Ganga Singh vs The State of Punjab and others

R.S. Narula, J.—Ganga Singh petitioner who is a resident of village Kheowala, tahsil Pazilka, district Ferozepore, obtained a loan of Rs. 4000/- from the Punjab Government on March 19, 1956, for the installation of a tubewell in his land situated in village Langiana in tahsil Ferozepore. According to the return of the Deputy Commissioner, the petitioner did not utilise the amount for the purpose for which it was given to him and the whole amount, therefore, because due from the petitioner. In proceedings for the recovery of the amount of the loan and interest etc. due from the petitioner, his land in dispute was put to auction on March 21, 1966. The highest bid of Rs. 6500/- was given by Lachhman Singh and Satnam Singh respondents Nos. 3 and 4 respectively. On May 7, 1966, the petitioner filed objections u/s 91 of the Punjab Land Revenue Act (17 of 1887) hereinafter referred to as the Act), for setting aside the sale. By order, dated July 26. 1966 (Annexure ''A'',) the Commissioner, Jullundur Division held that the objection petition was barred by time as having been filed after the expiry of the statutory period of thirty days. He declined to condone the delay of 17 days. The claim of the petitioner for relief on the ground that he was a resident of one of the border villages was not allowed on the finding that the village of the petitioner was "not within radius of the border." The order of the learned Commissioner does not show as to whether he was referring to Kheowala or Langiana as the village which was outside the radius of ten miles from the Indo-Pakistan border. The petitioner went up in revision to the Financial Commissioner against the abovesaid order of the Commissioner. Two contentions raised by the petitioner were noticed in the impugned order of the Financial Commissioner, dated September 19, 1966 (Annexure ''B''), namely, (i) that the village of the petitioner being situated within ten miles of the border, the sale of his land was exempt under orders of the Punjab Government dated June 15, 1965 (the year is erroneously mentioned as 1966 in the order of the Financial Commissioner); and (ii) that the land had been sold without any notice to the petitioner while he had gone away to Rajasthan in the wake of the Indo-Pakistan conflict of 1965. The Financial Commissioner did not repel any of the said two contentions of the petitioner and further took notice of the petitioner''s allegation that land worth about Rs. 40,000/- had been disposed of by the impugned auction for Rs. 6,500/- only. After noticing the above said contentions of the petitioner, the Financial Commissioner proceeded to dispose of his revision petition in the following words :

In these circumstances of the case, it is returned to the Commissioner, with the direction that if the petitioner pays the entire amount of the loan together with interest due till the date of payment, within a fortnight from the receipt of this order by the Commissioner, then the sale may be set aside after giving the vendee proper notice. If in fact the petitioner has suffered substantial loss without any fault of his, then his case is worthy of sympathetic consideration.

The petitioner did not pay up the amount in question within a fortnight from the date of the order of the Financial Commissioner. Before his objections u/s 91 of the Act could be considered and disposed of in the light of the directions given by the Financial Commissioner, he filed the present writ petition on October 26, 1966. His dispossession was stayed by the Motion Bench (Dua and Harbans Singh, JJ), while admitting the writ petition.

In the written statement of the Deputy Commissioner it has been admitted that village Kheowala is within ten miles of the Indo-Pakistan border, that recovery of the taccavi loans had been suspended by the Government, that the auction purchasers had paid one-fourth of the bid money on May 4, 1966, another Rs. 1,000/- on May 19, 1966, and the balance on June 4, 1966, in compliance with the orders of the Sub-Divisional Officer (Civil), Fazilka. It has been claimed on behalf of the State that the Government notification suspending recovery of loans from persons resident of villages within ten miles of the Indo-Pakistan border could not be availed of by the petitioner as he had not utilised the loan in village Largiara, tahsil Feiezepore, wheie he intended to instal a tubewell, and that in fact the petitioner had sifted to Chak Kheowala. tahsil Fazilka without utilising that amount. Respondents Nos. 3 and 4 have filed their return, dated November 14, 1966, wherein it is averred that the petitioner himself was present at the auction held in village Kheowala and he should have filed his objections u/s 91 of the Act within time. It has been admitted that the petitioner left for Rajasthan at the time of the Indo-Pakistan conflict, but it is alleged that he remained there only for about three months and that he came back with his family before the time of the impugned auction.

