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“REPORTABLE”

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.  161  OF 2014 (Arising out of SLP (C) No.23000 of 2010)

Sadashiv Prasad Singh            … Appellant

Versus

Harendar Singh & Ors.       … Respondents

WITH

CIVIL APPEAL NO.   162   OF 2014 (Arising out of SLP (C) No.26550 of 2010)

J U D G M E N T

Jagdish Singh Khehar, J.

1. On 11.9.1989, The Allahabad Bank (hereinafter referred to as ‘the Bank’)  

sanctioned a loan of Rs.12.70 lac to M/s. Amar Timber Works, a partnership firm  

having three partners, Jagmohan Singh, Payam Shoghi and Dev Kumar Sinha.  

The above loan was sanctioned to M/s. Amar Timber Works, after its partners  

had mortgaged certain properties to secure the loan amount.   Since the loan  

amount was not repaid in compliance with the commitment made by M/s. Amar  

Timber Works, nine years later, in 1998, the Bank preferred Original Application  

No.107 of 1998 before the Debt Recovery Tribunal for the recovery of the Bank’s  

dues. The above Original Application was allowed on 21.11.2000.  Accordingly, a

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2 direction was issued for the recovery of Rs.75,75,564/- from M/s. Amar  Timber  

Works.  For the execution of the order passed by the Debt Recovery Tribunal,  

the Bank initiated recovery proceedings on 28.11.2000.  During the pendency of  

the recovery proceedings, Jagmohan Singh, one of the partners of M/s. Amar  

Timber  Works,  died  (on  27.1.2004).   On  16.4.2004,  the  Recovery  Officer  

attached plot No.722, located at Exhibition Road, P.S. Gandhi  Maidan,  Patna  

(hereinafter  referred  to  as  ‘the  property’)  measuring  1298  sq.ft.   It  would  be  

pertinent to mention that the aforesaid plot was in the ownership of Jagmohan  

Singh, one of the partners in M/s. Amar Timber Works.

2. On  10.6.2004,  Harender  Singh,  brother  of  Jagmohan  Singh,  filed  an  

objection petition before the Recovery Officer alleging, that the attached property  

did not belong to the judgment debtors, but had been purchased by him from his  

brother Jagmohan Singh, by executing an agreement of sale dated 10.1.1991,  

which was duly notarized though not registered.  It would be relevant to mention,  

that  Harender  Singh  pursued  the  objection  petition  filed  by  him  before  the  

Recovery  Officer  till  26.10.2005,  but  chose  to  abandon  the  proceedings  

thereafter.   The order passed by the Recovery officer when the Objector was  

represented for the last time on 26.10.2005 is being extracted below:

“Ld.  Advocate  of  Bank  and  objectors  appears.   Objector  reiterated  his  points and invited attention towards Section 53 of TP Act.  Counsel of the  bank  submits  that  he  had  to  say  nothing  more  than  what  was  said/submitted earlier.  He also submits that D.Drs. was guarantor also in  this case hence his properties attached.  Put up on 28.12.08 for further  hearing.

Sd/- Illegible I/C R.O.”

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3 3. The recovery proceedings referred to above remained pending for a further  

period of more than two years.  Finally, the Recovery Officer passed an order  

dated 5.5.2008, for the sale of the property by way of public auction on 4.7.2008.  

The Recovery Officer fixed Rs.12.92 lacs as the reserve price, and also fixed  

28.8.2008 as the date of its auction.  At the auction held on 28.8.2008, Sadashiv  

Prasad Singh, was the highest bidder.  Accordingly, the Recovery Officer ordered  

the sale of the property in his favour on 28.8.2008.  On 22.9.2008, the Recovery  

Officer, in the absence of any objections, confirmed the sale of the property in  

favour  of  Sadashiv  Prasad  Singh.   The  Recovery  Officer  also  ordered,  the  

handing over of physical possession of the property to the auction purchaser.  

Sadashiv Prasad Singh, the auction purchaser, took physical possession of the  

property on 11.3.2009.

