Partly allowed

Sri. K. Sreenivasappa v. Special Land Acquisition Officer and Competent

Karnataka HC6 Jan 2021RFA/50/2019

Case brief

AI extract

What is this about?

HC of Karnataka allowed the appeal filed by the original owner of land acquired by the State. The Court held that the owner could recover the compensation amount deposited by the acquisition authority by depositing the auction price with 5% solatium and interest at 9% per annum payable to the auction purchaser. The excess compensation, if any, belongs to the owner.

What did the court decide?

Owner directed to deposit auction price plus 5% solatium and 9% interest to claim compensation; auction purchaser to be reimbursed from compensation.

Sri. K. Sreenivasappa Vs Special Land Acquisition Officer… — Land Acquisition | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 6^TH DAY OF JANUARY, 2021

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BEFORE

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THE HON’BLE MR. JUSTICE N.K.SUDHINDRARAO

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R.F.A.No.50/2019

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BETWEEN:

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SRI. K. SREENIVASAPPA S/O. KRISHNAPPA, AGED ABOUT 60 YEARS.

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MURALIDHAR S/O. K. SREENIVASAPPA, AGED ABOUT 45 YEARS.

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CHANDARASHEKAR S/O. SREENIVASAPPA, AGED ABOUT 48 YEARS

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ALL ARE RESIDING AT CHADALAPURA VILLAGE NANDI HOBLI, CHIKKABALLAPURA TALUK-562 101, CHIKKABALLAPURA DISTRICT. ..APPELLANTS

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(BY SRI B RAMESH, ADVOCATE)

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AND:

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SPECIAL LAND ACQUISITION OFFICER AND COMPETENT AUTHORITY FOR LAND

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ACQUISITION, NATIONAL HIGHWAYS, K. R. CIRCLE, BENGALURU-560 001.

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C.N.MOHAN S/O. LATE DR. A. NAGARAJ, AGED ABOUT 54 YEARS, R/AT No.328/B, 2^ND FLOOR, 14^TH CROSS, 5^TH MAIN ROAD, SADASHIVANAGAR, BENGALURU-560 080. ..RESPONDENTS

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(BY SRI SHILPA SHAH, ADVOCATE FOR R1, SRI K N NITISH, ADVOCATE FOR R2)

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THIS RFA IS FILED UNDER SECTION 96 OF CPC, AGAINST THE JUDGMENT AND AWARD DATED 20.11.2018 PASSED IN LAC.No.1/2008 ON THE FILE OF THE PRINCIPAL SENIOR CIVIL JUDGE AND CJM., CHICKBALLAPUR, ALLOWING THE PETITION FILED UNDER SECTION 3-H (4) OF THE NATIONAL HIGHWAYS ACT, 1956 R/W SECTION 151 OF CPC.

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THIS RFA COMING ON FOR ADMISSION THIS DAY, THE COURT THROUGH VIDEO CONFERENCE AT BENGALURU DELIVERED THE FOLLOWING:

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JUDGMENT

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Though the matter is listed for admission with

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the consent of the learned counsel appearing for the

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parties, appeal is taken up for final disposal.

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Appeal is directed against the Judgment and award dated 20.11.2018 passed in L.A.C.No.1/2008 by Principal Senior Civil Judge and CJM, Chikkaballapur wherein petition filed under Section 3-H(4) of the National Highways Act, 1956 R/w Section 151 of CPC came to be allowed.

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Operative portion of the order in L.A.C.No.1/2008

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is as under:

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“Petition filed by the petitioner U/Sec.3H(4) of the National Highways Act, 1956 R/w Sec.151 of CPC, is hereby allowed.

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It is ordered and declared that, the respondent No.4 C.N.Mohan is entitled for compensation from the petitioner for the acquisition of land bearing Sy.No.35/1 measuring 1 acre 22 guntas out of which 4 guntas kharab situated at Chadalapura Village, Chickballapur Taluk acquired under notification published in Government of India Extraordinary Gazette vide No.S.O.1306(E) dated 14^th August 2006 under Section 3-D(1) & (2) of the National Highways Act, 1956.”

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Trial Judge held that Respondent No.4 – C.N.Mohan is entitled for compensation amount that was granted in respect of acquisition of land bearing Sy.No.35/1 measuring 1 acre 22 guntas out of which

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4 guntas kharab situated at Chadalapura Village, Chikkaballapur Taluk acquired under notification published in Government of India, Extraordinary Gazette vide No.S.O.1306 (E) dated 14.08.2006 under Section 3-D(1) and (2) of the National Highways Act, 1956.

