Paragraph numbers below are the court’s original numbering, recovered from the source text.
21. Further details in regard to the sale of a holding or other immovable property for recovery of arrear are provided under rules 285-A to 285-N. For a very brief summary of the way a sale is to be conducted, we may refer to rule 285-A that provides that no sale under sections 284 and 286 would take. place until after the expiry of at least 30 days from the date on which the proclamation under rule 282 was issued; rule 285-C lays down that there would be no sale in case, before the date fixed for the sale, the defaulter pays the arrears in respect of which the land was to be sold. Rules 285-0 and 285-E are relevant for the present and are reproduced below: "285-D. The person declared to be the purchaser shall be required to deposit immediately twenty-five per cent of the amount of his bid, and in default of such deposit the land shall forthwith be again put up and sold and such person shall be liable for the expenses attending the first sale and any deficiency of price which may occur on the re-sale which may be recovered from him by the Collector as if same were an arrear of land revenue. 285-E. The full amount of purchase money shall be paid by the purchaser on or before the fifteenth day from the date of the sale at the district treasury or any sub-treasury and in case of default the deposit, after the expenses of sale have been defrayed therefrom, shall be forfeited to Government and the property shall be re-sold and the defaulting purchaser shall forfeit all claims to the property, {2010] 8 S.C.R. or to any part of the sum for which it may be subsequently sold."
22. Rule 285-H and 285-1 deal with applications/petitions that may be filed for setting aside the sale; rule 285-J provides 8 for confirmation of sale on expiry of thirty days from the date of the auction, provided no objection is filed under rules 285-H or 285-1 or, if any filed, has been disposed of. If no application is made within 30 days rule 285-K bars all claims on grounds of irregularity or mistake in publishing or conducting the sale. Rule C 285-M provides for putting the purchaser of the property in its possession and the grant of the Sale Certificate to him.
23. It is, thus, to be seen that under the Rules the only mode for advertisement of auction-sale is by affixation of the Sale Proclamation at a conspicuous place in the village where D the property is located and by beat of drum. There is no provision of advertisement in the newspapers or by any other means to spread the information about the proposed auction on a large scale. Form ZA 73 (under Rule 273) and form ZA 73-D (under Rule 273-A) only provide the physical description E of the property and ploUhouse number and boundaries of the immovable property; Form 74 (rule 282) does not provide any description of the type of property (e.g., agricultural, homestead, industrial, etc.) or type of rights (e.g., lease and its term or freehold, etc.).
24. There is no provision in the Act or the Rules for fixation of reserve price before the property is put up for auction sale. We were, however, informed that the Collector of the District regularly notifies "circle rate" for different types of land and different locations. This circle rate is primarily used for G computation of stamp duty for registration of document. We were informed that in 2007 instructions were given to confirm sale only above the market price. There is also no provision enabling the authorities to bar someone with a criminal record or against whom there are tax dues or government dues of any RAKESH KUMAR GOEL ETC. v. U.P. STATE INDUSTRIAL DEV. CORPN. LTD. [AFTAB ALAM, J.] other kinds from taking part in the sale of land by the government.
25. It is, thus, evident that the law under which the auction sale proceedings were held was itself quite deficient. But the enumeration of the shortcomings and the lacunae in the provisions of an archaic law is not to say that the auction proceedings of the two plots were otherwise fair and proper and suffered from some irregularities only due to the flaws in the law. On the contrary, we have no doubt in our mind that auction sale of the two plots was illegal, fraudulent and collusive and the appellants and their abettors in the revenue department of the State Government fully exploited the weaknesses of the law to their advantage. This would be evident as the facts of the case further unfold.
