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

- **Citation:** [2022] 8 S.C.R. 968
- **Court:** Supreme Court of India
- **Decided:** 2022-02-18
- **Case number:** Civil appeal Nos. 791-792 of 2022
- **Bench:** M. R. Shah, B. V. Nagarathna
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/k-kumara-gupta-v-sri-markendaya-and-sri-omkareswara-swamy-temple-ors-36538
- **Pages:** 23

## Headnote

Auction: Auction conducted on 26.06.1998 by the Executive
Officer of the Temple Trust following due procedure under the
provisions of the Endowments Act 1987 - Appellant was the highest
bidder - After confirming the sale in favour of the appellant by the
Commissioner, the appellant deposited the balance amount -
Thereafter, sale deed was held confirmed and executed in the year
1998 - On challenge before High Court, re-auction of the property
was ordered after a period of more than 23 years solely on the
basis of the offer made by one JK in the year 1998 and the offer
made by one LKR that they are ready to offer/pay a higher price
than fetched in the public auction - On appeal, held: Neither did
JK nor LKR had participated in the auction proceedings and made
any offer - Both of them ought not have been permitted to raise any
objection subsequently on the valuation when they had not
participated in the public auction and made any offer - After the
public auction is held and the highest bid is received and the
property 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 by
third parties subsequently - Further, unless and until it was found
that there was any material irregularity and/or illegality in holding
the public auction and/or vitiated by any fraud or collusion, it is
not open to set aside the auction or sale in favour of a highest
bidder - If there was any error in the decision-making process
adopted by the authority, the remedy available was to question the
sale deed in an appropriate proceeding available under the law
and not by filing a petition under Art.226 of the Constitution of
India - Moreover, respondents are not in a position to point out any
material on which it can be said that what was offered by the
appellant in the year 1998 was not a fair value - Hence, order of
the High Court set aside - Endowments Act 1987 - Constitution of
India - Art.226.
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Allowing the appeals, the Court
HELD: 1. Once the appellant was found to be the highest
bidder in a public auction in which 45 persons had participated
and thereafter when the sale was confirmed in his favour and
even the sale deed was executed, unless and until it was found
that there was any material irregularity and/or illegality in holding
the public auction and/or auction/sale was vitiated by any fraud or
collusion, it is not open to set aside the auction or sale in favour
of a highest bidder on the basis of some representations made by
third parties, who did not even participate in the auction
proceedings and did not make any offer. [Para 8.1][982-C-D]
2. The sale was confirmed in favour of the appellant by the
Commissioner, Endowments Department after obtaining the
report of the Assistant Commissioner. Therefore, in the aforesaid
facts and circumstances of the case, the High Court ought not to
have ordered re-auction of the land in question after a period of
23 years of confirmation of the sale and execution of the sale
deed in favour of the auction purchaser by observing that the
value of the property might have been much more, otherwise,
the object and purpose of holding the public auction and the
sanctity of the public auction will be frustrated. Unless there is
concrete material and it is established that there was any fraud
and/or collusion or the land in question was sold at a throw away
price, the sale pursuant to the public auction cannot 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 eventuality
where it is found on the basis of material on record that the
property had been sold away at a throw away price and/or on a
wholly inadequate consideration because of the fraud and/or
collusion and/or after any material irregularity and/or illegality is
found in conducing/holding the public auction. After the public
auction is held and the highest bid is received and the property
is sold

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SUPREME COURT REPORTS
[2022] 8 S.C.R.
[2022] 8 S.C.R. 968
968
K. KUMARA GUPTA
v.
SRI MARKENDAYA AND SRI OMKARESWARA SWAMY
TEMPLE & ORS.
(Civil appeal Nos. 791-792 of 2022)
FEBRUARY 18, 2022
[M. R. SHAH AND B. V. NAGARATHNA, JJ.]
Auction: Auction conducted on 26.06.1998 by the Executive
Officer of the Temple Trust following due procedure under the
provisions of the Endowments Act 1987 - Appellant was the highest
bidder - After confirming the sale in favour of the appellant by the
Commissioner, the appellant deposited the balance amount -
Thereafter, sale deed was held confirmed and executed in the year
1998 - On challenge before High Court, re-auction of the property
was ordered after a period of more than 23 years solely on the
basis of the offer made by one JK in the year 1998 and the offer
made by one LKR that they are ready to offer/pay a higher price
than fetched in the public auction - On appeal, held: Neither did
JK nor LKR had participated in the auction proceedings and made
any offer - Both of them ought not have been permitted to raise any
objection subsequently on the valuation when they had not
participated in the public auction and made any offer - After the
public auction is held and the highest bid is received and the
property 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 by
third parties subsequently - Further, unless and until it was found
that there was any material irregularity and/or illegality in holding
the public auction and/or vitiated by any fraud or collusion, it is
not open to set aside the auction or sale in favour of a highest
bidder - If there was any error in the decision-making process
adopted by the authority, the remedy available was to question the
sale deed in an appropriate proceeding available under the law
and not by filing a petition under Art.226 of the Constitution of
India - Moreover, respondents are not in a position to point out any
material on which it can be said that what was offered by the
appellant in the year 1998 was not a fair value - Hence, order of
the High Court set aside - Endowments Act 1987 - Constitution of
India - Art.226.
