K. KUMARA GUPTA versus SRI MARKENDAYA AND SRI OMKARESWARA SWAMY TEMPLE & ORS on 18 February 2022

968

SUPREME COURT REPORTS[2022] 8 S.C.R. 968

[2022] 8 S.C.R.

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K. KUMARA GUPTA

v.

SRI MARKENDAYA AND SRI OMKARESWARA SWAMYTEMPLE & ORS.

(Civil appeal Nos. 791-792 of 2022)

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FEBRUARY 18, 2022

[M. R. SHAH AND B. V. NAGARATHNA, JJ.]

Auction: Auction conducted on 26.06.1998 by the ExecutiveOfficer of the Temple Trust following due procedure under theCprovisions of the Endowments Act 1987 – Appellant was the highestbidder – After confirming the sale in favour of the appellant by theCommissioner, the appellant deposited the balance amount –Thereafter, sale deed was held confirmed and executed in the year1998 – On challenge before High Court, re-auction of the propertywas ordered after a period of more than 23 years solely on theDbasis of the offer made by one JK in the year 1998 and the offermade by one LKR that they are ready to offer/pay a higher pricethan fetched in the public auction – On appeal, held: Neither didJK nor LKR had participated in the auction proceedings and madeany offer – Both of them ought not have been permitted to raise anyEobjection subsequently on the valuation when they had notparticipated in the public auction and made any offer – After thepublic auction is held and the highest bid is received and theproperty is sold in a public auction in favour of a highest bidder,such a sale cannot be set aside on the basis of some offer made bythird parties subsequently – Further, unless and until it was foundFthat there was any material irregularity and/or illegality in holdingthe public auction and/or vitiated by any fraud or collusion, it isnot open to set aside the auction or sale in favour of a highestbidder – If there was any error in the decision-making processadopted by the authority, the remedy available was to question theGsale deed in an appropriate proceeding available under the lawand not by filing a petition under Art.226 of the Constitution ofIndia – Moreover, respondents are not in a position to point out anymaterial on which it can be said that what was offered by theappellant in the year 1998 was not a fair value – Hence, order ofthe High Court set aside – Endowments Act 1987 – Constitution ofHIndia – Art.226.

Allowing the appeals, the Court

HELD: 1. Once the appellant was found to be the highestbidder in a public auction in which 45 persons had participatedand thereafter when the sale was confirmed in his favour andeven the sale deed was executed, unless and until it was foundthat there was any material irregularity and/or illegality in holdingthe public auction and/or auction/sale was vitiated by any fraud orcollusion, it is not open to set aside the auction or sale in favourof a highest bidder on the basis of some representations made bythird parties, who did not even participate in the auctionproceedings and did not make any offer. [Para 8.1][982-C-D]

2. The sale was confirmed in favour of the appellant by theCommissioner, Endowments Department after obtaining thereport of the Assistant Commissioner. Therefore, in the aforesaidfacts and circumstances of the case, the High Court ought not tohave ordered re-auction of the land in question after a period of23 years of confirmation of the sale and execution of the saledeed in favour of the auction purchaser by observing that thevalue of the property might have been much more, otherwise,the object and purpose of holding the public auction and thesanctity of the public auction will be frustrated. Unless there isconcrete material and it is established that there was any fraudand/or collusion or the land in question was sold at a throw awayprice, the sale pursuant to the public auction cannot be set asideat the instance of strangers to the auction proceeding. The salepursuant to the public auction can be set aside in an eventualitywhere it is found on the basis of material on record that theproperty had been sold away at a throw away price and/or on awholly inadequate consideration because of the fraud and/orcollusion and/or after any material irregularity and/or illegality isfound in conducing/holding the public auction. After the publicauction is held and the highest bid is received and the propertyis sold in a public auction in favour of a highest bidder, such asale cannot be set aside on the basis of some offer made by thirdparties subsequently and that too when they did not participatein the auction proceedings and made any offer and/or the offer ismade only for the sake of making it and without any serious intent.

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AIn the present case, though JK immediately after finalising theauction stated that he is ready and willing to pay a higher price,however, subsequently, he backed out. If the auction/salepursuant to the public auction is set aside on the basis of thesuch frivolous and irresponsible representations made by suchpersons then the sanctity of a public auction would be frustratedBand the rights of a genuine bidder would be adversely affected.The so-called lucrative offer initially made by third parties appearsto be made only to frustrate the auction proceedings with a malafide intent. If there was any error in the decision-making processadopted by the authority, the remedy available was to questionCthe sale deed in an appropriate proceeding available under thelaw and not by filing a petition under Article 226 of the Constitutionof India. [Paras 8.2, 8.3][983-G-H; 984-A-E, G]

Jasbhai Motibhai Desai vs. Roshan Kumar, Haji BashirAhmed and Ors. (1976) 1 SCC 671 : [1976] 3 SCR 58;DState of Uttaranchal Vs. Balwant Singh Chaufal andOrs. (2010) 3 SCC 402 : [2010] 1 SCR 678 – reliedon.

Valji Khimji and Company vs. Official Liquidator ofHindustan Nitro Product (Gujarat) Limited and OthersE(2008) 9 SCC 299 : [2008] 12 SCR 1; ParamanandaMahapatra vs. Commissioner of Hindu ReligiousEndowments, Orissa and Others, AIR 1966 SC 1544 :[1966] 1 SCR 791; Mahant Ram Saroop Dasji vs. S.P.Sahi [1959] Supp (2) SCR 583; Princess Fatima Fauziaand Anr. vs. Syeed UI-Mulk alias Nawab Saheb ChathariF& Ors. AIR 1979 AP 229; Divya ManufacturingCompany (P) Ltd. vs. Union Bank of India and Ors.(2000) 6 SCC 69 : [2000] 1 Suppl. SCR 474; Chairmanand Managing director, SIPCOT, Madras and Ors. vs.Contromix Pvt. Ltd. (1995) 4 SCC 595 : [1995] 1 Suppl.GSCR 415; Union Bank of India vs. Official LiquidatorH.C of Calcutta and Ors. (2000) 5 SCC 274 : [2000]3 SCR 691; Navalkha and Sons vs. Sri Ramanya Dasand Ors. (1969) 3 SCC 537 : [1970] 3 SCR 1 – referredto.

K. KUMARA GUPTA v. SRI MARKENDAYA AND SRIOMKARESWARA SWAMY TEMPLE & ORS.

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Case Law Reference

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 791-792 of 2022.

From the Judgment and Order dated 08.09.2019 of the High Courtof Andhra Pradesh at Amaravati in Writ Appeal Nos. 790 and 1069 of2018.

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Harin P. Raval, Sr. Adv., Y. Rajagopala Rao, K. Pramod Kumar,D. Gopi Krishna, Kartikey Kanojiya, Ms. Sukanya Singh, Advs. for theAppellant.

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S. Niranjan Reddy, Siddhartha Dave, Sr. Advs., Abhijit Sengupta,Mahfooz A. Nazki, Polanki Gowtham, Shaik Mohamad Haneef, T. VijayaBhaskar Reddy, K. V. Girish Chowdary, Ms. Rajeswari Mukherjee,Abhishek Sharma, Rajendra Singhvi, T. R. B. Sivakumar, Advs. for theRespondents.

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The Judgment of the Court was delivered by

M. R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned judgmentand order dated 18.09.2019 passed by the High Court of Andhra Pradeshat Amaravati in Writ Appeal Nos.790 and 1069 of 2018 by which theHigh Court has allowed the said writ appeals and has directed theauthorities concerned to conduct a re-auction of the entire properties byfixing the upset price higher than what has been fixed earlier, the auctionpurchaser, who purchased the property in question in the year 1998, haspreferred the present appeals.

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A2. The facts leading to the present appeals and the chronologicaldates and events are as under:- 2.1 That a proposal was published by the office of Commissioner,Endowments Department to auction the land in question belonging to SriMarkendaya and Omkareswara Swamy Devasthanam, Eluru, which wasBpublished in the newspaper on 10.03.1997. Notification to sell the subjectland was published in the Andhra Pradesh Gazette on 22.05.1997. Nobodyraised any objection against the said proposal. That the probable expectedprice of the land was fixed at Rs. 4,00,000/- per acre and the total extentof land was about 1.81 acre. That thereafter the Commissioner ofEndowments Department granted permission to sell the land in questionCon 13.11.1997. The Executive Officer of the Temple Trust issued tender/public notice to sell the land in question by way of an open auction in thepresence of the Deputy Commissioner, Endowments on 22.05.1998. Asper the notice, the date and time of the open auction was 24.06.1998 at11.00 AM and the interested participants had to deposit Rs.20,000/- asDEMD. Forty-five persons participated including the appellant herein –K. Kumara Gupta. At this stage, it is required to be noted that Shri L.Kantha Rao, original writ petitioner did not participate in the auction andnor did he deposit the EMD of Rs.20,000/-.

2.2 Thereafter the auction took place on 24.06.1998 in which 45Epeople participated. The appellant herein was declared as the highestbidder quoting price of Rs.5,55,000/- per acre against the expected priceof Rs.4,00,000/-. However, thereafter, the highest offer of the appellantwas Rs.13,01,000/- per acre as per the bid submitted by the appellantherein. Thus, the appellant became the highest bidder fixing the price atRs.13,01,000/- per acre. The appellant deposited Rs.7,85,000/- being 1/F3[rd] of the bid amount immediately as per the tender conditions. It appearsthat thereafter the first round of litigation started at the instance of oneShri Jagat Kumar, who as such did not participate in the auction whichwas held on 24.06.1998. He made a representation on 20.07.1998 thatthe subject land has a potential of getting more money. Though, initiallyGhe had shown his readiness and willingness to pay the higher price butdid not deposit the money. On the contrary, he expressed his willingnessto buy only 1200 square yards but not the entire land put to auction. Onthe representation of the said Shri Jagat Kumar, the auction came to becancelled vide order dated 24.07.1998. The appellant filed the revisionunder Section 93 of the Endowments Act, 1987 (hereinafter referred toH

as the “Act of 1987”) against the order dated 24.07.1998 cancelling theauction. However, thereafter by order dated 22.12.1998, the orderconfirming the sale was issued by the Office of the Commissioner,Endowments Department in favour of the appellant. The ExecutiveOfficer of the Temple was directed to get the sale deed registered in thename of the highest bidder.

2.3 That thereafter the appellant deposited balance amount ofRs.15,69,810/- vide four banker cheques dated 30.12.1998. The saledeed was executed in favour of the appellant by Executive Officer onbehalf of the Temple vide Sale Deed dated 31.12.1998. As mentioned inthe sale deed, the physical possession of the land in question was alsodelivered to the appellant.

2.4 That at the relevant time, the sale deed could not be registeredbecause of the non-availability of the Clearance Certificate from theIncome Tax department. The sale deed was presented for registrationbefore the Sub-Registrar, Eluru on 01.01.1999. On 01.01.1999, theExecutive Officer of the Temple/Devasthanam filed an affidavit beforethe Income Tax Office for Clearance Certificate so that the sale deedcould be registered. The Clearance Certificate was granted to theExecutive Officer on 12.01.1999. Thus, the first round of litigation endedthere.

2.5 However, the second round of litigation begun at the instanceof one Shri L. Kantha Rao, the original writ petitioner before the HighCourt, and one of the respondents in these appeals, who as such and asobserved hereinabove did not even participate in the public auctionproceedings. The said Shri L. Kantha Rao filed a Writ Petition No. 41 of1999 before the High Court to direct the Executive Officer/ the TempleCommittee not to execute the sale deed in respect of the auctioned land.Vide interim order dated 05.01.1999, the High Court granted interimstay of all further proceedings subject to the condition that he furnishesa bank guarantee of a sum of Rs.30 lakhs within two weeks from thedate of the said interim order. That during the pendency of the aforesaidwrit petition and in light of the interim order passed by the High Court inthe aforesaid writ petition, being Writ Petition No. 41 of 1999, the officeof the Commissioner, Endowments Department unilaterally passed anorder dated 10.02.1999 cancelling the auction held on 24.06.1998. TheExecutive Officer of the Temple was instructed to conduct a re-auctionfor the land in question keeping the upset price of Rs.30 lakhs. As the A

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Aorder dated 10.02.1999 was passed without hearing the appellant, theappellant preferred revision before the Government under Section 93 ofAct of 1987. The Government stayed the order dated 10.02.1999 of theCommissioner vide its order dated 08.03.1999. Questioning the order ofthe Government dated 08.03.1999 staying the order of the Commissionerdated 10.02.1999, the said Shri L. Kantha Rao filed another Writ PetitionBNo. 11552 of 1999 before the High Court. That by order dated 11.03.1999,the Commissioner himself revoked his order dated 10.02.1999. That byorder dated 09.07.1999, the High Court disposed of both the writ petitions,i.e., Writ Petition No. 41 of 1999 and Writ Petition No. 11552 of 1999. Itappears that the High Court while disposing of the aforesaid writ petitionsCobserved that as the Commissioner had revoked the order dated10.02.1999, the revision filed against the same had become infructuousand Government was not required to decide the issue on merits unlesssuo moto revision was taken up by the Government. However, libertywas granted to the said Shri L. Kantha Rao to file a revision against theoriginal order passed by the Commissioner dated 22.12.1998 confirmingDthe sale in favour of the appellant. The second round of litigation endedthere.

2.6 Then the third round of litigation began. On the basis of theliberty granted by the High Court, the said Shri L. Kantha Rao filed arevision before the Government challenging the order dated 22.12.1998Ealthough he was not a participant in the auction in which appellant hereinwas declared the highest bidder. By order dated 26.11.1999, the saidrevision came to be allowed quashing and setting aside the order dated22.12.1998 and directing the Commissioner to refund the amount paidby the appellant and to conduct a re-auction. Even the said order datedF26.11.1999 was passed without hearing the appellant. The appellant filedWrit Petition No. 25407 of 1999 before the High Court challenging theorder dated 26.11.1999. By a detailed judgment and order dated02.02.2018, the learned Single Judge allowed the Writ Petition No.25407of 1999 (which shall be dealt with hereinbelow). The said Shri L. Kantha Rao died on 01.03.2018. That the respondent No.1 herein – the TempleGthrough its Executive Officer filed Writ Appeal No.790 of 2018 beforethe Division Bench challenging the judgment and order dated 02.02.2018passed in Writ Petition No.25407 of 1999 on 16.03.2018. The wife ofShri L. Kantha Rao also filed Writ Appeal No. 1069 of 2018 challengingthe judgment and order passed by the Learned Single Judge in WritHPetition No.25407 of 1999.

2.7 By the impugned common judgment and order, the DivisionBench of the High Court has allowed the said appeals and has set asidethe judgment and order passed by the learned Single Judge passed inWrit Petition No.25407 of 1999 and has directed the authorities concernedto conduct the re-auction of the entire land by fixing the upset pricehigher than what had been fixed earlier by observing that since morethan twenty years had elapsed from the date of issuance of GO Rt. No.1808 dated 26.11.1999 and price of the land in question had risen. TheDivision Bench of the High Court has further observed that as theappellant has agreed and even the learned Single Judge had directed theappellant to pay Rs.30 lakhs as the said Shri L. Kantha Rao furnished abank guarantee of Rs. 30 lakhs and therefore, the Temple would getmore than Rs.30 lakhs. While passing the impugned judgment and order,the Division Bench of the High Court has also observed that the writpetitioner as well as the appellant shall also be allowed to participate inthe re-auction, if they are otherwise eligible.

2.8 Feeling aggrieved and dissatisfied with the impugned commonjudgment and order passed by the Division Bench of the High Court, theoriginal respondent No.4 before the High Court, the auction purchaserhas preferred the present appeals.

3. Shri Harin P. Raval, learned Senior Advocate has appeared onbehalf of the appellant, Shri S. Niranjan Reddy, learned Senior Advocatehas appeared on behalf of the respondent – Temple Trust and ShriSiddhartha Dave, learned Senior Advocate has appeared on behalf ofthe wife of Shri L. Kantha Rao – the original writ petitioner.

4. Shri Harin P. Raval, learned Senior Advocate appearing onbehalf of the appellant has vehemently submitted that in the facts andcircumstances of the case the Division Bench of the High Court hascommitted a grave error in setting aside the auction/sale in favour of theappellant, which was held in the year 1998.

4.1 It is submitted that as such the auction sale was conductedafter wide publicity in the well-known newspapers and in fact, 45 peopleparticipated in the auction. It is submitted that the appellant was found tobe the highest bidder and therefore the sale in favour of the appellantwas confirmed and the appellant paid the full sale consideration andeven the sale deed was also executed in favour of the appellant on31.12.1998. It is submitted that as there was no illegality in conductingthe auction, therefore, the Division Bench of the High Court ought not to AB

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Ahave set aside such a sale after a period of approximately twenty yearsfrom the date of conducting the public auction and the sale that too atthe instance of a person, who never participated in the auction.

4.2 It is submitted that Division Bench of the High Court ought tohave appreciated that as the said Shri L. Kantha Rao did not evenBparticipate in the public auction and did not submit any offer, thereafter,he had no locus to challenge the public auction and/or the sale in favourof the appellant, who was found to be the highest bidder.

4.3 It is submitted that the Division Bench of the High Court oughtto have appreciated that merely because somebody, subsequently to theCcompletion of the public auction and the sale deed has been executed inthe favour of the highest bidder states that he is ready and willing to paya higher amount than the highest bid amount, would frustrate the objectand purpose of holding the public auction, if at such a person’s instance,the auction/sale is interfered with in any manner. It is submitted that theDivision Bench of the High Court ought to have appreciated that at theDrelevant time, nobody restrained the said Shri L. Kantha Rao fromparticipating in the public auction and submit his offer.

4.4 It is further submitted by Shri Raval, learned Senior Advocateappearing on behalf of the appellant that as such the Division Bench ofthe High Court has not at all observed and/or held that the auction wasEillegal and/or there was any illegality in holding the public auction. It issubmitted that the Division Bench of the High Court has passed theimpugned judgment and order and has directed for re-auction solely onthe ground that subsequently the said Shri L. Kantha Rao offered Rs. 30lakhs, which was higher than the amount paid by the appellant evenFwhen the learned Single Judge had also directed the appellant to pay atotal sum of Rs.30 lakhs, which the appellant had agreed; therefore, theDivision Bench of the High Court has presumed that the value of theland would have been much more than Rs.30 lakhs at the time when itwas put up for auction/sale. It is submitted that the High Court has not atall appreciated the fact that as such the said L. Kantha Rao had no locusGto challenge the sale in favour of the appellant, who was the highestbidder firstly, on the ground that he did not participate in the public auction.

4.5 It is submitted that the Division Bench of the High Court hasnot properly appreciated the fact that the proceedings initiated by ShriL. Kantha Rao were by way of “Public Interest Litigation (PIL)” andHtherefore after his death, his wife could not have continued the PIL

proceedings by way of writ petition before the High Court as a privatelitigation. It is submitted by learned Senior Advocate for the appellantthat the entire litigation was at the instance of the second highest biddernamely, Shri M.M. Gupta, brother-in-law of Shri L. Kantha Rao, whohad purchased the nearby lands to the auctioned land in the name of hisfamily members at Rs.7,50,000/- per acre on 28.07.1998 and 22.09.1998and who had an eye on the land in question.

Procedure

4.6 It is submitted by Shri Raval, learned Senior Advocate appearingon behalf of the appellant that filing of objections and entertaining thesame after the conclusion of the auction and after execution of the saledeed cannot be permitted at the instance of a stranger to the auctionproceeding. It is submitted that in the present case, the sale deed wasexecuted in favour of the appellant herein being the highest bidder in thepublic auction in which 45 persons had participated and therefore tomaintain the sanctity of the public auction, the objections ought not tohave been entertained that too by a person, who never participated inthe public auction, more particularly, when no allegation of fraud waseven pleaded, much less established or proved by the respondents.Reliance is placed on the decision of this Court in the case of ValjiKhimji and Company Vs. Official Liquidator of Hindustan NitroProduct (Gujarat) Limited and Others, (2008) 9 SCC 299 (paras11, 12, 25 and 28).

4.7 It is further submitted by Shri Raval that as such the wife ofthe deceased Shri L. Kantha Rao could not have preferred an appeal asan heir of Shri L. Kantha Rao, a petitioner, who had filed the petition asa Public Interest Litigation. It is submitted that as such the litigationinitiated on behalf of Shri M.M. Gupta the second highest bidder by ShriL. Kantha Rao, was in fact a private interest litigation only in the guiseof a Public Interest Litigation to thwart the auction sale. It is submittedthat the learned Single Judge had rightly reached to the conclusion thatthe respondents – writ petitioners had no locus standi to raise the objectionas well as to file the writ petitions before the High Court as admittedlythey did not participate in the auction.

4.8 It is further submitted that the Temple Trust never objected atany stage of auction or after the auction until the order/judgment dated02.02.2018 was rendered by the learned Single Judge. It is submittedthat the Executive officer of the Temple, who was aware of the entireproceedings including conducting of the public auction and after receiving AB

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Athe full and total consideration could not have challenged the judgmentand order passed by the learned Single Judge rendered on 02.02.2018 ata belated stage, i.e., almost after twenty years from the date of theexecution of the sale deed. It is submitted that filing of an appeal by theTemple Trust against the judgment and order dated 02.02.2018 beforethe Division Bench without any allegation of fraud or collusion against itBreeks of mala fides and collusion, which ought not to have been allowed.In fact, the Division Bench of the High Court ought not to have entertainedthe same, is the submission.

4.9 Making the above submissions, it is urged that the DivisionBench of the High Court has committed a grave error in quashing andCsetting aside the sale in favour of the appellant after a period of 23 yearsand when the appellant had paid the entire sale consideration on30.12.1998 and was put in the possession on execution of the sale deed.It is contended that the Division Bench of the High Court has not properlyappreciated the fact that as such the sale was confirmed in favour of theDappellant after the approval by the competent authority of the EndowmentsDepartment.

5. Learned counsel appearing on behalf of the respondent No.3has submitted that the respondent No.1 – Temple is a public religiousinstitution and registered under Section 6(b)(ii) of Act of 1987. It isEsubmitted that the Government under the Act of 1987 is necessarilybound to act for the benefit of the temples and ensure revenuemaximization for the temples. That as held by this Court in a catena ofdecisions Government acts as a trustee of the said properties. It issubmitted that as observed and held by this Court in a catena of decisions,the duty of the State is parens partriae in respect of the charitableFendowments and to ensure its due protection. Reliance is placed on thedecisions in Paramananda Mahapatra Vs. Commissioner of HinduReligious Endowments, Orissa and Others, AIR 1966 SC 1544and Mahant Ram Saroop Dasji Vs. S.P. Sahi, 1959 Supp (2) SCR583.G

5.1 It is submitted that therefore the Government cannot act againstthe interest of the temple. That in the present case the auction wasconducted on behalf of the Deity, which is in law a perpetual minor.Therefore, it is important to ensure that the trustees act strictly inaccordance with the interest of the Deity. It is submitted that in theHpresent case, the consideration paid was inadequate as on the date of auction. That initially the appellant offered Rs.13,01,000/- per acre, whichwas treated as the highest bid and the same was confirmed. That oneShri Jagat Kumar through representation dated 24.07.1998 stated thathe was willing to offer Rs. 22,00,000/- per acre, i.e., Rs. 7 lakhs morethan the price on which the bid was confirmed in favour of the appellant.Also one Shri L. Kantha Rao submitted a bank guarantee for an amountof Rs. 30 lakhs on 05.01.1999 pursuant to the directions passed by theHigh Court in Writ Petition No. 41 of 1999 on his submission that he wasready and willing to purchase the property in question at Rs. 30 lakhs. Itis submitted that thereafter the State Government vide its order dated26.11.1999 fixed the reserved at Rs.32 lakhs and allowed the parties toparticipate in the auction. It is submitted that the aforesaid facts evidentlyreveal that within a period of one year, the price of the propertysignificantly increased by more than 125%. That the value of the property,as on date, is about 15 crores. It is submitted that therefore in the interestof the Deity, the impugned judgment and order passed by the DivisionBench of the High Court may not be interfered with.

5.2 Relying upon the decision of the Division Bench of the HighCourt in the case of Princess Fatima Fauzia and Anr. Vs. Syeed UI-Mulk alias Nawab Saheb Chathari & Ors., AIR 1979 AP 229, it issubmitted that as held the Division Bench of the High Court, the authoritiesought to have permitted re-auction where, in case of a trust, theconsideration is inadequate.

5.3 It is further submitted by the learned Senior Advocate appearingon behalf of the respondent No.3 that it is the duty of the Court to ensurethat the price fetched is adequate – especially in the case of a PublicTrust even though there is no suggestion of irregularity or fraud. Relianceis placed on the decision of this Court in the case of DivyaManufacturing Company (P) Ltd. Vs. Union Bank of India andOrs., (2000) 6 SCC 69.

5.4 It is further submitted by the learned Senior Advocate appearingon behalf of respondent No.3 that by the impugned judgment and orderpassed by the Division Bench of the High Court, no prejudice shall becaused to the appellant as the Division Bench of the High Court hasdirected that the money deposited including the amount incurred on accountof purchase of stamp papers be refunded to the appellant and theappellant will also be getting the benefit of the prevailing bank intereston the deposited amount. Further, the appellant is also permitted to AB

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Aparticipate in the re-auction. It is therefore prayed not to interfere withthe impugned judgment and order passed by the Division Bench of theHigh Court considering the interest of the charitable institution.

6. Learned Senior Advocate appearing on behalf of respondentNo.1 – Temple Trust / Devasthanam in addition to the submissions madeBby the learned Senior Advocate appearing on behalf of respondent No.3has submitted that in the matter of sale of public property/auction, thedominant consideration is to secure the best price for the property. It issubmitted that the court should always keep the larger interest of thepublic in mind while interfering with the decision of the authority. Further,the concept of locus standi has been widened by this Court while dealingCwith matters of public interest. It is submitted that it is the duty of theCourt to see that the price fetched is adequate.

6.1 Learned counsel appearing on behalf of the respondent No.1has relied upon the decisions of this Court in the case of Chairman andManaging director, SIPCOT, Madras and Ors. Vs. ContromixDPvt. Ltd., (1995) 4 SCC 595; Union Bank of India Vs. OfficialLiquidator H.C of Calcutta and Ors., (2000) 5 SCC 274 andNavalkha and Sons Vs. Sri Ramanya Das and Ors., (1969) 3 SCC537 in support of his submission that in the matter of sale of publicproperty/auction the dominant consideration is to secure the best priceEfor the property.

6.2 Making the above submissions and relying upon abovedecisions, it is prayed to dismiss the present appeals.

7. Heard the learned counsel appearing for the respective partiesat length.F

8. At the outset, it is required to be noted that by the impugnedjudgment and order, the Division Bench of the High Court has orderedre-auction of the land in question by fixing the upset price more thanwhat has been fixed earlier by observing that since more than 20 yearshave elapsed from the date of the issuance of G.O. dated 26.11.1999, itGis in the interest of the Temple that the property in auction is put to re-auction. However, it is required to be noted that the appellant purchasedthe property in question in a public auction, which took place on24.06.1998. He was found to be the highest bidder, who offeredRs.13,01,000/- per acre. It is also required to be noted that in the saidauction, which took place on 24.06.1998, in all 45 people participated.H

The auction was conducted after following due procedure under theprovisions of the Act of 1987 and the auction was conducted by noneother than the Executive Officer of the Temple Trust. It is also to benoted that after receiving a detailed report of Assistant Commissioner ofEndowments, office of the Commissioner, Endowments Department videorder dated 22.12.1998 confirmed the sale in favour of the appellant.Consequently, the appellant deposited the balance amount. The sale deedcame to be executed in his favour vide Sale Deed dated 31.12.1998.Even thereafter on the application made by the Executive Officer of theDevasthanam/Temple, the Income Tax Department granted ClearanceCertificate to the Executive Officer on 12.01.1999. Therefore, as suchthe sale, which was held and confirmed in the year 1998 and for whichthe sale deed was executed on 31.12.1998, the Division Bench of theHigh Court has ordered re-auction of the property in question after aperiod of more than 23 years solely on the basis of the offer made byone Shri Jagat Kumar in the year 1998 (after the public auction wasconcluded) and the offer made by one Shri L. Kantha Rao that they areready to offer / pay a higher price than fetched in the public auctionalready concluded and therefore, the Division Bench of the High Courthas presumed that the value of the property must have been much morethan the sale consideration realized in the public auction. However, theDivision Bench of the High Court has not at all appreciated and consideredthe lack of bona fides on the part of the said Shri Jagat Kumar and evenShri L. Kantha Rao. It is to be noted that though in the month of July,1998, i.e., after the public auction was held, the said Shri Jagat Kumar,who even did not participate in the auction proceedings initially came outwith a case that he was ready and willing to pay a higher price for theauctioned land. But subsequently, he backed out and did not deposit anymoney. Neither did the said Shri Jagat Kumar nor Shri L. Kantha Raohad participated in the auction proceedings and made any offer. Therefore,as such both of them ought not have been permitted to raise any objectionsubsequently on the valuation when they had not participated in the publicauction and made any offer. The Division Bench of the High Courtought to have considered whether these subsequent objectors had actedin a bona fide manner. At this stage, it is required to be noted that evenShri Jagat Kumar subsequently did not prosecute the matter further andsubsequently it was only Shri L. Kantha Rao, who filed the revisionbefore the Government by way of a “Public Interest Litigation”. It isalso to be noted that neither the Government nor even the Division Bench ABC

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Aof the High Court have given any finding that the auction, which wasconducted/held on 24.06.1998 was in any way irregular and/or illegal.Even the Division Bench of the High Court has as such not set aside theauction/sale in favour of the appellant, however, it has ordered re-auctionby observing that as Shri L. Kantha Rao deposited a sum of Rs. 30 lakhspursuant to the interim order passed by the High Court in Writ PetitionBNo. 41 of 1999 and as even the learned Single Judge had also directedthe appellant to pay a total sum of Rs. 30 lakhs, which the appellant hadagreed, the Division Bench of the High Court has observed that thevalue of the property can be said to be much more than what was realizedin the public auction.C

8.1 Once the appellant was found to be the highest bidder in apublic auction in which 45 persons had participated and thereafter whenthe sale was confirmed in his favour and even the sale deed was executed,unless and until it was found that there was any material irregularityand/or illegality in holding the public auction and/or auction/sale wasDvitiated by any fraud or collusion, it is not open to set aside the auction orsale in favour of a highest bidder on the basis of some representationsmade by third parties, who did not even participate in the auctionproceedings and did not make any offer. In this context, we rely on thefollowing observations of this Court in the case of Jasbhai MotibhaiDesai Vs. Roshan Kumar, Haji Bashir Ahmed and Ors., (1976) 1ESCC 671 made in paragraphs 34, 37 and 49, which are as under:- “34. This Court has laid down in a number of decisions that inorder to have the locus siandi to invoke the extraordinary jurisdictionunder Article 226, an applicant should ordinarily be one who has apersonal or individual right in the subject-matter of the application,Fthough in the case of some of the writs like habeas corpus or quowarranto this rule is relaxed or modified. In other words, as ageneral rule, infringement of some legal right or prejudice to somelegal interest inhering in the petitioner is necessary to give him alocus standi in the matter, (see State of Orissa v. Madan GopalGRungta [AIR 1952 SC 12 ]; Calcutta Gas Co. v. State ofW.B. [AIR 1962 SC 1044]; Ram Umeshwari Suthoo v. Member,Board of Revenue, Orissa [(1967) 1 SCA 413]; GaddeVenkateswara Rao v. Government of A.P. [AIR 1966 SC828]; State of Orissa v. Rajasaheb Chandanmall [(1973) 3 SCC739]; Satyanarayana Sinha Dr v. S. Lal & Co. [(1973) 2 SCCH696] ).

37. It will be seen that in the context of locus standi to apply for awrit of certiorari, an applicant may ordinarily fall in any of thesecategories: (i) “person aggrieved”; (ii) “stranger”; (iii) busybodyor meddlesome interloper. Persons in the last category are easilydistinguishable from those coming under the first two categories.Such persons interfere in things which do not concern them. Theymasquerade as crusaders for justice. They pretend to act in thename of pro bono publico, though they have no interest of thepublic or even of their own to protect. They indulge in the pastimeof meddling with the judicial process either by force of habit orfrom improper motives. Often, they are actuated by a desire towin notoriety or cheap popularity; while the ulterior intent of someapplicants in this category, may be no more than spoking the wheelsof administration. The High Court should do well to reject theapplications of such busybodies at the threshold.

49. It is true that in the ultimate analysis, the jurisdiction underArticle 226 in general, and certiorari in particular is discretionary.But in a country like India where writ petitions are instituted in theHigh Courts by the thousand, many of them frivolous, a strictascertainment, at the outset, of the standing of the petitioner toinvoke this extraordinary jurisdiction, must be insisted upon. Thebroad guidelines indicated by us, coupled with other well-established self-devised rules of practice, such as the availabilityof an alternative remedy, the conduct of the petitioner etc. can goa long way to help the courts in weeding out a large number ofwrit petitions at the initial stage with consequent saving of publictime and money.”

In the aforesaid decision, it was also observed that despite adequateopportunity, if a person has not lodged any objection at an appropriatestage and time, he could not be said to have been in fact, grieved.

8.2 It is also required to be noted that the sale was confirmed infavour of the appellant by the Commissioner, Endowments Departmentafter obtaining the report of the Assistant Commissioner. Therefore, weare of the opinion that in the aforesaid facts and circumstances of thecase, the High Court ought not to have ordered re-auction of the land inquestion after a period of 23 years of confirmation of the sale and executionof the sale deed in favour of the auction purchaser by observing that thevalue of the property might have been much more, otherwise, the object AB

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Aand purpose of holding the public auction and the sanctity of the publicauction will be frustrated. Unless there is concrete material and it isestablished that there was any fraud and/or collusion or the land in questionwas sold at a throw away price, the sale pursuant to the public auctioncannot be set aside at the instance of strangers to the auction proceeding.The sale pursuant to the public auction can be set aside in an eventualityBwhere it is found on the basis of material on record that the property hadbeen sold away at a throw away price and/or on a wholly inadequateconsideration because of the fraud and/or collusion and/or after anymaterial irregularity and/or illegality is found in conducing/holding thepublic auction. After the public auction is held and the highest bid isCreceived and the property is sold in a public auction in favour of a highestbidder, such a sale cannot be set aside on the basis of some offer madeby third parties subsequently and that too when they did not participatein the auction proceedings and made any offer and/or the offer is madeonly for the sake of making it and without any serious intent. In thepresent case, as observed hereinabove, though Shri Jagat KumarDimmediately after finalising the auction stated that he is ready and willingto pay a higher price, however, subsequently, he backed out. If the auction/sale pursuant to the public auction is set aside on the basis of the suchfrivolous and irresponsible representations made by such persons thenthe sanctity of a public auction would be frustrated and the rights of aEgenuine bidder would be adversely affected.

8.3 Further, the Division Bench of the High Court ought to haveappreciated that the objector – Shri L. Kantha Rao, who did not participatein the auction proceedings and submit any bid can be said to be a fencesitter having no stakes on his shoulder and had simply come forward justFto nullify the registered sale deed executed in favour of the appellant byadopting an indirect method of making a public offer by way of filing a“Public Interest Litigation” before the High Court. The so-called lucrativeoffer initially made by Shri Jagat Kumar and the subsequent offer madeby Shri L. Kantha Rao appears to be made only to frustrate the auctionproceedings with a mala fide intent. As observed hereinabove, if thereGwas any error in the decision-making process adopted by the authority,the remedy available was to question the sale deed in an appropriateproceeding available under the law and not by filing a petition underArticle 226 of the Constitution of India.

8.4 The Division Bench of the High Court has observed that asHthe said Shri L. Kantha Rao submitted a bank guarantee of Rs. 30 lakhs

as he offered to pay Rs. 30 lakhs and even the learned Single Judge hadalso directed the appellant to pay a total sum of Rs.30 lakhs against hisoriginal offer and the appellant had agreed to pay the same, the HighCourt has presumed that the value of the property at the time of auctionwould have been much more. There was no concrete material beforethe Division Bench of the High Court to come to such a conclusion thatwhat was received in the public auction in the year 1998 was a lesseramount and/or at the relevant time, the valuation of the property wasmuch more than the highest bid received. Merely because the appellantmight have agreed to pay a total sum of Rs.30 lakhs (after deductingwhatever he paid earlier), by that itself, it cannot be presumed and/orheld against the appellant that in the year 1998 what was offered by himwas a lesser amount than the actual valuation. The appellant agreed topay a higher price for the land in question in order to save his rights.

8.5 At the cost of repetition, it is observed that as such there wasno material available with the Division Bench to the effect that thevaluation of the property in the year 1998 was much more and that thehighest bid of the appellant was for a lesser consideration than the actualvalue of the land.

8.6 In fact, the learned Single Judge had passed a detailed judgmentand order quashing and setting aside the order passed by the Governmentdated 26.11.1999. Learned Single Judge specifically observed inparagraphs 8, 9, 12 and 14 as under:- “8. The repeated orders of the second respondent passedtime and again in this matter are found to be without assigningany cogent reasons. Under the Indian Contract Act, which is aCentral Act, having an over riding effect upon the EndowmentsAct, more particularly when the matter pertains to contractualobligations between both the parties i.e., between the vendor andthe vendee and also when the matter pertains to tender-cum-auction, where both parties have fulfilled their part of obligationsand where no fraud played by the parties has been established,the action of the second respondent in canceling the sale deed isunwarranted. The conduct of the 4[th] respondent cannot beappreciated, where he has not participated in the tender-cum-auction and more so, he is not an effected party. Only after knowingthe tender and auction amount, the 4[th] respondent appears to haveeither got tempted by the sale of the property or he has been AB

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planted by the persons having vested interest. This kind of conductcannot be encouraged. It is an undisputed fact that petitioner, 45persons filed tenders and participated in the auction, nothingprevented the 4[th] respondent from filing tender and participatingin the auction.

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9. As stated supra, the respondents have not made out acase of fraud in conducting the sale and also they have not raisedany objection at the time of conducting sale proceedings. Therespondents conveniently causing interference, at a later stagecannot be accepted and they are estopped from raising objectionsafter conducting the sale proceedings……………

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12. Respondent No.4 has not approached this Court withclean hands. He has no locus standi. He did not participate in thetender-cum-auction and when 45 persons participated in tender-cum-auction, nothing prevented the 4[th] respondent to participatein tender-cum-auction proceedings. Mere depositing the moneyDsaying that the amount would fetch more is of no argument thatcan be looked into without establishing malafides or fraud playedby the vendor or vendee. No relief can be granted to respondentNo.4 in the writ petition filed by the petitioner.

14. Once the contractual obligation has been completed byboth parties and sale deed is executed, the second respondent hasno jurisdiction in the matter to cancel the same and it is thecompetent Court of law which has jurisdiction to decide thevalidity.”

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8.7 None of the aforesaid aspects have been dealt with and/orFconsidered by the Division Bench of the High Court while passing theimpugned judgment and order. Even it was the specific case of theappellant before the learned Single Judge that the order dated 26.11.1999passed by the Government cancelling the sale and ordering for re-auctionwas passed without hearing him. The same is also not dealt with by theGDivision Bench of the High Court.

8.8 Now, in so far as the submission on behalf of the respondentsthat the value of the property as on today is Rs. 15 crores approximatelyand therefore in the interest of the Deity/Temple, the impugned judgmentand order passed by the Division Bench of the High Court may not beinterfered with by this Court is concerned, it is to be noted that by theH

passage of time the value of the property is bound to increase. In thepresent case, subsequent to the auction and the sale, more than 23 yearshave passed, therefore, whatever was the value in the year 1998 wouldnot be same at a future date and that too, after 20-23 years. What isrequired to be considered is, at the relevant time, when the sale wasconducted, what was the value of the land/property. Learned SeniorAdvocate appearing on behalf of the respondents are not in a position topoint out any material on which it can be said that what was offered bythe appellant in the year 1998 was not a fair value. The base price wasRs.4,00,000/- per acre in the public auction, in which 45 personsparticipated and what was offered by the appellant, i.e., Rs. 13,01,000/-per acre was much higher than the base price. Under normalcircumstances, unless there are allegations of fraud and/or collusion and/or cartel and/or any other material irregularity or illegality, the highestoffer received in the public auction may be accepted as a fair value.Otherwise, there shall not be any sanctity of a public auction.

8.9 By the impugned judgment and order by ordering re-auction,the Division Bench of the High Court has permitted both, the appellantas well as the original writ petitioner to participate in the re-auction. It isto be noted that as such the original writ petitioner never participated inthe public auction, which was conducted/held on 24.06.1998. Therefore,by such a liberty being granted, the High Court has given one anotheropportunity to the original writ petitioner, who has died, and/or to hisheirs to participate in the re-auction, which liberty could not have beenreserved. As a result, the writ petition filed by the deceased petitionerShri L. Kantha Rao has ceased to be a “Public Interest Litigation” but itis a litigation with a private mala fide interest as the original writ petitionerhad no locus to file such a case, not being a participant in the auction andbeing unable to point out any irregularity or illegality in the auction.

8.10 Even the Division Bench of the High Court ought not to havepassed the impugned judgment and order in an appeal preferred by theTemple Trust for the simple reason that it was the Executive Officer ofthe Temple Trust, who had conducted the auction; it was the ExecutiveOfficer, who had obtained the Clearance Certificate from the IncomeTax department and who executed the sale deed in favour of the highestbidder – appellant herein. At no point of time till the judgment and orderwas passed by the learned Single Judge, the Temple Trust had challengedthe auction/sale on the ground that the amount realized was inadequate.

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ATherefore, the Temple Trust could not have challenged their own decision,which they had never challenged earlier.

8.11 Similarly, the appeal preferred by the heirs of Shri L. KanthaRao also ought not to have been entertained. Shri L. Kantha Rao neverparticipated in the auction. He never submitted any offer. The proceedingsBinitiated by Shri L. Kantha Rao was in the nature of a Public InterestLitigation and therefore being heir of Shri L. Kantha Rao, his wife couldnot have been permitted to prosecute further with the Public InterestLitigation.

8.12 Now, in so far as the decisions relied upon by the learnedCSenior Advocate appearing on behalf of the respondents referred tohereinabove are concerned, there cannot be any dispute to the propositionof law laid down by this Court in the aforesaid decisions. However, inthe facts and circumstances of the case narrated hereinabove, none ofthe decisions are of any assistance to the respondents. There was/is no material to show that the market value at the time of auction/sale inDfavour of the appellant was more than what was offered by the appellantas a highest bidder. The base price fixed was Rs. 4,00,000/- per acreagainst which the appellant being highest bidder offered Rs.13,01,000/-per acre. In all 45 persons participated in the auction, in which theappellant was found to be the highest bidder. There are no allegations ofEfraud and/or collusion. According to the appellant, the entire litigationstarted at the instance of Shri L. Kantha Rao when one Shri M.M.Gupta, brother-in-law of Shri L. Kantha Rao, who was the second highestbidder and who had purchased lands in the name of his family membersnear the auction land at Rs.7,50,000/- per acre on 28.07.1998 and22.09.1998. Therefore, it is observed that the proceedings initiated byFShri L. Kantha Rao as such cannot be said to be a Public InterestLitigation but is squarely a private interest litigation in the garb of espousinga public cause, which also did not exist in the instant case. Therefore, inthe facts and circumstances of the case, the Division Bench of the HighCourt ought not to have passed an order for re-auction of the propertyGafter a period of 23 years from the date of auction/sale to the detrimentof the rights of the appellant who was the successful bidder in the auctionsale. In this regard, we wish to rely on some of the observations madeby this Court in the case of State of Uttaranchal Vs. Balwant SinghChaufal and Ors., (2010) 3 SCC 402, cautioning the High Courts tobe more discerning / vigilant and/or cautious while entertaining writH

petitions apparently filed in public interest. In the said decision, it isobserved and held that: (1) The Courts must encourage genuine andbona fide PIL and effectively discourage and curb the PIL filed forextraneous considerations; (2) The Courts should prima facie verify thecredentials of the petitioner before entertaining a PIL; (3) The Courtsshould be prima facie satisfied regarding the correctness of the contentsof the petition before entertaining a PIL; (4) The Courts should be fullysatisfied that substantial public interest is involved before entertainingthe petition; (5) The Courts before entertaining the PIL should ensurethat the PIL is aimed at redressal of genuine public harm or public injury.The Court should also ensure that there is no personal gain, private motiveor oblique motive behind filing the public interest litigation; and (6) TheCourts should also ensure that the petitions filed by busybodies forextraneous and ulterior motives must be discouraged by imposingexemplary costs or by adopting similar novel methods to curb frivolouspetitions and the petitions filed for extraneous considerations.

8.13 The submission on behalf of the respondents that as on todaythe value of the property is Rs.15 crores and therefore, this Court maynot interfere with the impugned judgment and order passed by the DivisionBench of the High Court is concerned, the aforesaid cannot be accepted.After a period of 20-23 years, the prices of lands are bound to increase.The auction was conducted and held in the year 1998 and was sold infavour of the appellant then on payment of the full sale consideration asper the highest bid offered by him. Therefore, the valuation as on thedate of auction is the relevant consideration and not the value after somany years and over two decades after conducting the auction andconfirming the sale.

9. In view of the above and for the reasons stated above, theimpugned judgment and order passed by the Division Bench of the HighCourt is unsustainable and deserves to be quashed and set aside and isaccordingly quashed and set aside. The judgment and order passed bythe learned Single Judge in Writ Petition No.25407 of 1999 is herebyordered to be restored. However, as the appellant had agreed to depositthe balance amount of Rs.6,45,190/- being the balance of Rs. 30 lakhsand considering the fact that the respondent is a Temple Trust /Devasthanam, we direct the appellant to pay to the respondent – TempleTrust / Devasthanam a further sum of Rs. 15 lakhs (Rs.6,45,190/- plusinterest from 1998), to be paid by the appellant to the respondent –

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ATemple Trust /Devasthanam by demand draft /banker cheque within aperiod of two weeks from today and take all consequential steps pursuantto the auction/sale being confirmed in his favour including gettingregistration of the sale deed in his name and taking possession of theland in question in case the same have not yet taken place till date.

BPresent appeals are accordingly allowed to the aforesaid extent.However, in the facts and circumstances of the case, there shall be noorder as to costs.

Pending application(s), if any, also stands disposed of.

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Devika Gujral(Assisted by : Shevali Monga, LCRA)

Appeals allowed.

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