RAKESH KUMAR GOEL ETC. versus U.P. STATE INDUSTRIAL DEVELOPMENT CORPORATION LTD. & ORS.

Citation: [2010] 8 S.C.R. 220 · Decided: 08-07-2010 · Supreme Court of India · Bench: S.H. KAPADIA · Disposal: Dismissed
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

A 
B 
c 
[2010] 8 S.C.R. 220 
RAKESH KUMAR GOEL ETC. 
v. 
U.P. STATE INDUSTRIAL DEVELOPMENT 
CORPORATION LTD. & ORS. 
(Civil Appeal No. 5177 of 2010) 
JULY 8, 2010 
[S.H. KAPADIA, CJI., AND AFTAB ALAM, J.] 
Land laws: 
U.P. Zamindari Abolition and Land Reforms Rules, 1952 
- r. 285-D - Auction sale - Allottees of Government land in 
arrears of land revenue - Recovery of government dues -
Auction sale of Government plots in favour of highest bidders 
D - Set aside by High Court on the ground of violation of r. 285-
D - On appeal, held: Law under which the auction sale 
proceedings were held was deficient - Auction proceedings 
appear to be full of anomalies - On the contrary, bidders did 
not deposit twenty five percent of the bid amount immediately 
after the auction and there was no receipt showing payment 
E immediately after the auction - Regarding one plot, sale was 
confirmed and sale certificate was issued in favour of the 
bidder even without payment of full price of the plot - In the 
guise of recovery of government dues, said bidders in 
collusion with their abettors in government departments tried 
F 
to grab government lands - Thus, auction sale of plots in 
favour of the said bidders was illegal, bad and malafide -
Bidders directed to pay Rs. 2 lakhs each as exemplary costs 
- There is need to update UPZALR Act and UPZALR Rules 
since they are completely deficient for dealing with land 
G holdings in highly urbanised and industrialised regions - U.P. 
H 
Zamindari Abolition and Land Reforms Act, 1950 - s. 279 -
Cost - Legislation. 
The two pieces of government land-A and B, were 
220 
RAKESH KUMAR GOEL ETC. v. U.P. STATE 
221 
INDUSTRIAL DEV. CORPN. LTD. 
allotted to BSPL and SAPL respectively. Both BSPL and 
A 
SAPL were in arrears of land revenue. For the recovery 
of the government dues, the said lands were auctioned. 
The auction sale of two pieces of land was made in favour 
of the appellants. The High Court set aside the auctio1n 
sale. It held that the auction sale of the two plots was a 
B 
nullity because the appellants did not deposit one fourth 
of their bid accounts immediately on the conclusion of 
the auction but deposited the requisite amounts on the 
following day. 
In appeal to this Court, the respondents-BSPL and 
C 
SAPL contended •that no auCtion was ever held and the 
whole thing was mere paper work. 
Dismissing the appeal, the Court 
HELD: 1. It is evident that the law under which the 
D 
auction sale ,proceedings were held was itself quite 
deficient. But the enumeration .of the shortcomings and 
the lacunae in the provisions of.an archaic law is not to. 
say that the auction proceedings of the two plots were 
otherwise fair and proper and suffered from some 
E 
irregularities only due to the flaws in the law. On the 
contrary, there is no doubt that the auction sale of. the 
two plots in favour of the appellants was illegal, 
fraudulent and collusive. In the guise of recovery of the 
government dues, the two appellants in coltusion with 
F 
their abettors in the government departments were trying 
to grab government lands and they almost succeeded but 
for the interference by the High Court. Though the High. 
Court set aside the auction sale of the two plots on the 
technical ground of violation of Rule 285-D, on a G 
consideration of the overall facts and circumstances; the 
auction sale was bad and rrialafide and was a blatant 
attempt to grab the public land. [Paras 25, 32 and 39] [241-
B-C; 245-E; 249-B] 
2. The disposal of public property partakes the. H 
222 
SUPREME COURT REPORTS 
[2010] 8 S.C.R 
A character of trust and the government or the public 
authorities are obliged to make all attempts to obtain the 
best available market price while disposing of public 
properties. [Para 37] [248-E-F] 
· Ram and Shyam Co. vs. State of Haryana (1985) 3 SCC 
B 267; V. Purushotham Rao vs. Union of India (2001) 10 SCC 
305; Aggarwal and Modi Enterprises (P.) Ltd. vs. New Delhi 
Municipal Council (2007) 8 SCC 75; Meerut Development 
Authority vs. Association of Management Studies, (2009) 6 
SCC 171; Anil Kumar Srivastava vs. State of UP (2004) 8 
c sec 671 - referred to. 
3.1 Under the U.P. Zamindari Abolition and Land 
Reforms Rules, 1952 the only mode for advertisement of 
auction-sale is by affixation of the Sale Proclamation at 
0 a conspicuous place in the village where the property is 
located and by beat of drum. There is no provision of 
advertisement in the newspapers or by any
Excerpt shown. Read the full judgment & AI analysis in Lexace.