2008 (5) TMI 685 - SC - Indian Laws

Summary

Issues Involved:
1. Recovery of wages due to employees of SPL under the Uttar Pradesh Industrial Peace (Timely Payment of Wages) Act, 1978.
2. Procedural irregularities in the auction of SPL's property.
3. Validity of the auction notice and sale proclamation.
4. Compliance with mandatory provisions of the Uttar Pradesh Zamindari Abolition & Land Reforms Rules, 1952.
5. Adequacy of the property valuation and notice period.
6. Timely deposit of auction sale amount.
7. High Court's directions for action against officers involved in the auction.

Issue-wise Detailed Analysis:

1. Recovery of Wages Due to Employees:
The judgment notes that SPL, a sick unit, was unable to pay wages to its employees, leading to several applications under the Uttar Pradesh Industrial Peace (Timely Payment of Wages) Act, 1978. A recovery certificate was issued under Section 3(1) of the 1978 Act, and the authorities proceeded to recover the amounts due as arrears of land revenue.

2. Procedural Irregularities in the Auction of SPL's Property:
The auction of SPL's property was challenged on the grounds of procedural irregularities. The High Court observed that SPL had repeatedly failed to pay the dues, and procedural defects pointed out could be challenged under Rule 285(i) of the Uttar Pradesh Zamindari Abolition & Land Reforms Rules, 1952.

3. Validity of the Auction Notice and Sale Proclamation:
The High Court found that the auction notice dated 22nd April 2005 and the sale proclamation were not valid. The notice did not disclose property details, estimated value, or the auction date. The Court highlighted that the service of the sale proclamation on the Chowkidar was not proper service on the defaulter.

4. Compliance with Mandatory Provisions of the Rules:
The Court emphasized that the Act and Rules prescribed a mandatory procedure for the recovery of arrears of land revenue, requiring strict compliance. It was found that there was no material on record to show that any attempt had been made to serve the demand notice on SPL properly.

5. Adequacy of the Property Valuation and Notice Period:
The Court observed that the sale proclamation did not comply with Rule 285, 286, and 283 of the Rules. The estimated value of the property was not properly determined, and a clear 30 days' notice of the proposed auction was not given. The property was sold at a price far below its market value.

6. Timely Deposit of Auction Sale Amount:
The auction purchaser, UPSIDC, was found to have deposited the balance 75% of the auction amount late, contrary to Rule 285-D of the Rules. The Court noted that it was impossible for the auction purchaser to have procured the bank drafts from Kanpur on the day of the auction, as the auction was conducted in Meerut.

7. High Court's Directions for Action Against Officers Involved in the Auction:
The High Court passed strictures against the district authorities involved in the auction and directed action against the officers responsible. However, the Supreme Court found these directions unjustified and expunged them, maintaining only the direction concerning costs.

Conclusion:
The Supreme Court dismissed the appeals with a minor modification, maintaining the High Court's direction regarding costs but expunging the directions for action against the concerned officers. The judgment highlights the importance of strict compliance with procedural requirements in auction proceedings and proper valuation and notice to ensure fair recovery of dues.