Supreme Court upholds court-auction sale, directs survey and additional payment of Rs.25 lakh per acre

A bench of Justices Vikram Nath and Prasanna B. Varale heard civil appeals arising out of the Karnataka High Court’s order in C.R.P. No. 539/2015, which concerned challenges to a court-auction sale of agricultural land and related reliefs sought by the judgment debtor and the auction purchaser. The appeals — by the auction purchaser and by the judgment debtor — and an associated contempt petition were argued together before the Court.

The Supreme Court dismissed both appeals and closed the contempt proceedings, affirming the High Court’s confirmation of the auction sale and its directions that the auction purchaser pay an additional Rs.25,00,000 per acre to the judgment debtor and that the District Court conduct a fresh survey to fix the boundaries of Sy. No. 67. The Court noted that the High Court had rendered a “just and equitable judgment” after considering protracted litigation and the conduct of the parties, and it declined to disturb the sale certificate while upholding the survey and compensation directions. The Court, in its reasoning, observed: Background

The dispute arose from recovery proceedings instituted by Karnataka State Financial Corporation (KSFC) against Hoysala Thermo Farmers Pvt. Ltd., resulting in a decree for over Rs. 2.61 crore in 1999. Execution proceedings led to the auction of agricultural land in Sy. No. 67 of Agara Village in 2003; the appellant (R. Raghu) was the highest bidder and obtained a sale certificate in 2005 as a trustee of Ved Vignam Maha Vidya Peeth (VVMP). The judgment debtor (G.M. Krishna) contested the sale over several rounds of litigation, alleging that the purchaser had misrepresented the buyer’s status and that a trust was barred from holding agricultural land under Sections 79A–79C of the Karnataka Land Reforms Act, 1961. The trial court set aside the sale in 2015; the High Court allowed the auction to stand but assessed misconduct by the purchaser and directed an additional payment of Rs.25 lakh per acre and a fresh survey to rectify boundaries, while maintaining status quo pending the survey. The High Court order stated: “The Petition is allowed in part. … However, the Petitioner shall pay a further sum of Rs.25,00,000-00 (Rupees Twenty Five Lakh only) per acre to the respondent No.1 as additional sale price within three months from the date of receipt of a copy of this Order.” The Supreme Court observed that Sections 79A–79C had been retrospectively repealed in 2020 (with effect from 1.3.1974), and it took into account the long history of litigation and the parties’ conduct in declining to overturn the auction or the sale certificate. The Court affirmed the High Court’s directions for payment and for a district-level boundary survey; it found no merit in the challenge to the sale and recorded agreement with the High Court that a purchaser could not retain more area than that specified in the sale certificate. The contempt petition alleging continued construction despite injunctions was closed.

Case Details: Case No.: 2025 INSC 1040 (Civil Appeal Nos. 8544–8545 of 2024) Case Title: SRI R RAGHU v. SRI G M KRISHNA & ANR. Appearances: For the Petitioner(s): Not indicated in the judgment record For the Respondent(s): Not indicated in the judgment record