LexSADASHIV PRASAD SINGH versus HARENDAR SINGH & ORS.
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[2014] 1 S.C.R. 249 SADASHIV PRASAD SINGH v. HARENDAR SINGH & ORS. (Civil Appeal No.161 of 2014) JANUARY 8, 2014 [A.K. PATNAIK AND JAGDISH SINGH KHEHAR, JJ.] Auction: A B Auction sale - Rights of auction purchaser in the c property purchased ..;. Held: Cannot be extinguished except in cases where the said purchase can be assailed on grounds of fraud or collusion ..:. In the instant case, there was no allegation of fraud or collusion as regards auction purchase by a third party - It was no body's case that at the time of 0 auction purchase, the· value of the property purchased by him was in excess of his bid .:... Besides, no objection was raised to attachment proclamations and notices in newspapers for auction - Auction sale was confirmed and possession of property was handed over to auction purchaser - Mutation E proceedings were finalized - Challenge raised by first respondent ought to have been rejected on the ground <;>f delay and /aches "'."""" Interference by High Court even on ground of equity was clearly uncalled for - Impugned order passed by High Court is set aside - Right of appellant- auction purchaser in plot in question is confirmed - Delay/ F /aches - Equity. A partnership firm comprising three partners, including the brother of respondent no. 1, obtained a loan of Rs.12.70 lac from Allahabad Bank after mortgaging G certain properties. Since the loan amount was not repaid, the Bank, in 1998, preferred Original Application before the Debt. Recovery Tribunal for recovery of its dues. The application was allowed on 21.11.2000 and a direction ~9 H 250 SUPREME COURT REPORTS [2014] 1 S.C.R A was issued for the recovery of Rs.75,75,564/- from the firm. During the pendency of the recovery proceedings, plot No.722 was attached which was in the ownership of the brother of respondent no. 1, who had died meanwhile. On 10.6.2004, respondent no. 1 filed an objection before B the Recovery Officer stating that the attached property did not belong to the judgment debtors, but had been purchased by him from his brother under an unregistered agreement of sale dated 10.1.1991. He, however, chose to abandon the proceedings. The Recovery Officer c passed an order dated 5.5.2008, for the sale of the property by way of public auction. As the appellant turned to be the highest bidder, the Recovery Officer ordered the sale of the property in his favour on 28.8.2008. On 27 .11.2009, the appellant filed a writ petition before the D High Court assailing the order dated 5.5.2008 passed by the Recovery Officer. The High Court dismissed the writ petition. However, in the Letters Patent Appeal filed by respondent no. 1, the Division Bench of the High Court, besides adjudicating the matter on its merits, finally concluded that the proceedings before the Recovery E Officer were in flagrant violation of the provisions of r.11 (2) of the Income Tax (Certificate Proceedings) Rules, and set aside the proceedings conducted by the Recovery Officer, including the sale of the property by public auction. F Allowing the appeal, the Court HELD: 1.1. The rights of an auction-purchaser in the property purchased by him cannot be extinguished G except in cases where the said purchase can be assailed on grounds of fraud or collusion. [para 12] [264-F] H Ashwin S. Mehta & Anr. vs. Custodian & Ors. 2006 (1) SCR 56 = (2006) 2 SCC 385; Janatha Textiles & Ors. vs. Tax Recovery Officer & Anr. 2008 (8) SCR 1148 = (2008) 12 SADASHIV PRASAD SINGH v. HARENDAR SINGH & 251 ORS. SCC 582, Nawab Zain-Ul-Abdin Khan v. Mohd. Asghar Ali A Khan, (1887-88) 15 IA ·12; Janak Raj vs. Gurdia/ Singh 1~67 SCR 77 = AIR 1967 SC 608; Gurjoginder Singh vs. Jaswant Kaur, 1994 (1) SCR 794 = (1994) 2 SCC 368; Padanathil Ruqmini Amma vs. P.K. Abdulla 1996 (1) SCR 651 = (1996) 7 SCC 668; Velji Khimji and Company vs. B Official Liquidator of Hindustan Nitro Product (Gujarat) Limited & Ors. 2008 (12) SCR 1 = (2008) 9 SCC 299 - referred to. 1.2. In the instant case, there is no allegation of fraud or collusion. Therefore, irrespective of the merits of the C lis between the rival parties, namely, the Allahabad Bank and the partners of the borrower firm, it is not open for anyone to assail the purchase of the property made by the auction purchaser in the public auction held in furtherance of the order passed by the Recovery Officer on 28.8.2008. In this view of the matter, this Court is of D the
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