SRI PRABIN RAM PHUKAN &ANR.versusSTATE OF ASSAM & ORS.

                      [2014] 13 S.C.R.175


             SRI PRABIN RAM PHUKAN &ANR.                              A
                                v.
                  STATE OF ASSAM & ORS.
              (Civil Appeal Nos. 662-663 of 2008)
                                                                      B
                     DECEMBER 11, 2014
    [M. Y. EQBAL AND ABHAY MANOHAR SAPRE, JJ.)
                     .
        Assam Land and Revenue Regulation, 1886- ss. 3(b),
  70, 72 - Land revenue - Non-payment, by appellants-land
  holders-Auction sale of property of appellant for realization       C
  of Rs. 731. 701-- State purchased the land/estate for Rs. 1 in
  the auction proceedings - Board set aside the auction and
  sale proceedings and directed for restoration of l~nd to the
  appellant as also pay the appellants compensation amount
· deposited by IOC for allotted land - However, non-payment           D
  of compensation amount to the appellants - Single Judge
  directed the State to pay. compensation amount to the
  appellants - However, Division Bench upheld the auction
  sale as also the transfer of land to the State - On appeal,
  held: High Court erred in interfering with the finding of the       E
  Board - Board rightly held that auction conducted was not
  made in conformity with the procedure prescribed in the
  Regulation; that no notice of either demand or/and sale of
  land was served on the appellants and High Court ought not
  to have interfered with this finding of fact; that the High Court   F
  exceeded its jurisdiction and reversed the factual finding; and
  the writ court did not assign any cogent reason as to why the
  factual finding of the Board was wrong - Thus, the auction
  held by the State nefther legal and nor in conformity with the
  requirements contained in the Regulation and rightly set            G
  aside by the Board- lmpugnedjudgment set aside and that
  of the Board restored - State directed to pay the amount of
  compensation deposited by IOC for the land allotted to them
  to the appellants along with interest as also restore the
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                               175
176        SUPREME COURT REPORTS              [2014] 13 S.C.R.


A possession of the remaining land - Constitution of India,
      1950-Arts. 227 and 300A.
           Notice - Non-service of notice and a notice though
      served but with some kind of procedural irregularities in
      serving - Distinction between - Explained.
 B
           Allowing the appeals, the Court
         HELD: 1.1 The finding of the High Court cannot be
   concurred with. The High Court should not have
   interfered with the finding of the Board which rightly held
 C that auction conducted to recove.r the outstanding
   arrears of land revenue (Rs.731.70) from the appellants
   was not made in conformity with the procedure
   prescribed in the Regulation and was, therefore, bad in
   law. [Para 23][198-E-F]
 D       1.2 In the first place, the well reasoned finding of
   fact recorded by the Board in favour of the appellants
   (landholders) on the question of non-service of notice
   of the demand for payment of defaulted amount of arrears
   of land revenue of Rs. 731.70 and non-service of notice
 E of sale of land was binding on the writ court, being a
   pure finding of fact and more so, when it was based on
   proper appreciation of facts. The High CouJ1: exceeded
   its jurisdiction when it proceeded to examine this factual
   issue like an appellate court and reversed the factual
 F finding. Assuming that the High Court could go into this
   issue in its writ jurisdictiQn, yet mere perusal of the
   finding of the High Court would go to show that no
    proper service much less effective service of notice of
   demand and sale of land was made on the appellants. In
 G other words, reading of reasoning and discussion of the
    High Court cannot allow to reach to a conclusion that
    the appellants were duly served of the notices. Rather it
    would take to a conclusion that the appellants were not
    properly served. The writ court did not assign any cogent
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     SRI PRABIN RAM PHUKAN v. STATE OF ASSAM              177


reason as to why the factual finding of the Board on this A
issue was wrong and hence, call for interference. On
examination of the issue of notice independently in the
light of the requirement of s. 72 read with Rules 133, 134,
136 and 136-A which deals with the mode of effecting
service on the defaulting landholder, then there is no B
hesitation in recording a finding that no notice was served
on the appellants as contemplated under the
aforementioned provisions and the High Court ought not
to have interfered with this finding of fact for holding
otherwise. [Paras 24, 25][198-G-H; 199-A-E; 200-A]          C
        1.3 There lies a distinction between non- service of
  notice and a notice though served but with some kind
  of procedural irregularities in serving. In the ca~e of.
  former category of cases, all consequential action, if
  taken would be rendered bad in law once the fact of non- D
  service is proved whereas in the case of lat:n category
  of cases, the consequential action, if taken would be
  sustained. It is for the reason that in the case of former,
  since the notice was not served on the person concerned
  he was completely unaware of the proceedings which . E
  were held behind his back thereby rendering the action
  "illegal" whereas in the case of later, he was otherwise
  aware of the proceedings having received the notice
  though with procedural irregularity committed in making
  service of such notice on him. If a person has a F
  knowledge of the action proposed in the notice, then the
  action taken thereon cannot be held as being bad in law
  by finding fault in the manner of effecting service unless
  he is able to show substantial prejudice caused to him
. due to procedural lapse in making service on him. It, G
  however, depends upon individual case to case to find
  out the nature of procedural lapse complained of and
  the resultant prejudi'Ce caused. The instant case falls in
  former category of case. [Para 26][200-A-F]
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178      SUPREME COURT REPORTS              [2014) 13 S.C.R.