4. In  furtherance  of  the  proceedings  initiated  through  Mutation  Case  

No.295/2/09-10,  the  land  in  question  was  mutated  in  favour  of  the  auction  

purchaser.  It would be relevant to mention that the application for mutation filed  

by the auction purchaser, Sadashiv Prasad Singh, was supported by letter dated  

14.10.2008  of  the  Ministry  of  Finance,  Government  of  India,  Realization  

Authority, Patna.  It would be relevant to mention, that no objections were filed in  

the  mutation  case  preferred  by  Sadashiv  Prasad  Singh,  by  or  on  behalf  of  

Harender Singh, before the Mutation Officer.

5. On 27.11.2009,  CWJC No.16485 of  2009 was filed by Harender  Singh  

before the High Court of Judicature at Patna (hereinafter referred to as the ‘High  

Court’).  In the aforesaid writ petition, Harender Singh assailed the order of the

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4 Recovery Officer dated 5.5.2008, whereby, the property had been ordered to be  

sold by public auction in discharge of the debt owed by M/s Amar Timber Works  

to the Allahabad Bank.  Vide its order dated 23.3.2010, the High Court ordered  

the auction purchaser, i.e. Sadashiv Prasad Singh to be impleaded as a party-

respondent.  On 27.11.2010, the High Court dismissed the above writ petition by  

accepting the objections raised on behalf of the Bank, as well as, the auction  

purchaser by holding as under :

“The above facts do weigh with the Court in not interfering with the sale or  the  proceeding  where  it  has  been  reached.   The  petitioner  has  no  satisfactory  explanation  for  not  approaching  the  Court  well  within  time  challenging such a decision or the subsequent proceedings or orders of  the Recovery Officer at an appropriate time.  The conduct of the petitioner  by itself has precluded and prevented this Court from passing any order in  his favour at this belated stage.

The writ application has not merit.  It is dismissed accordingly.”

6. Dissatisfied with the order dated 27.4.2010 whereby the writ petition filed  

by  Harender  Singh was dismissed by  a Single  Bench of  the  High  Court,  he  

preferred  Letters  Patent  Appeal  No.844  of  2010.   Before  the  Letters  Patent  

Bench, Harender Singh, brother of Jagmohan Singh, asserted that his brother  

Jagmohan Singh had availed a loan of Rs.14.70 lacks.  As against the aforesaid  

loan  amount,  the  Bank  had  initiated  proceedings  before  the  Debt  Recovery  

Tribunal for the realization of a sum of 75,75,564/-.  The property under reference  

was  sold  by  way  of  public  auction  to  Sadashiv  Prasad  Singh  for  a  sum of  

Rs.13.20 lacs.  As against the aforesaid sale consideration paid by the auction  

purchaser,  Harender  Singh,  offered  a  sum  of  Rs.39  lacs  before  the  Letters  

Patent Bench.  In the order passed by the Letters Patent Bench disposing of

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5 Letters  Patent  Appeal  No.844  of  2010,  it  stands  noticed  that  the  Bank  had  

accepted to finally settle the matter on being paid a sum of Rs.45 lacs, subject to  

the condition that the Harender Singh pays a sum of Rs.15 lacs immediately, and  

the  balance amount  of  Rs.30  lacs  within  a  period  of  two years  in  a  phased  

manner.  Even though the learned counsel representing the appellant, Harender  

Singh was agreeable to proposal of the Bank, the rival parties could not amicably  

settle  the  matter.   It  is,  therefore,  that  the  letters  patent  Bench  went  on  to  

adjudicate the matter on its merits.  The above factual position has been noticed  

for the reason that it has a nexus to the final order which was eventually passed  

by the Letters Patent Bench disposing of LPA No.844 of 2010.  In fact, it would  

be in the fitness of matters to extract paragraph 8 from the impugned judgment  

rendered in LPA No.844 of 2010 in order to appreciate the niceties of the matter.  

The aforesaid paragraph is, accordingly, being extracted herein :

“8.  At this  juncture,  we may state that  the brother of  the appellant  had  availed a loan of Rs.14.70 lacs.  The said aspect is not disputed by Mr.  Ajay Kumar Sinha, learned counsel for the Bank.  The Bank had initiated a  proceeding before the Tribunal for realization of approximately a sum of  Rs.75.75  lacs.   The  property  has  been  sold  for  Rs.13.20  lacs.   It  is  submitted by Mr. Ojha that the prices have gone up and he is being offered  more than 39 lacs for the same.  It is not in dispute that the price, the  auction-purchaser has tendered, is Rs.13.20 lacs.  On the earlier occasion,  a suggestion was given whether the Bank would accept Rs.45 lacs in toto  to settle the dispute.  Mr. Sinha, learned counsel for the Bank has obtained  instructions  that  the  Bank  has  no  objection  to  settle  the  same,  if  the  appellant pays Rs.15 lacs immediately so that the same can be paid to the  auction-purchaser and Rs.30 lacks should be paid within a period of two  years in a phased manner.  Mr. Choubey, learned counsel for the appellant  submitted  that  the  appellant  is  agreeable  to  pay  the  same.   Mr.  Ojha  submitted that he has instructions not to accept the suggestion.”

