LAKSHMANASAMI GOUNDERversusC.I.T. SELVAMANI AND ORS.

                 LAKSHMANASAMIGOUNDER                                   A
                                 v.
                 C.I.T. SELVAMANI AND ORS.

                       NOVEMBER 1, 1991

     (S.RATNAVAL PANDIAN AND K. RAMASWAMY, JJ.]                         B

     Tamil Nadu Revenue Recovery Act, 1894:~

      Sections 36 & Forms 7 and 7A-Omission of specification ofplace
of sale-Sale rendered irregular and invalid.
                                                                        c
     The appellant was alleged to have misappropriated a sum of
Rs. 12,163.50 [though acquitted of the charge of misappropriation]
and for the recovery thereof his 13.07 acres of. coffee estate was
brought to sale under the Tamil Nadu Revenue Reco'Very Act, 1894.

      On March 30,1979 the sale by public auction was held by the       D
Tebsildar. The first respondent purchased the said estate for a sum
of Rs. 12,225 and deposited a sum of Rupees 2000 being 15% of the
sale price. Under section 36 of the Act, be should have deposited the
balance consideration within 30 days from the date of the auction.
This sale was confirmed on October 23,1981 and the balance amount       E
was deposited on November 4, 1981.

      So the appellant filed an application to set aside the sale but
the Revenue Divisional Officer overruled the objections and dis-
missed tlie application. On appeal to Additional District Collector
on October 13, 1982, the sale was set aside. So 'the first respondent   F
filed writ petition in the High Court and the single High Court
Judge quashed the order of the Additional District Collector. The
writ appeal by t'1e appellant to the Division Bench was also dis-
missed. Hence the appellant came to this Court.

      The appellant urged that under section 36 of the Act it is        G
mandatory that the date and place of sale 'shall' be published in the
Gazettee and that the publication did not mention the place of sale
so the sale is invalid in law. It was further submitted that it was
equally mandatory that the balance sale consideration of 85% should
be deposited within 30 days from the date of sale which was done by
the first respondent only on November 4, 1981 long after one year       H

                                 181
      182              SUPREME COURT REPORTS            (1991) SUPP. 2 S.C.R.

 A   and eight months of the date of sale and therefore illegal. While the
     first respondent contended tha~ it was Form 7 and not Form 7A that
     would be applicable to the facts of the instant case and that Form 7
     contains the place of salt: and that it was complied with. Therefore,
     the said sale is .not illegal. It was further submitted that the deposit
     was made after protracted correspondence and that the non-deposit
 B   within 30 days from .the date of sale is not illegal since the deposit
     was accepted by the authority. Therefore the confirmation of the
     sale is not illegal.
          Granting the special leave, dismissing the writ Petition, setting
     aside the Judgment of the High Court, and restoring the order of
 c   the Additional District Collector, the Court
                                                                                    l~
        HELD: That in the instant case, the High Court has wholly
   misconceived section 36 of the Act. A reading of the said section
   manifests that the word 'shall' is mandatory in the context. The
   publication is an invitation to the intending bidders to prepare an"
   participate at the bid. Unless there is due publication of lhe date
D and the place of sale, the intending purchasers cannot be expected
   to run after the sale officer. The sale officer has a statutory duty
  and a responsibility to have the date and place of sale mentioned in
  the notice giving due publication in terms of the Act and the Rules.
  Public auction is one of the modes of sale intending to get highest
  competitive price for ~he property and it also ensures fairness .in
E actions of the public authorities or the sale officers who should act
  fairly objectively and kindly. Nothing should be suggestive of bias
  favouritism nepotism or beset with suspicious features of under bid-
  ding detrimental to the legitimate interest of the debtor. [184 F, G -
  185 A]
F        Further it is settled law that the word 'shall' be construed in
   the light of the purpose of the Act or Rule that seeks to serve. Even
   though tbe word 'shall' be ordinarily mandatory but in the context
   or if the intention is otherwise it may be construed to be directory.
   The construction ultimately depends upon the provision itself. Con-
   sidered from this prospertive of non-compliance of section 35 that is
G omission to mention the place of sale would visit the deprivation of
   the property to the debtor for an adequate consideration due to
  absence of competing bidders. Hence the specification of the date &
  place of sale 'shall' be mandatory. The forms either 7 or 7A are
  only procedural and they should be in conformity with section 36.
  The form cannot prevail over the statute. The omission of !lpecifica-
H tion of the place of sale in the form renders the sale not DJerely
  irregular but also invalid. [185 C; H - 186 BJ

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                      LAKSHMANASAMI v. C.l.T. [RAMASWAMY, J.]            183

