PRAVESH KUMAR SACHDEVA versus STATE OF UTTAR PRADESH & ORS. on 13 September 2018

504

SUPREME COURT REPORTS

[2018] 11 S.C.R.

A

PRAVESH KUMAR SACHDEVA

v.

STATE OF UTTAR PRADESH & ORS.

(Civil Appeal No. 9836 of 2014)

B

SEPTEMBER 13, 2018

[MADAN B. LOKUR, S. ABDUL NAZEER ANDDEEPAK GUPTA, JJ.]

Auction: Auction sale – Waiver of rights – On facts, confirmedauction sale of land belonging to private respondents – Set asideCby the High Court despite there being no objections to it –Justification of – Held: Not justified – Private respondents throughtheir conduct, in failing to file objections to the auction sale andmaking an application and accepting the excess amount recoveredfrom the auction sale, waived off their rights in respect of the auctionDsale and acquiesced in the auction sale – They are estopped throughtheir conduct from challenging the auction sale in any mannerwhatsoever – Conduct of all the private respondents is a clearindication of their acceptance of the validity of the auction saleand they had no objections to the auction sale – High Court erredin ignoring the basic and primary fact on record – It erred in settingEaside the auction of the land belonging to the private respondentsand thereby prejudicing the rights of the appellants, highest bidderof the auction sale – Order passed by the High Court is set aside.

Waman Shriniwas Kini v. Ratilal Bhagwandas & Co.[1959] 2 Suppl. SCR 217 ; Municipal Corporation ofFGreater Bombay v. Dr Hakimwadi Tenants’ Association(1988) Suppl. SCC 55 : [1988] 2 SCR 21 ; P. DasaMuni Reddy v. P. Appa Rao (1974) 2 SCC 725– referred to.

Case Law Reference

G

[1959] 2 Suppl. SCR 217 referred to[1988] 2 SCR 21 referred to(1974) 2 SCC 725 referred to Para 21

referred toPara 22

referred toPara 23

H

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9836of 2014.

From the Judgment and Order dated 23.03.2006 of the HighCourt of Judicature at Allahabad in Civil Misc. Writ Petition No. 76863of 2005

WITH

Civil Appeal Nos. 9838 & 9837 of 2014 and Civil Appeal No.9524of 2018.

Ajay Kumar Mishra, AAG, V. Shekhar, Guru Krishna Kumar,Sr. Advs., A. Subba Rao, Annam D. N. Rao, Rajesh Sharma, SudiptoSircar, Annam Venkatesh, Rahul Mishra, Bharat Singh, Umesh Prasad,Amit Pawan, Abhijat P. Medh, S. S. Kushrostha, Ms. Shashi Kiran,Satish Chandra, Arjun Sain, Manoj Jain, Sarim Naved, Ms. Anitha Shenoy,Ms. Shakshi Kakkar, Ms. Swarupama Chaturvedi, Amit Sharma,M. P. Shorawala, T. Mahipal, Advs. for the appearing parties.

The Judgment of the Court was delivered by MADAN B. LOKUR, J. 1. Leave granted in S.L.P.(C) No.21229of 2007.

2. A narrow question arises for consideration in these appeals,namely, whether the Allahabad High Court was right in setting aside aconfirmed auction sale despite there being no objection to it. In our opinion,the High Court was in error in setting aside the auction of the land belongingto the private respondents (Alok Mitra, Ashok Mitra, Deepak Mitra,Manmohan Mitra and Madhurima Ghosh) and thereby prejudicing therights of the appellants.

3. The private respondents were having businesses under the nameand style of Mitra Prakashan Ltd. and Maya Press Ltd. It appears thatthe businesses were not successful and they fell in debt being unable topay the workmen or even pay closure compensation.

4. This led the workmen to approach the Labour Court whichdecided in their favour resulting in the private respondents having toshell out a huge amount of about Rs. 56 lakhs towards unpaid dues.Sincethe amounts were not paid despite a citation and recovery certificates,the property/vacant land of the private respondents being 1877.88 sq.yards in Plot No.4-A/4(1A/A)Hashimpur Road, Allahabad was attached.

A

B

C

D

E

F

G

H

A5. Subsequently, the property/vacant land was put to auction whichtook place on 17[th] November, 2004. One of the appellants Pravesh KumarSachdeva (for short Sachdeva) was the highest bidder having given abid of Rs. 70 lakhs.

