STATE OF U.P. & ORS.versusM/S. JASWANT SUGAR MILLS LTD. & ORS.ETC.

                         [2014] 9 S.C.R. 838


A                      STATE OF U.P. & ORS.
                                   v.
        M/S. JASWANT SUGAR MILLS LTD. & ORS.ETC.
               (Civil Appeal Nos. 6169-6171 of 2013)

B                          JUNE 30, 2014.

           [SUDHANSU JYOTI MUKHOPADHAYA AND
                   KURIAN JOSEPH, JJ.]

c        Compensation: Dispute relating to payment of
    compensation pursuant to acquisition of land of respondent-
    company and auction of part of the land of the company - In
    the instant case, respondent company was in heavy arrears
    and a receiver was appointed - Company was acquired on
D   28th October, 1984 under Sugar Undertakings (Acquisition)
    Act, 1971 - State Government extended a facility of loan to
    the extent· of Rs. 6. 13 crores to the receiver - Meanwhile,
    land owned _by respondent company acquired for the
    Development Authority - On 20th February, 1992, District
E   Collector ordered to pay the compensation amount to the
    Company after adjustment of different dues payable by the
    Company - Challenged - Held: It is always open to the
    competent authority to seek recovery of the amount if due
F   from the Company or to adjust the dues - The Collector was
    not a party by name - Order dated 20th February, 1992
    passed by the Collector was also not under challenge, inspite
    of the same the High Court declared the said order as illegal
    - High Court's order set aside - Matter remitted to the District
G   Collector to determine the liability of the Company upto the
    date of vesting i.e. 28th October, 1984 after notice to the
    parties.



H                                838
  STATE OF U.P. v. JASWANT SUGAR MILLS LTD.                 839


                                                                   A
      Interest: Auction of part of land - Auction sale set aside
- Refund of amount to auction purchaser - Claim for interest
- Held: There was no mis-representation on the part of the
auction purchasers; they deposited the total auction amount
within the time stipulated - The title of the land was also        B
transferred in their favour - But for the reasons mentioned
by the High Court the sale was cancelled - Auction purchaser
is entitled to interest on the refund amount on equitable
grounds @ 6% P.A.
                                                                   c
    Disposing of the appeals, the Court

     HELD: 1. The High Court though noticed that Section
8 of the U.P. State Sugar Undertakings (Acquisition) Act,
1971 empowers the prescribed authority to decide any               o
dispute regarding the amount payable to any person or
authority in respect of earlier liabilities of the undertaking,
but it wrongly held that in view of the provisions of the
Act of 1971, any liability incurred by the Company or loan
etc. taken by the receiver is not payable by the Company.          E
It is always open to the competent authority to seek
recovery of the amount if due from the Company or to
adjust the dues. The Collector was not a party by name.
The order dated 20th February, 1992 passed by the
Collector was also not under challenge, inspite of the             F
same the High Court declared the order as illegal. The
matter is remitted to the District Collector, Meerut to
determine the liability of the Company upto the date of
vesting i.e. 28th October, 1984 after notice to the parties.
The authority while so determining shall take into                 G
consideration the liability of the Company as on 28th
October, 1984. After determination of liabilities and
adjustment of the dues which is payable by the
Company, if any amount is found payable to the
                                                                   H
    840      SUPREME COURT REPORTS             [2014] 9 S.C.R.


A
    Company, the appellant shall pay the amount within four
    months from the date of determination. [Paras 31 to 34]
    [850-8-H]