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The present appeal is filed by K.Sreenivasappa who is the original land owner. The land stated above measuring 1 acre 22 guntas in Sy.No.35/1 have been mortgaged to Vysya Bank and subsequently mortgager and the owner of the said property became defaulter and said Vysya Bank filed a suit in O.S.No.313/89 and it was decreed and bank

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proceeded to execute the same which culminated in Execution Petition No.7/95 on the file of Civil Judge, Junior Division, Chikkaballapura, for recovery of sum of Rs.73,487/- with interest and the executing court on application ordered for sale notice and thereafter the said mortgaged property was brought to sale and was sold to the highest bidder for a sum of Rs.3,10,000/- in the auction proceedings dated 27.10.2005 and sale proceedings were accepted by the court and highest bidder was asked to deposit the full amount. It is stated that the auction purchaser C.N.Mohan who is respondent No.4 in the trial court and sale proceedings was accepted in his favour or confirmed by Additional Civil Judge (Jr.Dn) and JMFC, Chikkaballapur on 18.04.2007. However it is stated that the registered sale deed of the said property through the court by virtue of the auction proceedings is not complete. This is a peculiar circumstances of

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the case which may be also called as background of the case.

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For convenience the appellant in this case shall be referred as the “owner” and bank shall be referred as “mortgagee”, C.N.Mohan referred as “auction purchaser” and land acquisition officer shall be referred as “acquisition authority”.

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Learned counsel Sri.Ramesh, appearing for the appellant/owner Sreenivasappa and others would submit that owner’s right to the property cannot be defeated which implies the compensation granted to the owner of the property. He would further submit that deliberately the bank or the auction purchaser has driven their claim on the said property. As such they have challenged the order.

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The crux of the order is that auction purchaser is ordered to be entitled to draw the entire

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compensation amount of Rs.12,52,788/- and interest.

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Learned counsel Sri.K.N.Nitish for

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Sri.K.V.Narasimhan for auction purchaser –C.N.Mohan would submit that for all practical purpose he purchased the schedule property in a valid auction conducted by the court under its order. He was declared the highest bidder. He made necessary deposit and also deposited full sale consideration

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amount of Rs.3,10,000/- the court on 27.10.2005. Now that like any other purchaser who already purchased the schedule property under a court auction deposited Rs.3,10,000/- as early as during the year 2005 and he is entitled for the schedule property. Learned counsel submits that sale is confirmed by trial court on 18.04.2007.

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It is necessary to mention that for all the legal difficulties and practical inconvenience the mandate is provided under Order XXI CPC that whenever hyper technical or complicated problems arise like of present nature.

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In the present set of circumstances following points are amply clear:

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(1) Landed property in Sy.No.35/1 was mortgaged to the bank by the owner.

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(2) He became defaulter. Suit was filed in O.S.No.313/89 and it was decreed and execution proceedings were initiated.

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(3) In the execution proceedings said schedule property was brought to sale and it was sold as per the procedure and auction purchaser-C.N.Mohan tendered and deposited the amount.

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The next process that was due was getting the deed of sale executed through the officials of the court. There is no challenge for the acquisition proceedings or granting of compensation. The acquisition authority has already deposited the compensation amount before the court and the total amount of compensation for acquisition deposited is Rs.12,52,788/- and interest. It is that amount which is ordered to be given to the auction purchaser by the trial court. The aggrieved person by that order is the owner-K.Sreenivasappa and others who have come in this appeal.

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The owner who are the appellants herein says that they were not willing to loose the property and on the other hand, appellant No.1 is going to deposit the entire amount payable. In this connection, Order XXI Rule 82 of C.P.C., of course deals with the sale of

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immovable properties in execution of decrees.

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Reading of entire section it indicates that whenever the property of the owner who becomes the judgment debtor is sold, it is not one time final process. On the other hand, there is a mechanism for giving him chance or opportunity to deposit the purchase money with the other expenditure and to withdraw the proceedings.

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In this connection, Order XXI Rule 83 of C.P.C., provides for postponement of sale to enable the judgment debtor to raise the amount of decree. Further Order XXI Rule 84 of C.P.C., provides for deposit of amount by the purchaser and resale on default, which reads as under:

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“84. Deposit by purchaser and re-sale on default.—(1) On every sale of immovable property the person declared to be the purchaser shall pay immediately after such declaration a deposit of twentyfive per cent, on the amount of his purchase-money to the officer or other

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person conducting the sale, and in default of such deposit, the property shall forthwith be re-sold. (2) Where the decree-holder is the purchaser and is entitled to set-off the purchase-money under rule 72, the Court may dispense with the requirements of this rule.”