6. In terms of the provisions of the Uttar Pradesh ZamindariBAbolition and Land Reforms Act, 1950 and the Rules of 1952 framedthereunder, 30 days’ time was given for filing objections to the auctionsale under Rule 285-I which reads as follows:

“RULE 285-I(i) At any time within thirty days from the date ofsale, application may be made to the Commissioner to set asideCthe sale on the ground of some material irregularity or mistake inpublishing or conducting it; but no sale shall be set aside on suchground unless the applicant proves to the satisfaction of theCommissioner that he has sustained substantial injury by reasonof such irregularity or mistake.

D(ii) ***(iii) The order of the Commissioner passed under this rule shall befinal.”

7. One of the private respondents (Alok Mitra) filed an application/objections on 16[th] December, 2004. The cause title of the application/Eobjections mentioned the name of all the private respondents that is,Alok Mitra, Ashok Mitra, Deepak Mitra, Manmohan Mitra andMadhurima Ghosh. However, on a perusal of the application/objectionsplaced before us in original, we found that it was signed only by theadvocate R.K. Pandey. The vakalatnama given to the advocate wassigned only by Alok Mitra. One of the issues raised before us was whetherFthe application/objections were filed by Alok Mitra or by all the privaterespondents.

8. Be that as it may, in our opinion, the application/objections werefiled only by Alok Mitra and by none of the other private respondentseven though their names find mention in the cause title of the document.GWe say this because thevakalatnama was given in favour of the advocateonly by Alok Mitra and there is nothing to indicate that he had giventhevakalatnama as the attorney or representative of the other privaterespondents.

9. The District Magistrate was not informed about the application/objections having been filed by Alok Mitra and on the belief that no onehad objected to the auction sale, theDistrict Magistrate confirmed it on18[th]December, 2004. Thereafter Alok Mitra prepared an application dated31[st] December, 2004 which was filed by him on 4[th] January, 2005withdrawing the objections raised by him. The withdrawal of the objectionswas allowed by the competent authority on 24[th] January, 2005.

10. Quite independently on 11[th] January, 2005 and 25[th] January,2005 the private respondents (including Alok Mitra) moved two sets ofapplications for being paid the difference between the auction sale priceof Rs. 70 lakhs and the dues and liabilities of the private respondents ofabout Rs. 56 lakhs. These applications were allowed and the differentialamount was also given to the private respondents.

11. The position as it stood, therefore, was that the auction salehad taken place and was confirmed; objections filed to the auction saleby Alok Mitra were withdrawn; all the private respondents got back thedifference between the auction sale price and the dues and liabilitiesincurred by them.

12. On or about 1[st] April, 2005 Sachdeva got the subject landconverted to freehold and a little later in May 2005, he sold a part of it toPawan Kumar Agarwal (also an appellant).

13. After the aforesaid transaction, an application was filed bythe private respondents other than Alok Mitra before the CompetentAuthority on 19[th] May, 2005 in which a prayer was made to recall theorder of 24[th] January, 2005 permitting withdrawal of the application/objections filed by Alok Mitra. The averments made in the application inparagraphs 3 and 4 are significant and read as follows:

“3. That the applicants had never given a power of attorney to theopposite party No. 6 Alok Mitra to act for them and on their behalf,and were also not ratified the act and action taken by said SriAlok Mitra.

4. That the applicants never asked, directed and consented withSri Alok Mitra opposite party No. 6 not to press or to withdrawthe aforesaid objection/application No.5 of 2004.”

AB

C

D

E

F

G

H

A

A14. A reading of the aforesaid two paragraphs indicates an inherentself-contradiction. While it is stated in paragraph 3 that the applicantshad not given any power of attorney to Alok Mitra to act for them andon their behalf whereas in paragraph 4 they say that they had not asked,directed and consented to the withdrawal of the objections/applicationfiled by Alok Mitra. The inherent contradiction is that if they had notBauthorized Alok Mitra to file an application, there cannot be any questionof their authorizing Alok Mitra to withdraw the application since it wasnot filed on their behalf. The two paragraphs quoted above confirm thatthe application/objections of 16[th] December, 2004 were not filed by theprivate respondents.C[[st]]

15. Unfortunately, by an order dated 21[[st]] November, 2005 theapplication filed by the private respondents (other than Alok Mitra) wasallowed by the Competent Authority and the confirmation of sale in favourof Sachdeva was set aside. This led Sachdeva to file a writ petition[1] inthe Allahabad High Court, which came to be dismissed by the impugnedDjudgement and order dated 23[rd] March, 2006. This resulted in Sachdevaand the vendee, Pawan Kumar Agarwal to prefer the present appeals inthis Court.

