Supreme Court Restores Trial Decree Holding Auction Sale Valid and Quashes High Court’s Interference

A bench of Justices Aravind Kumar and Sandeep Mehta heard the appeal by Basheera Khanum against the High Court of Karnataka’s judgment which had allowed a municipal council’s second appeal and set aside concurrent findings of the trial and first appellate courts. The principal issue concerned whether the appellant had established title and possession over municipal plot No. 394 sold in an auction in 1977, and whether the High Court erred in reappraising and reversing the well-reasoned concurrent findings below.

The Court allowed the appeal, quashed the High Court judgment dated 29 July 2011 and restored the trial court decree as affirmed by the first appellate court, holding that the High Court had embarked on an impermissible roving inquiry and misdirected itself in law and on facts. The Court observed that certified copies of municipal records placed on the record by the appellant were admissible under Section 376 of the Karnataka Municipalities Act, 1964, and that the municipal respondent’s failure to produce original records despite court directions warranted an adverse inference. The Court rejected the municipal council’s attempt to annul a registered sale certificate by a board resolution, stating that "cancellation of such a valid document of title by simply drawing a resolution in a board meeting is illegal on the face of the record." The Court, in its reasoning, observed: “Resultantly, we are of the view that the High Court misdirected itself in holding that the appellant failed to substantiate the case set up by her in the plaint. Suffice it to note that the appellant submitted certified copies of the relevant documents, including the sale certificate, money receipt, etc., on record, and an application was filed on her behalf with a clear indication that if respondent No. 1-CMC intended to dispute the title of the appellant, then it should have come forward with the contemporaneous record. These documents are admissible in evidence by virtue of Section 376 of the Karnataka Municipalities Act, 1964.”

Background The dispute arose from two municipal plots (Nos. 394 and 395) auctioned by the City Municipal Council. The appellant claimed successful auction purchase of plot No. 394 on 24 June 1977, produced certified copies of receipts and a sale certificate (registered on 5 November 1980) and pleaded possession. Another purchaser, respondent No. 2, had earlier bought the bank site (plot No. 395) in a 1973 auction; a later sale deed mistakenly recorded the plot number, prompting respondent No. 2 to seek rectification in 1992. The municipal council’s junior engineer reported that the two plots were distinct and a council resolution of 10 August 1992 corrected respondent No. 2’s record to 395. Thereafter, a further council resolution dated 29 March 1993 purported to cancel the sale certificate in favour of the appellant and treat plot No. 394 as having been conveyed to respondent No.2 — an action the trial court found invalid.

The appellant sued for declaration and permanent injunction; the trial court drew an adverse inference against the municipal council for failing to produce auction records despite directions, held the appellant to be the highest bidder for plot No. 394, and decreed the suit. The first appellate court affirmed. The High Court, in second appeal under Section 100 CPC, reversed the concurrent findings holding that the appellant had not proved the sale certificate’s genuineness. The appellant challenged that judgment by special leave.

The Supreme Court analysed the record, noting documentary and oral evidence on record — certified municipal copies, money receipts and the minutes rectifying respondent No.2’s plot number — and concluded that the High Court had overstepped in reappraising facts. The Court held that certified copies under Section 376 carried the same evidentiary value as originals unless contradicted by the municipal council, which had not produced contemporaneous records or lodged criminal complaints if fabrication were suspected. The Court declared the High Court’s judgment unsustainable, restored the trial decree and allowed the appeal. No costs were imposed; pending applications stood disposed of.

Case Details: Case No.: CIVIL APPEAL NO(S). 9317 OF 2014 (2025 INSC 955) Case Title: BASHEERA KHANUM v. THE CITY MUNICIPAL COUNCIL AND ANOTHER Appearances: For the Petitioner(s): Smt. Anjana Chandrashekar, Advocate For the Respondent(s): Counsel for Respondent No.1 — City Municipal Council (name not indicated in the judgment)