PRABIN RAM PHUKAN & ANR. Vs. STATE OF ASSAM & ORS.
Supreme Court of India (Division Bench (DB)- Two Judge)
Appeal (Civil), 662-663 of 2008, Judgment Date: Dec 11, 2014
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOs. 662-663 OF 2008
Sri Prabin Ram Phukan
& Anr. ....Appellant(s)
Versus
State of Assam & Ors. ....Respondents(s)
J U D G M E N T
1. Leave granted
2. These civil appeals arise out of common judgment dated 06.05.2005
passed by the Division Bench of the High Court of Guwahati in W.A. No. 512
of 2002, which in turn, arises out of judgment dated 26.02.2001 passed by
the learned Single Judge in W.P. No. 2234 of 2000 and W.P. (Civil) No. 5628
of 2004 arising out of order dated 23.02.1998 passed by the Board in Case
No. 42RA(K) of 1996.
3. By impugned judgment, the Division Bench allowed the writ appeal and
writ petition filed by the State of Assam, in consequence, set aside the
order dated 23.02.1998 passed by the Board at Guwahati impugned in the
writ petition and also set aside the order dated 26.02.2001 passed by the
learned Single Judge in W.P. No. 2234 of 2000.
4. The question arises for consideration in these appeals is whether the
High Court was justified in allowing the writ appeal and the writ petition
filed by the State thereby was justified in setting aside the order of the
Board impugned in the writ petition?
5. In order to appreciate the issue involved in these appeals, it is
necessary to state the facts in detail infra.
6. The dispute relates to the agricultural land measuring 59 Bighas 1
Katha 14 Leacha covered by Dag Nos. 435, 437, 376, 433, 434, 438, 439,
358, 361, 1348, 343 and 836 bearing patta Nos. 284 (new)/269(old) situated
at Village Betkuchi in Mouza Beltola in the District of Kamrup. The
appellants were the co-land holders of this land which is an "estate" as
defined under Section 3(b) of the Assam Land And Revenue Regulation, 1886
(hereinafter referred to as "The Regulation"). Their names were also duly
entered in the revenue records as "recorded land holders" as defined in
Section 3(i) of the Regulation, all through. This land is subjected to
payment of land revenue as per the provisions of the Regulation.
7. It appears, as being an undisputed fact, that a sum of Rs.731.70 was
found payable by the appellants towards land revenue on the aforesaid land
(estate) and since the appellants did not pay the said amount, the Deputy
Commissioner registered a case being Case No. 3/13 of 1976-77 for recovery
of Rs. 731.70 from the appellants. The Deputy Commissioner after making
efforts to realize the dues by sale of moveable of the appellants put the
aforesaid land for auction sale on 29.06.1978 for realization of Rs.731.70
as per the provisions of the Regulation. However, no bidder participated
in the auction proceedings held on few adjourned dates and hence, the State
stepped in and purchased the entire land/estate for Rs.1/- in the auction
proceedings as provided under Rule 141. Thereafter, the State allotted 40
Bighas of land out of total land to the Indian Oil Corporation (IOC) on
payment of yearly premium of Rs. 26,000/- per Kattha. In addition, the
State also directed the IOC to deposit Rs.38,50,600/- towards compensation
with the State Government. The IOC, accordingly, deposited the sum as
directed.
8. The appellants (land holders) claiming to be completely unaware of
the aforesaid proceedings and on coming to know of the same filed Case No.
42/RA(K) of 1996 on 02.04.1996 before the Board at Guwahati under Rule 149
of the Regulation. The challenge to the entire proceedings was on the
grounds inter alia that firstly, the sale/auction proceedings undertaken by
the Deputy Commissioner for realization of Rs.731.70 as arrears of land
revenue for the land in question were per se without jurisdiction and
against the mandatory procedure prescribed in the Regulation for recovery,
attachment and sale of estate. Secondly, the appellants were not given any
notice of demand for payment of Rs. 731.70 and nor any notice was served
prior to sale/auction proceedings as provided in the Regulation. Thirdly,
the so called auction, even if held, was no auction as contemplated in the
Regulation because no publicity was given to enable any bidder to
participate in the auction proceedings and in fact no bidder participated
in the said auction and lastly, in such circumstances, the auction sale
made in favour of the State for Rs.1/- as per Rule 141 was illegal and
liable to be set aside, entitling the appellants to seek restoration of
land.
