Court orders cancellation of sale proceedings & return of ancestral property under proprietary estoppel rules

The Court allowed the writ petition, directing immediate action to cancel the sale proceedings and confirmations, returning the ancestral property within two months. The petitioner, who participated in the Amnesty Scheme and settled dues, was entitled to re-conveyance of the 1/5th share bought by the Government for Re.1. The Court emphasized principles of proprietary estoppel, highlighting that when a defaulter settles dues, the State must return the land. Despite the Government's argument of delay, the Court ruled in favor of the petitioner, ordering restitution of the property.

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Issues:
Challenge to sale proceedings and improper bidding over ancestral property under Kerala Revenue Recovery Act.

Analysis:
The petitioner sought to quash Exhibit-P1 and declared the sale proceedings and the improper bidding of his 1/5th share of ancestral property illegal. The petitioner, a failed business owner with unpaid sales tax dues, had his property attached for recovery. The undivided property was auctioned, and the Government bought the 1/5th share for Re.1. Despite applying for Amnesty Scheme and requesting re-conveyance, no final decision was made by the authorities. The petitioner approached the Court fearing non-reconveyance even after settling dues under the Amnesty Scheme.

The Government argued that the petitioner's delay in seeking relief after the sale in 2008 warranted dismissal. The petitioner, not in exclusive possession during the sale, made efforts to raise funds and requested re-conveyance. The Government did not take possession of the property post-sale, and no suit was filed for demarcation. The Court noted the petitioner's participation in the Amnesty Scheme based on Government's intimation, not Court orders.

Referring to precedent cases, the Court highlighted that when a defaulter pays dues accepted by the Government, principles of proprietary estoppel apply, entitling re-conveyance. The Court emphasized that when the basis of sale is undermined by payment, the State must return the land to the original owner. In this case, the State purchased only the petitioner's share, never possessing it. Given the petitioner's participation in the Amnesty Scheme, equity demanded restitution of the purchased share.

Consequently, the Court allowed the writ petition, directing immediate action to cancel the sale and confirmations, returning the property within two months.

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