1971 (10) TMI 114 - HC - Companies Law

Summary

Issues Involved:

1. Validity of the auction sale conducted on the basis of press-notes without framing relevant rules.
2. Violation of principles of natural justice due to lack of notice or opportunity to the appellants.
3. Jurisdiction of Mr. Rajni Kant to extend the time for deposit of the balance of the auction price.

Issue-wise Detailed Analysis:

1. Validity of the Auction Sale:

The first contention raised was whether the auction sale held on 24th August 1959, was void ab initio because it was conducted under press-notes issued by the Central Government before relevant rules were framed. The appellants argued that the sale was void as per the precedent set in Bishan Singh v. The Central Government and Ors., where it was held that the Central Government could not sell evacuee urban agricultural land without framing relevant rules. The court reaffirmed this position, stating, "an auction sale of evacuee urban agricultural land on the basis of the press-notes issued by the Central Government without framing the Rules was of no legal effect." Thus, the auction sale in favor of Surinder Singh was of no legal effect, as it was conducted based on the impugned press-notes and memorandum.

2. Violation of Principles of Natural Justice:

The second issue was whether the order of the Central Government was passed in violation of the principles of natural justice, as the appellants were not given any notice or opportunity before the impugned order was passed. The court noted that the appellants had a significant interest in the property and would be adversely affected if the earlier auction sale in favor of Surinder Singh was confirmed. The court observed, "In all fairness to them they should have been heard by Mr. Rajni Kant, if he was inclined to accept the prayer of Respondent No. 2 for allowing him more time for depositing the balance of the purchase price." The court concluded that the order was passed in violation of the principles of natural justice.

3. Jurisdiction to Extend Time for Deposit:

The third issue was whether Mr. Rajni Kant had the jurisdiction to extend the time for the deposit of the balance of the auction price. The court held that proceedings under Section 33 of the Displaced Persons (Compensation and Rehabilitation) Act, 1954, are quasi-judicial, and officers exercising powers under that section cannot review their orders unless specifically given the power by the statute. The court stated, "No other Officer has been conferred this power, under Sub-section (1) of this section." The court further clarified that Section 148 of the Code of Civil Procedure, which allows for the extension of time, applies to courts and not to officers acting under the Act. The court concluded that Mr. Rajni Kant had no jurisdiction to extend the time for the deposit of the balance of the auction price.

Conclusion:

The appeal was accepted on the grounds that the auction sale held on 24th August 1959, was void, the order was passed in violation of the principles of natural justice, and Mr. Rajni Kant had no jurisdiction to extend the time for the deposit. The judgment of the learned Single Judge was reversed, and the order made by Mr. Rajni Kant was quashed. The Rehabilitation Department was directed to take further proceedings regarding the auction sale held in favor of the appellants on 17th January 1969, in accordance with the law.