9. The Board, by order dated 23.02.1998, allowed the appeal filed by the
appellants and held that no notice of either recovery of arrears of land
revenue or/and auction proceedings was served on the appellants much less
served as per the procedure prescribed in the Regulation, that attachment
and sale of the so called moveable of the appellants and also of the land
in question was not done as per the procedure prescribed in the Regulation,
that a valuable land whose market value was around 50 lacs approximately
should not have been put to sale for realization of Rs.731.70 as it caused
extreme hardship to the appellants and lastly, no sincere attempt was made
to sell either moveable properties of the appellants as provided in Section
69 for realization of dues prior to the auction or to sell the land in
question as provided in the Regulation. The Board, after recording these
findings, set aside the auction and the sale proceedings and directed the
State to restore the land to the appellants on their paying outstanding
land revenue and other dues, if any, as per law. It was further directed
that since in the meantime, out of total land, some portion of the land,
i.e., (40 Bighas or so) was already allotted to the IOC for consideration
and hence, instead of restoring the possession of the land allotted to the
IOC, the amount of compensation deposited by the IOC for allotted land was
directed to be paid to the appellants after working out their actual share
in the land. In this way, the appellants got around 19 Bighas of land and
also became entitled to receive the compensation amount deposited by the
IOC whereas the IOC was allowed to retain the allotted land in lieu of
compensation paid by them for such land.
10. In compliance of the said order, the Deputy Commissioner raised a
demand (KRM 28/96/16) dated 15.02.1999 for Rs.1092/- towards land revenue
and Rs.273/- towards local tax from the appellants in relation to the land
in question. On 16.02.1999, the appellants deposited the sum so demanded.
Since the State was not paying the compensation amount to the appellants in
terms of the directions of the Board, the appellants filed Writ Petition
No. 2234 of 2000 before the High Court seeking mandamus against the State
and the concerned State Authorities to pay/release the compensation amount
to the appellants.
11. Learned single judge, by order dated 26.02.2001, allowed the
appellants' writ petition and by issuing a mandamus directed the
State to pay the compensation amount to the appellants in terms of order of
the Board within three months. Feeling aggrieved by the said order, the
State filed review petition being R.P. No. 4 of 2002. By order dated
11.01.2002, the Review court dismissed the review petition.
12. Challenging the order dated 26.02.2001 in W.P. No. 2234 of 2000, the
State filed intra court appeal being W.A. No 512 of 2002 before the High
Court. The State also filed an application for condonation of delay in
filing the appeal since it was filed beyond the period of limitation of
around 496 days.
13. The High Court, by order dated 27.05.2003, dismissed the appeal as
being barred by limitation. It was held that no sufficient cause had been
shown by the State to condone the delay in filing the appeal. Feeling
aggrieved by the dismissal of their appeal, the State filed SLP (C) No. 874
of 2004 before this Court. By order dated 03.09.2004, this Court granted
leave and allowed the appeal and remanded the case to the Division Bench
for its decision on merits in the appeal.
14. Challenging the order dated 23.02.1998 passed by the Board which had
allowed the appeal filed by the appellants, the State filed petition being
W.P. No. 5628/2004 before the High Court. The Division Bench clubbed writ
appeal of the State (WA No. 512/2002), which was remanded by this Court to
the High Court for its disposal on merits with Writ Petition No 5628 of
2004 filed by the State because both the cases had arisen out of the same
order of the Board and pertained to the same land.
15. By impugned order, the Division Bench allowed the writ appeal and the
writ petition. The High Court held that notice of demand and sale of land
were served on the appellants as per the procedure prescribed in the
Regulation and that the auction held by the Revenue Authorities was legal
and was held in conformity with the procedure laid down in the Regulation.
It was also held that no direction could be issued by the Board to pay
compensation to the appellants for the land which was rightly purchased by
the State for Rs.1/- in the auction sale as per Rule 141. The High Court
thus upheld the auction sale as also the transfer of land to the State as
provided in Rule 141 for Rs.1/-. Against this order, the landowners filed
these appeals by way of special leave before this Court.
