M/S. Swadeshi Plytex Ltd. v. Board Of Revenue, U.P, Lucknow & Ors.

1. Whether non-compliance of provision contained in Chapter N Section E of U.P Zamindari Abolition and Land Reform Rules, 1952 (in short hereinafter referred as the Rule) shall render the auction and sale of a property illegal and void, is the question involved for adjudication in the present proceeding? Apart from Rules the provisions contained in O. XXI, R. 54 of Code of Civil Procedure and the provision contained in Chapter X read with S. 327 of the URZA and LR Act, 1950 (in short hereinafter referred as the Act) and certain other statutory provisions have been invited the attention of this Court for interpretation which relates to procedure for recovery of dues as arrears of land revenue.

2. M/s. Swadeshi Polytex Limited (hereinafter referred to as the SPL) is a company incorporated under the provisions of the Companies Act, 1956 hereinafter referred to as the Companies Act and has its registered office at Kavi Nagar, Industrial Area, Ghaziabad. While 33.609% of the shares were held by Swadeshi Cotton Mills Company Limited, Kanpur (an unit of National Textile Corporation a Government of India enterprises) 28.012% share are held by M/s. Paharpur Cooling Towers Ltd. the 15.290% of the shares are held by the Financial Institutions and the remaining 23.0922% shares are held by the general public PCT is also a company incorporated under the provision of the Companies Act and has its registered office at Kolkata, Swadeshi Cotton Mills Ltd., Kanpur as dated above held 33.609% share of SPL but by virtue of nationalisation, the shares of Swadeshi Cotton Mills, Limited, were transferred in the name of National Textile Corporation Limited (hereinafter referred to as NTC).

From the evidence on record (Annexure 34), it borne out that CMD, National Textile Corporation Ltd. is holding charge of the petitioner-company and has taken steps by pursuing the Central Government for the rehabilitation of the petitioner-company.

3. According to petitioner's counsel, Shri N.K Seth, petitioner-company was doing well till 1996-1997 but on account of financial crises and under certain compelling circumstances it was closed on 30th September, 1998. The SPL could not pay wages to the workers and application was filed on 28-12-1999 before Deputy Labour Commissioner, Ghaziabad for payment of wages of December, 1998 to September, 1999. Again application was filed in the month of February, 2000 by respondent No. 8 in pursuance to provision contained in Uttar Pradesh Industrial Peace (Timely Payment of Wages) Act, 1978. In response to application submitted by respondent No. 8.workers, recovery certificate was issued under sub-section (1) of S. 3 of the 1978 Act. According to petitioner's counsel the recovery certificate was issued ex parte as no notice was served on occupier of the company in pursuance to provision contained in S. 4 of the 1978 Act. An objection was filed under Rule 285(i) of the Rule which was dismissed by the Commissioner, Meerut Division, Meerut. A revision against the order passed by the Commissioner, Meerut Division, Meerut, was also dismissed by Board of Revenue. Feeling aggrieved, the present writ petition has been preferred by the petitioner. The facts and pleadings as argued and relied upon by the parties are discussed hereinafter. Under the above facts and circumstances, application submitted by opposite party No. 8 under 1978 Act was allowed by Deputy Labour Commissioner, Ghaziabad in pursuance to power conferred under sub-section (1) of S. 3 of the 1978 Act, copies of the recovery certificates have been filed as Annexures 3 to 7 to the writ petition. When the amount could not be satisfied and wages could not be paid on the reference made by the Deputy Labour Commissioner, the district authorities had proceeded ahead to recover the dues in pursuance to recovery certificate issued by the Deputy Labour Commissioner as arrears of land revenue. The copies of demand notice/citation to appear have been filed as Annexures 8 to 15 to the writ petition. Thereafter, on the basis of report submitted by the Amin dated 7-1-2005 (Annexure 16) and the report of Sub-Divisional Magistrate, Ghaziabad dated 10-2-2005 (Annexure 17), an attachment notice (Annexure 18) was issued in ZA Form 73D. A proclamation of sale was issued on 23-2-2005 (Annexure 19). The Sub-Divisional Magistrate had however, cancelled the proclamation dated 23-2-2005 and considered the matter afresh and had passed an order dated 1-4-2005 (Annexure 20) appointing the Tehsildar, Ghaziabad as an officer to hold auction. By the same order, 2nd May, 2005 was fixed as a date of auction directing the Tehsildar to give wide publicity relating to advertisement and also evaluate the properties. However, on the same day, fresh sale proclamation was issued by the Sub-Divisinal Magistrate. Ghaziabad (Annexure 21) without disclosing the estimated costs and specifying the property in question. The sale proclamation also does not disclose the date of auction. In consequence thereof, an auction notice dated 22-4-2005 was published in Hindi Newspaper “Amar Ujala” (Annexure 22) indicating the estimated cost as about 27 crores with the rider that the transfer of property in pursuance to auction shall be done on the terms and condition provided by U.P State Industrial Development Corporation (in short hereinafter referred as UPSIDC). Admittedly, the advertisement has been done in only one newspaper “Amar Ujala” (Hindi) in its edited dated 22-4-2005. The personal service of the sale proclamation was done on peon/Chowkidar of the petitioner's establishment on 21-4-2005 as appears from the endorsement made over the back of sale proclamation, a copy of which has been filed as Annexure 21 to the writ petition. Auction was held on 2-5-2005 and UPSIDC was found to be highest bidder.

4. It has been brought on record that the issuance of recovery certificate by Deputy Labour Commissioner under the 1978 Act was subject-matter of dispute in a Writ Petition No. 5160 of 2005 filed in this Court at Allahabad which was dismissed by Division Bench of this Court by judgment and order dated 31-1-2005, a copy of the judgment has been filed as Annexure CA 1 to the counter-affidavit filed by respondent No. 8. The judgment of the Division Bench was affirmed by Apex Court by dismissing the special leave petition at admission stage (Annexure CA 2). The auction notice dated 22-4-2005 published by the Tehsildar, Ghaziabad was impugned in a Writ Petition No. 35005 of 2005 in this Court at Allahabad, which was dismissed by judgment and order dated 4-5-2005, a copy of which has been filed as Annexure CA-6 of the counter-affidavit filed by the opposite party No. 8. As shall be evident from discussion hereinafter while dismissing both these writ petitions the Division Bench of this Court had observed that for procedural illegality it shall be open to the petitioner to file an objection under Rule 285(i) of the Rules.

5. From the record as well as on the perusal of the judgment of this Court referred hereinabove it is evident that earlier also prior to present controversy sale proclamation was issued for auction of the property in question it was later on cancelled and fresh sale proclamation was issued in the manner discussed hereinabove. In view of discussion made hereinabove, auction of the property was held on 2nd May, 2005 at MEERUT and being the highest bidder of the property in question measuring 1 lakh 88 thousand 65 sq. m. of vacant land, was auctioned in favour of UPSIDC for 32.20 crores. Accordingly, bid was finalised and UPSIDC had submitted 11 bank drafts for an amount of Rs. 7 crore 80 lakhs along with their letter dated 2-5-2005 (Annexure 25) on the date of auction. The drafts were prepared in the Sarojani Nagar Branch of Punjab National Bank on 2nd May, 2005. The remaining amount of Rs. 24 crore 15 lakhs were said to be deposited by UPSIDC through 13 bank drafts dated 14-5-2005 on 16-5-2005. The endorsement dated 18-5-2005 was made on the letter of UPSIDC dated 16-5-2005 by ADM, Finance for appropriate action as evident from Annexure 26.

6. Feeling aggrieved with the auction proceeding the petitioner had filed an objection before the Commissioner, Meerut Division, Meerut under R. 285(i) of the Rules, a copy of the objection has been filed as Annexure No. 28 to the writ petition. The objection was rejected by the Commissioner vide order dated 24-6-2005, a copy of which has been filed as Annexure 2 to the writ petition. Against the order passed by the Divisional Commissioner, Meerut a revision was preferred under S. 293 of the UPZA and LR Act read with S. 219 of the Land Revenue Act, a copy of the memo of revision has been filed as Annexure No. 30 to the writ petition. By the impugned order dated 9-9-2005, the Board of Revenue had rejected the petitioner's revision. Feeling aggrieved petitioner had preferred the present writ petition.

7. The submission of learned counsel for the petitiner is that S. 327 of the Act provides the mode of service of notice under the Act. In addition to provision contained in S. 327 of the Act itself, has been further provided that the provision contained in the Code of Civil Procedure shall also be applicable. Section 341 of the Act further provides that unless otherwise specially provided by the Act the provision contained in certain other acts including the provision contained in the Code of Civil Procedure shall be applicable. Accordingly, the submission of learned counsel for the petitioner the provision contained in O. 21, R. 54 shall be applicable but the same has not been followed while auctioning the property in question. Learned counsel for the petitioner had further proceeded to submit that under R. 273-A of the Rule it was incumbent upon the opposite parties while issuing ZA Form 73D to follow the provision contained in O. 21, R. 54 of the Code of Civil Procedure. According to petitioner's counsel in the ZA Form 73D (Annexure 18) no date was disclosed for setting the terms of sale proclamation as required under O. 21, R. 54(1) of the Code of Civil Procedure. Neither the detail of property has been given nor its estimated costs was disclosed. Only the area of land has been disclosed. In the subsequent sale proclamation dated 1-4-2005 (Annexure 21), which was issued after canceling the earlier sale proclamation by order passed on 1st April, 2005 again the same mistake was committed and neither the estimated cost has been given nor the particulars relating to the property in question has been mentioned. Accordingly, the submission of learned counsel for the petitioner is that the sale proclamation was issued in violation of Rule 283 of the Rules. It has been further submitted that only one advertisement (Annexure 22) was done in Hindi Newspaper Amar Ujala in its edition dated 22-4-2005. The advertisement at the face of record speaks the mala fide attitude of District authorities giving favour of UPSIDC. Virtually the advertisement reflects the predecision imposed by the districts authorities in favour of UPSIDC to auction the property. It has been also submitted that it was incumbent upon the auctioning authority to effect service on the petitioners in compliance of provision contained in S. 327(D) of the Act. The further submission of the learned counsel for the petitioner is that under Rule 285(A) it was incumbent upon the auctioning authorities, to give 30 days clear notice before the date of auction. Even assuming that sale proclamation could have been served on the peon/chowkidar but since it was served on 21-4-2005 and advertisement was one on 22-4-2005 it shall amount to violation of provision contained in R. 285 of the Rules. Learned counsel for the petitioner further submits that the amount deposited through bank draft to the tune of Rs. 7 crore 80 lakhs was violative of Rule 285(D). According to petitioners counsel the bank drafts were prepared at Sarojani Nagar Branch of Punjab National Bank, Kanpur. It could not have been deposited to the Districts authorities on the same day at Ghaziabad at the fall of hammer. The further submission of learned counsel for the petitioner is that in view of provision contained in R. 285(D) of the Rules it was incumbent upon the UPSIDC to deposit the amount in cash. Accordingly, the submission is things have been manipulated for extraneous reasons coupled with political compulsion by the District Magistrate, Ghaziabad, Shri Santosh Kumar Yadav. It has been further submitted by petitioner's counsel that the remaining 75 per cent, amounts should have been deposited within fifteen days in the treasury but from the endorsement made by ADM, Finance and Revenue, Ghaziabad it appears that antedating was done and virtually the bank draft was handed over to ADM, Finance and Revenue on 18-5-2000 i.e after expiry of period of fifteen days. Accordingly the submission is since remaining 75 per cent, amount was not deposited in the treasury within fifteen days, the entire proceedings vitiates in view of provision contained in R. 285(E) of the Rules.