B        2. No fault can be found with the impugned judgment
    of the High Court so far as the setting aside of the sale
    is concerned. In a situation like in the present case, one
    cannot hold of any statute entitling the auction
    purchasers to claim interest, in case the auction got
C   cancelled or set aside by the Court of law. The question
    arises as to whether in such a situation an auction
    purchaser can claim interest on equitable ground. In the
    present case, there was no mis-representation on the part
    of the auction purchasers; they deposited the total
D   auction amount within the time stipulated. It has not been
    in dispute that the title of the land was also transferred
    in their favour. But for the reasons mentioned by the High
    Court the sale has been cancelled. It has been ordered
    to refund the amount in favour of the auction purchaser-
E   appellant(s). There is no reason as to why on equitable
    grounds the appellants should not get interest on the
    said amount. Taking into consideration the said factor
    while working out equities, the State is directed to pay
F   interest @ 6% on the amount to be refunded as per the
    High Court's order. [Paras 40, 42 and 44] [854-C, E; 855-
    G]
       State of Maharashtra and Ors. v. Maimuma Banu and
G Ors. (2003) 7 SCC 448: 2003 (2) Suppl. SCR 228 -
  referred to.

                      Case Law Reference;

          2003 (2) Suppl. SCR 228    referred to    Para 43
H
                                                              \




  STATE OF U.P. v. JASWANT SUGAR MILLS LTD.                841


    CIVIL APPELLATE JURISDICTION : Civil Appeal No.               A
6169-6171 of 2013.

     From the Judgment and Order dated 01.03.2011 in WP
No. 10220/1996, WP No. 31378/1996, WP No. 13322/1997
of the High Court of Judicature at Allahabad.                     B


                            WITH

C.A. Nos. 6172-6174/2013, 7122/2003, 7123-7124/2003,
7125/2003, 7126-7129/2003.                                        c
     Pramod Swarup, Dinesh Dwivedi, Vinay Garg, Tanmaya .
Agarwal, Naveen R. Nath, Anupam Lal Das, Amit Sharma,
Anirudh Singh, Parthiv Goswami, Dipesh Sinha, S. Chandra D
Shekhar, R.D. Upadhyay, Ajay Bansal, Kuldip Singh, Gaurav
Yadav, Paraduman Singh, Ardhendumauli Kumar Prasad,
Prateek Dwivedi, Manish Shanker Srivastava, Krishnan Mishra,
Pawan Shree Agrawal, Vivek Singh, Adarsh Upadhyay for the
appearing parties.                                           E

    The Judgment of the Court was delivered by

     SUDHANSU JYOTI MUKHOPADHAYA, J. 1. In these
appeals the dispute relates to payment of compensation            F
pursuant to acquisition of land of respondent-Mis. Jaswant
Sugar Mills Ltd. (hereinafter referred to as the "Company") and
auction of part of the land of the Company. There being cross-
claims, all of these appeals were heard together for              G
determination by a common judgment.

     2. The Company preferred two writ petitions challenging
the orders passed by the District Magistrate/Collector, Meerut
    842     SUPREME COURT REPORTS                  [2014] 9 S.C.R.


A    and Board of Revenue dated 18th December, 1995 and 3rd
    August, 1996 respectively. The aforesaid orders were also
    ·challenged by the State Government. The writ petitions were
     disposed of by the learned Single Judge of Allahabad High
B    Court by a common judgment dated 1st March, 2011. By the
     said judgment, the High Court directed the State Government
     to pay the Company the compensation on the basis of the
     compromise reached between the State Government and the
     tenure holder Company for acquisition of their land by Meerut
C    Development Authority. It is also directed that out of
     compensation paid by the Meerut Development Authority (about
     Rs.4.33 crores) an amount of Rs.1.62 crores shall be deducted
     and the remaining amount shall be paid to the Company. The
D    State has been given liberty to realize the said amount from
    those authorities to whom it was wrongly paid by the previous
     Collector, Tulsi Gaur, under his order dated 20th February,
     1992. The impugned judgment dated 1st March, 2011 has been
     challenged by the State of U.P. in C.A. Nos.6169-6171 of 2013
E    (State of U.P. & ors. Vs. Mis. Jaswant Sugar Mills Ltd. &
    Ors.etc.), as also by M/s. Jaswant Sugar Mills Ltd. in C.A. Nos.
    6172-6174 of2013 & Ors. (Mis. Jaswant Sugar Mills Ltd. vs
    The Colletor/District Magistrate & Ors.).
F
      3. A piece of land of the Company was put to auction for
  recovery of dues of the Company. It was challenged by the
  Company by filing a writ petition. The High Court by impugned
  judgment dated 27th April, 2001 cancelled the auction sale
G and allowed the writ petition. In a review application preferred
  by auction purchaser, the High Court by order dated 3rd
  September, 2001 directed the respondents to refund the
  amount to the auction purchasers. The aforesaid judgment and

