Rakesh Kumar Goel Etc vs U.P.State Industrial Dev.Corpn.Ltd.& ...

2. On the writ petitions filed by the UP State Industrial Development Corporation (respondent no.1) the Allahabad High Court set aside the auction sale of two pieces of land made in favour of the appellants. The High Court held that the auction sale of the two plots was a nullity because in violation of rule 285-D of the UP Zamindari Abolition and Land Reforms (UPZALR) Rules, 1952 the appellants did not deposit one fourth of their bid 2 amounts immediately on the conclusion of the auction, but deposited the requisite amounts on the following day. Having thus held the auction sale legally untenable, the High Court did not advert to the other circumstances and the manner in which the auction sale was held.

4. The two pieces of land that are at the centre of the dispute are plot nos.2/1 & 2/2 situated in the Industrial Estate, Sahibabad, in the district of Ghaziabad, UP. The two plots are owned by the Uttar Pradesh State Industrial Development Corporation (UPSIDC). Plot no.2/1 was allotted by the UPSIDC to M/s Bramic Suri Private Limited (BSPL) and plot no.2/2 to M/s Suri Asbestos Private Limited (SAPL). These two plots were purported to be purchased by Rakesh Kumar Goel (one of the two appellants) and M/s Moti Board Industries Private Limited, represented by its Director, Moti Lal Goel (the other appellant) in an auction sale held by the revenue authorities of the State Government. In course of hearing of the case, on our direction, the State of UP (respondent no.3) produced all the documents concerning the auction proceedings in respect of the two plots. Those were taken on record as "Additional Documents- Vol. 8", (relating to plot no.2/1) and "Additional Documents- Vol. 9", (relating to plot no.2/2). The following narration of facts is on the basis of the documents as contained in the two volumes.

5. BSPL had dues of Rs.1,55,309.85 plus interest @ Rs.26.38 per day from January 12, 1991 under the Employees State Insurance Act, 1948. The Regional Director, ESI on December 13, 1991 sent a certificate to the Collector, Ghaziabad under section 5 of the Revenue Recovery Act for recovery of the dues. In pursuance of the certificate the Additional Collector, 4 Ghaziabad issued two proclamations on May 12, 1992, one for attachment under sections 284/286 of the UP Zamindari Abolition and Land Reforms Act, 1950 and the other restraining `the defaulter' (BSPL) from selling or transferring the plot in any manner to anyone or from creating any charge on it. The service report of the proclamations, scribbled in hand on their reverse sides, simply said that, on going to the site the firm was found closed. The chowkidar declined to take copies of the proclamations. The copies of the proclamations were, therefore, affixed to the gate of the premises in presence of witnesses and it was announced in a loud voice that the premises, plot no.2/1 was under attachment for non payment of government dues. The next step in the proceedings was the issuance of the Sale Proclamation by the Additional Collector. In the Sale Proclamation it was stated as follows:

7. On June 9, 1992 a petition was filed on behalf of BSPL requesting the Tehsildar, Dadri (Ghaziabad) for grant of some time for payment of the government dues for the recovery of which the auction sale proclamation was issued. The petition submitted by the BSPL lies in the file of the auction proceeding but apparently no notice was taken of it. It seems that Canara Bank from where BSPL had taken a loan also got a wind of the auction proceedings concerning plot no.2/1. On June 10, 1992, the Canara Bank wrote a letter to the ADM (Finance), Ghaziabad stating that Site 4, plot no.2/1, Ghaziabad was mortgaged in its favour as security for the loan advanced to BSPL. The letter further stated that the bank had the first charge over the land in question and requested the ADM not to proceed with the proposed auction sale.

8. At this stage BSPL took the matter to the court and filed a writ petition (W. P. no.22295 of 1992) in the Allahabad High Court for quashing the Sale Proclamation fixing the auction sale of plot no. 2/1 on June 15, 1992. A photostat copy of the Sale Proclamation was annexed to the writ petition marked as Annexure 1. Along with the writ petition a stay petition was also filed in which a prayer was made in the following terms:

9. On June 12, 1992 the High Court granted ad interim stay in favour of the writ petitioner, BSPL. (We may state here that on these facts being stated before us in course of hearing of the case, we summoned the original record of the writ petition from the Allahabad High Court and verified the facts from the original record). A certified copy of the order was produced later on but there is sufficient evidence to show that before the date fixed for the auction, the revenue authorities at Ghaziabad were informed about the stay order passed by the High Court through the lawyer's certificate.

11. Next, proclamations were issued on May 13, 1992, one for attachment of the plot and the other prohibiting SAPL from selling, transferring or mortgaging the property in favour of any other person. The service of the proclamations was effected exactly in the same manner as in the case of the other plot (being plot no.2/1). The Pargana Adhikari then made a request to the Tehsildar, Dadri for issuing the order for auction sale of the property that 8 was lying under attachment. The Tehsildar issued the Sale Proclamation (undated) fixing the auction sale of this plot too on June 15, 1992. The service of the Sale Proclamation was effected in the same way as in case of the earlier proclamations. A petition for grant of some time for payment of the government dues was filed before the Tehsildar on June 9, 1992 on behalf of SAPL also.

13. There are memos of auction in respect of both the plots showing that their auction took place on June 15, 1992. From the memo of auction for plot no 2/1, it appears that five (5) bidders, including the appellant, Rakesh Kumar Goel, took part in the auction. The appellant made the highest bid of Rs.6,30,000/- and his bid was finally accepted. The memo also recorded that one fourth of the bid amount was deposited in the Nazarat in Register No.4.