8. Petitioner's counsel further submits that the while proceeding ahead with the auction the District authorities had not identified the land which was placed for auction. It has been also submitted though the value of the property in question is more than 100 crore but it has been auction for a meager amount of Rs. 32 crores under the political compulsion. Learned counsel for the petitioner had invited attention of the Court towards a letter dated 26-4-2005 of UPSIDC, a copy of which have been filed as Annexure 24 which indicates that the cost of its land existing in Kavi Nagar, Ghaziabad belonging to UPSIDC has been assessed as Rs. 3 thousand per sq. m. Accordingly, the submission is that the total amount of the land shall come to more than 56 crores.

9. Relying upon the document filed as Annexures 34 to 39 petitioner's counsel submits that the National Textile Corporation which is holding 34 per cent, (majority share) of petitioner's Swadeshi Polytex Limited has been pursuing the matter with the Government of India for rehabilitation of the industry, and is in its effective control. Accordingly, by letter dated 10-3-2005 (Annexure 34) the Government of India had informed the Labour Commissioner to determine the quantum and modalities of the payment of worker dues in the company after providing opportunity of hearing to all interested persons i.e NTC, SPL and PCT Ltd. so that steps may be taken for the rival or rehabilitation of the industry. By letter dated 14-3-2005 the Government of India had informed the District Magistrate, Ghaziabad Shri S.N Yadav that the decision has been taken to refer the matter to arbitration and Government of India had directed to take appropriate action (Annexure 35). By an other letter dated 30-3-2005 the Director, Ministry of Textile Government of India had requested the District Magistrate, Ghaziabad that matter has been referred to arbitrator to determine the liability of SPL (petitioner) towards debtor. Accordingly, a request was made that the sale and auction of the assets of the company may be kept in abeyance. By another letter dated 5-8-2005 the Labour Commissioner Government of U.P had informed the District Magistrate, Ghaziabad that the initiatives has been taken for arbitration and since on the persuasion of the National Textile Corporation appropriate action has been taken for rehabilitation of the industry in question including the payment of dues/wages, the sale proclamation may be recalled and auction proceedings may defer. By another letter dated 28-4-2005 again the Labour Commissioner Government of U.P (Annexure 38) had requested the District Magistrate, Ghaziabad Shri S.N Yadav to withdrawn the recovery certificates and matter may be kept in abseyance so that arbitrator may proceed with the matter and decision may be taken for payment of wages to the employees. Labour Commissioner had indicated that the petitioner industry may be rehabilitated to provide livelihood to its employees/workmen.

10. The submission of learned counsel for the petitioner is that the District authorities had proceeded to auction the petitioner's property in spite of fact that the Government of India as well as National Textile Corporation had taken steps to rehabilitate the industry and initiatives were taken to appoint arbitrator to determine the wages payable to the employees. The categorical request of the Government of India as well as Labour Commissioner, U.P was ignored for extraneous reasons coupled with the political compulsion by the District Magistrate, Ghaziabad. Learned counsel for the petitioner further submits that the petitioner had categorically pleaded in the objection filed before the Commissioner, Meerut Division, Meerut as well as the Board of Revenue inviting attention to the material procedural irregularity committed by the Tehsildar, Ghaziabad but no finding has been recorded by both the authorities. The objection (Annexure 28) filed before the Commissioner and memo of revision (Annexure 30) reveals the ground raised by the petitioner. It has been also submitted that about 4.50 crores have already been paid to workmen since 1998, i.e after the closure of industry.

11. Petitioner's counsel further submitted by inviting attention towards Paras 8 and 58 of the writ petition that one of its officer was kidnapped by certain unsocial elements so that petitioner may not pursue with the objection filed against the order passed by the Commissioner in the Board of Revenue.

12. Officers of the petitioner were compelled to send a letter for deferment of hearing, which was later on recalled by subsequent letter. According to petitioner's counsel complaint was lodged on 5th July, 2005. Thereafter, on 6th July, 2005 with the Station House Officer, Ghaziabad and District Magistrate, Ghaziabad were informed relating to the kidnapping of an officer of the petitioner namely Shri G.C Jain. Certain letters in this regard have been sent the copies of which has been filed as Annexures 43 to 46 to the writ petition. The factum of kidnapping of Shri G.C Jain has been not categorically denied by the opposite parties while filing the counter-affidavit. Learned counsel for the petitioner further submitted that citation under R. 242 of the Rules was issued only for an amount of Rs. 1 Lakh 93 crores and not for the entire amounts. The further submission is that since estimated value of the property in question has been not mentioned in the sale proclamation the entire sale proceedings vitiates. It has been further submitted that it was incumbent upon the comptent authority to evaluate the properties keeping in view the market rate as well as the provision contained in Chapter 15 of the Revenue Manual. According to petitioner's counsel since no demand notice except for 1 crore 93 lakh was issued it shall amount to non-compliance of S. 280 of the Act. Petitioner's counsel further submitted that Ss. 279, 286 of the Act had been not complied with. Relying upon the pleading contained in para 37 of the writ petition it has been submitted by learned counsel for the petitioner that specific ground was raised before the Commissioner under Ground Nos. H, J and M in the objection, but Commissioner, Meerut Division, Meerut had not considered the same. It has been further submitted by petitioner's counsel that while rejecting the petitioner's objection Commissioner Meerut Division, Meerut had not provided opportunity of hearing to the petitioner by advancing oral argument, though a written argument was filed (para 37 of the writ petition). It has been further submitted in the Board of Revenue also under Ground Nos. 6 and 10 specific pleading was raised relating to the causing of substantial injury. Thus the sum and substance of the argument advanced by the petitioner's is that entire sale process suffers from violation of Ss. 280, 279 and 286 and other provisions contained in UPZA and LR Act read with Rules 241, 242, 243, 245, 273-A and 281, 283, 285-A and other related Rules. Petitioner's counsel submits that thirty days clear notice was not given in compliance of 285-A of the Rule which was mandatory. According to petitioner's counsel there should have been specific demand by the opposite parties by serving the citation and only thereafter opposite parties could have issued a sale proclamation or could have proceeded to auction the property in question in accordance to Rules.

13. Learned counsel for the petitioner-Shri N.K Seth had relied upon the various judgments reported in (1975) 4 SCC 844 : AIR 1976 SC 1150; Commissioner Wealth Tax, U.P v. Kundan Lal Behari Lal, (2004) 7 SCC 151 : AIR 2004 SC 3392; Gajraj Jain v. State of Bihar, (2004) 7 SCC 166 : AIR 2004 SC 2421; SJS Business Enterprises v. State of Bihar, 2004 (22) LCD 1494; Ramesh Kumar v. Collector Gonda, 1985 Revenue Reporter 5, Jalauddin v. State of U.P, 1978 All WC 189; Shanti Devi v. State of U.P, 2005 Revenue Digest 12 (BOR); U.P Financial Corporation v. Malik Flour Mills, 1996 Revenue Judgment Collection 241, Abinandan Agarwal v. State of U.P, 1990 Revenue Reporter 61, Babu Ram v. Board of Revenue, 1995 Revenue Digest 240 : 1995 All LJ 772; Rao Mehmood Admed Khan v. Ranbir Singh.

14. On the other hand, learned standing counsel as well as counsel for the respondent on behalf of 6, 7 and 8 Shri Umesh Pandey and Dr. L.P Mishra had proceeded to submit that since the argument advanced by the petitioner's counsel has been already considered by the Division Bench of this Court in W.P No. 22817/2003 dated on 13-1-2005 followed by judgment and order dated 4-5-2005 passed in W.P No. 35005/2005 and judgment order dated 26-5-2005 passed in W.P No. 36736/2005, the impugned order passed by the Board of Revenue as well as the Commissioner, Meerut Division, Meerut does not suffer from any illegality or any impropriety. No substantial injury has been caused to the petitioner on account of any procedural defect, hence, present writ petition is not sustainable under law. Sri Umesh Pandey learned counsel representing the opposite party Nos. and 7 submitted that since the advertisement for sale as contained in Annexure No. 22 contains the estimated value of the property in question to the tune of Rs. 27 crore it shall amount to compliance of Rule 283 of the Rule. He had further submitted that the proclamation filed as Annexure No. 21 reveals that it was issued for recovery of wages of workmen to a tune of Rs. 18,53,05,908/- it amounts to compliance of R. 283 of the Rule. According to learned counsel, the auction proceeding as evident from bid-sheet filed as Annexure No. 23-A was perfectly done in accordance to law hence, no substantial injury has been caused for interference in pursuance to power conferred by R. 285(i). Dr. L.P Mishra learned counsel for the respondent No. 8 submits that since Deputy Labour Commissioner had passed an order in pursuance to statutory provisions contained in S. 3 of the 1978 Act and petitioner was party as respondent No. 6 in W.P No. 22817/2003 thereafter, petitioner himself filed a Writ Petition No. 35005/2005 in this Court at Allahabad, the impugned order does not call for interference by this Court. He had further proceeded to submit that the amount of Rs. 5 crore was not deposited by the petitioner in compliance of order passed by the Apex Court in a special leave petition, hence, the petitioner has got no right to assail the impugned orders. However, this argument has been denied by the petitioner's counsel with the statement that special leave petition was filed by M/s. Swadeshi Polytex Limited and not by the petitioner, hence, petitioner cannot be blamed for non-compliance of order passed by the Apex Court. It has been further submitted by learned counsel that the petitioner is the lessee of UPSIDC of the same land. It is UPSIDC which had leased the land in question to the petitioner for 30 years renewable for 90 years. It has been further submitted by petitioner's counsel that in view of finding recorded by Division Bench in W.P No. 36736/2005 it was not necessary for publication in two newspapers since Rule does not provide to do so.

15. According to respondent's counsel petitioner himself had pleaded that value of land may be 55 or 56 crore, hence, argument that its value is about 100 crore is not sustainable. Learned counsel for the respondents further submitted that right from the year 2001 citations were issue from time to time covering the entire land and dues. The argument that the citation was issued only for 1.93 crore is not correct. It has been further submitted that BIFR has rejected the petitioner's application to declare it a sick unit on 25th April, 2005. Learned counsel for the respondents had placed reliance upon three judgments of this Court at Allahabad referred hereinabove.

QUESTIONS IN ISSUE

16. From argument advanced by the parties counsel following the question seems to have been cropped up for adjudication by this Court in the present controversy:—

(A) While doing recovery in pursuance to order passed under sub-section (1) of S. 3 of the Uttar Pradesh Industrial Peace (Timely Payment of Wages) Act, 1978, the recovery proceedings should not be interfered while considering objection under R. 285(i) of the Rules or by this Court?

(B) Whether in view of judgment and order dated 13-1-2005, 4-5-2005 and 26-5-2005 decided by the Division Bench of this Court at Allahabad the impugned order passed by the Commissioner Meerut Division, Meerut as well as the Board of Revenue called for no interference by this Court and matter shall be deemed to be settled and attains finality?

(C) Whether the provisions contained in UPZA and LR. Act and Rules framed thereunder and certain provisions referred hereinabove under Code of Civil Procedure have got statutory force and their non-compliance shall vitiate the entire sale proceedings?

(D) Whether the auction and sale of the property in question was held in violation of statutory provisions referred and discussed hereinabove and what will be its effect?

(E) Whether the petitioner has sustained injury in case statutory provisions in question have been not complied with, calling for in terference under R. 285(i) of the Rule?

(F) Whether the entire sale process was held malafidely for some extraneous reasons in a hasty manner without following the due process of law?

17. Question (A) While doing recovery in pursuance to order passed under sub-section (1) of S. 3 of the Uttar Pradesh Industrial Peace (Timely Payment of Wages) Act, 1978, the recovery proceedings should not be interfered while considering objection under R. 285(i) of the Rules or by this Court?