A      1.4 It is mandatory on the part of the State to serve
  a proper notice to a person, who is liable to pay any kind
  of State's dues strictly in the manner prescribed in the
  Regulation. It is equally mandatory on the part of the
  State to give prior notice to the defaulter for recovery of
B dues before his properties-moveable or/and
  immoveable) are put to sale in the manner prescribed in
  the Regulation. [Para 27][200-F-G]
        1.5 The appellants were deprived of the land without
  following the procedure prescribed in law because the
C so-called auction was conducted by the State behind
  their back and without their knowledge. The action of
  the State was thus, clearly violative of the appellants'
  Constitutional right guaranteed under Article 300-A and
  hence, such action cannot be sustained in law. [Para 29]
D [201-C-D]
        1.6 There is nothing on record to show as to why
  the extreme step to recover a small sum of Rs.731.70
  paisa was required to be taken for sale of the estate
E under Section 70 and why arrears of Rs.731.70 paisa
  could not be recovered by sale of any moveable
  belonging to the appellants. It is inconceivable to think
  that the appellants did not own moveable which would
  not have even fetched Rs.731/- on sale or would have
  fetched less amount. The auction held by the Deputy
F Commissioner for realization of dues by sale of land
  under s.70 was bad in law being held in' contravention
  of s.70(1) and was thus, not sustainable. [Paras 33, 34]
  [202-C-E]
                        '
G        1.7 Taking recourse to auction proceedings for sale
   of defaulter's immovable property for realization of the
   State dues is an extreme remedy. It is also discernable
   in the facts of this case on reading Sections 69, 70 and
   Rule 155. It has been held by this Court that once the
 H State take recourse to a remedy of disposing of the
     SRI PRABIN RAM PHUKAN v. STATE OF ASSAM               179


defaulter's property by means of public auction as A
provided in Regulation for realization of State dues then
its dominant consideration should always be to secure
the best price for the property put to sale. This can,
however, be achieved only when there is maximum ·
public participation in the process of sale and every one B
has an opportunity to offer the best offer to purchase
the property. The reason is that the public auction held
after adequate publicity ensures participation of every
person interested in purchasing the property and in that
process, the State and, in turn, the defaulter gets the best c
price of his property which was put to auction sale.
(Para 36][202-F-H; 203-A-B]
      Chairman and Managing Director, SIPCOT,
      Madras and Others v. Contromix Pvt. Ltd. 1995
      (1) Suppl. SCR415: (1995) 4 SCC 595; Haryana          D
      Financial Corporation and Another v. Jagdamba
      Oil Mills and Another 2002 (1) SCR 621 : (2002)
      3 sec 496 - relied on.
       1.8 The auction was not held by the Deputy E
. Commissioner in conformity with the said principle. It
  seems that the auction was held only on papers to show
  compliance of the Rules to enable the State -to invoke
  Rule 141 and acquire the land for Rs.11- as provided
  therein. As a matter of fact, no efforts were made by the F
  State to file any document to prove that adequate
  publicity was given on all adjourned dates and despite
  such publicity no bidder participated in the auction. It is
  indeed inconceivable that a land in the district when put
  to auction sale despite publicitywould go unnoticed and G
  no person would come forward to bid for such land. It
  appears that the State had decided to allot the land to
  the IOC, who were interested to use the land for their
  own purpose and hence recourse to remedy of disposal
  of land by auction as provided in s.70 followed by
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180        SUPREME COURT REPORTS                [2014] 13 S.C.R.


A invocation of Rule 141 was taken to acquire the land on
      payment of Rs.1/- by the State and then its major part
      was allotted to the IOC on payment of yearly premium
      and further payment of compensation by the IOC.
      [Para 37][203-C-G]
B           1.9 The auction held by the State was neither legal
      and nor in conformity with the requirements contained
      in the Regulation. It was, therefore, rightly set aside by
      the Board. The impugned judgment is set aside and that
      of the Board restored. [Paras 38, 39][203-G-H; 204-A]
 c
           1.10 The State-respondent no.1 is directed to pay
      the amount of compensation deposited by the IOC for
      the land allotted to them to the appellants along with
      interest on the said amount at the rate of 6 % payable
 0    from the date of deposit till paid to the appellants. The
      State is also directed to restore the possession of the
      remaining land. [Para 40][204-B-C]
                          Case Law Reference:
           1995 (1) Suppl. SCR 415      relied on     Para 36
 E
           2002 (1) SCR 621             relied on      Para 36
           CIVILAPPELLATE JURISDICTION: Civil Appeal Nos.
      662-663 of 2008.
        From the Judgment and Order dated 06.05.2005 of the
 F High Court of Gauhati in W.A. No. 512 of 2002 and W. P. (C)
   No. 5628 of 2004.
        Brijendra Chahar, Sr. Adv., Anshuman Sinha, Vijay Kumar
   Pandey, Ms. Sangeeta Joshi, Pravir Choudhary for the
 G Appellants.
            Ms. Vartika Sahay Walia (for M/s. Corportae Law Group),
      Renjith for the Respondents.
           The following Judgment of the Court was delivered:
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     SRI PRABIN RAM PHUKAN y, STATE OF ASSAM                    181


                      JUDGMENT                                   A
      1. Leave granted
      2. These civil appeals arise out of common judgment
dated 06.05.2005 passed by the Division Bench of the High
CourtofGuwahati in W.A. No. 512 of2002, which in tum, arises B
out of judgment dated 26.02.2001 passed by the learned
Single Judge in W.P. No. 2234 of 2000 and W.P. (Civil) No.
5628 of 2004 arising out of order dated 23.02.1998 passed
by the Board in Case No. 42RA(K) of 1996.
      3. By impugned judgment, the Division Bench allowed C
the writ appeal and writ petition filed by the State of Assam, in
consequence, set aside the order dated 23.02.1998 passed
by the Board at Guwahati impugned in the writ petition and
also set aside the order dated 26.02.2001 passed by the
learned Single Judge in W.P. No. 2234 of 2000.                    D
       4. The question arises for consideration in these appeals
is whether the High Court was justified in allowing the writ
appeal ·and the writ petition filed by the State thereby was
justified in setting aside the order of the Board impugned in
the writ petition? · ·                                           E
    5. In order to appreciate the issue involved in these
appeals, it is necessary to state the facts in detail infra.
      6. The dispute relates to the agricultural land measuring
59Bighas1Katha14 Leacha covered by Dag Nos. 435, 437, F
376, 433, 434, 438, 439, 358, 361, 1348, 343 and 836
bearing patta Nos. 284 (new)/269(old) situated at Village
Betkuchi in Mouza Beltola in the District of Kamrup. The
appellants were the co-land holders of this land which is an
"estate" as defined under Section 3(b) of the Assam Land And G
Revenue Regulation, 1886 (hereinafter referred to as 'The
Regulation"). Their names were also duly entered in the
revenue records as "recorded land holders" as defined In
Section 3(i) of the Regulation; all through. This land is subjected
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182       SUPREME COURT-REPORTS                  [2014] 13 S.C.R.


