Thontadarya K.S. vs The Principal Secretary to Government, Revenue Department and Others

A.S. Bopanna, J.—The petitioner is before this Court assailing the endorsement dated 22/29.08.2011 impugned at Annexure-N to the petition. The petitioner is seeking for issue of mandamus to direct the respondents to pay interest on Rs. 1,45,60,000/- at 18% p.a. from the date of deposit till the date of refund.

The respondents had by a notification dated 11.08.2008 invited offers for the lands indicated therein to be sold in the auction to be conducted by it. The fact that the petitioner had responded in respect of the land bearing Sy. No. 109 measuring 30 guntas in Koppa village, Jigani Hobli, Anekal Taluk and that he was the highest bidder is not in dispute. The petitioner on subsequently noticing that the land which was auctioned was agricultural land and the petitioner would not be in a position to utilize the same, had sought for refund of the amount. The amount was refunded by the order of the respondents dated 05.07.2011 indicating that the petitioner should not seek for interest on the said amount. The petitioner has received the entire principal amount of Rs. 1,45,60,000/-. Presently, the petitioner is contending that the petitioner is entitled to payment of interest on the said amount. The petitioner had made a representation to the respondents calling upon them to pay the interest. In that view, when he was before this Court in W.P. No. 35526/2010, he was granted leave to seek his relief before the respondents. Accordingly, the petition was disposed of on 24.03.2011. Subsequent thereto, the respondents have issued the impugned endorsement indicating that the petitioner would not be entitled to interest. It is in that view the petitioner is before this Court against the impugned endorsement dated 22/29.08.2011.

A perusal of the endorsement impugned at Annexure-N would disclose that the respondents in addition to the other reasons indicated therein have also intimated the petitioner that the request as made cannot be accepted in view of the decision rendered in WA No. 2713/2010 and connected appeals.

Learned counsel for the petitioner while assailing the endorsement would contend that the said decision does not apply to the facts of the instant case. In fact the learned counsel would refer to the earlier Division Bench judgment of this Court in WA No. 984/2009 dated 12.10.2009 wherein an order to pay interest was upheld. In addition, learned counsel for the petitioner has also placed reliance on the judgment of the Hon''ble Supreme Court in the case of Allahabad Bank Vs. Bengal Paper Mills Co. Ltd. and Others etc., (2004) 4 CompLJ 245 : (2004) 8 JT 340 : (2004) 8 SCALE 551 : (2004) 8 SCC 236 : (2004) 55 SCL 368 . In that light, it is contended that the respondents themselves were at fault in notifying an item of agricultural land by depicting the same as a land which could be utilized for residential purpose. Therefore, it is contended that the petitioner under bonafide belief that the land could be utilised for residential purpose, had responded and also paid the entire sale consideration on being considered as the successful bidder. It is only subsequently when it was noticed that the land in question was agricultural property, the petitioner had sought for refund of the principal amount and in that light, since the amount belonging to the petitioner had been retained by the respondents, the petitioner is entitled to payment of interest on the same. He therefore contends that the decision as relied on by the learned counsel would be applicable to the instant facts and not the decision which was relied on in the impugned endorsement.

Learned Government Advocate would point out that in the auction notice itself, it had been clearly indicated that the property was also in the agricultural zone. It is her further case that the conditions depicted in the sale notification itself states that the land being offered is on ''AS IS WHERE IS'' basis and therefore, any person responding to the said notification ought to have satisfied himself/herself/themselves about the nature and status of the land before offering to purchase such land. In that light, it is contended that the petitioner in any event cannot make out any grievance subsequently. It is also pointed out that when the petitioner had made a request to refund the amount, the order dated 05.07.2011 passed in that regard to return the principal amount was made subject to the condition that the petitioner would not seek for interest subsequently. The petitioner without assailing the said order had received back the principal amount without any reservations, as such at this juncture, the petitioner cannot make out any grievance.

In the light of the rival contentions, I have perused the judgment of the Hon''ble Supreme Court relied on by the learned counsel for petitioner. It is seen that the consideration with regard to the payment of interest or otherwise was made by the Hon''ble Supreme Court while considering the sale of the property which was made by the Official Liquidator in a winding up proceedings. In that light, the provisions applicable for such sale as contained in Section 457(1)(C) of the Companies Act and Rule 272 of the Companies (Court) Rules, 1959 was kept in view and in that circumstance, the manner in which the sale is to be conducted under Order 21 Rule 93 of CPC was also considered. While taking note of the same, the Hon''ble Supreme Court has arrived at the conclusion that when such sale is made under the provisions of the Companies Act, the sale would be concluded only after the approval by the Company Court and in such circumstance, the Company Court would have the power to either award interest or otherwise. Therefore, if the consideration therein is kept in view, it cannot be made applicable to the instant facts of the case. The judgment of the Division Bench relied on in the impugned endorsement dated 17.01.2011 is available at Annexure-O to the petition. Though the learned counsel for the petitioner contends that the same would not be applicable to the instant facts, what is necessary to be noticed is that the Division Bench of this Court was in fact considering a similar sale of property belonging to the Government under the provisions of the Karnataka Land Revenue Act and in that circumstance, taking note of the fact that the land was being offered for sale on ''AS IS WHERE IS'' basis has arrived at the conclusion that the payment of interest would not be sustainable. In fact in the said judgment itself, the Hon''ble Division Bench has referred to the judgment dated 12.10.2009 passed in WA No. 984/2009 relied on by the learned counsel for the petitioner.

Further in the light of the judgment of the Division Bench of this Court, what is necessary to be noticed is that in the instant case, the notification dated 11.08.2008 at Annexure-A with reference to the property bearing Sy. No. 109 had indicated the property being in the agricultural as well as the residential zone. The extent of the property was indicated therein. It is not as if a representation had been made that the entire property was in the residential zone. Therefore, in a circumstance when in the notification it was indicated that the property bearing Sy. No. 109 is in the agricultural as well as residential zone, the petitioner should have been prudent enough to verify these aspects before making his offer. Hence if these aspects are kept in view and also the fact that while refunding the principal amount, the respondents taking into consideration these aspects had returned the principal amount by indicating that the interest would not be payable and when the petitioner without protesting against the same has received the principal amount, certainly he cannot make out any grievance at this juncture. The respondents have examined all aspects of the matter keeping in view the judgment of the Division Bench of this Court and have issued the impugned endorsement. Therefore I see no reason to grant the relief sought in this petition.

Accordingly, the petition stands disposed of.