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2020 (8) TMI 287 - HC - Indian LawsExercise of Equity Jurisdiction - Return of property which had been taken over as bought-in land (by Government) after accepting amount towards the Abkari Workers Welfare Fund dues - principles of restitution - remedy of rescission - HELD THAT - Admittedly, the sale was conducted on the basis of a notice showing arrears of Abkari Workers Welfare Fund and Sales tax. It is later on admitted that there were no sales tax dues actually pending from the petitioner. That is to say, there was no proper notice as envisaged under Section 34 as also under Section 49(2)(iv) of the Revenue Recovery Act prior to the sale and the sale was for that very reason vitiated. It is admitted that the purchase was made on behalf of the Government and not on behalf of the requisitioning authority. On that ground also, the sale was vitiated. An application for re-conveyance of the bought-in land had been made within 3 months from the confirmation of the sale. It is also a fact that the Government decided in principle to return the bought-in land as per Exhibit P3. Even though Exhibit P3 was issued in 2011, admittedly, the actual amount of arrears was made known to the petitioner only as per Exhibit P5 on 4.11.2016. Apart from the fact that the sale has to be held to be invalid since the same has been completed without following the procedure prescribed by law, even on the principles of equity, it is a case coming within the remedy of rescission - While holding that the sale is vitiated, it cannot be forgotten that the petitioner has liabilities to the Government. In my view, equity requires that the petitioner is directed to pay the amount of ₹ 5,54,045/- along with simple interest at the rate of 6% from 4.11.2016 to 29.8.2019, and that on receipt of the same the respondents return possession of the land taken possession as bought-in land from the petitioner. It is declared that the proceedings under Section 50(2), which culminated in the taking over of the petitioner's lands as bought-in-land on behalf of the State is vitiated - respondents are directed to restore the lands to the petitioner after receiving a sum of ₹ 5,54,045/- along with simple interest at the rate of 6% per annum from 4.11.2016 to 29.8.2019 - petition disposed off.
Issues Involved
1. Validity of the revenue sale. 2. Calculation and correctness of arrears. 3. Right to re-conveyance of bought-in land. 4. Application of equitable principles. 5. Procedural compliance under the Revenue Recovery Act. Detailed Analysis 1. Validity of the Revenue Sale The petitioner contested the validity of the revenue sale of 10 acres of property conducted by the State for recovery of arrears towards the Abkari Workers Welfare Fund and alleged sales tax dues. The sale was conducted on 25.10.2000, and the property was taken over as bought-in land. The court noted that the sale was based on incorrect calculations of arrears, as it was later admitted that no sales tax dues were pending. The court concluded that the sale was vitiated due to material irregularity and lack of proper notice under Section 34 and Section 49(2)(iv) of the Revenue Recovery Act. 2. Calculation and Correctness of Arrears The petitioner argued that the amounts shown as arrears were incorrect. Initially, the dues towards the Abkari Workers Welfare Fund were shown as ?1,37,088/- with additional interest and other charges. However, discrepancies were found in the amounts communicated by the authorities over time. The Welfare Fund Inspector's letter dated 27.9.2016 (Ext.P1) indicated dues of ?10,18,087/-, which was later corrected to ?5,54,045/- as per Ext.P5 dated 4.11.2016. The court found that the sale was conducted based on incorrect arrears, further invalidating the sale. 3. Right to Re-conveyance of Bought-in Land The petitioner sought the return of the bought-in land after paying the corrected dues. The court referred to various precedents, including George Jacob (2010(3) KLT 483) and Chandrasekharan (2018(3) KLT 562), which supported re-conveyance on equitable grounds. The court noted that the petitioner had made timely efforts to settle the dues and that the delay in communication of the correct amount was attributable to the authorities. The court directed the State to restore the land to the petitioner after receiving the corrected amount with interest. 4. Application of Equitable Principles The court emphasized the application of equitable principles, noting that the petitioner should not suffer due to procedural lapses and incorrect calculations by the authorities. Citing the principle of restitution, the court held that the petitioner should be restored to his original position. The court also highlighted that equity jurisdiction under Article 226 of the Constitution of India allows the court to pass orders based on justice, equity, and good conscience. 5. Procedural Compliance under the Revenue Recovery Act The court scrutinized the procedural compliance under the Revenue Recovery Act. It was found that the sale did not follow the prescribed procedures, particularly the requirement of proper notice under Section 34 and Section 49(2)(iv). Moreover, the purchase was made on behalf of the Government instead of the requisitioning authority, further vitiating the sale as per the principles laid down in Subaida Beevi (2010 (1) KLT 913). Judgment The court declared the proceedings under Section 50(2) of the Revenue Recovery Act, which culminated in the taking over of the petitioner's land as bought-in land, to be vitiated. The court directed the respondents to restore the land to the petitioner after receiving ?5,54,045/- along with simple interest at the rate of 6% per annum from 4.11.2016 to 29.8.2019. The petitioner was instructed to deposit the amount within three months, and upon receipt, the respondents were to restore the property within two weeks. The petitioner was not entitled to claim the value of the usufructs from the land during the period it was in the State's custody. The petitioner could then move the appropriate authorities to correct the revenue records regarding his right over the properties. Conclusion The court's judgment emphasized the importance of procedural compliance, correct calculation of dues, and the application of equitable principles to ensure justice. The sale was invalidated due to procedural lapses and incorrect arrears, and the petitioner was granted relief based on equity and restitution principles.
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