H
  STATE OF U.P. v. JASWANT SUGAR MILLS LTD.                   843
     [SUDHANSU JYOTI MUKHOPADHAYA, J.]
orders are under challenge in C.A. Nos.7122 of 2003, 7123-            A
7124 of 2003, 7125 of 2003 and 7126-7129 of 2003.

C.A.Nos.6169-6171 of 2013 and C.A.Nos.6172-6174 of
2013.
                                                                      8
     4. For detelrmination of the issue involved in C.A.
Nos.6169-6171 of 2013 and C.A. Nos. 6172-6174 of 2013, it
is desirable to refer the relevant factual matrix of the case which
is as follows:

    The proprietors of respondent Company, namely M/s.                C
Jaswant Sugar Mills Ltd. had six business units as under:

      (i)     Mis. Jaswant Sugar Mills.

      (ii)    Meerut Straw Board Mills.
                                                                      D
      (iii)   Pootha Farm.

      (iv)    Northern India Paper Mills.

      (v)     Bindal Vanaspati Ghee Mills.
                                                                      E
      (vi)    Meduwala Open Pan Sugar, Bijnor.

     The Company was in heavy arrears as on 3rd January,
1977 to the extent of Rs.1.14 crores. Accordingly, the District
Collector, Meerut appointed a Receiver under Section 286-A            F
of U.P. Zamindari Abolition and Land Reforms Act,(hereinafter
referred to as the "Zamindari Abolition Act").

     5. Subsequently, the Company was acquired by the State
on 28th October, 1984 as per provisions of the U.P. State
Sugar Undertakings Acquisition Act, 1971 (hereinafter referred        G
to as the "Acquisition Act, 1971 "), as amended in the year
1984, free from all encumbrances and the said Unit was vested
with the U.P. State Sugar Corporation (hereinafter referred to
as the "Corporation").
                                                                      H
    844      SUPREME COURT REPORTS                  [2014] 9 S.C.R.


A      6. Since, the Company was in arrears to the extent of
  Rs.1.29 crores, the District Collector, Meerut by order dated
  28th November, 1984, attached all the remaining five
  constituent units except the Sugar Mill. The General Manger of
  the aforesaid Sugar unit was appointed as a Receiver with
B reference to all the aforesaid remaining five units. In between
  1977 to 1984, for smooth functioning of the Sugar Mill, payment
  of dues to sugarcane grower, repairing of machinery etc., on
  the request of the Receiver, the State Government granted loan
  of Rs.6.13 crores to the Company, and was to be recovered
c as the arrears of Land Revenue along with interest.

       7. The District Collector, Meerut taking into consideration
  the dues to the extent of Rs.1.62 crores as on 24th October,
  1990 were to be paid by the Company, extended the tenure of
  the Receiver till further orders. The order of the extension of
D tenure of the Receiver was challenged by the ex-proprietors of
  the Company in a Writ Petition No.18496/1991. Subsequently,
  the Receiver was withdrawn on 18th December, 1995,
  therefore, the writ petition was also withdrawn.

E       8. Pursuant to "Uttar Pradesh imposition of Ceiling of Land
    Holdings Act" (hereinafter referred to as the "Ceiling Act"), land
    admeasuring 723.3 bigha belonging to the Company was
    declared surplus. Against the same a Writ Petition No.3905/
    1987 was preferred by the Company.
F      9. During the pendency of the aforesaid writ petition the
  State Government issued a Notification dated 14th August,
  1987 under Section 4 read with Section 17(4) of the Land
  Acquisition Act, 1894 for the Meerut Development Authority. It
  was followed by a Notification dated 4th September, 1987
G issued u/s 6 of the Acquisition Act. The said Notification
  included the land of M/s Pootha Farm, a constituent unit of the
  Company. In the said case compensation amount of Rs.4.33
  crores was awarded by Special Land Acquisition Officer vide
  award dated 22nd February, 1990.
H
  STATE OF U.P. v. JASWANT SUGAR MILLS LTD.                  845
     [SUDHANSU JYOTI MUKHOPADHAYA, J.]
     10. The District Collector, Mee rut, pursuant to a report of   A
the Tehsildar, ordered to pay the compensation amount after
adjustment of different dues payable by the Company.

