B.N. Kirpal, J.
(1) The petitioners are the auction-purchasers of land measuring 983 square yards out of Khasra Nos. 173. 174 and 175 of Sadhora Kalan, Subzi Mandi, Delhi and in this writ petition are seeking to challenge the order of the Rehabilitation Authorities whereby the said sale in their favor has been set-aside.
(2) The aforesaid property was held by the Custodian of Evacuee Properties under the provisions of Administration of Evacuee Property Act, 1950. as an evacuee property, Subsequently respondent No. 4, Aftab Ahmed Multani, claimed that he had 1/6th share in the said property and that share was not an evacuee property. The custodian accepted this plea. He held that 1/6th share of the aforesaid land on which land superstructure had been constructed, was not an evacuee property and the remaining 5/6th share, however, belonged to the Custodian as evacuee property.
(3) The said composite property, in which there were evacuee and non-evacuee interests, had to be dealt with, for the purposes of separation of the said interests, under the provisions of the Evacuee Interest (Separation) Act, 1951 (hereinafter referred to as 'the said Act'). The Competent Officer by- his order dated 22nd June, 1966, on information having been received from the Custodian, of Evacuee Property, also held that respondent No. 4 had l/6th share in the property. Steps were thereafter taken for the separation of the evacuee interest.
(4) The Competent Officer, at the first instance, called for a valuation report. The Valuation Officer valued the property at Rs. 1,96.600. On 26th April, 1967 respondent No. 4 made a statement before the Competent Officer accepting the aforesaid valuation. One of the modes of separation of interests provided under section 10(a)(iii) of the said Act is for the property being sold and the sale proceeds being distributed between the Custodian and the non-evacuee claimant in proportion to their shares. Rule 11B of the Evacuee Interest (Separation) Rules, 1951 (hereinafter referred to as 'the said Rules') also refers to the mode of separation of interest of evacuee. In the case where the evacuee's share is valued at more than Rs. 15,000, one of the modes of separation of interest which is prescribed is by the sale of the property and distribution of its proceeds. This is to be resorted to only if the property cannot be reasonably and conveniently partitioned or ransferred to the non-evacuee claimant on payment by him of the amount assessed in respect of the share of the evacuee in the property. In the prevent case it was found that neither was it possible to partition the property nor could the same be transferred to the non evacuee claimant and, thereforee, the only method by which the interests could be separated was by sale of the said property.
(5) The sale of composite property is to be carried out in the manner prescribed by Rule I Id of the said Rules. The said Rule. inter alia, provides for property being sold by public auction, inter alia, through an approved auctioneer. The Rule provides for proclamation of sale being prepared and the notice of the intended sale being given at least 15 days before the proposed sale. It is also provided that one copy of the notice is to be affixed on a conspicuous part of the property to be sold. Sub-Rule (10) of Rule 11D provides that every such sale ahall be subject to a reserve price being fixed by the Competent Officer at such rate which shall not be less than 90% of the value of the property. Sub-rule (II) provides for the occeptancc of the bids. Sub-clause (c) provides that if the highest bid which is received falls short of the reserve price, the Competent Officer may with the approval of the Custodian accept such bid notwithstanding that such bid is less than the reserve price. Sub-rule (12) provides for objections being filed to the sale. The relevant portion of the said sub-rule reads as under :
'(12)(a) Where a person desires that the sale of any property made under sub-rule (II) in which he has an interest should be set aside because of any material irregularity or fraud in the conduct of the sale he may make an application to that effect to the Competent Officer. (b) Every application for settng aside a sale under this rule shall be made within seven days from the date of acceptance of the bid. (c) If, after consideration of the facts alleged, the Competent Officer is satisfied that any material irregularity or fraud has been committed in the publication or the conduct of the sale he may make an order that the property be re-auctioned : Provided that no sale shall be set aside unless upon the facts proved, the Compettent Officer is satisfied that the application sustained substantial injury by reason of the material irregularity or fraud as the case may be.'
