M/S. JAGAN SINGH & CO Versus LUDHIANA IMPROVEMENT TRUST & ORS

M/S. JAGAN SINGH & CO Versus LUDHIANA IMPROVEMENT TRUST & ORS

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले


REPORTABLE
 IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.371 OF 2022
M/S. JAGAN SINGH & CO. …Appellant
Versus
LUDHIANA IMPROVEMENT TRUST & ORS. …Respondents
J U D G M E N T
SANJAY KISHAN KAUL, J.
1. The dispute about the non-payment of acquired land under the
Land Acquisition Act, 1984 (hereinafter referred to as the ‘LA Act’) has
spanned over more than three decades.
2. Respondents no. 2 to 5 were the original owners of the land,
measuring 8 Kanals and 11 ½ Marlas, which was acquired by Ludhiana
Improvement Trust, Respondent no.1 (hereinafter referred to as “the
Respondent Trust”).
1
3. The compensation determined by the Respondent Trust was not
acceptable to the land owners, thus, reference was sought in terms of
Section 18 of the LA Act. The Land Acquisition Tribunal made an award
enhancing the compensation to the owners by determining the
compensation as Rs.4,27,068/- along with future interest at 9%, per
annum, from the date of the application. The Respondent Trust,
however, did not pay the amount while it continued to enjoy the land.
4. It appears from the list of dates that despite all requests to the
owners, the Respondent Trust did not oblige, leaving the owners with
little option but to file an execution petition in the year 1991. The
Execution Petition was, however, dismissed as unsatisfied on 21.09.1991.
5. A perusal of the order, however, shows no reason for the same
except mere sentence of the decree, holding the execution petition as
unsatisfied. On 27.09.1991, the owners filed the second execution
application for recovery of the compensation amount, along with interest,
seeking to make the recovery through attachment of property. The
details of the property, which was sought to be attached, were more
specifically described by a site plan, which was filed in the proceedings
2
and has been placed before us. The site plan shows a triangular piece of
land i.e. field on one side, Pakhowal Road towards Ludhiana on the
second side and the railway line on the hypotenuse side.
6. In the application filed under Order XXI Rule 66 of the Code of
Civil Procedure, 1908 (hereinafter referred to as ‘the said Code’) read
with Section 151 of the said Code, a proclamation of the sale of the
property, comprised of Khewat No.867, Khatauni No.971, Khasra
No.272, as per Jamabandi for the year 1988-89, Village Jawaddi, Hadbast
No.160, Tehsil and District, Ludhiana, was sought. It may be noted that
in the site plan, there is an ear marking of the godown and the chowkidar
room and the remaining land has been shown as vacant. The tentative
cost of the property, as stated in the application, is about Rs. 8 lakhs
which was sufficient to cover the recovery of Rs.4,27,068/- along with
interest at the rate of 9% per annum.
7. Once again, the notice was served upon the Respondent Trust on
12.05.1992, but elicited no response from the Respondent Trust. The
Court of Civil Judge, Senior Division, Ludhiana, issued a warrant for sale
of the attached property on 25.05.1992. Consequently, the attached
property, measuring 7000 sq. yards approximately, bearing Khasra
3
nos.271 and 272, was sold to the Appellant by way of auction conducted
by the Court Auctioneer on 12.08.1992 for a consideration of Rs.22.65
lakhs.
8. The Respondent Trust apparently woke up only thereafter and on
26.09.1992 filed an application before the Court of the Senior Sub Judge,
Ludhiana, under Order XXI Rule 90 of the said Code to set aside the ex
parte attachment and auction of the Trust’s property. It may be noted that
even during this period of time it is not as if the payments were made to
the land owners.
