'Monarchical' Exercise Of Power Has No Place In Constitutional Governance: P&H High Court Slams Arbitrary Cancellation Of Confirmed Auction

Observing that unreasoned, cryptic orders reflect a “lingering hangover of monarchical practices” incompatible with constitutional governance, the Punjab and Haryana High Court has dismissed a Second Appeal filed by the Punjab Government, holding that cancellation of a confirmed public auction by a one-word order without notice or hearing is arbitrary, unconstitutional and violative of Articles 14 and 21.Justice Virinder Aggarwal said, "Such arbitrary exercise of power appears to be under the lingering hangover of monarchical practices prevalent prior to independence, when unreasoned commands were the norm. The times, however, have long changed. In a sovereign democratic republic governed by the Constitution of India, every public authority is bound by the rule of law and cannot act according to personal whims or unfettered discretion."The Court further said that the, Sales Commissioner, Muktsar being a statutory functionary, was duty bound to act fairly, reasonably and in conformity with constitutional discipline. Before taking any action adversely affecting the accrued civil rights of the respondent/plaintiff, it was incumbent upon the authority to issue notice and afford a reasonable opportunity of hearing in consonance with the principles of natural justice."Failure to adhere to these basic safeguards renders the impugned action arbitrary, legally unsustainable and violative of Articles 14 and 21 of the Constitution of India, it added.The appeal arose from a civil suit instituted by the respondent seeking declaration of ownership and permanent injunction in respect of land measuring 621 square yards and 6 square feet, situated at Mohalla Water Works, Muktsar.The land was sold through an open public auction on 06.03.1987 conducted by the Tehsildar (Sales), Muktsar. The respondent emerged as the highest bidder for ₹13,500 and deposited one-fourth of the bid amount at the fall of the hammer. The auction was thereafter approved and confirmed on 09.11.1987 by the competent authority, i.e., the Sales Commissioner, Muktsar.However, by a cryptic order dated 24.05.1988, the already confirmed auction was cancelled by merely recording the word “Rejected”, without assigning reasons and without issuing any notice or affording an opportunity of hearing to the auction purchaser.Aggrieved, the respondent filed a civil suit challenging the cancellation as illegal, arbitrary and violative of principles of natural justice.The Trial Court decreed the suit, holding that the exemption from notice under Section 80 CPC had been validly granted, the civil court had jurisdiction and the cancellation order was non-speaking and arbitrary.The First Appellate Court (Additional District Judge, Faridkot) dismissed the State's appeal, observing that once the auction had been confirmed by the competent authority, it could not be cancelled subsequently by a cryptic order without affording an opportunity of hearing. It further held that government instructions relied upon by the State were subsequent in time and could not operate retrospectively.Assailing the concurrent judgments, the State argued that the suit was not maintainable due to non-service of mandatory notice under Section 80 CPC. The civil court's jurisdiction was barred under Section 16 of the Punjab Package Deal Properties (Disposal) Act, 1976 Rejecting the State's arguments, the High Court held that in Punjab and Haryana, second appeals are governed by Section 41 of the Punjab Courts Act, 1918, not Section 100 CPC, relying on Pankajakshi v. Chandrika and subsequent Supreme Court judgments; therefore, no substantial question of law was required to be framed.Once an auction sale is confirmed, the purchaser acquires vested civil rights, which cannot be taken away except in accordance with law and the cancellation by a one-word order “Rejected” was non-speaking, arbitrary and unsustainable, having been passed without notice or hearing.The bar of jurisdiction under Section 16 of the 1976 Act does not apply where State action is arbitrary or violative of natural justice, relying on Dhulabhai v. State of MP and RSRTC v. Bal Mukund Bairwa.The Court emphasised that administrative lapses of the State cannot defeat the accrued rights of a bona fide auction purchaser, and that access to civil courts against arbitrary State action is a fundamental facet of the rule of law, it added."The cancellation of a confirmed auction by a cryptic one-word order without issuance of notice or affording opportunity of hearing is ex facie arbitrary and has resulted in deprivation of vested civil rights of the respondent. The suit was, therefore, rightly entertained as the respondent/plaintiff was seeking protection against an illegal and unconstitutional exercise of power rather than merely assailing an administrative discretion," the Court said.Finding no perversity or illegality in the concurrent findings of the Courts below, the High Court dismissed the Regular Second Appeal and affirmed the...

'Monarchical' Exercise Of Power Has No Place In Constitutional Governance: P&H High Court Slams Arbitrary Cancellation Of Confirmed Auction

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