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2000 (7) TMI 980 - MADRAS HIGH COURT

2000 (7) TMI 980 - MADRAS HIGH COURT - TMI - Dated:- 19-7-2000 - K GOVINDARAJAN J. ORDER 1. The respondents 1 and 2 exercising powers under section 29 of the State Financial Corporation Act, 1951 brought in the properties question for auction. The petitioner has submitted tender to purchase the said properties. The petitioner's offer was confirmed for a sum of ₹ 11,60,000 on 26.4.1999. On such confirmation, the petitioner was called upon to remit the balance sum of ₹ 10,44,000 wi .....

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ased by the petitioner were attached, and the same was notified in the District Gazette, dated 22.1.99, fixing the date of auction of the said properties. Immediately, the petitioner addressed a letter dated 28.6.99 to the first respondent, informing that the above said facts regarding arrears of sales tax were not informed to the petitioner and so he requested to refund the deposit amount. But, it was not acceded to, and the petitioner was again informed on 31.12.99 that the 10% of the bid amou .....

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ctronics were attached by issue of Form No.4 on 29.7.98, and the same was published in the District Gazette on 22.1.99. It was also informed to the respondents 1 and 2 that they had proposed to sell the assets on 14.4.99, and subsequently it has been adjourned to 16.4.99. The respondents 1 and 2 were requested to defer further action or to settle the arrears of sales tax. In spite of the same, the petitioner's offer was confirmed by the respondents 1 and 2 by communication dated 26.4.99. It .....

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ons. It is also stated that it is the duty of the petitioner to verify the dues payable on the properties on the principle of "Caveat emptor". On that basis it is prayed to dismiss the writ petition. 5. From the above pleadings, it is clear that the petitioner's bid was confirmed on 26.4.99 by the respondents 1 and 2. Before such confirmation, the respondents 1 and 2 knew about the arrears of sales tax payable by M/s. Maxima Electronics, and the properties which are sought to be so .....

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The learned counsel appearing for the petitioner has submitted that after inspection of the properties, the petitioner has offered the price of ₹ 11,60,000. Though the respondents 1 and 2 knew about the arrears of sales tax and the attachment, they have not informed about the same to the petitioner even before the acceptance of the petitioner's bid. Only after acceptance of the bid and after receipt of the notice from the Sales Tax Department, the petitioner came to know about the sai .....

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w of clause 16 of the terms and conditions, it is for the petitioner to pay the said amount, and on that basis he cannot come forward with the plea that he will not pay the full amount of sale consideration. The learned counsel has also relied on the decision in Thakarlal v. Smt. Rama, . 9. In this case, admittedly, the petitioner is the successful bidder and his bid has been confirmed. It is not the case of the petitioner that the respondents 1 and 2 have no right to sell the properties. Now it .....

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etitioner that the sale in his favour has been set aside and the respondents 1 and 2 have no right at all to bring the properties for sale. While dealing with similar issue, in the decision in Thakarlal v. Smt. Rama, it has been held as follows:- "(10) In the Lahore case, AIR 1932 Lah.401 (FB) the decision of the Privy Council in Kissorimohan Roy v. Harsukh Das, ILR 17 Cal.436 in which it was held that an illegal attachment under the Code of Civil Procedure is a direct act of the decree-hol .....

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the decree-holder is required to declare that what is stated therein is true to the best of his knowledge and belief. But with regard to the interest of the judgment-debtor in the immovable property sought to be proceeded against all that the decree-holder is required to declare is that, so far as he has been able to ascertain, his interest in the property is as specified. No publicity is given to the declaration contained in the execution application. Publicity is only given to the sale procla .....

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in the Schedule below have been stated to be the best of the information of the Court, but the Court will not be answerable for any error, misstatement or omissions in the proclamation. It is thus clear that there is no question of any representation by the decree-holder to the auction-purchaser that the judgment-debtor has a saleable interest in the property. (11) The Oudh and Labour cases have also taken the view that the sale can be rescinded at the instance of the auction- purchaser on the g .....

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ellip;…. (15) Now the auction purchaser is not bound to purchase the property at an auction sale. His mistake in thinking that the judgment-debtor has a saleable interest in the property does not therefore entitle him to a refund of the purchase money merely on the ground that he subsequently discovers that he has no such interest. It appears to me that money paid under a mistake of fact can only be recovered in the circumstances specified by Farwell, J, in the above case. (16) Another as .....

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