IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH WEDNESDAY, THE 14TH OCTOBER 2009 / 22ND ASWINA 1931 SA.NO. 442 OF 1995() ---------------------------------- AS.192/1990 OF DISTRICT COURT,KOZHIKODE OS.196/1985 OF PRL.M.C.KOZHIKODE-I .................... APPELLANT(S) – RESPONDENT - 4TH DEFENDANT: ------------------------------------------------------------ VARKEY JOSEPH, PARAYIL LHOUSE, THALAPALAM VILLAGE, P.O. KOTTAYAM. BY ADVOCATE SHRI P.R. VENKITESH. RESPONDENT(S) – APPELLANT & RESPONDENTS 1 TO 3 PLAINTIFF & DEFENDANTS 1 TO 3: ---------------------------------------------------------------------- 1. T. SURESHAN, S/O.KUNHIKANDAN, T., VANAKKAT HOUSE, P.O. CHELAVOOR, KOZHIKODE TALUK, KOZHIKODE DISTRICT. 2. STATE OF KERALA, REPRESENTED BY THE DISTRICT COLLECTOR, KOZHIKODE. 3. THE DISTRICT COLLECTOR, KOZHIKODE. 4. THE TAHSILDAR, KOZHIKODE. BY SENIOR ADVOCATE SHRI M.C. SEN BY ADVOCATE SHRI M.P. SREEKRISHNAN BY GOVERNMENT PLEADER SHRI L.G. SURESH BABU THIS SECOND APPEAL HAVING BEEN FINALLY HEARD ON 14/10/2009 ALONG WITH SA NO. 568 OF 1995 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: THOMAS P.JOSEPH, J. = = = = = = = = = = = = = = = = = = = = = = = = S.A. NOS.442 & 568 of 1995 = = = = = = = = = = = = = = = = = = = = = = = = = Dated this the 14th day of October, 2009 J U D G M E N T ---------------------- These appeals arose from judgment and decree of learned Additional District Judge, Kozhikode in A.S.No.192 of 1990 reversing dismissal of O.S. No.196 of 1985. Parties are referred to as arrayed in S.A. No.442 of 1995. 2. Respondent No.1 filed the suit for a declaration that revenue sale of the suit property conducted by the revenue officials on 23.2.1985 is illegal and for consequential injunction. His case is that suit property was put for sale for realisation of sales tax arrears due from one Narendran on 8.1.1985 under the provisions of the Kerala Revenue Recovery Act (for short, “the Act”) fixing the auction on 23.2.1985 at about 11.00 a.m., venue being the premises of Village Office, Chevayur. In the sale notification no upset price was fixed and there was no proper description of the property to be sold. Respondent No.1 was interested in purchasing the property and went to the venue for participating in the auction. Officials stated that upset price is Rs.30,000/- per cent and that the intending bidders must deposit Rs.10,000/- each to take part in the bid. Respondent No.1 was S.A. NOS.442 & 568 OF 1995 -: 2 :- ready to deposit Rs.10,000/- but felt that Rs.30,000/- per cent fixed was very high. There were several other bidders who also felt like respondent No.1 and they waited till 11.45 a.m but since nothing happened, they returned. Next day respondent No.1 learnt that property was sold for Rs.20,000/- per cent in the auction and that the auction was bid by the appellant (in S.A. No.442 of 1995). According to respondent No.1, auction sale conducted on 23.2.1985 is illegal since it violated the provisions of the Act. He filed a petition before respondent No.3 (District Collector, Kozhikode) on 8.3.1985 under Sec.53 of the Act and requested to set aside the sale. There was no hearing on the petition and he received a letter dated 13.3.1985 asking him to deposit Rs.2,91,450/- (being the bid amount) within three days. According to respondent No.1, that direction is illegal and respondent No.3 should have considered the petition on merits and passed appropriate orders. Hence the suit for declaration that the sale is illegal and consequential injunction. 3. Appellant and respondent Nos.2 to 4 contended that sale is proper and that there is no provision to fix upset price in the auction conducted under the Act. They denied that respondent No.1 had come to the venue to take part in the auction. Property was sold in auction on 23.2.1985 after complying with all formalities. Description of the S.A. NOS.442 & 568 OF 1995 -: 3 :- property was given in Part III Page 70 of the Kerala Gazette and notice was also published. It is not true that upset price was fixed as Rs.30,000/- per cent. Upset price fixed was Rs.20,000/- per cent. In the auction held on 23.2.1985 appellant purchased 14.5 cents of land out of the suit property, he being the highest bidder and paid 15% of the bid amount on 23.2.1985 and the balance amount was remitted on 23.3.1985. On receiving petition from respondent