26. We have seen above that rule 285-D of the UPZALR Rules requires the highest bidder to deposit immediately twenty five percent of the amount bid by him. We also noted that this was one of the conditions mentioned in the Auction Memos. We have also seen that in the two Auction Memos it was stated that the highest bidders for the two plots, namely Rakesh Kumar Goel and Moti Lal Goel had deposited one fourth of their respective bid amounts immediately after the auction. But the payment recorded in the Auction Memos is proved to be wrong and incorrect by reference to the Government Records. All such payments are entered in Register no.4. In the Allahabad High Court where the auction sale of the two plots was challenged on grounds of violation of rule 285-D, the Register was produced by the Naib Tehsildar on being summoned by the Court. The· High Court found that in Register no.4 there were only three entries at serial nos.39, 40 and 55 in respect of the auction sale of the two plots. These were as follows: "39. 16.6.1992 1/4t part No.844499/ 155000.00 16.6.1992 Immovable property of Ram Kumar SA, M/s Suri Asbestos c Pvt. Ltd. through ML Moti Goel, Director, Mis. Moti Board Ind. Pvt. Ltd. 40. 16.6.1992 1/4th part No. 844500/ 157500.00 16.6.1992 of Immovable Property M/s Bramic Suri Pvt. Ltd. through Rakesh Kumar S/o. Lajja Ram, Rio. Navyug Market, Ghaziabad. 55. 29.6.1992 3/4th part of No.846590/ 46500Q.OO 29.6.1992 of Immovable Property Mis Suri Asbestos property Pvt. Ltd through ML Moti Goel, Director, M/s. Moti Board Ind. Pvt. Ltd."
27. From entries 39 and 40 it is clear that twenty five percent of the bid amounts for the two plots in question were E deposited on June 16 and not immediately after the auction held on June 15, 1992 as claimed by the appellants. Mr. Mohta, learned senior advocate, appearing for the appellants kept telling us for days on end the appellants had receipts in their possession showing that the deposits were made on June 15 F itself. Notwithstanding the fact that the receipts were not filed in the High Court and neither were those enclosed with the SLP at the time of its filing, Mr. Mohta was allowed as much time as he wanted for producing those receipts. In the end he said that the receipts were misplaced and the appellants were G not able to find them out. We have no doubt in our mind that all the time Mr. Mohta was wrongly briefed by the appellants. No receipts were produced in court because there were, in fact, no receipts showing payment immediately after the auction.
28. The entries in Register no.4 show something else very H important. It appears that the balance seventy five percent of RAKESH KUMAR GOEL ETC. v. U.P. STATE INDUSTRIAL DEV. CORPN. LTD. [AFTAB ALAM, J.] the bid (Rs.6,30,000/-) for plot no.2/1 of BSPL was never deposited at all. In other words the sale of plot no.2/1 was confirmed and sale certificate was issued in favour of the appellant even without.payment of the full price of the plot.
29. Let us now see how the sale of the two plots was confirmed. The appellants and their abettors inside the revenue department of the government were so far able to show that for recovery of the Government dues the plots of land of BSPL (2/1) and SAPL (2/2) were put to auction on June 15, 1992 in which the two appellants were the highest bidders. The next stage was the confirmation of the sale after dealing with th.e objections. It is noted above that even before the date of the auction the concerned authorities were given information about the stay order passed by the Allahabad High Court in respect of plot no.2/1. At that time they paid no heed to it but later on certified copies of the order were produced. On June 18, 1992 certified copies of the stay order passed by the Allahabad High Court were submitted before the Tehsildar, Dadri, both by the private respondent and the Canara Bank. Now, this was a real impediment to overcome before the sales could be confirmed and the appellants and their abettors inside the government could succeed in their designs. The High Court order was put away in a highly disingenuous way. A note was put up in which referring to the cause title of the writ petition, where the address of the writ petitioner, M/s Bramic Suri Pvt. Ltd. was shown as "Gyani Border, Post Office Chikambarpur, District Ghaziabad", it was declared that the High Court Order was with respect to some other property, situate at the site of the address given in the writ petition. On June 30, 1992 the note was perused by the District Magistrate and on the same date it was approved by the ADM (F & R). No one cared to see that Annexure 1 to the writ petition was a photostat copy of the very same Sale Proclamation on the basis of which the auction sale of plot no.2/ 1 was held and in the writ petition the prayer was to quash the Sale Proclamation at annexure 1 and in the stay petition the A prayer was to stay its operation. It is not known whether this matter was brought to the notice of the High Court and whether the High Court took any action in the matter. We can only say that we find it one of the crudest manipulations coming to our notice.
