M/S. JAGAN SINGH & CO. versus LUDHIANA IMPROVEMENT TRUST & ORS.

Citation: [2022] 14 S.C.R. 747 · Decided: 02-09-2022 · Supreme Court of India · Bench: SANJAY KISHAN KAUL · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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   [2022] 14 S.C.R. 747
747
M/S. JAGAN SINGH & CO.
v.
LUDHIANA IMPROVEMENT TRUST & ORS.
(Civil Appeal No.371 of 2022)
SEPTEMBER 02, 2022
[SANJAY KISHAN KAUL, S. RAVINDRA BHAT
AND M.M. SUNDRESH, JJ.]
Land Acquisition – Compensation – Execution proceedings –
Auction sale – Setting aside of Auction Sale – Civil Procedure
Code,1908 – O. XX1 R. 17, 66, 54, 66, 89, 90(3) and s.151 –
Respondent no. 1 (Respondent Trust) acquired the land and failed
to give the compensation as determined by the Land Acquisition
Tribunal – In the first round of execution proceedings, the property
bearing khasra no. 271 and 272 of Respondent Trust was attached
and sold to the appellant by way of auction for 22.65 lakhs –
Respondent Trust filed application before the Court of the Senior
Sub Judge to set aside the ex-parte attachment and auction of the
Trust’s property – The executing Court dismissed the objections and
uphold the sale – SLP filed before Supreme Court – The Court set
aside the impugned orders and remitted the matter to the Executing
Court for deciding the application u/O. XX1 R. 90 de novo – In the
Second round of Execution Proceedings – Executing Court
dismissed the objections, raised against the auction sale, on the
ground of material irregularities and substantial injury caused to
the Respondent Trust – First Appellate Court also confirmed the
decision of Execution Court – High Court set aside the judgments
of the executing Court and the First Appellate Court on the ground
that there were glaring irregularities in the auction sale – The property
auctioned consisted of Khasra nos. 271 and 272, whereas the list
of property was only in reference to the land in khasra no 272 –
Appellant in appeal before the Supreme Court – Held : No doubt
originally Khasra No. 271 was not mentioned and only Khasra No.
272 was mentioned but that would have been relevant if there was a
problem in identification of the property and the ownership of the
property – And, there was no problem in such identification – The
property is clearly described in site plan – Order XXI of the Code is
exhaustive – It is clearly stated in O. XXI Rule 90(3) that no
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SUPREME COURT REPORTS
[2022] 14 S.C.R.
application to set aside a sale on grounds of irregularity or fraud
under the Rule can be entertained on any ground which the applicant
would have taken on or before the date on which the proclamation
of sale was drawn up – The Explanation to the Rule further says
that mere absence of or defect in attachment of the property sold
should not by itself be a ground for setting aside the sale under this
Rule – The Judgment Debtor/Respondent Trust failed to avail any
of these opportunities at different stages – The dual test of material
irregularity of fraud and substantial injury is not satisfied in the
present case – Thus, auction sale is confirmed.
Allowing the appeal, the Court
HELD :
1. The dragging of the proceedings for three decades have
been a grave injustice to the Appellant, who have been deprived
of the enjoyment of the property despite having paid the full
auction price 30 years back. Merely because the Respondent
No. 1 is an Improvement Trust does not give it a licence to take
a citizen’s right for a ride. [ Para 29][759-B-C]
2. In the view of this Court, there is no irregularity or
discrepancy in identification of the property when the site plan
was filed with it. This Court has reproduced the site plan so as to
make it explicitly clear how the bounded property was clearly
described. No doubt originally Khasra No.271 was not mentioned
and only Khasra No.272 was mentioned but that would have been
relevant if there was a problem in identification of the property
and the ownership of the property. This was not so. [Para 32][759-
G-H; 760-A]
3. The Court fails to understand how the dual test of material
irregularity of fraud and substantial injury is satisfied in the
present case. In fact, neither part of the dual test is satisfied.
The Respondent Trust cannot be permitted to say that merely
because the property was auctioned there is some substantial
injury. No doubt there were some structures shown in the site
plan itself, however, they were merely basic structures of a godown
and a quarter. [Para 34][760-A]
4. The Executing Court and the First Appellant Court duly
supported the reasoning based on various failures of the
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Judgment Debtor: (a) did not file objections at the time of
presentation of executio

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