Narayan Yadav (D) Thr.Lrs. vs The State Of Bihar . on 25 February, 2020


Supreme Court of India

Narayan Yadav (D) Thr.Lrs. vs The State Of Bihar . on 25 February, 2020

Author: Mohan M. Shantanagoudar

Bench: Mohan M. Shantanagoudar, R. Subhash Reddy

       C. A. No.9173 of 2010
                                                            1

                                                                                REPORTABLE

                                              IN THE SUPREME COURT OF INDIA

                                              CIVIL APPELLATE JURISDICTION

                                              CIVIL APPEAL NO.9173 OF 2010


                         Narayan Yadav (D) Thr.Lrs.                                  …Appellants


                                                                  vs


                         The State of Bihar & Ors.                              ..Respondents




                                                   J U D G M E N T

R.SUBHASH REDDY,J.

1. This civil appeal is filed by the appellants,

aggrieved by the judgment and order dated 12 th March,

2008 passed in Letters Patent Appeal No.79 of 1994 by

the High Court of Patna.

2. Necessary facts in brief are as under:-

Signature Not Verified 3. One Sadhusharan Yadav, Respondent No.14 herein,
Digitally signed by
GULSHAN KUMAR
ARORA
Date: 2020.02.25
16:43:10 IST
Reason:

took a loan from the Land Development Bank, Uda
C. A. No.9173 of 2010
2
Kishunganj (Madhipura) during the year 1971, by

mortgaging his agricultural land. Sadhusharan Yadav

defaulted in payment of loan and, thus, a certificate

case No.338 of 1981-82 was initiated for realization of

said loan amount. It appears that even before

initiation of certificate proceedings, the mortgaged

land was sold by the Respondent No.14 to the objectors-

writ petitioners by executing registered sale deeds.

In realization of the loan amount, the mortgaged land,

i.e.the land in question, was sold by way of auction.

The appellants herein are the purchasers in the

auction sale held on 15.06.1983. The respondents-writ

petitioners having come to know about the auction sale,

filed an application before the Certificate Officer on

15.07.1983 under Section 28 of Bihar & Orissa Public

Demands Recovery Act, 1914 (hereinafter “the Act”).

Though, there is some controversy, as to whether

application was filed under Section 28 or 29 of the

Act, as much as all authorities have proceeded on the

premise that the application was filed under Section 28

of the Act, we need not go into such controversy.

Though, the said application was filed for setting

aside the sale, no deposit of any amount was made as
C. A. No.9173 of 2010
3
required under Section 28 of the Act. The Certificate

Officer by an order dated 05.09.1983 permitted the

objectors-writ petitioners to deposit the amount of

Rs.12000/- along with 10% penalty on the said purchase

money and interest thereon @ 6¼% per annum at the Uda

Kisunganj branch of the Land Development Bank, and

submit proof of the deposit on or before 22.09.1983.

The respondent-writ petitioners claimed to have

deposited the amount on 17.09.1983. However, it is

stated that pacca receipt in respect of the said

deposit, was made available by bank authorities later

on 28.09.1983.

4. The Certificate Officer who is the 5th respondent

herein vide order dated 18.11.1983 allowed the

objections of the respondent-writ petitioners and set-

aside the sale dated 15.06.1983. The auction purchaser

had filed an application before the Collector,

Madhipura, who is the 4th respondent herein. The

Collector, vide his order dated 29.01.1985, set-aside

the order of Certificate Officer on the ground that the

money, as required under Section 28 of the Act, was not

deposited within the stipulated time. The respondent-

objector-writ petitioners filed an application before
C. A. No.9173 of 2010
4
the Commissioner, Koshi Division, by way of Revision

Case No.96/84-85, who in his order dated 31.03.1986

confirmed the order of Collector by dismissing the

revision application. Aggrieved by such order, the

respondent-writ petitioners moved to the learned

Member, Board of Revenue, Bihar, in Certificate

Revision Case No. 323 of 1986. Vide his order dated

27.04.1987, he dismissed the case mainly on the ground

that the deposit as required under Section 28 of the

Act, was not made within the prescribed time.