14. The memo of auction for plot no.2/2 shows that there were five (5) bidders, including Moti Lal Goel, representing the second appellant. He made the highest bid of Rs.6,20,000/- which came to be accepted. The memo recorded that one fourth of the bid amount was received, vide Receipt 9 no.043560. We shall presently see that the statement in both the memos in regard to payment of one fourth of the bid amounts was quite false.

16. According to the private respondents (BSPL & SAPL), no auction was ever held and the whole thing was mere paper work. Our attention was also drawn to certain facts coming to light in course of a departmental enquiry later held in the matter. In the departmental enquiry One Harbeer Singh, AWBN stated that auction proceedings with respect to SAPL and 10 BSPL (lands) were not held in the Tehsil office but papers were prepared at the residence of the ADM. In the morning of June 15, 1992 he was called there. At the residence of the ADM, the Amin, Ram Kumar was writing the proceedings on one of the files and he was asked to write the proceedings on the other file. Harbeer Singh said that the auction proceedings at pages 40-41 were written by him and he wrote about the payment of one fourth of the bid amount on the instruction of the Naib Tehsildar who was his superior officer.

29. Let us now see how the sale of the two plots was confirmed. The appellants and their abettors inside the revenue department of the government were so far able to show that for recovery of the Government dues the plots of land of BSPL (2/1) and SAPL (2/2) were put to auction on June 15, 1992 in which the two appellants were the highest bidders. The next stage was the confirmation of the sale after dealing with the objections. It is noted above that even before the date of the auction the concerned authorities were given information about the stay order passed by the Allahabad High Court in respect of plot no.2/1. At that time they paid no heed to it but later on certified copies of the order were produced. On June 18, 1992 certified copies of the stay order passed by the Allahabad High Court were submitted before the Tehsildar, Dadri, both by the private respondent and the Canara Bank. Now, this was a real impediment to 20 overcome before the sales could be confirmed and the appellants and their abettors inside the government could succeed in their designs. The High Court order was put away in a highly disingenuous way. A note was put up in which referring to the cause title of the writ petition, where the address of the writ petitioner, M/s Bramic Suri Pvt. Ltd. was shown as "Gyani Border, Post Office Chikambarpur, District Ghaziabad", it was declared that the High Court Order was with respect to some other property, situate at the site of the address given in the writ petition. On June 30, 1992 the note was perused by the District Magistrate and on the same date it was approved by the ADM (F & R). No one cared to see that Annexure 1 to the writ petition was a photostat copy of the very same Sale Proclamation on the basis of which the auction sale of plot no.2/1 was held and in the writ petition the prayer was to quash the Sale Proclamation at annexure 1 and in the stay petition the prayer was to stay its operation. It is not known whether this matter was brought to the notice of the High Court and whether the High Court took any action in the matter. We can only say that we find it one of the crudest manipulations coming to our notice.

30. Coming now to plot no.2/2 which was put up for auction sale for recovery of the demand of Central Excise dues raised by the Excise Superintendent. Against the adjudication order giving rise to the demand an 21 appeal, along with a petition for stay-cum-waiver, was filed before the Central Excise and Gold Control Appellate Tribunal. The appeal and the stay petition were still pending before the Tribunal when the recovery proceedings were started in which the plot in question was put up for auction sale. In those circumstances, in this matter also, the private respondents approached the Allahabad High Court with a writ petition which was disposed of by the High Court by order dated July 13, 1992 observing as follows:

35. These, in short, are the credentials of the two appellants and the manner in which the two plots in question were put to auction sale purportedly for recovery of the government dues.

38. He also took us through the relevant provisions of the UPZALR Act and the UPZALR Rules as referred to above in this judgment. We appreciate the assistance rendered by him to the Court.

40. At one stage we considered asking the CBI to investigate the present case as also other cases of auction sale and alienation of land by the Revenue Department of the State Government in the District of Ghaziabad. We, however, refrain from doing so for two reasons. One, the CBI is already overburdened and secondly, the matter is about 20 years old. The officers posted at Ghaziabad would no longer be there, some of them might even have retired.

41. But this case certainly calls for exemplary costs to the appellants. We wish to make it absolutely clear that this Court is not for manipulators, speculators and land grabbers. The litigation in this Court is not like buying a lottery ticket that, if luck favours, might bring a windfall (even though illegitimate) but would cost no more than the expenses of litigation. That is not the way of this Court. We, accordingly, impose cost of Rs.2 lakhs on each of the two appellants. The amount of cost must be paid to the Supreme Court Legal Aid Committee within 12 weeks from today. In case receipts showing payment of the cost is not filed within the time as directed, the amounts of cost shall be realised from the appellants as fine under the provisions of the Code of Criminal Procedure.

42. Before parting with the records we feel obliged to say that the existing provisions of the UPZALR Act and the UPZALR Rules are out of date by three quarters of a century. Those were designed to deal with agriculture holdings in a rural area. Even for that purpose the provisions appear to be far from satisfactory. But they have become woefully inadequate and completely deficient for dealing with land holdings and other immovable properties in highly urbanised and industrialised regions of the State. There is, therefore, an urgent need to update the law either by framing fresh Act and Rules or by thoroughly amending the existing ones.

43. In the result the appeal is dismissed with costs as indicated above. The dismissal of the appeal shall not stand in the way of the authorities to recover from the private respondents Government dues, if any, in accordance with law. We are also not expressing any opinion as to who would get possession over the two plots as the result of the setting aside of their auction sale. If the private respondents claim possession over the two plots the UPSIDC will take a decision on their claim, in accordance with law.

....................................CJI.

......................................J. (AFTAB ALAM) New Delhi, July 8, 2010