At the hearing of the writ petition, Chaudhry Roop Chand, Learned Counsel for the petitioner, has pressed only two points into service. Before considering the said two grounds, it is necessary to dispose 01 a preliminary objection which was raised by the Learned Counsel for the respondents to the effect that this writ petition must be dismissed on the short ground that the Commissioner concerned has not been impleaded as a party It was urged that the non-impleading of the Commissioner was fatal to the writ petition according to the law laid down by this Court in Gurbakhsh Singh v The Deputy Commissioner Amritsar 1967 P.L.J. 168, Counsel for the respondents does not appear to be correctly instructed in taking up this objection as the Commissioner, Jullunder Division, has in fact been impleaded as respondent No. 5 in this case.

The first contention of Mr. Roop Chand is that the impugned sale of the petitioner''s land was wholly unauthorised and without jurisdiction as the amount in question was not due to be recovered on the day when the sale took place, because of the Punjab Government''s order, dated June 15, 1965, which had been duly communicated to the Deputy Commissioner of Amritsar, Ferozepore and Gurdaspur, in the following words :

Government has decided to suspend till further order, recovery of due instalments of taccavi loans and other loans advanced by Revenue, Agriculture and Community Development Departments and recoverable by the Revenue Department, from residents of villages situated within ten miles of the Indo-Pak border of Amritsar, Ferozepore and Gurdaspur district. Where the village is beyond ten miles of the border, but the land is within ten miles, persons will also be entitled to this relief. You are requested to ensure that this decision is implemented accordingly.

In the order of the Financial Commissioner, dated September 19, 1966 (Annexure ''B''), the date of the letter communicating the relevant decision of the State Government is mentioned as June 15, 1966. It was urged by counsel for petitioner that in fact the communication was dated and actually issued on June 15, 1965. If the correct date was of June 1966, the order could be of no avail to the petitioner as his land was sold in March, 1966. No copy of the order had been produced by either of the parties. The Learned Counsel for the State has, however, today filed a copy of the above said communication in pursuance of a direction given by me. yesterday during the hearing of the case. The copy has been marked ''R-X''. It is dated June 15, 196b. The learned Advocate-General for the State of Punjab took care to make sure of the correct date from the office concerned and has confirmed that the "exemption notice" was in fact issued in June, 1965. According to Mr. Roop Chand, the case of the petitioner falls squarely within the above-quoted notification in as much as the petitioner was at the time of the impugned sale, a resident of village Kheowala, which place is admittedly within ten miles of the Indo-Pakistan border. Two objections were raised against this contention of Mr. Roop Chand by Mr. D.S. Kang, the Learned Counsel for the State. It has firstly been submitted by him that the village which is relevant for the purposes of bringing the case of the petitioner within the abovesaid notification is Langiana where the loan had to be utilised and not Kheowala of which village the petitioner was merely a resident. Emphasis is laid on the fact that the amount in question had already become due before the petitioner shifted to village Kheowala in 1957, subsequent to the non-utilisation of the amount. The objection appears to be wholly misconceived. The Government notification gave relief to two categories of persons; namely, (i) whose land in connection with which the loan in dispute was advanced was within a radius of ten miles from the Indo-Pakistan boarder of Amritsar Ferozepore and Gurdaspur districts, and (ii) who were residents of any village situated within that radius irrespective of the situation of the land for the purposes of which the loan was taken. The case of the petitioner obviously and squarely falls within the second category of persons as it is admitted that the petitioner was a resident of village Kheowala, which is within ten miles of the border.

The second objection of Mr. D.S. Kang is that relief was granted only in respect of installments which were due at the time when the notification was issued and the relief was not intended to be given to persons from whom the entire amount of the loan had become due as a result of non-utilisation of the amount of the loan for the specific purpose. I am unable to find any force in this argument either. The relief could be intended to be given only in respect of the amount which had become due and there could be no question of staying the recovery of any amount which bad not become due. The expression ''installments" used in the notification is not capable of being read (in the context in which the word is used in the notification), so as to exclude therefrom the entire amount which was originally recoverable in installments. The apparent ground on which the relief was decided to be granted was that life and conditions were not normal within the radius of ten miles of the border. Cultivators of those villages had to be given some incentives and concessions as they had often to lace heavy odds due to the hostile attitude of Pakistan. The instructions applied to all such specified loans which were recoverable by the Revenue Department. The expression "due installment" appears to have been used to exclude from the ambit of the relief such amounts which had not become due till June 15, 1965, and which may fall due only after the relief granted by the letter ''R-X'' is withdrawn by the Government. In the present case if is admitted that the entire amount, that is all the installments, had become due long before the relevant order of the State Government. I, therefore, hold that the petitioner was entitled to the relief granted by the abovesaid order of the Punjab Government; and that being so, the sale of his land in recovery proceedings which were not permitred by the order (Annexure ''R-X'') was wholly unauthorised. This is being held on the common case of the parties that the notification, dated June 15, 1965, had not been withdrawn or cancelled till the date of the sale, i.e. till March, 21, 1966.