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Of course, if the purchaser fails to pay the auction money, he forfeits his rights without prejudice to the amount what he has deposited. The procedure

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in default of payment is provided under Order XXI

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Rule 86 of C.P.C., which reads as under:

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“86. Procedure in default of payment.—In default of payment within the period mentioned in the last preceding rule, the deposit may, if the Court thinks fit, after defraying the expenses of the sale, be forfeited to the Government, and the property shall be re-sold, and the defaulting purchaser shall forfeit all claim to the property or to any part of the sum for which it may subsequently be sold.”

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When the first sale becomes failure, there is a provision for resale and the same is provided under Order XXI Rule 87 of C.P.C., which reads as under:

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“87. Notification on re-sale.—Every re-sale of immovable property, in default of payment of the purchase-money within the period allowed for such payment, shall be made after the issue of fresh proclamation in the manner and for the period hereinbefore prescribed for the sale.”

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Order XXI Rule 90 of CPC provides for setting aside the sale in case of fraud or mis-representation. Regard being had to the fact that, in the present case, there is no allegation of fraud or mis-representation in the sale.

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It is also submitted that W.P.No.3531/2019 was

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preferred against the order passed by the learned trial Judge.

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The trial Court on 21.12.2013 ordered as under:

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“The application filed by the JDR No.1 under Ord.21 R.89, 90 and 92 r/w 151 of CPC and application filed under Ord. 21 R.54(2) and 64 of CPC filed by JDR No.1

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and application filed under Rule 138 and 139 of Civil Rules of Practice filed by JDR No.1 is accordingly allowed. The JDR No.1 is permitted to deposit the decreetal/amount forthwith.”

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Judgment Debtor No.1 was permitted to deposit

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the decreetal amount to the Court. Accordingly, it is stated that the amount of Rs.1,35,672/was deposited. Against the said order, the auction purchaser filed MA.No.4/2014 before the Prl. Senior Civil Judge & CJM, Chickballapur. The order dated 20.11.2018 passed by the Prl. Senior Civil Judge & CJM reads as under:

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“Appeal filed by the appellant U/o 43 Rule 1 R/w Sec.151 of CPC is hereby allowed with cost.

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Consequently, the impugned order dated 21.12.2013 passed in Ex.No.7/1995 by the Addl. Civil Judge & JMFC., Chickballapur permitting the JDR No.1 to deposit the decreetal amount is hereby setaside.

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The executing court is hereby directed to proceed further with proceedings of Ex.No.7/1995 in accordance with law.

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Office is directed to send back the records to the lower court along with a copy of this judgment forthwith.”

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By virtue of the said order, the order passed on 21.12.2013 in Ex.No.7/1995 by the Addl. Civil Judge & JMFC permitting the judgment debtor to deposit the amount came to be set aside and the Executing Court was directed to proceed further with proceedings in Ex.No.7/1995. In these circumstances, appellant No.1 herein filed W.P.No.3531/2019 before this Court against the order dated 20.11.2018 passed in M.A.No.4/2014 by the Prl. Senior Civil Judge & CJM, Chickballapur, which is stated to be pending. It is submitted that the execution proceedings would not be persuaded till the matter is disposed of. However, the main order is being challenged, which would mention the result of the proceedings.

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To avoid confusion and to have clarity in reading and understanding the aspect, the following points are necessary:

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The subject matter in Execution No.7/1995 is pending. Earlier the property was sold in auction and the auction purchaser has deposited the amount of Rs.3,10,000/- in the year 2005. The sale was confirmed. Thereafter, the learned trial Judge directed the judgment debtor to deposit the decreetal amount and MA.No.4/2014 was filed against the said order, which came to be set aside. The said appeal came to be allowed and the Executing Court was directed to proceed further proceedings in Ex.No.7/1995. Basically, the legal position would be that the litigating party could not seek for change of ownership as it is a closed chapter and the property was acquired and all proceedings were taken place and an amount of compensation of Rs.12,52,788/- and interest has

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already been deposited by the Land Acquisition Officer. Thus, there is no question of his participation or making submission regarding the genuineness of representations of the parties.