              Equally the second objection is insurmountable. It is manda-      A
       tory that the balance of the sale amount shall be remitted within 30
       day• from the date of auction and if not the earnest money depos-
       ited 'is liable to forfeiture. Section 36 mandates remittance of the
       balance of 8So/o of the sale consideration within 30 days from the
       date of auction. It is obligatory on the purchaser to deposit the
       amount within the period unless prevented by an order of the Court       B
       or Tribunal~So the confirmation of sale without compliance is ille-
       gal and the s~ e is vitiated by m~nifest error of Law & rightly set
       aside by the A itional District Magistrate. The High Court bas
       committed error        law in interfering with the order of the appel-
       late authority. [186 -DJ
                                                                                c
               CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4380 of
       1991.

            From the Judgment and Order dated 10.4.1991 of the Madras High
       Court in Writ Appeal No. 38of1991.
                                                                                D
               K. Parasaran, K.V. Vijaya Kumar and V. Bala Chandran for the
       Appellants.

               C.T. Selvamani and P.P. Tripathi for the Respondents.

               The Judgment of the Court was delivered by                       E
               K. RAMASWAMY, J. Special Leave is granted.

              This appeal is against the judgment dated April 4, 1991 of the Ma-
        dras High Court. A sum of Rs.12,163.50 p. was alleged to have been
        misappropriated by the appellant (now be was acquitted of the charge of F
        misappropriation) and for the recovery thereof bis 13.07 acres of coffee
        estate situated in Semmanthaputbur village was brought to sale under the
        Tamil Nadu Revenue Recovery Act, 1894 (for short 'The/Act'). On March
...     30, 1979 the sale by auction was held by the Tahsildar. The first respond-
        ent purchased for a sum of Rs. 12,225 and deposited a sum of Rs.2,000
        being 15 per cent of the sale price. Under Sec. 36 of the Act, the first G
        respondent should have deposited the balance consideration within 30
        days from the date of the auction. On October 23,1981 the sale was
        confirmed and the balance amotint was deposited on November 4, 1981.
        The appellant filed an application but by proceeding dated October 23,
      · 1981, the Revenue Divisional Officer overruled the objections and dis-
        missed the application. On appeal the Addi. Distt. Collector, Salem set H .
        aside the sale on October 13,1982. The first respondent filed writ petition
     184                 SUPREME COURT REPORTS              [1991} ~UPP. 2 S.C.R.

A    No. 246of1984 in the High Court. The learned Single Judge by judgment
     dated August 21, 1990 quashed the order of the Addi. Dist. Collector. On
     writ appeal, the Division Bench dismissed it. Thus this appeal.

          The fonnidable objection raised by the appellant is that it is manda-
    tory under Sec.36 that the date and place of sale shall be published in the
B Gazette and that the publication did not mention the place of sale. There-
   fore, the sale is invalid in law. It is also his further plea tJiat it is equally
                                                                                       f
   mandatory that the balance sale consideration of 85% should be deposited
   within 30 days from the date of sale which was done only on November 4,
    1981 long after one year and eight months of the date of sale. The sale
   and confinnation thereof are, therefore, illegal. The learned Single Judge
C and the Division Bench held that Fonn 7A of the fonns prescribed under
   the Act read with relevant provisions of the Board Standing Order No.41
   does not prescribe the place of sale and that, therefore, the omission tO
   specify the place of sale does not render the sale invalid nor an irregular-
   ity. Shri Selvamani, the first respondent-in-person {himself a practising
   Advocate) contended that it is Fonn 7 and not Fonn 7 A that would be
D applicable to the facts of the case. Form 7 contains the place of sale and
   that it was complied with. Therefore, the sale is not illegal. It is also
   contended that the deposit was made after protracted correspondence and
   that, therefore, the non-deposit within 30 days from the date of sale is not
   illegal. At any rate, having accepted the amount, the authority acquiesced ·
  to the deposit. Therefore, the confirmation of the sale is not illegal. We
E find no substance in either of the contentions. The contenion that Form 7
  and not Form 7A would be applicable to the facts, is not the case set up or
  argued either before the authorities or the courts below. For the first time
  he cannot raise that plea in this Cqurt. That apart specifically the High
  Court (learned Single Judge and the Division Bench) held that it is fonn
  7A that is applicable and that it does not prescribe publication of place of
F sale and therefore, the omission thereof does not render the sale invalid.
  The High Court wholly misconceived of Sec.36. A reading of Sec. 36
  manifests that the word 'shall' is mandatory in the context.