The only other provision which is relevant for the purpose of this case, is Rule 11E (3) (a) which, inter alia, provides the manner of the delivery of possession where any property has been sold and the same is in occupation of a tenant or an allottee. Sub-clause (b) of sub-rule (3) of Rule 11E further provides that an authorised occupant of the composite property shall not be liable to be evicted, excent on the grounds contained therein, by the purchaser for a period of two years from the date of sale or transfer.
(6) The market value of the land being Rs. 1,96 600, the reserve price of this was fixed at 90% i. e. at Rs. 1.76,400.00 . The property was first listed for auction on 24th October, 1968. No bid was received and the auction was postponed to 6th November, 1968. On that date the highest bid which was received was for Rs. 1,11.000. By order dated 29th May, 1969 this bid was not accepted, by the Competent Officer. The property was again listed for auction or. 14th November. 1969. The highest offer which was received was for Rs. 95,000/. This bid was also rejected by the Comptent Officer by his Older dated 9th April, 1970.
(7) In the Sunday Standard of 27th September, 1970 a public notice was printed which, into' 'alia. advertised the auction of the property in question on 9th Nov., 1970. At that auction the highest bid was of the petitioners. According to the bid sheet the terms and conditions' of the said were announced at the spot before the commencement of the auction. This shows that. as per the bid sheet, the sale was conducted at the spot. A number of persons participated in the auction and the petitioners gave the highest bid of Rs. 92 000.00 . This bid was provisionally accepted subject to the approval of the Competent Officer. As the higest bid was less than the reserve price the matter was referred by the Competent Officer to the Custodian. Vide his letter dated 20th November, 1970 the office of the Custodian gave its approval to the sale at the said price of Rs. 92,000.00 . It was observed that the property was in the occupation of the tenants who were paying nominal rent and it would not be possible to evict them and, thereforee, an outside bidder i.e. a person other than an occupant, would not be interested to invest in the property. It may here be mentioned that the petitioners are, along with a number of other persons, occupants of the portion of the building on the said land. By order dated 24th November, 1970 the Competent Officer accepted the said bid. A letter was issued asking the ouction-purchasers, namely the petitioners to deposit the balance amount. The balance purchase, price of Rs. 82 500 was deposited by the petitioners vide a challan dated 8-12-70. By order dated 19th December. 1970 the Competent Officer confirmed the bid and directed that sale certificate be issued in favor of the petitioners. On 30th December, 1970 respondent No. 4, the non-evacuee claimant, filed an application before the Competent Officer. In the application it was, inter alia, state that as the aforesaid land had been auctioned the claimant was entitled to l/6th share of the sale proceeds which came to Rs. 15,333. Prayer was made by respondent No. 4 that the aforesaid amount should be paid to him by the Competent Officer.
(8) On 1st March, 1971 respondents 5 to 8 filed objections before the Competent Officer. These objections were filed under Rule IID(12)(a) of the said Rules. There were four obiectors. It was contended by them in the objections' that the objectors were entitled to transfer by allotment at the reserve price that portion of the building on the land in question which' was in their respective occupations. It was also stated that the bid of Rs, 92,000 had been accepted on fraudulent representation having been made by the purchasers and the Custodian's staff who were in league with each other. It was also contended that the property has been sold at a price less than the reserve price and further the sale was fraudulent and there were also material irregularities as the sale was not held at the spot and it was further contended that a fictitious bid list had been prepared in favor of the petitioners herein. It was also contended that the objectors had suffered substantial and irreparable injury by having been deprived of their right to purchase the property at a figure higher than what it had been transferred for. Being conscious of the fact that the objections had to be filed within the period of limitation, it was contendeded that the objectors came to know of the confirmation of sale only on Saturday, the 27th February, 1971 from the petitioners rerein and, thereforee, taking the date of confirmation of the sale to be from the date of the knowledge of the objectors the objections were stated to be within limitation.