    11. Pursuant to a Court's order, the District Collector,
Meerut passed a speaking order dated 20th February, 1992
                                                                    8
showing the details of adjustments to be made out of
compensation amount of Rs.4.34 crores payable by the
Company, as detailed below:

     1. Labour Dues and others         Rs.1,39, 72,300.83
                                                                    c
     2. Sales Tax                      Rs. 40, 18,401.00

     3. Payments towards Loan          Rs.2,54,04,080.57

                                       Total Rs.4,33,94,783.40
                                       -----------------            D

     The District Collector in the said order dated 20th
February, 1992 concluded that after such adjustment the
following dues were still to be paid by the Company.
                                                                    E
     1. Payments towards loan           Rs. 3,59,83,381.43

     2. Income Tax                      Rs. 79,14,781.00

     3. Levy Price(Central Govt)        Rs. 38,64,000.00
                                                                    F
     4. House Tax                       Rs. 6,23,605.49

     5. Railway Dues                    Rs. 2,54,570.40

     6. Cane Commissioner                Rs. 45, 11,400.00
                                                                    G
     7. Provident Fund                  Rs. 55,25,769.59

     8. Labour Dues                     Rs. 44,856.60

     9. E.S.I.                          Rs. 72,624.00
                                                                    H
    846      SUPREME COURT REPORTS                 [2014] 9 S.C.R.


A         10. Labour Dues( other units)     Rs. 20,73,704.78

          11. Purchase Tax                  Rs. 1,05,518.69

                    Total                   Rs. 6,09,74,211.98
B                                           ================="
       12. The State Government filed the deduction statement
  for recovery of the dues before the prescribed authority
  constituted under U.P. Sugar Undertaking (Acquisition) Act,
  1971. However, the aforesaid claim was rejected by the
C prescribed authority by order dated 4th October, 1994 in Claim
  No.13 of 1999.

        13. Against the said order dated 4th October, 1994
  passed by the prescribed authority, the appellant filed Appeal
D No.1 /95 before the Appellate Tribunal. By order dated 12th
  October, 1995, the Appellate Tribunal directe~e appellant to
  file a fresh deduction claim before the prescribed authority.

       14. The Company moved an application before the District
  Collector, Meerut stating therein that as on date there are no
E arrears/liability payable by the Company, therefore, requested
  to remove the Receiver.

       15. The District Collector, Meerut by order dated 18th
  December, 1995, allowed the case No.30/1995 with
F observation that as on the date no recovery certificate was
  pending against the Company. Hence, the appointment of
  Receiver was terminated with immediate effect. It 11.1as further
  ordered that a detailed list of the assets be prepared and
  signed by both the parties and the assets be transferred to the
G Company. An order was passed to appoint a Chartered
  Accountant to complete the audit of the accounts.

         16. As the order dated 18th December, 1995, passed by
    the District Collector, Meerut is silent about the amount payable
    to the Company, the Ex-Proprietor of the Company moved an
H
  STATE OF U.P. v. JASWANT SUGAR MILLS LTD.                 847
     [SUDHANSU JYOTI MUKHOPADHAYA, J.]
application before the Chairman Board of Revenue and                A
requested to refund the compensation amount to the Company.

     17. The Company filed a Writ Petition No.10220/1996
before High Court for modification of the order of the District
Collector, Meerut dated 18th December, 1995.
                                                                    B
     18. During the pendency of the said case, the Chairman,
Board of Revenue, by order dated 3rd August, 1996 directed
that out of the total amount of Rs.4.33 crores received as
compensation from Meerut Development Authority, after
deduction of a sum of Rs.1.62 crores along with interest and        C
collection charges the balance amount shall be refunded to the
Company.

