possession on execution of the sale deed. It is

contended that the Division Bench of the High Court has not properly

appreciated the fact that as such the sale was confirmed in favour of the

appellant after the approval by the competent authority of the

Endowments Department.

5. Learned counsel appearing on behalf of the respondent No.3 has

submitted that the respondent No.1 – Temple is a public religious

institution and registered under Section 6(b)(ii) of Act of 1987. It is

submitted that the Government under the Act of 1987 is necessarily

bound to act for the benefit of the temples and ensure revenue

maximization for the temples. That as held by this Court in a catena of

decisions Government acts as a trustee of the said properties. It is

submitted that as observed and held by this Court in a catena of

decisions, the duty of the State is parens partriae in respect of the

charitable endowments and to ensure its due protection. Reliance is

placed on the decisions in Paramananda Mahapatra Vs.

13

Commissioner of Hindu Religious Endowments, Orissa and Others,

AIR 1966 SC 1544 and Mahant Ram Saroop Dasji Vs. S.P. Sahi, 1959

Supp (2) SCR 583.

5.1 It is submitted that therefore the Government cannot act against

the interest of the temple. That in the present case the auction was

conducted on behalf of the Deity, which is in law a perpetual minor.

Therefore, it is important to ensure that the trustees act strictly in

accordance with the interest of the Deity. It is submitted that in the

present case, the consideration paid was inadequate as on the date of

auction. That initially the appellant offered Rs.13,01,000/- per acre,

which was treated as the highest bid and the same was confirmed. That

one Shri Jagat Kumar through representation dated 24.07.1998 stated

that he was willing to offer Rs. 22,00,000/- per acre, i.e., Rs. 7 lakhs

more than the price on which the bid was confirmed in favour of the

appellant. Also one Shri L. Kantha Rao submitted a bank guarantee for

an amount of Rs. 30 lakhs on 05.01.1999 pursuant to the directions

passed by the High Court in Writ Petition No. 41 of 1999 on his

submission that he was ready and willing to purchase the property in

question at Rs. 30 lakhs. It is submitted that thereafter the State

Government vide its order dated 26.11.1999 fixed the reserved at Rs.32

lakhs and allowed the parties to participate in the auction. It is submitted

that the aforesaid facts evidently reveal that within a period of one year,

14

the price of the property significantly increased by more than 125%. That

the value of the property, as on date, is about 15 crores. It is submitted

that therefore in the interest of the Deity, the impugned judgment and

order passed by the Division Bench of the High Court may not be

interfered with.

5.2 Relying upon the decision of the Division Bench of the High Court

in the case of Princess Fatima Fauzia and Anr. Vs. Syeed UI-Mulk

alias Nawab Saheb Chathari & Ors., AIR 1979 AP 229, it is submitted

that as held the Division Bench of the High Court, the authorities ought

to have permitted re-auction where, in case of a trust, the consideration

is inadequate.

5.3 It is further submitted by the learned Senior Advocate appearing on

behalf of the respondent No.3 that it is the duty of the Court to ensure

that the price fetched is adequate – especially in the case of a Public

Trust even though there is no suggestion of irregularity or fraud.

Reliance is placed on the decision of this Court in the case of Divya

Manufacturing Company (P) Ltd. Vs. Union Bank of India and Ors.,

(2000) 6 SCC 69.

5.4 It is further submitted by the learned Senior Advocate appearing

on behalf of respondent No.3 that by the impugned judgment and order

passed by the Division Bench of the High Court, no prejudice shall be

15

caused to the appellant as the Division Bench of the High Court has

directed that the money deposited including the amount incurred on

account of purchase of stamp papers be refunded to the appellant and

the appellant will also be getting the benefit of the prevailing bank

interest on the deposited amount. Further, the appellant is also

permitted to participate in the re-auction. It is therefore prayed not to

interfere with the impugned judgment and order passed by the Division

Bench of the High Court considering the interest of the charitable

institution.

6. Learned Senior Advocate appearing on behalf of respondent No.1

– Temple Trust / Devasthanam in addition to the submissions made by

the learned Senior Advocate appearing on behalf of respondent No.3

has submitted that in the matter of sale of public property/auction, the

dominant consideration is to secure the best price for the property. It is

submitted that the court should always keep the larger interest of the

public in mind while interfering with the decision of the authority. Further,

the concept of locus standi has been widened by this Court while dealing

with matters of public interest. It is submitted that it is the duty of the

Court to see that the price fetched is adequate.

