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Narayan Yadav (D) Thr. LRs. v. The State of Bihar & Ors.

Civil Appeal · 2020 INSC 221Decided 25 Feb 2020
Civil Appeal No. 9173 of 2010
Justice L. Nageswara Rao · Justice R. Subhash Reddy

Background

Land mortgaged to secure a loan was auctioned off by the authorities after the borrower defaulted. The buyers who had purchased that same land from the borrower before the mortgage applied to the Certificate Officer to set aside the auction sale, but deposited the legally required purchase-money-plus-penalty a few days after even the extended deadline the officer had granted, beyond the 30-day window fixed by the statute. The Certificate Officer nonetheless accepted the late deposit and set aside the sale; after conflicting decisions through revenue authorities, the Patna High Court ultimately restored that order in favour of the objectors.

Decision Breakdown

The Supreme Court held that Section 28 of the Bihar & Orissa Public Demands Recovery Act, 1914, fixes a strictly mandatory 30-day deadline from the date of sale for making the application and the required deposit together, and that the Certificate Officer has no power to extend this period. Since the deposit here was admittedly made beyond that 30-day window, the application to set aside the sale should never have been entertained. The Court allowed the appeal, set aside the High Court's judgment, and restored the original auction sale in favour of the appellants (the auction purchasers), while directing a refund of the money the objectors had deposited.

Lesson Learnt

Statutory deadlines for depositing money to reverse a property auction are strictly mandatory and cannot be extended by an administrative officer, even where the shortfall in time is small and the facts seem sympathetic.

Official source (sci.gov.in)View Judgment (PDF)

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