(9) The aforesaid objections were filed before the Competent Officer on 1st March. 1971. On the said objections the Competent Officer noted as follows :
(10) 'THE objections are belated, hence filed'. Against the said rejection an appeal was filed. The aforesaid appeal was heard and decided by Shri G. C. Mogha, Appellate Officer on, 18th January, 1972. It was held by the Appellate Officer that the objections filed by the objectors had been dismissed by the Competent .Officer without the objectors' being given aa opportunity of being heard. On this ground it was observed thatthe order of the Competent Officer was improper and liable to be set-aside. It was contended by the petitioners-herein that the objectors had no locus standi to file any objections as no substantial injury has been suffered by them by reason of any material irregularity or fraud. No finding was given by the Appellate Officer with regard to this contention. It was merely noted that with regard to the allegations made by the objectors the Competent Officer had not given any finding and nothing could be said about the said allegations made by the objectors at this stage. The Appellate Officer, however, took note of an application dated 26th October, 1971 which was presented before him. In the said application it was stated by the objectois that they were ready to give an initial bid of Rs. 1,20,000 and were ready to deposit 1/5th of their initial offer if they were given 30 days' time to deposit. The validity of this offer was contested by the petitioners herein. It was observed by the Appellate Officer that such offers were not to be entertained because they lead to mar the sanctity of public auctions. The Appellate Officer nevertheless observed as follows :
'HOWEVER,there are allegations of fraud in the conduct of the sale and the highest bid received if much below the reservice price, there is' some justification to entertain such an offer which in itself gives a higher start of Rs. 28,000.'
With the aforesaid observations the Appelate Officer set aside the sale in favor of the petitioners-herein and directed that the property be put to auction with a starting bid of Rs. 1,20,000 provided that l/5th;of the said amount was deposited by the objectors within one month with the Competent Officer along with the sale expenses. It was further observed that if this was not done by the objectiors within the sale in favor of the petitioners-herein would stand and would be finalised. The aforesaid deposit of 115th of Rs. 1,20.000 was not made within one month. An application was filed on 11th February, 1972 asidng for extension of time by two months. On 18th February, 1972 another application was filed asking for extension of time to deposit Rs. 24.000 by 19th Feb., 1972. On 19th February, 1972 the aforesaid application for extension of time was allowed ex parte, and without notice to the petitioners- herein, by the Appellate Officer, He extended the period of making the deposit by one day, as Rs. 24,000 had been deposited within that time.
(11) The present writ petition has now been filed by the auction purchasers' challenging the aforesaid order dated 18th January, 1972 passed by the Appellate Officer whereby the sale in their favor had been setaside. The only question winch arises for consideration in this petition is whether the Appellate Office' was justified in settingaside 'he sale at the instance of the objectors'.
(12) From the facts enumerated above it is clear that, admittedly, the objections were filed beyond the period of limitation prescribed by the Rules. These objections were rejected by the Competent Officer, possibly without giving a hearing to the objectors, on the ground that they had been filed beyond time. The Appellate Officer found that the objections' had been rejected without affording the objectors an opportunity of being heard. Ordinarily in view of such a finding, he could . have setaside the order and remanded the case to the Competent Officer for a fresh decision after affording the objectors an opportunity of being heard. The Appellate Officer did not choose this course. The Appellate Officer, also did not decide .the objections raised by the petitioners-herein to the effect that the objectors had no locus standi to file the objections and further that the objectors had not been able to show that .any substantial, injury has been sustained by them. Without giving a finding on any of these points and without hoping .that there had, been any material irregularity or fraud in the conduct of the sale and by entertaining a fresh bid of Rs. 1,20,000 .the sale in favor of the petitioners-herein.was setaside .by the Appellate Officer.
