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PETITIONER: LAKSHMANASAMI GOUNDER

       Vs.

RESPONDENT: C.I.T. SELVAMANI AND ORS.

DATE OF JUDGMENT01/11/1991

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. PANDIAN, S.R. (J)

CITATION:  1991 SCR  Supl. (2) 181  1992 SCC  (1)  91  JT 1992 (2)   298        1991 SCALE  (2)956

ACT: Tamil Nadu Revenue Recovery Act, 1894:--                   Sections  36 & Forms 7 and  7.4---Omission               of  specification  of  place  of  sale----Sale               rendered irregular and invalid.

HEADNOTE:                   The  appellant was alleged to have  misap-               propriated  a  sum of  Rs.  12,163.50  [though               acquitted  of the charge of  misappropriation]               and  for the recovery thereof his 13.07  acres               of coffee estate was brought to sale under the               Tamil Nadu Revenue Recovery Act, 1894.                   On  March 30,1979 the sale by public  auc-               tion  was  held by the  Tehsildar.  The  first               respondent purchased the said estate for a sum               of  Rs. 12,225 and deposited a sum  of  Rupees               2000  being 15% of the sale price. Under  sec-               tion  36 of the Act, he should have  deposited               the balance consideration within 30 days  from               the  date of the auction. This sale  was  con-               firmed  on  October 23,1981  and  the  balance               amount was deposited on November 4, 1981.                   So  the appellant filed an application  to               set aside the sale but the Revenue  Divisional               Officer overruled the objections and dismissed               the  application.  On  appeal  to   Additional               District  Collector on October 13,  1982,  the               sale  was set aside. So the  first  respondent               filed writ petition in the High Court and  the               single  High Court Judge quashed the order  of               the  Additional District Collector.  The  writ               appeal by the appellant to the Division  Bench               was  also dismissed. Hence the appellant  came               to this Court.                   The appellant urged that under section  36               of  the Act it is mandatory that the date  and               place  of  sale ’shall’ be  published  in  the               Gazetee  and  that  the  publication  did  not               mention  the  place  of sale so  the  sale  is               invalid in law. It was further submitted  that               it was equally mandatory that the balance sale

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             consideration  of  85%  should  be   deposited               within 30 days from the date of sale which was               done by the first respondent only on  November               4, 1981 long after one year               182               and  eight  months  of the date  of  sale  and               therefore illegal. While the first  respondent               contended  that it was Form 7 and not Form  7A               that  would be applicable to the facts of  the               instant  case  and that Form  7  contains  the               place  o[ sale and that it was complied  with.               Therefore,  the said sale is not  illegal.  It               was  further  submitted that the  deposit  was               made after protracted correspondence and  that               the  non-deposit within 30 days from the  date               of  sale is not illegal since the deposit  was               accepted  by  the  authority.  Therefore   the               confirmation of the sale is not illegal.                   Granting the special leave, dismissing the               writ  Petition, setting aside the Judgment  of               the High Court, and restoring the order of the               Additional District Collector, the Court                   HELD:  That in the instant case, the  High               Court  has wholly misconceived section  36  of               the  Act. A reading of the said section  mani-               fests  that the word ’shall’ is  mandatory  in               the context. The publication is an  invitation               to the intending bidders to prepare an partic-               ipate at the bid. Unless there is due publica-               tion  of the date and the place of  sale,  the               intending purchasers cannot be expected to run               after the sale officer. The sale officer has a               statutory  duty and a responsibility  to  have               the  date and place of sale mentioned  in  the               notice giving due, publication in terms of the               Act  and the Rules. Public auction is  one  of               the  modes  of sale intending to  get  highest               competitive price for the property and it also               ensures  fairness  in actions  of  the  public               authorities  or the sale officers  who  should               act  fairly  objectively and  kindly.  Nothing               should  be  suggestive  of  bias   favouritism               nepotism or beset with suspicious features  of               under  bidding detrimental to  the  legitimate               interest of the debtor. [184 F, G 1 85 A]               Further  it  is  settled  law  that  the  word               ’shall’  be  construed  in the  light  of  the               purpose  of  the  Act or Rule  that  seeks  to               serve.  Even though the word ’shall’ be  ordi-               narily mandatory but in the context or if  the               intention is otherwise it may be construed  to               be  directory.  The  construction   ultimately               depends upon the provision itself.  Considered               from  this  prospective of  non-compliance  of               section  35 that is comission to  mention  the               place  of sale would visit the deprivation  of               the  property  to the debtor for  an  adequate               consideration  due  to  absence  of  competing               bidders. Hence the specification of the date &               place of sale ’shall’ be mandatory. The  forms               either  7 or 7A are only procedural  and  they               should  be in conformity with section 36.  The               form  cannot  prevail over  the  statute.  The               omission of specification of the place of sale               in the form renders the sale not merely irreg-

