Writ Jurisdiction Cannot Override Failure to Avail Statutory Remedy Under Revenue Recovery Act: Supreme Court

Statutory Remedy Under Section 37-A of Revenue Recovery Act Is Mandatory, Interim Stay Cannot Override It”, In a decisive ruling on the scope of statutory remedies under revenue recovery proceedings, the Supreme Court dismissed a long-pending challenge to a confirmed public auction, holding that failure to invoke Sections 37-A or 38 of the Tamil Nadu Revenue Recovery Act, 1864 within the statutory 30-day limitation period bars any later recourse under Article 226 of the Constitution.

The Division Bench of Justices Satish Chandra Sharma and Vipul M. Pancholi reaffirmed that interim orders merely staying the confirmation of a sale do not extend or suspend the statutory limitation, and reiterated that "depositing money under court orders does not substitute the statutory requirement of application and deposit under Section 37-A."

In this appeal, the Court was dealing with the legality of a public auction of immovable property conducted on 29.07.2005, for recovery of arrears owed by the deceased Ramaswamy Udayar, husband of the appellant. The auction was held under the Tamil Nadu Revenue Recovery Act, 1864, following an ex-parte decree in 1987 for Rs. 56,170.20, which had not been challenged by the heirs.

The appellant, Kolanjiammal, approached the Madras High Court in 2005 under Article 226 of the Constitution, seeking to quash the auction proceedings. Despite an interim stay on confirmation of sale, the property was auctioned and later confirmed in favour of Respondent No. 4 in July 2008, by which time no application under Sections 37-A or 38 had been filed.

The High Court dismissed the writ petition, writ appeal, and subsequent review application, holding that the appellant failed to avail the statutory remedy, and thus could not maintain a belated writ challenge. The Supreme Court, concurring with this view, dismissed the civil appeal.

Recovery of Arrears and Public Auction Amidst Family Disputes

The dispute began when the Government initiated recovery proceedings against Ramaswamy Udayar, who defaulted on payments related to liquor shop licences in the 1970s. An ex-parte decree was obtained in 1987, but after Udayar’s death in 1988, his heirs, including the appellant, allegedly remained unaware of these proceedings.

As partition disputes among the legal heirs ensued, revenue authorities issued auction notices in 2005. The appellant and her son challenged these notices in the Madras High Court. The Court granted interim stay only against confirmation of the sale, not the auction itself. Despite this, the auction was conducted on 29.07.2005, and Respondent No. 4 paid the full amount that same day. The sale was confirmed in July 2008.

Notably, no application was filed under Sections 37-A or 38 of the Revenue Recovery Act to set aside the sale within the 30-day statutory period.

The core legal issues were:

• Whether failure to file an application under Sections 37-A or 38 within 30 days bars later recourse through a writ petition;
• Whether an interim stay on confirmation of sale tolls the limitation under the Revenue Recovery Act;
• Whether deposits made under court orders satisfy the statutory condition under Section 37-A;
• Whether auction conducted pursuant to a decades-old ex-parte decree is enforceable via revenue recovery.

The Court rejected all contentions raised by the appellant, holding:

“The Act provides a complete mechanism for setting aside a sale either by deposit (S. 37-A) or by alleging fraud/irregularity (S. 38). Both require filing an application within 30 days of the sale. The appellant admittedly filed none.”

The Bench clarified that:

“The stay on confirmation does not suspend the statutory obligation to file an application within 30 days as per Sections 37-A or 38. The pendency of a writ petition cannot be used to circumvent the legislative mandate.”

The Court relied heavily on its prior rulings in Rajasthan Housing Board v. Krishna Kumari and State of M.P. v. M.V. Vyavsaya & Co., reiterating that:

“The court should not take upon itself the responsibility of staying the recovery of amounts due to the State unless a clear case of illegality is made out.”

Deposits Made During Litigation Do Not Replace Statutory Deposit

The appellant argued that she had deposited around Rs. 3,41,900/- during the High Court proceedings, which satisfied the dues. But the Court observed:

“These payments were made pursuant to interim directions of the High Court and not as part of any statutory application under Section 37-A. Therefore, they cannot retrospectively validate non-compliance with the statutory requirement.”

The Bench emphasized that compliance with statutory procedure was indispensable, and that equitable arguments could not override mandatory legal requirements.

Confirmed Auction Cannot Be Reversed Absent Fraud or Irregularity

The Court also addressed the rights of the auction-purchaser, reiterating the principle laid down in Valji Khimji v. Official Liquidator, where it was held:

“Once the sale is confirmed by that authority, certain rights accrue in favour of the auction-purchaser, and these rights cannot be extinguished except in exceptional cases such as fraud.”

In the present case, the property had already been sold to bona fide purchasers, and no fraud or material irregularity was proven. The Court thus held that the transaction had attained finality and could not be undone.

Review Jurisdiction Not a Substitute for Appeal

The Supreme Court also upheld the High Court’s dismissal of the review application filed by the appellant, observing that:

“A review can be entertained only when there is an error apparent on the face of the record. The findings of the High Court are based on a comprehensive appreciation of facts and law and no such error has been demonstrated.”

Citing Lily Thomas v. Union of India and Parison Devi v. Sumitri Devi, the Court reiterated that review cannot be used to reargue matters or act as an appeal in disguise.

Failure to Avail Statutory Remedy Fatal to the Case

In dismissing the appeal, the Supreme Court concluded:

“The appellant failed to invoke Sections 37-A/38 within limitation – Auction conducted and confirmed as per law – Interim stay did not excuse non-compliance with statutory mechanism – No illegality, irregularity, or fraud established – High Court orders upheld.”

The judgment sends a strong message on the primacy of statutory remedies in revenue recovery matters, and affirms that writ jurisdiction is not a bypass for limitation or procedural non-compliance. Once rights accrue in favour of auction-purchasers, they are protected by law unless vitiated by demonstrable fraud or irregularity.

Date of Decision: November 14, 2025