# Jai Narain Singh v. Board Of Revenue Lko. & Anr

- **Citation:** (2026) 3 ILRA 661
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2026-03-19
- **Case number:** Writ C No. 1001887 of 2006
- **Bench:** Irshad Ali
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/jai-narain-singh-v-board-of-revenue-lko-anr-54791
- **Pages:** 15

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3 All. Jai Narain Singh Vs. Board of Revenue Lko. & Anr.
661
15. In the opinion of this Court, the registration of sale deed was executed in pursuance to
an order passed in appeal. Registration of the sale deed was not executed in a independent capacity,
therefore, the order passed by the Appellate Court and registration of sale deed is dependent upon
the order of the Appellate Court.

16. Considering the above facts and circumstances of the case, the Sub-Registrar or the
Appellate Authority under the Act though works as public servant but does not discharge duties as
presiding officer of a Court. Accordingly, the limitation Act shall not be applicable. The impugned
order suffers from lack of jurisdiction. Hence the writ petition deserves to be allowed.

17. In view of the above, writ in the nature of Certiorari is issued quashing the impugned
order dated 15.12.2014 (Annexure No.6 to the writ petition) passed by the opposite party no.1 with
all consequential actions.

18. In the result, this writ petition succeeds and is hereby allowed.
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(2026) 3 ILRA 661
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 19.03.2026

BEFORE

THE HON'BLE IRSHAD ALI, J.

Writ C No. 1001887 of 2006

Jai Narain Singh ...Petitioner
Versus
Board Of Revenue Lko. & Anr. ...Respondents

Issue for consideration
The case concerns a dispute arising out of auction proceedings initiated for recovery of bank dues where the
petitioner became the highest bidder and obtained a confirmed sale certificate. The Commissioner/Board of
Revenue set aside the sale on grounds of low price on lack of publicity, without proof of fraud or substantial
injury.

Headnotes
A. Constitution of India,1950-Article 226-U.P. Zamindari Abolition and Land Reforms Rules 1952Rules 285-I & 285-K-Once an auction sale is duly confirmed and sale certificate issued, the
rights of auction purchaser stand crystallized and can be set aside only on limited grounds such
as fraud or material irregularity in the conduct or publication of sale causing substantial injuryMere inadequacy of price or alleged lack of wide publicity is not sufficient to annul a confirmed
sale-Revisional authorities cannot exercise jurisdicition beyond statutory limits to unsettle such
sale on conjectural grounds-Order setting aside the sale held illegal and perverse, auction sale
restored.(Para 14 to 21)
Held
662 INDIAN LAW REPORTS ALLAHABAD SERIES
The court held that the Commissioner/Board of Revenue exceeded jurisdiction in setting aside confirmed sale
on grounds not contemplated under Rules. Rights of bona fide auction purchaser protected upon confirmation
of sale, such rights cannot be lightly interfered with except in exceptional cases like fraud or collusion. (E-6)

Case law Cited
Ashwin S. Mehta & Anr. Vs Custodian & Ors (2006) 2 Supreme Court Cases 385, M/s Kayjay Industries (P)
Ltd. Vs M/s Asnew Drums (P) Ltd. & Ors AIR (1974) Supreme Court 1331 (V 61 C 252), Valji Khimji &
Company Vs Official Liquidator of Hindustan Nitro Product (Gujarat) Ltd & Ors; (2008) 9 Supreme Court Cases
299, Smt. Shanti Devi Vs State of U.P. & Ors; C.A. No. 6240 of 1997, September 9, 1997., Divya
Manufacturing Co.Tirupati Wool Mills Shr. Shangharsha Vs. Union Bank of India, The Official Liquidator & Ors
(2000) AIR SCW 2465, Kunwar Mohan Swarup Vs State of U.P. & Ors ; Writ No. 2391 of 1959 September 11,
1964., Vindhayachal Vs Commissioner, Azamgarh Division, Azamgarh & Ors(2009) 108 RD 63, Mohammad
Rafiq Vs Board of Revenue, Lucknow & Ors (2012) 116 RD 483, Ramesh Kumar & Ors Vs Collector, Gonda &
Ors (2004) 97 RD 628, M/s Jaswant Sugar Mills Ltd. Maliyana, Meerut Vs Commissioner, Meerut Division,
Meerut & Ors (2001) 92 RD 478, State of U.P. & Ors Vs M/s Swadeshi Polytex Ltd. & Ors (2009) 107 RD 22referred to.