16. Assailing the legality and correctness of the order, learned Counsel
for the appellants mainly contended five points that are:
(i) that the High Court erred in allowing the writ appeal and the writ
petition filed by the State thereby erred in quashing the order of the
Board. According to him, the well-reasoned findings of fact recorded by
the Board was binding on the writ court while deciding the writ petition
filed under Article 227 of the Constitution and otherwise also the findings
were beyond challenge because they were legal and proper calling no
interference in the writ proceedings;
(ii) that none of the mandatory procedure prescribed under the Regulation
and especially, the procedure prescribed for, (1) effecting service of
notices on the defaulting landholders for recovery of land revenue payable
on their estate (2) sale of properties/estate of the landholders for
realization of unpaid land revenue and (3) the manner as to how the auction
sale is to be conducted for disposal of the properties/estate were complied
with by the revenue authorities;
(iii) that when there was no notice served on the appellants of the auction
proceedings, no publicity was given to such proceedings and no bidder
participated in the so-called auction proceedings then in such
circumstances, it was beyond anybody's comprehension as to on what basis,
the sale/auction could be held and if held, the same could be held as being
legal.
(iv) that in no case, the land whose market value was more than Rs.50 lacs
(approx.) could directly be put to auction sale for realization of such
meager sum of Rs. 731.70 as arrears of land revenue unless all other modes
of recovery provided in the Regulation had been exhausted which in this
case was not done and assuming that it was done yet it was not done in
conformity with the procedure prescribed in the Regulation;
(v) that in any event, such valuable land could not have been restored
or/and sold to the State for Rs.1/- by taking recourse to Rule 141 on the
ground that no bidder participated in the auction proceeding unless entire
procedure prescribed in Section 69 for recovery of arrears by sale of
moveable was followed in the first instance and on failure to recover by
such mode, the steps should have been taken to auction or/and re-auction
the land to enable the bidders to participate in the auction proceedings
which again was not done and lastly, the appellants in the event of their
success in these appeals would be satisfied, if they are allowed to
withdraw the compensation amount deposited by the IOC for 40 Bighas of land
and are further allowed to retain the remaining land.
17. In contra, learned counsel for the State supported the impugned
judgment and contended that it should be upheld as it does not call for any
interference.
18. Having heard the learned counsel for the parties and on perusal of
the record of the case, we find force in the submissions urged by the
learned counsel for the appellants.
19. Before we consider the factual issues arising in this case, it is
apposite to take note of the relevant Sections/Rules of the Regulation,
which have a bearing over the controversy.
20. The Regulation consists of two parts. Part I consists of Sections
whereas Part II consists of the Rules. The provisions of the Regulation
applies to all lands by virtue of Section 4 except the lands which are
specified in Section 4(a), i.e., the land which is included in any forest
constituted a reserved forest under the law for the time being in force and
(b), i.e., any land which the State Government may by notification exempt
from operation of the Chapter. The relevant provisions are extracted
hereinbelow:
Sections
3. Definitions - In this Regulation, unless there is something repugnant in
the subject or context,
(b) "estate" includes -
(1) any land subject, either immediately or prospectively, to the payment
of land revenue, for the discharge of which a separate engagement has been
entered into;
(2) any land subject to the payment of, or assessed with a separate amount
as land revenue, although no engagement has been entered into with the
Government for that amount;
(3) any local area for the appropriation of the produce or products whereof
a license or farm has been granted under rules made by the State Government
under section 155, clause (e) or clause (f);
(4) any char or island thrown up in a navigable river which under the laws
in force is at the disposal of the Government.
(5) any land which is for the time being entered in the Deputy
Commissioner's register of revenue free estates as a separate holding;
(6) any land being the exclusive property of the Government of which the
State Government has direct the separate entry in the registers of revenue-
paying and revenue-free estates mentioned in Chapter I.
3(i) "Recorded proprietor", "recorded land holder" "recorded sharer" and
"recorded possession" mean any proprietor, land holder, sharer or
possession, as the case may be, registered in the general registers
prescribed in Chapter IV:
63. Liability for land-revenue etc. - Land-revenue payable in respect of
any estate shall be due jointly and severally from all persons who had been
in possession of the estate or any part of it during any portion of the
agricultural year in respect of which that revenue is payable.
69. Attachment and sale of moveables (1) The Deputy Commissioner may, for
the recovery of an arrear, order the attachment and sale of so much of a
defaulter's moveable property as will as nearly as may be defray the
arrear.
(2) Every such attachment and sale shall be conducted according to the law
for the time being in force for the attachment and sale of moveable
property under a decree of a Civil Court, subject to such modifications
thereof as may be prescribed by rules framed by the State Government for
proceedings under the Assam Land and Revenue Regulation.