A to payment of land revenue as per the provisions of the
  Regulation.
        7. It appears, as being an undisputed fact, that a sum of
  Rs. 731. 70 was found payable by the appellants towards land
  revenue on the aforesaid land (estate) and since the appellants
8 did not pay the said amount, the Deputy Commissioner
  registered a case being Case No. 3/13of1976-77 for recovery
  of Rs. 731. 70 from the appellants. The Deputy Commissioner
  after making efforts to realize the dues by sale of moveable of
  the appellants put the aforesaid land for auction sale on
C 29.06.1978 for realization of Rs. 731. 70 as per the provisions
  of the Regulation. However, no bidder participated in the
  auction proceedings held on few adjourned dates and hence,
  the State stepped in and purchased the entire land/estate for
  Rs.1 /- in the auction proceedings as provided under Rule 141.
P Thereafter, the State allotted 40 Bighas of land out of total land
  to the Indian Oil Corporation (IOC) on payment of yearly
  premium of Rs. 26,000/- per Kattha. In addition, the State also
  directed the IOC to deposit Rs.38,50,600/- towards
   compensation with the State Government. The IOC,
E accordingly, deposited the sum as directed.
         8. The appellants (land holders) claiming to be
   completely unaware of the aforesaid proceedings and on
   coming to know of the same filed Case No. 42/RA(K) of 1996
 F on 02.04.1996 before the Board at Guwahati under Rule 149
   of the Regulation.The challenge to the entire proceedings was
   on the grounds inter alia that firstly, the sale/auction
   proceedings undertaken by the Deputy Commissioner for
   realization of Rs. 731. 70 as arrears of land revenue for the land
 G in question were per se without jurisdiction and against the
   mandatory procedure prescribed in the Regulation for recovery,
   attachment and sale of estate. Secondly, the appellants were
   not given any notice of demand for payment of Rs. 731. 70 and
   nor any notice was served prior to sale/auction proceedings
 H as provided in the Regulation. Thirdly, the so called auction,
       SRI PRABIN RAM PHUKAN v. STATE OF ASSAM                        183


  even if held, was no auction as contemplated in the Regulation · A
  because no publicity was given to enable any bidder to
  participate in the auction proceedings and in fact no bidder
  participated in the said auction and lastly, in such
  circumstances, the auction sale made in favour of the State
  for Rs.1 /-as per Rule 141 was illegal and liable to be set aside, · B ·
. entitling the appellants to seek restoration of land.
       9. The Board, by order dated 23.02.1998, allowed the
 appeal filed by the appellants and held that no notice of either
 req.overy of arrears of land revenue or/and auction proceedings
 was served on the appellants much less served as per the              C
 proc~dure prescribed in the Regulation, that attachment and
 sale of the so called moveable of the appellants and also of
 the land in question was not done as per the procedure
 prescribed in the Regulation, that a valuable land whose market
 value was around 50 lacs approximately should not have ~een           D
 put to sale for realization of Rs. 731.70 as it caused extreme
 hardship to the appellants and lastly, no sincere attempt was
 made to sell either moveable properties of the appellants as
 provided in Section 69 for realization of dues prior to the
 auction or to sell the land in question as provided in the            E
 Regulation. The Bpard, after recording these findings, set
 aside the auction and the sale proceedings and directed the
 State to restore the land to the appellants on their paying
 outstanding land revenue and other dues, if any, as per law. It
 was further directed that since in the meantime, out of total         F
 land, some portion of the land, i.e., (40 Bighas or so) was
 already allotted to the IOC for consideration and hence, instead
 of restoring the possession of the land allotted to the IOC, the
 amount of compensation deposited by the IOC for allotted land
 was directed to be paid to the appellants after working out           G
 their actual share in the land. In this way, the appellants got
 around 19 Bighas of land and also became entitled to receive
 the compensation amount deposited by the IOC whereas the
 IOC was allowed to retain the allotted land in lieu of
 compensation paid by them for such land.                              H
184         SUPREME COURT REPORTS                  [2014] 13 S.C.R.


A       10. In compliance of the said order, the Deputy
  Commissioner raised a demand (KRM 28/96/16) dated
  15.02.1999 for Rs.1092/-towards land revenue and Rs.273/-
  towards local tax from the appellants in relation to the land in
  question. On 16.02.1999, the appellants deposited the sum
B so demanded. Since the State was not paying the
  compensation amount to the appellants in terms of the
  directions of the Board, the appellants filed Writ Petition No.
  2234 of 2000 before the High Court seeking mandamus
  against the State and the concerned State Authorities to pay/
c release the compensation amount to the appellants.
            11. Learned single judge, by order dated 26.02.2001,
      allowed the appellants' writ petition and by issuing a mandamus
      directed the

 0          State to pay the compensation amount to the appellants
      in terms of order of the Board within three months. Feeling
      aggrieved by the said order, the State f~ed review petition being
      R.P. No. 4 of 2002. By order dated 11.01.2002, the Review
      court dismissed the review petition.
 E          12. Challenging the order dated 26.02.2001 in W.P. No.
      2234 of 2000, the State filed intra court appeal being W.A. No
      512 of 2002 before the High Court. The State also filed an
      application for con donation of delay in filing the appeal since
      it was filed beyond the period of limitation of around 496 days.
 F       13. The High Court, by order dated 27.05.2003,
   dismissed the appeal as being barred by limitation. It was held
   that no sufficient cause had been shown by the State to
   condone the delay in filing the appeal. Feeling aggrieved by
   the dismissal of their appeal, the State filed SLP (C) No. 87 4
 G of 2004 before this Court. By order dated 03.09.2004, this
   Court granted leave and allowed the appeal and remanded
   the case to the Division Bench for its decision on merits in the
   appeal.