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969
Allowing the appeals, the Court
HELD: 1. Once the appellant was found to be the highest
bidder in a public auction in which 45 persons had participated
and thereafter when the sale was confirmed in his favour and
even the sale deed was executed, unless and until it was found
that there was any material irregularity and/or illegality in holding
the public auction and/or auction/sale was vitiated by any fraud or
collusion, it is not open to set aside the auction or sale in favour
of a highest bidder on the basis of some representations made by
third parties, who did not even participate in the auction
proceedings and did not make any offer. [Para 8.1][982-C-D]
2. The sale was confirmed in favour of the appellant by the
Commissioner, Endowments Department after obtaining the
report of the Assistant Commissioner. Therefore, in the aforesaid
facts and circumstances of the case, the High Court ought not to
have ordered re-auction of the land in question after a period of
23 years of confirmation of the sale and execution of the sale
deed in favour of the auction purchaser by observing that the
value of the property might have been much more, otherwise,
the object and purpose of holding the public auction and the
sanctity of the public auction will be frustrated. Unless there is
concrete material and it is established that there was any fraud
and/or collusion or the land in question was sold at a throw away
price, the sale pursuant to the public auction cannot 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 eventuality
where it is found on the basis of material on record that the
property had been sold away at a throw away price and/or on a
wholly inadequate consideration because of the fraud and/or
collusion and/or after any material irregularity and/or illegality is
found in conducing/holding the public auction. After the public
auction is held and the highest bid is received and the property
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 by third
parties subsequently and that too when they did not participate
in the auction proceedings and made any offer and/or the offer is
made only for the sake of making it and without any serious intent.
K. KUMARA GUPTA v. SRI MARKENDAYA AND SRI
OMKARESWARA SWAMY TEMPLE & ORS.
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SUPREME COURT REPORTS
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In the present case, though JK immediately after finalising the
auction stated that he is ready and willing to 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
such frivolous and irresponsible representations made by such
persons then the sanctity of a public auction would be frustrated
and the rights of a genuine bidder would be adversely affected.
The so-called lucrative offer initially made by third parties appears
to be made only to frustrate the auction proceedings with a mala
fide intent. If there was any error in the decision-making process
adopted by the authority, the remedy available was to question
the sale deed in an appropriate proceeding available under the
law and not by filing a petition under Article 226 of the Constitution
of India. [Paras 8.2, 8.3][983-G-H; 984-A-E, G]
Jasbhai Motibhai Desai vs. Roshan Kumar, Haji Bashir
Ahmed and Ors. (1976) 1 SCC 671 : [1976] 3 SCR 58;
State of Uttaranchal Vs. Balwant Singh Chaufal and
Ors. (2010) 3 SCC 402 : [2010] 1 SCR 678 - relied
on.
Valji Khimji and Company vs. Official Liquidator of
Hindustan Nitro Product (Gujarat) Limited and Others
(2008) 9 SCC 299 : [2008] 12 SCR 1; Paramananda
Mahapatra vs. Commissioner of Hindu Religious
Endowments, 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 Fauzia
and Anr. vs. Syeed UI-Mulk alias Nawab Saheb Chathari
& Ors. AIR 1979 AP 229; Divya Manufacturing
Company (P) Ltd. vs. Union Bank of India and Ors.
(2000) 6 SCC 69 : [2000] 1 Suppl. SCR 474; Chairman
and Managing director, SIPCOT, Madras and Ors. vs.
Contromix Pvt. Ltd. (1995) 4 SCC 595 : [1995] 1 Suppl.
SCR 415; Union Bank of India vs. Official Liquidator
H.C of Calcutta and Ors. (2000) 5 SCC 274 : [2000]
3 SCR 691; Navalkha and Sons vs. Sri Ramanya Das
and Ors. (1969) 3 SCC 537 : [1970] 3 SCR 1 - referred
to.