The second argument of Chaudhry Roop Chand is that the sale itself was a nullity and it was not even necessary for the petitioner to have applied for its being set aside, u/s 91 of the Act. The basis of this submission is that on the admitted facts of the case, the auction purchasers had not deposited the full amount of the purchase money before the close of the l5th day from the date on which the respondents Nos. 3 and 4 were deemed to have been declared the purchasers as required by sections 85 and 88 of the Act. Since reliance has been placed by Mr. Roop Chand on a judgment of the Supreme Court relating to the corresponding provisions of the Code of Civil Procedure, it appears to be appropriate to set out at this stage the relevant provisions of the Act and the corresponding provisions of the CPC at the same place:

Provisions of Land Revenue Act.

Provisions of Code of Civil Procedure.

S. 85. When the highest bid at the auction has been ascertained the person who made that bid shall, on the requisition of the officer conducting the sale, pay to that officer a deposit of twenty-five per centum on the amount of his bid and shall, on payment thereof be declared to be the purchaser subject to the provisions of this Chapter with respect to the exercise of any right of pre-emption.

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R. 84 (1). On every sale of immovable property the person declared to be the purchaser shall pay immediately after such declaration a deposit of twenty-five per cent on the amount of his purchase-money to the officer or other person conducting the sale, and in default of such deposit, the property shall forthwith be resold.

S. 86. If the person who made the highest bid fail to pay the deposit as required by the last foregoing section, the property shall forthwith be put up again and sold, and all expenses attending the first sale, and the deficiency of price, if any, which may happen on the resale, may be recovered from him by the Collector as if the same were an arrear of land-revenue.

S. 88. The full amount of the purchase-money shall be paid by the purchaser before the close of the fifteenth day from that on which the purchaser was declared.

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R. 85. The full amount of purchase money payable shall be paid by the purchaser into Court before the Court closes on the fifteenth day from the sale of the property. Provided that, in calculating the amount to be so paid into Court, the purchaser shall have the advantage of any set-off to which he may be entitled under rule 72.

S. 89. In default of payment of the full amount of the purchase-money within the period mentioned in the last foregoing section, the deposit referred to in section 85 or section 87, as the case may be, shall after defraying the expenses of the sale, be forfeited to the Government and may, if the Collector, with the previous sanction of the Commissioner, so directs, be applied in reduction of the arrears and the property shall be resold, and the defaulting purchaser shall have no claim to the property or to any part of the sum for which it may subsequently be sold.

21. R. 86. In default of payment within the period mentioned in the

last preceding rule, the deposit may, if the Court thinks fit, after defraying the expenses of the sale, be forfeited to the Government, and the property shall be resold, and the defaulting purchaser shall forfeit all claim to the property or to any part of the sum for which it may subsequently be sold.

S. 91(1) At any time within thirty days from the date of the sale, application may be made to the Commissioner to set aside the sale on the ground of some material irregularity or mistake in publishing or conducting it.

21 R. 90. Where any immovable property has been sold in execution of a decree, the decree-holder or any person entitled to share in a rateable distribution of assets, or whose interests are affected by the sale, may apply to the Court to set.

(2) But a sale shall not be set aside on that ground unless the applicant proves to the satisfaction of the Commissioner that he has sustained substantial injury by reason of the irregularity or mistake.

aside the sale on the ground of a material irregularity or fraud in publishing or conducting it :

Provided that no sale shall be set aside on the ground of irregularity or fraud unless upon the facts proved the Court is satisfied that the applicant has sustained substantial injury by reason of such irregularity or fraud.

