Decided on November 15,1979



N.H.BHATT - (1.) This is an interesting petition by an auction purchaser of the properly situated in the city of Ahmedabad challenging the attempt of the municipality to put the property to auction sale in order to satisfy its dues of taxes leviable from the property. 2 A few facts deserve to be pertinently noted : The property in question belonged to one firm Messrs. Shivlal Virchand Contractors. As back as on 24-2-1955 the said owner of the property had mortgaged the property with the then Bombay State Finance Corporation and the said debt came to be inherited by the Gujarat State Finance Corporation. Said M/s. Shivlal Virchand Contractors had also created second mortgage on 13-10-1964 of the very property in favour of another creditor M/s Rajendrakumar & Co. Then for the years 1965- 66 1966 1967 and 1968-69 Municipal Taxes also came to be due in respect of that property and by virtue of sec. 141 of the Bombay Provincial Municipal Corporation Act 1949 this property was liable for those property taxes due in respect of those very properties. With respect to the first mortgage in respect of the Gujarat State Finance Corporation an application under the provisions of that Act was made and the decree was procured by the Corporation and the Darkhast No. 304/71 had come to be filed and in that Darkhast the suit property was put to aucction sale on 17-3-1971 and the present petitioner had purchased the same. A sale certificate was also issued in his favour on 17-1-1974. With respect to the second mortgage created by Messrs. Shivlal Virchand Contractors in favour of Messrs. Rajendrakumar & Co. the; Regular Civil Suit No. 2063/65 had come to be filed on 29-12-1975 and in that case a final decree had come to be passed on 25-11-1968 to execute which the Darkhast No. 222 of 1969 had come to be filed. A notice of sale under Order 21 Rule 66 of the Civil Procedure Code was issued on 14-4-1969. At this stage the Sales tax Recovery Officer claiming the sales tax dues belonging to the Gujarat Government had advertised the sale of the property by publishing a notice in the local newspaper Jansatta on 11-7-1969 notifying that the disputed property would be put to auction sale by the State Government official on 19-7-1969. Similarly the Municipal Corporation had also issued a public advertisement in the newspaper Gujarat Samachar dated 24-6-1969 notifying to the public the sale of the property by public auction on 25-7-1969 to realise the property tax due on the property for the years 1965-66 to 1968- 69 M/s. Rajendrakumar & Co. the second mortgagee and the holder of the decree in this suit No. 2063/65 therefore had filed two Writ Petitions in this High Court namely Special Civil Application No. 974/69. against the present respondent Municipal Corporation and the Special Civil Application No. 975/69 against the State of Gujarat seeking to restrain these two public authorities from conducting the simultaneous auction sale of the property. As far as the petition against the State of Gujarat was concerned it was ultimately allowed by this High Court placing reliance on the case of Maganlal Bechardas v. Shah Kesharimal Dalichand and Others reported in 2 G.L.R. page 625 and the Writ of Mandamus issued by this High Court against the State of Gujarat stood final between the parties because the Supreme Court had summarily rejected their appeal. As far as the Writ Petition against the Corporation is concerned it was withdrawn by M/s. Rajendrakumar & Co. in view of the statement made on behalf of the Corporation to the effect that the threatened sale would not be proceeded with.
(2.) As noted above the sale took place in the first mortgage decree of the Gujarat State Finance Corporation and the bid was made by the present petitioners who by that time had already got assigned in their favour the decretal rights of M/s. Rajendrakumar & Co. in the Civil Suit No. 2063/65 referred to hereinabove the deed of assignment being dated 20
(3.) After the petitioners purchased the suit property in auction sale for Rs. 1 40 0 which was not even sufficient to defray the two mort- gage debts the Municipal Corporation again purported to attach this property on 22-3-1973 and put through the newspaper the notice (Annexure O) dated 13-7-1976 informing the public that the Municipal Corporation would auction the suit property on 12-8-1976. The auction purchaser from the holder of the second mortgage decree M/s. Saurashtra Paints Pvt. Ltd. have therefore filed the present petition for a prayer to quash the intended auction sale proceedings of the respondent Municipal Corporation on the ground that when the second mortgage debt has remained partially unsatisfied even by putting the whole of the property to auction sale there remained no right with the original mortgagor over which the respondent Municipal Corporation could lay its hands for the purposes of recovering its dues the legitimacy of which dues is not called in question in this petition.;

Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.