Case: Ram Kishun &amp; Others Vs. State of U.P. &amp; Others

exercise of judicial discretion. (See also: M/s. Kayjay Industries (P) Ltd. v. M/s. Asnew Drums (P) Ltd. & Ors., AIR 1974 S 1331; Union Bank of India v. Official Liquidator High Court of Calcutta & Ors., AIR 2000 SC 3642 ; B. Arvind kumar v. Govt. of India & Ors., (2007) 5 SCC 745 ; and M/s. Transcore v. Union of India & Anr., AIR 2007 SC 712 ). 21. In Divya Manufacturing Co. (P) Ltd. & Anr. v. Union Bank of India & Ors., AIR 2000 SC 2346 , this Court held that a confirmed sale can be set aside on the ground of material irregularity or fraud. The court does not become functus officio after the sale is confirmed. In Valji Khimji and Company v. Official Liquidator of Hindustan Nitro Product (Gujarat) Ltd. & Ors., (2008) 9 SCC 299 , the Court held that auction sale should be set aside only if there is a fundamental error in the procedure of auction e.g. not giving wide publication or on evidence that property could have fetched more value or there is somebody to offer substantially increased amount and not only a little over the auction price. Involvement of any kind of fraud would vitiate the auction sale. 22. In FCS Software Solutions Ltd. v. La Medical Devices Ltd. & Ors., (2008) 10 SCC 440 , this Court considered a case where after confirmation of auction sale it was found that valuation of movable and immovable properties, fixation of reserve price, inventory of Plant and Machineries had not been made in proclamation of sale, nor disclosed at time of sale notice. Therefore, in such a fact-situation, the sale was set aside after its confirmation. 23. In view of the above, the law can be summarised to the effect that the recovery of the public dues must be made strictly in accordance with the procedure prescribed by law. The liability of a surety is co-extensive with that of principal debtor. In case there are more than one surety the liability is to be divided equally among the sureties for unpaid amount of loan. Once the sale has been confirmed it cannot be set aside unless a fundamental procedural error has occurred or sale certificate had been obtained by mis-representation or fraud. 24. Learned counsel for the parties are not in a position to point out the specific rules under which the recovery was to be made. Thus, the aforesaid legal principles have been considered on general principles of law as argued by them. The instant case is required to be examined in the light of the aforesaid settled legal propositions. Admittedly, the father of the appellants stood guarantor when Ganga Prasad took loan from the bank. Though there are some documents to show that there were two guarantors but who was the other guarantor is not evident from the record, nor such a plea had ever been taken by the appellants before the courts below. As the appellants had inherited the estate of the guarantor, they are liable to meet the liability of unpaid amount. The appellants land admeasuring 1 bigha and 10 biswas was sold for Rs.25,000/-. It cannot be held, even by any stretch of imagination, that the land had been sold at a heaper rate, for the reasons, that the land belonging to Ganga Prasad (principal debtor) measuring 3 bighas and 2 biswas in the same village in a close proximity of time had been sold for a sum of Rs.6,000/- only. More so, elder brother of the appellant no.1 Ram Swaroop had participated in the auction and given the bid of Rs.20,000/- for the land in dispute. In view of the above, the submission made by Shri Garg that property worth Rs.2,00,000/- had been sold at a throw away price of Rs.25,000/- is not worth acceptance.25. No fundamental procedural error had been pointed out which would vitiate the order of confirmation of sale and issuance of sale certificate.26. The total amount of loan sanctioned in favour of Ganga Prasad was Rs.4,425/-. The Collector issued citation for recovery of Rs.10,574/- on 13.1.1986 and the total amount to be recovered including principal amount, interest, collection charges etc. came to Rs.14,483.15P. The property of Ganga Prasad had been sold for a sum of Rs.6,000/-. So, the total amount to be recovered remained about Rs.8,500/-. The appellants land had been sold for Rs.25,000/- i.e., three times the amount which was to be recovered. In the facts and circumstances of this case, instead of putting this whole land admeasuring 1 bigha and 10 biswas, the sale of 1/3rd of this land could have served the purpose. Therefore, there had been material irregularity in putting the entire property to auction.27. In case, the auctioning authority had received Rs.25,000/- from the respondent no.4 as a sale consideration after adjusting the outstanding dues of Rs.8,500/-, the balance amount of Rs.16,500/- ought to have been paid to the appellants. There is nothing on record to show that authorities had ever adopted such a course.28. In view of the above, the auction sale stood vitiated and all the consequential proceedings are liable to be quashed. However, for the reasons best known to the appellants, they have neither impleaded the Bank (creditor) nor any of the legal heirs of Ganga Prasad (principal debtor). In such a fact-situation, it becomes difficult to proceed with the case any further.29. Be that as it may, the respondent No.4 had been put in possession of the land more than two decades ago and he had made improvements. This Court has consistently held that such a possession should not be disturbed at a belated stage for the reason that such a person would have spent his whole life savings in improving the land and making developments thereon which may include the construction of residences etc. (See: State of Gujarat v. Patel Raghav Natha & Ors., AIR 1969 SC 1297 ; and Brij Lal v. Board of Revenue & Ors., AIR 1994 S 1128).