(3) Nothing in this section shall authorise the attachment and sale of
necessary wearing apparel, implement of husbandry, tools of artisans,
materials of houses and other buildings belonging to and occupied by
agriculturists, or of such cattle or seed-grain as may be necessary to
enable the defaulter to earn his livelihood as an agriculturist.
70. When estate may be sold - When an arrear has accrued in respect of a
permanently-settled estate or of an estate in which the settlement-holder
has a permanent, heritable and transferable right of use and occupancy, the
Deputy Commissioner may sell the estate by auction:
Provided that -
(1) Except when the State Government by general order applicable to any
local area or any class of cases, or by special order, otherwise direct, an
estate which is not permanently-settled shall not be sold unless the Deputy
Commissioner is of opinion that the process provided for in section 69 is
not sufficient for the recovery of the arrear;
(2) If the arrear has accrued on a separate account opened under Section
65, only the shares or lands comprised in that account shall in the first
place be put up to sale; and, if the highest bid does not cover the arrear,
the Deputy Commissioner shall stop the sale, and direct that the entire
estate shall be put up for sale at a future date, to be specified by him;
and the entire estate shall be put up accordingly and sold;
(3) No property shall be sold under this section -
(a) For any arrear which may have become due in respect thereof while it
was under the management of the Court of Wards, or was so circumstanced
that the Court of Wards might have exercised jurisdiction over it under the
law for the time being in force; or
(b) For any arrear, which may have become due while it was under attachment
by order of a revenue authority.
72. Notice of sale (1) If the Deputy Commissioner proceeds to sell any
property under Section 70, he shall prepare a statement in manner
prescribed, specifying the property which will be sold, the time and place
of sale, the revenue assessed on the property and any other particulars
which he may think necessary.
(2) A list of all estates for which a statement has been prepared under sub-
section (1) shall be published in manner prescribed, and the copy of the
statement relating to every such estate shall be open to inspection by the
pubic free of charge in manner prescribed.
(3) If the revenue of any estate for which a statement has been prepared
under sub-section (1) exceeds five hundred rupees, a copy of the statement
shall be published in the official Gazette.
74. Sale by whom and when to be made (1) Every sale under this Chapter
shall be made either by the Deputy Commissioner in person or by an officer
specially empowered by the State Government in this behalf.
(2) No such sale shall take place on a Sunday or other authorised holiday,
or until after the expiration of at least thirty days from the date on
which the (list of estates) has been published under section 72.
Rules
133. Notices of demand under section 68 of the Regulation shall ordinarily
be issued by, and the signature and seal of, the following officers:-
(a) By the Deputy Commissioner with respect to all estates situated within
the Sadar Subdivision of a district and not included within the limits of
any tahsil or mauza.
(b) By the Subdivisional Officer with respect to all estates situated
within the limits of a mufassil sub-division, and not included within the
limits of any tahsil or mauza.
(c) Tahsildar with respect to all estates situated within the limits of
this Tahsil, or by the Sub-Deputy Collector or other officer invested with
the power under section 68 of the Regulation.
134.A notice of demand under rule 132 shall be served by delivering to the
person to whom it is directed a copy thereof attested by the Revenue
Officer who issues it, or by delivering such copy at the usual place of
abode of such person to some adult male member of his family or, in case it
cannot be so served, by pasting such copy upon some conspicuous part of the
usual or last known place of abode of such person. In case such notice
cannot be served in any of the ways hereinbefore mentioned it shall be
served in such way as the officer issuing the notice may direct.
135. Sale proclamation - The statement and list of estates to be prepared
under section 72(1) and (2) of the Land and Revenue Regulation, in respect
of property to be sold under section 70, shall be prepared in the language
of the district and may, if the Deputy Commissioner thinks fit be recorded
in a book prepared for this purpose, to be called the sale Statement Book.
When published in the Gazette, the statement shall also be published in the
vernacular of the district and in English.
136. Publication of list of estates - The list of estates referred to in
the foregoing rule shall be published -
(a) In the Court of the Revenue Officer by whom it has been prepared;
(b) At the office of the Sub-Deputy Collector in whose circle the estate is
situated
(c) At the office of the Tahsildar or house of the mauzadar within whose
tahsil or mauza defaulting estate lies; and
(d) Where gaonburas are employed, on the signboard of the gaonbura within
whose charge the defaulting estate falls;
(e) At the offices of the Gaon Panchayat and the Anchalik Panchayat.