Admittedly, NTC of India has got 34 per cent, of the share in the industry also presently in control of the industry in question and being a major shareholder, the NTC has been pursuing the matter with the Central Government for its rehabilitation. It is also admitted fact on record that since 1998 wages have been not paid to the petitioner and in consequence thereof the Deputy Labour Commissioner had exercised power in pursuance to provision contained in 1978 Act. Sub-section (1) of the S. 3 empowers the Labour Commissioner to issue a certificate under his signature specifying the amount of wages due from the industrial establishment concerned. In pursuance thereof of the Collector of the district shall release the amount in pursuance to power conferred by sub-section (2) of S. 3 and shall remit the same to Labour Commissioner after taking the recovery charges.

For convenience S. 3 of the 1978 Act is reproduced as under:—

“Recovery of wages in certain industrial establishment as arrear of land revenue.— (1) Where the Labour Commissioner is satisfied that the occupier of an industrial establishment is in default of payment of wages and that the wage bill in respect of which such occupier is in default exceeds fifty thousand rupees, he may, without prejudice to the provisions of Ss. 5 and 6, forward to the Collector, a certificate under his signature specifying the amount of wages due from the industrial establishment concerned.

(2) Upon receipt of the certificate referred to in sub-section (1), the Collector shall proceed to realise, from the industrial establishment, the amount specified therein, besides recovery charges at the rate of ten per cent, as if such amount were an arrear of land revenue.

(3) The amount realised under sub-section (2) shall, after deducting the recovery charges, be placed at the disposal of the Labour Commissioner who shall disburse the same or cause it to be disbursed among the workmen entitled thereto.

(4) Where the amount so realised falls short of the wages bill in respect of which the occupier has been in default, the Labour Commissioner may arrange for disbursement of such proportion or respective proportions of the wages due to various categories of workmen as he may think fit.

(5) The liability of the occupier towards each workman in respect of payment of wages, shall, to the extent of the amount paid to such workman under this section stand discharged.”

Admittedly, in pursuance to power conferred by S. 3 of the 1978 Act recovery certificate was issued and sent to Collector, Ghaziabad to recover the dues in question. It is also not disputed that a reference made by the Labour Commissioner under S. 3 of the 1978 Act may be enforced by the Collector to recover the dues as arrears of land revenue by the Collector of the District in pursuance to provision contained in UPZA and LR Act and Rule framed thereunder.

18. Section 4 of the 1978 Act further provides that for the purpose of ascertaining the Wage Bill of an establishment in respect of which default has been committed the Labour Commissioner will have power to enforce the attendance of witness and may examine the claim in pursuance to provision by discharging duty with the power of Civil Court. Section 4 of the Act reflects that before issuing a recovery certificate the Labour Commissioner shall ascertain the wages of the workmen after providing reasonable opportunity to the parties. In the present case from the records it does not appears that the Labour Commissioner had provided opportunity of hearing to the parties particularly the petitioner while ascertaining the dues or wages of the workmen.

For convenience S. 4 of the Uttar Pradesh Industrial Peace (Timely Payment of Wages) Act, 1978 is reproduced as under:—

“4. Powers of Labour Commissioner.— For the purposes of ascertaining the wages bill of an establishment in respect of which default has been committed the Labour Commissioner shall have all the powers of a Civil Court, while trying a suit, under the Court of Civil Procedure, 1908 in respect of enforcing the attendance of witness and examining them on oath compelling the production of documents and shall be deemed to be a Civil Court for the purposes of S. 195 and Chapter XXVI of the Code of Criminal Procedure, 1973.”

The provision contained in S. 4 of the 8 Act extents quasi judicial power to the Deputy Labour Commissioner to decide the quantum of wages and while doing so the Deputy Labour Commissioner shall take all powers vested in competent Civil Court under S. 195 as well as Chapter 26 of the Code of Criminal Procedure. The provision contained S. 4 of the 1978 Act also extend statutory right to the person or authorities concerned against whom an order is to be passed in pursuance to power conferred by sub-section (1) of S. 3 of the 1978 Act to make submission in respect of default of payment of wages. The legislature as seems had provided the safeguard so that employer may have opportunity to pay wages or may enter into settlement with the workmen during the course of proceedings before the Deputy Labour Commissioner under S. 3 of the 1978 Act. An officer discharging duty as quasi-judicial authority has got no right to pass an ex parte order. Accordingly, prima facie it appears that the Deputy Labour Commissioner had not taken care to comply with the statutory provisions contained in the S. 4 of the 1978 Act.

However, in view of Division Bench of this Court in Writ Petition No. 22817 of 2003 decided on 13-1-2005 and Writ Petition No. 35005 of 2005 decided on 4-5-2005 this question is not open to be considered afresh under the present proceedings.

19. So far as interference by this Court against the impugned orders is concerned it does not seem to be prohibited by any law. Once it has been not denied that the dues relating to the wages assessed by the Deputy Labour Commissioner and the consequential certificate issued under sub-section (1) of S. 3 of the 1978 Act was liable to be recovered by the District Magistrate in pursuance to provision contained in UPZA and LR Act and rules framed thereunder and the dues were recoverable as the arrears of land revenue in pursuance to statutory provisions then all such proceedings including the judgment rendered by the Commissioner as well as Board of Revenue may be subjected to review by this Court in pursuance to Arts. 226/227 of the Constitution of India.

Accordingly, the argument advanced by the petitioner's counsel relating to the non-compliance of provision contained in UPZA and LR Act and Rules framed thereunder as well as Code of Civil Procedure may be considered by this Court while considering the validity of auction and sale proceeding as well as the impugned judgments rendered by the Commissioner, Meerut Division, Meerut and the Board of Revenue.

20. Question B Whether in view of judgment and order dated 13-1-2005, 4-5-2005 and 26-5-2005 decided by the Division Bench of this Court at Allahabad the impugned order passed by the Commissioner, Meerut Division Meerut as well as the Board of Revenue called for no interference by this Court and matter shall deem to be settled by three judgments of this Court?

A preliminary objection was raised during the course of hearing that in view of Division Bench judgments of this Court dated 13-1-2005, 4-5-2005 followed by the judgment and order dated 26-5-2005, it is not open for this Court to entertain the petition for judicial review of the auction and sale proceedings as well as the impugned judgment and orders rendered by the Commissioner, Meerut Division, Meerut and the Board of Revenue. While defending the impugned order it has been submitted by the respondent's counsel that the question relating to the validity of auction and sale proceeding was considered by the Division Bench of this Court. Accordingly, the present writ petition is barred by the principle of res judicata and not open for judicial review. It has been also submitted that the opposite party Nos. 1 and 2 had rightly dismissed the objection as well as revision by relying upon the Division Bench judgments of this Court on the ground that the controversy had attained finality. The auction and sale proceedings has been virtually affirmed by the Division Bench of this Court vide three judgments referred hereinabove.

I have given my anxious considerations to the argument advanced by the learned counsel for the respondents. It is settled law that while interpreting a judgment, it should not be read in a piece meal but it should be read as a whole.

Writ Petition No. 50571 of 2002 was filed by the Pharpur Cooling Towers Limited and others as admitted by parties counsel. Petitioner was arrayed as respondent No. 6 in the said writ petition. The issuance of recovery certificate by Deputy Labour Commissioner under sub-section (1) of S. 3 of the 1978 Act was questioned before the Division Bench of this Court. The Division Bench of this Court had considered the question relating to the issuance of recovery certificate by the Deputy Labour Commissioner and relying upon the decision of the Board of Directors had dismissed the writ petition. While dismissing the writ petition the Division Bench of this Court had observed that since the petitioner of the said writ petition-M/s. Pharpur Cooling Towers Limited is pursuing the matter with the Company Law Board and has availed the alternative remedy the writ petition was not maintainable and liable for dismissal. However, reading of entire judgment does not show that the procedural illegality raised by the petitioner in the present writ petition was considered by the Division Bench of this Court, since the writ petition was filed before the auction and sale proceedings which was held on 2-5-2005. Though the writ petition was dismissed but no finding has been recorded by the Division Bench of this Court relating to the validity of recovery certificate issued by the Deputy Labour Commissioner coupled with compliance of S. 4 of the 1978 Act. The Special Leave Petition filed on 13-1-2005 in the Hon'ble Supreme Court, which was dismissed on 24-2-2005.

21. It shall be relevant to mention that the special appeal was filed by the M/s. Pharpur Cooling Towers Limited. Initially Hon'ble Supreme Court had passed an interim order dated 7-2-2005 directing the M/s. Pharpur Cooling Towers to deposit an amount of Rs. 5 crores in the form of Bank draft in favour of Registrar General of Hon'ble Supreme Court. However, the amount in compliance of order dated 7-2-2005 passed by the Apex Court was not deposited and ultimately special leave petition was dismissed on 24-2-2005 (Annexures 2 and 3 to the counter-affidavit filed by the respondent No. 8).

Accordingly, under these facts and circumstance of the case the petitioner cannot be held to be at fault as no direction was issued by the Apex Court against the petitioner, who is presently under the effective control of National Textile Corporation Ltd.

Next Writ Petition No. 35005 of 2005 undoubtedly filed by the petitioner SPL against auction notice dated 22-4-2005 published by the Teshildar, Ghaziabad. Though the Division Bench of this Court had shown its displeasure on account of non-disclosure of certain material fact but proceeded to held that for the procedural defects petitioner will have got alternative statutory remedy to file an objection under R. 285(i) of the UPZA and LR Rules. For convenience relevant portion from the judgment of Writ Petition No. 35005 of 2005 is reproduced as under:—

“We have examined the submissions advanced in this regard. The question as regard to the recovery proceedings has now in view of the aforesaid facts, almost attained finality. So far as the procedural defects, which are being pointed out by the petitioner. Are concerned, they can be attempted by way of filing objections under R. 285-I of the UPZA and LR Rules as, in case the allegations made by the petitioner of inadequacy of price, improper valuation and non-following of procedure, are made out, then it would be a case of material irregularity and such objections can be decided by the Collector or by the Commissioner, as the case may be. In view of this also, it would not be sound exercise of discretion to interfere at the instance of the petitioner at this stage.”

Accordingly, in view of Division Bench of judgment of this Court dated 4-5-2006 passed in Writ Petition No. 35005 of 2005 an observation was made that petitioner will have statutory right to file an objection under R. 285(i) of Rules. Hence, keeping in view the Division Bench judgment of this Court dated 4-5-2005 the submission of respondents counsel that controversy has been settled at rest seems to be misconceived and petitioner was having right to file an objection under R. 285(i) of the Rules. Petitioner has rightly exercised the statutory remedy to ventilate his grievance. The exercise of power by the petitioner by filing objection under R. 285(i) of the Rules does not suffer from any substantial illegality or impropriety.

22. Writ Petition No. 36736 of 2005 was filed by one Jitendra Khaitan challenging the validity of auction notice published in daily Amar Ujala dated 22-4-2005. While dismissing the writ petition this Court has observed that since there is no provision for publication in two newspapers and petitioner-Jitendra Khaitan had failed to explain as to what prejudice was caused to him if the auction notice was published in only one newspaper the writ petition was found to be not sustainable. However, while dismissing the writ petition the Division Bench seized with the Writ Petition No. 36736 of 2005 while rendering the judgment and order dated 26-5-2005 had observed that petitioner will have right to raise his grievance under UPZALR Act and LR Rules, 1952. For convenience relevant portion from the judgment of Writ Petition No. 36736 of 2005 is reproduced as under:—

“If the land has been sold at a cheaper price, the owner of the land can be termed as a person aggrieved and he is the only person who can raise the grievance of selling the land at a cheaper rate by filing objections under the U.P Zamindari Abolition and Land Reform Rules, 1952. In such a situation we fail to understand how the present petition has been filed by the petitioner claiming himself to be the aggrieved person if the land has been sold in pursuance to the recovery proceedings under the U.P Zamindari Abolition and Land Reforms Act which does not prescribe for publication of the notice or auction in two newspapers having global circulation.”