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Case Law Reference
[2008] 12 SCR 1
referred to
Para 4.6
[1966] 1 SCR 791
referred to
Para 5
[1959] Supp (2) SCR 583
referred to
Para 5
[2000] 1 Suppl. SCR 474
referred to
Para 5.3
[1995] 1 Suppl. SCR 415
referred to
Para 5.3
[2000] 3 SCR 691
referred to
Para 5.3
[1970] 3 SCR 1
referred to
Para 6.1
[1976] 3 SCR 58
relied on
Para 8.1
[2010] 1 SCR 678
relied on
Para 8.12
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 791792 of 2022.
From the Judgment and Order dated 08.09.2019 of the High Court
of Andhra Pradesh at Amaravati in Writ Appeal Nos. 790 and 1069 of
2018.
Harin P. Raval, Sr. Adv., Y. Rajagopala Rao, K. Pramod Kumar,
D. Gopi Krishna, Kartikey Kanojiya, Ms. Sukanya Singh, Advs. for the
Appellant.
S. Niranjan Reddy, Siddhartha Dave, Sr. Advs., Abhijit Sengupta,
Mahfooz A. Nazki, Polanki Gowtham, Shaik Mohamad Haneef, T. Vijaya
Bhaskar Reddy, K. V. Girish Chowdary, Ms. Rajeswari Mukherjee,
Abhishek Sharma, Rajendra Singhvi, T. R. B. Sivakumar, Advs. for the
Respondents.
The Judgment of the Court was delivered by
M. R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned judgment
and order dated 18.09.2019 passed by the High Court of Andhra Pradesh
at Amaravati in Writ Appeal Nos.790 and 1069 of 2018 by which the
High Court has allowed the said writ appeals and has directed the
authorities concerned to conduct a re-auction of the entire properties by
fixing the upset price higher than what has been fixed earlier, the auction
purchaser, who purchased the property in question in the year 1998, has
preferred the present appeals.
K. KUMARA GUPTA v. SRI MARKENDAYA AND SRI
OMKARESWARA SWAMY TEMPLE & ORS.
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SUPREME COURT REPORTS
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2. The facts leading to the present appeals and the chronological
dates 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 Sri
Markendaya and Omkareswara Swamy Devasthanam, Eluru, which was
published in the newspaper on 10.03.1997. Notification to sell the subject
land was published in the Andhra Pradesh Gazette on 22.05.1997. Nobody
raised any objection against the said proposal. That the probable expected
price of the land was fixed at Rs. 4,00,000/- per acre and the total extent
of land was about 1.81 acre. That thereafter the Commissioner of
Endowments Department granted permission to sell the land in question
on 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 the
presence of the Deputy Commissioner, Endowments on 22.05.1998. As
per the notice, the date and time of the open auction was 24.06.1998 at
11.00 AM and the interested participants had to deposit Rs.20,000/- as
EMD. 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 and
nor did he deposit the EMD of Rs.20,000/-.
2.2 Thereafter the auction took place on 24.06.1998 in which 45
people participated. The appellant herein was declared as the highest
bidder quoting price of Rs.5,55,000/- per acre against the expected price
of Rs.4,00,000/-. However, thereafter, the highest offer of the appellant
was Rs.13,01,000/- per acre as per the bid submitted by the appellant
herein. Thus, the appellant became the highest bidder fixing the price at
Rs.13,01,000/- per acre. The appellant deposited Rs.7,85,000/- being 1/
3rd of the bid amount immediately as per the tender conditions. It appears
that thereafter the first round of litigation started at the instance of one
Shri Jagat Kumar, who as such did not participate in the auction which
was held on 24.06.1998. He made a representation on 20.07.1998 that
the subject land has a potential of getting more money. Though, initially
he had shown his readiness and willingness to pay the higher price but
did not deposit the money. On the contrary, he expressed his willingness
to buy only 1200 square yards but not the entire land put to auction. On
the representation of the said Shri Jagat Kumar, the auction came to be
cancelled vide order dated 24.07.1998. The appellant filed the revision
under Section 93 of the Endowments Act, 1987 (hereinafter referred to
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as the "Act of 1987") against the order dated 24.07.1998 cancelling the
auction. However, thereafter by order dated 22.12.1998, the order
confirming the sale was issued by the Office of the Commissioner,
Endowments Department in favour of the appellant. The Executive
Officer of the Temple was directed to get the sale deed registered in the
name of the highest bidder.
2.3 That thereafter the appellant deposited balance amount of
Rs.15,69,810/- vide four banker cheques dated 30.12.1998. The sale
deed was executed in favour of the appellant by Executive Officer on
behalf of the Temple vide Sale Deed dated 31.12.1998. As mentioned in
the sale deed, the physical possession of the land in question was also
delivered to the appellant.