9. A perusal of the objection shows that it is pleaded that there was
no valid or proper service of notice though it is not disputed that there
was a service of notice. There were certain other technical objections
also raised, inter alia, alleging that no mandatory notice under Order
XXI Rule 66 of the said Code was issued or served, no proclamation of
sale by auction has been made or published, the property in question, is
not capable for attachment and sale as it is part of development scheme,
which stands already allocated for allotment under Punjab Improvement
Act read with Land Disposal Rules framed thereunder. It was, thus,
4
sought to be claimed that the Judgment Debtors did not have saleable
interest in the property. The factum of the earlier execution proceeding
was dismissed for non satisfaction of motion. This application was
contested by the Appellant, as auction purchaser, pointing out that the
warrants for attachment of the property were filed by order dated
03.10.1991. The warrant for attachment was issued on 01.04.1992,
Munadi was effected on 03.04.1992 and the property was attached on the
same date, thereafter notice under Order XXI Rule 66 of the said Code
was served on 12.05.1992, which was duly received by the Judgment
Debtor on the same date along with the copy of the execution. The sale
warrants were issued on 25.05.1992, Munadi was effected on the spot on
17.07.1992 and the auction took place on 12.08.1992. The decree holder
also contested proceedings to challenge the auction.
10. After hearing learned counsel for the parties, the Executing Court
decided Execution no. 93/1991 post framing of issues on 11.02.1993 and
recording evidence while dismissing the objections on 05.06.1993 and
upholding the sale of the land to the Appellant.
11. A perusal of the proceedings shows that Respondent Trust, as
5
objector, produced no evidence despite repeated opportunities nor even
filed the list of witnesses. This is recorded in the proceedings on
17.04.1993, 08.05.1993, 29.05.1993 (and was called on more than one
occasion). The Executing Court noticed that no specific fraud or
misrepresentation has been mentioned in the objections by the objector
nor any substantial irregularities have been pointed out. The objector has
neither deposited the decreetal amount nor the amount equal to 5% of the
purchase amount for payment to the auction purchaser as is required
under Order XXI Rule 89 of the said Code. Thus, the objections were
not even maintainable. In view of the said provision, no sale could be set
aside unless the Court is satisfied that the applicant has sustained
substantial injury by reason of irregularity or fraud in completing or
conducting the sale. For convenience, Order XXI Rule 90 of the said
Code is reproduced as under:
“ORDER XXI
EXECUTION OF DECREES AND ORDERS
.... .... .... .... ....
90. Application to set aside sale on ground of irregularity or
fraud: (1) Where any immovable property has been sold in
execution of a decree, the decree-holder, or the purchaser, or any
other person entitled to share in a rateable distribution of assets or
whose interests are affected by the sale, may apply to the court to
6
set aside the sale on the ground of a material irregularity or fraud
in publishing or conducting it.
(2) No sale shall be set aside on the ground of irregularity or fraud
in publishing or conducting it unless, upon the facts proved, the
court is satisfied that the applicant has sustained substantial injury
by reason of such irregularity or fraud.
(3) No application to set aside a sale under this rule shall be
entertained upon any ground which the applicant could have taken
on or before the date on which the proclamation of sale was drawn
up.
Explanation.- The mere absence of, or defect in, attachment of the
property sold shall not, by itself, be a ground for setting aside a
sale under this rule.”
12. A certificate of sale dated 15.06.1993 was issued by the Court
under Order XX1 Rule 94 of the said Code confirming the sale.
13. On the Respondent Trust assailing the Executing Court’s order,
Additional District Judge, Ludhiana, rejected the same vide order dated
04.03.1994 and the High Court also dismissed the Revision Petition. The
matter finally came up before this Court in SLP filed by the Respondent
Trust, being SLP (Civil) No.22328/2004. Leave was granted and the said
appeal was decided by the judgment dated 09.06.2010 in Improvement
Trust, Ludhiana v. Ujagar Singh and Others, reported at (2010) 6 SCC
786. A reading of the order shows that what weighed this Court was that
7
the negligence of the counsels should not be blamed on the parties, as the
matter has been prosecuted after having gone unrepresented. The
impugned orders were set aside and the matter was remitted to the
Executing Court for deciding the application under Order XXI Rule 90 of
the said Code at an early date. However, being conscious of the fact that
the Appellant had been put to inconvenience and had already deposited a
huge amount of Rs.22.65 lakhs in 1992 but has not been able to get the
fruits thereof, Rs.50,000/-, as costs, were imposed on the Respondent
Trust. Thus, the first round itself reached a culmination after more than
15 years of acquisition of land but once again starting the process almost
de novo on the Executing Court taking up the proceedings again.