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

Explanation:
0[ds]Admittedly, the father of the appellants stood guarantor when Ganga Prasad took loan from the bank. Though there are some documents to show that there were two guarantors but who was the other guarantor is not evident from the record, nor such a plea had ever been taken by the appellants before the courts below. As the appellants had inherited the estate of the guarantor, they are liable to meet the liability of unpaidappellants land admeasuring 1 bigha and 10 biswas was sold for Rs.25,000/-. It cannot be held, even by any stretch of imagination, that the land had been sold at a heaper rate, for the reasons, that the land belonging to Ganga Prasad (principal debtor) measuring 3 bighas and 2 biswas in the same village in a close proximity of time had been sold for a sum of Rs.6,000/- only. More so, elder brother of the appellant no.1 Ram Swaroop had participated in the auction and given the bid of Rs.20,000/- for the land in dispute. In view of the above, the submission made by Shri Garg that property worth Rs.2,00,000/- had been sold at a throw away price of Rs.25,000/- is not worth acceptance.25. No fundamental procedural error had been pointed out which would vitiate the order of confirmation of sale and issuance of sale certificate.26. The total amount of loan sanctioned in favour of Ganga Prasad was Rs.4,425/-. The Collector issued citation for recovery of Rs.10,574/- on 13.1.1986 and the total amount to be recovered including principal amount, interest, collection charges etc. came to Rs.14,483.15P. The property of Ganga Prasad had been sold for a sum of Rs.6,000/-. So, the total amount to be recovered remained about Rs.8,500/-. The appellants land had been sold for Rs.25,000/- i.e., three times the amount which was to be recovered. In the facts and circumstances of this case, instead of putting this whole land admeasuring 1 bigha and 10 biswas, the sale of 1/3rd of this land could have served the purpose. Therefore, there had been material irregularity in putting the entire property to auction.27. In case, the auctioning authority had received Rs.25,000/- from the respondent no.4 as a sale consideration after adjusting the outstanding dues of Rs.8,500/-, the balance amount of Rs.16,500/- ought to have been paid to the appellants. There is nothing on record to show that authorities had ever adopted such a course.28. In view of the above, the auction sale stood vitiated and all the consequential proceedings are liable to befor the reasons best known to the appellants, they have neither impleaded the Bank (creditor) nor any of the legal heirs of Ganga Prasad (principal debtor). In such a fact-situation, it becomes difficult to proceed with the case any further.29. Be that as it may, the respondent No.4 had been put in possession of the land more than two decades ago and he had madeCourt has consistently held that such a possession should not be disturbed at a belated stage for the reason that such a person would have spent his whole life savings in improving the land and making developments thereon which may include the construction of residences etc. (See: State of Gujarat v. Patel Raghav Natha & Ors., AIR 1969 SC 1297 ; and Brij Lal v. Board of Revenue & Ors., AIR 1994 S 1128).