2018 (4) TMI 1820 - HC - Indian Laws

Amnesty Scheme - whether the owner of a property, which is brought to sale under the provisions of Revenue Recovery Act and bid on behalf of the Government, thus treating it as bought-in-land, can seek reconveyance of the same once the liability, against which revenue recovery action had been initiated, has been paid off subsequently either in full or under the terms of an Amnesty Scheme? HELD THAT - The power of restitution of this Court is edificed on the acme principles of justice, equity and fair play and wherever it becomes necessary, this Court would not refrain from passing orders to ensure that litigants, who are illegally and unfairly divested of their properties, are restituted appropriately so that the allegation of unjust enrichment is not perpetrated. In the case at hand, once the orders of assessment had been set aside by Exhibit P1 order of the learned Tribunal, there was no justification for the State to hold on to the property even though such sale was confirmed in their favour by the Revenue Divisional Officer through Exhibit P2 order. The conduct of the authorities in rejecting the request made by the appellant for return of his property, on the ground that the Act does not provide for such a course is completely unfair and improper. There was no justification for the State to hold on to the property as bought-in-land and since they are refusing to return it, it would be enjoined on us, while acting under writ jurisdiction, to ensure restitution in favour of the appellant so as to obtain to him complete justice and equity. This is more so because, when we pointedly asked the learned Government Pleader whether the value of the land was taken into account while the appellant was offered an opportunity to pay off the tax amounts assessed subsequent to the sale through the Amnesty Scheme, the learned Government answered in the negative and confirmed that the value of the land was not taken into account and that the appellant had paid all the liability under the Amnesty Scheme without the value of the property being set off against it. The first respondent is directed to issue orders immediately and take action to return the property covered by Exhibit P2 order of the Revenue Divisional Officer to the appellant, after cancelling the sale and the orders of confirmation - appeal allowed.

Summary

Issues Involved:
1. Re-conveyance of bought-in-land.
2. Validity of the sale of property under the Revenue Recovery Act.
3. Restitution of property post-assessment modification.

Issue-wise Detailed Analysis:

1. Re-conveyance of Bought-in-Land:
The primary issue initially appeared to be whether the owner of a property, sold under the Revenue Recovery Act and bought by the Government, could seek reconveyance after settling the liability under an Amnesty Scheme. The court referred to settled law, including precedents like *State of Kerala v. George Jacob* (2010), *Laxmi Devi Tile Works v. District Collector, Thrissur* (2009), and *Sibi Francis v. State of Kerala* (2013), concluding that reconveyance is not permissible merely because the dues were paid subsequently.

2. Validity of the Sale of Property Under the Revenue Recovery Act:
The appellant's property was auctioned due to unpaid tax assessments. Despite initial appeals and an interim stay, the property was eventually bid in favor of the Government. However, the Tribunal later set aside the original assessment orders, significantly reducing the tax liability. This raised the question of whether the sale of the property, based on now-invalidated assessments, was valid.

3. Restitution of Property Post-Assessment Modification:
The court emphasized that the real issue was not reconveyance but the validity of the sale itself, given the Tribunal's order nullifying the original assessments. The sale's foundation was obliterated by the Tribunal's decision, rendering the sale illegal and untenable. The court cited the Supreme Court's judgment in *Mohan Wali v. Commissioner, Income-Tax, Varanasi* (2001), which held that a sale based on a subsequently nullified assessment must be canceled.

Restitution Principle:
The court underscored the principle of restitution, which mandates restoring a party to their original position if a decree or order is reversed or modified. This principle is rooted in justice, equity, and fair play, as recognized in various Supreme Court judgments, including *South Eastern Coalfields Ltd. v. State of M.P.* (2003) and *State of Gujarat v. Essar Oil Ltd.* (2012). The court concluded that the state must return the property to the appellant, as holding onto it after the assessment's nullification constituted unjust enrichment.

Conclusion:
The appeal was allowed, and the judgment of the learned Single Judge was vacated. The court directed the Government to cancel the sale and return the property to the appellant within two months, ensuring complete justice and equity.