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      SRI PRABIN RAM PHUKAN v. STATE OF ASSAM                      185


       14. Challenging the order dated 23.02.1998 passed by A
 the Board which_ had allowed the appeal filed by the appellants,
 the State filed petition being W.P. No. 5628/2004 before the
 High Court. The Division Bench clubbed writ appeal of the State
 0NANo. 512/2002), which was remanded by this Court to the
 High Court for its disposal on merits with Writ Petition No 5628 B
 of 2004 filed by the State because both the cases had arisen
 out of the same order of the Board and pertained to the same
 land.
         15. By impugned order, the Division Bench allowed the
  writ appeal and the writ petition. The High Court held that notice C
. of demand and sale of land were served on the appellants as
  per the procedure prescribed in the Regulation and that the
  auction held by the Revenue Authorities was legal and was
  held in conformity with the procedure laid down in the
  Regulation. It was also held that no direction could be issued D
  by the Board to pay compensation to the appellants for the
  land which was rightly purchased by the State for Rs.1 /-in the
  auction sale as per Rule 141. The High Court thus upheld the
  auction sale as also the transfer of land to the State as provided
  in Rule 141 for Rs.1 /-.Against this order, the landowners filed E
  these appeals by way of special leave before this Court.
       16. Assailing the legality and correctness of the order,
 learned Counsel for the appellants mainly contended five points
 thatare:
                                                                    F
       (i) that the High Court erred in allowing the writ appeal
         and the writ petition filed by the State there.by erred in
         quashing the order of the Board. According to him,
         the w~ll-reasoned findings of fact recorded by the
         Board was binding on the writ court while deciding G
         the writ petition filed under Article 227 of the
         Constitution and otherwise also the findings were
         beyond challenge because they were legal and proper
         calling no interference in the writ proceedings;
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186   SUPREME COURT REPORTS                    [2014] 13 S.C.R.


A     (ii)that none of the mandatory procedure prescribed under
           the Regulation and especially, the procedure
           prescribed for, (1) effecting service of notices on the
           defaulting landholders for recovery of land revenue
           payable on their estate (2) sale of properties/estate
 B         of the landholders for realization of unpaid land
           revenue and (3) the manner as to how the auction sale
           is to be conducted for disposal of the properties/estate
           were complied with by the revenue authorities;
      (iii)that when th ere was no notice served on the appellants
 c         of the auction proceedings, no publicity was given to
           such proceedings and no bidder participated in the
           so-called auction proceedings then in such
           circumstances, it was beyond anybody's
           comprehension as to on what basis, the sale/auction
 D         could be held and if held, the same could be held as
            being legal.
      (iv)that in no case, the land whose market value was more
          than Rs.50 lacs (approx.) could directly be put to
          auction sale for realization of such meager sum of Rs.
 E
          731. 70 as arrears of land revenue unless all other
          modes of recovery provided in the Regulation had
          been exhausted which in this case was not done and
          assuming that it was done yet it was not done in
          conformity with the procedure prescribed in the
 F
           Regulation;
       (v) that in any event, such valuable land could not have
          been restored or/and sold to the State for Rs.1 /- by
          taking recourse to Rule 141 on the ground that no
 G         bidder participated in the auction proceeding unless
          entire procedure prescribed in Section 69 for recovery
           of a<rears by sale of moveable was followed in the
           first instance and on failure to recover by such mode,
           the steps should have been taken to auction or/and
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     SRI PRABIN RAM PHUKAN v. STATE-OF ASSAM                    187


        re-auction the land to enable the bidders to participate A
        in the auction proceedings which again was· not done
        and lastly, the appellants in the event of their success
        in these appeals would be satisfied, ifthey are allowed
        to withdraw the compensation amount deposited by
        the IOC for 40 Big has of land and are further allowed B
        to retain the remaining land.
       17. In contra, learned counsel for the State supported
the impugned judgment and contended that it should be upheld
as it does not call for any interference.
                                                                c
     18. Having heard the learned counsel for the parties and
on perusal of the record of the case, we find force in the
submissions urged by the learned counsel for the appellants.
      19. Before we consider the factual issues arising in this
case, it is apposite to take note of the relevant Sections/Rules D
of the Regulation, which have a bearing over the controversy.
       20. The Regulation consists of two parts. Part I consists
of Sections whereas Part II consists of the Rules. The
provisions of the Regulation applies to all lands by virtue of
Section 4 except the lands which are specified in Section 4(a), E
i.e., the land which is included in any forest constituted a
reserved forest under the law for the time being in force and
(b), i.e., any land which the State Government may by
notification exempt from operation of the Chapter. The relevant
provisions are extracted hereinbelow:                            F ·
                         Sections
     3. Definitions - In this Regulation, unless there is·
     something repugnant in the subject or context,
     (b) "estate" includes -                                    G

     (1) any land subject, either immediately or
     prospectively, to the payment of land revenue, for
     the discharge of which a separate engagement has
     been entered into;                                 H
188   SUPREME.COURT REPORTS              [2014] 13 S.C.R.


A     (2) any land subject to the payment of, or assessed
      with a separate amount as land revenue, although
      no engagement has been entered into with the
      Government for that amount;
      (3) any local area for the appropriation of the
 B    produce or products whereof a license or farm has
      been granted under rules made by the State
      Government under section 155, clause (e) or clause
      (f);
 c    (4) any char or island thrown up in a navigable river
      which under the laws in force is at the disposal of
      the Government.
      (5) any land which is for the time being entered in
      the Deputy Commissioner's register of revenue free
 D    estates as a separate holding;
      (6) any land being the exclusive property of the
      Government of which the State Government has
      direct the separate entry in the registers of
      revenue-paying and revenue-free estates
 E    mentioned in Chapter I.
      3(i) "Recorded proprietor", "recorded land holder"
      "recorded sharer" and "recorded possession"
      meari any proprietor, land holder, sharer or
 F    possession, as the case may be, registered in the
      general registers prescribed in Chapter IV:
      63. Liability for land-revenue etc. • Land-revenue
      payable in respect of any estate shall be due jointly
      and severally from all persons who had been in
 G    possession of the estate or any part of it during any
      portion of the agricultural year in respect of which
      that revenue is payable.
       69. Attachment and sale of moveables (1) The
       Deputy Commissioner may, for the recovery of an
 H
SRI PRABIN RAM PHUKAN v. STATE OF ASSAM              189


