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Issues Involved:
1. Whether sub-rules (1) and (2) of Rule 57 of the Second Schedule to the Income Tax Act, 1961 empower the Debt Recovery Officer to extend the time prescribed for the auction purchaser to pay the purchase money. Issue-Wise Detailed Analysis: 1. Interpretation of Rule 57(1) and Rule 57(2): The primary issue is whether the Debt Recovery Officer has the authority to extend the time prescribed under Rule 57(1) and (2) for the auction purchaser to pay the purchase money. The petitioner, an auction purchaser, failed to pay the balance 75% of the purchase money within 15 days as required by Rule 57(2). The Recovery Officer extended the time upon the petitioner's request, allowing the payment after the prescribed period. The third respondent challenged this extension, leading to a series of legal proceedings. 2. Legal Precedents and Mandatory Nature of Rules: The court examined various judgments to determine if the rules are mandatory. In Manilal Mohanlal Shah v. Sardar Sayed Ahmed Sayed Mohamad (AIR 1954 SC 349), the Supreme Court held that the deposit of 25% of the purchase money immediately after the sale is mandatory under Order XXI, Rule 84 of the Civil Procedure Code. The court also referenced Balram v. Ilam Singh (1996) 5 SCC 705, where it was held that non-compliance with Rule 84 renders the sale a nullity. Similarly, in Rao Mahmood Ahmed Khan v. Sh. Ranbir Singh (AIR 1995 SC 2195), the Supreme Court found Rule 285-D of the U.P. Zamindari Abolition and Land Reforms Act, which is akin to Rule 57(1), to be mandatory. 3. Applicability of Section 29 of the Recovery of Debts Due to Banks and Financial Institutions Act: Section 29 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, applies the provisions of the Second and Third Schedules to the Income Tax Act, 1961, with necessary modifications. This section empowers the Recovery Officer to follow these provisions as far as possible but allows for modifications to suit the context of debt recovery. 4. Discretion of the Recovery Officer: The court noted that while Rule 57(1) is mandatory, Rule 57(2) allows for some discretion. Rule 58 provides that in default of payment within the prescribed period, the deposit may be forfeited, and the property resold. However, the Recovery Officer has discretion in deciding whether to forfeit the deposit. The court found that the Recovery Officer could extend the time for payment under Rule 57(2) if such modifications are included in the sale notice, aligning with the objective of speedy debt recovery. 5. Judgment of Andhra Pradesh High Court: The court referred to P. Mohanreddy v. Debts Recovery Appellate Tribunal (AIR 2004 AP 94), where it was held that the Recovery Officer has discretion to extend the time for deposit under Section 29 of the Recovery of Debts Due to Banks and Financial Institutions Act. However, the court distinguished this case by emphasizing that Rule 57(1) is mandatory, and any extension must be explicitly stated in the sale notice. 6. Conclusion and Order: The court concluded that: - Sub-rule (1) of Rule 57 is mandatory, and the Recovery Officer has no power to extend the time for the initial 25% deposit. - Sub-rule (2) of Rule 57 is not mandatory and can be modified to allow extensions if stated in the sale notice. - In the absence of such a clause in the sale notice, the Recovery Officer cannot extend the time for the 75% balance payment beyond 15 days. Given these conclusions, the court found that the Recovery Officer's extension of time in the petitioner's case was unsustainable due to the lack of a clause in the sale notice permitting such an extension. Consequently, the writ petition was dismissed, and the order of the Debts Recovery Appellate Tribunal setting aside the sale was upheld.
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