1990 (8) TMI 382 - SC - Indian Laws

Auction sale void for non-payment, civil court has jurisdiction to protect possession. Appeal dismissed.

The Supreme Court held that the auction sale was void as the auction-purchasers failed to pay the balance within the prescribed time, rendering the sale ... Whether a Lambardar who fails to collect the land revenue and deposit the same in the State Treasury, can be said to be a 'defaulter' within the meaning of Section 3(8) of the Act? Whether the sale in favour of the purchasers, i.e. the appellants before us, was null and void as they had failed to pay the balance (75%) of the purchase-price within the time allowed by Section 88 of the Act? Whether the civil court had jurisdiction to entertain and try the suit having regard to Section 158 of the Act? Held that:- Once it is held that the sale was rendered null and void on the failure of the auction-purchasers to comply with the requirements of Section 88 of the Act, it was the imperative duty of the authorities to put the property to re-sale for the law did not confer any discretion in the concerned authorities to extend the time for the payment of the balance amount. Once the mandatory requirement of Section 88 of the Act was not complied with, the only course open to the concerned authorities was to put the property to re- sale. It, therefore, by Section 88 of the Act. Therefore, the action of the concerned authority in accepting the balance money on 2nd March, 1965 long after the period prescribed by Section 88 of the Act had expired was an act without jurisdiction and of no avail. So also the confirmation of sale on 21st March, 1966 was without jurisdiction and must be ignored. If that is the true position in law, there can be so doubt that there was no sale in the eye of the law in favour of the appellants herein and, therefore, the threatened action of the appellants to dispossess the landowner was clearly de hors the Act and could validity be challenged in a civil court. We, therefore, do not find any infirmity in the view which found favour with the High Court. Appeal dismissed. Issues Involved:1. Whether a Lambardar who fails to collect and deposit land revenue can be considered a 'defaulter' under Section 3(8) of the Punjab Land Revenue Act, 1887.2. Whether the auction sale was null and void due to the failure of the auction-purchasers to pay the balance (75%) of the purchase price within the time prescribed by Section 88 of the Act.3. Whether the civil court had jurisdiction to entertain and try the suit in light of Section 158 of the Act.Issue-wise Detailed Analysis:1. Defaulter Status of Lambardar:The primary question was whether the plaintiff, as a Lambardar, was a 'defaulter' under Section 3(8) of the Punjab Land Revenue Act, 1887. The plaintiff argued that he did not actually act as a substitute Lambardar and did not collect any land revenue. The trial court found that the plaintiff was a defaulter and dismissed the suit. However, the appellate court reversed this finding, concluding that the plaintiff was not a defaulter and that the sale was fraudulent and illegal. The High Court upheld the appellate court's decision, stating that the plaintiff was not a defaulter and thus the sale was void. Consequently, the civil court had jurisdiction.2. Validity of Auction Sale:The second issue was whether the auction sale was null and void due to the failure of the auction-purchasers to pay the balance (75%) of the purchase price within the prescribed time. The auction-purchasers paid the balance amount on 2nd March 1965, instead of within the 15 days allowed by Section 88 of the Act. The High Court held that this default rendered the sale void, citing the decision in Manilal Mohanlal Shah and Ors. v. Sardar Sayed Ahmed Sayed Mahamad and Anr., which emphasized the mandatory nature of such payments. The Supreme Court agreed, stating that the failure to comply with the mandatory requirements of Section 88 rendered the sale non-existent in the eyes of the law, and thus, no right, title, or interest passed to the auction-purchasers.3. Jurisdiction of Civil Court:The third issue was whether the civil court had jurisdiction to entertain and try the suit, given Section 158 of the Act, which limits civil court jurisdiction over certain matters related to land revenue collection and enforcement. The Supreme Court noted that the suit was not to set aside the sale under Section 91 of the Act but to protect the plaintiff's possession against a void sale. The Court held that since the sale was void, the civil court had jurisdiction to hear the case. The Court emphasized that acts without jurisdiction by revenue authorities do not oust the jurisdiction of civil courts.Conclusion:The Supreme Court concluded that the auction sale was void due to the failure of the auction-purchasers to pay the balance amount within the prescribed time. Consequently, the civil court had jurisdiction to entertain and try the suit. The appeal was dismissed, and each party was directed to bear its own costs.