arrear, order the attachment and sale of so much of A
a defaulter's moveable property as will as nearly
as may be defray the arrear.
  (2) Every such attachment and sale shall be
  conducted according to the law for the time being
  in force for the attachment and sale of moveable 8
  property under a decree of a Civil Court, subject to
  such modifications thereof as may be prescribed
  by rules framed by the State Government for
. proceedings under the Assam Land and Revenue
  Regulation.                                          C
(3) Nothing in this section shall authorise the
attachment and sale of necessary wearing apparel,
implement of husbandry, tools of artisans, materials
of houses and other buildings belonging to and 0
occupied by agriculturists, or of such cattle or seed·
grain as may be necessary to enable the defaulter
to earn his livelihood as an agriculturist.
 70. When estate may be sold ·When an arrear has
accrued in respect of a permanently-settled estate E
or of an estate in which the settlement-holder has a
permanent, heritable and transferable right of use
and occupancy, the Deputy Commissioner may sell
the estate by auction:
 Provided that -                                      F
 (1) Except when the State Government by general
 order applicable to any local area or any class of
 cases, .or by special order, otherwise direct, an
 estate which is not permanently-settled shall not G
 be sold unless the Deputy Commissioner is of
 opinion that the process provided for in section 69
 is not sufficient for the recovery of the arrear;
 (2) If the arrear has accrued on a separate account
 opened under Section 65, only the shares or lands H
190   SUPREME COURT REPORTS                 [2014] 13 S.C.R.


A     comprised in that account shall in the first place be
      put up to sale; and, if the highest bid does not cover
      the arrear, the Deputy Commissioner shall stop the
      sale, and direct that the entire estate shall be put
      up for sale at a future date, to be specified by him;
B     and the entire estate shall be put up accordingly
      and sold;
      (3) No property shall be sold under this section -
      (a) For any arrear which may have become due in
c     respect thereof while it was under the management
      of the Court of Wards, or was so circumstanced
      that the Court of Wards might have exercised
      jurisdiction over it under the law for the time being
      in force; or
D     (b) For any arrear, which may have become due
      while it was under attachment by order of a revenue
      authority.
      72. Notice of sale (1) If the Deputy Commissioner
      proceeds to sell any property under Section 70, he
E     shall prepare a statement in manner prescribed,
      specifying the property which will be sold, the time
      and place of sale, the revenue assessed on the
      property and any other particulars which he may
      think necessary.
 F
      (2) A list of all estates for which a statement has been
      prepared under sub-section (1) shall be pubrished
      in manner prescribed, and the copy of the
      statement relating to every such estate shall be
      open to inspection by the pubic free of charge in
 G
      manner prescribed.
      (3) If the revenue of any estate for which a statement
      has been prepared under sub-section (1) exce~ds
      five hundred rupees, a copy of the statement shall
 H    be published in the official Gazette.
SRI PRABIN RAM PHUKAN v. STATE OF ASSAM                   191


74. Sale by whom and when to be made (1) Every A
sale under this Chapter shall be made either by the
Deputy Commissioner in person or by an officer
specially empowered by the State Government in
this behalf.
                                                 /
(2) No such sale shall take place on a Sundawor 8
other authorised holiday, or until after the expiration
of at least thirty days from the date on which the
(list of estates) has been published under section
72.                                          .
                                                          c
                     Rules
133. Notices of. demand under section 68 of the
Regulation shall ordinarily be issued by, and the
signature and seal of, the following officers:~
(a) By the Deputy Commissioner with respect to all D
estates situated within the Sadar Subdiv\sion of a
district and not included within the limits of any
tahsil or mauza.
(b) By the Subdivisional Officer with respect to all E
estates situated wjthin the limits of a mufassil sub-
division, and not included within the limits of any
tahsil or mauza.
(c) Tahsildar with respect to all estates situated
within the limits of this Tahsil, or by the Sub-Deputy F
Collector or other officer invested with the power
under section 68 of the Regulation.
134.A notice of demand under rule 132 shall be
served by delivering to the person to whom it is G
directed a copy thereof attested by the Revenue
Officer who issues it, or by delivering such copy at
the usual place of abode of such person to some
adult male member of his family or, in case it cannot
be so served, by pasting such copy upon .some H
192   SUPREME COURT REPORTS                 (2014] 13 S.C.R.


A     conspicuous part of the usual or last known place
      of abode of such person. In case such notice
      cannot be served in any of the ways hereinbefore
      mentioned it shall be served in such way as the
      officer issuing the notice may direct.
B     135. Sale proclamation • The statement and list of
      estates to be prepared under section 72(1) and (2)
      of the Land and Revenue Regulation, in respect of
      property to be sold under section 70, shall be •
      prepared in the language of the district and may, if
c     the Deputy Commissioner thin ks fit be recorded in
      a book prepared for this purpose, to be called the
      sale Statement Book. When published in the
      Gazette, the statement shall also be published in
      the vernacular of the district and in English.
D
      136. Publication of list of estates ·The list of estates
      referred to in the foregoing rule shall be published

      (a) In the Court of the Revenue Officer by whom it
E     has been prepared;
      (b) At the office of the Sub-Deputy Collector in
      whose circle the estate is situated
      (c) At the office of the Tahsildar or house of the
F     mauzadar Within whose tahsil or mauza defaulting
      estate lies; and
      (d) Where gaonburas are employed, on the
      signboard of the gaonbura within whose charge the
      defaulting estate falls;
G     (e) At the offices of the Gaon Panchayat and the
      Anchalik Panchayat.
      136A. Serving of sale statement • The sale
      statement mentioned in rule 135 shall be served
H
SRI PRABIN RAM PHUKAN v. STATE OFASSAM                  193