(13) Impugning the aforesaid order, it is firstly contended by the petitioners that the objectors, who are respondents in this petition, had no locus standi to file the objections. In this connection, it is submitted that the objectors did not have any interest ?n the property and as such they. were not entitled to file objections under rule 11D (12) (a). The said sub-rule entitles a person to file objections with regard to the sale of any property in-which he has an interest. The said sub-clause would mean that any interest in the property which is the subject matter of sale a person cannot raise an objection. It is admitted that the objectors are in occupation of the building which has been constructed on the land in question. The objectors cannot be regarded as complete Strangers to the property being put to sale. The objectors, to my mind, do have an interest in the property being put to sale. It may be that that interest, namely, the right to occupy the property may not be affected by the sale. The opening portion of subrule 12(a) is not concerned with the interest being affected by the sale. It gives a right to a person to. file objections if that person has an interest in the property. The interest referred to is with regard to the property and not with regard to the sale thereof. In my opinion, thereforee, the objectors who were in occupation of portion of the building on the land in question which was being sold would be regarded as persons who had an interest in the property being sold.
(14) Even though the objectors may have an interest in the property which was being sold their objections for setting-aside of the sale cannot succeed unless they prove that they suffered substantial injury as a result of any material irregularity or fraud being committed with regard to the conduct of the sale. In other words the objectors have to prove two things, (1) that there has been any material irregularity or fraud, and (2) as a result thereof they have suffered substantial injury. If any of these two conditions are not satisfied the sale cannot be setaside.
(15) In my opinion neither of these two conditions were satisfied in the present case. The irregularity or fraud which was alleged by the objectors in the objections was that the bid had been accepted at much below the reserve price and, secondly, the sale was not conducted at the spot. It cannot be denied that the reserve price, which was fixed at Rs. 1,76,400 was much more than the bid of the petitioners. As already noticed the property had been put to auction earlier. The first time the highest bid was of Rs. 1,11,000. After one year, when the property was put to auction again, the highest bid which was received was for Rs. 95,000. Thereafter when the property was put to auction after nearly one year the present bid of Rs. 92,000 was the highest The matter was referred by the Competent Officer to the Custodian for the approval of the Custodian of the bid under sub-rule 11(c) of rule 11D. The said sub-rule provides that where the highest bid received falls short of the reserve price then such bid may be accepted by the Competent Officer, notwithstanding that the bid is less than the reserve price, if approval is obtained of the Custodian. In the present case the approval of the Assistant Custodian was obtained for the acceptance of the bid of Rs. 92,000. The suggestion on behalf of the respondents objectors is that there was a fraud committed in the granting of this approval. Except for a bald allegation made in this behalf no evidence was placed by the respondents before any. of the authorities or even before this court which can possible lead one to the conclusion that the bid of Rs. 92,000 was wrongly; accepted by the authorities concerned. In the order of the Assistant Custodian giving the consent to the sale of the property at Rs. 92,000 it is stated that as the property is in the occupation of tenants it is not likely to fetch aprice better than Rs. 92,000, It is also noted that as on the date of the order, i.e. on 20th November, 19.70, no objections had been received to the-conduct of the sale and nor had any often been received from any one. In view of these circumstances the bid of. Rs. 92,000 was agreed to be accepted by the Assistant Custodian. It will be seen that the beneficiary with regard to 5/6th evacuee share in the property was the Custodian. He agreed to the bid of Rs. 92,000. As already noted the non-evacuee sharer also accepted the bid when he applied, for the money to be paid to him. In any case there is nothing on the record to show that the decision taken by the Asstt. Custodian was in any way bad in law. There is also no merit in the contention that the property was not put to sale at the spot. The bid sheet has been placed on the record. The auction was publicised by publication in Sunday Standard on 27th September. 1970. The bid sheet shows that the property was put to auction at the spot. I see no reason to disbelieve the statement in the said bid sheet. The earlier bids sheets also, when highest bids of Rs. 1,11,000 and Rs. 95,000 were received, have been placed on record. They also similarly show that the property was sold at the spot. The evidence on record, thereforee, clearly establishes that the sale was conducted at the spot and nowhere else.