14. It is pleaded on behalf of the Respondent Trust that the ex parte
proceedings earlier initiated, which resulted in the order for auction of
the property, were without valid or proper service of notice, no former
proclamation for attachment of Judgement Debtor’s property, as required
under Order XXI Rule 54 of the said Code, was made and no mandatory
notice under Order XXI Rule 66 of the said Code was either issued or
served to Respondent Trust.
8
15. The question of land being part of Development Scheme was again
contended. In substance what was pleaded was that the objections, which
were pleaded earlier in the execution, were once again urged. While
contending on the dual principle of; (A) the sale was conducted with
gross material irregularities and (B) the Respondent Trust has sustained
substantial injury to their rights.
16. The objections were once again rejected by the Executing Court on
10.11.2012. A perusal of the order shows that the Executing Court
observed that the Respondent Trust, as Judgement Debtor, has not denied
that the property bearing Khasra no.271 and 272 was the same, which
was shown by way of boundaries in the site plan, and no discrepancy or
distinction between the properties attached and sold was made out.
17. On the issue of valuation raised under Order XXI Rule 66 of the
said Code, the Executing Court opined that the Judgment Debtor has
chosen not to protest the settlement terms and the Court had no objection
but to go by the valuation report of the decree holder. For convenience,
Order XXI Rule 66 of the said Code is reproduced as under:
“ORDER XXI
9
EXECUTION OF DECREES AND ORDERS
.... .... .... .... ....
66. Proclamation of sales by public auction.- (1) Where any
property is ordered to be sold by public auction in execution of
a decree, the court shall cause a proclamation of the intended
sale to be made in the language of such court.
(2) Such proclamation shall be drawn up after notice to the
decree holder and the judgment debtor and shall state the time
and place of sale, and specify as fairly and accurately as
possible—
(a) the property to be sold, [or, where a part of the property
would be sufficient to satisfy the decree, such part];
(b) the revenue assessed upon the estate or part of the estate,
where the property to be sold is an interest in an estate or in
part of an estate paying revenue to the government;
(c) any incumbrance to which the property is liable;
(d) the amount for the recovery of which the sale is ordered;
and
(e) every other thing which the court considers material for a
purchaser to know in order to judge of the nature and value of
the property:
[Provided that where notice of the date for settling the terms of
the proclamation has been given to the judgment debtor by
means of an Order under rule 54, it shall not be necessary to
give notice under this rule to the judgment debtor unless the
court otherwise directs:
Provided further that nothing in this rule shall be construed as
requiring the court to enter in the proclamation of sale its own
estimate of the value of the property, but the proclamation shall
10
include the estimate, if any, given, by either or both of the
parties.]
(3) Every application for an Order for sale under this rule shall
be accompanied by a statement signed and verified in the
manner hereinbefore prescribed for the signing and verification
of pleadings and containing, so far as they are known to or can
be ascertained by the person making the verification, the
matters required by sub-rule (2) to be specified in the
proclamation.
(4) For the purpose of ascertaining the matters to be specified in
the proclamation, the court may summon any person whom it
thinks necessary to summon and may examine him in respect to
any such matters and require him to produce any document in
his possession or power relating thereto.”
18. As regards the objection relating to the conduct of auction
proceedings, the Executing Court held that the auction purchaser had
proved due proclamation and conduct of auction sale at the spot and,
thus, drawing, signing and issuance of sale certificate is entirely under
the domain of the Court. The property was described as “plot/godown
situated at Pakhowal Road, near Railway Crossing, Ludhiana, shown as
red in the site plan attached” with the sale certificate dated 15.06.1993.