under subsection (4) of section 72 of the Regulation    A
on the defaulter or, if he can not be found, it shall
be pasted on a conspicuous part of the estate.
141. Purchase of defaulting estates by the State
Government -When a defaulting estate is put up
for sale for arrears of revenue due thereon, if there 8 ·
be no bid, the Revenue Officer conducting the sale
may purchase the estate on account of the State
Government for one rupee or, if the highest bid be
insufficient to cover the arrear due, may purchase
the estate on account of State Government at the C
highest amount of bid.
 154. Order to sell property - Should the defaulter,
after attachment of moveable property, still fail to
pay in the arrear with costs, the Deputy 0
Comm·issioner or Sub-divisional Officer shall, on
receiving a report to that effect from the mauzadar,
issue an order to the Nazir, to sell the property
attached if the arrear is not paid before the date fixed
for sale.
                                                         E
The mauzadar's report under this rule shall be
stamped with court-fee stamps equivalent to the
process fees required by the rules issued under
section 155 (b) of the Regulation.
155. Sale defaulting estates - If the mauzadar is of F
opinion that the process provided for in these rules
is not sufficient for the recovery of the arrear, he
may, if the arrear has accrued in respect of an estate
in which the settlement-holder has a permanent
heritable and transferable right of use and G
occupancy, apply to the Deputy Commissioner to
order the attachment under section 69A, or the sale
of the estate itself, subject to the provisions of
section 74 of the Land and Revenue Regulation:
                                                       H
194       SUPREME COURT REPORTS                 [2014] 13 S.C.R.


·A       Provided the arrear has accrue'tt not earlier than in
         the two revenue years referred to in the provisions
         to rules 152 and 156 and, where action under
         section 69 of the Assam Land and Revenue
         Regulation is taken by or at the instance of the
 B       mauzadar, the application is made within three
         months of the termination of the proceedings under
         section 69."
       21. After setting out the relevant provisions of the
  Regulation, which essentially deals with the sale of land, it is
C now apposite to first reproduce the relevant finding of the Board
  which held the auction sale of estate/land as being illegal and
  not in conformity with the procedure prescribed in the
  Regulation.

 D       "The case re.cord shows that prior to the sale of the
         land, attempt was made for recovery of arrears
         through attachment and sale of movables. But it·
         has been denied by the appellants that any such
         attempt was actually made. The Jarikarak stated
         that he had gone to the residence of the defaulter
 E
         but he failed to serve the notice and for that reason
         he hanged the notice in the office of the mauzadar.
         He also stated that he failed to recover the arrear
         as the defaulters were not found and other
         members of the family were not willing to make the
 F
         payment. The report of the Jarikarak was not
         properly endorsed by any witness. The attachment
         and sale of movables is required under the note
         below Rule 147 to be witnessed by at least two
         respectable persons of the locality. But the report
G        of the Jarikarak was not endorsed by such persons
         and nothing was stated by him regarding
         attachment and sale of movables. Therefore, the
         authenticity of the report on attempts made by the
         Jarikarak for realization of the arrears through
 H
SRI PRABIN RAM PHUKAN v. STATE OF ASSAM               195


attachment of movables is doubtful. Further, it is ·A
also seen that the notice was not duly served in
the (illegible) officer. The service of the notice,
therefore, cannot be. regarded as being adequate
and properly done.
After perusal of the sale record, it is also seen that 8
there was procedural irregularity at the time of
holding the auction sale. The Jarikarak had stated
that no bidder was found at the time of holding the
auction sale. But the report of the Jarikarak was
not endorsed by any witness. All these would raise C
some suspicion as to the authenticity of holding
the auction sale. As such the sale cannot be
regarded as being done in full conformity with the
provisions of the Rule. Therefore, injustice has
been caused to the pattadars of the land in question. D
The total area of land in question is 59 bighas 1
Katha 14 leachas, the market Value of which is over
fifty lakhs rupees. Therefore, the sale of the said
land for a sum of Rs. 732.00 has definitely caused E
g~eat hardship to the Appellants/Petitioners who are
the actual pattadar of the land in question.
I am, therefore, fully satisfied that the sale has
caused injustice as well as hardship to the
Appellants/Petitioners. The sale, therefore, F
deserves to be set aside.
Under Executive Instruction No. 133 annulment is
to be resorted to only as an alternative to other
means of realization through attachment and sale
of movables as well as sale of the estate and when G
all these fail or are held to be in effective then only
the provision for annulment can be resorted to.
Again after annulment not only that the record
correction is to be made but also steps should have
                                                        H
196   SUPREME COURT REPORTS              [2014] 13 S.C.R.


A     been taken under Rule 150 of the Rules under the
      Regulation after issuing notice to the pattadars to
      hand over possession. This was also apparently
      not done. In the parawise comments submitted by
      the learned Addi. Deputy Commissioner, Kamrup
 B    nothing in detail has been stated in support of the
      sale and the annulment of settlement.
      In view of the above discussions, the impugned
      order of sale and annulment of settlement, can not
      be allowed to sustain. Accordingly, the impugned
 c    order of sale dt. 28.6.77 is set aside and the
      endorsement making correction of the land records
      as made on 29.6.78 is struck down. The patta shall
      be restored to the Appellants pattadars and the land
      be restored on payment of the arrears revenue and
 D    other dues as usual as per law. It also appears from
      the records that after the order of sale and
      annulment of settlement by the Deputy
      Commissioner, Kamrup, land measuring 40
      Bighas, out of the total land in question, have been
 E    acquired and transferred by the Govt. of Assam to
      Indian Oil Corporation (Assam Oil Division) and the
      said Corporation has already paid necessary
      compensation for the said land and occupied the
      land on possession being handed over by the
 F    authority concerned. It also appears that there were
      tenants on the land transferred to Indian Oil
      Corporation and their share of compensation was
      already paid keeping the balance amount of
      compensation· for the Pattadars. During the course
 G    of hearing of this appeal, learned advocate for the
      Appellants has submitted that the Appellants will
       be satisfied if they receive the compensation
       money instead of their land already transferred to
      the Indian Oil Corporation. As the compensation
 H
    SRI PRABIN RAM PHUKAN v. STATE OF ASSAM                   197