          The publication is an invitation to the intending bidders to prepare
    and participate at the bid. Unless there is a due publication of the date and
G   place of sale, the intending purchasers cannot be expected to run after the
    Sale Officer to find out the date and place of sale and to participate
    thereat. The Sale officer has a statutory duty and a responsibility to have
    the date and place of sale mentioned in the notice and given due publica-
    tion in terms of the Act and the Rules. Public auction is one of the modes
    of sale intending to get highest competitive price for the property. Public
H   auction also ensures fairness in actions of the public authorities or the sale
                                                                                       (
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                LAKSHMANASAMlv. C.I.T. [RAMASWAMY,J.]                         185

  officers who should act fairly, objectively and kindly. Their action should        A
  be legitimate. Their dealing should be free from suspicion. Nothing should
  be suggestive of bias, favouritism, napotism or beset with suspicious fea-
  tures of underbidding detrimental to the legitimate interest of the debtor.
  The fair and objective public auction would relieve the public authorities
  or sale officers from above features and accountability. Any infraction in
  this regard would render the sale invalid.                                         B

          It is settled law that the word 'shall' be construed in the light of the
   purpose the Act or Rule that seeks to serve. It is not an invariable rule that
   even though the word 'shall' is ordinarily mandatory but in the context or
   if. the intention is otherwise, it may be construed to be directory.The
   construction ultimately depends upon the provisions itself, keeping in            •C
   view the intendment of the enactment or of the context in which the word
   'shall' has been used and the mischief it seeks to avoid. Where the conse-
   quence of failure to comply with any requirement of a provision is pro-
   vided by the statute itself, the consequence has to be detennined with
   reference to the nature of the provision, the purpose of enactment and the
  effect of non-compliance thereof. In its absence the consequence has to be         D
  detennined with reference to the effect of the non-compliance of the
  provision of the legislature. Mere use of the word 'shall' need not be
  given that connotation in each and every case· that the provision would be
  invariabl)I interpreted to be mandatory or directory. But given due consid-
   eration to the object, design, purpose and scope of the legislation, the
   word shall be construed and interpreted in that design and given due              E
   emphasis. Sec.36 obligates the Sale Officer (fahsildar) that he shall pub-
  lish the date and place of sale.The object thereby is an invitation to the
  public at large that the notified property would be brought to sale at that
  specified time and place and that they are invited to participate, if they so
  desire; To reiterate for emphasis and continuity that the object of the sale
  is to secure the maximum price and to avoid arbitrariness in the procedure         F
  adopted before sale and to prevent underhand dealings in effecting sale
  and purchase of the debtor's property. As a responsibility as sale officer
  and a duty towards the debtor, the sale officer should conduct the sale
  strictly in conformity with the prescribed procedure under the statute and
  the rules as the case may be. Such due and wide publicity would relieve
  the debtor from the maximum liability he owes and payable to the credi-            G
  tor. This responsibility is not only salutory to vouchsafe bonafides in the
  conduct of the sale officer but also to ensure fairness in the procedure
. adopted in bringing the property of the debtor to sale. Considered from
  this perspective the non-compliance of Sec.35 .i.e., omission to mention
  the place of sale would visit with deprivation of the property to the debtor
                                                                                     H
           186                SUPREME COURT REPORTS              (1991) SUPP. 2 S.C.R.

      A    for an inadequate sale consideraion due to absence of competing bidders.
           Thus, we hold that specification of the date and place of sale shall be
           mandatory. The forms either 7 or 7A are only procedural and they should
           be in conformity with Sec. 36. The form cannot prevail over the statute.
           The omission of specification of the place of sale in the form renders the
           sale not merely irregulate but also invalid.
      B
                 Equally the ~econd objection is insunr.ountable. It is mandatory that
           "the balance of the sale amount shall be remitted within 30 days from the
           date of auction" and if not the earnest money deposited is liable to forfei-
           ture. Confirmation of the sale should precede the deposit of the sale
           amount. Sec. 36 mandates remittance of the balance of 85%· of the sale
      C consideration within 30 days from the date of auction. It is obligatory on
           the purchaser to deposit the amount within that period unless he is pre-
           vented by an order of the court or tribunal from so making deposit. The
, I       non-compliance renders the 15% deposit liable to forfeiture. Therefore,
          the confirmation of the sale without compliance is illegal. We hold that
          the sale is vitiated by manifest error of law and rightly set aside by the
      D Adell. Dist. Collector, Salem (Appellate Authority). The High Court, both
          the learned Single Judge and the Division Bench committed menifest error
          of law in interfering with the order of the appellate authority. The appeal
        . is accordingly allowed. The writ petition stands dismissed and that of the
          order of the Adell. Distt. Collector, Salem restored, but in the circum-
          stances parties are directed to bear their own costs throughout.

           S.B.                                                      Appeal allowed.