6.1 Learned counsel appearing on behalf of the respondent No.1 has

relied upon the decisions of this Court in the case of Chairman and

16

Managing director, SIPCOT, Madras and Ors. Vs. Contromix Pvt.

Ltd., (1995) 4 SCC 595; Union Bank of India Vs. Official Liquidator

H.C of Calcutta and Ors., (2000) 5 SCC 274 and Navalkha and Sons

Vs. Sri Ramanya Das and Ors., (1969) 3 SCC 537 in support of his

submission that in the matter of sale of public property/auction the

dominant consideration is to secure the best price for the property.

6.2 Making the above submissions and relying upon above decisions,

it is prayed to dismiss the present appeals.

7. Heard the learned counsel appearing for the respective parties at

length.

8. At the outset, it is required to be noted that by the impugned

judgment and order, the Division Bench of the High Court has ordered

re-auction of the land in question by fixing the upset price more than

what has been fixed earlier by observing that since more than 20 years

have elapsed from the date of the issuance of G.O. dated 26.11.1999, it

is in the interest of the Temple that the property in auction is put to reauction. However, it is required to be noted that the appellant purchased

the property in question in a public auction, which took place on

24.06.1998. He was found to be the highest bidder, who offered

Rs.13,01,000/- per acre. It is also required to be noted that in the said

auction, which took place on 24.06.1998, in all 45 people participated.

17

The auction was conducted after following due procedure under the

provisions of the Act of 1987 and the auction was conducted by none

other than the Executive Officer of the Temple Trust. It is also to be

noted that after receiving a detailed report of Assistant Commissioner of

Endowments, office of the Commissioner, Endowments Department vide

order dated 22.12.1998 confirmed the sale in favour of the appellant.

Consequently, the appellant deposited the balance amount. The sale

deed came to be executed in his favour vide Sale Deed dated

31.12.1998. Even thereafter on the application made by the Executive

Officer of the Devasthanam/Temple, the Income Tax Department granted

Clearance Certificate to the Executive Officer on 12.01.1999. Therefore,

as such the sale, which was held and confirmed in the year 1998 and for

which the sale deed was executed on 31.12.1998, the Division Bench of

the High Court has ordered re-auction of the property in question after a

period of more than 23 years solely on the basis of the offer made by

one Shri Jagat Kumar in the year 1998 (after the public auction was

concluded) and the offer made by one Shri L. Kantha Rao that they are

ready to offer / pay a higher price than fetched in the public auction

already concluded and therefore, the Division Bench of the High Court

has presumed that the value of the property must have been much more

than the sale consideration realized in the public auction. However, the

Division Bench of the High Court has not at all appreciated and

18

considered the lack of bona fides on the part of the said Shri Jagat

Kumar and even Shri L. Kantha Rao. It is to be noted that though in the

month of July, 1998, i.e., after the public auction was held, the said Shri

Jagat Kumar, who even did not participate in the auction proceedings

initially came out with a case that he was ready and willing to pay a

higher price for the auctioned land. But subsequently, he backed out

and did not deposit any money. Neither did the said Shri Jagat Kumar

nor Shri L. Kantha Rao had participated in the auction proceedings and

made any offer. Therefore, as such both of them ought not have been

permitted to raise any objection subsequently on the valuation when

they had not participated in the public auction and made any offer. The

Division Bench of the High Court ought to have considered whether

these subsequent objectors had acted in a bona fide manner. At this

stage, it is required to be noted that even Shri Jagat Kumar

subsequently did not prosecute the matter further and subsequently it

was only Shri L. Kantha Rao, who filed the revision before the

Government by way of a “Public Interest Litigation”. It is also to be noted

that neither the Government nor even the Division Bench of the High

Court have given any finding that the auction, which was conducted/held

on 24.06.1998 was in any way irregular and/or illegal. Even the Division

Bench of the High Court has as such not set aside the auction/sale in

favour of the appellant, however, it has ordered re-auction by observing

19

that as Shri L. Kantha Rao deposited a sum of Rs. 30 lakhs pursuant to

the interim order passed by the High Court in Writ Petition No. 41 of

1999 and as even the learned Single Judge had also directed the

appellant to pay a total sum of Rs. 30 lakhs, which the appellant had

agreed, the Division Bench of the High Court has observed that the

value of the property can be said to be much more than what was

realized in the public auction.