16. As mentioned above, on these facts, the only question for ourconsideration is whether the High Court was in error in setting aside theEconfirmed auction sale.

17. It is quite clear from the narration of facts that the objectionsraised to the auction sale wereonly by Alok Mitra, who did notcommunicate the objections to the District Magistrate in time. No otherobjection was raised to the auction sale and it was duly confirmed by theFDistrict Magistrate. Alok Mitra later withdrew his objections.

18. The other private respondents contended that even they wereparties to the objections filed by Alok Mitra. We cannot agree for thesimple reason that the objections were signed only by R.K.Pandey,advocate and the vakalatnama given to him was signed only by AlokGMitra. None of the other private respondents signed the vakalatnama infavour of R.K.Pandey. On the contrary, when the other privaterespondents objected to the withdrawal of the objections by Alok Mitra,they categorically stated that they had not given a power of attorney toAlok Mitra. In that view of the matter, it can hardly lie in the mouth of 1Civil Miscellaneous Writ Petition No. 76863 of 2005

H

these private respondents to contend that the objections filed by AlokMitra were also filed on their behalf. The private respondents otherthan Alok Mitra have come out with an unbelievable story only tosomehow or other keep the issue alive through litigation and unfortunately,they have been successful in doing so for the last more than one decade.

19. We also find that the conduct of all the private respondents isa clear indication of their acceptance of the validity of the auction sale.It has come on record that the auction sale resulted in a sale price whichwas over and above the dues and liabilities of the private respondents byan amount of about Rs. 14 lakhs. Through applications filed by the privaterespondents on 11[th] January, 2005 and 25[th] January, 2005 requests weremade for being given back the excess amount raised by the auction sale.In fact this request was acceded to and the amount was given back tothe private respondents by the Competent Authority. It appears that thepresent litigation is being fought by the private respondents on the basisof the amounts received by them from the Competent Authority. In anyevent, the conduct of the private respondents is a clear indication, if anyis required, that they had no objection to the auction sale.

20. Through their conduct, in failing to file objections to the auctionsale and making an application and accepting the excess amountrecovered from the auction sale, the private respondents have waivedoff their rights in respect of the auction sale and have acquiesced in theauction sale. Today, the private respondents are estopped through theirconduct from challenging the auction sale in any manner whatsoever.

21. In Waman Shriniwas Kini v. Ratilal Bhagwandas &Co.[2]it was observed as follows:

“Waiver is the abandonment of a right which normally everybodyis at liberty to waive. A waiver is nothing unless it amounts to arelease. It signifies nothing more than an intention not to insistupon the right. It may be deduced from acquiescence or may beimplied.”

22. In Municipal Corporation of Greater Bombay v.Dr Hakimwadi Tenants’ Association[3] it was held that”In order toconstitute waiver, there must be voluntary and intentional relinquishmentof a right. The essence of a waiver is an estoppel and where there is no 2 1959 Supp (2) SCR 2173 1988 Supp SCC 55

A

B

C

D

E

F

G

H

Aestoppel, there is no waiver. Estoppel and waiver are questions of conductand must necessarily be determined on the facts of each case.”

23. Finally, in P. Dasa Muni Reddy v. P. Appa Rao[4] this Courtheld:

“ … Waiver is an intentional relinquishment of a known right orBadvantage, benefit, claim or privilege which except for such waiverthe party would have enjoyed. Waiver can also be a voluntarysurrender of a right. ….. The doctrine which the courts of lawwill recognise is a rule of judicial policy that a person will not beallowed to take inconsistent position to gain advantage throughCthe aid of courts.”

24. We are of the clear opinion that in view of the law, the HighCourt erred in ignoring the basic and primary facts on record and settingaside the auction sale in favour of Sachdeva, and thereby alsoprejudicingPawan Kumar Agarwal.

D25. Under the circumstances, the appeals are allowed and theimpugned judgment and order passed by the Allahabad High Court on23[rd] March, 2006 is set aside.

E

Nidhi Jain

Appeals allowed.

F

G

4 (1974) 2 SCC 725

H