Thus, as the evidence show, the sale was not confirmed in reference to
any Khasra number, therefore, the mention of Khasra number could not
be inadvertent inclusion. The Court also upheld the objections raised by
the Appellant that the objections have not been filed by the competent
11
person and were, thus, invalid.
19. To appreciate the locational aspect we reproduce the site plan as
under:
12
20. The endeavour of the Respondent Trust to assail the aforesaid
order was rejected by the First Appellate Court confirming the judgment
of the Executing Court on 14.09.2015. Thereafter that matter went in
Civil Revision no.815/2016 before the High Court filed by the
Respondent Trust. It is relevant to note that one aspect of submission of
the Appellant was that in view of Order XXI Rule 90(3) of the said Code,
the Respondent Trust could not be heard at that stage as the grounds were
available to the Trust before the proclamation of sale was done. In this
behalf, a reference was made to the judgment in Saheb Khan v. Mohd.
Yousufuddin and Others1
, opining that the safest rule to determine what
is an irregularity and what is a nullity is to see whether the party can
waive the objection. If the party can waive the objection, it amounts to
irregularity and in case he cannot, it is a nullity.
21. The High Court, however, in terms of the impugned judgment
dated 06.03.2018 set aside the judgments of the Executing Court and the
First Appellate Court. The impugned judgment is predicated on the
reasoning that although there were glaring irregularities, yet the sale was
confirmed. The property auctioned consisted of Khasra nos.271 and 272,
1
(2006) 4 SCC 476
13
whereas the list of property submitted by the decree holder was only in
reference to the land in Khasra no.272.
22. On the issue of the compliance of the provisions of Order XXI
Rule 17 and Order XXI Rule 66 of the said Code, the High Court
observed that the Executing Court had failed to apply its mind since the
statutory provisions mentioned clearly stipulate that the attached
property’s price must correspond to the decretal amount and the court
must adjudicate upon whether the entire attached property or only a part
of it is required to be sold to satisfy the decree.
23. A balance was required to be maintained between the rights of the
Judgment Debtor and the auction purchaser under Order XXI Rule 90 of
the said Code as the land projected was not a barren stand-alone land, but
had a constructed building on it. The twin conditions referred to
aforesaid was established and the auction sale was set aside.
24. The aforesaid judgment has been assailed before us and notice was
issued on 24.07.2018 and the interim direction to the parties to maintain
status quo as on date was issued. Leave was granted on 07.01.2022
while making the interim order absolute.
14
Submissions on behalf of the Appellant:
25. Mr. P.S. Patwalia, learned senior counsel for the Appellant urged
that the Appellant was a bona fide successful auction purchaser having
purchased the property in a public auction with the consideration amount
of Rs.22.65 lakhs, duly deposited. The amount was paid between
13.08.1992 and 24.08.1992. The sale certificate was also issued in the
Appellant’s favour on 15.06.1993 and despite this the Appellant has not
been able to enjoy the property for 30 years due to pendency of this
litigation. On a reading of Order XXI Rule 90(3) of the said Code, it was
urged that the Respondent Trust as Judgment Debtor could not satisfy the
test by merely pointing out material irregularity but had to further
establish to the satisfaction of the Court that the material irregularity or
fraud has resulted in causing substantial injury to the Judgment Debtor.
There was no ground to have reversed the concurrent findings of the
courts below especially when the decree holder did not file any
objections at the time of presentation of the execution petition or at the
time of order of attachment or when the issuance of proclamation under
Order XXI Rule 66 of the said Code was issued. In fact they had chosen
to absent themselves. It was urged that in light of Order XXI Rule 90
15
(3), no application to set aside a sale can be entertained upon any ground
which the applicant could have taken on or before the date on which the
proclamation of sale was drawn up. The objections of the decree holder
could not be entertained at a belated stage.
26. Learned senior counsel sought to canvas that the bona fide
purchaser for value in an auction sale is treated differently than a decree
holder purchasing such properties and, in that behalf, relied upon the
judgment of this Court in Sadashiv Prasad Singh v. Harendar Singh2
wherein it was opined that even if such a decree is set aside, the interest
of the bona fide purchaser in an auction-sale is saved.