No.1, respondent No.3 asked him to deposit Rs.2,91,450/- being the bid amount before 25.3.1985 to prove his bona fides. He did not do so. It is contended that respondent No.1 has no locus standi to challenge the auction sale. Auction sale was conducted as per the Act and Rules. Learned munsiff found that respondent No.1 has not suffered any injury and his remedy under the Act is not exhausted and hence since civil court has no jurisdiction to entertain the suit. 4. Respondent No.1 took up the matter in appeal. Learned District Judge, Kozhikode found that the auction sale conducted on 23.2.1985 is in violation of the provisions of the Act and hence civil court has jurisdiction to interfere. Accordingly dismissal of the suit was set aside and a decree was granted as prayed for to respondent No.1. Sale of 14.5 cents conducted on 23.2.1985 being illegal was set aside and the State and its Officials were restrained from enforcing any right S.A. NOS.442 & 568 OF 1995 -: 4 :- under the auction sale. That judgment and decree are under challenge in these Second Appeals, S.A. No.442 of 1984 is at the instance of the purchaser in auction and S.A. No.568 of 1995 is at the instance of State. 5. Substantial questions of law framed for a decision are: (i) Can a total stranger who has not participated in a revenue auction sale seeks to set aside the revenue sale? (ii) Whether the suit is barred under Section 72 of the Revenue Recovery Act? (iii) Whether the Officer to conduct a revenue auction sale is entitled to modify the upset price and sell either a portion or whole of the property? (iv) Whether the first appellate court court was justified in holding that the sale is in violation under Section 50 of the Revenue Recovery Act? 6. It is contended by learned Government Pleader appearing for appellant in S.A. No.568 of 1995 and learned counsel for appellant S.A. NOS.442 & 568 OF 1995 -: 5 :- in S.A. No.442 of 1995 that first appellate court went wrong in holding that the suit is maintainable and at any rate that the sale violated the provisions of the Act. Respondent No.1 supported the judgment and decree of the first appellate court. 7. Exhibit A1 is the photocopy of the Auction Notification produced by respondent No.1 to show that there was no upset price fixed before sale of the property. Exhibit A2 is the copy of the petition filed by respondent No.1 before respondent No.3 and Ext.A3 is the reply from him directing respondent No.1 to deposit Rs.2,91,450/-. Exhibit A4 is the copy of the petition preferred by respondent No.1 to respondent No.3 stating that since the petition is under Sec.53 of the Act he is not liable to deposit any amount. According to respondent No.1 he did not get any communication after Ext.A4. Exhibits B2 and B3 are produced by the appellant to show that respondent No.1 was not a participant in the auction. Exhibit B2 is the bidders list. Exhibit B3 is the sale list. Exhibits B2 and B3 do not contain the name of respondent No.1. Exhibit B1 is the petition filed by one Sidharthan and Sivadasan. Exhibit B4 is the file regarding sales tax dues of Patteyeri Narendran for which the property was put in auction. It is true that Exts.B2 and B3 do not show that respondent No.1 had participated in the auction and he also has no case in that regard. His S.A. NOS.442 & 568 OF 1995 -: 6 :- case is being that since the Officer concerned insisted that upset price to be deposited is Rs.30,000/- per cent those who intend to take in the auction should deposit at the rate of Rs.10,000/- per cent. Himself and others who had come to participate in the auction felt that it is excessive, they waited till 11.45 a.m. and returned. Assuming that respondent No.1 had not come to the venue to take part in the auction, still question arises whether as a citizen he is entitled to file a suit challenging the auction sale on the ground that auction sale is illegal being against the provisions of the Act. 8. One contention raised by the appellants is that in view of Sec.72 of the Act and in the absence of any allegation of fraud the suit is not maintainable. Section 72 of the Act states that all question arising between the District Collector or the authorised Officer and the defaulter or his representative or any other person claiming any right through the defaulter and relating to the execution, discharge or satisfaction of a