     19. Against the aforesaid order dated 3rd August, 1996
passed by the Chairman, Board of Revenue, the Company filed         D
Writ Petition No.31378/1996 on the ground that there is no dues
payable by the Company. In the said case the U.P. State Sugar
Corporation Ltd. filed a counter affidavit refuting such stand
taken by the Company.

     20. A separate counter affidavit was filed by the Deputy       E
Secretary, Sugar and Cane Development, Lucknow, giving
details of dues payable by the Company as detailed by the
District Collector, Meerut by his order dated 18th December,
1995.
                                                                    F
     21. The High Court initially passed an interim order on 17th
July, 1997 as under:

    "Considering the facts and the circumstances of the case,
    the respondents are directed to pay to Mis Jaswant Sugar
    Mills Ltd., Meerut the amount of compensation money             G
    amounting to Rs.4,33,94,783.40 after deducting a sum
    of Rs.1,62,02,402.20 + interest and collection charges
    within a period of two months from today. Payments so
    made shall be subject to final decision of the Writ
    Petition."                                                      H
    848       SUPREME COURT REPORTS                  [2014] 9 S.C.R.


A       22. Against the interim order, the appellant-State filed the
    Special Appeals.

         23. By judgment and order dated 7th July, 2010 passed
    in Special Appeal Nos.5179-80/2010, the High _Court quashed
    the interim order dated 17th July, 1997 passed by the learned
8   Single Judge. It was ordered to dispose of the writ petition
    expeditiously.

       24. In the meantime, the District Collector by its notice
  dated 22nd August, 2005, directed the Company to refund
C certain amount. The said notice was also challenged by the
  Company.

        25. The High Court by judgment and order dated 23rd
  February, 2011 quashed the notice dated 22nd August, 2005
  with direction to the appellant to pay the compensation amount
0
  to the Company. However, it was clarified that if the land, which
  have been acquired finally, does not fall within the ceiling limit
  of the Company, then it will be open for the State to recover it
  after the finalisation of the ceiling proceedings, as per law.
  Subsequently, impugned common judgment and order dated
E 1st March, 2011 was passed in Writ Petition No.31378/1996,
  etc., with observation and directions as referred to above.

          26. The grievance of the appellant-State is that the High
    Court while passing the impugned order has not noticed the
F   liability incurred by the undertaking and the loan paid to the
    Company. According to the appellant, the aforesaid issue has
    not been decided.

     27. On the other hand, learned counsel for the respondents
G made the following submissions:

          (i) No amount, whatsoever, is due and payable by the
          Company to the State. Till date, there has not been a single
          determination/adjudication by any Court/Authority of any
          dues against the Company nor is there any claim pending
H
  STATE OF U.P. v. JASWANT SUGAR MILLS LTD.                   849
     [SUDHANSU JYOTI MUKHOPADHAYA, J.]
    before any Authority or before any Court, on date.                A
    Furthermore, the State has not been able to produce any
    recovery certificate of any department showing any dues
    against the Company.

    (ii) The Collector has no power to adjudicate the dues            8
    under the U.P. Zamindari Abolition and Land Revenue Act
    and is merely a recovery agent to recover sums payable
    as arrears of land revenue, upon receipt of a valid
    Recovery Certificate.

    28. We have heard learned counsel for the parties and             C
perused the records.

      29. It is not in dispute that the Company was under heavy
arrears as on 3rd January, 1977. Therefore, the District
Collector, Meerut appointed the Receiver. Subsequently, Sugar         o
Mill of the Company was acquired on 28th October, 1984 under
Sugar Undertakings Acquisition Act, 1971 and the unit was
vested with the U.P. State Sugar Corporation.