2.4 That at the relevant time, the sale deed could not be registered
because of the non-availability of the Clearance Certificate from the
Income Tax department. The sale deed was presented for registration
before the Sub-Registrar, Eluru on 01.01.1999. On 01.01.1999, the
Executive Officer of the Temple/Devasthanam filed an affidavit before
the Income Tax Office for Clearance Certificate so that the sale deed
could be registered. The Clearance Certificate was granted to the
Executive Officer on 12.01.1999. Thus, the first round of litigation ended
there.
2.5 However, the second round of litigation begun at the instance
of one Shri L. Kantha Rao, the original writ petitioner before the High
Court, and one of the respondents in these appeals, who as such and as
observed hereinabove did not even participate in the public auction
proceedings. The said Shri L. Kantha Rao filed a Writ Petition No. 41 of
1999 before the High Court to direct the Executive Officer/ the Temple
Committee not to execute the sale deed in respect of the auctioned land.
Vide interim order dated 05.01.1999, the High Court granted interim
stay of all further proceedings subject to the condition that he furnishes
a bank guarantee of a sum of Rs.30 lakhs within two weeks from the
date of the said interim order. That during the pendency of the aforesaid
writ petition and in light of the interim order passed by the High Court in
the aforesaid writ petition, being Writ Petition No. 41 of 1999, the office
of the Commissioner, Endowments Department unilaterally passed an
order dated 10.02.1999 cancelling the auction held on 24.06.1998. The
Executive Officer of the Temple was instructed to conduct a re-auction
for the land in question keeping the upset price of Rs.30 lakhs. As the
K. KUMARA GUPTA v. SRI MARKENDAYA AND SRI
OMKARESWARA SWAMY TEMPLE & ORS. [M. R. SHAH, J.]
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SUPREME COURT REPORTS
[2022] 8 S.C.R.
order dated 10.02.1999 was passed without hearing the appellant, the
appellant preferred revision before the Government under Section 93 of
Act of 1987. The Government stayed the order dated 10.02.1999 of the
Commissioner vide its order dated 08.03.1999. Questioning the order of
the Government dated 08.03.1999 staying the order of the Commissioner
dated 10.02.1999, the said Shri L. Kantha Rao filed another Writ Petition
No. 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 by
order 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. It
appears that the High Court while disposing of the aforesaid writ petitions
observed that as the Commissioner had revoked the order dated
10.02.1999, the revision filed against the same had become infructuous
and Government was not required to decide the issue on merits unless
suo moto revision was taken up by the Government. However, liberty
was granted to the said Shri L. Kantha Rao to file a revision against the
original order passed by the Commissioner dated 22.12.1998 confirming
the sale in favour of the appellant. The second round of litigation ended
there.
2.6 Then the third round of litigation began. On the basis of the
liberty granted by the High Court, the said Shri L. Kantha Rao filed a
revision before the Government challenging the order dated 22.12.1998
although he was not a participant in the auction in which appellant herein
was declared the highest bidder. By order dated 26.11.1999, the said
revision came to be allowed quashing and setting aside the order dated
22.12.1998 and directing the Commissioner to refund the amount paid
by the appellant and to conduct a re-auction. Even the said order dated
26.11.1999 was passed without hearing the appellant. The appellant filed
Writ Petition No. 25407 of 1999 before the High Court challenging the
order dated 26.11.1999. By a detailed judgment and order dated
02.02.2018, the learned Single Judge allowed the Writ Petition No.25407
of 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 Temple
through its Executive Officer filed Writ Appeal No.790 of 2018 before
the Division Bench challenging the judgment and order dated 02.02.2018
passed in Writ Petition No.25407 of 1999 on 16.03.2018. The wife of
Shri L. Kantha Rao also filed Writ Appeal No. 1069 of 2018 challenging
the judgment and order passed by the Learned Single Judge in Writ
Petition No.25407 of 1999.
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2.7 By the impugned common judgment and order, the Division
Bench of the High Court has allowed the said appeals and has set aside
the judgment and order passed by the learned Single Judge passed in
Writ Petition No.25407 of 1999 and has directed the authorities concerned
to conduct the re-auction of the entire land by fixing the upset price
higher than what had been fixed earlier by observing that since more
than 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. The
Division Bench of the High Court has further observed that as the
appellant has agreed and even the learned Single Judge had directed the
appellant to pay Rs.30 lakhs as the said Shri L. Kantha Rao furnished a
bank guarantee of Rs. 30 lakhs and therefore, the Temple would get
more than Rs.30 lakhs. While passing the impugned judgment and order,
the Division Bench of the High Court has also observed that the writ
petitioner as well as the appellant shall also be allowed to participate in
the re-auction, if they are otherwise eligible.