Submissions on behalf of the Respondents:
27. Mr. Neeraj Kumar Jain, learned senior counsel appearing for the
Respondent Trust sought to support the impugned judgment on the
ground that the High Court had found material irregularities and
illegalities causing substantial injury to the Respondent Trust. The nondisclosure at the time of filing of the application under Order XXI Rule
66 of the said Code qua the land whereby the land comprised in Khasra
No.271 had also been sold in the public auction was material as only the
2
(2015) 5 SCC 574 (para 17 to 19)
16
land comprised in Khasra No.272 could have been sold.
28. On the delay of three decades a reference was sought to be made to
the judgment of this Court in Sugandhi (Dead) by L.Rs. & Ors. v. P.
Rajkumar3
 to contend that mere delay in disposal of the case should not
come in the way of the court to do justice between the parties. There had
been procedural lapses on the part of the Respondents in following up the
case but public property ought not to be auctioned for the errors
committed by the errant officers.
Conclusion:
29. We have given thought to the matter and the submissions of the
learned counsel and have no doubt whatsoever that the dragging of the
proceedings for three decades have been a grave injustice to the
Appellant, who have been deprived of the enjoyment of the property
despite having paid the full auction price 30 years back. Merely because
the Respondent No. 1 is an Improvement Trust does not give it a licence
to take a citizen’s right for a ride.
30. We may notice at the threshold itself that though the right in
3
(2020) 10 SCC 706
17
property is not a fundamental right, it is still a constitutional right under
Article 300A of the Constitution of India. Thus, a person can be deprived
of the rights of the property only in a manner known to law. The
acquisition proceedings in respect of the land in question sought to
deprive the owners of their land which had to be paid for in terms of the
provisions of the LA Act. The amount of compensation was determined
by the reference court under Section 18 of the LA Act and the matter was
not taken further. Thus, both the owner and acquiring beneficiary agreed
to the compensation as determined by the Tribunal. The next step should
have been to immediately pay the amount to the owners which did not
happen. On the other hand, the owners were made to run from pillar to
post and ultimately the execution proceedings were filed six years after
the amount had been so determined. This conduct of the Respondent
Trust itself is not condonable and this is what resulted in the proceedings
for execution, the auction and the matter being dragged on for decades.
31. The fact of the first execution petition being dismissed as not
satisfied will not, in our view, preclude filing of the second execution
petition giving details of the property. In those proceedings also the
Respondent Trust chose to absent itself. The execution proceedings have
18
to proceed in accordance with the various stages as envisaged under
Order XXI of the said code and those stages were duly followed.
32. In our view, there is no irregularity or discrepancy in identification
of the property when the site plan was filed with it. We have reproduced
the site plan so as to make it explicitly clear how the bounded property
was clearly described. No doubt originally Khasra No.271 was not
mentioned and only Khasra No.272 was mentioned but that would have
been relevant if there was a problem in identification of the property and
the ownership of the property. This was not so.
33. We may also notice that when the objections were filed by the
Respondent Trust, issues were framed. On the basis of the issues framed
evidence had to be led. Despite various opportunities the Respondent
Trust did not lead any evidence and we have dealt with this aspect
factually in detail while referring to the proceedings before the Executing
Court in the first round. The second round arose only on account of the
benefit given by this Court in the first round of proceedings that the
Respondent Trust should be able to assist the Court. In fact, the
maximum indulgence which could be shown was shown to them
19
predicated largely on the fact that Respondent No.1 was an Improvement
Trust. It is a fact that in the various stages of execution proceedings what
was required to be done by the Respondent Trust was never done. It is
not one single failure. In the execution petition itself the amount to be
realised and the value of the property were both mentioned. There was
no objection by the Respondent Trust that the property was far more
valuable and, thus, only a part of the property should be sold. If one may
say, the Respondent Trust would have saved the day even at that time by
depositing the amount due to the owners. It did not do so. The fact that
ultimately the property fetched a larger price cannot be held against the
Appellant who participated in the process and offered the appropriate
price, which was accepted. The Respondent Trust did not even comply
with the requirement of Order XXI Rule 89 by depositing the decretal
amount along with 5 per cent of the auction amount. The Respondent
Trust behaved as if it had some superior right to appropriate the property
of the owners without paying for it contrary to the mandate of the LA
Act. That would be hardly called a case of fraud in such a situation.
