Malik TOFAZZAL HUSSAIN AND Another vs THE SETTLEMENT AND REHABILITATION COMMISSIONER, LAHORE DIVISION, LAHORE AND 2 OHTERS
This petition for leave to appeal is directed against the order of the High Court which allowed a Letters Patent Appeal and maintained the Settlement and Rehabilitation Commissioner's order directing a re-auction of the disputed shop. The core legal question concerns the validity of setting aside a property auction and whether a provisional transfer order confers title without confirmation and full payment. The Supreme Court held that a Provisional Transfer Order does not transfer title to the purchaser, particularly when the auction proceedings are irregular, not confirmed, and the full price has not been paid. The court laid down the principle that mere issuance of a provisional transfer order, absent auction confirmation and full payment of the purchase price, does not vest absolute title in the auction purchaser so as to bar the competent authority from ordering a re-auction upon discovering irregularities.
- Does a Provisional Transfer Order confer absolute title to an auction purchaser prior to confirmation and full payment?
- Can a competent authority order a re-auction of property when initial auction proceedings are found to be irregular?
- Whether an auction purchaser acquires vested rights in property without the confirmation of the auction?
ORDER
1. SALAHUDDIN AHMED, J.--This leave petition is directed against the order of the High Court allowing the Letters Patent Appeal of respondents Nos. 2 and 3, and maintaining the order of the Settlement and Rehabilitation Commissioner dated the 28th May 1962.
2. The shop in dispute had been put up to auction and it was purchased by the appellant for Rs. 1000 and a provisional transfer order was issued to him. Sher Ali, an old tenant of the shop objected to the auction on the ground that he was unable to participate in the auction due to the incorrect particulars given in the Auction List about the location of the shop and its occupant.
3. It transpired later that the suction proceedings were irregular and the auction was not confirmed.
4. The Settlement and Rehabilitation Commissioner, therefore, by his order dated the 28th May 1962, declared that the shop be put to auction again.
5. This order was challenged by the appellant in a writ petition. The petition was allowed by a Single Judge of the High Court. On the Letters Patent Appeal of respondents Nos. 2 and 3 however, the writ petition was dismissed.
6. The Provisional Transfer Order did not transfer any title to the appellant. The auction was not confirmed and the appellant did not pay to entire price of the shop. In these circumstances we are unable to find any fault with the impugned order of the High Court.
7. The petition is dismissed.