2.8 Feeling aggrieved and dissatisfied with the impugned common
judgment and order passed by the Division Bench of the High Court, the
original respondent No.4 before the High Court, the auction purchaser
has preferred the present appeals.
3. Shri Harin P. Raval, learned Senior Advocate has appeared on
behalf of the appellant, Shri S. Niranjan Reddy, learned Senior Advocate
has appeared on behalf of the respondent - Temple Trust and Shri
Siddhartha Dave, learned Senior Advocate has appeared on behalf of
the wife of Shri L. Kantha Rao - the original writ petitioner.
4. Shri Harin P. Raval, learned Senior Advocate appearing on
behalf of the appellant has vehemently submitted that in the facts and
circumstances of the case the Division Bench of the High Court has
committed a grave error in setting aside the auction/sale in favour of the
appellant, which was held in the year 1998.
4.1 It is submitted that as such the auction sale was conducted
after wide publicity in the well-known newspapers and in fact, 45 people
participated in the auction. It is submitted that the appellant was found to
be the highest bidder and therefore the sale in favour of the appellant
was confirmed and the appellant paid the full sale consideration and
even the sale deed was also executed in favour of the appellant on
31.12.1998. It is submitted that as there was no illegality in conducting
the auction, therefore, the Division Bench of the High Court ought not to
K. KUMARA GUPTA v. SRI MARKENDAYA AND SRI
OMKARESWARA SWAMY TEMPLE & ORS. [M. R. SHAH, J.]
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have set aside such a sale after a period of approximately twenty years
from the date of conducting the public auction and the sale that too at
the instance of a person, who never participated in the auction.
4.2 It is submitted that Division Bench of the High Court ought to
have appreciated that as the said Shri L. Kantha Rao did not even
participate 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 favour
of the appellant, who was found to be the highest bidder.
4.3 It is submitted that the Division Bench of the High Court ought
to have appreciated that merely because somebody, subsequently to the
completion of the public auction and the sale deed has been executed in
the favour of the highest bidder states that he is ready and willing to pay
a higher amount than the highest bid amount, would frustrate the object
and 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 the
Division Bench of the High Court ought to have appreciated that at the
relevant time, nobody restrained the said Shri L. Kantha Rao from
participating in the public auction and submit his offer.
4.4 It is further submitted by Shri Raval, learned Senior Advocate
appearing on behalf of the appellant that as such the Division Bench of
the High Court has not at all observed and/or held that the auction was
illegal and/or there was any illegality in holding the public auction. It is
submitted that the Division Bench of the High Court has passed the
impugned judgment and order and has directed for re-auction solely on
the ground that subsequently the said Shri L. Kantha Rao offered Rs. 30
lakhs, which was higher than the amount paid by the appellant even
when the learned Single Judge had also directed the appellant to pay a
total sum of Rs.30 lakhs, which the appellant had agreed; therefore, the
Division Bench of the High Court has presumed that the value of the
land would have been much more than Rs.30 lakhs at the time when it
was put up for auction/sale. It is submitted that the High Court has not at
all appreciated the fact that as such the said L. Kantha Rao had no locus
to challenge the sale in favour of the appellant, who was the highest
bidder 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 has
not properly appreciated the fact that the proceedings initiated by Shri
L. Kantha Rao were by way of "Public Interest Litigation (PIL)" and
therefore after his death, his wife could not have continued the PIL
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proceedings by way of writ petition before the High Court as a private
litigation. It is submitted by learned Senior Advocate for the appellant
that the entire litigation was at the instance of the second highest bidder
namely, Shri M.M. Gupta, brother-in-law of Shri L. Kantha Rao, who
had purchased the nearby lands to the auctioned land in the name of his
family members at Rs.7,50,000/- per acre on 28.07.1998 and 22.09.1998
and who had an eye on the land in question.
4.6 It is submitted by Shri Raval, learned Senior Advocate appearing
on behalf of the appellant that filing of objections and entertaining the
same after the conclusion of the auction and after execution of the sale
deed cannot be permitted at the instance of a stranger to the auction
proceeding. It is submitted that in the present case, the sale deed was
executed in favour of the appellant herein being the highest bidder in the
public auction in which 45 persons had participated and therefore to
maintain the sanctity of the public auction, the objections ought not to
have been entertained that too by a person, who never participated in
the public auction, more particularly, when no allegation of fraud was
even pleaded, much less established or proved by the respondents.
