SETH BANARASI DASS (DEAD) BY LRS. versus THE DISTRICT MAGISTRATE AND COLLECTOR, MEERUT AND ORS.

Citation: [1996] 2 S.C.R. 268 · Decided: 08-02-1996 · Supreme Court of India · Bench: M.M. PUNCHHI · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
SETH BANARASI DASS (DEAD) BY LRS. 
v. 
THE DISTRICT MAGISTRATE AND COLLECTOR, 
MEERUT AND ORS. 
FEBRUARY 8, 1996 
[M.M. PUNCHHI AND SUJATA V. MANOHAR, JJ.] 
Civil Procedure Code, 1908-Section 47-Auctiqn sale-Objeetion relat-
e ing to execution, discharge or satisfaction of claint-To be dete1mined by 
officer in charge of execution before proceeding with executi<;m by way of 
sal~Proceeding with auction sale withouJ adjudication Upon 01Jjec-
tions-Mate1ial irregulality-Vitiates sales. 
D 
The appellant was the lessee of a Sugar Mill,; In respei;'.t Qf sugercane· 
cess, purchase tax and other Government dues of the Mills, tlte-Collector 
issued a recovery certificate against the appellant in his pers,0nal capacity. 
The appellant being· the owner of some equity shares and preference 
shares, several attempts were made to sell those shares by public auction. 
Thereafter, a citation was issued by the Tehsildar on.the appellant u/s 280 
E of the U.P. Zamindari Abolition and Land Reforms Act, 1950, calling upon 
him to pay a sum of Rs. 50, 42,523 failing which his property would be 
attached and sold. The objections raised by the appellant stating that the 
shares for which notice of auction was given were already pledged with a 
Bank and the amount mentioned in the recovery certificate of the Collector 
F was not outstanding, were left undecided by the Collector and/or sale 
officer. Subsequently, a sale proclamation was issued by the sale officer 
and pursuant to this an auction sale was held when shares held by the 
appellant were auctioned. The objections filed to the auction sale were 
allowed and the auction sale was declared invalid and therefore set aside 
by the District Magistrate. The auction purchasers filed Writ Petition 
G challenging the order of the District Magistrate. The Collector issued a 
notice to the appellant as well as the auction purchasers to hear the parties 
again. The appellant filed a writ petition to restrain the Collector from 
reviewing or recalling his order. Both these writ petitions were disposed of 
by a common judgment. The High Court upheld the validity of the auction 
H sale. These appeals were filed against the judgment of the High Court. 
268. 
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BANARASI DASS v. DISIT. MAGISTRATE AND COLLECTOR 
269 
The appellant contended that the auction sale was invalid because A 
the auction purchasers did not deposit the full purchase price on the date 
of the auction sale and that objections raised by him to the proposed 
auction sale when thtl-Shares were attached and these objections which go 
to the root of the liability of the appellant to pay the amount were pending 
when the auction sale took place. 
B 
Allowing the appeals, this Court 
HELD : 1.1. In the ~nstant case, the auction purchasers had 
deposited the purchase price as directed by the officer holding the sale and 
had also been issued a receipt for the same. The auction sale therefore, C 
could not be faulted on the ground that the auction purchasers did not 
deposit the full purchase price on the date of the auction sale. [273-B] 
1.2. An auction which is held without deciding objections to it is bad 
in law. Recovery proceedings are equivalent to execution proceedings 
under the Civil Procedure Code. The objections to the attachment and sale D 
of the said shares were raised by the debtor. Under Section 47 of the Civil 
Procedure Code, all questions arising between the parties relating to 
execution, discharge or satisfaction of the claim were required to be 
determined by the officer in charge of execution before proceeding with 
execution by way of sale. The first respondent has given no explanation for E 
not deciding these objections earlier. Therefore, the High Court was not 
right in observing that the objections could be decided at a latter date even 
after the sale of the shares to which the objections pertained. Proceeding 
with the auction sale without adjudicating upon the objections is a 
mat~rial irregularity which vitiates the sales. The appellant had thereby F 
lost his valuable right to have his objections adjudicated upon in accord· 
ance with law. The objections were raised much prior to the auction sale 
and they ought to have been decided before the auction sale took place. 
Failure to do so vitiated the sale. [273-D-E; H; 274-A-B] 
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 1644- G 
1645 of 1980. 
From the Judgment and Order dated 8.5.78 of the Allahabad l{igh 
Court in C.Misc. W.P. Nos. 8

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