     money has already been paid by the Indian Oil A
     corporation and the same is kept in the Govt.
     (illegible) after working payment of the share of the
     compensation money may be paid to the Appellant
     and the land will remain with the Indian Oil
     Corporation."                                         B
     22. The aforesaid finding of Board was reversed and
set aside by the High Court in its writ jurisdiction in the
impugned order for sustaining the auction sale. It is also
apposite to reproduce the finding of the writ court infra.
                                                              c
     "A~ order of attachment of movable property was
     issued on 18.11.1976 for recovery of land revenue
     to the extent of Rs. 731.70, due from the pattadars
     Shri Suren Ram Phukan and Shri Prabin Ram
     Phukan. The aforesaid order was sought to be             0
     delivered to the defaulters but the same could not
     be executed and the process server submitted a
     report to the effect that the defaulters were in
     different places and, therefore could not be
     contacted and their legal heirs/representatives so       E
     contacted, had submitted that they do not know
     anything in the matter. The aforesaid endorsement
     of the Process Server was recorded in the presence
     of the two witnesses including a Gaonburah. On
     the said report, the Mouzadar, who had issued the         F
      order of attachment of moveable property, had
      recorded a note to the effect that even if 'Moveable'
      (appears to be wrongly recorded as immovable) is
      sold, nothing would accrue and, therefore, the
      revenue should be realized by auction sale of the
      land. Thereafter, it appears that the statement/list     G
      contemplated under Section 72 of the Regulation
      was prepared mentioning 21.6.1977 as the date on
      which the estate will be sold. The aforesaid list/
      statement could not be served on the defaulter in
                                                               H
198        SUPREME COURT REPORTS                 (2014] 13 S.C.R.


A         spite of 34 attempts. The mother and other relatives
        . of the defaulters refused to accept the same and
          thereafter, a notice was pasted on the wall of the
          house of the defaulters in presence of neighbours
          as witnesses and the copy of the notice was also
B       · published in the office of the sub-Deputy
          Collector, Mouzadar and Gaonburah. Thereafter, it
          would appear from the order-sheet of the
          proceedings of sale that the sale was conducted
          on 21.6.1977, 22.6.1977, 23.6.1977, 24.6.1977,
c         25.6.1977, 26.6.1977 and 28.6.1977, a bid of one
          rupee was offered on behalf of the State
          Government, which was accepted by the ofUcer
          conducting the sale. The amount of one rupee was
          deposited by a Treasury Challan dated 171h/18 1h
D         August, 1977 ..... "
         23. Having examined the entire controversy in the light
  of relevant Sections and the Rules, we are unable to persuade
  ourselves to concur with the finding of the High Court as, in our
  considered opinion, the High Court should not have interfered
E with the finding of the Board which rightly held that auction
  conducted to recover the outstanding arrears of land revenue
  (Rs.731.70) from the appellants was not made in conformity
  with the procedure prescribed in the Regulation and was,
  therefore, bad in law. This we say so on our independent
F examination of the entire case for more than one reason stated
  infra.
        24. In our considered opinion, in the first place, the well
  reasoned finding of fact recorded by the Board in favour of the
G appellants (landholders) on the question of non-service of
  notice of the demand for payment of defaulted amount of
  arrears of land revenue of Rs. 731. 70 and non-service of notice
  of sale of land was binding on the writ court, being a pure
  finding of fact and more so, when it was based on proper
H appreciation of facts. Secondly, the High Court exceeded its
     SRI PRABIN RAM PHUKAN v. STATE OF ASSAM                   199


jurisdiction when it proceeded to examine this factual issue A
like an appellate court and reversed the factual finding. Thirdly,
assuming that the High Court could go into this issue in its writ
jurisdiction, yet in our opinion, mere perusal of the finding of
the High Court would go to show that no proper service much
less effective service of notice of demand and sale of land B
was made on the appellants. In other words, reading of
 reasoning and discussion of the High Court cannot allow us to
 reach to a conclusion that the appellants were duly served of
 the notices. Rather it would take us to a conclusion that the
 appellants were not properly served. Fourthly, the writ court c
 did not assign any cogent reason as to why the factual finding
 of the Board on this issue was wrong and hence, call for
 interference. Fifthly, when we, on our part, have examined the
 issue of notice independently in the light ofthe requirement of
 Section 72 read with Rules 133, 134, 136 and 136-A which o
 deals with the mode of effecting service on the defaulting
 landholder, then we have rio hesitation in recording a finding
 that no notice was served on the appellants as contemplated
  under the aforementioned provisions.
      25. It is an admitted fact that there was no personal E
service of any notice effected on the appellants. It is on record
that the process server said that he, therefore, displaced the
notice in the office of Mauzadar. There is no evidence much
less a conclusive one to prove that when the appellants could
not be served personally then whether notices were served on F
any adult member of the appellants' family and, if so, what were
the names of those adult members, what was their age, their
relation with the appellants, whether they were living in the
same house in which the appellants were residing. Whether
notice was served in presence of any witness residing· in area G
and who were those witnesses and why these details were
 not mentioned in the service report. In any case, in the absence
of this material evidence, it was rightly held by the Board that
 no notice of either demand or/and sale of land was served on
                                                                  H
200         SUPREME COURT REPORTS                   [2014] 13 S.C.R.


A the appellants and the High Court ought not to have interfered
  with this finding of fact for holding otherwise.
            26. In our considered opinion, there lies a distinction
      between non-service of notice and a notice though served but
      with some kind of procedural irregularities in serving. In the
8     case of former category of cases, all consequential action, if
      taken would be rendered bad in law once the fact of non-service
      is proved whereas in the case of later category of cases, the
      consequential action, if taken would be sustained. It is for the
      reason that in the case of former, since the notice was not
C     served on the person concerned he was completely unaware
      of the proceedings which were held behind his back thereby
      rendering the action "illegal" whereas in the case of later, he
      was otherwise aware of the proceedings having received the
      notice though with procedural irregularity committed in making
D     service of such notice on him. If a person has a knowledge of
      the action proposed in the notice, then the action taken thereon
      cannot be held as being bad in law by finding fault in the manner
      of effecting service unless he is able to show substantial
      prejudice caused to him due to procedural lapse in making
E     service on him. It, however, depends upon individual case to
      case to find out the nature of procedural lapse complained of
      and the resultant prejudice caused. The case in hand falls in
      former category of case.
F      27. In our considered opinion, therefore, it is mandatory
  on the part of the State to serve a proper notice to a person,
  who is liable to pay any kind of State's dues strictly in the
  manner prescribed in the Regulation. It is equally mandatory
  on the part of the State to give prior notice to the defaulter for
  recovery of dues before his properties (moveable or/and
G immoveable) are put to sale in the manner prescribed in the
  Regulation.
            28. It is a settled principle of law that no person can be
      deprived of his property or any interest in the property save by
H
    SRI PRABIN RAM PHUKAN v. STATE OF ASSAM                      201


