IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HON'BLE THE ACTING CHIEF JUSTICE MR.J.B.KOSHY & THE HONOURABLE MR. JUSTICE V.GIRI FRIDAY, THE 23RD JANUARY 2009 / 3RD MAGHA 1930 WA.No. 2216 of 2007(B) ---------------------- {IN WPC.16045/2007 OF THIS COURT} .................... APPELLANT(S)//5TH RESPONDENT: --------------------------------------------------------- CHANDRAMONY, THAVOOT HOUSE, PRAKKULAM,PERINADU P.O, KOLLAM. BY ADV. SRI.KRB.KAIMAL (SR.) SRI.T.R.HARIKUMAR SRI.JAIBY PAUL SRI.V.G.ARUN RESPONDENT(S)/PETITIONER & RESPONDENTS: ------------------------------------------------------------------------------ 1. M/S.S.R.CASHEWS (P) LIMITED KOCHUPILAMOODU, KOLLAM, REPRESENTED BY ITS MANAGING DIRECTOR, S.RADHAKRISHNAN NAIR. 2. THE ASSISTANT COMMISSIONER (ASSMT) SPECIAL CIRCLE, KOLLAM. 3. THE TAHSILDAR (REVENUE RECOVERY) TALUK OFFICE, KOLLAM. 4. THE VILLAGE OFFICER, VADAKKEVILA, KOLLAM. WA.No. 2216 of 2007 :: 2 :: 5. THE INDIAN OVERSEAS BANK, KOLLAM. 6. THE DISTRICT COLLECTOR,KOLLAM. 7. STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, TAXES DEPARTMENT , TRIVANDRUM. 8. P. RAMACHANDRAN, KIRAN STEEL INDUSTRIES KANNALLUR, KOLLAM. R1 ADVS. SRI.ARIKKAT VIJAYAN MENON SRI.HARISANKAR V. MENON SMT.MEERA V.MENON & SRI.MAHESH V.MENON R5 BY ADVS.SRI.P.B.SURESH KUMAR, SC,I.O.BANK R8 BY ADV.SRI.JIJO PAUL THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ALONG WITH WPC NO.9642 OF 2008 & WPC NO.10045 OF 2008 ON 23/01/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: J.B. KOSHY, Ag.C.J. & V.GIRI, J. ------------------------- W.A.No.2216 of 2007, W.P.(C)Nos.9642 & 10045 of 2008 ------------------------- Dated this the 23th day of January, 2009. JUDGMENT GIRI, J. The issues involved in these cases are connected and the parties are also common. Therefore, they have heard together and are disposed of by this common judgment. 2. The 5th respondent in W.P.(C)No.16045/07 is the appellant in the writ appeal. The writ petitioners committed default in payment of sales tax arrears as also arrears due to the 4th respondent bank. In revenue sale, a property belonging to the defaulter firm was purchased by the appellant for an amount of Rs.19.90 lakhs. The sale was held on 25.4.2007 and the purchaser remitted the amount within the due date on 22.5.2007. The 8th respondent impleaded in the writ petition affirmed before the learned single Judge that he has a right to purchase the property for a price of Rs.10 lakhs in excess of the price quoted by the appellant/auction purchaser. The learned single Judge had stayed the confirmation of the W.A.No.2216 of 2007 & con. cases :: 2 :: sale and proceeded to pass an order setting aside the sale in favour of the 5th respondent, on the additional 8th respondent paying to the appellant the entire amount in terms of Section 52 of the Revenue Recovery Act {for short 'the Act'}, within a period three weeks from the date of the judgment. There was a further direction to the additional 8th respondent to deposit the balance amount of the sale price of Rs.29 lakhs before the Tahsildar. The Tahsildar was directed to make appropriate appropriations of the amount so remitted to the sales tax arrears in the first instance and make out the balance to the 4th respondent bank. The bank was permitted to proceed against the defaulter for recovery of the balance amount. 3. The auction purchaser the 5th respondent in the writ petition has filed the appeal and the Bench proceeded to pass an interim stay of further proceedings on 10.9.2007. 4. In the meanwhile, taking note of the application filed by the defaulter under Section 53 of the Act in respect of the revenue sale held on 25.4.2007, the collector proceeded to pass an W.A.No.2216 of 2007 & con. cases :: 3 :: order on 12.2.2008 setting aside the auction sale conducted on 25.4.2007. The collector proceeded to note from the files forwarded to him as also from the report of the Tahsildar (RR) that a valuation of the property which was brought to sale is not seen to have been done prior to the auction. Collector went on to express his opinion that it is doubtful whether the auction process has been conducted impartially and the whole proceedings were not transparent. The collector took note of the offer made by the additional 8th respondent in W.P.(C)No.16045/07 for purchase at Rs.10 lakhs above the price quoted by the appellant. 5. For all those reasons, among others, the collector proceeded to set aside the auction sale conducted on 25.4.2007 as per Section 53 of the Act. The collector also issued a direction to the Tahsildar (RR) to conduct a re-auction. This order passed by the Collector has been challenged in W.P.(C)No.10045/08 by the appellant in W.A.No.2216/07, and in W.P.(C)No.9642/08, by the additional 8th respondent in W.P.