- (1.) BY means of this petition, the petitioners have challenged the auction alleged to have taken place on 28- 10-94 and thereafter confirmed by the Sub-Divisional Magistrate, Barabanki on 2-12-94. The present petition is filed by U. P. Financial Corporation through its Managing Director challenging the auction on the ground that the property of the Cold Storage has wrongly and illegally been sold by the Sub- Divisional Magistrate, Fatehpur, District-Barabanki. It is not disputed that initially a Recovery Certificate was sent by the U. P. Financial Corporation to the Collector, Barabanki for realisation of the loan amount alleged to be due against M/s. Harman Cold Storage, the opposite party No. 5. After receipt of the Recovery Certificate, the Collector Barabanki delegated his power to the Sub-Divisional Magistrate, Fatehpur, Distt. Barabanki who fixed several dates for auction of the cold storage. It appears that the U. P. Financial Corporation received some complaint about the auction and therefore, the petitioners informed the Collector, Barabanki that the earlier auction which took place for Rs. 23. 60 lakh was not proper and the U. P. Financial Corporation be also informed about the next auction date. It has also been specifically alleged by the U. P. Financial Corporation that the authorities concerned are going to confirm the said auction and therefore, another date be fixed for auction of the property. In the meantime, the U. P. Financial - Corporation also received some offers for purchase of the Cold Storage and finally the U. P. Financial Corporation had accepted the offer of Rs. 30 lakh and had also accepted Rs. One Lakh as advance money. The U. P. Financial Corporation, thereafter by Fax Message dated 30-11- 94 informed the Collector, Barabanki that in view of the facts mentioned above, the recovery certificate be returned and be treated as cancelled. It may be pointed out here that by letter dated 16-11-94, the petitioners had also informed the Collector, Barabanki that the debtor has also submitted a scheme for payment of the loan amount and the same is under consideration and therefore, the recovery certificate be treated as cancelled. It has also been mentioned in the said letter that the Corporation is ready to pay the expenses incurred by the District Authorities. On this letter, an order had been passed on 17-11- 94 and this shows that the letter had been received by the district authorities. BY letter dated 21-11-94, it appears that the Managing Director of the petitioners had a talk on phone with the Collector, Barabanki about the cancellation of the Recovery-Certificate. Again letter dated 22-11-94 contained in Annexure No. 9 shows that the Senior Manager (Finance) alongwith Dy. Senior Manager (Finance) went to Barabanki alongwith letter dated 21-11-94 and met the Collector, Barabanki in his Chamber. After discussion, the Collector, Barabanki conveyed the order to the Addl. Distt. Magistrate, Barabanki that after charging 10% recovery expenses, the recovery certificate be returned. It is also alleged in the said letter that the Sub-Divisional Magistrate, Fatehpur, Distt. Barabanki (under whose jurisdiction the Unit lies) was also present and in his presence, the discussions took place between the Distt. Magistrate and the officers of the U. P. Financial Corporation. From the said letter, it appears that the Sub-Divisional Magistrate, Fatehpur, Distt. Barabanki was insisting for 10% recovery expenses on the total amount and it also appears that the Sub-Divisional Magistrate, Fatehpur, Distt. Barabanki was not in a mood to return the recovery certificate. The above mentioned letters show that the U. P. Financial Corporation admittedly withdrew the recovery-certificate on 16-11-94. It is also not disputed that the District Authorities had been informed and requested for return of the recovery-certificate. Admittedly the auction was not confirmed upto the date and finally the same was confirmed by the Sub-Divisional Magistrate, Fatehpur, Distt. Barabanki on 2-12-94. It is also strange thing that on the same day after confirmation, the Tahsildar, Barabanki handed over the possession of the Cold Storage to the buyer. It appears that the sale was confirmed on 2-12-94 because the U. P. Financial Corporation had again sent a letter dated 1- 12-94 to the Collector, Barabanki including the Sub-Divisional Magistrate, Fatehpur, Distt. Barabanki for return of the recovery-certificate. After coming to know all these facts, the U. P. Financial Corporation filed the present writ petition on 15-12-94, and on the same day this Court stayed the operation of the orders contained in Annexure Nos. 14 & 15 by which the confirmation was done. This Court further directed the purchaser, the opposite party No. 6 not to sell, mortgage or alienate or change the nature of the property in any manner whatsoever. The facts stated above are not disputed, and on the basis of these facts, it is submitted by the petitioners' counsel that the sale as well as confirmation and handing over of the possession of the Cold Storrage to the opposite party No. 6 is not sustainable and it appears that all these proceedings took place in order to release the Cold-Storage in favour of the opposite party No. 6. Then above-mentioned facts are not disputed and therefore, in our opinion the auction as well as confirmation deserves to be struck down.
