Conduct Matters: Supreme Court Confirms Auction Sale but Orders Buyer to Pay Extra ₹25 Lakh/Acre

The Supreme Court upheld the High Court’s decision confirming the validity of a court-auctioned property sale. It endorsed the directions for a fresh survey to demarcate the exact purchased area and for the auction purchaser to pay additional consideration, citing his conduct, while ruling that subsequent challenges to the sale were barred by law.

Facts Of The Case:

The dispute originated from a debt recovery proceeding initiated by the Karnataka State Financial Corporation (KSFC) against a company, for which the respondent, G.M. Krishna, was a guarantor. Following a decree, KSFC attached the respondent’s agricultural land for auction. The appellant, R. Raghu, emerged as the highest bidder in a court auction in 2003, and a sale certificate was subsequently issued. The respondent’s initial application to set aside the sale was dismissed by the Executing Court and the High Court, and his SLP was dismissed by the Supreme Court, primarily on the grounds of limitation. A protracted series of litigations ensued, involving multiple writ petitions concerning survey notices and a gift deed executed by the respondent in favour of his wife over adjacent lands, all of which were ultimately decided against the respondent. Subsequently, the respondent filed a fresh application under Section 47 of the CPC, contending that the auction sale was void as the appellant, purportedly acting as a trustee for a trust, misrepresented himself as an individual agriculturist, which was prohibited under the Karnataka Land Reforms Act. While the Trial Court set aside the sale, the High Court, in an impugned order, partially allowed the appellant’s revision by confirming the sale but directing him to pay an additional sum per acre to the respondent and ordering a fresh survey of the property. This led to the present cross-appeals before the Supreme Court.

Procedural History:

The procedural history of this case is extensive and multifaceted. It commenced with execution proceedings initiated by KSFC, leading to a court auction in 2003. The respondent’s first challenge to the sale under Order XXI Rule 90 CPC was dismissed by the Executing Court in 2006, a decision upheld by the High Court and the Supreme Court in 2007, primarily on the ground of limitation. This was followed by multiple rounds of writ litigation concerning survey notices and a gift deed, all of which were decided against the respondent up to the High Court level. In a fifth set of proceedings, the respondent filed a fresh application under Section 47 CPC in 2014, which the Trial Court allowed in 2015, setting aside the auction sale. On revision, the High Court, in the impugned 2023 order, partially allowed the petition by confirming the sale but imposing conditions on the appellant. This decision was challenged by both parties, leading to the present cross-appeals and a contempt petition before the Supreme Court, which culminated in the final judgment.

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Court Observation:

The Supreme Court observed that the High Court had rendered a just and equitable judgment after a meticulous examination of the long-drawn litigation and the conduct of the parties. It concurred with the High Court’s finding that the auction purchaser could not possess land beyond the specific area purchased in the auction. The Court upheld the direction for a fresh survey to demarcate the exact purchased property, noting long-standing issues with its identification. It also affirmed the direction for the appellant to pay additional sale consideration, citing his conduct and dual role which cast doubt on the proceedings. However, the Court firmly held that the respondent’s belated attempt to re-agitate the validity of the auction sale was impermissible in law, as the issue was barred by the principle of finality, given the earlier dismissal of his challenge up to the Supreme Court and the retrospective repeal of the legal provisions on which his new objections were based.

Final Decision & Judgement:

The Supreme Court dismissed both civil appeals, thereby upholding the impugned judgment of the High Court. The final decision confirms the validity of the court-auction sale of the property in favour of the appellant, R. Raghu. Consequently, the respondent’s challenge to set aside the auction sale and certificate was rejected. The Court also affirmed the two key directions issued by the High Court: first, that the appellant must pay an additional sum of Rs. 25,00,000 per acre to the respondent as additional sale consideration, and second, that a survey must be conducted by the District Court to demarcate the precise boundaries of the auctioned property. The connected contempt petition was also closed.

Case Details:

Case Title: Sri R Raghu vs. Sri G M Krishna & Anr.
Citation: 2025 INSC 1040
Appeal Number: Civil Appeal No. 8544 of 2024 
Date of Judgement: August 25, 2025
Judges/Justice Name: Justice Vikram Nath and Justice Prasanna B. Varale
Download The Judgement Here

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