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6 7. During  the course  of  appellate  proceedings,  the High Court  referred  to  

Chapter V of the Recovery of Debts Due to Banks and Financial Institutions Act,  

1993  (hereinafter  referred  to  as  the  Debt  Recoveries  Act)  and particularly  to  

Section 29 which is being extracted hereunder:

“29.  Application  of  certain  provisions  of  Income-tax  Act.—The  provisions of the Second and Third Schedules to the Income-tax Act, 1961  (43 of 1961) and the Income-tax (Certificate Proceedings) Rules, 1962, as  in force from time to time shall, as far as possible, apply with necessary  modifications as if the said provisions and the rules referred to the amount  of debt due under this Act instead of to the Income-tax :

Provided that any reference under the said provisions and the rules  to the “assessee” shall be construed as a reference to the defendant under  this Act.”

The High Court  while interpreting Section 29 extracted above, concluded that  

certain  provisions  of  the  Income  Tax  Act  and  Income  Tax  (Certificate  

Proceedings)  Rules  would  be  applicable  mutatis  mutandis  in  the  matter  of  

recovery of debts under the Debt Recoveries Act.  The High Court then referred  

to Rule 11 of the Income Tax (Certificate Proceedings) Rules and arrived at the  

conclusion  that  sub-rule  (2)  of  Rule  11,  had  not  been  complied  with  by  the  

Recovery Officer, inasmuch as, the objection raised by Harender Singh had not  

been  adjudicated  upon.   As  such,  the  High  Court  finally  concluded  that  the  

proceedings  before  the  Recovery  Officer  were  in  flagrant  violation  of  the  

provisions  of  Rule  11(2)  of  the  Income  Tax  (Certificate  Proceedings)  Rules.  

Having so concluded, the High Court set aside the proceedings conducted by the  

Recovery Officer, including the sale of the property by public auction.  In order to

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7 appreciate  the  basis  of  the order  passed  by  the  High  Court,  Rule  11  of  the  

Second Schedule of the Income Tax Act, 1961, is being extracted herein:

“Investigation by Tax Recovery Officer.  

11. (1) Where any claim is preferred to, or any objection is  made  to  the  attachment  or  sale  of,  any  property  in  execution  of  a  certificate,  on  the  ground  that  such  property  is  not  liable  to  such  attachment or sale, the Tax Recovery Officer shall proceed to investigate  the claim or objection:

Provided that no such investigation shall  be made where the Tax  Recovery Officer considers that the claim or objection was designedly or  unnecessarily delayed.

(2) Where the property to which the claim or objection applies has been  advertised  for  sale,  the  Tax  Recovery  Officer  ordering  the  sale  may  postpone it pending the investigation of the claim or objection, upon such  terms as to security or otherwise as the Tax Recovery Officer shall deem  fit.  

(3) The claimant or objector must adduce evidence to show that-   

(a) (in the case of immovable property) at the date of the service  of the notice issued under this Schedule to pay the arrears, or  

(b) (in  the  case  of  movable  property)  at  the  date  of  the  attachment,  

he  had  some  interest  in,  or  was  possessed  of,  the  property  in  question.

(4) Where,  upon  the  said  investigation,  the  Tax  Recovery  Officer  is  satisfied that, for the reason stated in the claim or objection, such property  was not, at the said date, in the possession of the defaulter or of some  person in truest for him or in the occupancy of a tenant or other person  paying rent to him, or that, being in the possession of the defaulter at the  said date, it was so in his possession, not on his own account or as his  own property, but on account of or in trust for some other person, or partly  on his own account and partly on account of some other person, the Tax  Recovery Officer shall make an order releasing the property, wholly or to  such extent as he thinks fit, from attachment or sale.  

