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CASE NO.: Appeal (civil)  6164 of 1999

PETITIONER: Kishori Lal

RESPONDENT: Sales Officer, District Land Development Bank & Ors.

DATE OF JUDGMENT: 24/08/2006

BENCH: S.B. Sinha & Dalveer Bhandari

JUDGMENT: J U D G M E N T

WITH Civil Appeal No.6165 of 1999

S.B. Sinha, J.

The District Land Development Bank (hereinafter referred to as ’the  Bank’) situated at Tikamgarh in the State of Madhya Pradesh     is a Co- operative Society registered under the Madhya Pradesh Co-operative  Societies Act, 1960 (’the 1960 Act’, for short).  Its functions are regulated  by M.P. Sahkari Bhoomi Vikas Bank Adhiniyam, 1966 (’the 1966 Act’, for  short).  The appellant herein was an agriculturist.  He obtained a sum of  Rs.6,473.69p. by way of loan from the said Co-operative Society on three  different occasions.  The break-up of the amount of loan taken by him for  three different purposes is as under :

(i)     A sum of Rs.1,300/- was  taken  on 5.5.71; and  (ii)    Rs.1,200/- was taken on 5.5.71 for the purpose of  purchase of a pumping set; and (iii)   A sum of Rs.3,973.69p. was taken on 25.8.71 for  the purpose of construction of well.  

By way of security of loan so taken, he had mortgaged with the Bank  his agricultural holdings comprising in Khasra Nos. 430, 431, 432, 435, 437,  439, 441, 442, 443, 444, 446 and 447 measuring 10.59 acres.  Allegedly, he  failed to repay the said amount of loan.  Recovery proceedings were,  therefore, initiated against him by the Bank.  On the date when the loan was  taken, the appellant was a minor.  The lands mortgaged to the Bank were  sold.  A sale certificate was issued in the name of auction purchaser Smt.  Chandrakanta Devi.  An appeal preferred by him thereagainst before the  Joint Registrar, Co-operative Societies, Bhopal, was dismissed by an order  dated 30.5.1986.  A second appeal before the Board of Revenue, however,  succeeded. The Sales Officer, District Land Development Bank filed a writ  petition before the High Court aggrieved by and dissatisfied therewith  which, by reason of the impugned judgment, has been allowed.   

The contentions of the appellant, which found favour with the Board  of Revenue, are as under :-.

a)      No notice of auction was served upon the him;

b)      The statutory requirements of Section 18(2)(b) of the Land  Development Bank Act and Rule 15(d) of the Rules framed  thereunder, known as M.P. Sahakari Bhoomi Vikas Bank  Rules, 1967 (’the Rules’, for short) were not complied with.

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c)      The service of the proclamation report was not certified by the  person who effected the service.   

d)      He was a miser.

By reason of the impugned judgment, the High Court, however,  reversed the said findings holding :-       i)      The irregularities in the auction cannot be a ground  for impeaching the title of the purchaser in terms of  Section 27 of the 1966 Act;  

ii)     Non-service of notice was a procedural  irregularity.

A Letters Patent Appeal filed by the appellant before the Division  Bench was dismissed holding that the same was not maintainable on the  premise that the learned Single Judge has exercised jurisdiction under  Article 227 of the Constitution of India.

Ms. Sandhya Goswami, learned counsel appearing on behalf of the  appellant would submit that the appellant having been found to be a minor,  the contract was void and in that view of the matter, the impugned  judgments cannot be sustained.   

Mr. Balraj Dewan, learned counsel appearing on behalf of the  respondents, on the other hand, urged that the Board of Revenue committed  a serious error in holding that the appellant was a minor as it, in support  thereof, relied upon two inadmissible pieces of documents, namely, medical  certificate dated 22.7.1985 and the mark-sheet of Higher Secondary  Education issued by the M.P. Higher Secondary Board, Bhopal.  In any  event, the said documents being not public documents were not admissible  in evidence and in that view of the matter, the High Court rightly set aside  the order of the Board of Revenue.  It was furthermore urged that as the said  documents were filed for the first time before the Joint Registrar, Co- operative Societies, the appellant could not be cross-examined and thus, they  were inadmissible in evidence.

The appellant herein does not deny or dispute that he had taken loan  from the Co-operative Bank.  It is also not denied or disputed that he had  mortgaged his agricultural lands by way of security for the loan taken.  It is  also not in dispute that a proceeding was initiated against him for recovery  of the amount as he had not been able to pay the due instalments. The  factum of holding auction is also not disputed.   