     30. Tiii 28th November, 1984, the Company was the owner
of the units/Sugar Mill. It was in arrears to the extent of Rs.1.29   E
crores. Therefore, the District Collector, Meerut attached
remaining five constituent units and the General Manager of the
sugar unit was appointed as a Receiver. In between 1979 and
1984, the State Government extended a facility of loan to the
extent of Rs.6.13 crores to the Receiver appointed by the State       F
Government for smooth functioning of the Sugar Mill, including
payment of dues to sugarcane grower, repairing of machinery,
etc. It is also not in dispute that labour and other dues were
payable by the Company apart from Sale Tax dues and the loan
was given by the State Government between 1977-1984 for               G
payment of such dues.

      31. The High Court by the impugned judgment dated 1st
March, 2011, though noticed the aforesaid f;:icts including the
fact that the Collector, Tulsi Gaur by order dated 20th February,     H
    850      SUPREME COURT REPORTS                    [2014] 9 S.C.R.


A 1992 held that there were dues of about Rs.10.44 crores
  payable by the Company, part of which can be adjusted from
  the compensation amount paid by the Meerut Development
  Authority, even thereafter an amount of Rs.6.09 crores will
  remain payable by the Company, but the High Court failed to
B address such issue. The High Court though noticed that Section
  8 of the U.P. State Sugar Undertakings Acquisition Act, 1971
  empowers the prescribed authority to decide any dispute
  regarding the amount payable to any person or authority in
  respect of earlier liabilities of the undertaking, but it wrongly held
c that in view of the provisions of the U.P. Sugar Undertakings
  Acquisition Act, 1971 any liability incurred by the Company or
  loan etc. taken by the receiver is not payable by the Company.

       32. It is always open to the competent authority to seek
  recovery of the amount if due from the Company or to adjust
D the dues.

       33. The Collector, Tulsi Gaur was not a party by name. The
  order dated 20th February, 1992 passed by the Collector was
  also not under challenge, inspite of the same the High Court
E declared the order dated 20th February, 1992 as illegal.

        34. For the reason aforesaid, the impugned order dated
  1st March, 2011 passed by the High Court in W.P. No.10220
  of 1996 etc. cannot be upheld. The same is accordingly set
  aside. The matter is remitted to the District Collector, Meerut
F to determine the liability of the Company upto the date of
  vesting i.e. 28th October, 1984 after notice to the parties. The
  authority while so determining shall take into consideration the
  liability of the Company as on 28th October, 1984, including
  labour charges, Sales Tax, loan amount given by the State
G Government etc. if payable. After determination of liabilities and
  adjustment of the dues which is payable by the Company, if any
  amount is found payable to the Company, the appellant shall
  pay the amount within four months from the date of
  determination. On the other hand, if any amount is found
H
  STATE OF UP v. JASWANT SUGAR MILLS LTD.                 851
     [SUDHANSU JYOTI MUKHOPADHAYA, J.]
payable by the Company, the Competent authority may recover       A
the amount, in accordance with law.

C.A.No.7122 of 2003, C.A.Nos.7123-7124 of 2003 and
C.A.No.7125 of 2003.

     35. For determination of the issue involved in C.A.          B
Nos.7122 of 2003, 7123-7124 of 2003, 7125 of 2003 and
7126-7129 of 2003 relevant factual matrix of the case is as
follows:

     After giving credit of Rs.4.33 crores payable by the State c
Government on account of amounts towards compensation for
acquisition of land, the liability of the Company was determined .
at Rs.6.09 crores on 20th February, 1992. A sale proclamation
was accordingly issued. The land of the Company measuring
1.391 Hectares in village Maliyana was put to auction. The D
appellants-Mis. Rudra Estate Pvt. Ltd. and another were the
highest bidders. According to Auction purchasers, the entire
amount was paid as per highest bid. Title to the land was also
transferred in their favour.

