1977 (11) TMI 9 - HC - Income Tax

Summary

Issues:
1. Validity of a mortgage executed during the pendency of income tax recovery proceedings.
2. Challenge to the order rejecting the application for setting aside the sale.
3. Jurisdiction of the civil court to execute the award under the Andhra Pradesh Co-operative Societies Act.

Analysis:
1. The case involved a dispute regarding the validity of a mortgage executed by the second respondent in favor of a bank during the pendency of income tax recovery proceedings. The appellant argued that the mortgage should be void under section 281 of the Income Tax Act, 1961. However, the court ruled that since the mortgage was executed before the Act came into force, section 281 could not be applied retrospectively. The court held that the mortgage in favor of the bank was valid and not void under the Act.

2. The appellant also challenged the order rejecting the application filed by the bank for setting aside the sale and confirming the sale. The court noted that the bank was not challenging the sale itself but contending that the sale should be subject to the mortgage created in its favor. The court emphasized that the sale would be subject to the mortgage based on which the award was passed in favor of the bank. The court dismissed the appellant's argument that the order had become final due to the failure to challenge it within the specified time frame.

3. The jurisdiction of the civil court to execute the award under the Andhra Pradesh Co-operative Societies Act was also questioned. The appellant argued that the civil court had no jurisdiction to execute the award, citing specific rules under the Act. However, the court held that the civil court did have jurisdiction to entertain the petition for execution of the award filed by the bank. The court rejected the appellant's contention that the relevant rules were ultra vires the powers of the rule-making authority, stating that the rules were made in accordance with the provisions of the Act.

In conclusion, the court dismissed all contentions raised by the appellant and upheld the validity of the mortgage, the decision regarding the sale, and the jurisdiction of the civil court to execute the award under the Andhra Pradesh Co-operative Societies Act. The Civil Miscellaneous Second Appeal was dismissed with costs.