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2014 (1) TMI 988 - SC - Indian LawsSetting aside of recovery proceedings of loan given - Held that:- For non-repayment of loan the Recovery Officer attached plot No.722, which was in the ownership of Jagmohan Singh, one of the partners in M/s. Amar Timber Works - Harender Singh, brother of Jagmohan Singh, filed an objection petition before the Recovery Officer alleging, that the attached property did not belong to the judgment debtors, but had been purchased by him from his brother Jagmohan Singh, by executing an agreement of sale dated 10.1.1991 - The Recovery Officer ordered the sale of the property - On 22.9.2008, the Recovery Officer, in the absence of any objections, confirmed the sale of the property in favour of Sadashiv Prasad Singh - The High Court set aside the proceedings conducted by the Recovery Officer, including the sale of the property by public auction. In terms of the law declared by the Court, property purchased by a third party auction purchaser, in compliance of a court order, cannot be interfered with on the basis of the success or failure of parties to a proceeding, if auction purchaser had bonafidely purchased the property - Law makes a clear distinction between a stranger who is a bona fide purchaser of the property at an auction-sale and a decree-holder purchaser at a court auction - The strangers to the decree are afforded protection by the court because they are not connected with the decree - Unless the protection is extended to them the court sales would not fetch market value or fair price of the property. The High Court was not justified while setting aside the recovery proceedings and in ignoring the vested right of the appellant in the property in question, after his auction bid was accepted and confirmed, subjected him to grave injustice by depriving him to property which he had genuinely and legitimately purchased at a public auction - Not only did the Division Bench of the High Court in the matter by ignoring the sound, legal and clear principles laid down by this Court in respect of a third party auction purchaser, the High Court also clearly overlooked the equitable rights vested in the auction-purchaser during the pendency of a lis - The High Court also clearly overlooked the equitable rights vested in the auction purchaser while disposing of the matter. The objections raised should be rejected on variety of reasons - Harender Singh had created an unbelievable story with the connivance and help of his brother, so as to save the property in question - The claim in his objection petition, was based on an unregistered agreement to sell dated 10.1.1991Harender Singh, despite his having filed objections before the Recovery Officer, had abandoned the contest raised by him by not appearing - before the Recovery Officer - Having abandoned his claim before the Recovery Officer, it was not open to him to have reagitated the same by filing a writ petition before the High Court - Harender Singh could not be allowed to raise a challenge to the public auction held on 28.8.2008 because he had not raised any objection to the attachment of the property in question or the proclamations and notices issued in newspapers in connection with the auction thereof. The objector had lost all interest in the property in question and had therefore, remained a silent spectator to various orders which came to be passed from time to time - He had no equitable right in his favour to assail the auction-purchase made by Sadashiv Prasad Sinha on 28.8.2008 - The auction purchaser was a bona fide purchaser for consideration, having purchased the property in furtherance of a duly publicized public auction, interference by the High Court even on ground of equity should not be called for - Decided in favour of petitioner.
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