Reliance is placed on the decision of this Court in the case of Valji
Khimji and Company Vs. Official Liquidator of Hindustan Nitro
Product (Gujarat) Limited and Others, (2008) 9 SCC 299 (paras
11, 12, 25 and 28).
4.7 It is further submitted by Shri Raval that as such the wife of
the deceased Shri L. Kantha Rao could not have preferred an appeal as
an heir of Shri L. Kantha Rao, a petitioner, who had filed the petition as
a Public Interest Litigation. It is submitted that as such the litigation
initiated on behalf of Shri M.M. Gupta the second highest bidder by Shri
L. Kantha Rao, was in fact a private interest litigation only in the guise
of a Public Interest Litigation to thwart the auction sale. It is submitted
that the learned Single Judge had rightly reached to the conclusion that
the respondents - writ petitioners had no locus standi to raise the objection
as well as to file the writ petitions before the High Court as admittedly
they did not participate in the auction.
4.8 It is further submitted that the Temple Trust never objected at
any stage of auction or after the auction until the order/judgment dated
02.02.2018 was rendered by the learned Single Judge. It is submitted
that the Executive officer of the Temple, who was aware of the entire
proceedings including conducting of the public auction and after receiving
K. KUMARA GUPTA v. SRI MARKENDAYA AND SRI
OMKARESWARA SWAMY TEMPLE & ORS. [M. R. SHAH, J.]
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the full and total consideration could not have challenged the judgment
and order passed by the learned Single Judge rendered on 02.02.2018 at
a belated stage, i.e., almost after twenty years from the date of the
execution of the sale deed. It is submitted that filing of an appeal by the
Temple Trust against the judgment and order dated 02.02.2018 before
the Division Bench without any allegation of fraud or collusion against it
reeks 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 entertained
the same, is the submission.
4.9 Making the above submissions, it is urged that the Division
Bench of the High Court has committed a grave error in quashing and
setting aside the sale in favour of the appellant after a period of 23 years
and when the appellant had paid the entire sale consideration on
30.12.1998 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 properly
appreciated the fact that as such the sale was confirmed in favour of the
appellant after the approval by the competent authority of the Endowments
Department.
5. Learned counsel appearing on behalf of the respondent No.3
has submitted that the respondent No.1 - Temple is a public religious
institution and registered under Section 6(b)(ii) of Act of 1987. It is
submitted that the Government under the Act of 1987 is necessarily
bound to act for the benefit of the temples and ensure revenue
maximization for the temples. That as held by this Court in a catena of
decisions Government acts as a trustee of the said properties. It is
submitted 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 charitable
endowments and to ensure its due protection. Reliance is placed on the
decisions in Paramananda Mahapatra Vs. Commissioner of Hindu
Religious Endowments, Orissa and Others, AIR 1966 SC 1544
and Mahant Ram Saroop Dasji Vs. S.P. Sahi, 1959 Supp (2) SCR
583.
5.1 It is submitted that therefore the Government cannot act against
the interest of the temple. That in the present case the auction was
conducted on behalf of the Deity, which is in law a perpetual minor.
Therefore, it is important to ensure that the trustees act strictly in
accordance with the interest of the Deity. It is submitted that in the
present case, the consideration paid was inadequate as on the date of
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auction. That initially the appellant offered Rs.13,01,000/- per acre, which
was treated as the highest bid and the same was confirmed. That one
Shri Jagat Kumar through representation dated 24.07.1998 stated that
he was willing to offer Rs. 22,00,000/- per acre, i.e., Rs. 7 lakhs more
than 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 amount
of Rs. 30 lakhs on 05.01.1999 pursuant to the directions passed by the
High Court in Writ Petition No. 41 of 1999 on his submission that he was
ready and willing to purchase the property in question at Rs. 30 lakhs. It
is submitted that thereafter the State Government vide its order dated
26.11.1999 fixed the reserved at Rs.32 lakhs and allowed the parties to
participate in the auction. It is submitted that the aforesaid facts evidently
reveal that within a period of one year, the price of the property
significantly 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 interest
of the Deity, the impugned judgment and order passed by the Division
Bench of the High Court may not be interfered with.
5.2 Relying upon the decision of the Division Bench of the High
Court in the case of Princess Fatima Fauzia and Anr. Vs. Syeed UIMulk alias Nawab Saheb Chathari & Ors., AIR 1979 AP 229, it is
submitted that as held the Division Bench of the High Court, the authorities
ought to have permitted re-auction where, in case of a trust, the
consideration is inadequate.