(2.) THE facts as pointed out above clearly show that the auction of the Cold Storage by the District Authorities was not permissible. THE District Authorities can auction the property only after receipt of the recovery-certificate from the U. P. Financial Corporation. THE U. P. Financial Corporation has a right to withdraw the recovery-certificate at any moment and atleast before the confirmation of the sale. THE opposite parties have no right to proceed further after withdrawal of the recovery-certificate by the petitioners. From the facts stated above, it is apparent that the Collector, Barabanki himself ordered for return of the recovery certificate on payment of 10% collection charges. A dispute was raised by the Sub-Divisional Magistrate, Fatehpur, district Barabanki by saying that he will charge the collection charge at the rate of 10% on the total amount whereas, the U. P. Financial Corpora tion was ready to deposit 10% collection charges on Rs. one lakh which was deposited with the Corporation. THE contents of Annexure No. 9 itself show that this dispute arose between the parties. However, mere is no dispute that the recovery certificate has been cancelled by the U. P. Financial Corporation. It is strange thing that in spite of the fact that the authorities concerned were fully aware of the fact that the recovery certificate had been cancelled by the U. P. Financial Corporation and they prayed for return of the recovery certificate, the authorities concerned instead of returning the recovery certificate, auctioned the property and confirmed the auction and handed over the property to the opposite party No. 6 on the same day. In these circumstances, the order of confirmation passed by the Sub-Divisional Magistrate, Fatehpur, Distt. Barabanki is liable to be quashed. The present writ petition had initially come up before us on 5-9-95 and during the course of the arguments we directed the petitioners' counsel to inform the Court as to whether the U. P. Financial Corporation is interested to return the money to the auction-purchaser or not ? The order was passed as the counsel for the opposite party No. 6 pointed out that the opposite party No. 6 has already deposited the amount and the Corporation is not returning the same. However, in compliance of the said order an affidavit has been file by the U. P. Financial Corporation pointing out that the money in question is lying with the revenue authorities Barabanki and the same be returned to the opposite party No. 6. The opposite party No. 6 also filed an affidavit stating therein that after taking possession of the cold-storage on 2-12-94, he spent Rs. 2,44,777 and further stated that as the amount in question has been taken from the Bank, therefore, he is entitled to get the interest at the rate of 18. 75% and in this way he is entitled to get Rs. 4,17,341. He also claimed 5% of the purchase money in accordance with the Rule 285- H of the U. P. Zamindari Abolition and Land Reforms Act. Accordingly, the opposite party No. 6 states that he is entitled to get Rs. 31,40,118. As regards the expenses are concerned, the opposite party No. 6 has shown Rs. 20,000 as court case expenses. He further shows Rs. 9,000 as travelling expenses for Cold Storage-purchase and repairing etc. He also filed several receipts but except one or two receipts, the other receipts are not in the name of the opposite party No. 6. Apart from this, the opposite party No. 6 has also filed a certificate of the Bank showing that the opposite-party No. 6 has maintained an account and the Bank is charging an interest at the rate of Rs. 18. 75% per annum. From the said certificate, it is not clear as to whether the opposite party No. 6 has taken loan and whether the amount has been taken for this purpose. Apart from this, as pointed out above, the auction of the Cold-Storage by the Revenue Authorities is not free from doubt regarding bona fides, hence in these circumstances, it will not be proper to allow such an amount to the opposite party No. 6 as he claimed interest or other expenses. However, the fact cannot be denied that an amount of Rs. 23,60,000 has been deposited by the opposite party No. 6 with the Revenue Authorities in pursuance of the sale which of course was not confirmable.
(3.) IN the interest of justice, we direct the petitioners to pay an interest on the said amount at the rate of Rs. 7. 5% per annum from the date of deposit of the total amount till today. The auction-money is in deposit of the revenue authorities. 6. IN the result, the present writ petition is allowed, the impugned orders of confirmation and auction contained in Annexure Nos. 14 and 15 to this writ petition are hereby quashed. The Collector, Barabanki is directed to refund the amount in question to the opposite party No. 6 forthwith say within 15 days from the date of receipt of this order. The petitioners are directed to calculate the interest at the rate of Rs. 7. 5% per annum from the date of deposit of the amount till today and pay the same to the opposite party No. 6 within a period of one month from today. The opposite party No. 6 is directed to hand over the possession of the Cold-Storage to the petitioners, U. P. Financial Corporation within a period of two weeks from the date of receipt of this order in accordance with the inventory if any prepared at the time of handing over of the possession on 2-12-94. Petition allowed. .;