(C) No.16045/07. W.A.No.2216 of 2007 & con. cases :: 4 :: 6. It is necessary to take note of another development which took place in the meanwhile. The defaulter, the petitioner in W.P.(C) No.16045/07 proceeded to discharge the entire sales tax arrears due to the Government under the amnesty scheme, 2008. Thereupon, the requisitioning authority issued a communication to the Revenue Recovery authority, to lift the attachment on the premise that there are no outstanding arrears due from the defaulter. 7. We heard learned counsel on both sides. 8. The direction issued by the learned single Judge in W.P.(C)No.16045/07 for re-auction is not necessary at this stage in circumstances where the defaulter had later discharged the arrears due to the Government. Even apart from the direction issued by the learned single Judge, which is the subject matter of the writ appeal, the Collector has proceeded to set aside the auction held on 25.4.2007 and set aside the proceedings under Section 53 of the Act as per the order dated 12.2.2008 impugned in W.P.(C) No.9642/08 and 1004/08. What now survives for consideration is whether any grounds have been W.A.No.2216 of 2007 & con. cases :: 5 :: made out for interference with the order passed by the District Collector. We have perused the order and we take note of the fact that the defaulter was prompt in approaching the District Collector on 30.4.2007, to set aside the sale held on 25.4.2007. We also take note of the fact that the collector has entered a specific finding that an evaluation does not seen to have been done prior to the auction. Collector had rightly taken note of the fact that a better price was reported for the property on an earlier occasion. The collector has the jurisdiction to confirm the auction or set aside the sale under Section 53 of the Act. If the collector finds from the materials available that a better price could have been obtained for the property, had appropriate steps been taken by the auctioning officer in that regard, then he has the power to set aside the sale and direct re-auction. From a reading of the order and from the attendant circumstances, we find that the Collector has exercised his power in a proper and legal manner. We also take note of the fact that in the meanwhile the defaulter had actually remitted the W.A.No.2216 of 2007 & con. cases :: 6 :: amount due to the Government. Therefore, at any rate, it would not be fair to permit a stranger auction purchaser to proceed to purchase the property or permit another stranger to bid for the property. We find no grounds to interfere with the order passed by the District Collector on 12.2.2008 setting aside held on 25.4.2007. 9. But we take note of the fact that auction purchaser namely the appellant has been put to certain trouble and as a matter of fact he had remitted the amount due within the time prescribed. He has been deprived of the use of the money deposited by him. In the facts and circumstances of the case, we are of the view that he is eligible to be compensated. 10. Accordingly, we direct the petitioner in W.P.(C)No.16045/07 viz., the 1st respondent in the writ appeal, to pay the appellant an amount equivalent to interest at the rate 12%, from 22.5.2007, on the amount deposited by the appellant in the auction sale held on 25.4.2007. Such amount by way of interest shall be paid within two months from today. The interest shall be payable from 22.5.2007 till the date of W.A.No.2216 of 2007 & con. cases :: 7 :: payment. The State shall also refund the amount deposited by the appellant as the bid amount, within two months from today. It is made clear that if there is any delay on the part of the State in refunding the amount to the appellant, the same shall carry interest at the rate of 12% from the date on which the refund becomes due till the date of payment. In the facts and circumstances of the case, we are of the view that the 1st respondent in the appeal shall also pay an amount of Rs.1 lakh to the appellant, as compensation and also to cover the expenses incurred by the appellant. The said amount of Rs.1 lakh shall also be paid within the aforementioned period of two months from today. The writ appeal is disposed of, subject to the above directions. 11. For the reasons stated above, W.P.(C) No.9642/08 and 10045/08 shall stand dismissed, subject to the modification that the revenue officers shall not proceed with the re-auction of the property, on the basis of the direction issued by the District Collector. But, this shall be without prejudice to their right to act W.A.No.2216 of 2007 & con. cases :: 8 :: upon a fresh recovery certificate, if any, issued by the competent authority. Writ appeal and the writ petitions are disposed of as above. Sd/- (J.B. KOSHY) ACTING CHIEF JUSTICE Sd/- (V.GIRI) JUDGE sk/ //true copy//