LexSTATE OF U.P. & ORS. versus M/S. SWADESHI POLYTEX LTD. & ORS.
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[2008] 9 S.C.R. 85 STATE OF U.P. & ORS. A v. M/S. SWADESHI POLYTEX LTD. & ORS. (Civil Appeal No.3840 of 2008) MAY16, 2008 B [rARUN CHATTERJEE AND HARJIT SINGH BEDI, JJ.] Uttar Pradesh Zamindari Abolition & Land Reforms Rules, 1952- rr 246, 273A, 283, 285 and 285A-· Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 - s. 327 - c Sick company unable to pay wages due to its employees - Concerned authorities proceeded to recover amounts due, as arrears of land revenue, by way of attachment and sale of prop- erty belonging to company in auction - Auction purchaser, a Government agency - Company filed writ petition cha/Ieng- D ing the auction proceedings - High Court allowed the petition and also passed strictures against the officers of State Gov- ernment who had been instrumental in arranging the auction - On appeal, held: Issuance of sale proclamation and auction notice did not comply with the procedure prescribed under the E Act and the Rules - Hence, auction sale vitiated and cannot be maintained - However, High Court's direction that action should be initiated against the concerned officers not justified - Same accordingly expunged - Strictures - Expunging of - . Service Law. ' F Respondent, a sick company, was unable to pay wages due to its employees. The concerned authorities proceeded to recover the amounts due as arrears of land revenue by way of attachment and sale of property be- longing to Respondent-company in auction. U.P. State In- G dustrial Development Corporation (UPSIDC), a Govern- ment agency, was the auction purchaser. Respondent- company filed writ petition challenging the entire auction proceedings. It contended that the issuance of the sale 85 H 86 SUPREME COURT REPORTS [2008] 9 S.C.R. A proclamation and the auction notice did not comply with the procedure prescribed unde,r the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 and the Uttar Pradesh Zamindari Aboliti 1on and Land Reforms Rules, 1952. High Court allowed the writ petition with B costs and also passed strictures against the officers of the State Government who had been instrumental in ar- ranging the auction. Hence thr~ present appeal. Dismissing the appeal, t.he Court F c HELD:1. From a bare rf:ading of the r.246 of the Uttar Pradesh Zamindari Abolition & Land Reforms Rules, 1952, it is clear that notice can 'oe served on the agent only if it is not possible to serve it on the actual defaulter. In the present case, no attempt whatever had been made to D serve the notice to the actual defaulter and had been served on the Chow'kidai ~t the very initial stage. (Par(l 1 O] (97-F,G] 2. There is yet another circumstance which indicates that the procedure for sale had not been followed. It is E clear from the rer.:ord that the sale proclamation had been issued without any valuation of the properties and only the area of thr; vacant land had been specified therein. There was a r.lear violation of rs. 283 and 285. R.283 pro- vides for the. estimated value of the property to be deter- F mined undr~r the provisions contained in Chapter XV of the Reven•1.1e Manual. The said Chapter specifies the pro- cedure fo,r valuation of the property in terms of other simi- lar prorierties. It is, however, clear from the record that the fig•1.1re of 27 Crores, the value of the property which is G ment;,oned in the advertisement in the newspaper "Amar Ujal.a" appears to have picked up without any basis as it is not the case of the UPSIDC that the property had been va,lued in accordance with the provisions of the Revenue l\llanual or by a valuer or expert in the field. [Para 11] (97- 'ri, 98-A-E] .. H STATE OF U.P. & ORS. v. SWADESHI 87 POLYTEX LTD 3. The question of valuation is of the utmost impor- A tance as it is designed to ensure the best price for the property and it is essential in this circumstance that wide publication and notice of the proposed sale should be given as per r.285-A which postulates a notice of 30 days between the date of issuance of the sale proclamation and B the date of auction. In the present case, however, the auc- tion had been held on 2nd May 2005 though the sale proc- lamation had been issued on 1st April 2005, and served on the Chowkidar on 21st April 2005 and the publication made in "Amar Ujala" on 22nd April 2005. The argument c that as SPL (Respondent-company) had suffered no prejudice in the auction proceedings, the sale
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