2019 (2) TMI 1596 - HC - Income Tax

Recovery proceedings - Auction sale of immovable property - unpaid tax dues of the Income Tax Department - non eviction of occupants from the auctioned property to give peaceful possession to highest bidder - Respondent No. 5 one Ajit More had unpaid tax dues of the Income Tax Department - Held that - Petitioner who is a successful bidder of the property in question, has become the owner of the property upon confirmation of sale and issuance of sale certificate by the Income Tax Authorities. The petitioner has paid a sum of ₹ 50 Lacs sometime by 13.3.2008. Till date, the petitioner is not put in possession of the property as the Income Tax Department could not evict the occupants thereof. Respondent No. 5 has not actively participated in the present proceedings. His wife who has appeared through lawyer contends that she does not have cordial relations with her husband and that she had nothing to do with the dues of her husband towards Income Tax Department. The property in question belongs to her and not to her husband. Initially, the Income Tax Department accepted her request for not evicting for a period of six months in view of the ensuring HSC examination of her daughter. Further, the City Civil Court protected her against eviction by granting injunction. Such injunction also stood vacated on 3.5.2014. Respondent No. 4 cannot take shelter of merely having filed the appeal before the High Court against the judgment of the City Civil Court, that too, for a period of close to six years. For nearly six years after filing the appeal and vacation of interim relief by the City Civil Court, she is without any protection from any Court. Mere filing of the appeal would not automatically operate as a stay. For over 5 and 1/2 years, as no interim relief is granted to the appellant, the petitioner cannot be asked to wait indefinitely to be put in possession of the property in question. We do not find fault with the Department in being cautious in view of the fact that the appeal was pending before the High Court. However, in our view, sufficiently long time has passed since respondent No. 4 filed appeal before the High Court. A successful bidder and auction purchaser cannot be asked to wait indefinitely for the legal proceedings to be completed. Under the circumstances, we direct the Income Tax Authorities to proceed further in accordance with law to give vacant and peaceful possession of the property in question to the petitioner.

Summary

Issues:
- Auction purchaser unable to enjoy fruits of sale confirmation due to occupants not being evicted.
- Dispute over ownership of property between husband and wife.
- Delay in obtaining possession of the property by the successful bidder.

Analysis:
1. Auction Purchaser's Right to Possession:
The petition raised the issue of an auction purchaser being unable to enjoy the benefits of a sale confirmation due to occupants not being evicted. The petitioner successfully bid for a property put to auction by the Income Tax Department for unpaid tax dues. Despite making the required payments and obtaining a sale certificate, the petitioner was not put in possession of the property as the occupants were not evicted by the Income Tax Department. The court emphasized that the successful bidder cannot be asked to wait indefinitely for legal proceedings to be completed and directed the Income Tax Authorities to provide vacant and peaceful possession of the property to the petitioner.

2. Ownership Dispute:
The judgment highlighted a dispute over the ownership of the property between the wife of the original owner and the auction purchaser. The wife of the original owner contested the auction on grounds that she was the real owner of the property, claiming that the entire sale consideration came from her father's source. Despite filing appeals and obtaining temporary injunctions against eviction, the court noted that the wife had not actively pursued the legal proceedings, and mere filing of appeals does not automatically prevent eviction. The court directed the wife to expedite her appeal process while ensuring that the auction purchaser is not unduly delayed in obtaining possession.

3. Delay in Possession:
The judgment addressed the delay faced by the successful bidder in obtaining possession of the property. The court acknowledged the cautious approach of the Income Tax Department due to pending legal proceedings but emphasized that a successful bidder should not be made to wait indefinitely. The court directed the Income Tax Authorities to proceed in accordance with the law to provide vacant and peaceful possession to the petitioner while allowing the wife to continue pursuing her appeal. The judgment aimed to balance the rights of the auction purchaser with the legal processes involved, ensuring timely resolution of the possession issue.