(5) Where the Tax Recovery Officer is satisfied that the property was, at  the said date, in the possession of the defaulter as his own property and  not on account of  any other person,  or was in the possession of some  other  person in trust  for  him,  or  in  the occupancy  of  a tenant  or  other

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8 person paying  rent  to him,  the Tax Recovery  Officer  shall  disallow the  claim.  

(6) Where a claim or an objection is preferred, the party against whom  an order is made may institute a suit in a civil court to establish the right  which he claims to the property in dispute; but, subject to the result of such  suit (if any), the order of the Tax Recovery Officer shall be conclusive.”

8. Having dealt with the controversy in the manner expressed in the foregoing  

paragraphs, the Division Bench of the High Court was of the view that the matter  

in  hand ought  to be settled by working  out  the equities  between the parties.  

Accordingly, the High Court disposed of the matter in the following manner:

“12. Though we have held the same could not have been sold in auction,  yet equities are to be worked out.  Regard being had to the fact that the  respondent-purchaser has deposited Rs.13.20 lac between 28.8.2008 to  22.9.2009 and thus the amount is with the Bank for almost more than one  year and 10 months and thereafter there had been challenge to the order  in the writ petition and after dismissal of the writ petition the present L.P.A.  has been filed in quite promptitude and that the amount of the respondent- purchaser was blocked, it will be obligatory on the part of the appellant to  compensate  the  respondent-purchaser  at  least  by  way  of  payment  of  interest at the Bank rate.  We are disposed to think that if a sum of Rs.17  lacs  is  paid  to  the  auction-purchaser,  it  would  sub-serve  the  cause  of  justice and house of the appellant shall be saved and, accordingly, it  is  directed  that  the appellant  shall  deposit  a sum of  Rs.17 lacks within  a  period of four weeks from today in the Bank.  After such deposit, the Bank  shall hand it over to the purchaser by way of a bank draft.  The same shall   be  sent  by  registered  post  with  acknowledgment  due.   Thereafter  the  appellant shall deposit a further sum of Rs.32 lacs within a period of two  years; sum of Rs.16 lacs by 25th March, 2011 and further sum of Rs.16  lacs by 25th March, 2012.  Needless to say pro-rate interest shall accrue in  favour of the Bank for the said period.

13. After the amount is paid to the purchaser, it would be the duty of the  Recovery Officer to hand over the possession to the appellant.”

9. Sadashiv Prasad Singh, the auction purchaser, has assailed the impugned  

order passed by the Division Bench of the High Court in LPA No.844 of 2010  

praying for the setting aside of the order by which he has been deprived of the

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9 property purchased by him in the public auction held on 28.8.2008, which was  

subsequently confirmed by the Recovery Officer of the Debt Recovery Tribunal  

on 23.9.2008.  This challenge has been made by Sadashiv Prasad Singh by filing  

Special Leave Petition (C) No.23000 of 2010.  The impugned order passed by  

the  High  Court  on 17.5.2010,  has also been assailed  by Harender  Singh by  

preferring Special Leave Petition (C) No.26550 of 2010.  The prayer made by  

Harender Singh is, that order passed by the Division Bench places him in the  

shoes of the auction purchaser, and as such, he could have only been asked to  

pay a sum of Rs.17 lacs.  Requiring him to pay a further sum of Rs.32 lacs is  

unsustainable in law, and accordingly, deserved to be set aside.

10. Leave granted in both the Special Leave Petitions.

11. For  the  narration  of  facts,  we have  relied  upon  the  pleadings  and  the  

documents appended to Special Leave Petition (C) No.23000 of 2010.

12.  Learned counsel for the auction purchaser Sadashiv Prasad Singh, in the  

first instance vehemently contended, that in terms of the law declared by this  

Court, property purchased by a third party auction purchaser, in compliance of a  

court order, cannot be interfered with on the basis of the success or failure of  

parties  to  a  proceeding,  if  auction  purchaser  had  bonafidely  purchased  the  

property.   In  order  to  substantiate  his  aforesaid  contention,  learned  counsel  

representing  Sadashiv  Prasad  Singh  placed  emphatic  reliance,  firstly,  on  a  

judgment rendered by this Court in Ashwin S. Mehta & Anr. vs. Custodian & Ors.,

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10 (2006)  2  SCC 385).   Our  attention  was  drawn to  the  following  observations  

recorded therein :