List of Acts/Rules
Constitution of India, 1950, U.P. Zamindari Abolition and Land Reforms Rules 1952. U.P. Zamindari Abolition
and Land Reforms Act, 1950.

List of Keywords
Auction sale, Confirmed sale, Sale certificate, Revenue recovery proceedings, bank dues, Setting aside of sale,
Inadequacy of price, Lack of wide publicity, Material irregularity, Substantial injury, Fraud or collusion, Bona
fide purchaser, Board of revenue, Commissioner, U.P. Zamindari Abolition and Land Reforms Rules 1952.

Case Arising from
Civil jurisdiction: WRIT-C No.- 1001887 of 2006
 Jai Narain Singh Vs. Board Of Revenue Lucknow & Ors.
From the judgment and order dated 19.03.2026 of the High Court of judicature at Allahabad.

Appearances for Parties
Advs. for Petitioner(s)
Mohd. Arif Khan, Devendra K. Srivastava, Mohd. Aslam Khan
Advs. for Respondent(s)
C.S.C., Manish Kumar Singh, Rayees Ahmad Khan, Satyendra Singh Rana,Tushar Gupta

(Delivered by Hon'ble Irshad Ali, J.)

1. Heard Sri Mohd. Arif Khan, learned Senior Counsel for the petitioner assisted by Sri Mohd.
Aslam Khan, learned counsel for the petitioner, Sri Manish Kumar Singh, learned counsel for legal
heirs of respondent Nos.4 to 6 and Sri Devesh Mishra, learned Additional CSC for respondent -
State.

2. By means of present writ petition the petitioner is challenging the order dated
29.03.2006 annexured 10 to the writ petition passed by respondent No.1 upholding the order dated
04.04.2001 annexure 9 to the writ petition passed by respondent No.2.

3. Factual matrix of the case is that Shyam Narain - grand father of respondent Nos.4 to 6
took a loan from State Bank of India which was not repaid with the result recovery certificate was
3 All. Jai Narain Singh Vs. Board of Revenue Lko. & Anr.
663
issued on 09.08.1985 by the bank to the Collector for realization of the amount. Writ of citation
moved and being aggrieved writ petition No.10002/88 was filed permitting the borrower to pay the
dues in installments but the amount was not deposited.

4. Sale proclamations issued and served on the borrower and after due publicity auction
could not held. Again sale proclamation issued but this time also sale could not be held. On
01.12.1990 sale proclamation issued and respondent Nos.4 to 6 made application to the Sub
Divisional Officer seeking time to deposit. Sale took place and on deposit of the amount, sale
certificate issued in favour of the petitioner. Objections filed by the grand father of respondent No.4
to 6.

5. On 20.12.1992 respondent No.2 decided the objections and remanded the matter
whereupon grand father of respondent Nos.4 to 6 filed a revision which was decided by respondent
No.1 vide order dated 01.12.1994. On 02.05.1995, respondent No.2 dismissed the objections. On
31.10.1995 restoration application was dismissed. On 13.06.1996, revision filed by respondent
Nos.4 to 6 dismissed by respondent No.1. On 23.11.2000 writ petition No.1688 (M/S) of 1996 was
filed by respondent No.4 to 6 was allowed and case was remanded to respondent No.2

6. On 04.04.2001 objections were allowed by respondent No.2 and sale was set aside. On
29.03.2006 a revision filed by the petitioner was dismissed by respondent No.1. On 02.02.2001
respondent Nos.4 to 6 sold the earth to brickklin owner and on the application made by the
petitioner respondent No.2 passed an order of injunction / Stay. On 26.05.1995, sale certificate was
issued to the petitioner. Name of the petitioner was mutated in the revenue records.

7. Submission of learned Senior Counsel for the petitioner is that once the sale was
affirmed, the Commissioner and Board of Revenue was having no jurisdiction to set aside the
confirmation of sale. He submitted that on the ground of inadequacy of amount to be deposited in
sale confirmation, cannot be a ground for setting aside the sale confirmation.

8. He next submitted that the order passed by the Commissioner and Board of Revenue are
wholly without jurisdiction as it is not amenable to pass order on the ground which was not
available to the petitioner. He submitted that in the impugned order finding has been recorded that
there is no wide circulation of the auction sale, otherwise the price fixed would have been raised in
case wide circulation was made. He submitted that this finding is perverse and without any basis.
The petitioner being highest bidder was granted sale and it was confirmed. On this ground alone,
the right of the petitioner cannot be curtailed.