30. Coming now to plot no.2/2 which was put up for auction sale for recovery of the demand of Central Excise dues raised by the Excise Superintendent. Against the adjudication order giving rise to the demand an appeal, along with a petition for stay-cum-waiver, was filed before the Central Excise and Gold C Control Appellate Tribunal. The appeal and the stay petition were still pending before the Tribunal when the recovery proceedings were started in which the plot in question was put up for auction sale. In those circumstances, in this matter also, the private respondents approached the Allahabad High Court D with a writ petition which was disposed of by the High Court by order dated July 13, 1992 observing as follows: "Having considered the matter carefully, we find that there is a good deal of justification made by the petitioner. In the circumstances, we consider it equitable and in the interest of justice to direct the respondents to stay their hands and not to proceed with the recovery proceedings till the stay- cum-waiver application is adjudicated by the tribunal. Accordingly, we direct the Central Excise and Gold Control Appellate Tribunal, New Delhi to decide the stay-cum- waiver application, within a period of six weeks, a certified copy of this order is filed before it. The petitioner undertakes to file a certified copy of the order within ten days before the Tribunal. We further direct that for a period of two months or till the disposal of the stay-cum-waiver application, whichever is earlier, recovery proceedings against the petitioner shall remain stayed and no further proceedings shall be taken in pursuance to sale proclamation, a copy of which has been filed as Annexure- 3 to the writ petition. We however, make it clear that if the RAKESH KUMAR GOEL ETC. v. U.P. STATE INDUSTRIAL DEV. CORPN. LTD. [AFTAB ALAM, J.) stay-cum-waiver application has already been decided or if the petitioner fails to file a certified copy of the order before the Appellate Tribunal as directed above, the stay of the recovery proceedings granted by this court by this order shall be of no avail to the petitioner and it shall be open to the respondents to proceed against the petitioner in accordance with law."
31. In the counter affidavit filed on behalf of the private respondents it is stated that a copy of the High, Court order was served upon the District Magistrate on July ·15, 1992. In the Government record, however, there is no trace·of the High Court order and there is no discussion about it in any of the notes. · On the contrary on the same day (July 15, 1992) Sale Certificates were issued under the signature of the ADM (Finance), a certain Ram Bahadur in favour of the appellants and were sent for registration.
32. In the facts and circumstances discussed above, we do not have the slightest hesitation in_ holding that the auction sale of the two plots in question was fraudulent, collusive, sham and mala fide. In the guise of recovery of the government dues, · E the two appellants in collusion with their abettors in the government departments were trying to grab government lands and they almost succeeded but for the interference by the Allahabad High Court.
