Commercial Tax Officer vs M/S Arjunlal Palia.

NEUTRAL CITATION NO. 2026:MPHC-JBP:58423
1 WA-1121-2009
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR

BEFORE
HON'BLE SHRI JUSTICE VIVEK RUSIA,
ACTING CHIEF JUSTICE
&
HON'BLE SHRI JUSTICE PRADEEP MITTAL
st
ON THE 31 OF JULY, 2026
WRIT APPEAL No. 1121 of 2009
M/S ARJUNLAL PALIA
Versus
THE STATE OF MADHYA PRADESH AND OTHERS
Appearance:
None appears for appellant.
Shri Rajvardhan Dutt Padraha G.A. for State.
Shri D. Soni, Advocate for respondent No.5.
Shri Sanjay Agrawal, Senior Advocate with Shri Rajesh Upadhyaya, for
intervernor.
WITH
WRIT APPEAL No. 1138 of 2009
COMMERCIAL TAX OFFICER AND OTHERS
Versus
M/S ARJUNLAL PALIA. AND OTHERS
Appearance:
Shri Shri Rajvardhan Dutt Padraha G.A. for State/appellants.
Shri D. Soni, Advocate for Intervernor.
Shri Sanjay Agrawal, Senior Advocate with Shri Rajesh Upadhyaya, Advocate for
Intervenor.
ORDER
Per: Pradeep Mittal, J.
Since these appeals involve common questions of law and fact, they are
Signature Not Verified
Signed by: MANVENDRA
SINGH PARIHAR
Signing time: 04-08-2026
10:07:40

NEUTRAL CITATION NO. 2026:MPHC-JBP:58423
2 WA-1121-2009
being heard and decided by this common order. For the sake of convenience, the

references to the pleadings, documents and annexures are taken from W.A. No.
1121 of 2009.
2. These writ appeals are directed against the order dated 08.10.2009
passed in W.P. Nos. 377 of 2004 whereby the writ petition was dismissed.
3. The facts leading to the filing of the present appeals are that the
appellant was the successful auction purchaser of the factory premises and
property of M/s Kabra Agro Industries in recovery proceedings initiated by the
Commercial Tax Department for recovery of outstanding dues. The auction was
conducted after following the prescribed procedure, including attachment,
publication of notice and participation of bidders.
4. That the property was auctioned on 20.12.2002, wherein the appellant
was declared the highest bidder for Rs. 1,02,00,000/-. After payment of the sale
consideration, a sale certificate was issued in favour of the appellant on
29.01.2003, and possession was handed over on 04.04.2003.
5. That subsequently, the Collector, Hoshangabad, by exercising suo motu
powers under Section 50 of the Madhya Pradesh Land Revenue Code, 1959, set
aside the auction proceedings and sale certificate vide order dated 23.12.2003.
6. That the appellant challenged the said order before this Court in WP.
No. 377/2004 contending that the Collector had no jurisdiction to interfere with
the auction proceedings conducted by the Commercial Tax Officer and that the
order was passed without granting any opportunity of hearing to the appellant.
7. That the learned Single Judge dismissed the writ petition and upheld the
Collector’s order mainly on the ground of alleged irregularities in the auction
proceedings and violation of provisions relating to sick industries. Hence, these
appeals on the following grounds.
Signature Not Verified
Signed by: MANVENDRA
SINGH PARIHAR
Signing time: 04-08-2026
10:07:40

NEUTRAL CITATION NO. 2026:MPHC-JBP:58423
3 WA-1121-2009
8. The pleadings of the appellant are that the learned Single Judge erred in

upholding the Collector's order passed under Section 50 of the Madhya Pradesh
Land Revenue Code, 1959, as the auction proceedings were conducted by the
Commercial Tax Department under the relevant statutory provisions and not by a
subordinate Revenue Officer; therefore, the Collector had no jurisdiction to
interfere with the auction or the sale certificate.
9. That the auction dated 20.12.2002 was conducted after due compliance
with the prescribed statutory procedure, public notice and competitive bidding,
and the Appellant, being a bona fide auction purchaser for valuable consideration,
acquired valid rights upon issuance of the sale certificate without any knowledge
of prior litigation or alleged interim orders.
10. That the learned Single Judge failed to appreciate that neither Section
22 of the Sick Industrial Companies (Special Provisions) Act, 1985, nor any
subsisting order of any competent court operated as a legal bar to the auction
proceedings on the date of auction.
11. That the Collector cancelled the auction and sale certificate without
affording the Appellant an opportunity of hearing, in violation of the principles of
natural justice.
12. That the appellant had taken possession of the property and altered his
position on the strength of the sale certificate, and therefore, the rights of a bona
fide auction purchaser could not have been defeated for any alleged irregularity
attributable to the authorities.
13. That the findings regarding the validity of the auction, adequacy of the
sale price and cancellation of the sale certificate are contrary to the material
available on record and settled principles of law. That the impugned judgment is
contrary to law and the facts on record and is, therefore, liable to be set aside.
Signature Not Verified
Signed by: MANVENDRA
SINGH PARIHAR
Signing time: 04-08-2026
10:07:40