“In that view of the matter, evidently, creation of any third-party interest is  no longer in dispute nor the same is subject to any order of this Court.  In  any event, ordinarily, a bona fide purchaser for value in an auction-sale is  treated differently than a decree-holder purchasing such properties.  In the  former event, even if such a decree is set aside, the interest of the bona  fide  purchaser  in  an  auction-sale  is  saved.  (See  Nawab  Zain-ul-Abdin  Khan v. Mohd. Asghar Ali Khan (1887) 15 IA 12)  The said decision has  been affirmed by this Court in Gurjoginder Singh v. Jaswant Kaur (1994) 2   SCC 368).”

(emphasis is ours)

On the same subject, and to the same end, learned counsel placed reliance on  

another  judgment  rendered by this  Court  in  Janatha  Textiles  & Ors.  vs.  Tax  

Recovery Officer & Anr., (2008) 12 SCC 582, wherein the conclusions drawn in  

Ashwin S. Mehta’s case (supra) came to be reiterated.  In the above judgment,  

this  Court  relied upon the decisions of  the Privy Council  and of  this  Court  in  

Nawab Zain-Ul-Abdin Khan v. Mohd. Asghar Ali Khan, (1887-88) 15 IA 12; Janak  

Raj vs. Gurdial Singh, AIR 1967 SC 608; Gurjoginder Singh vs. Jaswant Kaur,  

(1994) 2 SCC 368; Padanathil Ruqmini Amma vs. P.K. Abdulla, (1996) 7 SCC  

668,  as  also,  on Ashwin S.  Mehta (supra)  in  order  to  conclude,  that  it  is  an  

established principle of law, that a third party auction purchaser’s interest, in the  

auctioned property continues to be protected, notwithstanding that the underlying  

decree is subsequently set aside or otherwise.  It is, therefore, that this Court in  

its ultimate analysis observed as under:

“20. Law makes a clear distinction between a stranger who is a bona fide  purchaser  of  the  property  at  an  auction-sale  and  a  decree-holder  purchaser at a court auction.  The strangers to the decree are afforded  protection by the court because they are not connected with the decree.

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11 Unless the protection is extended to them the court sales would not fetch  market value or fair price of the property.”

(emphasis is ours)

On the issue as has been dealt with in the foregoing paragraph, this Court has  

carved out one exception.  The aforesaid exception came to be recorded in Velji  

Khimji and Company vs. Official Liquidator of Hindustan Nitro Product (Gujarat)  

Limited & Ors., (2008) 9 SCC 299, wherein it was held as under :

“30. In the first case mentioned above i.e. where the auction is not subject  to confirmation by any authority, the auction is complete on the fall of the  hammer,  and  certain  rights  accrue  in  favour  of  the  auction-purchaser.  However, where the auction is subject to subsequent confirmation by some  authority (under  a  statute  or  terms  of  the  auction)  the  auction  is  not  complete  and  no  rights  accrue  until  the  sale  is  confirmed  by  the  said  authority.  Once, however, the sale is confirmed by that authority, certain  rights accrue in favour of the auction-purchaser, and these rights cannot  be extinguished except in exceptional cases such as fraud.

31.  In the present case, the auction having been confirmed on 30.7.2003  by the Court it  cannot be set aside unless some fraud or collusion has  been  proved.   We  are  satisfied  that  no  fraud  or  collusion  has  been  established by anyone in this case.”

(emphasis is ours)

It is, therefore, apparent that the rights of an auction-purchaser in the property  

purchased  by  him  cannot  be  extinguished  except  in  cases  where  the  said  

purchase can be assailed on grounds of fraud or collusion.   

13. It is imperative for us, to adjudicate upon the veracity of the sale of the  

property by way of public auction, made in favour of Sadashiv Prasad Singh on  

28.8.2008.  It is not a matter of dispute, that the lis in the present controversy  

was between the Allahabad Bank on the one hand and the partners of M/s. Amar  

Timber Works, namely, Jagmohan Singh, Payam Shoghi and Dev Kumar Sinha  

on the other.  Sadashiv Prasad Sinha was not a party to the proceedings before

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12 the Debt Recovery Tribunal or before the Recovery Officer.  By an order dated  

5.5.2008, the Recovery Officer ordered the sale of the property by way of public  

auction.  On 4.7.2008, the Recovery Officer fixed Rs.12.92 lacs as the reserve  

price, and also fixed 28.8.2008 as the date of auction.  At the public auction held  

on 28.8.2008, Sadashiv Prasad Sinha was the highest bidder, and accordingly,  

the Recovery officer ordered the sale of the property in his favour on 28.8.2008.  