     36. The Company being aggrieved preferred a Civil Misc.      E
Writ Petition No.16451 of 1999 before the High Court of
Judicature at Allahabad challenging the sale proclamation
dated 28th March, 1992, order dated 30th May, 1992 passed
by Sub-Divisional Magistrate, Meerut confirming the sale of the
properties owned by the Company and the order dated 5th           F
April, 1999 passed by the Commissioner, Meerut Division,
Meerut whereby the objections filed by the Company under Rule
285-1 of the Rules framed under U.P. Zamindari Abolition and
Land Reforms Act (hereinafter referred to as the "Land Reforms
Act") was rejected. The said writ petition was allowed by the     G
learned Single Judge by the impugned judgment and order
dated 27th April, 2001 with following observations:

         "For the facts and reasons stated above, this petition
    succeeds and is hereby allowed. The order dated               H
    852       SUPREME COURT REPORTS                 [2014] 9 S.C.R.


A         05.04.1999 (annexure-23), order dated 30.05.1992
          (Annexure-7), sale proclamation dated 28.3.1992
          (Annexure-2) are hereby quashed and the respondents
          are directed to restore back status quo ante as on before
          the auction sale dated 28.04.1992 was held, within a
B         period of two weeks from the date a certified copy of this
          order is communicated to the competent authority."

       37. M/s. Rudra Estate Pvt. Ltd. being aggrieved by the said
  judgment preferred review application under Order XLVll Rule
  1 CPC for review of the judgment and order dated 27th April,
C 2001 passed by the High Court. The review application was
  disposed of by an order dated 3rd September, 2001 with the
  following observations:

                "In view of the aforesaid facts and circumstances,
D         in my opinion, it will meet the ends of justice if I grant
          three months time to the respondent no.2 and 3 to refund
          the amount in question to the auction purchasers!
          application, during this time the said amount shall
          positively be paid to them. It is ordered accordingly."
E        Another application was filed by M/s. Rudra Estate Pvt.
    Ltd. under Order XIVll Rule 1 CPC for review of the order dated
    3rd September, 2001. The said review application was
    dismissed by the impugned judgment dated 15th March, 2002.

F     38. The aforesaid orders have been challenged in C.A.
  No.7122 of 2003 (M/s. Rudra Estate Pvt. Ltd. & Anr. vs. M/s.
  Jaswant Sugar Mills Ltd. & Ors.), C.A. Nos. 7123-7124 of 2003,
  C.A. No.7125 of 2003 (Shri Munindra Singh & Anr. vs. Mis.
  Jaswant Sugar Mills Ltd. & Ors.) and C.A. Nos.7126-7129 of
G 2003 (Commissioner, Meerut Division, Meerut vs. M/s Jaswant
  Sugar Mills Ltd.).

        On 30th October, 2002 C.A. No.7122 of 2003 preferred
    by M/s. Rudra Estate Pvt. Ltd. was taken up and this Court
    passed the following order:
H
  STATE OF UP. v. JASWANT SUGAR MILLS LTD. , 853
     [SUDHANSU JYOTI MUKHOPADHAYA, J.]

    "Delay condonecf.                                               A

          Out of the 3 special/eave petitions, the only special
    leave petition which we find worlh being enterlained, after
    hearing the teamed senior counsel for the petitioners, is
    as against the order dated 15.3.2002. Issue notice to           B
    respondents No. 2 to 4 only limited to the question as to
    why the amount directed to be refunded to the petitioner
    should not bear reasonable interest. Oasti service in
    addition is permitted.

         The other two special leave petitions are                  C
    dismissed."

     On 24th January, 2003, C.A. Nos. 7123-24 of 2003
preferred by Shri Munindra Singh & Anr. were taken up and this
Court passed the following order:                                   D

    "Delay condoned .

    Permission to file the Special Leave Petition is granted.

           After hearing the learned counsel for the                E
    petitioners, we are satisfied that no fault can be found with
    the impugned judgment of the High Coult so far as the
    setting aside of the sale is concerned.

           The learned counsel for the petitioners invites our F
    attention to the Order dated 20. 10. 2002 (page 94C of the
    Paper Book). Issue notice to respondent nos. 1 to 4
    limited to the question as to why the amount which will
    be directed to be refunded to the petitioners herein
    consequent upon the sale having been set aside should G
    not bear reasonable interest.

          Tag with SLP(C)No.2154012002."

