2011 (2) TMI 1097 - HC - Indian Laws

Public auction - possession of the property - title of the property - petitioner challenged the order passed by the first respondent and has sought a declaration that respondent Nos. 1 and 2 have no authority to put the C.A. site, for public auction and other incidental reliefs - Held that - Under Sub-Rule (6) of Rule 11, it is clearly stated that any party who is aggrieved by an order passed, may institute a suit, in a civil court to establish the right which he claims to the property in dispute, but subject, to the result of such suit, if any, the order of the Tax Recovery Officer shall be conclusive. Therefore, the petitioner herein is disabled to file a suit with regard to possession, as also with regard to title in respect of the property in question in view of the finding with regard to title being given by the respondent authorities. Therefore if a suit is filed by the petitioner, then in that, case, any decree to be passed in the said suit would have to override the order that is impugned in this writ petition. Under the circumstances, the said rule states that the order passed by the Tax Recovery Officer shall be conclusive, but it would be subject to the result of any suit that would be filed by a person who is aggrieved by an order passed under Rule 11. Therefore, the petitioner herein is at liberty to file a suit insofar as the property in question, is concerned not only against the third respondent herein, but also against any such person who is claiming the said property and any decree to be passed in the said suit would override the order impugned in this writ petition. Therefore the order impugned is kept in abeyance until the petitioner succeeds in establishing its right, title and interest as well as possession over the property in question. In order to enable the petitioner to do so, taking into consideration that there is a serious dispute regarding the site in question, it is also necessary that both the parties would have to maintain status quo insofar as the property is concerned.

Issues Involved:
1. Authority of Respondents to Auction Property
2. Title and Ownership of the Civic Amenity (C.A.) Site
3. Maintainability of Writ Petition vs. Civil Suit
4. Findings of the Tax Recovery Officer
5. Directions for Future Legal Proceedings

Issue-wise Detailed Analysis:

1. Authority of Respondents to Auction Property:
The primary issue is whether respondent Nos. 1 and 2 had the authority to auction the C.A. site measuring 52x80 meters situated at Gayatridevi Park Extension, Bangalore. The Bangalore Development Authority (BDA) claimed ownership and argued that the site, part of a larger area acquired under the City Improvement Act, 1945, was reserved as a civic amenity site. The BDA contended that the property could not be auctioned to recover income tax arrears from the third respondent.

2. Title and Ownership of the Civic Amenity (C.A.) Site:
The BDA asserted that it was the absolute owner of the C.A. site, which was part of 18 acres 10 guntas acquired by the City Improvement Trust Board (CITB). The land was handed over by the father of the third respondent to the CITB, as evidenced by a letter dated 22/23.8.1966. The BDA argued that the site was earmarked for a public park in the comprehensive development plan. The third respondent, however, claimed ownership and had no objection to the auction for recovering tax dues.

3. Maintainability of Writ Petition vs. Civil Suit:
The respondents argued that the writ petition was not maintainable under Rule 11 of the II Schedule of the Income-tax Act, 1961, which allows an aggrieved person to institute a civil suit to establish their right to the property. The BDA countered that the findings in the impugned order would disadvantage them in any civil suit, affecting their right to the C.A. site.

4. Findings of the Tax Recovery Officer:
The Tax Recovery Officer's order dated 21.11.2006 concluded that the land in question remained the property of the Maharaja of Mysore and was rightly proposed for public auction. The BDA challenged these findings, arguing that the Tax Recovery Officer was not competent to decide on the title of the property, as his role was limited to investigating claims or objections regarding possession.

5. Directions for Future Legal Proceedings:
The court noted that under Rule 11 of the II Schedule of the Income-tax Act, the Tax Recovery Officer could only investigate claims or objections related to possession, not title. The court held that the petitioner (BDA) could file a civil suit to establish its right, title, and interest in the property. The court directed that the impugned order be kept in abeyance until the petitioner succeeds in the civil suit. Both parties were ordered to maintain the status quo regarding the property.

Conclusion:
The writ petition was allowed in part. The impugned order was kept in abeyance, and the petitioner was given liberty to file a civil suit to establish its rights over the property. The court directed that the status quo be maintained until the petitioner's rights are determined by a competent court.

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