(16) Even if it be assumed that there -was some irregularity or fraud committed in the conduct of the sale on the basis that the property was sold at a sum less than the reserve price can it be said. that the objectors had suffered substantial injury by reason of such a sale In my opinion the answer can only be in the negative. As far as the respondents-objectors are concerned they continue to remain in occupation of the premises by virtue of rule 11E(3). Sub-rule (3) (b) of the said rule further states that the occupant shall not be liable to be evicted by the purchaser for a period of two years from the date of the sale. The status of the 'occupant docs not, in effect, change as a result of the sale. Whether the sellers, namely, the evacuee and non-evacuee sharers have received less or more money can be of no concern to the occupant. In this connection reference usefully be made to a Division Bench decision of this Court reported as Union of India and others v. Sh. Rallia Ram. and others, 1981 P.L.R. 42. In the said case the property was sold by public auction. Objections were filed to the sale. The objector was an occupant of the property. The. Court held that there was a valid publication of the sale. Having come to this finding it was observed that if the objector did not attend the sale it did not concern him whether the sale was 'mock affair' or an organized affair. The. Court-further observed that 'how docs it matter to one who does .not go to the sale that the bidders join hands or outsiders do not attend to bid. Nor this ought to make any difference to him that the property fetched a low price because of' the rains, whether a down pour or a drizzle. Mere inadequacy of price, it is well established, is not a ground for setting-aside the sale'. The bid sheets for the earlier auctions further show that the objectors did not take part in the earlier auctions also, If the objectors do not take part in the auction, I find it difficult to comprehend that they can thereafter contend that they have suffered substantial injury. Injury can be suffered only by a person who took part in the sale, which sale was conducted irregularly or in a fraudulent manner, or would be suffered by one who was not given a reasonable opportunity of taking part in the bid. In the present case the advertisement regarding the auction had been published in the newspaper long before the date of auction. I have already held that the auction took place at the spot, as is evident from the bid sheet. Admittedly the respondents-objectors did not take part in the auction. Nowhere in the objections filed before the Competent Officer was it stated by the objectors that they were prevented from taking part in the auction. In such circumstances the objectors cannot be heard to plead that any irregularity or fraud in the sale of the property has resulted in a substantial injury to them.
(17) Another Division Bench authority of this Court in. the case of Rajinder Singh v. Chakravarti Malhotra and others, : AIR1981Delhi48 , dealing with Rule 92(3) of the Displaced Persons (Compensation and Rehabilitation) Rules, which is analogous to Rule 11D of the present Rules, has laid down that unless an intending bidder is willing to purchase the property at a higher bid it cannot be said that he suffered a substantial injury on his being denied an opportunity of bidding. It was further held in that case at page 51 as follows :
'THEproceedings of the auction are between the Government as the seller and the bidders at the auction as. the intending purchasers. The rest of the world which has not offered any bid at the auction are excluded and the auction thus became a proceeding between two sets of parties and they were not proceedings in rem.'
On this basis it was held that a person who had not taken part in the auction had no locus standi to challenge the sale. In the present case, in the objections filed before the Competent Officer, it was not stated that the objectors were ready and willing to bid at the auction which was held and that they were prevented from making such a bid. The only averments made in the objections in this regard are contained in paragraphs 11 and 12 which read as under:
'11.'That on the one hand, by the said acceptance of the bid in favor of the respondents Nos. 1 and 2 the Objectors have suffered a substantial and an irreparable injury, by having been. deprived of their right to purchase the property at a figure higher than at which it has been transferred to the respondents Nos. 1 and 2, and on the other hand, the evacuee pool has also suffered a fairly high loss by the transfer of the property at such a low value in favor of the respondents No?. 1 and 2. 12. That the Objectors are all poor people and not in a position to give a bid for the property higher than Rs. 92,000, but they and all the other occupiers can purchase their shares of the property at the price assessed by the honourable court.'
In neither of these two paragraphs- is it contended that the objectors wanted to take part in the auction. Para 12 clearly indicates that the objectors were poor person and were not in a position to give a bid of the property higher than Rs. 92,000. The reference by the objectors being deprived of their right to purchase, as made in para 11, is with regard to point of time after the bid had been accepted. It is evident that on the date of auction the objectors, admittedly, did not have enough money to give a bid for more than Rs. 92,000 and it is possibly for this reason that they did not take part in the auction. If this be so they have no right to challenge the sale which has been confirmed in. favor of the petitioners.