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             ular but also invalid. [185 C; H - 186 B]                 183                   Equally  the  second objection  is  insur-               mountable. It is mandatory that the balance of               the  sale amount shall be remitted  within  30               days  from the date of auction and if not  the               earnest  money deposited is liable to  forfei-               ture.  Section 36 mandates remittance  of  the               balance  of  85%  of  the  sale  consideration               within 30 days from the date of auction. It is               obligatory  on  the purchaser to  deposit  the               amount  within the period unless prevented  by               an  order  of the Court or  Tribunal.  So  the               confirmation  of  sale without  compliance  is               illegal  and the sale is vitiated by  manifest               error of Law & rightly set aside by the  Addi-               tional District Magistrate. The High Court has               committed error in law in interfering with the               order of the appellate authority. [186 B-D]

JUDGMENT:               CIVIL APPELLATE JURISDICTION: Civil Appeal No.               4380 of               1991.                   From   the   Judgment  and   Order   dated               10.4.1991  of  the Madras High Court  in  Writ               Appeal No. 38 of 1991.                   K.  Parasaran,  K.V. Vijaya Kumar  and  V.               Bala Chandran for the Appellants.               C.T.  Selvamani  and  P.P.  Tripathi  for  the               Respondents.               The Judgment of the Court was delivered by               K. RAMASWAMY, J. Special Leave is granted.                   This appeal is against the judgment  dated               April 4, 1991 of the Madras High Court. A  sum               of  Rs. 12,163.50 p. was alleged to have  been               misappropriated  by the appellant (now he  was               acquitted  of the charge of  misappropriation)               and  for the recovery thereof his 13.07  acres               of  coffee estate situated in  Semmanthaputhur               village  was brought to sale under  the  Tamil               Nadu  Revenue  Recovery Act, 1894  (for  short               ’The  Act’).  On March 30, 1979  the  sale  by               auction  was held by the Tahsildar. The  first               respondent  purchased for a sum of Rs.  12,225               and  deposited a sum of Rs.2,000 being 15  per               cent  of the sale price. Under Sec. 36 of  the               Act, the first respondent should have deposit-               ed  the balance consideration within  30  days               from  the  date  of the  auction.  On  October               23,1981 the sale was confirmed and the balance               amount was deposited on November 4, 1981.  The               appellant filed an application but by proceed-               ing dated October 23, 1981, the Revenue  Divi-               sional  Officer overruled the  objections  and               dismissed the application. On appeal the Addl.               Distt. Collector, Salem set aside the sale  on               October  13,1982. The first  respondent  filed               writ petition               184               No. 246 of 1984 in the High Court. The learned               Single Judge by judgment dated August 21, 1990               quashed  the order of the Addl. Dist.  Collec-

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             tor.  On writ appeal, the Division Bench  dis-               missed it. Thus this appeal.                   The  formidable  objection raised  by  the               appellant is that it is mandatory under Sec.36               that  the  date  and place of  sale  shall  be               published in the Gazette and that the publica-               tion did not mention the place of sale. There-               fore,  the sale is invalid in law. It is  also               his further plea that it is equally  mandatory               that  the  balance sale consideration  of  85%               should  be deposited within 30 days  from  the               date  of sale which was done only on  November               4,  1981 long after one year and eight  months               of the date of sale. The sale and Confirmation               thereof  are, therefore, illegal. The  learned               Single Judge and the Division Bench held  that               Form 7A of the forms prescribed under the  Act               read  with  relevant provisions of  the  Board               Standing  Order No.41 does not  prescribe  the               place  of sale and that, therefore, the  omis-               sion  to  specify the place of sale  does  not               render  the sale invalid nor an  irregularity.               Shri Selvamam, the first  respondent-in-person               (himself a practising Advocate) contended that               it  is  Form 7 and not Form 7A that  would  be               applicable  to the facts of the case.  Form  7               contains  the  place of sale and that  it  was               complied  with.  Therefore, the  sale  is  not               illegal. It is also contended that the deposit               was  made after protracted correspondence  and               that,  therefore,  the non-deposit  within  30               days from the date of sale is not illegal.  At               any  rate,  having accepted  the  amount,  the               authority acquiesced to the deposit/Therefore,               the  confirmation of the sale is not  illegal.               We find no substance in either of the  conten-               tions. The contention that Form 7 and not Form               7A  would be applicable to the facts,  is  not               the  case set up or argued either  before  the               authorities or the courts below. For the first               time he cannot raise that plea in this  Court.               That   apart  specifically  the   High   Court               (learned Single Judge and the Division  Bench)               held that it is form 7A that is applicable and               that  it  does not  prescribe  publication  of               place  of  sale and  therefore,  the  omission               thereof does not render the sale invalid.  The               High  Court wholly misconceived of  Sec.36.  A               reading  of  Sec. 36 manifests that  the  word               ’shall’ is mandatory in the context.                   The  publication is an invitation  to  the               intending  bidders to prepare and  participate               at the bid. Unless there is a due  publication               of  the date and place of sale, the  intending               purchasers cannot be expected to run after the               Sale Officer to find out the date and place of               sale  and  to participate  thereat.  The  Sale               officer  has a statutory duty and a  responsi-               bility to have the date and place of sale men-               tioned in the notice and given due publication               in  terms  of the Act and  the  Rules.  Public               auction is one of the modes of sale  intending               to  get  highest  competitive  price  for  the               property. Public auction also ensures fairness               in  actions of the public authorities  or  the