33. It may also be stated here that in the counter affidavit filed by the UPSIDC it was alleged that Moti Lal Goel and his brother Rake'Sh Kumar Goel are notorious land grabbers in the districts of Ghaziabad and Gautam Budh Nagar and they had misappropriated about Rs.1125 crores. The counter affidavit gave a large extract from the affidavit of the Tehsildar Oudicial), Ghaziabad, filed in the case before the High Court. In the Tehsildar's affidavit filed before the High Court very serious allegations were made against Moti Lal Goel. In view of the statements made in the counter affidavit of UPSIDC, this court on April 24, 2009 passed the following order: •. \ " ……… In this case serious allegations are made against the petitioner on the basis of petitioner indulging in land scam. An affidavit has been filled by the Deputy Manager, U.P. State Industrial Development Corporation Limited giving credentials of the petitioner with regard to the fraud allegedly committed of rupees more than one thousand crores. Several cases are pending before the Criminal Courts under Indian Penal Code as well as under Gangster Act. Although the present case arises from an auction sale, we want to know from the State of U.P. as to on what basis c people with such credentials are allowed to take part in the auction and why is the State not responding to the Petition …………. ." Again on July 14, 2009, this court passed the order: " …….. It has been alleged and prima facie we are satisfied that over the years lands owned by State of U.P. are being alienated in the name of auction at an undervalued rate. It is also alleged that some of the alienations have taken place at gun point. These are very serious allegations. FIRs have been filed in this connection. We want the State of U.P., through its counsel, to submit a status report of cases filed against the Goel family allegedly involved in the aforesaid practices ………. ."
34. In compliance with the order, an affidavit sworn by one Shri R.N. Upadhyaya, Special Secretary, Department bf Revenue, Government of Uttar Pradesh was filed on July 25, 2009. In this affidavit, it is stated that Moti Lal Goel, Rakesh Kumar Goel and their family members were accused in sixteen (16) criminal cases in district Gautam Budh Nagar. Out of the G sixteen (16) cases, three (3) were at the stage of investigation and one (1) was referred for inquiry to the CBI. In rest of the twelve (12) cases charge sheets were filed before the competent court in year 2005 and onwards. In the district of Ghaziabad, Moti Lal Goel, Rakesh Kumar Goel and their family RAKESH KUMAR GOEL ETC. v. U.P. STATE INDUSTRIAL DEV. CORPN. LTD. [AFTAB ALAM, J.] members were accused in ten (10) criminal cases. Out of the ten (10) cases, two (2) were at the stage of investigation and two (~) were referred to the CBL !n rest of the six (6) cases charge sheets were filed before the competent court in year 2005 onwards. In the affidavit a long list was given of the cases against Moti Lal Goel and Rakesh Kumar Goel and their other family members pending in the two districts. From the list of cases it appears that almost all the cases were under sections 420, 467, 468, 469 and 472 of the Penal Code and the different provisions of the Prevention of Corruption Act. In the affidavit it was further stated that according to the report of the District c Magistrate, Ghaziabad, Moti Lal Goel and his family members had got their name falsely and fraudulently entered in the revenue record in respect of land measuring about 129 hectares, the market value of which, in the year 2005, was approximately Rs.1100 crores. Similarly, from the report of the District Magistrate, Gautam Budh Nagar, it appeared that Moti Lal Goel and his family members had got their name fraudulently entered in the revenue records in respect of land measuring 252 hectares, the market value of which in the year 2005 was about Rs.400 crores. The affidavit also gave the list of the lands in regard to which Moti Lal Goel and his family members had got their names allegedly fraudulently recorded in the revenue records.
35. These, in short, are the credentials of the two appellants and the manner in which the two plots in question were put to auction sale purportedly for recovery of the government dues.
36. Against the auction sale of the plots in question both the private respondents and the UPSIDC, the owner of the plots, filed their respective objections before the Commissioner, Meerut Division, but their objections were rejected by the order dated November 5, 1998 passed by the Commissioner in objection letter Nos.19.and 25of1991-1992. The UPSIDC filed review petition before the Commissioner which too was dismissed on May 3, 1999 on the ground that the objection-:. H (2010) 8 S.C.R. A petition was dismissed on merits by a speaking order. Against the order passed by the Commissioner, both the private respondent and the UPSIDC filed revisions before the Board of Revenue, Lucknow. Even while the revision of the private respondent was pending, the revision filed by the UPSIDC was B dismissed by order dated October 11, 1999 passed by the Board of Revenue in Revision No.10(LR) of 1998-1999. We feel sorry that such a gross case could not be corrected even at the highest level of the State Administration.