written demand shall be determined by the District Collector or such other authorities as mentioned therein and not by a suit. Proviso however saves suits brought on the ground of fraud. This is not a case where respondent No.1 claims any right under the defaulter. Nor is he a defaulter or his representative. Therefore the bar under Sec.72 of the Act does not come into picture. The suit is S.A. NOS.442 & 568 OF 1995 -: 7 :- one of civil nature coming under Section 9 of the Code of Civil Procedure. For, as a citizen respondent No.1 is entitled to ensure that revenue officials conducted auction in compliance with provisions of the Act and that it did not result in loss of revenue to the State. This Court in Dorothy Beale v. Kurien (1962 KLT 450) held that a suit for declaration that order for eviction issued by the Rent Control Court is null and void on the ground that provisions of the Statute were not complied with is maintainable. The same view has been taken as to the jurisdiction of the civil court to interfere with the orders passed by the Tribunals or other authorities (see Ram Swarup v. Shikar Chand, AIR 1966 SC 893; Ganga Bair v. Vijay Kumar, AIR 1974 SC 1126 and Malabar P. & R. Co. Ltd. v. Tax Recovery Officer, 1990 (1) KLT 756. Exclusion of jurisdiction of the civil court is not to be readily inferred and the civil court will have jurisdiction to examine whether provisions of the Act have not been applied or the statutory Tribunal has not acted in conformity with the fundamental principles of natural justice or judicial procedure. Therefore, on the facts pleaded by respondent No.1 I am inclined to agree with the finding of the first appellate court that the suit is maintainable and civil court has jurisdiction to entertain the suit. S.A. NOS.442 & 568 OF 1995 -: 8 :- 9. Yet another contention raised on behalf of appellant is that respondent No.1 ought to have exhausted the statutory remedy provided under the Act. This is not a case where respondent No.1 had not attempted at the statutory remedy. He, in fact filed a petition before respondent No.3 complaining about the illegality in the revenue sale. But respondent No.3 directed him to deposit the sum of Rs.2,91,.450/-. To that, respondent No.1 replied as per Ext.A4 that Sec.53 of the Act does not require him to make any such deposit. No record is produced to show that any reply to Ext.A4 was given to respondent No.1. 10. Section 52 of the Act deals with application to set aside sale of immovable property on deposit. That provision says that any person owning or claiming an interest in immovable property sold may apply to the District Collector to set aside the sale of immovable property on deposit of the amount. Section 53 refers to application to set aside sale on ground of material irregularity, mistake etc., and reads, “53. At any time within thirty days from the date of the sale of immovable property, application may be made to the Collector to set aside the sale on the ground of some S.A. NOS.442 & 568 OF 1995 -: 9 :- material irregularity or mistake fraud in publishing or conducting it; but, except as otherwise hereinafter provided no sale shall be set aside on the ground of any such irregularity or mistake, unless the applicant proves to the satisfaction of the Collector that he has sustained substantial injury by reason thereof”. Section 53 of the Act does not speak of the applicant depositing the bid amount as a condition for requesting to set aside the sale. Hence respondent No.3 was not correct in requiring respondent No.1 to deposit the bid amount. The stand of respondent No.3 amounted to a negation of the right provided under Sec.53 of the Act. Then the course open to respondent No.1 was to approach the civil court. 11. What remained for consideration is whether the sale conducted is illegal being in violation of the provisions of the Act. Though respondent No.1 has a contention that revenue authorities before conducting the sale should have fixed the upset price, Statute does not contemplate that upset price must be fixed before conducting the revenue sale. Therefore that contention of respondent No.1 cannot be sustained. 12. It is not disputed that the sale was on 23.2.1985. It is also not disputed that of the property brought for sale only 14.5 cents was S.A. NOS.442 & 568 OF 1995 -: 10 :- sold in auction and purchased by the appellant (in S.A. No.442 of 1995) for Rs.2,91,450/-. Concededly sales tax arrears due from Narendran was Rs.4,72,493.62. 