136A. Serving of sale statement - The sale statement mentioned in rule 135
shall be served under subsection (4) of section 72 of the Regulation on the
defaulter or, if he can not be found, it shall be pasted on a conspicuous
part of the estate.
141. Purchase of defaulting estates by the State Government -When a
defaulting estate is put up for sale for arrears of revenue due thereon, if
there be no bid, the Revenue Officer conducting the sale may purchase the
estate on account of the State Government for one rupee or, if the highest
bid be insufficient to cover the arrear due, may purchase the estate on
account of State Government at the highest amount of bid.
154. Order to sell property - Should the defaulter, after attachment of
moveable property, still fail to pay in the arrear with costs, the Deputy
Commissioner or Sub-divisional Officer shall, on receiving a report to that
effect from the mauzadar, issue an order to the Nazir, to sell the property
attached if the arrear is not paid before the date fixed for sale.
The mauzadar's report under this rule shall be stamped with court-fee
stamps equivalent to the process fees required by the rules issued under
section 155 (b) of the Regulation.
155. Sale defaulting estates - If the mauzadar is of opinion that the
process provided for in these rules is not sufficient for the recovery of
the arrear, he may, if the arrear has accrued in respect of an estate in
which the settlement-holder has a permanent heritable and transferable
right of use and occupancy, apply to the Deputy Commissioner to order the
attachment under section 69A, or the sale of the estate itself, subject to
the provisions of section 74 of the Land and Revenue Regulation:
Provided the arrear has accrued not earlier than in the two revenue years
referred to in the provisions to rules 152 and 156 and, where action under
section 69 of the Assam Land and Revenue Regulation is taken by or at the
instance of the mauzadar, the application is made within three months of
the termination of the proceedings under section 69."
21. After setting out the relevant provisions of the Regulation, which
essentially deals with the sale of land, it is now apposite to first
reproduce the relevant finding of the Board which held the auction sale of
estate/land as being illegal and not in conformity with the procedure
prescribed in the Regulation.
"The case record shows that prior to the sale of the land, attempt was made
for recovery of arrears through attachment and sale of movables. But it
has been denied by the appellants that any such attempt was actually made.
The Jarikarak stated that he had gone to the residence of the defaulter but
he failed to serve the notice and for that reason he hanged the notice in
the office of the mauzadar. He also stated that he failed to recover the
arrear as the defaulters were not found and other members of the family
were not willing to make the payment. The report of the Jarikarak was not
properly endorsed by any witness. The attachment and sale of movables is
required under the note below Rule 147 to be witnessed by at least two
respectable persons of the locality. But the report of the Jarikarak was
not endorsed by such persons and nothing was stated by him regarding
attachment and sale of movables. Therefore, the authenticity of the report
on attempts made by the Jarikarak for realization of the arrears through
attachment of movables is doubtful. Further, it is also seen that the
notice was not duly served in the (illegible) officer. The service of the
notice, therefore, cannot be regarded as being adequate and properly done.
After perusal of the sale record, it is also seen that there was procedural
irregularity at the time of holding the auction sale. The Jarikarak had
stated that no bidder was found at the time of holding the auction sale.
But the report of the Jarikarak was not endorsed by any witness. All these
would raise some suspicion as to the authenticity of holding the auction
sale. As such the sale cannot be regarded as being done in full conformity
with the provisions of the Rule. Therefore, injustice has been caused to
the pattadars of the land in question.
The total area of land in question is 59 bighas 1 Katha 14 leachas, the
market Value of which is over fifty Iakhs rupees. Therefore, the sale of
the said land for a sum of Rs. 732.00 has definitely caused great hardship
to the Appellants/Petitioners who are the actual pattadar of the land in
question.
I am, therefore, fully satisfied that the sale has caused injustice as well
as hardship to the Appellants/Petitioners. The sale, therefore, deserves to
be set aside.
Under Executive Instruction No. 133 annulment is to be resorted to only as
an alternative to other means of realization through attachment and sale of
movables as well as sale of the estate and when all these fail or are held
to be in effective then only the provision for annulment can be resorted
to. Again after annulment not only that the record correction is to be
made but also steps should have been taken under Rule 150 of the Rules
under the Regulation after issuing notice to the pattadars to hand over
possession. This was also apparently not done. In the parawise comments
submitted by the learned Addl. Deputy Commissioner, Kamrup nothing in
detail has been stated in support of the sale and the annulment of
settlement.
