Case Note & Summary
One Daulat Ram, since deceased, owned M/s Durga Prasad Saw Mills and had defaulted in paying the employer’s share of provident fund contributions. Revenue authorities brought his agricultural properties bearing Survey Nos. 183/4 and 228, measuring 3.78 acres, to public auction on 27 June 1977 for recovery of those dues. The first respondent was the successful bidder for Rs.34,500 and deposited Rs.8,625, representing 25 percent of the bid amount, on the spot as required. The balance was payable under Section 202 of the Maharashtra Land Revenue Code, 1966 within two months from the auction date or 15 days from confirmation, whichever was earlier. The sale was confirmed on 21 November 1977, and the first respondent deposited the remaining three-fourths amount on 26 August 1977, which was beyond two months from the auction date. The appellant, widow of Daulat Ram, objected to the revenue sale; another objector, Banta Singh, claimed as legatee under a will, but his objection was rejected and he did not appeal. The Sub Divisional Officer, Ramtek rejected the appellant’s objection, but the Additional Commissioner, Nagpur Division by order dated 26 June 1979 accepted her objection and set aside the sale. The first respondent filed a revision before the Revenue Minister, Government of Maharashtra, who by order dated 10 October 1979 allowed the revision and upheld the auction sale. The appellant’s writ petition before the Bombay High Court was dismissed by a one-line order, leading to the present appeal by special leave. The appellant contended that the Additional Commissioner’s order was based on Sections 202 and 203 and the revisional order gave no valid reasons to upset it. The first respondent argued that his application dated 16 August 1977 to the Naib Tehsildar showed bona fide intention to deposit within time and that the delay was a procedural irregularity caused by revenue authorities. The Supreme Court examined Sections 202 and 203 and found that the full purchase money had to be deposited within the earlier of two months from auction or 15 days from confirmation. The first respondent admittedly did not deposit within that period. The alleged application was not proved; the Additional Commissioner had cogently doubted its existence and pointed out that there was no need for any endorsement and the first respondent could have approached the Sub Divisional Officer. The Revenue Minister’s order did not meet these findings but proceeded on the assumption that the application existed and that the first respondent was misled. The Supreme Court held that such revisional interference without reasons was impermissible and that the first respondent’s blame on revenue authorities was an afterthought. Consequently, the auction sale was not sustainable. However, because the appellant had deposited Rs.50,000 pursuant to the Supreme Court’s interim order dated 15 April 1985 and that amount with accrued interest was available, and because the provident fund dues had been adjusted from the sale amount, the Court directed that this deposit with interest be paid to the first respondent to meet the ends of justice. The appeal was allowed, the first respondent was permitted to withdraw the deposited amount with interest, and no costs were awarded.
Headnote
A) Revenue Sale - Mandatory Statutory Deposit - Section 202 Maharashtra Land Revenue Code, 1966 - Time limit for payment of full purchase money is mandatory; default attracts forfeiture under Section 203. Auction purchaser deposited 25% on spot and balance 3/4th only on 26.8.1977 beyond two months from auction on 27.6.1977; Additional Commissioner found no genuine obstacle prevented timely deposit and set aside sale. Held that failure to comply with Section 202 rendered sale liable to be set aside under Section 203, and the revisional order could not override this finding. (Paras Not mentioned) B) Revisional Jurisdiction - Interference with Findings - Sections 202 and 203 Maharashtra Land Revenue Code, 1966 - Revisional authority must give reasons and cannot reverse a well-considered order based on record by assuming facts not established. Revenue Minister upset Additional Commissioner's order without meeting its findings on the existence of application dated 16.8.1977; the Supreme Court held such interference impermissible as it proceeded on assumptions and failed to assign valid reasons. Held that the revisional order was unsustainable. (Paras Not mentioned) C) Equitable Relief - Restitution - Section 202 and 203 Maharashtra Land Revenue Code, 1966 - While setting aside sale, court can direct return of auction purchaser's deposit to meet ends of justice. Appellant had deposited Rs.50,000 pursuant to Supreme Court interim order, invested in fixed deposit; provident fund dues had been adjusted from sale amount. Held that first respondent was entitled to withdraw that deposit with accrued interest, though sale was set aside. (Paras Not mentioned)
Issue of Consideration
Whether the first respondent's failure to deposit the balance 3/4th auction amount within the period prescribed under Section 202 of the Maharashtra Land Revenue Code, 1966 rendered the revenue sale invalid under Section 203; and whether the Revenue Minister's revisional order was sustainable in reversing the Additional Commissioner's findings on the alleged application dated 16.8.1977.
Final Decision
Appeal allowed; the auction sale was held not sustainable in view of default under Sections 202 and 203; first respondent permitted to withdraw the amount deposited by the appellant (Rs.50,000 with accrued interest) to meet ends of justice; no order as to costs.
Law Points
- Mandatory compliance with statutory time limit for deposit of balance auction money under Section 202 of Maharashtra Land Revenue Code
- 1966
- default entails forfeiture and resale under Section 203
- revisional authority must give reasons and cannot interfere with well-considered findings based on record merely on assumptions
- equitable restitution of deposit with interest to auction purchaser despite setting aside sale.