8.1 Once the appellant was found to be the highest bidder in a public

auction in which 45 persons had participated and thereafter when the

sale was confirmed in his favour and even the sale deed was executed,

unless and until it was found that there was any material irregularity

and/or illegality in holding the public auction and/or auction/sale was

vitiated by any fraud or collusion, it is not open to set aside the auction

or sale in favour of a highest bidder on the basis of some

representations made by third parties, who did not even participate in the

auction proceedings and did not make any offer. In this context, we rely

on the following observations of this Court in the case of Jasbhai

Motibhai Desai Vs. Roshan Kumar, Haji Bashir Ahmed and Ors.,

(1976) 1 SCC 671 made in paragraphs 34, 37 and 49, which are as

under:-

“34. This Court has laid down in a number of decisions

that in order to have the locus siandi to invoke the

20

extraordinary jurisdiction under Article 226, an applicant

should ordinarily be one who has a personal or individual

right in the subject-matter of the application, though in the

case of some of the writs like habeas corpus or quo

warranto this rule is relaxed or modified. In other words,

as a general rule, infringement of some legal right or

prejudice to some legal interest inhering in the petitioner

is necessary to give him a locus standi in the matter,

(see State of Orissa v. Madan Gopal Rungta [AIR 1952

SC 12 ]; Calcutta Gas Co. v. State of W.B. [AIR 1962 SC

1044]; Ram Umeshwari Suthoo v. Member, Board of

Revenue, Orissa [(1967) 1 SCA 413]; Gadde

Venkateswara Rao v. Government of A.P. [AIR 1966 SC

828]; State of Orissa v. Rajasaheb Chandanmall [(1973) 3

SCC 739]; Satyanarayana Sinha Dr v. S. Lal &

Co. [(1973) 2 SCC 696] ).

37. It will be seen that in the context of locus standi to

apply for a writ of certiorari, an applicant may ordinarily

fall in any of these categories: (i) “person aggrieved”; (ii)

“stranger”; (iii) busybody or meddlesome interloper.

Persons in the last category are easily distinguishable

from those coming under the first two categories. Such

persons interfere in things which do not concern them.

They masquerade as crusaders for justice. They pretend

to act in the name of pro bono publico, though they have

no interest of the public or even of their own to protect.

They indulge in the pastime of meddling with the judicial

process either by force of habit or from improper motives.

Often, they are actuated by a desire to win notoriety or

cheap popularity; while the ulterior intent of some

applicants in this category, may be no more than spoking

the wheels of administration. The High Court should do

well to reject the applications of such busybodies at the

threshold.

49. It is true that in the ultimate analysis, the jurisdiction

under Article 226 in general, and certiorari in particular is

discretionary. But in a country like India where writ

21

petitions are instituted in the High Courts by the thousand,

many of them frivolous, a strict ascertainment, at the

outset, of the standing of the petitioner to invoke this

extraordinary jurisdiction, must be insisted upon. The

broad guidelines indicated by us, coupled with other wellestablished self-devised rules of practice, such as the

availability of an alternative remedy, the conduct of the

petitioner etc. can go a long way to help the courts in

weeding out a large number of writ petitions at the initial

stage with consequent saving of public time and money.”

In the aforesaid decision, it was also observed that despite

adequate opportunity, if a person has not lodged any objection at an

appropriate stage and time, he could not be said to have been in fact,

grieved.

