NARAYAN YADAV (D) THR. LRS. versus THE STATE OF BIHAR & ORS. on 25 February 2020

1. This civil appeal is filed by the appellants, aggrieved by thejudgment and order dated 12[th] March, 2008 passed in Letters PatentAppeal No.79 of 1994 by the High Court of Patna.

2. Necessary facts in brief are as under:-

3. One Sadhusharan Yadav, Respondent No.14 herein, took a loanfrom the Land Development Bank, Uda Kishunganj (Madhipura) duringthe year 1971, by mortgaging his agricultural land. Sadhusharan Yadavdefaulted in payment of loan and, thus, a certificate case No.338 of1981-82 was initiated for realization of said loan amount. It appears thateven before initiation of certificate proceedings, the mortgaged land wassold by the Respondent No.14 to the objectors-writ petitioners byexecuting registered sale deeds. In realization of the loan amount, themortgaged land, i.e.the land in question, was sold by way of auction.The appellants herein are the purchasers in the auction sale held on15.06.1983. The respondents-writ petitioners having come to know aboutthe auction sale, filed an application before the Certificate Officer on15.07.1983 under Section 28 of Bihar & Orissa Public DemandsRecovery Act, 1914 (hereinafter “the Act”). Though, there is somecontroversy, as to whether application was filed under Section 28 or 29of the Act, as much as all authorities have proceeded on the premisethat the application was filed under Section 28 of the Act, we need notgo into such controversy. Though, the said application was filed for settingaside the sale, no deposit of any amount was made as required underSection 28 of the Act. The Certificate Officer by an order dated05.09.1983 permitted the objectors-writ petitioners to deposit the amountof Rs.12000/- along with 10% penalty on the said purchase money andinterest thereon @ 6¼% per annum at the Uda Kisunganj branch of theLand Development Bank, and submit proof of the deposit on or before22.09.1983. The respondent-writ petitioners claimed to have deposited A

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Athe amount on 17.09.1983. However, it is stated that pacca receipt inrespect of the said deposit, was made available by bank authorities lateron 28.09.1983.

4. The Certificate Officer who is the 5[th] respondent herein videorder dated 18.11.1983 allowed the objections of the respondent-writBpetitioners and set-aside the sale dated 15.06.1983. The auction purchaserhad filed an application before the Collector, Madhipura, who is the 4[th]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 thestipulated time. The respondent-objector-writ petitioners filed anCapplication before the Commissioner, Koshi Division, by way of RevisionCase No.96/84-85, who in his order dated 31.03.1986 confirmed theorder of Collector by dismissing the revision application. Aggrieved bysuch order, the respondent-writ petitioners moved to the learned Member,Board of Revenue, Bihar, in Certificate Revision Case No. 323 of 1986.DVide his order dated 27.04.1987, he dismissed the case mainly on theground that the deposit as required under Section 28 of the Act, was notmade within the prescribed time. Assailing such orders, the respondent-writ petitioners filed a Writ Petition, W.P.No.3295 of 1987, before theHigh Court of Patna. The High Court allowed the Writ Petition, andrestored the order of the Certificate Officer, where he had set-aside theEsale. The said order of the learned Single Judge is confirmed in theLetters Patent Appeal filed by the appellants herein, and their appealwas dismissed by the Division Bench of the High Court by the impugnedorder.

5. We have heard Sri Amit Kumar, learned counsel appearing forFthe appellants, Sri Gopal Singh, learned counsel appearing for the Stateof Bihar and Sri Jagjit Singh Chhabra, learned counsel appearing for therespondent-writ petitioners.

6. Mainly, it is contended by the learned counsel appearing forthe appellants, that the respondent-writ petitioners did not make anyGdeposit along with their application filed on 15.07.1983 as required underSection 28 of the Act. It is submitted that, when there is a mandatoryrequirement of deposit for making an application to set-aside the sale, noapplication could have been entertained for setting aside the sale inabsence of such deposit within the time stipulated under law. Further, itHis submitted, that in absence of any power conferred on the Certificate

Officer, the Certificate Officer had no authority to either extend thetime for deposit, or to entertain the application for setting aside the sale,which was not supported by deposit. It is contended that as the CertificateOfficer had committed an error in allowing the application of thewrit-petitioners for setting aside the sale, the same was rightly interferedwith by the Collector in revision petition, and the same was confirmedby the Board of Revenue. It is submitted that the learned Single Judgehas allowed the writ petition by misinterpreting Section 28 of the Act. Itis submitted that even the Division Bench had erroneously confirmedthe order of the learned Single Judge. On the other hand, learned counselfor the State has supported the case of the appellants. Learned counselSri Jagjit Singh Chhabra, appearing for the respondent-writ petitioners,has submitted that even before the mortgage, land was sold by the originalowners, by registered sale deeds for a valuable consideration. It issubmitted that, inspite of the same, they have deposited the auction amountalong with the penalty amount, a sum equal to 10% of purchase money,and 6 ¼% interest. It is submitted that when the application is filedwithin time under Section 28 of the Act, it is always open for the CertificateOfficer 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 hasconsidered the matter in detail, and the order is also confirmed by theDivision Bench, there are no grounds to interfere with the same.

