Captain, E.N. vs District Collector and Others

K.S. Radhakrishnan, J.—Tahsildar, Aluva, under the provisions of the Kerala Revenue Recovery Act attached 13 cents of land in Sy. No. 635/2 of Chowara Village, which belonged to A.G. Sasidharan, Anakkattii Veedu, Chowara Village. The property was attached in order to realise an amount of Rs. 22,594.50 being the principal and interest due towards toddy workers welfare fund. Auction was earlier conducted on 9th March 1994 and the highest bid amount in that auction was Rs. 5,500. Authorised officer who conducted the auction reported that considering the importance of the locality and nearby toad, there is a possibility of getting higher amount. It was also cleared that minimum centage market value of the land in that locality is Rs. 2,000 and recommended to conduct re-auction.

Accordingly, a re-auction was conducted on 23rd September 1994, in which Petitioner bid the property for Rs. 10,350, which is only Rs. 796.15 percent. On reading of the report of the authorised officer, who conducted auction on 9th March 1994 that the minimum centage market value of the land in the locality is Rs. 2,000, it is stated the bid amount fetched in the auction conducted on 23rd September 1994 is very low. It is also found that the amount due from Sasidharan could not be realised, if the second auction is confirmed. Therefore the auction conducted on 23rd September 1994 was cancelled by the Sub Collector vide his order dated 30th March 1995. Tahsildar, Aluva was then directed to conduct re-auction at an early date fixing the upset value of the land at Rs. 2,000 per cent, as reported by the authorised officer. A communication was issued to the Petitioner by the Tahsildar vide his letter dated 5th July 1996 stating the reason for conducting a re-auction, and that the amount deposited by the Petitioner would be returned. Aggrieved by the same, Petitioner has approached this Court challenging Exts. P-5 and P-6 proceedings.

Main contention raised by Counsel for the Petitioner was that since Petitioner being the highest bidder in the auction conducted on 23rd September 1994, Respondents are duty bound to confirm the auction in favour of the Petitioner. It was also pointed out that there was no objection filed by anybody to set aside the sale. Petitioner also submitted that before conducting a re-auction no notice was issued to him. It was also contended inadequacy of sale price is not a ground to set aside the sale. Reference was made to the decision of this Court in Subaida Sulaiman v. Hamsa 1991 (2) KLT 158 (DB) stating that mere inadequacy of the price fetched at the sale would not by itself be a sufficient ground to set aside the sale. It was also contended that Collector has no jurisdiction to set aside the earlier sale, after a period of 30 days. According to Counsel, in the absence of any objection, the auction ought to have been confirmed in favour of the Petitioner.

The decision to conduct a re-auction was made by the District Collector as early as on 30th May 1995 after having found that the market value of the land in the locality is around Rs. 2,000 percent. In the auction conducted on 23rd September 1994, the highest offer made was Rs. 796.15 per cent, which was found to be inadequate. Since the amount fetched was inadequate Sub Collector decided to conduct a re-auction fixing the upset price of the land at Rs. 2,000 percent. Decision was also communicated to the Petitioner. It is in pursuance of Ext. P-6, that Tahsildar has issued Ext. P-5 proceedings stating that it was decided to conduct re-auction and that amount deposited by the Petitioner would be returned to him.

In the instant case, auction was not confirmed in favour of the Petitioner. Only if the auction is confirmed, Petitioner gets a legal right. u/s 54 of the Kerala Revenue Recovery Act, on expiration of 30 days from the date of sale, if no application to have the sale set aside is made u/s 52 or Section 53, or if any such application has been made and rejected, the Collector shall make an order confirming the sale. It cannot be contended that Collector has no jurisdiction to set aside a sale after a period of 30 days from the date of sale. On the expiry of 30 days from the date of sale,'' the sale does not become confirmed automatically in case there is no application for setting aside the sale. Only if the Collector makes an order, question of confirmation arises. There cannot be any automatic confirmation u/s 54, unless the Collector makes an order confirming the sale. If the Collector has not made an order confirming the sale, it cannot be said that confirmation is automatic which is never the intention of Section 54. As held by the Supreme Court in L.I.C.A (P) Ltd. v. Official Liquidator [No. 1) (1996) 85 Com. Cases 788 the condition of confirmation by the Court operates as a safeguard against the property being sold at an inadequate price whether or not it is a consequence of any irregularity or fraud in the conduct of the sale. Therefore question of adequacy, or inadequacy, of price is one of the relevant criteria to be taken note of by the revenue authorities when 3 property is brought to sale. The purpose of an open auction is to get the most remunerative price. It is the duty of the Court to keep the auction open so that intending bidders would be free to participate and offer higher prices. If that path were to be closed, the possibility of fraud or underbidding would loom large. Therefore contention of Counsel for the Petitioner that whatever might be the sale price, after the expiry of 30 days from the date of sale, sale has automatically become confirmed cannot be sustained.

It was contended by Counsel for the Petitioner that before conducting a re-auction, notice ought to have been given to him. I am of the view that since auction was not confirmed in favour of the Petitioner, there is no necessity of giving any notice to the Petitioner to show cause why a re-auction be not conducted. In the instant case, decision of the Sub Collector was already communicated to the Petitioner by the Tahsildar, Aluva, which is evident from Ext. P-6. Another communication was also issued to the Petitioner evidenced by Ext. P-5. This is sufficient notice to the Petitioner informing him that auction in favour of the Petitioner has not been confirmed and revenue authorities have decided to conduct a re-auction.

Decision of this Court in Subaida Sulaiman v. Hamsa 1991 (2) KLT 158 (D.B) cited by the Petitioner, is not applicable to the facts of this case. In that case a Division Bench of this Court was considering the scope of Sections 53 and 54 of the Revenue Recovery Act. It was held reading Sections 53 and 54 together, and it appears to us that the provision being a part of the scheme in the matter of setting aside the pie, they have to be read together, the picture becomes clear and the Collector can set aside the sale under the proviso to Section 54, only if he has reason to think that the sale ought to be set aside for the reasons mentioned in Section 53. De hors the reasons mentioned in Section 53, the Collector has no jurisdiction either u/s 53 or under the proviso to Section 54. Therefore the Division Bench held that decision of this Court in Joseph v. Tahsildar, South Wynad 1980 KLT (S.N.) 35 did not lay down the correct law.

The principle laid down by the Division Bench in Subaida Sulaisman,s case 1991 (2) KLT 158 (D.B) has to be considered in the light of facts of that case. That was a case where sale has already been confirmed by the District Collector.

Application was filed to set aside the sale. In the instant case, sale has not been confirmed. Since sale has not been confirmed as per Section 53 Collector has to make an order confirming the sale. As held by the Supreme Court in L.LC.A. (P) Ltd. s'' case (1996) 85 Com. Cases 788 (supra) the condition of confirmation operates as a safeguard against the property being sold at an inadequate price whether or not it is a consequence of any irregularity or fraud in the conduct of the sale. Therefore in a case where sale has not been confirmed, as held by the Supreme Court in the above mentioned case, it is always open to the Collector to look into the question whether the price fetched is inadequate or not. If the District Collector is satisfied that the price fetched is inadequate, he can set aside the sale. In the instant case since the Collector never confirmed the sale, I am of the vie w that going by the Supreme Court decision adequacy of the sale price is one of the relevant criteria to be taken note of by the District Collector.

Under the above-mentioned circumstances, I do not find any illegality or irregularity in Exts. P-5 and P-6.

Original Petition is accordingly dismissed.