    39. As against the said order C.A. Nos. 7126-29/2003
                                                                    H
    854      SUPREME COURT REPORTS                  [2014) 9 S.C.R.


A   (Commissioner, Meerut Division, Meerut & Ors. Vs. M/s.
    Jaswant Sugar Mills Ltd.) have been preferred by the
    Commissioner, Meerut Division, Meerut. The said case was
    also tagged with the aforesaid appeals.

B       40. In view of the fact that this Court vide order dated 27th
  April, 2003 in C.A. Nos. 7123-7124 of 2003 held that this Court
  is satisfied that no fault can be found with the impugned
  judgment of the High Court so far as the setting aside of the
  sale is concerned, we dismiss the appeals, so far it relates to
C cancellation of auction sale.

         41. We have heard the parties only on the limited question
    as to why the amount which has been directed to be refunded
    to the auction purchasers-appellants herein should not bear
    reasonable interest.
D
         42. In a situation like in the present case, one cannot hold
    of any statute entitling the auction purchasers to claim interest,
    in case the auction got cancelled or set aside by the Court of
    law. Counsel for the parties also could not refer any of the
E   clauses of auction prescribing interest on refund of amount in
    case of cancellation of auction or sale. The question arises as
    to whether in such a situation an auction purchaser can claim
    interest on equitable ground.

       43. In Sta.te of Maharashtra and others vs. Maimuma
F Banu and others, (2003) 7       sec
                                    448, the question arose as
  to whether interest was payable on rental compensation. In the
  said case, Government resolution provided for payment of
  rental compensation expeditiously but no provision was made
  to pay interest in case of delayed payment. This Court in the
G said case held:

                "10. The crucial question is whether there can be
          any direction for interest on rental compensation once it
          is held that the same has to be paid within the time
H
  STATE OF U.P. v. JASWANT SUGAR MILLS LTD.               855
     [SUDHANSU JYOTI MUKHOPADHAYA, J.]
    frame, notwithstanding the fact that there is no statutory   A
    obligation.

          11. It is not in dispute that in certain cases payments
    have already been made. Though the inevitable
    conclusion is that the High Court is not justified in
                                                                  8
    directing grant of interest on the logic of various
    provisions contained in the Act, yet there is an element
    of equity in favour of the landowners. It is, however, seen
    that the writ applications were fifed long after the
    possession was taken. This factor cannot be lost sight of
    while working out the equities. It would, therefore, be C
    appropriate if the appellants pay interest @ 6% from 1-
    4-2000 till amounts payable as rental compensation are
    paid to the landowners concerned. This direction shall not
    apply to those cases where the payments have already
    been made prior to 1-4-2000. Appeals are allowed to the D
    extent indicated without any stipulation of costs."

     44. In the present case, we find that there was no mis-
representation on the part of the auction purchasers; they
deposited the total auction amount within the time stipulated. It E
has not been in dispute that the title of the land was also
transferred in their favour. But for the reasons mentioned by the
High Court the sale has been cancelled. It has been ordered
to refund amount in favour of the auction purchaser-appellant(s) .
            •
We find no reason as to why on equitable grounds the F
appellants should not get interest on the said amount. Taking
into consideration the aforesaid factor while working out
equities, it would, therefore, be appropriate to direct the State
to pay interest at the rate of 6% on the amount to be refunded
as per the High Court's order with effect from 27th April, 2001
and 3rd September, 2001, the day, the High Court passed the G
impugned order. The concerned respondents are directed
accordingly.

    45. C.A. Nos. 6169-6171 of 2013, C.A. Nos. 6172-6174
                                                                 H
    856     · SUPREME COURT REPORTS              (2014] 9 S.C.R.


A   of 2013, C.A.No.7122 of 2003, C.A.Nos.7123-7124 of 2003,
    C.A.No.7125 of 2003 are allowed in terms of the directions as
    above. The appeals (C.A.Nos.7126-7129 of 2003) filed by the
    Commissioner, Meerut are dismissed. No costs.

B   Devika Gujral                              Appeals disposed of.