5.3 It is further submitted by the learned Senior Advocate appearing
on behalf of the respondent No.3 that it is the duty of the Court to ensure
that the price fetched is adequate - especially in the case of a Public
Trust even though there is no suggestion of irregularity or fraud. Reliance
is placed on the decision of this Court in the case of Divya
Manufacturing Company (P) Ltd. Vs. Union Bank of India and
Ors., (2000) 6 SCC 69.
5.4 It is further submitted by the learned Senior Advocate appearing
on behalf of respondent No.3 that by the impugned judgment and order
passed by the Division Bench of the High Court, no prejudice shall be
caused to the appellant as the Division Bench of the High Court has
directed that the money deposited including the amount incurred on account
of purchase of stamp papers be refunded to the appellant and the
appellant will also be getting the benefit of the prevailing bank interest
on the deposited amount. Further, the appellant is also permitted to
K. KUMARA GUPTA v. SRI MARKENDAYA AND SRI
OMKARESWARA SWAMY TEMPLE & ORS. [M. R. SHAH, J.]
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participate in the re-auction. It is therefore prayed not to interfere with
the impugned judgment and order passed by the Division Bench of the
High Court considering the interest of the charitable institution.
6. Learned Senior Advocate appearing on behalf of respondent
No.1 - Temple Trust / Devasthanam in addition to the submissions made
by the learned Senior Advocate appearing on behalf of respondent No.3
has submitted that in the matter of sale of public property/auction, the
dominant consideration is to secure the best price for the property. It is
submitted that the court should always keep the larger interest of the
public in mind while interfering with the decision of the authority. Further,
the concept of locus standi has been widened by this Court while dealing
with matters of public interest. It is submitted that it is the duty of the
Court to see that the price fetched is adequate.
6.1 Learned counsel appearing on behalf of the respondent No.1
has relied upon the decisions of this Court in the case of Chairman and
Managing director, SIPCOT, Madras and Ors. Vs. Contromix
Pvt. Ltd., (1995) 4 SCC 595; Union Bank of India Vs. Official
Liquidator H.C of Calcutta and Ors., (2000) 5 SCC 274 and
Navalkha and Sons Vs. Sri Ramanya Das and Ors., (1969) 3 SCC
537 in support of his submission that in the matter of sale of public
property/auction the dominant consideration is to secure the best price
for the property.
6.2 Making the above submissions and relying upon above
decisions, it is prayed to dismiss the present appeals.
7. Heard the learned counsel appearing for the respective parties
at length.
8. At the outset, it is required to be noted that by the impugned
judgment and order, the Division Bench of the High Court has ordered
re-auction of the land in question by fixing the upset price more than
what has been fixed earlier by observing that since more than 20 years
have elapsed from the date of the issuance of G.O. dated 26.11.1999, it
is in the interest of the Temple that the property in auction is put to reauction. However, it is required to be noted that the appellant purchased
the property in question in a public auction, which took place on
24.06.1998. He was found to be the highest bidder, who offered
Rs.13,01,000/- per acre. It is also required to be noted that in the said
auction, which took place on 24.06.1998, in all 45 people participated.
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The auction was conducted after following due procedure under the
provisions of the Act of 1987 and the auction was conducted by none
other than the Executive Officer of the Temple Trust. It is also to be
noted that after receiving a detailed report of Assistant Commissioner of
Endowments, office of the Commissioner, Endowments Department vide
order dated 22.12.1998 confirmed the sale in favour of the appellant.
Consequently, the appellant deposited the balance amount. The sale deed
came to be executed in his favour vide Sale Deed dated 31.12.1998.
Even thereafter on the application made by the Executive Officer of the
Devasthanam/Temple, the Income Tax Department granted Clearance
Certificate to the Executive Officer on 12.01.1999. Therefore, as such
the sale, which was held and confirmed in the year 1998 and for which
the sale deed was executed on 31.12.1998, the Division Bench of the
High Court has ordered re-auction of the property in question after a
period of more than 23 years solely on the basis of the offer made by
one Shri Jagat Kumar in the year 1998 (after the public auction was
concluded) and the offer made by one Shri L. Kantha Rao that they are
ready to offer / pay a higher price than fetched in the public auction
already concluded and therefore, the Division Bench of the High Court
has presumed that the value of the property must have been much more
than the sale consideration realized in the public auction. However, the
Division Bench of the High Court has not at all appreciated and considered
the lack of bona fides on the part of the said Shri Jagat Kumar and even
Shri 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 out
with a case that he was ready and willing to pay a higher price for the
auctioned land. But subsequently, he backed out and did not deposit any
money. Neither did the said Shri Jagat Kumar nor Shri L. Kantha Rao
had participated in the auction proceedings and made any offer. Therefore,
as such both of them ought not have been permitted to raise any objection
subsequently on the valuation when they had not participated in the public
auction and made any offer. The Division Bench of the High Court
ought to have considered whether these subsequent objectors had acted
in a bona fide manner. At this stage, it is required to be noted that even
Shri Jagat Kumar subsequently did not prosecute the matter further and
subsequently it was only Shri L. Kantha Rao, who filed the revision
before the Government by way of a "Public Interest Litigation". It is
also to be noted that neither the Government nor even the Division Bench
K. KUMARA GUPTA v. SRI MARKENDAYA AND SRI
OMKARESWARA SWAMY TEMPLE & ORS. [M. R. SHAH, J.]