authority of law. Article 300-A of the Constitution recognizes A
this constitutional right of a person, which was till 1978
recognized as the fundamental right of a citizen. Indeed whether
fundamental or constitutional, the fact remains that it has always
been recognized as a right guaranteed under the Constitution
in favour of a citizen/person and hence no person cannot be B
deprived of this valuable right which Constitution has given to
him save by authority of law.
      29. In the case in hand, we find that the appellants were
deprived of the land in question without following the procedure
prescribed in law because the so-called auction was C
conducted by the State behind their back and without their
knowledge. The action of the State was thus clearly violative
of the appellants' Constitutional right guaranteed under Article
300-A and hence such action can not be sustained in law.
                                                                 D
     30. In our considered opinion, the action taken by the
State for realization of arrears of land revenue dues from the
appellants is also bad in law yet for another reason which
neither the Board nor the High Court took note of it.
        31. Section 69 empowers the Deputy Commissioner to E
  recover the arrears of land revenue payable by any landholder
  by directing attachment and sale of so much of his moveable
. property as may be necessary to satisfy the dues.
      32. We, however, find from the record that no attempt
was made by the Deputy Commissioner to attach the F·
appellants' any moveable property for realization of dues and
even if he claimed to have made any such attempt yet there is
nothing on record to show as to why he was compelled to take
recourse to Section 70 for sale of land in question. Indeed
such action on the part of Deputy Commissioner was in G
contravention of Section 70 (1) because no auction of estate
(land) could be made unless he was of the opinion that process
provided in Section 69 was not sufficient for the recovery of
entire arrears. In other words, it was necessary for the State to
                                                                  H
202         SUPREME COURT REPORTS                 (2014} 13 S.C.R.

A have justified their action by showing that s;ncere attempt was
  made to first sell the appellants' moveable as per the procedure
  prescribed in Section 69 and when it was noticed that it was
  not possible to recover the arrears by sale of all attached
  moveables, the extreme step of recovery of arrears by sale of
B estate was taken by taking recourse to the procedure
  prescribed in Section 70.
        33. There is nothing on record to show as to why the
  extreme step to recover a small sum of Rs.731.70 paisa was
  required to be taken for sale of the estate under Section 70
C and why arrears of Rs.731.70 paisa could not be recovered
  by sale of any moveable belonging to the appellants. It is
  inconceivable to think that the appellants did not own moveable
  which would not have even fetched Rs.731/-on sale or would
  have fetched less amount.
D
        34. We are, therefore, of the considered opinion that
  the auction held by the Deputy Commissioner for realization
  of dues by sale of land in question under Section 70 was bad
  in law being held in contravention of Section 70 (1) ibid and
E was thus not sustainable.
            35. In our considered opinion there is yet another legal
      infirmity in conducting of the auction by the Deputy
      Commissioner for realization of dues which renders the auction
      sale bad in law.
F       36. It is a trite law that taking recourse to auction
  proceedings for sale of defaulter's immovable property for
  realization of the State dues is an extreme remedy. It is also
  discern able in the facts of this case when we read Sections
  69, 70 and Rule 155. Time and again this Court has held that
G once the State take recourse to a remedy of disposing of the
  defaulter's property by means of public auction as provided in
  Regulation for realization of State dues then its dominant
  consideration should always be to secure the best price for
  the property put to sale. This can, however, be achieved only
H
     SRI PRABIN RAM PHUKAN v. STATE OF ASSAM                        203


when there is maximum public participation in the process of A
sale and every one has an opportunity to offer the best offer to
purchase the property. The reason is that the public auction
held after adequate publicity ensures participation of every
person interested in purchasing the property and in that
process, the State and, in turn, the defaulter gets the best price B
of his property which was put to auction sale. [See Chairman
and Managing Director, SIPCOT, Madras and Others vs.
Contromix Pvt. Ltd., (1995) 4 SCC 595 and Haryana
Financial Corporation and Anothervs. Jagdamba Oil Mills
and Another, (2002) 3 SCC 496]                          C
      37. Keeping this well settled principle in mind and
applying the same to the facts of this case, we find that the
auction was not held by the Deputy Commissioner in
conformity with the aforesaid principle. It seems that the auction
was held only on papers to show compliance of the Rules to D
enable the State to invoke Rule 141 ·and acquire the land for
Rs.1/- as provided therein.As a matter of fact, no efforts were
made by the State to file any document to prove that adequate
publicity was given on all adjourned dates and despite such
publicity no bidder participated in ~he auction. It is indeed E
inconceivable that a land in Kamrup district when put to auction
sale despite publicity would go unnoticed and no person would
come forward to bid for such land. It appears to us that the
State had decided to allot the land to the IOC, who were
interested to use the land for their own purpose and hence F
recourse to remedy of disposal of land by auction as provided
in Section 70 followed by invocation of Rule 141 was taken to
acquire the land on payment of Rs.1 /-by the State and then its
major part was allotted to the IOC on payment of yearly premium
and further payment of compensation by the IOC.                    G
       38. In our considered opinion, therefore, the auction held
by the State was neither legal and nor in conformity with the
requirements contained in the Regulation. It was, therefore,
rightly set aside by the Board.
                                                                    H
204          SUPREME COURT REPORTS                 (2014] 13 S.C.R.


A           39. In the light of the foregoing discussion, the appeals
      succeed and are hereby allowed. The impugned judgment is
      set aside and that of the Board restored. As a consequence,
      the writ appeal and the writ petition filed by the State stand
      dismissed.
B         40. We direct the State (respondent no. 1) to pay the
  amount of compensation deposited by the IOC for the land
  allotted to them to the appellants along with interest on the
  said amount at the rate of 6 % payable from the date of deposit
  till paid to the appellants. The State is also directed to restore
C the possession of the remaining land, i.e., the land excluding
  the land allotted to IOC to the appellants within three months
  after making proper verification and demarcation of the land
  in question.

D
      Nidhi Jain                                      Appeals allowed.