NEUTRAL CITATION NO. 2026:MPHC-JBP:58423
4 WA-1121-2009
14. While dismissing the writ petition the learned Single Judge held that

the auction proceedings conducted by the Commercial Tax Officer suffered from
serious irregularities, including violation of the provisions of Section 22 of the
Sick Industrial Companies (Special Provisions) Act, 1985 and non-compliance
with the prescribed auction procedure under the Madhya Pradesh Land Revenue
Code, 1959. It was observed that M/s Kabra Agro Industries, being a sick
industrial company, was protected against recovery proceedings on the date of
auction, The Court further held that the findings recorded by the Collector
regarding procedural irregularities and undervaluation of the property were based
on the material available on record and did not require interference. It was
observed that setting aside the Collector’s order on technical grounds would result
in revival of an illegal auction.
Heard the learned counsel and perused the record.
15. By way of IA NO 8882 of 2023 the respondent no 5 has submitted
that in Company Petition No. 14/2001, the learned Company Judge accepted the
reference made by the Board of Industrial and Financial Reconstruction (BIFR),
New Delhi, and vide order dated 20.08.2009, directed the Official Liquidator to
take over the assets and properties of the sick company and proceed with the
winding-up proceedings in accordance with law. It is further submitted in the
application that the said order dated 20.08.2009 was challenged by way of Review
Petition No. 64/2010, which came to be dismissed vide order dated 09.03.2018.
16. In view of the aforesaid orders passed under the provisions of the
special statute, namely the Sick Industrial Companies (Special Provisions) Act,
1985, and the subsequent proceedings for winding up of the company, no issue
survives for adjudication in the present writ appeals. Therefore, the present writ
Signature Not Verified
Signed by: MANVENDRA
SINGH PARIHAR
Signing time: 04-08-2026
10:07:40

NEUTRAL CITATION NO. 2026:MPHC-JBP:58423
5 WA-1121-2009
appeals, being devoid of merit, deserve to be dismissed.

17. Upon consideration of the submissions made by Respondent No. 5, it
is evident that in Company Petition No. 14/2001, the learned Company Judge
accepted the reference made by the Board of Industrial and Financial
Reconstruction (BIFR), New Delhi, and vide order dated 20.08.2009, directed the
Official Liquidator to take over the assets and properties of M/s Kabra Agro
Industries and proceed with the winding-up proceedings in accordance with law.
The said order was challenged by way of Review Petition No. 64/2010, which was
dismissed vide order dated 09.03.2018. Thus, the order passed by the learned
Company Judge has attained finality.
18. In view of the subsequent proceedings under the provisions of the
Sick Industrial Companies (Special Provisions) Act, 1985, and the appointment of
the Official Liquidator for taking over the assets of the company, no surviving
issue remains to be adjudicated in the present writ appeal. The assets of the
company are now subject to the jurisdiction of the Company Court and the
Official Liquidator.
19. I.A. No. 1138/2009, dated 24.11.2009, was filed by Shri Anil Kumar
Shukla, Officer-in-Charge of the case, praying that he be permitted to file the
present writ appeal without filing a Vakalatnama and that the date of hearing be
intimated to him. On 24.02.2010, the learned Deputy Advocate General sought
time to address the Court on the question of the authorization of the private
counsel who had filed the present appeal on behalf of the Government. Thereafter,
on 23.12.2010, Shri Vijay Shukla, Advocate, filed a Vakalatnama stating that no
Government Advocate had been engaged by the Department. This clearly
indicates that Shri Anil Kumar Shukla was prosecuting the appeal in his personal
capacity and not on behalf of the Government. At the time of hearing, neither any
Signature Not Verified
Signed by: MANVENDRA
SINGH PARIHAR
Signing time: 04-08-2026
10:07:40

NEUTRAL CITATION NO. 2026:MPHC-JBP:58423
6 WA-1121-2009
counsel representing the State nor any officer on behalf of the appellant was

present before the Court. Thus, it is evident that the present appeal is being
prosecuted without proper authorization from the Government.
20. The present writ appeal was filed by Shri Anil Kumar Shukla,
Commercial Tax Officer, in his personal capacity and is not being represented by
the office of the Advocate General or the Deputy Advocate General. Although a
private advocate has filed a Vakalatnama seeking permission to appear on behalf
of the Government, in our considered opinion, a private counsel cannot represent
the State or its officers unless duly authorized by the competent Government
authority. No material has been placed on record to establish that the Government
authorized the private advocate to institute or prosecute the present appeal.
Consequently, the appeal has been filed and prosecuted without proper
authorization of the Government and, therefore, deserves to be dismissed for want
of prosecution.
21. The disputed properties are presently under liquidation, and a
Liquidator has been appointed to settle the claims of the creditors and other
stakeholders of the company. Any claim of the appellant against the company is
required to be adjudicated by the Liquidator in accordance with law. The
appellant is, therefore, at liberty to submit his claim before the Liquidator. In view
of the liquidation proceedings, no effective relief can be granted in the present
appeal. Accordingly, the appeal has been rendered infructuous.
22. Accordingly, we find that the continuation of the present writ appeals
would serve no useful purpose. The writ appeals, therefore, deserve to be
dismissed on account of the subsequent developments and the orders passed in the
winding-up proceedings. Apart from the above, W.A. No. 1138 of 2009 is
directed against a private party. Since no public or statutory duty is involved, no
Signature Not Verified
Signed by: MANVENDRA
SINGH PARIHAR
Signing time: 04-08-2026
10:07:40

NEUTRAL CITATION NO. 2026:MPHC-JBP:58423
7 WA-1121-2009
writ can ordinarily be issued against such a private party.


(VIVEK RUSIA)
ACTING CHIEF JUSTICE
(PRADEEP MITTAL)
JUDGE
MSP

Signature Not Verified
Signed by: MANVENDRA
SINGH PARIHAR
Signing time: 04-08-2026
10:07:40