23. In view of discussion hereinabove the argument advanced by the respondents-counsel that matter has been settled by three Division Bench judgments of this Court referred hereinabove seems to be misconceived and not sustainable. Petitioner was having statutory right to file an objection and approach the competent authority under the provision contained in UPZA and LR Act and Rules framed thereunder as well as other law time being enforced.

Opposite parties No. 1 and 2 as settled by catena of judgment of this Court exercise statutory quasi-judicial power under the relevant Act. Accordingly it was incumbent upon them to consider the petitioner's objection keeping in view the statutory provisions contained in UPZA and LR Act and Rules framed thereunder as well as Code of Civil Procedure. But it appears that the opposite parties No. 1 and 2 for the reasons best known to them had wrongly taken the shelter of the Division Bench judgments of this Court referred hereinabove, by not exercising their quasi-judicial duties while considering the objection raised by the petitioner. It is unfortunate that for the reasons best known to them the opposite parties No. 1 and 2 had not acted a manner which is expected from an authority exercising quasi-judicial powers under the Act. The ground raised by the petitiner as evident from an objection (Annexure 28) and memo of revision (Annexure 30) have been not considered by the opposite parties No. 1 and 2, hence, the impugned judgment and orders are liable to be interfered by this Court under the writ jurisdiction.

24. Question (C) Whether the provisions contained in UPZA and LR Act and Rules framed thereunder and certain other provisions referred under the Code of Civil Procedure have got statutory force and their non-compliance shall vitiate the entire sale proceedings?

25. UPZA and LR Act, 1950 (in short hereinafter referred as the Act) have received presidential assent on 24-1-1951 and notified in the Gazette on 26-1-1951. UPZA and LR Rules, 1952 (in short hereinafter referred as the Rule) was notified in the Official Gazette on 30-6-1952 and published in the Official Gazette on 30-6-1952. Under S. 294 of the Act the State Government has got power to frame Rules for the purpose of carrying into affect the various provision as contained in the Act. Chapter X of the Act deals with the recovery of dues as arrears of land Rule. Section 279 provides the procedure for recovery of arrears of land revenue and S. 280 contemplates issuance of the writ of demand and citation to appear. Section 282 provides the procedure for attachment and sale of movable property. Under S. 284 procedure has been provided for attachment lease and sale of holdings. Section 284(A) empowers the Collector to take appropriate steps for ejectment of persons who attach the land without title. Under S. 286 Collector has been vested with power to recover the arrears of land revenue by attachment and sale of the interest of defaulter in immovable property. Under S. 287-A of the Act the persons against whom the recovery proceedings has been initiated will have right to deposit the amount under protest. Under S. 293 the provision contained in Land Revenue Act (Act No. 3 of 1901) has been made applicable, so far as they are no inconsistent with the provisions of the Act. The provisions contained in Ss. 279, 280, 284, 286 and 287-A and S. 327 of the UPZA and LR Act are relevant for the purpose of present dispute, hence reproduced as under:—

“279. Procedure for recovery of an arrears of land revenue.— (1) An arrears of land revenue may be recovered by any one or more of the following process:

by serving a writ of demand or a citation to appear on any defaulter;

by arrest and detention of his person;

by attachment and sale of his movable property including produce;

by attachment of the holding in respect of which the arrears is due;

by lease or sale of the holding in respect of which the arrears is due;

by attachment and sale of other immovable property of the defaulter; and

by appointing a receiver of any property, movable or immovable of the defaulter.

(2) The costs of any of the processes mentioned in sub-section (1) shall be added to and be recoverable in the same manner as the arrears of land revenue.

280. Writ of demand and citation to appear.— (1) As soon as an arrears of land revenue has become due a writ of demand may be issued by the Tehsildar on the defaulter calling upon him to pay the amount within a time to be specified.

(2) In addition to or in lieu of a writ of demand the Tehsildar may issue a citation against the defaulter to appear and deposit arrears due on a date to be specified.

284. Attachment, lease and sale of holding.— (1) The Collector may in addition to or instead of any of the other processes hereinbefore specified either of his own motion or on the application of the Land Management Committee, attach the holding in respect of which an arrears is due.

(2) Where any holding is so attached the Collector may, notwithstanding anything contained in this Act, but subject to such conditions as may be prescribed, let out the holding, for such period not exceeding ten years commencing from the first day of July next following as he deems fit, to any person, other than the defaulter, who pays the whole of the arrears due on the holding and agrees to pay the same amount of land revenue during this period of the lease as has been payable by the defaulter in respect of the holding immediately preceding its attachment.

(3) If during the period of lease, the lessee commits defaults in payment of the land revenue due under lease, the arrears may be recovered from him by any one or more of the processes mentioned in Cls. (a) to (e), (f) and (g) of sub-section (1) of S. 279 and his lease shall also be liable to be determined.

(4) Upon the expiry of the period of lease the holding shall be restored to the tenure-holder concerned free or any claim on the part of the State Government for any arrears of revenue in respect thereof.

(5) If the Collector is satisfied that no suitable person is forthcoming to take the land on lease under sub-section (2) then notwithstanding anything contained in this Act he may sell the holding free from all enumbrances in such manner as may be prescribed and appropriate the proceeds in satisfaction of the arrears, and refund the excess, if any, to the defaulter.

(6) The Collector shall report to the Board of Revenue any sale made under sub-section (5).

286. Power to proceed against interest of defaulter in other immovable property.— (1) If any arrears of land revenue cannot be recovered by any of the processes mentioned in Cls. (a) to (e) of S. 279, the Collector may realise the same by attachment and sale of the interest of the defaulter in any other immovable property of the defaulter.

(2) Sums of money recoverable as arrears of land revenue but no due in respect of any specified land, may be recovered by process under this section from any immovable property of the defaulter including any holding of which he is a bhumidhar.

287-A. Payment under protest and suit for recovery.— (1) Whenever proceedings are taken under this Chapter against any person for the recovery of any arrears of land revenue, or for the recovery of any sum of money recoverable as arrears of land revenue he may pay the amount claimed under protest to officer taking such proceedings, and upon such payment, the proceedings shall be stayed and the person against whom such proceedings were taken may sue the State Government in the Civil Court for the amount so paid, and in such suit the plaintiff may, notwithstanding anything contained in S. 278, give evidence of the amount, if any, which he alleges to be due from him.

(2) No protest under this section shall enable the person making the same to sue in the Civil Court, unless it is made at the time of payment in writing and signed by such person or by an agent duly authorised in this behalf.

Section 327, Mode of service of notice.— Any notice or other document required or authorised to be served under this Act may be served either—

(a) by delivering it to the person on whom it is to be served, or

(b) by leaving it at the usual or last known place of abode of that person, or

(c) by sending it in a registered letter addressed to that person at his usual or last known place of abode, or

(d) in case of any incorporated company or body, by delivering it or sending it in a registered letter addressed to the secretary or other principal functionary of the company or body as its principal officer, or

(e) in such other manner as may be laid down in the Code of Civil Procedure, 1908 (5 of 1908).”

26. Section F of Chapter X of the rule deals with the coercive method which can be adopted by the Tahsil Authorities to recover the amount as arrears of land revenue. Rules 235 and 236 empowers the Tehsildar to issue relevant forms relating to citation, writs, warrant of arrest and warrant of attachment. Rules 239 and 240 provides that the citation to appear or a warrant must be issued separately. Rules 241 to 245 provides how the writ of demand and citation should be issued and may be served on the person concerned. For convenience Rules 235, 236, 239, 240, 241, 242, 243, 245 and 246 are reproduced hereunder:

“235. Section 294.— (1) Process against a defaulter being or having property in a district other than that in which the arrears fell due, can be issued against him or against such property only upon a certificate under S. 3 of the Revenue Recovery Act, 1890.

(2) Land Revenue realised upon such a certificate shall not, if the district of issue of the certificate and the district of realisation are both within Uttar Pradesh be remitted to the treasury of the district in which it is realised and an intimation to the effect that the amount has been realised, shall be sent to the officer who issued the certificate. The latter shall then have the fact of realisation noted in the accounts of his district, while in the district in which the amount was realised, the amount shall be credited as realised on behalf of the demand of the district from which the certificate was issued.

(3) When the district of issue of the certificate is not within Uttar Pradesh, the amount so recovered shall in the first instance be paid into the treasury of the district in which it is realised. At the end of the month, all sums so credited shall be withdrawn and remitted to the District Officer by whom the certificate was issued. Sums exceeding Rs. 15 shall be remitted by remittance transfer receipt and sums of Rs. 15 or less by postal money order, the money order commission being depited to the contract contingencies of the District Officer making the remittance.

(4) A register in A Form 67 shall be maintained by District Officers for the record of certificates of recovery of land revenue issued to and received from other districts.

236. Writs, citations warrants of arrest and warrants of attachment of movable property shall be in the A Forms 68, 69, 70 and 71. They shall be signed by the issuing officer and sealed with his official seal.

237. The wasil baqi navis shall be responsible for the correctness of the entries of the demand in all process in which such demand is required to be entered and shall sign every such process in token of its correctness in that respect.

238. At the first issue of process for the recovery of an arrear, the statement of account prescribed by S. 278 shall be drawn up by the wasil baqi navis and signed by him, and shall be certified by the Tahsildar. But if the first process issued is a writ or citation, certificate of the Tahsildar shall be recorded on the counterfoil.

239. A single writ of demand or a single writ for attachment and sale of movable property, may be issued against any one, or against some or all of number of defaulters who are jointly responsible for the payment of the arrears but a citation to appear or a warrant of arrest must be issued separately in respect of each defaulter required to attend or to be arrested.

240. Subject to the provisions of the Act, process shall ordinarily be issued in respect of the whole of the arrears due from the defaulter, whether such arrears are due in respect of one or more Khata Khataunis.

241. Section 280.—Process under S. 280 (writ of demand or citation to appear) shall be issued by the Tahsildar of the Tahsil in which the arrear fell due, or by the order of the Collector or the Assistant Collector incharge of the sub-division. If the Tahsildar issues such process against a defaulter residing in another Tahsil within the district he may do so either or through the Tahsildar of such other Tahsil.

242. Process under S. 280 is not required by law to proceed process under S. 282 (attachment of immovable property) but ordinarily a writ in ZA Form 68, or citation to appear in ZA Form 69 should issue before any other process is resorted to.

243. The fee charged for the issue of a writ or citation to appear shall be rupees two. This fee shall be added to the arrears to which the writ of citation is issued, and shall be included in the amount specified therein.

245. Not more than one writ shall be issued in respect of the same arrear to any defaulter, except under the express orders of the Collector. If the arrears are not paid within 15 days from the date of service, more severe measure should promptly be taken.

246. (1) Service of the writ or citation shall, if possible be made on the defaulter personally, but if service cannot be made on the defaulter if may be made on his agent. If the defaulter or his agent cannot be found or if there is more than one defaulter against whom a writ or citation has been issued a copy of the writ, or citation may be fixed at a prominent place on or adjacent to the defaulter's residence.

(2) Personal service shall be made by delivery to the defaulter or his agent of the foil of the writ or citation. The other portion shall be brought back to the Tahsil by the process server shall report to the officer whom the Tahsildar may appoint for the purpose, the date of service, the manner in which the writ or citation was served, and if it was not served on the defaulter personally the reason why it was not served. The official receiving the report shall note the particulars on the process, if this has not been done already.

(3) With the sanction of the Collector, writs of demand may also be served by registered post. In such cases the post office receipt shall be attached to the counterfoil.

Rules 247-A and 247-B deals with the process of arrest and detention and for convenience are reproduced hereunder:—

“247-A. The warrant of arrest may be executed by any one of the process-servers referred to in R. 244 or an Amin or any other officer whose name is entered in the warrant of arrest. Where the person authorised to execute the warrant is a process-server who has not furnished any security to Government, an Amin shall be deputed to accompany such process-server.