In view of the above discussions, the impugned order of sale and annulment
of settlement, can not be allowed to sustain. Accordingly, the impugned
order of sale dt. 28.6.77 is set aside and the endorsement making
correction of the land records as made on 29.6.78 is struck down. The patta
shall be restored to the Appellants pattadars and the land be restored on
payment of the arrears revenue and other dues as usual as per law. It also
appears from the records that after the order of sale and annulment of
settlement by the Deputy Commissioner, Kamrup, land measuring 40 Bighas,
out of the total land in question, have been acquired and transferred by
the Govt. of Assam to Indian Oil Corporation (Assam Oil Division) and the
said Corporation has already paid necessary compensation for the said land
and occupied the land on possession being handed over by the authority
concerned. It also appears that there were tenants on the land transferred
to Indian Oil Corporation and their share of compensation was already paid
keeping the balance amount of compensation for the Pattadars. During the
course of hearing of this appeal, learned advocate for the Appellants has
submitted that the Appellants will be satisfied if they receive the
compensation money instead of their land already transferred to the Indian
Oil Corporation. As the compensation money has already been paid by the
Indian Oil corporation and the same is kept in the Govt. (illegible) after
working payment of the share of the compensation money may be paid to the
Appellant and the land will remain with the Indian Oil Corporation."
22. The aforesaid finding of Board was reversed and set aside by the High
Court in its writ jurisdiction in the impugned order for sustaining the
auction sale. It is also apposite to reproduce the finding of the writ
court infra.
"An order of attachment of movable property was issued on 18.11.1976 for
recovery of land revenue to the extent of Rs. 731.70, due from the
pattadars Shri Suren Ram Phukan and Shri Prabin Ram Phukan. The aforesaid
order was sought to be delivered to the defaulters but the same could not
be executed and the process server submitted a report to the effect that
the defaulters were in different places and, therefore could not be
contacted and their legal heirs/representatives so contacted, had submitted
that they do not know anything in the matter. The aforesaid endorsement of
the Process Server was recorded in the presence of the two witnesses
including a Gaonburah. On the said report, the Mouzadar, who had issued the
order of attachment of moveable property, had recorded a note to the effect
that even if 'Moveable' (appears to be wrongly recorded as immovable) is
sold, nothing would accrue and, therefore, the revenue should be realized
by auction sale of the land. Thereafter, it appears that the statement/list
contemplated under Section 72 of the Regulation was prepared mentioning
21.6.1977 as the date on which the estate will be sold. The aforesaid
list/statement could not be served on the defaulter in spite of 3-4
attempts. The mother and other relatives of the defaulters refused to
accept the same and thereafter, a notice was pasted on the wall of the
house of the defaulters in presence of neighbours as witnesses and the copy
of the notice was also published in the office of the sub-Deputy Collector,
Mouzadar and Gaonburah. Thereafter, it would appear from the order-sheet
of the proceedings of sale that the sale was conducted on 21.6.1977,
22.6.1977, 23.6.1977, 24.6.1977, 25.6.1977, 26.6.1977 and 28.6.1977, a bid
of one rupee was offered on behalf of the State Government, which was
accepted by the of?cer conducting the sale. The amount of one rupee was
deposited by a Treasury Challan dated 17th/18th August, 1977....."
23. Having examined the entire controversy in the light of relevant
Sections and the Rules, we are unable to persuade ourselves to concur with
the finding of the High Court as, in our considered opinion, the High Court
should not have interfered with the finding of the Board which rightly held
that auction conducted to recover the outstanding arrears of land revenue
(Rs.731.70) from the appellants was not made in conformity with the
procedure prescribed in the Regulation and was, therefore, bad in law.
This we say so on our independent examination of the entire case for more
than one reason stated infra.
