Sri R Raghu v. Sri G M Krishna
Background
A company had defaulted on a loan from the Karnataka State Financial Corporation (KSFC), which obtained a decree against it and put the guarantor's agricultural land up for auction to recover the dues. The appellant was the highest bidder and paid for the land, but a sale certificate was later issued in his name as a trustee of a religious trust rather than as an individual, prompting years of litigation by the guarantor (respondent) alleging irregularities, including that the appellant had misrepresented who the real purchaser was and that the auctioned land's boundaries were never properly measured. After multiple rounds of litigation, the Karnataka High Court's Single Judge partly ruled in the respondent's favour, upholding the auction sale itself but ordering a fresh survey to fix the land's exact boundaries and requiring the appellant to pay an additional Rs. 25 lakh per acre. Both sides appealed to the Supreme Court, and the respondent also filed a contempt petition alleging the appellant was building on the disputed land despite a court injunction.
Decision Breakdown
The Supreme Court agreed with the High Court's balanced approach, holding that the appellant/auction-purchaser could not claim more land than was actually specified and sold in the auction, so ordering a fresh survey to fix precise boundaries was justified. It also upheld the High Court's direction that the appellant pay an additional Rs. 25 lakh per acre, given his questionable conduct in shifting his identity between individual bidder and trustee. On the respondent's side, the Court held his renewed challenge to the auction and sale certificate was barred, since he had already unsuccessfully raised the same objections years earlier and could not now relitigate them, especially after the legal provision underlying his misrepresentation argument had since been retrospectively repealed. Both appeals were dismissed, the auction sale was finally confirmed, and the associated contempt proceedings were closed.
Lesson Learnt
In long-running property litigation, courts strongly disfavor reopening objections that were already raised and rejected in earlier rounds of the same dispute: parties get one real opportunity to challenge an auction sale, not repeated attempts under new pretexts. An auction purchaser is also bound strictly by what was actually specified and sold, and cannot later claim more land merely because of ambiguity in boundaries.