Assailing such orders, the respondent-writ petitioners

filed a Writ Petition, W.P.No.3295 of 1987, before the

High Court of Patna. The High Court allowed the Writ

Petition, and restored the order of the Certificate

Officer, where he had set-aside the sale. The said

order of the learned Single Judge is confirmed in the

Letters Patent Appeal filed by the appellants herein,

and their appeal was dismissed by the Division Bench of

the High Court by the impugned order.

5. We have heard Sri Amit Kumar, learned counsel

appearing for the appellants, Sri Gopal Singh, learned

counsel appearing for the State of Bihar and Sri Jagjit
C. A. No.9173 of 2010
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Singh Chhabra, learned counsel appearing for the

respondent-writ petitioners.

6. Mainly, it is contended by the learned counsel

appearing for the appellants, that the respondent-writ

petitioners did not make any deposit along with their

application filed on 15.07.1983 as required under

Section 28 of the Act. It is submitted that, when

there is a mandatory requirement of deposit for making

an application to set-aside the sale, no application

could have been entertained for setting aside the sale

in absence of such deposit within the time stipulated

under law. Further, it is submitted, that in absence

of any power conferred on the Certificate Officer, the

Certificate Officer had no authority to either extend

the time for deposit, or to entertain the application

for setting aside the sale, which was not supported by

deposit. It is contended that as the Certificate

Officer had committed an error in allowing the

application of the writ-petitioners for setting aside

the sale, the same was rightly interfered with by the

Collector in revision petition, and the same was

confirmed by the Board of Revenue. It is submitted

that the learned Single Judge has allowed the writ
C. A. No.9173 of 2010
6
petition by misinterpreting Section 28 of the Act. It

is submitted that even the Division Bench had

erroneously confirmed the order of the learned Single

Judge. On the other hand, learned counsel for the

State has supported the case of the appellants.

Learned counsel Sri Jagjit Singh Chhabra, appearing for

the respondent-writ petitioners, has submitted that

even before the mortgage, land was sold by the original

owners, by registered sale deeds for a valuable

consideration. It is submitted that, inspite of the

same, they have deposited the auction amount along with

the penalty amount, a sum equal to 10% of purchase

money, and 6 ¼% interest. It is submitted that when

the application is filed within time under Section 28

of the Act, it is always open for the Certificate

Officer to extend the time for deposit, and the same is

within his power. It is submitted that as the learned

Single Judge of the High Court has considered the

matter in detail, and the order is also confirmed by

the Division Bench, there are no grounds to interfere

with the same.

7. Having heard learned counsel for the appearing

parties, and on perusal of the impugned order, the
C. A. No.9173 of 2010
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order passed by the learned Single Judge, and other

material on record, we are of the view that the

controversy in question can be narrowed down to the

interpretation of Section 28 of the Act. Section 28 of

Bihar & Orissa Public Demands Recovery Act, 1914 reads

as under:-

“28. Application to set aside sale of immovable
property on deposit.(1) Where immovable property
has been sold in execution of a certificate, the
certificate-debtor, or any person whose
interests are affected by the sale, may, at any
time within thirty days from the date of the
sale, apply to the Certificate Officer to set
aside the sale, on his depositing-

(a) for payment to the certificate-holder;
the amount specified in the proclamation of
sale as that for the recovery of which the
sale was ordered with interest thereon at
the rate of six and a quarter per centum
per annum calculated from the date of the
sale to the date when the deposit is made;

(b) for payment to the purchaser, as
penalty, a sum equal to ten percent of the
purchase money, but not less than one
rupee;

(c) for payment to the Collector (where
the certificate is for a public demand
payable to the Collector), such
outstanding charges due to the Government
under any law for the time being in force
as the Collector certifies to be payable
by the certificate-debtor.

(2) Where a person makes an application under
Section 29 for setting aside the sale of his
immovable property, he shall not unless he
C. A. No.9173 of 2010
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withdraws that application, be entitled to make
or prosecute an application under this Section.

Note.-In computing the 30 days prescribed in
Section 28(1), the day of sale should be
excluded.”

8. It is not in dispute that the mortgaged land was

sold in auction, in the initiated certificate

proceedings by the competent authority on 15.06.1983.

