Case name – Kolanjiammal (D) Thr Lrs. V. The Revenue Divisional Officer Perambalur District & Ors.
Case Number – Civil Appeal No. 2322 Of 2013
Date – Friday, fourteenth day of November, Two Thousand and Twenty – Five
Quorum – Justice Satish Chandra Sharma and Justice Vipul M. Pancholi
FACTS
The dispute traces back to arrears arising from licence fees for arrack shops for the year 1972 – 1973. Late Ramaswamy Udayar had successfully bid for two shops in Thevaiyar and Valikandapuram villages but defaulted on payments, leading the District Collector, Perambur, to secure an ex – parte decree in 1987 for Rs. 56,170.20. After Ramaswamy’s death in 1988, his widow who is the present appellant in this case and family, unaware of these proceedings, faced recovery actions many years later while partition proceedings among legal heirs were pending. In 2005, fresh auction notices were issued for properties under Patta No. 786 and 789 in Mettupalayam South Village. The appellant and her son challenged the notices before the Madras High Court, and though they made substantial deposits under interim orders, the authorities proceeded with the auction on 29.07.2005, selling the property to Respondent No. 4. The High Court dismissed the writ petitions, writ appeals and later the review petition, observing that the appellant had not invoked statutory remedies under Sections 37 – A or 38 of the Tamil Nadu Revenue Recovery Act, 1864 (TN RRA), within the prescribed 30-day limitation. The appellant therefore being aggrieved, approached the Supreme Court.
ISSUES
- Whether the appellant could challenge the auction sale under Article 226 of the Constitution of India without first invoking the statutory remedies under Sections 37-A and 38 of the Tamil Nadu Revenue Recovery Act.
- Whether the auction conducted during the pendency of the writ petition and in the presence of an interim order was illegal or procedurally irregular.
- Whether the recovery proceedings were barred by limitation or ought to have been executed only under the Civil Procedure Code owing to the earlier civil decree.
- Whether the confirmation of sale and subsequent transfers of property could be invalidated after significant delay and absence of any allegation of fraud.
LEGAL PROVISIONS
- Section 37A of Tamil Nadu Revenue Recovery Act, 1864 – Remedy for individuals to set aside sale of immovable property. Application to be filed with the Collector, along with deposit of arrears within 30 days of the sale.
- Section 38 of Tamil Nadu Revenue Recovery Act, 1864 – Application to the Collector set aside sale of immovable property on grounds of material irregularity, mistake, or fraud within 30 days.
- Article 226 of the Constitution of India, 1950 – Writ jurisdiction of High Courts.
- Article 112 of Limitation Act, 1963 – 30 year period of limitation for suits filed by Central or any State government.
ARGUMENTS
APPELLANT – The appellant argued that the High Court wrongly dismissed her challenge without examining the legality of the auction notice. She argued that the auction held during the pendency of her writ petition despite an interim order restraining confirmation was invalid, making an application under Sections 37-A or 38 Tamil Nadu Revenue Recovery Act, 1864 unnecessary. She emphasized that she had already deposited Rs. 3,41,900 under court directions, that a second auction notice was not permissible while previous proceedings were pending, and that the 1987 ex-parte decree was passed without notice. She also contended that the recovery was time-barred and that the authorities ought to have executed the 1987 decree under the Code of Civil Procedure, 1908 instead of resorting to revenue recovery proceedings.
RESPONDENT – The State contended that arrears from Ramaswamy’s arrack shop default had been duly determined through a civil decree and remained unpaid despite repeatedly giving notices, justifying recovery under the Revenue Recovery Act. The appellant, failing to file applications under Sections 37-A or 38 Tamil Nadu Revenue Recovery Act, 1864 within the 30 days period, could not bypass the statutory mechanism through writ jurisdiction. The auction-purchaser added that the sale was valid, the full bid amount was deposited on the auction day, and the sale was confirmed when no stay existed. Since the property was subsequently transferred to bona fide purchasers, the appellant’s delayed challenge had become infructuous.
ANALYSIS
The Hon’ble Supreme Court rested on the mandatory nature of the statutory scheme under the Tamil Nadu Revenue Recovery Act, 1864. Sections 37A and 38 Tamil Nadu Revenue Recovery Act, 1864 form a complete code for challenging a revenue sale, prescribing a strict 30 days limitation. The appellant admittedly did not file any such formal applications, instead chose to reply on writ proceedings. The Court clarified that the interim order protected only against confirmation of sale and not the conduct of auction and thereby did not relieve the appellant of the duty to invoke the statutory remedy. The deposits made pursuant to interim orders could not substitute for compliance under Section 37-A Tamil Nadu Revenue Recovery Act, 1864, which requires both deposit and a formal application. Relying on Rajasthan Housing Board v. Krishna Kumari [(2005)13 SCC 151] and Valji Khimji v. Official Liquidator [(2008) 9 SCC 299], the Court reiterated that once a sale is confirmed and rights accrue in favour of a purchaser, they cannot be disturbed except on proof of fraud or substantial irregularity neither of which was shown. The ex-parte decree having attained finality, the revenue recovery proceedings were valid, and the long delay, combined with third-party rights created in the meantime barred further interference.
JUDGEMENT
The Supreme Court stated the findings of the Madras High Court, holding that the failure of the to invoke the statutory remedies under Sections 37A or 38 Tamil Nadu Revenue Recovery Act, 1864 within the prescribed time barred her from subsequently challenging the auction through writ jurisdiction. The auction held on 29.07.2005 and confirmed on 23.07.2008 was found to be lawful, and no fraud or material irregularity was demonstrated. The Court held that the High Court had not committed any error in dismissing the writ appeal and review petition and upheld both the impugned judgment (07.08.2009) and order (06.01.2011). The appeal was dismissed.
CONCLUSION
This decision of the Supreme Court highlights the mandatory nature of statutory remedies under the Revenue Recovery Act and makes clear that writ jurisdiction cannot substitute prescribed procedures. The Court reaffirmed its reluctance to disturb confirmed auction sales, especially where no fraud is shown and third-party rights have arisen. It serves as a reminder that limitation and procedural compliance are decisive in protecting legal rights.
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WRITTEN BY- SUSMITA ROYCHOWDHURY
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