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             sale               185               officers  who should act  fairly,  objectively               and kindly. Their action should be legitimate.               Their  dealing should be free from  suspicion.               Nothing should be suggestive of bias, favouri-               tism,  napotism or beset with suspicious  fea-               tures  of  underbidding  detrimental  to   the               legitimate  interest of the debtor.  The  fair               and objective public auction would relieve the               public authorities or sale officers from above               features and accountability. Any infraction in               this regard would render the sale invalid.                   It is settled law that the word ’shall’ be               construed in the light of the purpose the  Act               or  Rule  that seeks to serve. It  is  not  an               invariable  rule  that even  though  the  word               ’shall’  is  ordinarily mandatory but  in  the               context  or if the intention is otherwise,  it               may be construed to be directory.The construc-               tion  ultimately depends upon  the  provisions               itself, keeping in view the intendment of  the               enactment or of the context in which the  word               ’shall’  has  been used and  the  mischief  it               seeks  to  avoid.  Where  the  consequence  of               failure  to comply with any requirement  of  a               provision  is provided by the statute  itself,               the  consequence  has to  be  determined  with               reference to the nature of the provision,  the               purpose  of enactment and the effect  of  non-               compliance thereof. In its absence the  conse-               quence has to be determined with reference  to               the effect of the non-compliance of the provi-               sion of the legislature. Mere use of the  word               ’shall’ need not be given that connotation  in               each  and every case that the provision  would               be  invariably interpreted to be mandatory  or               directory. But given due consideration to  the               object,  design,  purpose  and  scope  of  the               legislation  the word shall be  construed  and               interpreted  in  that  design  and  given  due               emphasis.  See.36 obligates the  Sale  Officer               (Tahsildar) that he shall publish the date and               place of sale.The object thereby is an invita-               tion to the public at large that the  notified               property  would  be brought to  sale  at  that               specified  time  and place and that  they  are               invited to participate, if they so desire.  To               reiterate for emphasis and continuity that the               object  of the sale is to secure  the  maximum               price and to avoid arbitrariness in the proce-               dure adopted before sale and to prevent under-               hand  dealings in effecting sale and  purchase               of the debtor’s property. As a  responsibility               as sale officer and a duty towards the debtor,               the  sale  officer  should  conduct  the  sale               strictly  in  conformity with  the  prescribed               procedure  under the statute and the rules  as               the  case may be. Such due and wide  publicity               would  relieve  the debtor  from  the  maximum               liability he owes and payable to the creditor.               This  responsibility is not only  salutory  to               vouchsafe bonafides in the conduct of the sale               officer  but  also to ensure fairness  in  the               procedure adopted in bringing the property  of

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             the  debtor  to  sale.  Considered  from  this               perspective the non-compliance of Sec.35 i.e.,               omission  to mention the place of  sale  world               visit with deprivation of the property to  the               debtor               186               for  an inadequate sale consideration  due  to               absence  of competing bidders. Thus,  we  hold               that  specification of the date and  place  of               sale shall be mandatory. The forms either 7 or               7A  are only procedural and they should be  in               conformity  with  Sec.  36.  The  form  cannot               prevail  over  the statute.  The  omission  of               specification of the place of sale in the form               renders  the  sale not merely  irregulate  but               also invalid.                   Equally  the  second objection  is  insur-               mountable.  It is mandatory that "the  balance               of the sale amount shall be remitted within 30               days from the date of auction" and if not  the               earnest  money deposited is liable to  forfei-               ture. Confirmation of the sale should  precede               the  deposit of the sale amount. Sec. 36  man-               dates remittance of the balance of 85% of  the               sale  consideration  within 30 days  from  the               date  of  auction.  It is  obligatory  on  the               purchaser  to deposit the amount  within               that period unless he is prevented by an order               of the court or tribunal from so making depos-               it. The ’non-compliance renders the 15% depos-               it  liable to forfeiture. Therefore, the  con-               firmation  of the sale without  compliance  is               illegal. We hold that the sale is vitiated  by               manifest error of law and rightly set aside by               the  Addl. Dist. Collector,  Salem  (Appellate               Authority).  The High Court, both the  learned               Single Judge and the Division Bench  committed               menifest error of law in interfering with  the               order  of the appellate authority. The  appeal               is  accordingly  allowed.  The  writ  petition               stands dismissed and that of the order of  the               Addl. Distt. Collector, Salem restored, but in               the circumstances parties are directed to bear               their own costs throughout.               S.B.               Appeal allowed. 87