From a reading of Section 28 of the Act as extracted

above, it is clear that the certificate-debtor, or any

person whose interests are affected by the sale, may,

at any time within thirty days from the date of the

sale, can make an application to the Certificate

Officer to set aside the sale by depositing the amount

specified in the proclamation of sale, along with

interest @ six and a quarter per centum per annum, and

with penalty, a sum equal to ten percent of the

purchase money. It is clear from the language of the

aforesaid Section, that the application is to be filed

at any time within thirty days from the date of sale by

depositing the amount. If the application filed under

Section 28 of the Act is to be treated as valid it must

be along with the deposit as contemplated under Section

28(1) of the Act. In this case admittedly the deposit

of purchase money along with penalty was not deposited
C. A. No.9173 of 2010
9
within a period of thirty days from the date of sale.

A reading of the order passed by the Certificate

Officer dated 05.09.1983 itself indicates that the

auction amount was not deposited and the respondent-

objector-writ petitioners were permitted to deposit the

same by 22.09.1983. It is the case of the respondents

that they have deposited the money on 17.09.1983. From

the language of Section 28, it is clear that the

application to set-aside the sale can be made only

after deposit of purchase money. Section is in two

parts. If any person applies for setting aside the

sale, one has to make an application to set-aside the

sale, and such application is to necessarily be

supported by deposit of money. For making an

application, when there is a stipulated time of thirty

days from the date of sale, it means that it is to be

done at sometime during the course of stated time

immediately preceding the expiry of thirty days.

Further, the word “deposit” used in the Section, is to

be understood and mean that deposit is to be made

either, before making an application, or simultaneously

with the application within the prescribed time of

thirty days. When there is a prescribed time of thirty
C. A. No.9173 of 2010
10
days from the date of sale, in absence of any power on

the certifying officer to extend the time, he has no

jurisdiction at all to extend the time of deposit,

beyond the period of thirty days from date of sale. In

absence of any power conferred on the authority under

Section 28 of the Act, and considering the consequence

of not depositing the money within the time of thirty

days, the period of thirty days as mentioned in the

Section 28 is to be considered as mandatory. The

aforesaid Section 28 is in the nature of a concession

shown to a defaulter, so he has to strictly comply with

the requirement thereto, and the sale would not be set-

aside unless the entire amount specified in the

Section, is deposited within a period of thirty days

from the date of sale. If it is beyond thirty days,

court cannot consider such application, as the same is

not in accordance with the Section itself. The said

provision under Section 28 is intended to safeguard the

interests of persons who are affected by the sale, to

approach the competent authority within the prescribed

time by depositing the purchase amount along with ten

percent thereof as penalty which is payable to auction

purchaser for retaining the land. If deposits are
C. A. No.9173 of 2010
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allowed to be made even after thirty days, same will

run contrary to Section 28 itself and frustrate the

object of the provision.

9. The learned Single Judge of the High Court has

allowed the writ petition by recording a finding that

the Certificate Officer is satisfied with the claim of

the objector-writ petitioners, and has allowed the

application. Even in the Letters Patent Appeal filed by

the appellants, the High Court has rejected the appeal

by recording a finding that whether or not it was a

fit case for extension of time, is basically judicial

discretion, and no case is made out to show that such

discretion was exercised erroneously or capriciously.

When the Section mandates for filing an application by

making a deposit within a particular time, we are of

the view that there is no discretion left to the

authority to extend the time. Learned counsel appearing

for the respondent-writ petitioners, except stating

that the writ-petitioners are the bona fide purchasers

by registered sale deeds from the original owners even

before the auction, and they have also deposited the

purchase money along with 10% towards penalty, could

not make any acceptable submission for entertaining
C. A. No.9173 of 2010
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application which is not supported by deposit as

required under Section 28 of the Act.

10. For the aforesaid reasons we allow this civil

appeal and set aside the impugned order. Consequently,

the order dated 03.05.1994 passed by the learned Single

Judge in W.P.No.3295 of 1987 stands set-aside

confirming the order of the Board of Revenue. In

effect, the application filed by the respondent-writ

petitioners under Section 28 of the Bihar & Orissa

Public Demands Recovery Act, 1914 stands rejected. The

respondent-writ petitioners are entitled for refund of

money deposited by them before the Certificate Officer.

…………………………………………………………………….J
(L. NAGESWARA RAO )

……………………………………………………………………J
(R. SUBHASH REDDY)

NEW DELHI;

February 25,2020



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