247-B.(1) Where a defaulter at the time of his arrest pays the entire amount of arrears specified in the warrant of arrest along with the process fee referred to in R. 248 to the process-server, the Amin or the officer, as the case may be, empowered in the said warrant to receive such arrears and process fee he shall not be arrested, and if arrested shall be released, and a receipt for the amount so paid shall be issued to him on the spot in ZA Form 64 by the process-server, Amin or officer, as the case may be.

(2) The amount of arrears and the process fee paid by the defaulter shall immediately be deposited in the tahsil in the same manner as a land revenue collection is deposited. The fact of payment of the aforesaid amounts as also the reference of the Receipt No. and Book No. of the receipt issued to the defaulter shall also be noted down on the warrant which shall then be put up before the officer issuing the warrant of arrest who shall ensure that the amounts noted on the warrant have been duly deposited in the tahsil.”

27. The procedure for the attachment of lease of land have been provided under Rules 272, 272-A, 272-B, 273, 273-A, 278 and 285(c) for convenience which are reproduced hereunder:—

“272. Sections 279, 284, 289 and 291.— (1) Process for attachment of a holding under Cl. (d) of S. 279 or for lease of a holding under S. 291 may be issued only by the Collector.

(2) Process for attachment of a village or any area therein under S. 289 may be issued by the Collector with the previous sanction of the Board of Revenue. While submitting his proposal for attachment to the Board of Revenue, the Collector shall report how the purposes to manage the land during the period of attachment, and the period for which the attachment is proposed.

(3) Where a holding is attached under Cl. (d) of S. 279, the Collector shall forthwith make necessary arrangements for the cultivation of land either by grant of a lease under S. 291 or in such other manner as he considers desirable.

272-A. Before proposing attachment under S. 289, the Collector should satisfy himself by reference to the Pargana Book and other sources of information available to him, that there is a reasonable probability of the arrears being recorded by this process within the period of three years allowed by the Act. If the Collector or the Board of Revenue is not satisfied the attachment shall not be made except as a preliminary measure to some more severe process.

273-B. The direction contained in paragraphs 713 to 716 of the Revenue Manual as to provision for the cost of collecting establishment and local management, shall apply mutatis mutandis to land under management after attachment for arrears of revenue.

273. Where any land is attached. In pursuance of the provisions of Cl. (d) or (f) of S. 277 or sub-section (1) of S. 284, or of S. 286 or is let out under sub-section (2) of S. 284, a proclamation in ZA Form 73 shall be affixed at a conspicuous place in the village in which the land is situate, and it shall also be notification by beat of drum.

273-A. The attachment of holding or other immovable property under Cl. (d) or (f) of S. 276 or under S. 284 or S. 286, shall be effected in the manner prescribed in O. 21, 54 of the Code of Civil Procedure, 1908 an the order to the defaulter shall be issued in ZA Form 83-D.

278. Section 284(2).— As soon as may be, after the holding is attached under sub-section (1) of S. 284, the Collector shall proceed to let out the holding to any person other than the defaulter, whom he thinks fit, and who pays the whole of the arrears due on the holding before a lease is given to them in respect of that holding.”

285(c). If the defaulter pays the arrears in respect of which the land for other immovable property is to be sold, at any time before the day fixed for the sale, the person authorised to collect the amount in arrears or to the person appointed under R. 285-A to conduct the sale, the sale officer, on being satisfied of the payment, shall stay the sale.

28. Under R. 281 procedure has been given for the sale of immovable property. For convenience Rules 281, 282 and 283 are reproduced hereunder:—

“281. (1) Recourse can only be had to the sale of the holding under S. 284 when the processes specified in Cl. (a), (b), (c) or (d) of S. 279 would be insufficient for the recovery of the arrear.

(2) Process for sale of holding under S. 284 and other immovable property under S. 286 shall be issued by the Collector.

(2-A) In the case of sale of a holding the Collector shall auction the holding in lots of 1.26 hectares (3.125 acres) to 5.04 hectares (12.50 acres) after working out an announcing the land revenue and the estimated value of each lot.

It should also be made clear that only those persons would bid in the auction, acquisition of land by whom would not contravene the provisions of S. 154.

282. Section 286.— The proclamation of sale shall be in Z.A Form 74.

283. In the proclamation for sale under S. 286, the Collector shall state the amount of the annual demand and the estimated value of the property calculated in accordance with the rules in Chapter XV of the Revenue Mannual.”

29. All the aforementioned provisions contained in the Act and Rules are in affirmative, and command the revenue authorities to fulfil requirements while proceeding to recover the dues as the arrears of land revenue. The various ZA Forms provided under the Rule should be effectively served on the defaulter before proceeding ahead with the auction and sale of the property. The provision of the Act as well as Rule stated hereinabove have got statutory force and are mandatory in nature. The violation of Rules may vitiate the entire recovery proceedings.

30. It is settled law that the provision which are mandatory must be complied with otherwise the action taken by the authorities shall be vitiated.

A combined reading of various provisions contained in the Rules shows that wasil baqi navis shall check the correctness of entries in all process relating to demand to recover the arrears as land revenue as provided under the Rule 237 of the Rule. Under R. 238 of the Rule, the statement of account as provided under S. 278 shall be prepared in relation to the dues pending for recovery. Thereafter in pursuance to R. 241 of the Rules read with R. 280 a writ of demand shall be served on the defaulter indicating therein the actual amount. Rule 246 provides that writ of demand or citation shall, if possible, be served on defaulter personally. It can be served on the agent only in case it is not possible to serve on defaulter.

In the instant case, there is no material on record neither it has been argued or pleaded by the opposite parties that the Tehsildar or District authorities had ever tried to serve demand notice personally or by registered post as provided under S. 327 of the Act the CMD, National Textile Corporation of India Limited who is holding the petitioners company as well as its assets as prima facie appears from Annexure 34, a letter sent by the Government of India showing its inclination to pay the wages to workmen as well as rehabilitate the industry.

31. Rule 245 provides that not more than one writ shall be issued in respect of same arrears of any defaulter except under the express order of Collector. However, if arrears are not paid within fifteen days from the date of service more severe method may be adopted to recover the dues. The letter and spirit of R. 245 is to grant an opportunity to defaulter to pay the dues before the serious coercive method is adopted like attachment and sale of property or the recourse of arrest and detention. Thus the spirit of S. 245 is that the citation or demand notice should be served on the actual defaulter and in case it is not possible only then the notice can be served on agent.

According to Black's Law Dictionary, “agent” means a person who is authorised to act for master, owner or proprietor. The definition of “agent” as given in Black's Law Dictionary is reproduced as under:—

“agent 1. One who is authorised to act for or in place of another; a representative . Cf. PRINCIPAL (1); EMPLOYEE. 2 Something that produces an effect .

“Generally speaking, anyone can be an agent who is in fact capable of performing the functions involved. The agent normally binds not himself but his principal by the contracts he makes; it is therefore not essential that he be legally capable to contract (although his duties and liabilities to his principal might be affected by his status).”

“The etymology of the word agent or agency tells us much. The words are derived from the Latin verb, ago, agere; the noun agens, agentis. The word agent denotes one who acts, a doer, force or power that accomplishes things.” Harold Gill Reuschlein and William A. Gregory, The law of Agency and Partnership 1, at 2-3 (2d ed. 1990).”

Thus, virtually the agent will be authorised substitute of actual owner to do a thing which the principal owner can do.

In the present case, the service of notice on the Chowkidar/watchman does not seem to be covered by word agent. Accordingly there seems to be no service of writ or citation or demand notice on the petitioner in compliance of statutory provisions contained in the Act as well as Rules. Coercive method under the Rules may be adopted only in case the authorities arrived to the conclusion that the arrears which is recoverable as land revenue cannot be recovered from the defaulter in normal course after service of demand notice or writ. Attachment and sale of property should be done only in case after effective service of writ/citation or demand notice a defaulter fails to pay the amount within stipulated period provided under the ZA Form. That is why Rule 281 provides that the recourse relating to attachment and sale of immovable property should be adopted under S. 284 only in case Cls. (a), (b), (c) and (d) of S. 279 found to be insufficient for recovery of arrears. Section 327 of the Act also speaks in the same manner.

Moreover, in the present case when the Government of India itself had taken steps for the payment of the dues and rehabilitate the industry then there was no justification on the part of District authorities to take coercive method without providing an opportunity to pay the dues after effective service of demand notice.

Under R. 285(c) defaulter has got right to pay arrears of which immovable property is to be sold any time before the date fixed for the sale and in case the amount is so paid the entire sale proceedings shall liable to be stayed.

32. Section 341 of the Act provides that the provision contained in Code of Civil Procedure shall be applicable. For convenience S. 341 is reproduced as under:—

“Application of certain Acts to the proceeding of this Act—

Unless otherwise expressly provided by or under this Act, the provisions of the Indian Court Fees Act, 1870 (7 of 1870), the Code of Civil Procedure, 1908 (5 of 1908), and the (Limitation Act, 1963 (36 of 1963), (including S. 5 thereof) shall apply to the proceedings under this Act.”

33. In view of S. 341 of the Act the provision contained in O. 5 of the Code of Civil Procedure may be made applicable in a proceeding where dues are recovered as arrears of land revenue under the rules.

34. A Full Bench of this Court in a case reported in 1977 AWC 115, R.B Luxman Das Sugar Mill Limited v. State of U.P while interpreting the power of Collector under S. 286-A read with S. 279 of the Act held that while proceeding ahead with the recovery proceedings as arrears of Land Revenue Collector has got power to appoint receiver for the attached property. However, before doing so he has to satisfy on the facts and circumstance of the particular case that it shall be “just and proper to do so.”

35. A Division Bench of this Court in a case reported in 1986 RD 173 : 1986 All LJ 404, Chotey Lal v. State Electricity Board held that S. 279 and S. 285 does not make distinction between land revenue and sums of money recoverable as arrears of land revenue. However, it was further held that the recourse of Cl. (b) of sub-section (1) of S. 279 may be taken only in case a person possess sufficient means to discharge the liability and not otherwise.

36. A Division Bench of this Court in the case reported in 1991 AWC (1) 210 : 1991 All LJ 80, Shiv Narain Tewari v. District Magistrate held that when law provides forum and the method for redress of grievance the affected person concerned should take recourse to said forum and the method. It was further held in the case of S.N Tewari (supra) that the auction and sale of immovable property to recover the dues as arrears of land revenue may be challenged only in accordance to provision contained in UPZA and LR Act and Rules framed thereunder and not otherwise.

37. While considering the provision contained in Ss. 297, 280, 281, 282 of the Act as well as O. XXI, R. 58 of the Code of Civil Procedure a Division Bench of this Court in a case reported in 1996 RD 161 : 1996 All LJ 591, Kanpur Rolling Mills Private Limited v. Sub-Divisional Officer, Kanpur held that if an objection is filed against the recovery proceedings including the attachment and sale of property then the competent authority shall legally oblige to decide the objection before proceedings with the auction and sale of property. Relevant portion from Kanpur Rolling Mills Private Limited's case is reproduced as under:—

“In the opinion of the Court, it was the respondent No. 1, who was competent to decide the objection of the petitioners in as much as the attachment and auction sale was directed by respondents No. 1, and the petitioners had filed their objection before him. Indeed the respondents No. 1 is legally obliged to decide the objection of the petitioners before proceeding with the auction of the property in dispute. For so long as the objection of the petitioners is not decided, the proceedings for sale of the property in dispute cannot go on.”

38. A division bench of this Court in a case reported in 2000 (2) AWC 1505, Manminder Singh v. Chandra Cold Storage held that the deposition of the entire amount by the auction purchasers will not create any right unless the auction is held in accordance to statutory provisions. It has been further held that thirty days clear notice is mandatory to hold an auction and sale in pursuance to provision contained in the Act and Rules framed thereunder. It has been further held that 25% of the amount should also be deposited immediately.