9. He further submitted that the order passed by the Commissioner as well as Board of
Revenue is wholly perverse in nature and illegal and finding recorded in this regard that the order
passed on inadequacy of price fixed, the order is illegal in view of fact that in exercise of power in
the revision, the Commissioner cannot set aside the auction sale which has been confirmed on the
ground of inadequacy of price of said property. Rule 285 K provides that auction sale can only be
cancelled on the ground of fraud and reference was also made to Rule 285(i) which prescribes that
at any time within thirty days from the date of the sale, application may be made to the
Commissioner to set aside the sale on the ground of some material irregularity or mistake in
664 INDIAN LAW REPORTS ALLAHABAD SERIES
publishing or conducting it; but no sale shall be set aside on such ground unless the applicant
proves to the satisfaction of the Commissioner that he has sustained substantial injury by reason of
such irregularity or mistake. For ready reference, Rule 285A, Rule 285 (I ), 285(K) and 285 of U.P.
Zamindari Abolition and Land Reforms Rules, 1952 are being quoted below:

 "Rule 285A : Every sale under Sections 284 and 286 shall be made either by the
Collector in person or by an Assistant Collector specially appointed by him in this behalf. No such
sale shall take place on a Sunday or other gazetted holiday or until after the expiration of at least
thirty days from the date on which the proclamation under Rule 282 was issued.

 The Collector may from time to time postpone the sale.

 Rule 285I : (i) At any time within thirty days from the date of the sale, application may be
made to the Commissioner to set aside the sale on the ground of some material irregularity or
mistake in publishing or conducting it; but no sale shall be set aside on such ground unless the
applicant proves to the satisfaction of the Commissioner that he has sustained substantial injury by
reason of such irregularity or mistake.

 (ii) [* * *]

 (iii) The order of the Commissioner passed under this rule shall be final.

 Rule 285K : If no application under Rule 215-1 is made within the time allowed
therefore, all claims on the ground of irregularity or mistake in publishing or conducting the sale
shall be barred :

 Provided that nothing contained in this rule shall bar the institution of a suit in the Civil
Court for the purpose of setting aside a sale on the ground of fraud.

 Rule 285 : Whenever any house or other building situated within the limits of a military
cantonment or station is sold, the Collector shall as soon as the sale has been confirmed, forward
to the Commanding Officer of such cantonment or station for his information or for record in the
brigade or other proper office, a written notice that such sale, has taken place and such notice
shall contain full particulars of the property sold and of the name and address of the purchaser."

 10. In support of his submissions, learned Senior Counsel for the petitioner placed
reliance upon following judgments:

 a) Ashwin S. Mehta and another Vs. Custodian and others; (2006) 2 Supreme Court
Cases 385.

 b) M/s. Kayjay Industries (P) Ltd. Vs. M/s. Asnew Drums (P) Ltd. and others; AIR
1974 Supreme Court 1331 (V 61 C 252)
3 All. Jai Narain Singh Vs. Board of Revenue Lko. & Anr.
665
 c) Valji Khimji and Company Vs. Official Liquidator of Hindustan Nitro Product
(Gujarat) Limited and others; (2008) 9 Supreme Court Cases 299.

10. On the other hand, learned counsel for respondent Nos.4 to 6 by placing certain
judgments argued that on the ground of non publication of sale auction in widely newspapers, the
sale is illegal. In support of his submissions, he placed reliance upon following judgments:

 a) Smt. Shanti Devi Vs. State of U.P. and others; C.A. No.6240 of 1997, decided on
September 9, 1997.

 b) Divya Manufacturing Co. Tirupati Wool Mills Shr. Shangharsha Vs. Union Bank
of India, The Official Liquidator and others; 2000 AIR SCW 2465

 c) Kunwar Mohan Swarup Vs. State of U.P. and others; Writ No.2391 of 1959
decided on September 11, 1964

 d) Vindhayachal vs. Commissioner, Azamgarh Division, Azamgarh and others; 2009
(108) RD 63

 e) Mohammad Rafiq Vs. Board of Revenue, Lucknow and others; 2012 (116) RD
483

 f) Ramesh Kumar and others Vs. Collector, Gonda and others; 2004 (97) RD 628

 g) M/s Jaswant Sugar Mills Ltd. Maliyana, Meerut Vs. Commissioner, Meerut
Division, Meerut and others; 2001 (92) RD 478

 h) State of U.P. and others Vs. M/s Swadeshi Polytex Ltd. and others; 2009 (107) RD
22

11. He next submitted that the Commissioner as well as Board of Revenue have recorded
finding that the sale was confirmed without making adequate circulation in the news paper. The
finding has also been recorded that in case adequate circulation was made, then certain persons
would have applied giving high charges of the land in dispute. He submitted that the order of
Commissioner and Board of Revenue do not suffer from any infirmity or illegality and are just and
valid.