24. In our considered opinion, in the first place, the well reasoned
finding of fact recorded by the Board in favour of the appellants
(landholders) on the question of non-service of notice of the demand for
payment of defaulted amount of arrears of land revenue of Rs. 731.70 and
non-service of notice of sale of land was binding on the writ court, being
a pure finding of fact and more so, when it was based on proper
appreciation of facts. Secondly, the High Court exceeded its jurisdiction
when it proceeded to examine this factual issue like an appellate court and
reversed the factual finding. Thirdly, assuming that the High Court could
go into this issue in its writ jurisdiction, yet in our opinion, mere
perusal of the finding of the High Court would go to show that no proper
service much less effective service of notice of demand and sale of land
was made on the appellants. In other words, reading of reasoning and
discussion of the High Court cannot allow us to reach to a conclusion that
the appellants were duly served of the notices. Rather it would take us to
a conclusion that the appellants were not properly served. Fourthly, the
writ court did not assign any cogent reason as to why the factual finding
of the Board on this issue was wrong and hence, call for interference.
Fifthly, when we, on our part, have examined the issue of notice
independently in the light of the requirement of Section 72 read with Rules
133, 134, 136 and 136-A which deals with the mode of effecting service on
the defaulting landholder, then we have no hesitation in recording a
finding that no notice was served on the appellants as contemplated under
the aforementioned provisions.
25. It is an admitted fact that there was no personal service of any
notice effected on the appellants. It is on record that the process server
said that he, therefore, displaced the notice in the office of Mauzadar.
There is no evidence much less a conclusive one to prove that when the
appellants could not be served personally then whether notices were served
on any adult member of the appellants' family and, if so, what were the
names of those adult members, what was their age, their relation with the
appellants, whether they were living in the same house in which the
appellants were residing. Whether notice was served in presence of any
witness residing in area and who were those witnesses and why these details
were not mentioned in the service report. In any case, in the absence of
this material evidence, it was rightly held by the Board that no notice of
either demand or/and sale of land was served on the appellants and the High
Court ought not to have interfered with this finding of fact for holding
otherwise.
26. In our considered opinion, there lies a distinction between non-
service of notice and a notice though served but with some kind of
procedural irregularities in serving. In the case of former category of
cases, all consequential action, if taken would be rendered bad in law once
the fact of non-service is proved whereas in the case of later category of
cases, the consequential action, if taken would be sustained. It is for the
reason that in the case of former, since the notice was not served on the
person concerned he was completely unaware of the proceedings which were
held behind his back thereby rendering the action "illegal" whereas in the
case of later, he was otherwise aware of the proceedings having received
the notice though with procedural irregularity committed in making service
of such notice on him. If a person has a knowledge of the action proposed
in the notice, then the action taken thereon cannot be held as being bad in
law by finding fault in the manner of effecting service unless he is able
to show substantial prejudice caused to him due to procedural lapse in
making service on him. It, however, depends upon individual case to case to
find out the nature of procedural lapse complained of and the resultant
prejudice caused. The case in hand falls in former category of case.
27. In our considered opinion, therefore, it is mandatory on the part of
the State to serve a proper notice to a person, who is liable to pay any
kind of State's dues strictly in the manner prescribed in the Regulation.
It is equally mandatory on the part of the State to give prior notice to
the defaulter for recovery of dues before his properties (moveable or/and
immoveable) are put to sale in the manner prescribed in the Regulation.
28. It is a settled principle of law that no person can be deprived of
his property or any interest in the property save by authority of law.
Article 300- A of the Constitution recognizes this constitutional right of
a person, which was till 1978 recognized as the fundamental right of a
citizen. Indeed whether fundamental or constitutional, the fact remains
that it has always been recognized as a right guaranteed under the
Constitution in favour of a citizen/person and hence no person cannot be
deprived of this valuable right which Constitution has given to him save by
authority of law.
29. In the case in hand, we find that the appellants were deprived of the
land in question without following the procedure prescribed in law because
the so-called auction was conducted by the State behind their back and
without their knowledge. The action of the State was thus clearly violative
of the appellants' Constitutional right guaranteed under Article 300-A and
hence such action can not be sustained in law.
30. In our considered opinion, the action taken by the State for
realization of arrears of land revenue dues from the appellants is also bad
in law yet for another reason which neither the Board nor the High Court
took note of it.
31. Section 69 empowers the Deputy Commissioner to recover the arrears of
land revenue payable by any landholder by directing attachment and sale of
so much of his moveable property as may be necessary to satisfy the dues.