Keeping in view the infirity in the auction and sale proceedings, the Division Bench while exercising powers under Special Appeal had upheld and affirmed the judgment of Hon'ble Single Judge of this Court whereby the auction and sale was set-aside on account of non-compliance of statutory provisions under the Act and Rules.

Relevant portion from the case of Manminder Singh (supra) is reproduced as under:—

“We agree that the view taken in Raghunath Prasad (supra) and accordingly held that the appellant herein acquired no right in the property merely because he had deposited the entire amount offered by him at the auction sale. On merit also, the auction sale was liable to be set-aside firstly due to the reason that thirty days clear notice was not given and secondly, because 25% of the amount of the bid was not deposited “immediately” as stipulated by Rule 285D of the Rules of 152 in asmuchas the deposit by Cheque was not a valid deposit as per law laid down by the Apex Court in Mahmood Ahmad Khan (dead) through L. Rs. v. Ranbir Singh, 1995 AWC 896 : 1995 All LJ 772. We are of the view that the auction sale was not sale at all in the eye of law and 25% of the purchased money had not been deposited “immediately” on the appellant being declared as the highest bidder. In the circumstances, it would be deemed that no sale had taken at all as held by the Apex Court in Mani Lal Mohan Lal v. Syed Ahmad, AIR 1954 SC 349.”

39. Hon'ble Supreme Court in a case reported in 1995 RD 240 : 1995 All LJ 772 Rao Mahmood Ahmed Khan through Legal representatives v. Ranbir Singh held that the provisions contained in Order XXI Rule 84, 85 & 86 of the Code of Civil Procedure are mandatory and since the provisions of Rule 285D & 285E are similar in terms they are also mandatory and in case the provisions contained in Rule 285D is not complied with the auction shall be nullity. It has been further held by Hon'ble Supreme Court that in case 25% of the amount in cash is not deposited on the same day then it shall always be violation of rules.

The paramateria provisions contained in Code of Civil Procedure shall also be applicable while interpreting the rules. Relevant portion from the case of Rao Mahmood Ahmed Khan (supra) is reproduced as under:—

“Thus, it is settled law that the provisions of Order 21, Rules 84, 85 and 86 of the Code of Civil Procedure are mandatory and the provisions of Rules 285-D and 285-E being similar in terms of the aforementioned corresponding provisions of the Code of Civil Procedure and in view of the aforesaid discussion there is no escape from declaring the sale a nullity if Rule 285-D is not complied with.

The question now remains to be considered is whether the deposit of 25 percent of the bid amount by the purchaser respondent No. 1 herein by cheque instead of cash would be a valid deposit within the meaning of Rule 285-D of the Rules. Admittedly the respondent No. 1 was declared purchaser of the property in question on 18-10-1973. According to the learned counsel for the appellants neither the deposit of 25 per cent of the bid amount was made in cash nor by cheque on 18-10-1973 as the cheque was encashed on 22-10-1973. While accordingly to the learned counsel appearing for the auction purchaser respondent No. 1 the cheque was tendered on 18-10-1973 itself which was encashed on 22-10-1973 and the amount was deposited in the Government treasury on 22-10-1973. The question is whether such a payment by cheque could be regarded as a valid deposit within the meaning of Rule 285-D. As discussed above Rule 285-D is a mandatory rule according to which if 25 per cent of the bid amount is not deposited immediately the land shall forthwith be gain put up and sole. In other words on the failure of the purchaser to deposit 25 percent of the bid amount immediately the land shall be re-sold immediately after such failure the very same day……It, therefore, appears to us that Rule 285-D does not contemplate any payment by cheque but a cash deposit of 25 per cent of the bid amount has to be made in accordance with the requirement of the rule, otherwise the very purpose of the mandatory Rule 285-D would be frustrated and rendered nugatory. In these facts and circumstances we are of the view that deposit of 25 per cent of the bid amount by cheque will not be a valid tender within the meaning of the rule. This was also the view taken by a Division Bench of the Allahabad High Court in the case of Hira Lal (sic) (supra) and the learned single Judge was not right in ignoring the said view by observing that it was obiter. The High Court of Madhya Pradesh in Progresing Industrial Enterprises v. Bank of Baroda (sic) also expresed the view that deposit of 25 per cent of the bid amount by cheque which was not encashed on the date on which the person was declared purchaser but on a later date, there was no compliance of Order 21, Rule 84(C), C.P.C”

40. In a case reported in 1978 AWC 189, Smt. Shanti Devi v. State of U.P the Division Bench of this Court held that attachment of immovable property for recovery of land revenue should be done in accordance to provisions contained in Order XXI, Rule 54 of Code of Civil Procedure in view of provisions contained in Rule 273-A of the Rules.

For convenience relevant portion from the case of Shanti Devi (supra) is reproduced as under:—

“A persual of Rule 273-A shows that attachment of an immovable property in proceedings for recovery of land revenue has to be done in the manner prescribed in Order XXI, Rule 54 of the Code of Civil Procedure the attachment of immovable property is to be made by an order prohibiting the judgment-debtor from transferring or charging the property in any way. It further requires that the order shall be proclaimed at some place on or adjacent to such property by beat of drum or other customary mode and a copy of the order shall be affixed on a conspicuous part of the property and then upon a conspicuous part of the court-house.”

41. I have occasion to consider identical controversy interpreting the provisions contained in Act and Rules in question in the case of Ramesh Kumar (supra), where certain guidelines were issued by this Court to check the exercise of power in arbitrary manner by the authorities. It was noticed by this Court that properties are sold in the State of U.P for meager amount for extraneous reasons and considerations, hence, following directions were issued for compliance while proceeding ahead to recover the arrears of land revenue:—

“First A copy of citation of recovery or notice should be send by personal service as well as by registered post.

Second In case the notices are not served by personal service or by registered post then the competent authorities shall publish the notice in the newspaper as substituted mode of service. The proclamation of attachment and sale of a movable and immovable property should also be served personally as well as by registered post in case the person concerned is not served, the notice should be published in two widely circulated newspaper (out of which one may be widely circulated in local newspaper) indicating the the amount due as well as the date of auction and sale which should be a date beyond thirty days, from the date of publication.

Third In any case either after receipt of citation or proclamation of attachment and sale or even on the date of auction and sale of movable or immovable property the borrower or the guarantor wants to pay entire amount due along with expanses, the competent authority shall not proceed with the auction and sale of the property and shall permit the person concerned to deposit the dues. In case dues are deposited, the movable or immovable property shall be released in favour of the owner.

Fourth In case an objection is filed by the borrower, guarantor or owner of the property against the attachment and sale of the immovable property then the authorities shall not proceed with the attachment and sale of the property without deciding the objection.

Fifth The service on friends, relatives or family member of the person concerned shall not be treated as actual and affective service. It shall be duty of the authorities to serve the citation or notices on the actual borrower guarantor or person concerned in the manner indicated hereinabove.

Sixth Keeping in view the letter and spirit of Rule 283, in every notice or proclamation of attachment and sale of movable or immovable property, the estimated value of the property should be mentioned by the authorities. While deciding the estimated value of a property, the market rate of the property and in case it is an agricultural land then the circle rate of the property notified by District Magistrate for the purpose of execution of sale deed should be considered as guiding factor by the authorities.”

42. The judgment and order of this Court was circulated by the State Authorities for compliance throughout the State of U.P by Circular dated 10-3-2005. For convenience Circular dated 10-3-2005 is reproduced as under:—

(Matter in vernacular omitted…Ed.)

43. In view of the above, the provisions contained in the Act and Rules as well as non-compliance of the guidelines issued by this Court in Rakesh Kumar's case (supra) shall render the auction and sale proceedings nullity. The provisions contained in UPZA & LR Act & Rules are mandatory and their non-compliance shall nullify the entire auction and sale proceeding done while recovering the dues as arrears of the land revenue.

Question (D) Whether the auction and sale of the property in question was held in violation of statutory provisions referred and discussed hereinabove and what will be its effect?

44. According to admitted facts and record notice of citation of appearance and demand were issued on 11-1-2005. Admittedly on 1-4-2005 the Sub-Divisional Magistrate had passed an order for evaluation of properties as well as for wide publication of auction and sale of the property in question. The Tehsildar Ghaziabad was appointed as Auction Officer and date for auction was scheduled for 2-5-2005 (Annexure 20). The sale proclamation was issued on the same day but it does not contain the evaluation of the properties in question (Annexure 21). Only the area of vacant land has been given. Notice was alleged to serve on watchman on 21-4-2005 and publication was done in only one newspaper Amar Ujala on 22-4-2005. There is neither any material on record nor argued that any effort was made to serve citation/demand notice on the petitioner in compliance of Rule 245 and 246 of the Rule and Section 327 of the Act or the Government circular dated 10-3-2005 issued in compliance of Rakesh Kumar's case (supra).

45. At the face of record, neither evaluation of property was not done by experts of the field nor it was disclosed in the sale proclamation in compliance of Rule 283 of the rules. Rule 283 provides that estimated value of property should be calculated in accordance to provisions contained in Chapter XV of the Revenue Manual. The Revenue Manual provides specific procedure for evaluation of properties. In the present case evaluation of properties was not done by the opposite parties. In the advertisement it has been mentioned that the cost of the property is expected to the tune of Rs. 27 crores. Opposite parties had no where in the counter-affidavit had said that the property in question was evaluated in accordance to provision contained in Revenue Manual or by the evaluer of the properties or the experts of the field.

46. In compliance of Rule 245 of the Rules it was incumbent upon the competent authority tehsildar to issue citation of demand for entire amount. Learned cousnel for the petitioner submitted that citation for only 1.93 crore was issued by the opposite parties and not for the entire amount in question. Under Rule 245 it has been provided that in case within fifteen days after service of citation, arrears is not paid then authorities may take more sever measure to recover the dues. However, respondents’ counsel submitted that citation was issued from time to time for entire amount but no cogent evidence or material has been brought on record by the opposite parties either through counter-affidavit or by filing document to indicate that citation was issued for entire dues which comes around 18. The purpose of Rule 245 is to provide an opportunity to the defaulter or person concerned to make good the dues to avoid serious consequence in accordance to Rules. Virtually, it provides an opportunity to the defaulter to pay the dues. The non-compliance of Rule 245 take away the valuable right of the defaulter to pay dues and to avoid the suffering with the ill consequences.

47. As discussed hereinabove, Rule 285. A provides that there should be thirty days notice from the date of issuance of sale proclamation and date of auction and sale. Though the sale proclamation was issued on 1-4-2005 but it was served on the watchman on 21-4-2005 and publication in the Newspaper was done on 22-4-2005. While defending the question relating to compliance of Rule 285 it was submitted by the respondent's counsel Dr. L.P Mishra that thirty days should be counted from the date of issuance of sale proclamation i.e 1-4-2005. The argument advanced by the respondent's counsel seems to be not sustainable under law in view of statutory provisions as well as judgement discussed hereinafter.

48. Hon'ble Supreme Court had also in a case reported in (1975) 4 SCC 844 : AIR 1976 SC 1150 Commissioner of Wealth Tax, U.P v. Kunan Lal Behari Lal held that “expression of issue notice means service also”. Accordingly, issuance of thirty days notice means the intervening period from the date of service of notice to the date of auction should be of thirty days. Relevant portion from the Apex Court judgment from the case of Commissioner of Wealth Tax (supra) is reproduced as under:—

“The main question on which the High Court decided and which is the only question urged before us for admitting the petition is that the word “issued” occurring in Section 18(2A) of the Wealth Tax Act means “served”. This decision is well supported not only by the decisions of the High Court but also of this Court. In Banarsi debi v. I.T.O, Calcutta, AIR 1964 SC 1742 this Court observed that the expressions “issued” and “served” are used as interchangable terms and in the legislative practice of our country they are sometimes used to convey the same idea. Accordingly, it was held that the word “issued” was not used in the narrow sense of “sent” but that the said expression had received, before the Indian Income-tax (Amendment) Act, 1959, a clear judicial interpretation. Subba Rao, J., as he then was, dealing with the purpose which the word “issue” was intended to serve after referring to Sri Niwas v. I.T.O, AIR 1956 All 657 cited in the judgment under attack and a Bombay decision, observed at page 108:

The intention would be effectuated if the wider meaning of the expression ‘issued’ takes in the entire process of sending notices as well as service thereof. The said word used in Section 34(1) of the Act itself was interpreted by courts to mean “served”.