In the absence of any objections, the Recovery Officer confirmed the sale of the  

property  in  favour  of  Sadashiv  Prasad  Sinha  on  22.9.2008.   Thereafter  

possession of the property was also handed over to the auction-purchaser on  

11.3.2009.  Applying the law declared by this Court in the judgments referred in  

the foregoing paragraphs irrespective of the merits of the lis between the rival  

parties,  namely,  the  Allahabad  Bank  and  the  partners  of  M/s.  Amar  Timber  

Works, it is not open for anyone to assail the purchase of the property made by  

Sadashiv  Prasad Sinha in the public  auction held in furtherance of  the order  

passed by the Recovery Officer on 28.8.2008.  In the above view of the matter,  

especially in the absence of any allegation of fraud or collusion, we are of the  

view that the High Court clearly erred while setting aside the auction ordered in  

favour of the auction-purchaser, Sadashiv Prasad Sinha in the impugned order  

dated 17.5.2010.   

14. A  perusal  of  the  impugned  order  especially  paragraphs  8,  12  and  13  

extracted hereinabove reveal  that  the impugned order  came to  be passed in  

order to work out the equities between the parties.  The entire deliberation at the  

hands  of  the  High  Court  were  based  on  offers  and  counter  offers,  inter  se

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13 between the Allahabad Bank on the one hand and the objector Harender Singh  

on  the  other,  whereas  the  rights  of  Sadashiv  Prasad  Sinha  –  the  auction-

purchaser,  were not at  all  taken into consideration.   As a matter  of  fact,  it  is  

Sadashiv Prasad Sinha who was to be deprived of the property which came to be  

vested in him as far back as on 28.8.2008.  It is nobody’s case, that at the time of  

the auction-purchase, the value of the property purchased by Sadashiv Prasad  

Sinha was in  excess  of  his  bid.   In  fact,  the  factual  position  depicted  under  

paragraph 8 of the impugned judgment reveals, that the escalation of prices had  

taken place thereafter,  and the value of  the property  purchased by Sadashiv  

Prasad Sinha was presently  much higher than the bid amount.   Since it  was  

nobody’s case that Sadashiv Prasad Sinha,  the highest  bidder at  the auction  

conducted on 28.8.2008, had purchased the property in question at a price lesser  

than the then prevailing market price, there was no justification whatsoever to set  

aside  the  auction-purchase  made  by  him on  account  of  escalation  of  prices  

thereafter.  The High Court in ignoring the vested right of the appellant in the  

property in question, after his auction bid was accepted and confirmed, subjected  

him to grave injustice by depriving him to property which he had genuinely and  

legitimately purchased at a public auction.  In our considered view, not only did  

the Division Bench of the High Court in the matter by ignoring the sound, legal  

and clear principles laid down by this Court in respect of a third party auction  

purchaser, the High Court also clearly overlooked the equitable rights vested in  

the auction-purchaser during the pendency of a lis.  The High Court also clearly  

overlooked the equitable rights vested in the auction purchaser while disposing of  

the matter.

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14 15. At the time of hearing, we were thinking of remanding the matter to the  

Recovery Officer to investigate into the objection of Harender Singh under Rule  

11 of the Second Schedule to the Income Tax Act, 1961.  But considering the  

delay such a remand may cause, we have ourselves examined the objections of  

Harender Singh and reject the objections for a variety of reasons.  Firstly, the  

contention raised at the hands of the respondents before the High Court, that the  

facts narrated by Harender Singh (the appellant  in Special  Leave Petition (C)  