12. I have considered the submissions advanced by learned counsel for the parties and
perused the material on record as well as law reports cited by learned counsel for the parties.

13. To resolve the controversy involved in the matter, relevant portion of the judgments
relied upon by learned counsel for the parties are being quoted below:

 Judgments relied upon by learned Senior Counsel for the petitioner:
666 INDIAN LAW REPORTS ALLAHABAD SERIES
 a) Ashwin S. Mehta and another (Supra):

 "70. In that view of the matter, evidently, creation of any third-party interest is no longer
in dispute nor the same is subject to any order of this Court. In any event, ordinarily, a bona fide
purchaser for value in an auction-sale is treated differently than a decree-holder purchasing such
properties. In the former event, even if such a decree is set aside, the interest of the bona fide
purchaser in an auction-sale is saved. (See Nawab Zain-ul-Abdin Khan v. Mohd. Asghar Ali Khan
[(1887) 15 IA 12] .) The said decision has been affirmed by this Court in Gurjoginder Singh v.
Jaswant Kaur [(1994) 2 SCC

 71. In Janak Raj v. Gurdial Singh [(1967) 2 SCR 77 : AIR 1967 SC 608] this Court
confirmed a sale in favour of the appellant therein who was a stranger to the suit being the auctionpurchaser of the judgment-debtor's immovable property in execution of an ex parte money decree
in terms of Order 21 Rule 92, Civil Procedure Code. Despite the fact that ordinarily a sale can be
set aside only under Rules 89, 90 and 91 of Order 21, it was opined that the Court is bound to
confirm the sale and direct the grant of a certificate vesting the title in the purchaser as from the
date of sale when no application in terms of Rule 92 was made or when such application was made
and disallowed and in support thereof Zain-ul-Abdin Khan [(1887) 15 IA 12] and various other
decisions were referred to."

 b) M/s. Kayjay Industries (P) Ltd. (Supra):

 "6. We now come closer to the finale. On August 28, 1969 a sale was held and the highest
bids for land and buildings went up to Rs 5.70 lakhs and for machinery to Rs 5.40 lakhs. It must be
noted that at this time the Judge, who was then holding the sale, was not the presiding officer but
another judge, since the former was on leave. It was felt by the latter that it would be better to have
some valuation report to serve as a basis and to guide the court in concluding whether a grossly
unjust offer was being fobbed off on it. The Receiver who was in charge requested both the
judgment debtor and the Corporation to get valuation reports from competent valuers and the sale
itself stood adjourned. The judgment debtor did not bother to have the properties valued but the
Corporation secured the services of a competent valuer, Corona Electricals of Bombay, who
estimated the land and buildings to be worth Rs 10,46,096 and the machinery Rs 7,02,000. The
total value thus arrived at was Rs 17,48,096. In the light of various facts, including the absence of
an alternative evaluation report from the judgment debtor's side, these Corona figures were rightly
treated by both Courts as tentatively sound. The auction held on September 3, 1969, however,
fetched the highest offer for the two lots of only Rs 5,65,000 and Rs 5,00,000 respectively, in the
latter case Rs 40,000 less than on the previous occasion. After considerable persuasion by the
Judge, the appellant agreed to raise the offer for both lots together to a gross sum of Rs 11,50,000,
and making an intelligent guess on the given circumstances the Court approved the sale, which is
now being challenged in these proceedings as an insensible and injurious sanctioning of the sale,
ignoring the hopeful prospects of higher prices had the auction been adjourned and better and
fuller publicity given.