49. In view of above assuming that notice was served on 2-4-2005 and notice for auction was published in the newspaper on 22-4-2005 shall not entitled the authorities to proceed with the auction and sale on 2-5-2005. The auction and sale held on 2-5-2005 was violative of provision contained in Rule 285A of the Rules. Under Rule 285D it is mandatory to deposit 25% amount of the auction money at the fall of the hammer and remaining 75 per cent within fifteen days. As discussed hereinabove instead of cash, bank-draft for Rs. 7.80 crore were deposited by the auction-purchaser on the date of auction i.e 2-5-2005. Serious doubt has been raised by the petitioner in the manner bank-draft were deposited. Relying upon the Apex Court judgment in the case of Rao Mahamood Ahmed Khan (supra), the submission of petitioner's counsel is that amount could not be deposited through Bank-draft more so when the bank-draft prepared from the Sarojini Nagar Branch of Punjab National Bank, Kanpur on same day and deposited at the time of auction sale at Meerut situated almost at the distance of 460 Km. which was not possible in any way.

50. Great emphasis has been given by the petitioner's counsel relating to the deposition of 75 per cent of the amount (24.15 lacs) vide various bank-draft dated 14-5-2005 on 16-5-2005, descrition of which has been given in the letter of respondents (UPSIDC), a copy of which has been filed as Annexure 26 of the writ petition. The letter contains endorsement by Additional District Magistrate Finance dated 18-5-2005 instructing the Tehsildar to take necessary action. Accordingly, the submission of learned counsel for the petitioners is that these bank drafts were given on 18-5-2005 i.e after expiry of fifteen days. Admittedly, fifteen days expired on 17-5-2005. The argument advanced by the learned counsel for the petitioner seems to be covered by the Apex Court judgment in Rao Mahmood's case (supra). Obviously, it appears that bank-draft was handed over on 18-5-2005 and on the same day Additional District Magistrate, Finance and Revenue had made an endorsment. At the face of record, Rule 285D seems to have been not complied with, in view of the writ petition by Hon'ble Supreme Court in Rao Mahmood Ahmed Khan's case (supra).

51. As discussed hereinabove in pursuance to Rule 273A, the provision of Order XXI, Rule 54 has been made applicable. For convenience Order XXI Rule 54 is reproduced as under:—

“Attachment of immovable property.— (1) Where the property is immovable, the attachment shall be made by an order prohibition the judgment-debtor from transferring or charging the property in any way, and all persons from taking any benefit from such transfer or charge.

[(1A) The order shall also require the judgment-debtor to attend Court on a specified date to take notice of the date to be fixed for settling the terms of the proclamation of sale.]

(2) The order shall be proclaimed at some place on or adjacent to such property by beat of drum or other customary mode, and a copy of the order shall be affixed on a conspicuous part of the property and then upon a conspicuous part of the Court-house and also where the property is land paying revenue to the Government, in the office of the Collector of the district in which the land is situate [and, where the property is land situate in a village, also in the office of the Gram Panchayat, if any, having jurisdiction over that village.]”

52. Keeping in view the provisions contained in O. XXI, R. 54 of the Code of Civil Procedure it was incumbent upon the opposite parties to provide opportunity for the settling the terms of proclamation of sale. It appears that such opportunity was not provided to the petitioner. As discussed hereinabove the ZA Form 74 does not indicate the estimated cost of the property only it indicate the area of land as well as the dues of workman of about 18,53,05,908.00/-. Obviously no exercise was done by the district authorities to work out the estimated cost of the property of question in pursuance to Revenue Manual and to call the petitioner to pay the entire dues.

53. According to petitioner's counsel the UPSIDC itself had notified its property of the Kavi Nagar area at the rate of Rs. 3,000.00/- per square meter (vide Annexure 24). Accordingly even if peitioner's valuation of Rs. 100 crores of the property in question is not accepted, the cost of the land will come about 56.42 crores. However, respondents’ counsel submits that there is no much difference between 32 crores (auction amount) and 56 crores.

54. Hon'ble Supreme Court in a case of Gajraj Jain (supra) held that while proceeding a head with the auction and sale of a property the authorities should obtain valuation report from the experts of the field before proceedings of the auction and sale of the property, so that then action may be justified at the touch-stone of Art. 14 of the Constitution of India which provides that every State action should meet out the test of reasonableness and fairness. Relevant portion from the case of Gajraj Jain (supra) is reproduced as under:—

“In the present case, it has been urged that absence of valuation report and the reserve bid does not vitiate the sale. We do not find merit in this argument. In the case of S.J.S Business Enterprises (P) Ltd. it has been held that the financial corporation, in the matter of sale under S. 29, must act in accordance with the statute and must not act unreasonably. In this case, the Corporation fails on both the counts. It has neither complied with the provisions of sub-sections (1) and (4) of S. 29, nor has it acted fairly. The test of reasonableness has been laid down in the above judgment in which it is held that reasonableness is to be tested against the dominant consideration to secure the best price. Value of price is fixed by the market. In the case of a going concern, one has to value the assets shown in the balance-sheet (Datta, S. Valuation of Real Property, p. 198). In our view, if the object of S. 29 of the Act is to obtain the best possible price then the Corporation ought to have called for the valuation report. This has not been done. There is no inventory of assets produced before us. The mortgaged assets of the company could be sole on itemised basis or as a whole, whichever is found on valuation to be more profitable. No particulars in that regard have been produced before us. If publicity and maximum participation is to be attained then the bidders should know the details of the assets (or itemised value). In the absence of the proper mechanism the auction sale becomes only a pretence.”

55. In the case of S.J.S Business Enterprises (supra) the Apex Court held that adequate publicity should be given so that maximum bidders may participate in auction and sale proceedings and this should be done providing fair and practical period of time. For convenience relevant portion from the case of S.J.S Business Enterprises (supra) is reproduced as under:—

“Adequate publicity to ensure maximum participation of bidders in turn requires that a fair and practical period of time must be given to purchasers to effectively participate in the sale. Unless the subject-matter of sale is of such a nature which requires immediate disposal, an opportunity must be given to the possible purchaser who is required to purchase the property “as-is-where-is basis” to inspect it and to give a considered offer with the necessary financial support to deposit the earnest money and pay the offered amount, if required.

In this case, the first notice of sale was given on 31-1-2002. A period of about four weeks was given to the purchasers to submit their offers by ordinary norm. But when the second impugned notice of sale was given on 26-3-2002, less than three days were given to the purchasers to inspect the premises, make necessary arrangements and submit their offers to BICICO. Of these three days, two were public holidays when banks would have also been shut. The period of notice was, in the circumstances, entirely inadequate. Besides, we have not been told the reason for this unusual haste. Such precipitate action was not called for unless there were some other considerations weighing with the authorities, considerations which have not been disclosed to the Court.”

56. In the case of Ramesh Kumar (supra) this Court had provided that notice for auction and sale should be published in two newspapers and apart from regular mode of service notice should be sent by registered post. The judgment of this Court was circulated by the State Government for compliance to all State authorities vide Circular dated 10-3-2005. The auction was held on 2-5-2005 much after the Circular issued by the State Government.

57. At the face of record, the judgment of Ramesh Kumar (supra) of the Act coupled with Circular dated 10-3-2005 issued by the State Government as well as S. 327 have not been complied with, by the District authorities while proceeding ahead with the auction and sale of the property in question. Authorities seem to be acted in a hasty and arbitrary manner to auction the property in question.

58. To sum up, the statutory provisions contained in UPZA and LR Act and Rules framed thereunder were given a go-bye at the face of record and not followed, hence, the auction and sale of the property in question suffer from the substantial illegality and is nullity in law.

Question (E) Whether the petitioner has sustained injury in case statutory provisions in question have been not complied with, calling for interference under R. 285(i) of the Rule?

59. As discussed hereinabove petitioner had categorically pleaded before the Commissioner, Meerut Division, Meerut (para 36 of the objection) as well as Board of Revenue with the grievance that serious injury has been caused to him. According to learned counsel for the respondents under R. 285(i) an objection can be entertained and allowed only in case petitioner has sustained injuries on account of any illegality or irregularity. For convenience R. 285(i) of the rules is reproduced as under:—

“285-1. (i) At any time within thirty days from the date of the sale, application may be made to the Commissioner to set aside the sale on the ground of some material irregularity or mistake in publishing or conducting it; but no sale shall be set aside on such ground unless the applicant proves to the satisfaction of the Commissioner that he has sustained injury by reason of such irregularity of mistake.

(ii) [*****]

(iii) The order of the Commissioner passed under this rule shall be final.”

60. As discussed hereinabove even if the cost of land is not 100 crores and for sake of argument it is treated as 56 crores the difference of 20 crores is substantial in nature. The difference of 20 crores or more cannot be ignored and it cannot be said that a party shall not suffer with huge financial loss resulting in substantial injury.

61. Moreover, under R. 285-I an objection can be filed in case there is material irregularity or mistake in publishing or conducting an auction and sale. In the present case as discussed hereinabove the statutory provisions of UPZA and LR Act, UPZA and LR Rules and O. XXI, R. 54 of the Code of Civil Procedure and settled propositions of law referred hereinabove have been given go-bye. The entire auction and sale proceeding was held in hasty and arbitrary manner without following the due process of law.

62. As settled by the Apex Court in a case reported in AIR 1967 SC 295, Barium Chemicals Ltd. v. Company Law Board that in case authorities wants to do certain things then they have to do in the manner provided in the Act and statutes or not at all. Relevant portion (‘Para 34-A’) of the said judgment of Apex Court is reproduced as under:—

“As a general rule, whatever a person has power to do himself, he may do by means of an agent. This broad rule is limited by the operation of the principle that a delegated authority cannot be redelegated, delegatus non-potest delegare. The naming of a delegate to do an act involving a discretion indicates that the delegate was selected because of his peculiar skill and the confidence reposed in him, and there is a presumption that he is required to do the act himself and cannot redelegate his authority. As a general rule, “if the statute directs that certain acts shall be done in a specified manner or by certain persons, their performance in any other manner than that specified or by any other person than one of those named is impliedly prohibited.” See Crawford on Statutory Construction, 1940 Edn., Art. 195, p. 335. Normally, a discretion entrusted by Parliament to an administrative organ must be exercised by that organ itself. If a statute entrusts an administrative function involving the excercise of a discretion to a Board consisting of two or more persons it is to be presumed that each member of the Board should exercise his individual judgment on the matter and all the members of the Board should act together and arrive at a joint decision. Prima facie, the Board must act as a whole and cannot delegate its function to one of its members.”

63. Fairness and reasonableness in action is a fundamental right guaranteed under Art. 14 of the Constitution of India. Statutory Rules provide that citation should be served indicating actual amount. Evaluation of properties were not done in accordance to statutory provisions. On the same day an order was passed for evaluation of properties but without doing any ground work and without obtaining report from expert relating to the property in question sale proclamation was issued for the reasons best known to the district authorities of the District Ghaziabad. A notice was also not served on the petitioner by registered post in compliance of law laid down by this Court in Ramesh Kumar's case (supra). Thirty days clear notice was also not given as discussed hereinabove. Thus, undoubtedly, it may be held that petitioner had sustained injury on account of serious irregularity or illegality committed by the district authorities.