8.2 It is also required to be noted that the sale was confirmed in favour

of the appellant by the Commissioner, Endowments Department after

obtaining the report of the Assistant Commissioner. Therefore, we are of

the opinion that in the aforesaid facts and circumstances of the case, the

High Court ought not to have ordered re-auction of the land in question

after a period of 23 years of confirmation of the sale and execution of the

sale deed in favour of the auction purchaser by observing that the value

of the property might have been much more, otherwise, the object and

purpose of holding the public auction and the sanctity of the public

auction will be frustrated. Unless there is concrete material and it is

established that there was any fraud and/or collusion or the land in

22

question was sold at a throw away price, the sale pursuant to the public

auction cannot be set aside at the instance of strangers to the auction

proceeding. The sale pursuant to the public auction can be set aside in

an eventuality where it is found on the basis of material on record that

the property had been sold away at a throw away price and/or on a

wholly inadequate consideration because of the fraud and/or collusion

and/or after any material irregularity and/or illegality is found in

conducing/holding the public auction. After the public auction is held and

the highest bid is received and the property is sold in a public auction in

favour of a highest bidder, such a sale cannot be set aside on the basis

of some offer made by third parties subsequently and that too when they

did not participate in the auction proceedings and made any offer and/or

the offer is made only for the sake of making it and without any serious

intent. In the present case, as observed hereinabove, though Shri Jagat

Kumar immediately after finalising the auction stated that he is ready and

willing to pay a higher price, however, subsequently, he backed out. If

the auction/sale pursuant to the public auction is set aside on the basis

of the such frivolous and irresponsible representations made by such

persons then the sanctity of a public auction would be frustrated and the

rights of a genuine bidder would be adversely affected.

8.3 Further, the Division Bench of the High Court ought to have

appreciated that the objector – Shri L. Kantha Rao, who did not

23

participate in the auction proceedings and submit any bid can be said to

be a fence sitter having no stakes on his shoulder and had simply come

forward just to nullify the registered sale deed executed in favour of the

appellant by adopting an indirect method of making a public offer by way

of filing a “Public Interest Litigation” before the High Court. The so-called

lucrative offer initially made by Shri Jagat Kumar and the subsequent

offer made by Shri L. Kantha Rao appears to be made only to frustrate

the auction proceedings with a mala fide intent. As observed

hereinabove, if there was any error in the decision-making process

adopted by the authority, the remedy available was to question the sale

deed in an appropriate proceeding available under the law and not by

filing a petition under Article 226 of the Constitution of India.

8.4 The Division Bench of the High Court has observed that as the

said Shri L. Kantha Rao submitted a bank guarantee of Rs. 30 lakhs as

he offered to pay Rs. 30 lakhs and even the learned Single Judge had

also directed the appellant to pay a total sum of Rs.30 lakhs against his

original offer and the appellant had agreed to pay the same, the High

Court has presumed that the value of the property at the time of auction

would have been much more. There was no concrete material before

the Division Bench of the High Court to come to such a conclusion that

what was received in the public auction in the year 1998 was a lesser

amount and/or at the relevant time, the valuation of the property was

24

much more than the highest bid received. Merely because the appellant

might have agreed to pay a total sum of Rs.30 lakhs (after deducting

whatever he paid earlier), by that itself, it cannot be presumed and/or

held against the appellant that in the year 1998 what was offered by him

was a lesser amount than the actual valuation. The appellant agreed to

pay a higher price for the land in question in order to save his rights.

8.5 At the cost of repetition, it is observed that as such there was no

material available with the Division Bench to the effect that the valuation

of the property in the year 1998 was much more and that the highest bid

of the appellant was for a lesser consideration than the actual value of

the land.

8.6 In fact, the learned Single Judge had passed a detailed judgment

and order quashing and setting aside the order passed by the

Government dated 26.11.1999. Learned Single Judge specifically

observed in paragraphs 8, 9, 12 and 14 as under:-

“8. The repeated orders of the second respondent

passed time and again in this matter are found to be

without assigning any cogent reasons. Under the Indian

Contract Act, which is a Central Act, having an over riding

effect upon the Endowments Act, more particularly when

the matter pertains to contractual obligations between

both the parties i.e., between the vendor and the vendee

and also when the matter pertains to tender-cum-auction,

where both parties have fulfilled their part of obligations

and where no fraud played by the parties has been

established, the action of the second respondent in

canceling the sale deed is unwarranted. The conduct of

25

the 4th respondent cannot be appreciated, where he has

not participated in the tender-cum-auction and more so,

he is not an effected party. Only after knowing the tender

and auction amount, the 4th respondent appears to have

either got tempted by the sale of the property or he has

been planted by the persons having vested interest. This

kind of conduct cannot be encouraged. It is an

undisputed fact that petitioner, 45 persons filed tenders

and participated in the auction, nothing prevented the 4th

respondent from filing tender and participating in the

auction.