At the hearing of the writ petition, Mr. Roop Chand wanted to rely on the non-compliance with the provisions of section 85 of the Act on the ground that the averments in the return of the Deputy Commissioner clearly showed that twenty-five per cent of the amount of the bid-money had not been deposited by respondents Nos. 3 and 4 on the date of the sale, i.e. on March 21, 1966, but only on May 4, 1966. I am unable to consider this objection for two reasons. Firstly, this objection has not been taken in the writ petition, and it has not even been alleged that the initial deposit of twenty-five per cent was not made on the date of the auction. Secondly there appears to me to be some material difference in the language of section 85 of the Act on the one hand, and of the corresponding provisions contained in sub-rule (1) of rule 84 of Order 21 of the CPC on the other. Whereas the requirement to make the initial deposit at the time of the sale is mandatory in the Code of Civil Procedure, the requirement is made dependent in section 85 of the Act on a requisition being made by the Officer conducting the sale. I, however, find force in the second part of this argument of Mr. Roop Chand. There is no material difference between the requirements of Order 21 Rule 85 of the Code on the one hand and of section 88 of the Act on the other. Taking a charitable view of the things in favour of respondents Nos. 3 and 4, they could at best be deemed to have been declared to have purchased the property on May 4, 1966, when they made the initial deposit of twenty-five per cent. On that basis they were required to pay the entire balance of the purchase-money within fifteen days from May 4, 1966 that is, till May 19, 1966. It is, however, admitted that they did not do so and they deposited only Rs. 1000/- on the last mentioned day and made over the balance, though with the permission of the Revenue Authorities, only on June 4, 1966. This is not permitted by section 88 of the Act. Nor is it allowed by Rule 85 of Order 21 of the Code. I hold that the consequences which follow non payment of balance of the bid money within the prescribed time in the case of a sale under the CPC by operation of Rule 86 of Order 21, do also follow in the case of non-payment of the entire balance within 15 days in the case of a sale under the Act on account of the provisions of section 89 thereof.

In Manilal Mohanlal Shah and Others Vs. Sardar Sayed Ahmed Sayed Mahamad and Another, , it was held that the provisions of order 21 Rules 84, 85 and 86 requiring the deposit of 25 per cent of the purchase-money immediately, on the person being declared as a purchaser, such person not being a decree-holder, and the payment of the balance within fifteen days of the sale, are mandatory and upon non-compliance with these provisions, there is no sale at all Their Lordships of the Supreme Court further held that the above said rules do not contemplate that there could be any sale in favour of an auction purchaser without depositing twenty-five per cent of the purchase money in the first instance and the balance within fifteen days. It was held that when there was no sale within the contemplation of the said rules, there could be no question of any material irregularity in the conduct of the sale, and that non-payment of the price within the time permitted by the rules rendered the sale proceedings a complete nullity. Their Lordships also relied on Rule 86 of Order 21 for holding that the very fact that the Court was bound to resell the property under that rule, in the event of default, showed that the previous proceedings for sale were completely wiped out as if they did not exist in the eye of law. Same appears to be the effect of section 89 of the Act on a sale under the Punjab Land Revenue Act. No material difference between the languages of Rule 86 of Order 21 of the Code on the one hand and section 89 of the Act on the other, has been pointed out to me. In this view of the matter, it is wholly unnecessary to allow the case to go back to the Commissioner for consideration of the objections (alleging irregularities etc. in the conduct of the sale) preferred by the petitioner beyond the period of limitation u/s 91 of the Act though the same had been ordered to be considered sympathetically by the Commissioner by the Financial Commissioner''s order as the petitioner had not availed of the gratuitous opportunity granted by the Financial Commissioner to him to pay up the amount due from him within fifteen days.

As I have held that the purported sale itself was conducted contrary to and in utter disregard of the Government''s own notification, dated June 15, 1965 (Annexure RX) and further that in fact there was no sale in the eye of law, on account of default of the auction purchasers to make payment in compliance with the mandatory requirements of section 88 of the Act, I have no hesitation in allowing this petition with costs and declaring that the land in question had not been sold out to respondents Nos. 3 and 4 at the auction held on March, 21, 1966. Respondents Nos. 3 and 4 will, of course, be entitled to withdraw the entire amount deposited by them towards the sale price in pursuance of the impugned sale.