13. Section 50 of the Act reads, “50. Bidding on behalf of Government:- (1) When an immovable property is put up for sale at the time and place specified in the notice under clause (2) of Section 49 for the recovery of arrears of public revenue due on land, if there be no bid or if the highest bid be insufficient to cover the said arrears and those subsequently accruing due upto the date of sale, together with interest and cost of process, the officer conducting the sale shall postpone the sale to another date which shall not be later than sixty days from the date of the first sale and give notice of the subsequent sale as required under clause (4) of Section 49. (2) When the property is put up for sale on the date to which it was postponed under sub-section (1) at the time and place specified in the notice,- (i) if there be no bid, the officer S.A. NOS.442 & 568 OF 1995 -: 11 :- conducting the sale may purchase the property on behalf of the Government for an amount of ten paise; (ii) if the highest bid be insufficient to cover the arrears referred to in sub-section (1) and those subsequently accruing due upto the date of the sale and interest and cost of process, such officer may bid on behalf of the Government for an amount higher than such bid by ten paise, and in either case the Government shall acquire the property subject to the provisions of this Act. (3) ............. (4) ..............” As per sub-section (1) if there is no bid or if the highest bid is insufficient to cover the arrears of public revenue due on land and those subsequently accruing upto the sale conducted with interest and cost the officer conducting the sale is bound to postpone the sale to another day which shall not be later than sixty days. Under sub- section (2) if on the date to which the sale is postponed there is no bid, officer conducting the sale may purchase the property on behalf of the Government for an amount of ten paise and if the highest bid be insufficient to cover the arrears as aforesaid such officer may bid on S.A. NOS.442 & 568 OF 1995 -: 12 :- behalf of the Government for an amount higher than such bid by ten paise and in either case the Government shall acquire the property subject to the provisions of the Act. In this case it is not disputed and materials on record show that Sec.50 of the Act was not complied with by the officer concerned in that without postponing the sale as required under Sec.50 of the Act the officer sold 14.5 cents of land out of the property brought for sale for Rs.2,91,450/- while the public revenue due on land was Rs.4,72,493.62. Therefore the sale conducted is in violation of Sec.50(1) of the Act and hence illegal. 14. There is yet another interesting aspect that has emerged in the evidence. Though it is only 14.5 cents out of the property brought for sale that was sold, it is not clear in which portion of the entire property the 14.5 cents sold is situated. Exhibit B4 does not show that the 14.5 cents sold was separately marked. D.W.1 said that he cannot say which portion of the total extent was sold and hence the portion sold is not identifiable. If appellant (in S.A. No.442 of 1995) is to be put in possession, the 14.5 cents has to be demarcated. That may require a suit for partition. It is without specifying or identifying the 14.5 cents that it has been sold in auction. Civil Court was certainly entitled to look into the question whether the sale conducted is in violation of the statutory provision which the first appellate court has S.A. NOS.442 & 568 OF 1995 -: 13 :- done and in my view, rightly. Therefore first appellate court is justified in reversing the judgment and decree of the trial court and granting a decree as prayed for. Substantial questions of law framed are answered accordingly. Appeals are only to be dismissed. I make it clear that it will open to the State to bring the property for sale as provided under law if public revenue due on land from the defaulter remains unpaid even now. Second Appeals are dismissed without any order as to costs. THOMAS P.JOSEPH, JUDGE. vsv S.A. NOS.442 & 568 OF 1995 -: 14 :- THOMAS P.JOSEPH, J. =================== S.A. NOS.442 & 568 OF 1995 =================== J U D G M E N T 14TH OCTOPBER, 2009