9. As stated supra, the respondents have not

made out a case of fraud in conducting the sale and also

they have not raised any objection at the time of

conducting sale proceedings. The respondents

conveniently causing interference, at a later stage cannot

be accepted and they are estopped from raising

objections after conducting the sale

proceedings……………

12. Respondent No.4 has not approached this Court

with clean hands. He has no locus standi. He did not

participate in the tender-cum-auction and when 45

persons participated in tender-cum-auction, nothing

prevented the 4th respondent to participate in tender-cumauction proceedings. Mere depositing the money saying

that the amount would fetch more is of no argument that

can be looked into without establishing malafides or fraud

played by the vendor or vendee. No relief can be granted

to respondent No.4 in the writ petition filed by the

petitioner.

14. Once the contractual obligation has been

completed by both parties and sale deed is executed, the

second respondent has no jurisdiction in the matter to

cancel the same and it is the competent Court of law

which has jurisdiction to decide the validity.”

8.7 None of the aforesaid aspects have been dealt with and/or

considered by the Division Bench of the High Court while passing the

26

impugned judgment and order. Even it was the specific case of the

appellant before the learned Single Judge that the order dated

26.11.1999 passed by the Government cancelling the sale and ordering

for re-auction was passed without hearing him. The same is also not

dealt with by the Division Bench of the High Court.

8.8 Now, in so far as the submission on behalf of the respondents that

the value of the property as on today is Rs. 15 crores approximately and

therefore in the interest of the Deity/Temple, the impugned judgment and

order passed by the Division Bench of the High Court may not be

interfered with by this Court is concerned, it is to be noted that by the

passage of time the value of the property is bound to increase. In the

present case, subsequent to the auction and the sale, more than 23

years have passed, therefore, whatever was the value in the year 1998

would not be same at a future date and that too, after 20-23 years. What

is required to be considered is, at the relevant time, when the sale was

conducted, what was the value of the land/property. Learned Senior

Advocate appearing on behalf of the respondents are not in a position to

point out any material on which it can be said that what was offered by

the appellant in the year 1998 was not a fair value. The base price was

Rs.4,00,000/- per acre in the public auction, in which 45 persons

participated and what was offered by the appellant, i.e., Rs. 13,01,000/-

per acre was much higher than the base price. Under normal

27

circumstances, unless there are allegations of fraud and/or collusion

and/or cartel and/or any other material irregularity or illegality, the

highest offer received in the public auction may be accepted as a fair

value. Otherwise, there shall not be any sanctity of a public auction.

8.9 By the impugned judgment and order by ordering re-auction, the

Division Bench of the High Court has permitted both, the appellant as

well as the original writ petitioner to participate in the re-auction. It is to

be noted that as such the original writ petitioner never participated in the

public auction, which was conducted/held on 24.06.1998. Therefore, by

such a liberty being granted, the High Court has given one another

opportunity to the original writ petitioner, who has died, and/or to his

heirs to participate in the re-auction, which liberty could not have been

reserved. As a result, the writ petition filed by the deceased petitioner

Shri L. Kantha Rao has ceased to be a “Public Interest Litigation” but it is

a litigation with a private mala fide interest as the original writ petitioner

had no locus to file such a case, not being a participant in the auction

and being unable to point out any irregularity or illegality in the auction.

8.10 Even the Division Bench of the High Court ought not to have

passed the impugned judgment and order in an appeal preferred by the

Temple Trust for the simple reason that it was the Executive Officer of

the Temple Trust, who had conducted the auction; it was the Executive

28

Officer, who had obtained the Clearance Certificate from the Income Tax

department and who executed the sale deed in favour of the highest

bidder – appellant herein. At no point of time till the judgment and order

was passed by the learned Single Judge, the Temple Trust had

challenged the auction/sale on the ground that the amount realized was

inadequate. Therefore, the Temple Trust could not have challenged their

own decision, which they had never challenged earlier.

8.11 Similarly, the appeal preferred by the heirs of Shri L. Kantha Rao

also ought not to have been entertained. Shri L. Kantha Rao never

participated in the auction. He never submitted any offer. The

proceedings initiated by Shri L. Kantha Rao was in the nature of a Public

Interest Litigation and therefore being heir of Shri L. Kantha Rao, his

wife could not have been permitted to prosecute further with the Public

Interest Litigation.

8.12 Now, in so far as the decisions relied upon by the learned Senior

Advocate appearing on behalf of the respondents referred to

hereinabove are concerned, there cannot be any dispute to the

proposition of law laid down by this Court in the aforesaid decisions.