 7. Certain salient facts may be highlighted in this context. A court sale is a forced sale
and, notwithstanding the competitive element of a public auction, the best price is not often
3 All. Jai Narain Singh Vs. Board of Revenue Lko. & Anr.
667
forthcoming. The judge must make a certain margin for this factor. A valuer's report, good as a
basis, is not as good as an actual offer and variations within limits between such an estimate,
however careful, and real bids by seasoned businessmen before the auctioneer are quite on the
cards. More so, when the subject-matter is a specialised industrial plant, which has been out of
commission for a few years, as in this case, and buyers for cash are bound to be limited. The
brooding fear of something out of the imported machinery going out of gear, the vague
apprehensions of possible claims by the Dena Bank which had a huge claim and was not a party,
and the litigious sequel at the judgment-debtor's instance, have ?scare? value in inhibiting
intending buyers from coming forward with the best offers. Businessmen make uncanny
calculations before striking a bargain and that circumstance must enter the judicial verdict before
deciding whether a better price could be had by a postponement of the sale. Indeed, in the present
case, the executing Court had admittedly declined to affirm the highest bids made on May 16, 1969,
June 5, 1969 and August 28, 1969, its anxiety to secure a better price being the main reason. If
Court sales are too frequently adjourned with a view to obtaining a still higher price it may prove a
self-defeating exercise, for industrialists will lose faith in the actual sale taking place and may not
care to travel up to the place of auction being uncertain that the sale would at all go through. The
judgment-debtor's plea for postponement in the expectation of a higher price in the future may
strain the credibility of the Court sale itself and may yield diminishing returns as was proved in
this very case.

 8. A material circumstance which weakens the first respondent's case is that on both the
dates ? August 28 and September 3 ? Shri B. Paul, director of the judgment-debtor company was
present at the auction and never voiced any grievance about the conduct of the sale or asked for its
postponement on the ground that better price may be obtained on a later date. Equally significant
is the fact sworn to by the authorised officer of the Corporation that ?the valuation of the total
assets? was around Rs 15 lakhs ?when the application was made by the petitioner Corporation for
sale of the assets under Section 31 of the State Financial Corporation Act? and ?that the said
estimate was given on the basis of the information supplied by the applicants at the time of the
disbursal of the loan?. The Dena Bank, the second charge holder with considerable stakes in the
sale, was present on the August and September auctions through a senior representative and did
not think it necessary to raise any objection regarding the conduct of the sale or the price tendered.
Nor do the proceedings disclose an unfair undervalue on account of the absence of effective
bidders or inertness of the Judge. On both occasions there were about 30 or 40 bidders. The
judgment-debtor, the second charge holder, the Indian Oil Corporation, and other leading
industrial concerns interested in the drum industry were represented. All the bidders on the 28th
August were told of the next auction date and most of them participated passively or actively in the
September sale. On both the sale dates the judges (they were different on the two days) were keen
on maximising the price. A total of Rs 11,10,000 was the highest bid in late August and in early
September the best offer for lot No. 2 sagged from Rs 5,40,000 to Rs 5,00,000. This downward
trend could have persisted if further postponements of sale had taken place and the judge did his
best to boost the total price to Rs 11.5 lakhs and finalised it, taking no chances by adjourning the
auction. The trend of today may be the silhouette of tomorrow and the reduced offer for lot No. 2
this time may well infect lot No. 1 next time. The Court did a good job taking a conspectus of the
circumstances and avoiding the ominous maybes of future auctions. Such are the broad facts to
which the law must be applied. Section 32(8) of the Act attracts the Code of Civil Procedure, as far
668 INDIAN LAW REPORTS ALLAHABAD SERIES
as practicable, in the realisation of the dues of the Corporation, and so it may be right to apply the
provisions of Order XXI Rule 90. In short, was there any material irregularity in the conduct of the
sale, and did it cause substantial injury to the debtor"

 9. The first respondent's Counsel, Shri Parekh, drew our attention to Condition 3 in the
present proclamation of sale which is as follows:

 "The highest bidders for the two lots shall be declared to be the purchasers of the
respective lots, provided always that he or they are legally qualified to bid, and provided that it
shall be in the discretion of the undersigned Receiver holding the sale to decline acceptance of the
highest bid for any lot when the price offered for any of the two lots appears so manifestly
inadequate as to make its acceptance inadvisable. The highest bid offered by any bidders for any of
the two lots shall be subject to the sanction and approval of the District Judge, Thana."

 Form 29 prescribed in Appendix E to the Code contains Condition 3 which is in like
terms The Court's activist obligation to exercise a discretion to make a fair sale out of a court
auction ? and avert a distress sale ? is underscored by this provision. In all public sales the
authority must protect the interests of the parties and the rule is stated by this Court in Neyalkha
and Sons v. Ramanya Das [(1969) 3 SCC 537 : (1970) 3 SCR 1] thus: (at p. 5)

 "The principles which should govern confirmation of sales are well established. Where
the acceptance of the offer by the Commissioners is subject to confirmation of the Court the offerer
does not by mere acceptance get any vested right in the property so that he may demand automatic
confirmation of his offer. The condition of confirmation by the Court operates as a safeguard
against the property being sold at inadequate price whether or not it is a consequence of any
irregularity or fraud in the conduct of the sale. In every case it is the duty of the Court to satisfy
itself that having regard to the market value of the property the price offered is reasonable. Unless
the Court is satisfied about the adequacy of the price the act of confirmation of the sale would not
be a proper exercise of judicial discretion."