32. We, however, find from the record that no attempt was made by the
Deputy Commissioner to attach the appellants' any moveable property for
realization of dues and even if he claimed to have made any such attempt
yet there is nothing on record to show as to why he was compelled to take
recourse to Section 70 for sale of land in question. Indeed such action on
the part of Deputy Commissioner was in contravention of Section 70 (1)
because no auction of estate (land) could be made unless he was of the
opinion that process provided in Section 69 was not sufficient for the
recovery of entire arrears. In other words, it was necessary for the State
to have justified their action by showing that sincere attempt was made to
first sell the appellants' moveable as per the procedure prescribed in
Section 69 and when it was noticed that it was not possible to recover the
arrears by sale of all attached moveables, the extreme step of recovery of
arrears by sale of estate was taken by taking recourse to the procedure
prescribed in Section 70.
33. There is nothing on record to show as to why the extreme step to
recover a small sum of Rs.731.70 paisa was required to be taken for sale of
the estate under Section 70 and why arrears of Rs.731.70 paisa could not be
recovered by sale of any moveable belonging to the appellants. It is
inconceivable to think that the appellants did not own moveable which would
not have even fetched Rs.731/- on sale or would have fetched less amount.
34. We are, therefore, of the considered opinion that the auction held
by the Deputy Commissioner for realization of dues by sale of land in
question under Section 70 was bad in law being held in contravention of
Section 70 (1) ibid and was thus not sustainable.
35. In our considered opinion there is yet another legal infirmity in
conducting of the auction by the Deputy Commissioner for realization of
dues which renders the auction sale bad in law.
36. It is a trite law that taking recourse to auction proceedings for
sale of defaulter's immovable property for realization of the State dues is
an extreme remedy. It is also discernable in the facts of this case when we
read Sections 69, 70 and Rule 155. Time and again this Court has held that
once the State take recourse to a remedy of disposing of the defaulter's
property by means of public auction as provided in Regulation for
realization of State dues then its dominant consideration should always be
to secure the best price for the property put to sale. This can, however,
be achieved only when there is maximum public participation in the process
of sale and every one has an opportunity to offer the best offer to
purchase the property. The reason is that the public auction held after
adequate publicity ensures participation of every person interested in
purchasing the property and in that process, the State and, in turn, the
defaulter gets the best price of his property which was put to auction
sale. [See Chairman and Managing Director, SIPCOT, Madras and Others vs.
Contromix Pvt. Ltd., (1995) 4 SCC 595 and Haryana Financial Corporation and
Another vs. Jagdamba Oil Mills and Another, (2002) 3 SCC 496]
37. Keeping this well settled principle in mind and applying the same to
the facts of this case, we find that the auction was not held by the Deputy
Commissioner in conformity with the aforesaid principle. It seems that the
auction was held only on papers to show compliance of the Rules to enable
the State to invoke Rule 141 and acquire the land for Rs.1/- as provided
therein. As a matter of fact, no efforts were made by the State to file any
document to prove that adequate publicity was given on all adjourned dates
and despite such publicity no bidder participated in the auction. It is
indeed inconceivable that a land in Kamrup district when put to auction
sale despite publicity would go unnoticed and no person would come forward
to bid for such land. It appears to us that the State had decided to allot
the land to the IOC, who were interested to use the land for their own
purpose and hence recourse to remedy of disposal of land by auction as
provided in Section 70 followed by invocation of Rule 141 was taken to
acquire the land on payment of Rs.1/- by the State and then its major part
was allotted to the IOC on payment of yearly premium and further payment of
compensation by the IOC.
38. In our considered opinion, therefore, the auction held by the State
was neither legal and nor in conformity with the requirements contained in
the Regulation. It was, therefore, rightly set aside by the Board.
39. In the light of the foregoing discussion, the appeals succeed and are
hereby allowed. The impugned judgment is set aside and that of the Board
restored. As a consequence, the writ appeal and the writ petition filed by
the State stand dismissed.
40. We direct the State (respondent no. 1) to pay the amount of
compensation deposited by the IOC for the land allotted to them to the
appellants along with interest on the said amount at the rate of 6 %
payable from the date of deposit till paid to the appellants. The State is
also directed to restore the possession of the remaining land, i.e., the
land excluding the land allotted to IOC to the appellants within three
months after making proper verification and demarcation of the land in
question.
....................................J.
[M.Y. EQBAL]
......................................J.
[ABHAY MANOHAR SAPRE]
New Delhi;
December 11, 2014.
-----------------------
46