The Board of Revenue under the M.P. Land Revenue Code is the final  court of fact.  Indisputably, holding of auction is governed by the provisions  of the 1966 Act.  Some notices appear to have been served upon the  appellant, but, thereafter, service of notice on the appellant is said to have  been effected by affixing a notice on his house when he was not available.   A purported notice was also published in a newspaper.  The Board of  Revenue, in regard to service of notice, has clearly came to the conclusion  that the statutory requirements envisaged under Section 18(2) of the 1966  Act and Rule 15 of the Rules have not been complied with, by reason  whereof the appellant had not been served with the notice.  He had not been  given an opportunity of hearing.  The Board of Revenue opined that the  authorities concerned did not consider these aspects of the matter.  In regard  to the question of minority, as indicated hereinbefore, the appellant had filed  two documents before the Joint Registrar.  The respondents may be right in  their submissions that they had the right to cross-examine the appellant, but  it does not appear from the records that any objection as regards the  admissibility thereof had been taken either before the court of first appeal or  before the Board of Revenue.  The said plea, at this stage, therefore, is not  available to them.  The Board of Revenue, having regard to the documents  brought on records, opined that the appellant was aged about 15 years in the

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year 1971.  The High Court did not address itself on the question of minority  of the appellant on the date of entering into the contract of loan.  As regards  the question of service of notice, the High Court opined :

"The respondent Kishorilal promised to deposit a  sum of Rs.700/- on 25.4.75 and on account of this, the  auction sale was postponed and Kishorilal deposited a  sum of Rs.700/- on 22.4.74 as promised.  This fact  establishes that the proceedings for auction were in  vogue since earlier i.e. before 25.4.75 and the auction  sale was stayed on account of the deposit of a sum of  Rs.700/- by Kishorilal and accordingly, the Board of  Revenue found that the notices which were served on  Kishorilal were before 22.4.75 and completed their effect  on 22.4.75. Thereafter on 30.3.76 in Form 8, a notice was  issued and Kishorilal was at Gwalior and as such, the  notice was served on the member of his family and the  auction took place on 6.5.78 on which date no body made  any bid and thereafter, according to the order sheet dated  21.5.1981, Kishorilal was contacted.  This order sheet  does not contain anything regarding service of the notice  for auction.  The process server has reported "Kishorilal  is not found at his house and the members of the family  refused to take notice."  The notice was pasted in front of  the witnesses on the house, which obtained the thumb  impression of Laxmidevi.  But who is this Laxmidevi is  nowhere mentioned.  This is the basis for decision by the  Board of Revenue that on the note sheet dated 2.6.82 it  has been mentioned that Kishorilal was not living in the  village and the notice issued earlier in the year 1975 and  the purpose of that notice was completed on 22.4.75.   Accordingly, the respondents have failed to comply with  the provisions of Section 18(2) of the Act."   

From what has been noticed hereinbefore, it is evident that there has  been no proper service of notice upon the appellant.  The High Court did not  arrive at a finding that there was a valid service of notice.

The High Court, however, proceeded on the basis that Section 27 of  the 1966 Act validated such auction.  It reads as under :

"27. Title of purchaser not impeachable for irregularities.   When a sale has been made in professed exercise of  a power of sale under Section 19 and has been  confirmed under Section 21, the title of the  purchaser shall not be impleachable on the ground  that no case had arisen to authorise the sale or that  due notice was not given or that the power was  otherwise improperly or irregularly exercised of the  power shall have his remedy in damages against the  Development Bank."

Section 27 of the Act does not state that no notice is necessary to be  served.  It speaks of due notice.  Where a service has been effected but not in  accordance with the known procedure, the matter may be different.  The  appellant, in view of the finding of fact arrived at, was not living in the  village at all.  He was living in Gwalior.  Admittedly, no notice was served  as one person refused to accept the same.  Whether she was a family  member at all or not has not been proved.  We may notice, the auction  purchaser did not question the findings of fact arrived at by the Board of  Revenue.   

Before the High Court a writ petition was filed only by the Sales  Officer.  The auction purchasers, therefore, cannot question the findings of

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fact arrived at by the Board of Revenue for the first time before this Court.   Section 27 of the 1966 Act does not protect an auction sale when the initial  contract of loan was void ab initio.

The learned Single Judge of the High Court, in our opinion,  committed an error in interfering with the findings of fact arrived at by the  Board of Revenue.  The Division Bench of the High Court also wrongly  dismissed the LPA without noticing that an appeal would be maintainable if  the writ petition was filed under Article 226 and 227 of the Constitution of  India as was held by this Court in Sushilabai Laxminarayan Mudliyar &  Ors. vs. Nihalchand Waghajibhai Shaha & Ors. [(1993) Supp.1 SCC 11].

However, with a view to do complete justice between the parties, in  our considered opinion, the appellant should be directed to deposit the entire  auction money with interest thereupon @6% per annum.  This order is being  passed by us under Article 142 of the Constitution of India.  Such amount  should be deposited within eight weeks from this date before respondent  No.1, Sales Officer.  On such deposit being made, the auction shall stand set  aside and the possession of the property shall be restored to the appellant  herein.  However, in the event the appellant fails and/or neglects to deposit  the said amount within the aforementioned period, these appeals shall stand  dismissed.

The appeals are allowed with the aforementioned directions.  No  costs.