34. We also fail to understand how the dual test of material irregularity
of fraud and substantial injury is satisfied in the present case. In fact,
20
neither part of the dual test is satisfied. The Respondent Trust cannot be
permitted to say that merely because the property was auctioned there is
some substantial injury. No doubt there were some structures shown in
the site plan itself, however, they were merely basic structures of a
godown and a quarter.
35. The Executing Court and the First Appellant Court duly supported
the reasoning based on various failures of the Judgment Debtor: (a) did
not file objections at the time of presentation of execution petition; (b)
did not file any objections at the time of order of attachment; (c) no
objections filed when proclamation under Order XXI Rule 66 of the said
Code was made; (d) no objections filed even at the time of public auction
being actually conducted.
36. Learned senior counsel for the Appellant rightly drew the attention
of this Court to Order XXI Rule 90 (3) of the said Code to contend that it
is clearly stated that no application to set aside a sale on grounds of
irregularity or fraud under the Rule can be entertained on any ground
which the applicant would have taken on or before the date on which the
proclamation of sale was drawn up. The Explanation to the Rule further
21
says that mere absence of or defect in attachment of the property sold
should not by itself be a ground for setting aside the sale under this Rule.
The Judgment Debtor/Respondent Trust failed to avail any of these
opportunities at different stages.
37. In Sadashiv Prasad Singh4
 it was emphasised by referring to the
earlier judicial precedents that a bona fide purchaser for value in auction
sale is to be treated differently than a decree holder purchasing such
property. It would be useful to set forth the relevant paragraphs as under:
“17. The learned counsel for the auction purchaser Sadashiv Prasad
Singh, in the first instance vehemently contended, that in terms of the
law declared by this Court, property purchased by a third party
auction purchaser, in compliance of a court order, cannot be interfered
with on the basis of the success or failure of parties to a proceeding, if
auction purchaser had bonafidely purchased the property. In order to
substantiate his aforesaid contention, learned counsel representing
Sadashiv Prasad Singh placed emphatic reliance, firstly, on a
judgment rendered by this Court in Ashwin S. Mehta & Anr. vs.
Custodian & Ors. (2006) 2 SCC 385. Our attention was drawn to the
following observations recorded therein: (SCC p. 407, para 70)
“70. In that view of the matter, evidently, creation of any thirdparty interest is no longer in dispute nor the same is subject to
any order of this Court. In any event, ordinarily, a bona fide
purchaser for value in an auction-sale is treated differently than
a decree-holder purchasing such properties. In the former event,
even if such a decree is set aside, the interest of the bona fide
purchaser in an auction-sale is saved. (See Nawab Zain-ulAbdin Khan v. Mohd. Asghar Ali Khan (1887-88) 15 IA 12) The
4
(supra)
22
said decision has been affirmed by this Court in Gurjoginder
Singh v. Jaswant Kaur (1994) 2 SCC 368.”
(emphasis supplied),”
18. On the same subject, and to the same end, learned counsel placed
reliance on another judgment rendered by this Court in Janatha
Textiles & Ors. vs. Tax Recovery Officer & Anr., (2008) 12 SCC 582,
wherein the conclusions drawn in Ashwin S. Mehta’s case (supra)
came to be reiterated. In the above judgment, this Court relied upon
the decisions of the Privy Council and of this Court in Nawab ZainUl-Abdin Khan v. Mohd. Asghar Ali Khan, (1887-88) 15 IA 12; Janak
Raj vs. Gurdial Singh, AIR 1967 SC 608; Gurjoginder Singh vs.
Jaswant Kaur, (1994) 2 SCC 368; Padanathil Ruqmini Amma vs. P.K.
