Case: Bombay Salt &amp; Chemical Industries Vs. L.J. Johnson &amp; Ors

shall state among other things the terms and conditions of the sale. Sub-rule (8) provides that the person declared to be the highest bidder at the auction shall pay immediately on the fall of the hammer a deposit not exceeding 10 per cent. of the amount of his bid and in default of such deposit the property may be resold. Sub-rule (10) states that the bid in respect of which the initial deposit has been accepted shall be subject to the approval of the Settlement Commissioner or an officer appointed by him for the purpose - provided that no. bid shall be approved until after the expiry of 7 days from the date of the auction. Sub-rule (11) provides that the intimation of the approval of a bid or its rejection shall be given to the highest bidder, thereafter referred to in the Rules as the auction purchaser, and the auction purchaser shall when the bid has been accepted, be required within 15 days of the issue of such intimation to send or produce a Treasury challan in respect of the deposit of the balance of the purchase money. Sub-rule (15) provides that when the purchase price has been realised in full from the auction purchaser, the Managing Officer shall issue to him a sale certificate in the form specified in appendix 22 or 23 as the case may be. Form 23 relates to a sale of lease-hold property and with this we are not concerned. Form 22 is in respect of freehold properties and is in these terms :"This is to certify that . . . . . . has been declared the purchaser at a sale by public auction held in pursuance of the powers conferred upon me under section 20 of the Displaced Persons (Compensation and Rehabilitation) Act, 1954 (XLIV of 1954) on the . . . . . day of . . . . . . . 195 of the property described in the schedule."By virtue of Rs. 15, this certificate has to be signed by the Managing Officer.9. In this case certain conditions of the auction sale had been imposed and set out in the notice of sale. Imposition of such conditions is permitted by R. 90 (3) already referred to . The notice stated that the sale was subject to the provisions of the Act, and the Rules. Condition No. 2 provided that no. initial deposit was required from bidders who were displaced persons but that they would have to file an Indemnity Bond while others had to pay the initial deposit. It also provided that the filing of the Indemnity Bond or the receipt of the initial deposit constituted no. commitment as to the acceptance of the bid which would be subject to the approval of the Regional Settlement Commissioner and that such officer was not bound to accept the highest bid but the bidder would be held to his bid for a period of six months. Conditions No. 4 stated that within 15 days of the issue of the intimation of the approval of his bid the auction-purchaser had to send a receipted Treasury challan in respect of the deposit of the balance of the purchaser money. Condition No. 7 was to the effect that when the purchase price had been realised in full from the auction-purchaser, the Managing Officer should transfer complete ownership of the property and issue a sale certificate in the prescribed form.10. It is clear from the rules and the conditions of sale set out above that the declaration that a person was the highest bidder at the auction does not amount to a complete sale and transfer of the property to him. The fact that the bid has to be approved by the Settlement Commissioner shows that till such approval which the Commissioner is not bound to give, the auction-purchaser has no. right at all. It would further appear that even the approval of the bid by the Settlement Commissioner does not amount to a transfer of property for the purchaser has yet to pay the balance of the purchase money and the rules provide that if he fails to do that he shall not have any claim to the property. The correct position is that on the approval of the bid by the Settlement Commissioner, a binding contract for the sale of the property to the auction-purchaser comes into existence. Then the provision as to the sale certificate would indicate that only upon the issue of it a transfer of the property takes place. Condition of sale No. 7 in this case, furthermore, expressly stipulated that upon the payment of the purchase price in full the ownership would be transferred and a sale certificate issued. It is for the appellants to show that the property had been transferred. They have not stated that the sale certificate was issued, nor that the balance of the purchase money had been paid. In those circumstances, it must be held that there has as yet been no. transfer of the salt pans to respondents Nos. 4 and 5. The appellants cannot therefore claim the benefit of S. 29 and ask that they should not be evicted. Mr. Purshottam Trikamdas contended that the sale certificate will in any event be granted and that once it is granted, as the form of this certificate shows, the transfer will relate back to the date of the auction. It is enough to say in answer to this contention that assuming it to be right, a point which is by no. means obvious and which we do not decide, till it is granted no. transfer with effect from any date whatsoever takes place and none has yet been granted.11. In the view that we have taken on the question of transfer it is not necessary to decide the other point as to whether the appellants can be said to have been in lawful possession. In the absence of a transfer the question does not arise.