However, in the facts and circumstances of the case narrated

hereinabove, none of the decisions are of any assistance to the

respondents. There was/is no material to show that the market value at

29

the time of auction/sale in favour of the appellant was more than what

was offered by the appellant as a highest bidder. The base price fixed

was Rs. 4,00,000/- per acre against which the appellant being highest

bidder offered Rs.13,01,000/- per acre. In all 45 persons participated in

the auction, in which the appellant was found to be the highest bidder.

There are no allegations of fraud and/or collusion. According to the

appellant, the entire litigation started at the instance of Shri L. Kantha

Rao when one Shri M.M. Gupta, brother-in-law of Shri L. Kantha Rao,

who was the second highest bidder and who had purchased lands in the

name of his family members near the auction land at Rs.7,50,000/- per

acre on 28.07.1998 and 22.09.1998. Therefore, it is observed that the

proceedings initiated by Shri L. Kantha Rao as such cannot be said to

be a Public Interest Litigation but is squarely a private interest litigation in

the garb of espousing a public cause, which also did not exist in the

instant case. Therefore, in the facts and circumstances of the case, the

Division Bench of the High Court ought not to have passed an order for

re-auction of the property after a period of 23 years from the date of

auction/sale to the detriment of the rights of the appellant who was the

successful bidder in the auction sale. In this regard, we wish to rely on

some of the observations made by this Court in the case of State of

Uttaranchal Vs. Balwant Singh Chaufal and Ors., (2010) 3 SCC 402,

cautioning the High Courts to be more discerning / vigilant and/or

30

cautious while entertaining writ petitions apparently filed in public

interest. In the said decision, it is observed and held that: (1) The Courts

must encourage genuine and bona fide PIL and effectively discourage

and curb the PIL filed for extraneous considerations; (2) The Courts

should prima facie verify the credentials of the petitioner before

entertaining a PIL; (3) The Courts should be prima facie satisfied

regarding the correctness of the contents of the petition before

entertaining a PIL; (4) The Courts should be fully satisfied that

substantial public interest is involved before entertaining the petition; (5)

The Courts before entertaining the PIL should ensure that the PIL is

aimed at redressal of genuine public harm or public injury. The Court

should also ensure that there is no personal gain, private motive or

oblique motive behind filing the public interest litigation; and (6) The

Courts should also ensure that the petitions filed by busybodies for

extraneous and ulterior motives must be discouraged by imposing

exemplary costs or by adopting similar novel methods to curb frivolous

petitions and the petitions filed for extraneous considerations.

8.13 The submission on behalf of the respondents that as on today the

value of the property is Rs.15 crores and therefore, this Court may not

interfere with the impugned judgment and order passed by the Division

Bench of the High Court is concerned, the aforesaid cannot be

accepted. After a period of 20-23 years, the prices of lands are bound to

31

increase. The auction was conducted and held in the year 1998 and

was sold in favour of the appellant then on payment of the full sale

consideration as per the highest bid offered by him. Therefore, the

valuation as on the date of auction is the relevant consideration and not

the value after so many years and over two decades after conducting the

auction and confirming the sale.

9. In view of the above and for the reasons stated above, the

impugned judgment and order passed by the Division Bench of the High

Court is unsustainable and deserves to be quashed and set aside and is

accordingly quashed and set aside. The judgment and order passed by

the learned Single Judge in Writ Petition No.25407 of 1999 is hereby

ordered to be restored. However, as the appellant had agreed to deposit

the balance amount of Rs.6,45,190/- being the balance of Rs. 30 lakhs

and considering the fact that the respondent is a Temple Trust /

Devasthanam, we direct the appellant to pay to the respondent – Temple

Trust / Devasthanam a further sum of Rs. 15 lakhs (Rs.6,45,190/- plus

interest from 1998), to be paid by the appellant to the respondent –

Temple Trust /Devasthanam by demand draft /banker cheque within a

period of two weeks from today and take all consequential steps

pursuant to the auction/sale being confirmed in his favour including

getting registration of the sale deed in his name and taking possession

32

of the land in question in case the same have not yet taken place till

date.

Present appeals are accordingly allowed to the aforesaid extent.

However, in the facts and circumstances of the case, there shall be no

order as to costs.

Pending application(s), if any, also stands disposed of.

………………………………….J.

 [M.R. SHAH]

NEW DELHI; ………………………………….J.

FEBRUARY 18, 2022. [B.V. NAGARATHNA]

33

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले