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Laduram Hajarimal Vs. Ramrao Jankiram Kadam and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil;Property
CourtMumbai High Court
Decided On
Case NumberFirst Appeal Nos. 142 and 211 of 1947
Judge
Reported inAIR1950Bom195; (1950)52BOMLR263
ActsBombay Land Revenue Code, 1879 - Sections 150, 155 and 214 - Rules 128 and 129; Bombay Abkari Act, 1878 - Sections 34
AppellantLaduram Hajarimal
RespondentRamrao Jankiram Kadam and anr.
Appellant AdvocateB.N. Gokhale, Adv.
Respondent AdvocateR.B. Kotwal and ;G.M. Joshi, Advs. for Respondent 1 and ;C.K. Daphatary, Adv. General and ;B.G. Thakor, Assistant Government Pleader for Respondent 2
Excerpt:
.....abkari act (bom. v of 1878), section 34--abkan' contractor--default in payment of government dues--sale by government of defaulter's property at auction--government purchasing property at nominal bid of re. 1--whether such sale valid.;the plaintiff, an abkari contractor, having failed to pay the government dues, the government gave a notice to him, on august 5, 1938, that they would recover the amount by an auction sale of his lands on a nominal bid, and that he should be present and arrange to bid at the auction sale or to bring the amount due by him. on the same day a proclamation was issued which stated that if the amount due by government was not obtained, the defaulter's property would be sold on a nominal bid of re. 1. no reserve bid was fixed. at the auction sale, on september 21,..........of the defaulter because the only credit that the defaulter gets is re. 1 which is realised at the sale. government may sell that land to someone else, as they have done in this case, they may realise a fairly large amount, and yet no credit is given to the defaulter in respect of the amount realised by government. therefore, government are really taking to themselves the rights which are even higher than in a case of forfeiture where under section 153, land revenue code if a land is forfeited and then sold by the collector, the sale proceeds are to be credited to the defaulter. therefore, government without forfeiting the land, yet do not give credit to the defaulter when they sell his and recover the sale proceeds of that land. in this very case there was a sale prior to the sale we.....
Judgment:

Chagla, C.J.

1. The question referred to this Full Bench is whether when at a sale of land held under Section 155, Bombay Land Revenue Code, the land is purchased by Government on a nominal bid, that sale is, therefore, void or is voidable.

2. The two appellants are purchasers from Government, who having purchased lands of a defaulter in payment of Abkari dues at a nominal bid of Re. 1, sold these lands to the appellants, and the sale is being challenged by the defaulter as being void. The plaintiff in the suit was an Abkari contractor and he failed to pay the Government dues amounting to about Rs. 9,000. Under Section 34, Abkari Act, all dues under the Act can be recovered by the Government as if they were arrears of land revenue. The mode of recovery under the Land Revenue Code is laid down in Section 150, and under Section 155, the Collector is given the right of selling the property of the defaulter. The rules framed Under Section 214, Land Revenue Code deal with the sales to be held Under Section 155, and R. 123 provides. 'Where any land or other property is sold by public auction, an upset price shall, if the Collector thinks fit, be placed thereon.' And Rule 129 provides:

'Every sale by auction under these rules, or in pursuance of any of the provisions of the Code, shall be conducted, so Far as may be, in accordance with SECTIONS 165, 166, 170 to 177 both inclusive and 180.'

And when we turn to these sections, we find that Section 165 deals with a proclamation; Section 167 provides that sales shall be made by auction by such persons as the Collector may direct; Section 172 deals with the deposit that is to be made by the bidder at the auction; Section 178 deals with the mode of setting aside the sale for material irregularity, or mistake, or fraud; and Section 179 deals with the confirmation of the sale if no application has been made to set aside the sale or the application has been dismissed and also if the Collector does not think that that particular sale ought to be set aside.

3. Now, in this case, a notice was given by Government to the defaulter on 5th August 1938, that the Government would recover the amount by an auction sale on a nominal bid, and he was further told that he should be present and arrange to bid at the auction sale or to bring the money, i. e., the amount due by him. On the same day the proclamation was issued and the proclamation also states that if the amount due to Government is not obtained, all the property of the defaulter as a last resort shall be sold on a nominal bid of Re. l. The auction sale was held on 21st September 1938, and as no bidders were forthcoming, the lands were purchased by Government for Re. l. It is this sale that is being challenged by the defaulter as being a nullity, and in support of his contention he relies on a decision of a Division Bench of this Court reported in Tumbu Dhansing v. Province of Bombay : AIR1947Bom403 , There also, lands belonging to the defaulter were sold, they were purchased at Re. 1, and the Court came to the conclusion that the sale was a nullity. There are two important distinguishing features between the facts found in that case and the facts as found in the case before us. In that case there was a reserve bid fixed and the selling of the property at Re. 1 was in total disregard of the reserve bid; and the second distinguishing feature was that in that case no notice was given to the defaulter that Government proposed to sell his land at a bid of Re. l. The question that we have to consider here is whether, although Government gave notice to the defaulter that his property was liable to be sold at Re, l and although no reserve bid was fixed by the Collector as he was not bound to do, the mere fact that Government purchased the property at Re. l made the sale a nullity. We have not been referred to any provision of the law which precludes Government from purchasing the property of the defaulter. But the Advocate General concedes that if Government wished to purchase his property and to purchase it at so small a price as Re. 1, it would be incumbent upon Government to give notice to the defaulter of their intention to do so, and the Advocate General also concedes that the Government could only do so provided no reserve bid was fixed by the Collector. If a reserve bid was fixed, then the Government could not purchase the property at any price less than the reserve bid. Under these circumstances, it is difficult for us to understand how we can say that the sale in this particular case was a nullity. The matter was referred to the Full Bench by Weston and Shah JJ. because they felt a doubt as to whether Tumbu Dhan-singh v. Province of Bombay 49 Bom. L. R. 209 : , was righly decided. In our opinion, it is unnecessary to consider that question because we are upholding the sale in this case on grounds which are entirely different from the grounds which obtained in the case before Sir Leonard Stone and Div A. I. R 1947 Bom. 408atia J. and which led that Bench to come to the conclusion that the sale was a nullity.

4. But while upholding the sale in this case, we should like to point out to Government that the practice followed by them is by no means fair or equitable. We appreciate the position of Government that when bidders are not forthcoming they have to realise their dues and they have to sell the property. But we do not understand why the Government are obliged to offer a price which is wholly unreasonable and which is in no way commensurate with the real value of the property. Government ought to know what is fair and reasonable price of the property which they are purchasing and there is no reason why they should not offer at the auction a reasonable price. The importance of this will be apparent from the point of view of the defaulter because the only credit that the defaulter gets is Re. 1 which is realised at the sale. Government may sell that land to someone else, as they have done in this case, they may realise a fairly large amount, and yet no credit is given to the defaulter in respect of the amount realised by Government. Therefore, Government are really taking to themselves the rights which are even higher than in a case of forfeiture where Under Section 153, Land Revenue Code if a land is forfeited and then sold by the Collector, the sale proceeds are to be credited to the defaulter. Therefore, Government without forfeiting the land, yet do not give credit to the defaulter when they sell his and recover the sale proceeds of that land. In this very case there was a sale prior to the sale we are considering in this matter, there was a subsequent sale and three different lots of the defaulter were sold, and yet as far as the defaulter is concerned the only credit he has gotis Rs. 3 and his liability to the Government continues unimpaired. Whatever the law may be, it strikes us that on the face of it this procedure followed by Government is extremely inequitable.

5. In this view of the case it is unnecessary to consider whether a sale which is made with-out intimation being given to the defaulter or which is in disregard of a reserve bid, is void or voidable. Therefore, the only answer we propose to give to the question referred to this Full Bench is that the sale in the particular case we are dealing with is a good sale.


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