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Civil · Reportable judgment

Narayan Yadav (D) Thr. Lrs. vs The State of Bihar & Ors.

Court
Supreme Court of India
Date
25 February 2020
Case No.
Civil Appeal No. 9173 of 2010
Result
Allowed
Bench
L. Nageswara Rao, R. Subhash Reddy
Citation
[2020] 3 S.C.R. 999 : 2020 INSC 221
Supreme Court Reports [2020] 3 S.C.R. 999 : 2020 INSC 221
Headnote

Bihar & Orissa Public Demands Recovery Act, 1914: s. 28 – Auction sale of land in question – For recovery of loan – Application u/s. 28 for cancelling the auction sale claiming to be bona fide purchaser even before auction – Amount as required to be deposited was not deposited within 30 days – Certificate Officer extended time to deposit the amount – Pursuant to objector depositing the amount, auction sale cancelled – Whether auction sale liable to be cancelled on failure to make deposit within 30 days – Held: Time limit was mandatory – Certificate Officer had no jurisdiction to extend that time – Hence, could not have cancelled auction sale.

Allowing the appeal, the Court

HELD 1. From a reading of Section 28 of the Bihar and Orissa Public Demand Recovery Act, 1914, it is clear that the certificate-debtor, or any person whose interests are affected by the sale, may, at any time within thirty days from the date of the sale, can make an application to the Certificate Officer to set aside the sale by depositing the amount specified in the proclamation of sale, along with interest @ six and a quarter per centum per annum, and with penalty, a sum equal to ten percent of the purchase money. If the application filed under Section 28 of the Act is to be treated as valid it must be along with the deposit, as contemplated under Section 28(1) of the Act. [Para 8][1004D-F]

2. In the present case, the deposit of purchase money along with penalty was not deposited within a period of thirty days from the date of sale. [Para 8][1004-F]

3. If any person applies for setting aside the sale, one has to make an application to set-aside the sale, and such application is to necessarily be supported by deposit of money. For making an application, when there is a stipulated time of thirty days from the date of sale, it means that it is to be done at sometime during the course of stated time immediately preceding the expiry of thirty days. Further, the word “deposit” used in the Section, is to be understood and mean that deposit is to be made either, before making an application, or simultaneously with the application within the prescribed time of thirty days. When there is a prescribed time of thirty days from the date of sale. [Para 8][1004H; 1005-A-B]

Read the full headnote (3 more paragraphs)

4. In absence of any power on the certifying officer to extend the time, he has no jurisdiction at all to extend the time of deposit, beyond the period of thirty days from date of sale. In absence of any power conferred on the authority under Section 28 of the Act, and considering the consequence of not depositing the money within the time of thirty days, the period of thirty days as mentioned in the Section 28 is to be considered as mandatory. [Para 8][1005-B-C]

5. The provision under Section 28 is intended to safeguard the interests of persons who are affected by the sale, to approach the competent authority within the prescribed time by depositing the purchase amount along with ten percent thereof as penalty which is payable to auction purchaser for retaining the land. If deposits are allowed to be made even after thirty days, same will run contrary to Section 28 itself and frustrate the object of the provision. [Para 8][1005-D-E]

6. The respondent-writ petitioners, except stating that the writ-petitioners are the bona fide purchasers by registered sale deeds from the original owners even before the auction, and they have also deposited the purchase money along with 10% towards penalty, could not make any acceptable submission for entertaining application which is not supported by deposit as required under Section 28 of the Act. [Para 9][1005-G-H; 1006-A]

As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.

Full Judgment Text

The Judgment of the Court was delivered by R. SUBHASH REDDY, J. 1. This civil appeal is filed by the appellants, aggrieved by the judgment and order dated 12th March, 2008 passed in Letters Patent Appeal No.79 of 1994 by the High Court of Patna. 2. Necessary facts in brief are as under:3. One Sadhusharan Yadav, Respondent No.14 herein, took a loan from the Land Development Bank, Uda Kishunganj (Madhipura) during the year 1971, by mortgaging his agricultural land. Sadhusharan Yadav defaulted in payment of loan and, thus, a certificate case No.338 of 1981-82 was initiated for realization of s
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