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of the High Court have given any finding that the auction, which was
conducted/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 the
auction/sale in favour of the appellant, however, it has ordered re-auction
by observing that as Shri L. Kantha Rao deposited a sum of Rs. 30 lakhs
pursuant to the interim order passed by the High Court in Writ Petition
No. 41 of 1999 and as even the learned Single Judge had also directed
the appellant to pay a total sum of Rs. 30 lakhs, which the appellant had
agreed, the Division Bench of the High Court has observed that the
value of the property can be said to be much more than what was realized
in the public auction.
8.1 Once the appellant was found to be the highest bidder in a
public auction in which 45 persons had participated and thereafter when
the sale was confirmed in his favour and even the sale deed was executed,
unless and until it was found that there was any material irregularity
and/or illegality in holding the public auction and/or auction/sale was
vitiated by any fraud or collusion, it is not open to set aside the auction or
sale in favour of a highest bidder on the basis of some representations
made by third parties, who did not even participate in the auction
proceedings and did not make any offer. In this context, we rely on the
following observations of this Court in the case of Jasbhai Motibhai
Desai Vs. Roshan Kumar, Haji Bashir Ahmed and Ors., (1976) 1
SCC 671 made in paragraphs 34, 37 and 49, which are as under:-
"34. This Court has laid down in a number of decisions that in
order to have the locus siandi to invoke the extraordinary jurisdiction
under Article 226, an applicant should ordinarily be one who has a
personal or individual right in the subject-matter of the application,
though in the case of some of the writs like habeas corpus or quo
warranto this rule is relaxed or modified. In other words, as a
general rule, infringement of some legal right or prejudice to some
legal interest inhering in the petitioner is necessary to give him a
locus standi in the matter, (see State of Orissa v. Madan Gopal
Rungta [AIR 1952 SC 12 ]; Calcutta Gas Co. v. State of
W.B. [AIR 1962 SC 1044]; Ram Umeshwari Suthoo v. Member,
Board of Revenue, Orissa [(1967) 1 SCA 413]; Gadde
Venkateswara Rao v. Government of A.P. [AIR 1966 SC
828]; State of Orissa v. Rajasaheb Chandanmall [(1973) 3 SCC
739]; Satyanarayana Sinha Dr v. S. Lal & Co. [(1973) 2 SCC
696] ).
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37. It will be seen that in the context of locus standi to apply for a
writ of certiorari, an applicant may ordinarily fall in any of these
categories: (i) "person aggrieved"; (ii) "stranger"; (iii) busybody
or meddlesome interloper. Persons in the last category are easily
distinguishable from those coming under the first two categories.
Such persons interfere in things which do not concern them. They
masquerade as crusaders for justice. They pretend to act in the
name of pro bono publico, though they have no interest of the
public or even of their own to protect. They indulge in the pastime
of meddling with the judicial process either by force of habit or
from improper motives. Often, they are actuated by a desire to
win notoriety or cheap popularity; while the ulterior intent of some
applicants in this category, may be no more than spoking the wheels
of administration. The High Court should do well to reject the
applications of such busybodies at the threshold.
49. It is true that in the ultimate analysis, the jurisdiction under
Article 226 in general, and certiorari in particular is discretionary.
But in a country like India where writ petitions are instituted in the
High Courts by the thousand, many of them frivolous, a strict
ascertainment, at the outset, of the standing of the petitioner to
invoke this extraordinary jurisdiction, must be insisted upon. The
broad guidelines indicated by us, coupled with other wellestablished self-devised rules of practice, such as the availability
of an alternative remedy, the conduct of the petitioner etc. can go
a long way to help the courts in weeding out a large number of
writ petitions at the initial stage with consequent saving of public
time and money."
In the aforesaid decision, it was also observed that despite adequate
opportunity, if a person has not lodged any objection at an appropriate
stage 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 in
favour of the appellant by the Commissioner, Endowments Department
after obtaining the report of the Assistant Commissioner.