7. Having heard learned counsel for the appearing parties, and onperusal of the impugned order, the order passed by the learned SingleJudge, and other material on record, we are of the view that thecontroversy in question can be narrowed down to the interpretation ofSection 28 of the Act. Section 28 of Bihar & Orissa Public DemandsRecovery Act, 1914 reads as under:- “28. Application to set aside sale of immovable property ondeposit.(1) Where immovable property has been sold in executionof a certificate, the certificate-debtor, or any person whoseinterests are affected by the sale, may, at any time within thirtydays from the date of the sale, apply to the Certificate Officer toset aside the sale, on his depositing- (a) for payment to the certificate-holder; the amount specifiedin the proclamation of sale as that for the recovery of whichthe sale was ordered with interest thereon at the rate of sixand a quarter per centum per annum calculated from thedate of the sale to the date when the deposit is made; A

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

(c) for payment to the Collector (where the certificate is for apublic demand payable to the Collector), such outstandingcharges due to the Government under any law for the timeBbeing in force as the Collector certifies to be payable by thecertificate-debtor.

(2) Where a person makes an application under Section 29 forsetting aside the sale of his immovable property, he shall not unlesshe withdraws that application, be entitled to make or prosecute anCapplication under this Section.

Note.-In computing the 30 days prescribed in Section 28(1), theday 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 onD15.06.1983. From a reading of Section 28 of the Act as extracted above,it is clear that the certificate-debtor, or any person whose interests areaffected by the sale, may, at any time within thirty days from the date ofthe sale, can make an application to the Certificate Officer to set asidethe sale by depositing the amount specified in the proclamation of sale,Ealong with interest @ six and a quarter per centum per annum, and withpenalty, a sum equal to ten percent of the purchase money. It is clearfrom the language of the aforesaid Section, that the application is to befiled at any time within thirty days from the date of sale by depositing theamount. If the application filed under Section 28 of the Act is to betreated as valid it must be along with the deposit as contemplated underFSection 28(1) of the Act. In this case admittedly the deposit of purchasemoney along with penalty was not deposited within a period of thirtydays from the date of sale. A reading of the order passed by the CertificateOfficer dated 05.09.1983 itself indicates that the auction amount wasnot deposited and the respondent-objector-writ petitioners were permittedGto deposit the same by 22.09.1983. It is the case of the respondents thatthey have deposited the money on 17.09.1983. From the language ofSection 28, it is clear that the application to set-aside the sale can bemade only after deposit of purchase money. Section is in two parts. Ifany person applies for setting aside the sale, one has to make anapplication to set-aside the sale, and such application is to necessarily beHsupported 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 tobe done at sometime during the course of stated time immediatelypreceding the expiry of thirty days. Further, the word “deposit” used inthe Section, is to be understood and mean that deposit is to be madeeither, before making an application, or simultaneously with the applicationwithin the prescribed time of thirty days. When there is a prescribedtime of thirty days from the date of sale, in absence of any power on thecertifying officer to extend the time, he has no jurisdiction at all to extendthe time of deposit, beyond the period of thirty days from date of sale. Inabsence of any power conferred on the authority under Section 28 ofthe Act, and considering the consequence of not depositing the moneywithin the time of thirty days, the period of thirty days as mentioned inthe Section 28 is to be considered as mandatory. The aforesaid Section28 is in the nature of a concession shown to a defaulter, so he has tostrictly comply with the requirement thereto, and the sale would not beset-aside unless the entire amount specified in the Section, is depositedwithin a period of thirty days from the date of sale. If it is beyond thirtydays, court cannot consider such application, as the same is not inaccordance with the Section itself. The said provision under Section 28is intended to safeguard the interests of persons who are affected by thesale, to approach the competent authority within the prescribed time bydepositing the purchase amount along with ten percent thereof as penaltywhich is payable to auction purchaser for retaining the land. If depositsare allowed to be made even after thirty days, same will run contrary toSection 28 itself and frustrate the object of the provision.

9. The learned Single Judge of the High Court has allowed thewrit petition by recording a finding that the Certificate Officer is satisfiedwith the claim of the objector-writ petitioners, and has allowed theapplication. Even in the Letters Patent Appeal filed by the appellants,the High Court has rejected the appeal by recording a finding that whetheror 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 exercisederroneously or capriciously. When the Section mandates for filing anapplication by making a deposit within a particular time, we are of theview that there is no discretion left to the authority to extend the time.Learned counsel appearing for the respondent-writ petitioners, exceptstating that the writ-petitioners are the bona fide purchasers by registeredsale deeds from the original owners even before the auction, and theyhave also deposited the purchase money along with 10% towards penalty, AB

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Acould not make any acceptable submission for entertaining applicationwhich is not supported by deposit as required under Section 28 of theAct.

10. For the aforesaid reasons we allow this civil appeal and setaside the impugned order. Consequently, the order dated 03.05.1994Bpassed 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, theapplication filed by the respondent-writ petitioners under Section 28 ofthe Bihar & Orissa Public Demands Recovery Act, 1914 stands rejected.The respondent-writ petitioners are entitled for refund of money depositedby them before the Certificate Officer.

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Kalpana K. Tripathy

Appeal allowed.

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