Abdulla, (1996) 7 SCC 668, as also, on Ashwin S. Mehta (supra) in
order to conclude, that: [Janatha Textiles case (supra) p. 586, para 18]:
“18. It is an established principle of law, that a third party
auction purchaser’s interest, in the auctioned property continues
to be protected, notwithstanding that the underlying decree is
subsequently set aside or otherwise.”
It is, therefore, that this Court in its ultimate analysis observed as
under [Janatha Textiles case (supra) pp. 588-89, para 20]:
“20. Law makes a clear distinction between a stranger who is a
bona fide purchaser of the property at an auction-sale and a
decree-holder purchaser at a court auction. The strangers to the
decree are afforded protection by the court because they are not
connected with the decree. Unless the protection is extended to
them the court sales would not fetch market value or fair price
of the property.”
(emphasis supplied)
On the issue as has been dealt with in the foregoing paragraph, this
Court has carved out one exception. The aforesaid exception came to
be recorded in Velji Khimji and Company vs. Official Liquidator of
Hindustan Nitro Product (Gujarat) Limited & Ors., (2008) 9 SCC
299, wherein it was held as under:
23
“30. In the first case mentioned above i.e. where the auction is
not subject to confirmation by any authority, the auction is
complete on the fall of the hammer, and certain rights accrue in
favour of the auction-purchaser. However, where the auction is
subject to subsequent confirmation by some authority (under a
statute or terms of the auction) the auction is not complete and
no rights accrue until the sale is confirmed by the said
authority. Once, however, the sale is confirmed by that
authority, certain rights accrue in favour of the auctionpurchaser, and these rights cannot be extinguished except in
exceptional cases such as fraud.
31. In the present case, the auction having been confirmed on
30.7.2003 by the Court it cannot be set aside unless some fraud
or collusion has been proved. We are satisfied that no fraud or
collusion has been established by anyone in this case.”
(emphasis supplied)
19. It is, therefore, apparent that the rights of an auction-purchaser in
the property purchased by him cannot be extinguished except in cases
where the said purchase can be assailed on grounds of fraud or
collusion.”
38. The mandatory nature of the twin conditions to be satisfied before
an auction sale can be set aside as provided under Order XXI Rule 90(3)
of the said Code which has been discussed by this Court in various
judicial pronouncements. We may refer to two of them as under:
i. In Saheb Khan5
case, it was observed that satisfaction of
only one of the two conditions was not sufficient. It was
5
(supra)
24
also observed that a charge of fraud or material irregularity
must be specifically made with sufficient particulars and
bald allegations would not do.
ii. In Chilamkurti Bala Subrahmanyam v. Samanthapudi
Vijaya Lakshmi & Anr.6
, the aforesaid judgment was
referred to with approval.
39. We must note in the end that Order XXI of the said Code is
exhaustive and in the nature of a complete Code as to how the execution
proceedings should take place. This is the second stage after the success
of the party in the civil proceedings. It is often said in our country that
another legal battle, more prolonged, starts in execution proceedings
defeating the right of the party which has succeeded in establishing its
claim in civil proceedings. This is exactly what has happened in the
present case. The various stages of Order XXI of the said Code when
violated cannot given right to some extra indulgence merely because the
Respondent Trust is an Improvement Trust. There cannot be a licence to
prolong the litigation ad infinitum.
40. We have, thus, no hesitation in setting aside the impugned
6
(2017) 6 SCC 770
25
judgment of the High Court dated 06.03.2018 and sustain the view taken
by the Executing Court in the order dated 10.11.2012 as sustained by the
Appellate Court in its order dated 14.09.2015. We also grant costs to the
Appellant against Respondent No.1 quantified at Rs.1 lakh. We only
hope that, at least, now the Appellant would be able to get the benefit of
using the land they purchased three decades ago.
41. The appeal is accordingly allowed.
………………………J.
[Sanjay Kishan Kaul]
………………………J.
[S. Ravindra Bhat]
....……………………J.
[M.M. Sundresh]
New Delhi.
September 02, 2022.
26

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