 Be it by a receiver, commissioner, liquidator or court this principle must govern. This
proposition has been propounded in many ruling cited before us and summed up by the High
Courts. The expression ?material irregularity in the conduct of the sale? must be benignantly
construed to cover the climax act of the Court accepting the highest bid. Indeed, under the Civil
Procedure Code, it is the Court which conducts the sale and its duty to apply its mind to the
material factors bearing on the reasonableness of the price offered is part of the process of
obtaining a proper price in the course of the sale. Therefore, failure to apply its mind to this aspect
of the conduct of the sale may amount to material irregularity. Here, substantial injury without
material irregularity is not enough even as material irregularity not linked directly to inadequacy
of the price is insufficient. And where a Court mechanically conducts the sale or routinely signs
assent to the sale papers, not bothering to see if the offer is too low and a better price could have
been obtained, and in fact the price is substantially inadequate, there is the presence of both the
elements of irregularity and injury. But it is not as if the Court should go on adjourning the sale till
a good price is got, it being a notorious fact that court sales and market prices are distant
neighbours. Otherwise, decree-holders can never get the property of the debtor sold. Nor is it right
3 All. Jai Narain Singh Vs. Board of Revenue Lko. & Anr.
669
to judge the unfairness of the price by hindsight wisdom. Maybe, subsequent events, not within the
ken of the executing Court when holding the sale, may prove that had the sale been adjourned a
better price could have been had. What is expected of the judge is not to be a prophet but a
pragmatist and merely to make a realistic appraisal of the factors, and, if satisfied that, in the given
circumstances, the bid is acceptable, conclude the sale. The Court may consider the fair value of
the property, the general economic trends, the large sum required to be produced by the bidder, the
formation of a syndicate, the futility of postponements and the possibility of litigation, and several
other factors dependent on the facts of each case. Once that is done, the matter ends there. No
speaking order is called for and no meticulous post mortem is proper. If the Court has fairly, even
if silently, applied its mind to the relevant considerations before it while accepting the final bid, no
probe in retrospect is permissible. Otherwise, a new threat to certainty of court sales will be
introduced.

 10. So viewed, we are satisfied that the district Court had exercised a conscientious and
lively discretion in concluding the sale at Rs 11.5 lakhs. If the market value was over 17 lakhs, it is
unfortunate that a lesser price was fetched. Mere inadequacy of price cannot demolish every court
sale. Here, the Court tried its best, time after time, to raise the price. Well-known industrialists in
the public and private sectors knew about it and turned up. Offers reached a stationary level. Nor
could the Corporation be put off indefinitely in recovering its dues on baseless expectations and
distant prospects. The judgment debtor himself, by his litigious exercises, would have contributed
to the possible buyers being afraid of hurdles ahead. After all, producing around Rs 11.5 lakhs
openly to buy an industry is not easy even for apparently affluent businessmen. The sale
proceedings had been pending too long and the first respondent could not, even when given the
opportunity, produce buyers by private negotiation. Not even a valuer's report was produced by
him. We are satisfied that the District Judge had committed no material irregularity in the conduct
of the sale in accepting the highest offer of the appellant on September 3, 1969."

c) Valji Khimji and Company (Supra):

 "28. If it is held that every confirmed sale can be set aside the result would be that no
auction-sale will ever be complete because always somebody can come after the auction or its
confirmation offering a higher amount. It could have been a different matter if the auction had been
held without adequate publicity in well-known newspapers having wide circulation, but where the
auction-sale was done after wide publicity, then setting aside the sale after its confirmation will
create huge problems. When an auction-sale is advertised in well-known newspapers having wide
circulation, all eligible persons can come and bid for the same, and they are themselves to be
blamed if they do not come forward to bid at the time of the auction. They cannot ordinarily later
on be allowed after the bidding (or confirmation) is over to offer a higher price. Of course, the
situation may be different if an auction-sale is finalised, say for Rs 1 crore, and subsequently
somebody turns up offering Rs 10 crores. In this situation it is possible to infer that there was some
fraud because if somebody subsequently offers Rs 10 crores, then an inference can be drawn that
an attempt had been made to acquire that property/asset at a grossly inadequate price. This
situation itself may indicate fraud or some collusion. However, if the price offered after the auction
is over which is only a little over the auction price, that cannot by itself suggest that any fraud has
been done.
670 INDIAN LAW REPORTS ALLAHABAD SERIES
 30. In the first case mentioned above i.e. where the auction is not subject to confirmation
by any authority, the auction is complete on the fall of the hammer, and certain rights accrue in
favour of the auction-purchaser. However, where the auction is subject to subsequent confirmation
by some authority (under a statute or terms of the auction) the auction is not complete and no
rights accrue until the sale is confirmed by the said authority. Once, however, the sale is confirmed
by that authority, certain rights accrue in favour of the auction-purchaser, and these rights cannot
be extinguished except in exceptional cases such as fraud.

