2018 (9) TMI 2127 - SC - Indian Laws

Principle of estoppel - Rule of Judicial policy - Setting aside a confirmed auction sale - No objection for the sale was raised - HELD THAT - Through their conduct, in failing to file objections to the auction sale and making an application and accepting the excess amount recovered from the auction sale, the private Respondents have waived off their rights in respect of the auction sale and have acquiesced in the auction sale. Today, the private Respondents are estopped through their conduct from challenging the auction sale in any manner whatsoever. The doctrine which the courts of law will recognise is a Rule of judicial policy that a person will not be allowed to take inconsistent position to gain advantage through the aid of courts. In view of the law, the High Court erred in ignoring the basic and primary facts on record and setting aside the auction sale in favour of Sachdeva, and thereby also prejudicing Pawan Kumar Agarwal - Appeal allowed.

Summary

Issues:
1. Setting aside of confirmed auction sale by the High Court despite no objection.
2. Validity of objections filed by private Respondents to the auction sale.
3. Withdrawal of objections by Alok Mitra and subsequent actions by private Respondents.
4. Allegations of self-contradiction in the objections filed by private Respondents.
5. Claim of other private Respondents regarding objections filed on their behalf.
6. Conduct of private Respondents indicating acceptance of auction sale validity.
7. Legal principles of waiver and estoppel in relation to the auction sale.
8. Error by the High Court in setting aside the confirmed auction sale.

Analysis:
1. The Supreme Court considered whether the Allahabad High Court was correct in setting aside a confirmed auction sale without any objection. The High Court's decision was deemed erroneous as it prejudiced the rights of the Appellants who were the successful bidders at the auction.
2. The objections to the auction sale were raised by Alok Mitra, but there were discrepancies regarding the filing and communication of these objections. The Court found that the objections were filed only by Alok Mitra and not by all private Respondents, despite their names being mentioned in the cause title.
3. Alok Mitra later withdrew his objections, and the private Respondents made requests for the excess amount from the auction sale. These actions indicated their acceptance of the auction sale's validity, leading the Court to conclude that they had waived their rights to challenge the sale.
4. The Court highlighted the legal principles of waiver and estoppel, emphasizing that the private Respondents' conduct amounted to an intentional relinquishment of their rights, preventing them from challenging the auction sale.
5. Citing previous judgments, the Court reiterated that waiver requires a voluntary and intentional relinquishment of a right, which was evident in the private Respondents' actions. The High Court's decision to set aside the auction sale was deemed erroneous, and the appeals were allowed, overturning the High Court's judgment.