Cuttack: Orissa High Court has ruled that state authorities cannot deprive a private party of his valuable rights to cover up their own lapses.

The court ruling was given while disposing of an 11-year-old case, in which a private party was not being given leasehold rights after he had purchased a plot during auction.

The court endorsed the contention that two government bodies were responsible for whatever wrong had been done and the bona fide purchaser could not be deprived of the property which was purchased by it in an auction.

The Odisha State Financial Corporation auctioned a 22-acre plot in possession of a loanee after he had failed to pay its dues 20 years ago.

The corporation had sold the plot in favour of Mahanadi Castings (P) Ltd after negotiation for Rs 36 lakh and signed an agreement in December 1997 and gave possession of the property a month later.

Later when the Industrial Development Corporation of Odisha (Idco) did not execute lease deed for the plot in its favour, Mahanadi Castings (P) Ltd sought intervention of the high court in 2006.

During adjudication, Idco claimed that the plot at Idco Old Industrial Estate, Jagatpur (Cuttack) was 1.5 acres, but the corporation had given possession of excess.

But, the court felt that Idco had not raised any objection even when public auction notice was issued by the corporation for the plot and the erstwhile leaseholder was in possession of 22 acres which was transferred in favour of the petitioner by sale agreement.

After the petitioner had deposited the entire amount (Rs 36 lakh), the dues of the erstwhile leaseholder were settled with the corporation and the other dues were also paid from the deposit made by the petitioner.

The division bench of Chief Justice Vineet Saran and Justice B.R. Sarangi held: "In such view of the matter, we are of the opinion that the two state authorities cannot get together to deprive a private party of his valuable rights, for which it has paid valid consideration and as such, at this stage, depriving the petitioner of the land would be unjustified in law."

"In case there is any dispute with regard to the area which has been sold to the petitioner, it is for Idco to realise the price of the excess area from the corporation," the bench ruled in its January 12 order.