No.26550 of 2010) were a total sham, as he was actually the brother of one of  

the judgment-debtors, namely, Jagmohan Singh.  And that Harender Singh had  

created an unbelievable story with the connivance and help of his brother, so as  

to save the property in question.  The claim of Harender Singh in his objection  

petition, was based on an unregistered agreement to sell dated 10.1.1991. Not  

only that such an agreement to sell would not vest any legal right in his favour; it  

is apparent that it may not have been difficult for him to have had the aforesaid  

agreement  to  sell  notarized  in  connivance  with  his  brother,  for  the  purpose  

sought to be achieved.  Secondly, it is apparent from the factual position depicted  

in  the  foregoing  paragraphs  that  Harender  Singh,  despite  his  having  filed  

objections before the Recovery Officer, had abandoned the contest raised by him  

by not appearing (and by not being represented) before the Recovery Officer  

after 26.10.2005, whereas, the Recovery Officer had passed the order of sale of  

the property by way of public auction more than two years thereafter, only on  

5.5.2008.  Having abandoned his claim before the Recovery Officer, it was not  

open to him to have reagitated the same by filing a writ petition before the High  

Court.  Thirdly, a remedy of appeal was available to Harender Singh in respect of

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15 the order of the Recovery Officer assailed by him before the High Court under  

Section 30, which is being extracted herein to assail the order dated 5.5.2008:

“30.  Appeal  against  the  order  of  Recovery  Officer.—  (1)  Notwithstanding anything contained in section 29, any person aggrieved by  an order of the Recovery Officer made under this Act may, within thirty  days from the date on which a copy of the order is issued to him, prefer an  appeal to the Tribunal.

(2) On receipt of an appeal under sub-section (1), the Tribunal may, after  giving an opportunity to the appellant to be heard, and after making such  inquiry as it deems fit, confirm, modify or set aside the order made by the  Recovery Officer in exercise of his powers under section 25 to 28 (both  inclusive).”

The  High  Court  ought  not  to  have  interfered  with  in  the  matter  agitated  by  

Harender Singh in exercise of  its writ  jurisdiction.   In fact,  the learned Single  

Judge rightfully dismissed the writ  petition filed by Harender Singh.   Fourthly,  

Harender Singh could not be allowed to raise a challenge to the public auction  

held on 28.8.2008 because he had not raised any objection to the attachment of  

the property in question or the proclamations and notices issued in newspapers  

in connection with the auction thereof.  All these facts cumulatively lead to the  

conclusion  that  after  26.10.2005,  Harender  Singh  had  lost  all  interest  in  the  

property in question and had therefore, remained a silent spectator to various  

orders  which  came to  be  passed  from time  to  time.   He had,  therefore,  no  

equitable right  in his favour to assail  the auction-purchase made by Sadashiv  

Prasad Sinha on 28.8.2008.  Finally, the public auction under reference was held  

on 28.8.2008.  Thereafter the same was confirmed on 22.09.2008.  Possession  

of  the  property  was  handed  over  to  the  auction-purchaser  Sadashiv  Prasad  

Sinha on 11.3.2009.   The auction-purchaser initiated mutation proceedings in

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16 respect of the property in question.  Harender Singh did not raise any objections  

in  the said  mutation  proceedings.   The said  mutation  proceedings  were  also  

finalized in favour of Sadashiv Prasad Sinha.  Harender Singh approached the  

High Court through CWJC No.16485 of 209 only on 27.11.2009.  We are of the  

view that the challenged raised by Harender Singh ought to have been rejected  

on the grounds of delay and latches, especially because third party rights had  

emerged in the meantime.  More so, because the auction purchaser was a bona  

fide purchaser for consideration, having purchased the property in furtherance of  

a duly publicized public auction, interference by the High Court even on ground  

of equity was clearly uncalled for.   

For  the  reasons  recorded  hereinabove,  we  are  of  the  view  that  the  

impugned  order  dated  17.5.2010  passed  by  the  High  Court  allowing  Letters  

Patent  Appeal  No.844  of  2010  deserves  to  be  set  aside.   The  same  is  

accordingly set aside.  The right of the appellant Sadashiv Prasad Sinha in Plot  

No.2722, Exhibition Road, P.S. Gandhi Maidan, Patna, measuring 1289 sq.ft. is  

hereby confirmed.  In the above view of the matter, while the appeal preferred by  

Sadashiv  Prasad  Sinha  stands  allowed,  the  one  filed  by  Harender  Singh  is  

hereby dismissed.

………………………….J. (A.K. Patnaik)

………………………….J. (Jagdish Singh Khehar)

New Delhi; January 8, 2014

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