(18) Mr. Maheshwar Dayal. learned counsel for the objectors, strongly relied on Navalkha and Sons v. Sri Ramanya Das and others, : 3SCR1 and contended that it was open to the Appellate Officer to setaside the sale if he came to the conclusion that the sale price was not reasonable. The said decision can be. of no assistance to the respondents. The aforesaid Supreme Court decision was with regard to a sale conducted in violation of Rule 273 of the Companies (Court) Rules. It was held by the Supreme Court that the Court must be satisfied that the price was reasonable before confirming the sale. In the present case it is evident that the Custodian, who was one of the beneficiaries of the sale, accepted the bid and was satisfied that the price offered was reasonable. It was not for the Appellate Officer to have come to a different conclusion. The adequacy or inadequacy had to be considered not by the Appellate Officer but by the beneficiary, namely, the Custodian. If the Custodian was satisfied that the amount offered was reasonable and acceptable neither the Competent Officer nor, in appeal, the Appellate Officer could setaside the said decision. Further more, it is settled law that a sale will not be setaside merely because at a later date a higher offer may be received. The sale can be setaside only if there were material irregularities or fraud in the conduct of the sale. That is absent in the present case. Inadequacy or insufficient price is not a ground for the settingasied of a gal;. Furthermore, the respondents never took part in the auction and they are nobody to raise such an objection, as already held by Division Bench of this- Court in Rallia Ram's case. There is considerable force in the contention of the petitioners that there was inordinate delay in filing of the objections. In the objections, in order to explain the delay, it has been stated that 'the objectors are not aware of the exact date of confirmation of sale by this Honble Court, as they were not parties to the case, and came to know of it only on Saturday, the 27th February, . 1971 when the respondents Nos. 1 and 2 publicly stated that bid had been confirmed in their favor in the last week'. It was not the case of the objectors that they were not aware of the auction having been conducted. The contention of the respondents- objectors was that they were not aware of the date of Confirmation of sale. If the respondents-objectors were aware of the fact that the auction had taken place then it was their duty to have found out as to when the sale was confirmed, if they wanted to file any objections. In the present case the auction was held on 9th November, 1970 and the sale was confirmed on 19th December, 1970. The objections were filed only on 1st March. 1971. The Explanationn of the respondents-objectors that they came to know of the confirmation of sale only on 27th February, 1971, even if that Explanationn is correct, cannot be a valid ground for condoning the delay.
(19) It was contended by the learned counse1 for the respondents- objectors that if there was any infirmity in the Appellate Officer's order the said order should be setaside and the case remanded to the Appellate Officer who had not given any finding on the question of fraud etc. which had been alleged. In view of the fact that the disputes between the parties are very old and also in view of the fact that the Appellate Officer had setaside the sale, I do not consider it proper to remand the case to him at this late stage. The allegations, as made by the respondents- objectors with regard to fraud etc., are on record and have been discussed by me. I have found as a fact that there is nothing on the record which shows that -any irregularity or fraud in the conduct of the sale took place. The sale had been properly advertised, and no grievance of this was made in the objections, and the auction was held at the spot as is evident from the bid sheet. Shri R. K. Anand, learned counsel appearing on behalf of respondents 1 to 3, placed before me the original file of the Department and that also shows that, as per the bid sheet, the property was auctioned at the spot and that there was no other infirmity in the conduct of the sale. Furthermore, as the respondents- objectors did not take part in the auction, it cannot be said that they have suffered any substantial injury by reason of any alleged material irregularity or fraud having been committed. For this reason also it is not necessary to send the case back to the Appellate Officer.
(20) For the aforesaid reasons the writ petition is allowed and the orders of the Appellate Officer dated 18th January, 1972 and 19th February, 1972 are quashed. The petitioner would be entitled to costs from respondents objectors Counsel's fee Rs. 500.