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Now that the land is acquired and it has become

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the Government Property and the auction purchaser cannot raise any grievance in respect of the property and at the end of the day, he is only entitled to other amount, which is entitled under law. Now the question is whether any action in this matter has to be taken by way of thread bifurcation or present natural rule that is available for the auction? If a particular property is sold in auction and the amount is realized, if the auction amount exceeds the due amount that has to be returned to the owner and if it falls less, the personal liability to that extent would continue. In connection with the sale of the property in public

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auction and the application by the owner or judgment

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debtor to recover is provided under Order XXI Rule 83

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of CPC which reads as under:

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"Postponement of sale to enable judgment- debtor to raise amount of decree"

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(1) Where an order for the sale of immovable property has been made, if the judgment-debtor can satisfy the Court that there is reason to believe that the amount of the decree may be raised by the mortgage or lease or private sale of such property, or some part thereof, or of any other immovable property of the judgmentdebtor, the Court may, on his application, postpone the sale of the property comprised in the order for sale on such terms and for such period as it thinks proper, to enable him to raise the amount.

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(2) In such case the Court shall grant a certificate to the judgment-debtor authorizing him within a period to be mentioned therein, and notwithstanding anything contained in section 64, to make the proposed mortgage, lease or sale:

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Provided that all moneys payable under such mortgage, lease or sale shall be paid, not to the judgment-debtor, but, save in so far as a decree-holder is entitled to set-off such money under the provisions of rule

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72, into Court:

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Provided also that not mortgage, lease or sale under this rule shall become absolute until it has been confirmed by the Court.

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(3) Nothing in this rule shall be deemed to apply to a sale of property directed to be sold in execution of a decree for sale in enforcement of a mortgage of, or charge on, such property.

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Now for all legal understanding, the word

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“ property ” read as amount in deposit not the land.

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The claimants are now Sri.K.Sreenivasappa and the auction purchaser. Invariably, it suggest the rights and liabilities of both the auction purchaser and the owner, which are provided under Order XXI Rule 89 of CPC, where the property was sold in a public auction conducted by the Court, any person claiming an interest in the property may apply, which invariably includes the judgment debtor, then the question is not

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only the amount which the auction purchaser has deposited, but also it includes 5% of solatium. In the

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present case, the auction purchaser has deposited an amount of Rs.3,10,000/- during the year 2005, which is not yesterday’s, months, but yester years, it is for a span of 15 years. Thus, if the owner has to claim back the property i.e., the amount in deposit, he has to satisfy the dues.

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In the circumstances of the case, liability, equity and justice unanimously demand that the amount deposited by the auction purchaser is entitled for interest right from the date of deposit along with solatium. Hence, I find that the rights of ownership are also equally important and the auction purchaser cannot be jeopardized and the Court cannot direct the owner as it is the auction purchaser should be satisfied with the amount what he has deposited. In my opinion, the owner Sri.K.Sreenivasappa is entitled to withdraw the amount in deposit made by the Land

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Acquisition Officer and the order of the trial Court, which is already set aside by the Prl. Senior Civil Judge & CJM, Chickballapur, is not applicable. In order to withdraw, the owner of the property shall deposit Rs.3,10,000/- plus 5% of solatium and also interest at the rate of 9% per annum from the date of deposit of Rs.3,10,000/by the auction purchaser. On compliance of such condition, the auction purchaser is entitled to withdraw the amount with interest within a period of seven days from the date of such deposit by the owner. The amount to be deposited by the owner shall be positively and without fail be made within a period of 45 days. In case of failure, the benefit of this order shall stand forfeited.

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It is made clear that the present order is confined only with regard to acquiring piece of land in Survey No.35/1 measuring 1 acre 22 guntas. In case,

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the Bank has already withdrawn Rs.3,10,000/-, the auction purchaser is entitled for the said amount from the owner which requires no further clarifications.

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Compensation of Rs.12,52,788/- is deposited by the acquisition authority. The owner shall pay Rs.3,10,000/- plus 5% solatium plus interest @ 9% p.a. till date to the auction purchaser as he has deposited the amount in the trial court. The bank is entitled for any additional interest if any. If the amount of compensation is in excess of such payment same is entitled to be given to owner. However in case of deficiency the owner only is liable.

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Accordingly appeal is disposed of.

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Sd/JUDGE

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SBN/PB

Sri. K. Sreenivasappa v. Special Land Acquisition Officer and Competent

Case brief

What is this about?

What did the court decide?

Sri. K. Sreenivasappa v. Special Land Acquisition Officer and Competent

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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