 31. In the present case, the auction having been confirmed on 30-7-2003 by the Court it
cannot be set aside unless some fraud or collusion has been proved. We are satisfied that no fraud
or collusion has been established by anyone in this case."

 Judgments relied upon by learned counsel for the respondent Nos.4 to 6:

 a) Smt. Shanti Devi (Supra):

 "26. The amount of Rs 1 lakh has been invested in short-term deposit in this Court. The
same shall, on maturity, be sent to the High Court to the credit of Civil Writ Petition No. 6557 of
1983. The amount due as per the sale warrant amount with interest will be ascertained and the
same shall first be disbursed to the Revenue authority concerned for satisfying the certificate issued
to the said authority under Section 11-A of the U.P. Agricultural Credit Act, 1973. The High Court
will ascertain the amount payable under the certificate together with interest, if any, as stated in
the sale proceedings and for satisfying the costs of the proceedings as incurred by the Government.
If the amount in deposit now transferred to the High Court is not sufficient, the appellant has to
make good the deficiency. The amount deposited by the purchaser shall be returned to her together
with interest at 12% from the date of deposit. The interest amount payable to the purchaser shall be
disbursed out of the amount now being sent by this Court to the High Court. If after meeting the
demand payable under the certificate and costs to the Government, there is no balance left to pay
the interest component payable to the purchaser as stated above on the amount the purchaser may
have deposited in the Revenue Court, the appellant shall again have to make good the deficiency.
In respect of any such further sums payable by the appellant, as aforesaid, if need be, the High
Court will grant reasonable time to the appellant. If of course, the amount now sent to the High
Court is sufficient to meet all these directions, no question of further payment by the appellant will
arise."

 b) Divya Manufacturing Co. Tirupati Wool Mills Shr. Shangharsha (Supra):

 13. From the aforesaid observation, it is abundantly clear that the court is the custodian
of the interests of the company and its creditors. Hence, it is the duty of the court to see that the
price fetched at the auction is an adequate price even though there is no suggestion of irregularity
or fraud. As stated above, in the present case, the sale proceedings have a chequered history. The
appellant started its offer after having an agreement with the Employees' Samity for Rs 37 lakhs.
This was on the face of it under bidding for taking undue advantage of court sale. At the
intervention of the learned Single Judge, the bid was increased to Rs 85 lakhs. Subsequently, before
the Division Bench, the appellant increased it to Rs 1.30 crores. At that stage, Respondent 7
3 All. Jai Narain Singh Vs. Board of Revenue Lko. & Anr.
671
?Sharma? was not permitted to bid because it had not complied with the requirements of the
advertisement. It is to be stated that on 26-6-1998 the Division Bench has ordered that offers of
Eastern Silk Industries Ltd. and Jay Prestressed Products Ltd. would only be considered on 2-71998 and confirmation of sale would be made on the basis of the offers made by the two parties.
Further, despite the fact that the appellant ?Divya? had withdrawn its earlier offer, the Court
permitted it to take part in making further offer as noted in the order dated 2-7-1998. In this set of
circumstances, there was no need to confine the bid between three offerors only.

 14. In LICA (P) Ltd. (1) v. Official Liquidator [(1996) 85 Comp Cas 788 (SC) [see below
at p. 79]] this Court dealing with a similar question observed thus:

 "The purpose of an open auction is to get the most remunerative price and it is the duty
of the court to keep openness of the auction so that the intending bidders would be free to
participate and offer higher value. If that path is cut down or closed the possibility of fraud or to
secure inadequate price or underbidding would loom large. The court would, therefore, have to
exercise its discretion wisely and with circumspection and keeping in view the facts and
circumstances in each case."