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]5. This, however, is not a point that arises on the facts of this case. The case is not concerned with any eviction under S. 19. In their application to the Chief Settlement Commissioner the appellants had not made a case under S. 19 nor could they make one. At the date of the auction and also of the application the lease was running and there was no. question of the Managing Officer terminating it under S. 19 or at all. The appellants had not then been evicted nor threatened with any eviction under S. 19. In fact, in the application the appellants had asked that they should not be evicted because the property should not have been sold but allotted to them as its value was less than Rs. 50, 000 and that, even if the sale was good, they could not be evicted because of the provisions of S. 29 of the Act. They had asked for a stay of the eviction not because of S. 19 but because they felt that their lease would run out before the application could be decided. None of the grounds, therefore, on which they sought to resist eviction turned on S. 19 of the Act. It is not the respondents case either that possession was taken from the appellants under S. 19. Whether the eviction was illegal or not for any other reason besides those on which the application is based is irrelevant. There had, in fact, been no. eviction at the date of the application to the Chief Settlement Commissioner nor when he made his order. This point of Mr. Purshottam Trikamdas, therefore, fails.6. We come now to the first point on which the application was based, namely, that the property being of a value lower than Rs. 50, 000 should have been allotted to the appellants and not sold. This point was not pressed in thiswas not disputed that the appellants were persons to whom the provisions of the section applied, nor that the property was of the class notified under29, nor further that none of the grounds on which an ejectment was permitted by the section existed. Mr. Purshottam Trikamdas had, however, to show that there was a transfer of the salt pans and that his clients were in lawful possession ofare unable to agree that because the section permits a sale by auction, whenever there is an auction the sale must be deemed to be complete. Whether there is a transfer or not depends on the conditions of the auction and these have to be examined to find out when a transfer of the property auctioned takes place. There may be a sale by auction where the sale is not complete till, for example, a document is executed. The section, furthermore, states that the transfer under it would be subject to the rules made under the Act. Turning to the Rules we are unable to say that the declaration of a bidder at the auction as the highest bidder amounts to a completed sale and to a transfer of the property to be sold.The power to sell is given by S. 20 of theIt is clear from the rules and the conditions of sale set out above that the declaration that a person was the highest bidder at the auction does not amount to a complete sale and transfer of the property to him. The fact that the bid has to be approved by the Settlement Commissioner shows that till such approval which the Commissioner is not bound to give, the auction-purchaser has no. right at all. It would further appear that even the approval of the bid by the Settlement Commissioner does not amount to a transfer of property for the purchaser has yet to pay the balance of the purchase money and the rules provide that if he fails to do that he shall not have any claim to the property. The correct position is that on the approval of the bid by the Settlement Commissioner, a binding contract for the sale of the property to the auction-purchaser comes into existence. Then the provision as to the sale certificate would indicate that only upon the issue of it a transfer of the property takes place. Condition of sale No. 7 in this case, furthermore, expressly stipulated that upon the payment of the purchase price in full the ownership would be transferred and a sale certificate issued. It is for the appellants to show that the property had been transferred. They have not stated that the sale certificate was issued, nor that the balance of the purchase money had been paid. In those circumstances, it must be held that there has as yet beenno. transfer of thesalt pans to respondents Nos. 4 and 5. The appellants cannot therefore claim the benefit of S. 29 and ask that they should not be evicted. Mr. Purshottam Trikamdas contended that the sale certificate will in any event be granted and that once it is granted, as the form of this certificate shows, the transfer will relate back to the date of the auction. It is enough to say in answer to this contention that assuming it to be right, a point which is by no. means obvious and which we do not decide, till it is granted no. transfer with effect from any date whatsoever takes place and none has yet beenwas not disputed that the appellants were persons to whom the provisions of the section applied, nor that the property was of the class notified underSub-section (2) of SectionIn the view that we have taken on the question of transfer it is not necessary to decide the other point as to whether the appellants can be said to have been in lawful possession. In the absence of a transfer the question does not arise.