64. There is one more reason why it can be held that petitioner had suffered substantial injury by impugned action of District authorities. As discussed hereinabove, the Government of India had taken steps by proceedings ahead to appoint arbitrator for rehabilitation of industry in question on persuasion of National Textile Corporation of India Lim ited as well as to pay wages. Rehabilitation of the industry as well as payment of arrears of wages shall not be only in the interest of workmen but shall also be in national interest. By closure of industry the workmen will get only arrears of wages but in case the industry in question is restored they will not get only arrears but they shall also get the continuous source of livelihood to serve their family with the continuity of employment.

Question (F) Whether the entire sale process was held malafidely for some extraneous reasons in a hasty manner without following the due process of law?

65. It has been already discussed hereinabove, that the statutory provisions contained in the Act and Rules have been not followed and given go-bye by the Tehsildar Ghaziabad while proceedings with the auction and sale of the property in question. As discussed hereinabove, the National Textile Corporation of India has got major share and its persuation the Government of India had intervened with intention to rehabilitate the industry in question by letter dated 10-3-2005 (Annexure 34). The Government of India had proposed for appointment of arbitrator and also to determine the quantum and modalities for the payment of wages of the workers. The letter dated 10-3-2005 reveals that National Textile Corporation is holding the charge of the company. The intention of Government of India, Ministry of Textile was communicated to District Magistrate, Ghaziabad Shri Santosh Kumar Yadav 14-3-2005 (Annexure 35). By letter dated 30-3-2005 again the Government of India had requested the District Magistrate, Ghaziabad not to proceed with the sale of the companies’ assets. Government of India had shown its keen interest for the rehabilitation of the industry in question as well as to pay wages by appointment of arbitrator.

66. In case the Government of India had taken steps to rehabilitate the petitioners-industry on persuasion of National Textile Corporation of India Limited and District Magistrate was informed accordingly then what prompted the District Magistrate to proceed with the auction and sale of the property. Why the altrenative mode was not adopted to pay the wages of workmen coupled with rehabilitation of petitioner-industry. The other letters filed as Annexures 37 and 38 also show the intention of Government of India to pay the wages of workmen by arbitration and rehabilitation of the industry.

67. The manner in which the district authorities had proceeded to auction and sale the property in question without following the statutory provisions in a hasty way and arbitrarily creates reasonable doubt over the conduct of district authorities who were involved in auction and sale of the petitioners property, which is presently (Annexure 34) under the control of CMD, National Textile Corporation of India.

68. The combined reading of Rr. 246, 281, 282, 284, 285(c), 286 and 287-A of the Rules shows that the defaulter has got statutory right to pay the entire dues whenever proceedings is initiated under Rules to recover the dues as arrears of land revenue. At no stretch of time petitioner was provided opportunity to pay the dues, notices were not served in accordance to law laid down by this Court in Ramesh Kumar's case (supra) coupled with S. 327 of the Act. Issuance of sale proclamation was done on the same date i.e on 1-4-2005 without evaluation of the property in question. Notice were not published in two newspapers as provided in Ramesh Kumar's case (supra). From the date of publication in newspapers and from the date of auction, the intervening period was about only ten days. These material and facts on record indicates that the auction and sale proceedings was held not only in violation of rules but also suffer from some extraneous reasons.

69. There is one more reason which creates reasonable doubt of involvement of extraneous considerations on the part of district authorities. Under S. 4 of the Uttar Pradesh Industrial Peace (Timely Payment of Wages) Act, 1978 it was incumbent upon the Deputy Labour Commissioner to provide opportunity of hearing to the parties including the petitioner to ascertain the wages and the proceedings should have gone in just and fair manner. The spirit of S. 4 is to ascertain the actual wages from the records of employer after providing reasonable opportunity but the same has been not done.

70. On other fact which is relevant to be considered is that according to petitioner's counsel the Commissioner, Meerut Division, Meerut had not provided opportunity of hearing to the petitioner. The petitioner had submitted written argument with the prayer that opportunity of hearing may also be provided. The written argument contains various ground which has been argued by the petitioner's counsel in this Court. No satisfactory reply has been given to the pleading contained in Paras 36, 37 and 38 of the writ petition. Commissioner, Meerut Division, Meerut had rejected the objection on 24-6-2005. Petitioner had obtained the certified copy of order on 27-6-2005. On the same day after having knowledge of the order of Commissioner special messenger was sent to collect the records from Meerut by Tehsildar. What was the urgency and why the district authorities had acted in a hasty manner without following statutory provisions. No effort was made for personal service of Citation/Demand Notice on CMD, National Textile Corporation in compliance of Rr. 245 and 246 of the Rule or S. 327 of the Act. These facts and circumstance creates reasonable doubt on the conduct of officers involved in the auction and sale proceedings.

71. Once it was brought into the knowledge of District authorities that CMD (as per Annexure 34) that National Textile Corporation is holding the petitioner-company then not only it was incumbent upon them to serve notice of demand on the occupier of the petitioner-company but also they should have considered the letter and spirit of various letters sent by the Government of India on persuation of National Textile Corporation of India Limited as well as Labour Commissioner, Kanpur. Once the Government of India or National Textile Corporation was interested to pay the wages then specific demand notice should have been served on CMD. National Textile Corporation of India Limited with a reference to recovery certificate issued by Deputy Labour Commissioner but in spite of knowledge of actual occupier of the petitioner-company the District Administration had acted in a most unfair manner without following the statutory provisions contained in the Rules and Act referred and discussed hereinabove. The kidnapping of the officer of petitioner during the course of proceeding before Board of Revenue, the passing of the order dated 1-4-2005 for the evaluation of properties on the one hand and on the other hand the issuance of sale proclamation on the same day without adopting recourse of evaluation of the properties also creates reasonable doubt over the conduct of District authorities. There is more reason, which shows the polluted conduct of District Authorities while proceedings with the auction and sale of the property in question. A perusal of the advertisement dated 22-4-2005 (Annexure 22) published in the Hindi newspaper Amar Ujala indicates that the auction and related terms and conditions were subjected to the conditions imposed by UPSIDC (opposite party No. 6). Once the authorities were having fairness in mind then there was no justification on their part to indicate in the advertisement that auction proceedings shall be subjected to terms and condition of UPSIDC (opposite party No. 6), who was said to be highest bidder and is the auction-purchaser of the property in question. Apart from other fact discussed hereinabove this fact also shows the involvement of some ulterior motive on the part of District Authorities while proceedings ahead to auction the property in question. There seems to be predecision on the part of District Authorities to finalise the bid in favour of opposite party No. 6.

FINDING

72. In view of above discussion hereinabove, on the basis of material on record as well as the argument advanced by the parties’ counsel the conclusion under the present controversy may be summarised as under:—

1. The provision contained in UPZA and LR Act as well as UPZA and LR Rules read with O. 21, R. 54 and other provisions discussed hereinabove were given go-bye and have been not followed. Non-compliance of statutory provision render the entire auction and sale proceedings nullity.

2. District authorities had acted in a hasty and arbitrary manner while proceedings with the auction and sale of the property in question. For the reasons best known to him the District Magistrate, Ghaziabad had not taken care of the request of Government of India to defer the auction and sale proceedings for short period on the ground that on the persuasion of National Textile Corporation Limited rehabilitation package was planned for the petitioners-industry and arbitrator was to be appointed to pay the wages of the workmen. No satisfactory reply has been given by the respondents as to why request of the Government of India was not considered by the District Authorities.

3. The three Division Bench judgments at Allahabad do not preclude the petitioner to file an objection under R. 285(i) of the UPZA and LR Rules. Rather the Division Bench of this Court had observed that petitioner will have alternative remedy to file an objection under R. 285(i) of the Rule which has been rightly availed by the petitioner.

4. The statutory provisions under the UPZA and LR Act and Rules virtually gives opportunity to the petitioner to pay the dues of the workmen before the coercive method for auction and sale is adopted. Denial to petitioner, to exercise statutory right, lack of service of citation and demand notice on the petitioner himself, the cost of land on the basis of admitted rate of UPSIDC itself and other related facts and from the circumstances of the case discussed hereinabove it is evident that the petitioner had sustained injury. Accordingly, rightly the petitioner had exercised the remedy under R. 285(i) of Rules.

5. Commissioner as well as Board of Revenue had exercised quasi-judicial duty while deciding the petitioner's objection, but they have not considered the grounds raised by the petitioner. More or less for the reasons best known to the authorities concerned they have taken shelter of the Division Bench judgment of this Court referred hereinabove with out adjudicating the dispute after considering the ground raised by the petitioner. Both the authorities have not applied their mind to the statutory provisions referred and discussed hereinabove. The reliance on the judgment of the Division Bench of this Court in W.P No. 22817/2003 decided on 13-1-2005 followed by judgment and other dated 4-5-205 passed in W.P No. 35005/2005 and judgment order dated 26-5-2005 passed in W.P No. 36736/2005 by the respondents No. 1 and 2 for rejecting the petitioners objection and statutory rights, suffers from non-application of mind. 6. The action and sale proceeding was done in a hasty and arbitrary manner without following the statutory provision, seems to suffer from extraneous reasons.

73. In view of above, the auction and sale proceedings held on 2-5-2005 as well as impugned judgments dated 9-9-2005 and 24-6-2005 passed by opposite party Nos. 1 and 2 are not sustainable under law and they are liable to be set aside.

74. During the course of argument learned counsel for the petitioner submitted that National Textile Corporation Limited is presently in control of the company and is ready to pay wages to the workmen. Though under the statutory provisions and settled law referred hereinabove it shall always be open to the petitioner to pay the wages and make prayer with the authorities before the auction and sale is held. However, keeping in view the statement made by petitioner's counsel it may be appropriate that petitioner may be permitted to deposit immediately certain amount in lieu of wages and authorities should consider the rehabilitation package proposed by the Government of India on persuasion of National Textile Corporation Limited which not only includes the payment of wages but the restoration of industry resulting continuity of employment and source of livelihood to the workmen.

Since, the District authorities have seems to be acted a hasty and arbitrary manner without giving even little heed to the statutory provision contained in the Act and Rules, and seems to suffer from extraneous reasons. Hence, the present writ petition deserves to be allowed with exemplary costs.

Accordingly, a writ in the nature of certiorari is issued quashing the impugned order dated 9-9-2005 passed by the Board of Revenue in Revision No. 84 (Sale) of 2004-05 and order dated 24-6-2005 passed by the Commissioner, Meerut Mandal, Meerut as well as auction and sale proceedings dated 2-5-2005 conducted by Tehsildar Ghaziabad with natural consequence. Petitioner is directed to deposit an amount of Rs. 10 crore with a period of six weeks to Deputy Labour Commissioner, Ghaziabad in lieu of wages which shall be disbursed to workmen in accordance to law. For rest of the amount the authorities may serve fresh demand notice and proceed afresh in accordance to law and observation made in the present judgment. UPSIDC (opposite party No. 6) shall be entitled to withdrawn the auction money. Let the records be sent back to the authority concern.

Subject to above writ petition is allowed with cost quantifies to Rs. 50,000/-. Petitioner shall be entitled to withdraw Rs. 25,000/- and rest of Rs. 25,000/- shall be remitted to U.P State Legal Services Authorities to utilise for providing legal aid to the litigants approaching Lucknow Bench of High Court. The cost shall be deposited within one month from today in this Court by the District Magistrate, Ghaziabad. Registrar to ensure compliance. It shall be open for the State Government to recover the cost from the salary of the officer/officers who are responsible to auction the property in question in such unruly manner by holding an inquiry. The Chief Secretary, Government of U.P is further directed to take appropriate action against the officers or employees who had acted in arbitrary manner while proceeding with the auction and sale of the property in question.

Let a copy of the judgment be sent to the Chief Secretary, Government of U.P by the ofice within a week for appropriate action.

75. Petition allowed.