 15. The matter was again brought before this Court and in LICA (P) Ltd. (2) v. Official
Liquidator [(1996) 85 Comp Cas 792 (SC) [see below at p. 82]] the Court held:

 "Proper control of the proceedings and meaningful intervention by the court would
prevent the formation of a syndicate, underbidding and the resultant sale of property for an
inadequate price. The order passed by this Court yielded the result that the property which would
have been finalised at Rs 45 lakhs, fetched Rs 1.10 crores and in this Court a further offer of Rs
1.25 crores is made. In other words, the property under sale is capable of fetching a higher market
price. Under these circumstances, though there is some force in the contention of Shri Ramaswamy
that the court auction may not normally be repeatedly disturbed, since this Court, on the earlier
occasion, had limited the auction between the two bidders, the impediment will not stand in the way
to direct sale afresh. Even today the parties are prepared to participate in the bid."

 c) Kunwar Mohan Swarup (Supra):

 "10. If the payment is not made within the period of 15 days the Court has the discretion
to forfeit the deposit and there the discretion ends but the obligation of the court to resell the
property is imperative. A further consequence of non-payment is that the defaulting purchaser
forfeits all the claim to the property."

 11. In Nand Lal v. Mohd. Siddiquan [A.I.R. 1957 All. 558.] , it was held, ?if a sale had
been confirmed, such sale could be set aside not necessarily under Order 21, rule 92 as that rule
only applies to a valid sale. If there is no valid sale there can be no confirmation of an invalid sale.
If the confirmation of an invalid sale has been made it will be an invalid confirmation. ?Here an
auction purchaser fails to deposit the full amount of purchase money payable by him on the 14th
day from the sale of the property then under rule 84 the sale by which the auction purchaser
purchased the property is automatically cancelled and he can have no interest in the property
672 INDIAN LAW REPORTS ALLAHABAD SERIES
which was the subject of sale. But if there is no interest then acquired by the auction purchaser
there is no question of confirmation of the sale. The sale can only be if there is no interest acquired
by the auction purchaser."

 12. In view of these authorities it is idle for the department to contend that there is an
alternate remedy which ought to have been pursued by the petitioner under the provisions of the
Z.A. & L.R. Rules or the Code of Civil Procedure, Order 21, rules 84, 85 and 86. According to the
Supreme Court, such a sale where the auction purchaser has not deposited the balance of 75%
within 15 days of the sale, for any reason whatsoever, is non-existent in the eye of law. The sale is a
complete nullity and it is non est and as such the writ jurisdiction of this Court would be the
appropriate forum for ventilating such a grievance. That apart, the realisation and recovery of tax
having been stayed by the Board of Revenue the recovery, if any, made after the stay order would
not be in accordance with law and would therefore contravene the provisions of Art. 265 of the
Constitution, vide Banwari Lal v. Rajasthan State [A.I.R. 1953 Raj. 180.] . In any view of the
matter, this would be a fit case for the exercise of the writ jurisdiction, particularly as the only
relief to which the petitioner would be entitled to is a re-auction of the property in view of the
mandatory, provisions of rule 285-E of the Z.A. & L.R. Rules read with order 21, rule 85 of the
C.P.C. and as such no injustice can be said to be done to the Department by acceding to this writ
petition."

 d) Vindhayachal (Supra):

 "6. The State also does something which is extremely harsh if not cruel. It auctions
borrowers' lands for petty amounts without proper advertisement. If the auction is advertised in
widely circulated News Paper well in advance land may be auctioned for proper consideration.
State further charges 10% recovery charges. In this scenario some times the borrower of
agricultural loan feels himself pitched into Shylocks (plural, not singular).

 9. It is utmost essential to ascertain that what minimum part of the land of borrower can
satisfy the arrears and only that much part should be put to auction (vide (2006) 3 SCC 49 : AIR
2006 S.C. 1458 Balakrishnan v. Malaiyandi Konar). It is all the more necessary when
property/land is purchased by the State under the aforesaid proviso to Rule 285-B. State is not
supposed to take over the property/purchase the property of a person, even though he may be the
defaulter for less than the market value. If auction takes place then the presumption is that the
properties are sold for the market value. Excess amount (more than the arrears) for which property
is auctioned is to be returned to the owner of the land. However, if State purchases the property
under the aforesaid proviso then there is no excess amount. Accordingly, it is utmost essential in
such cases where State purchases the property under the aforesaid proviso to determine that what
minimum part of the property to be auctioned can satisfy the entire arrears."

 e) Mohammad Rafiq (Supra):

 "19.