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1986 (9) TMI 411 - SC - Indian Laws

Issues Involved:
1. Legality of the auction sale of urban agricultural property in the absence of specific rules.
2. Validity of the order extending time for depositing the auction sale money.
3. Violation of principles of natural justice.

Summary:

Issue 1: Legality of the Auction Sale
The High Court held that the sale of urban agricultural property, part of the compensation pool, could only be conducted in accordance with rules framed u/s 8 and u/s 40 of the Displaced Persons (Compensation and Rehabilitation) Act, 1954. Since no rules were framed for the disposal of such property, the auction sale held on August 24, 1959, was deemed illegal. However, the Supreme Court disagreed, stating that the absence of rules does not preclude the exercise of statutory powers. The Central Government had the authority to issue administrative directions for the auction sale of urban agricultural property. The auction sale held in the appellant's favor on August 24, 1959, was therefore legal.

Issue 2: Validity of the Order Extending Time
The High Court quashed the order of Shri Rajni Kant, who extended the time for the appellant to deposit the auction sale money, on the grounds that it amounted to a review of the earlier order and was done without jurisdiction. The Supreme Court found this to be incorrect, stating that the power conferred u/s 33 of the Act is broad and includes the authority to extend time for depositing the auction sale money. The extension did not amount to a review but was a procedural order intended to ensure compliance. The High Court erred in holding that the extension of time was beyond jurisdiction.

Issue 3: Violation of Principles of Natural Justice
The High Court held that Shri Rajni Kant's orders were in violation of natural justice as no notice or opportunity of hearing was given to the respondents, Sohan Lal and Sunder Lal, who were the highest bidders in a subsequent auction. The Supreme Court agreed with this finding, stating that the respondents had sufficient interest in the proceedings and should have been afforded an opportunity to be heard. The failure to do so justified the High Court's decision to quash the orders of Shri Rajni Kant.

Conclusion:
The Supreme Court allowed the appeal in part, modifying the High Court's order. The Central Government or the authority exercising its power u/s 33 of the Act is directed to reconsider the appellant's petition afresh, after giving notice and affording an opportunity of hearing to the respondents, Sohan Lal and Sunder Lal. No order as to costs was made.

 

 

 

 

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