37. Whatever little redemption the State Government was C able to attain in this case was through Mr. Ashok Desai, senior advocate, who appeared on its behalf at the stage of the final hearing of the case. Mr. Desai, with great fairness, did not try to support the auction sale of the plots in question even for a moment. On the contrary, he submitted that the auction D proceedings broke all canons and principles laid down by this Court for the sale of government land by public auction. Mr. Desai invited our attention to a number of decisions of this Court where it is said that the disposal of public property partakes the character of trust and the government or the public E authorities are obliged to make all attempts to obtain the best available market price while disposing of public properties. [Ram and Shyam Co. vs. State of Haryana, (1985) 3 SCC 267 (paragraphs 5, 6 12 & 15); V. Purushotham Rao vs. Union of India, (2001) 10 SCC 305 (paragraph 26); Aggarwal and F Modi Enterprises (P.) Ltd. vs. New Delhi Municipal Council (2007) 8 SCC 75 (paragraph 23); Meerut Development Authority vs. Association of Management Studies, (2009) 6 SCC 171]. He also submitted that it was not open to the government or the public authority to dispose of public property G below the reserve price. In support of the submission he invited our attention to a decision of this court in Anil Kumar Srivastava vs. State of UP, (2004) 8 SCC 671.
38. He also took us through the relevant provisions of the UPZALR Act and the UPZALR Rules as referred to above in RAKESH KUMAR GOEL ETC. v. U.P. STATE INDUSTRIAL DEV. CORPN. LTD. [AFTAB ALAM, J.] this judgment. We appreciate the assistance rendered by him to the Court.
39. Ir the facts and circumstances of the case, we are satisfied that the so called auction sale of the two plots in favour of the appellants was thoroughly illegal. Though the High Court set aside the auction sale of the two plots on the technical ground of violation of Rule 285-D, on a consideration of the overall facts and circumstances, we are satisfied that the auction sale was bad and malafide and was a blatant attempt to grab the public land. We, thus, find no merit in the appeal. c
40. At one stage we considered asking the CBI to investigate the present case as also other cases of auction sale and alienation of land by the Revenue Department of the State Government in the District of Ghaziabad. We, however, refrain from doing so for two reasons. One, the CBI is already overburdened and secondly, the matter is about 20 years old. The officers posted at Ghaziabad would no longer be there, some of them might even have.retired.
41. But this case certainly calls for exemplary costs to the appellants. We wish to make it absolutely clear that this Coµrt is not for manipulators, speculators and land grabbers. The litigation in this Court is not like buying a lottery ticket that, .if luck favours, might bring a windfall (even though illegitimate) but would cost no more than the expenses of litigation. That is not the way of this Court. We, accordingly, impose cost of Rs.2 lakhs on each of the two appellants. The amount of cost must be paid to the Supreme Court Legal Aid Committee within 12 weeks from today. In case receipts showing payment of the cost is not filed within the time as directed, the amounts of cost shall be realised from the appellants as fine under the provisions of the Code of Criminal Procedure,
42. Before parting with the records we feel obliged to say that the existing provisions of the UPZALR Act and the UPZALR Rules are out of date by three quarters of a century. Those were A designed to deal with agriculture holdings in a rural area. Even for that purpose the provisions appear to be far from satisfactory. But they have become woefully inadequate and completely deficient for dealing with land holdings and other immovable properties in highly urbanised and industrialised regions of the B State. There is, therefore, an urgent need to update the law either by framing fresh Act and Rules or by thoroughly amending the existing ones.
43. In the resuft the appeal is dismissed with costs as indicated above. The dismissal of the appeal shall not stand in the way of the authorities to recover from the private respondents Government dues, if any, in accordance with law. We are also not expressing any opinion as to who would get possession over the two plots as the result of the setting aside of their auction sale. lf"the private respondents claim C possession over the two plots the UPSIDC will take a decision on their claim, in accordance with law. N.J. Appeal dismissed.