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TMI Blog2008 (9) TMI 888X X X X Extracts X X X X X X X X Extracts X X X X ..... erest as a precondition for setting aside the sale. Therefore, the petitioner-company in W.P. Nos. 3847 and 4378 of 2008 are directed to deposit as undertaken by them vide undertaking dated June 25, 2008 within a period four weeks from the date of receipt of a copy of this order. The sale made in favour of K. Govindaraj the successful auction purchaser is hereby set aside and the Commercial Tax Department is directed to refund the amount taken from the auction purchaser within two weeks from the date of receipt of the order. X X X X Extracts X X X X X X X X Extracts X X X X ..... the TNGST Act, the total amount for those six years worked out to Rs. 1,79,25,765. Despite several reminders, since the company did not pay the amount, an auction notice was given by the Assistant Commercial Tax Officer, Nilakkottai, dated March 12, 2008. In the schedule of properties described under the auction notice, the lands covered by patta No. 185 (survey No. 236/6b and 236/1), punja land to the extent of 6.37 hectares were included apart from the buildings and machineries. It is seen that the copies of the auction notice was only marked to only to the company and to K.K. Surendranath. No notice was given to the joint owners for the land covered by patta No. 185. Thereafter, in the auction held on March 26, 2008, there were three bidders. Since K. Govindaraj (contesting respondent) was the highest bidder, the auction sale was confirmed in his favour. It was stated that he had already deposited Rs. 12 lakhs before the auction. The sale certificate was given to the said K. Govindaraj after receiving the full purchase amount of Rs. 80,50,000 and the lands were directed to be registered in the name of K. Govindaraj. It was contended primarily by the petitioners that the obje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and it operates as res judicata. The auction bidder had purchased the property as a bona fide purchaser and in good faith for consideration. Therefore, the sale cannot be set aside after confirmation of the sale. Sections 36 and 38 of the R.R. Act are in pari materia Order XXI and rules 89 to 92 of the Code of Civil Procedure, 1908. Therefore, after the confirmation of the sale, since the third parties rights have intervened, the sale cannot be set aside. After the arguments were concluded, one of the directors of the company filed an affidavit of undertaking dated August 25, 2008 by name K.K. Gnanaprabakaran. In paras 3 and 5, he has averred as follows: "3. Petitioner respectfully submits that the petitioner undertakes to pay the sum of Rs. 45,67,264 being the sales tax due and payable by the petitioner-company. Petitioner respectfully submits that so far as the demand for interest for the defaulted period is concerned, petitioner states that the petitioner-company has been declared as sick, non-viable category company by the Department of Industries and Commerce, Government of Tamil Nadu under its proceedings Rc. No. 10214/D3/2002 dated July 19, 2006 copy of which has alr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent, management and sale and other costs also. But the petitioners have not undertaken to pay the said amount as provided under section 37A of the Act. According to section 37A, the petitioners are liable to pay tax arrears of Rs. 45,63,726 and interest for arrears Rs. 1,33,62,039. As they have undertaken to pay Rs. 45,67,264 only, they are not entitled for the relief sought for." It is no doubt true that the petitioner-company earlier challenged notice dated October 22, 2002 of the Commercial Tax Officer, Madurai and subsequent auction notice dated July 30, 2004. The notice dated October 22, 2002 was the order of the Commercial Tax Officer, Madurai rejecting the request of the petitioner-company to be treated it as a sick unit. Notice dated July 30, 2004 is the auction notice issued by the DCTO, Nilakkottai for bringing the properties into auction on October 14, 2004. It is seen from the said auction notice not only the copies were marked to the company but also to the four brothers individually. Pending the challenge to the notice, this court granted an interim order directing as a condition for an interim order to deposit rupees five lakhs on or before March 31, 2005 in W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a sale conducted under the Act of 1864. Consequently, the question that will arise for consideration is whether the failure on the part of the officers concerned to affix a copy of the sale notice on a conspicuous part of the land to be sold will constitute an illegality or merely a material irregularity. 9.. There is no gainsaying the importance of complying with this requirement. A mere survey number given in the sale notice may not be sufficient for the intending purchaser to identify the land so that he can make up his mind as to what price he should offer. It is only the fixing up of a copy of the notice on some conspicuous part of the land that will enable an intending purchaser to identify and localise the land and also assess its value so that he will be in a position to offer a proper price for the land. Under these circumstances, the conclusion is irresistible that the requirement that a copy of the sale notice should be affixed on some conspicuous part of the land sought to be sold is a basic and inescapable obligation imposed on the revenue authority conducting the sale. If so, the question for consideration is whether the failure to observe this statutory requirem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Senior Counsel for the petitioner in W. P. No. 5324 of 2008, submitted that the petitioner is a joint owner of the landed property covered by patta No. 185 and he was not given any notice by the authorities. Had he been given notice, he would have objected to the lands being brought under sale. The petitioner-company is not the owner of the land and the land has been given on lease. Even assuming that the company's properties can be brought under sale, the lands in which the factory is located cannot be auctioned. Further, personal properties of the two directors of the company cannot be brought under auction. Even otherwise the two directors of the company owned only 50 per cent of the undivided share. Though he submitted section 59 of the TNRR Act provides for suit remedy, the relief under article 226 cannot be denied in such cases. In this context, the learned Senior Counsel relied upon a Division Bench judgment of this court in C. Dhanalakshmi Ammal v. Income-tax Officer reported in [1957] 31 ITR 460; AIR 1957 Mad 376, and referred the following passages found in paras 10 and 11 which are as follows: (page 465 of ITR) "10. . . . we are prepared to hold that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32 of that judgment, which is reproduced below: "31. It is the basic principle of law long settled that if the manner of doing a particular act is prescribed under any statute, the act must be done in that manner or not at all. The origin of this rule is traceable to the decision in Taylor v. Taylor [1876] 1 Ch. D 426; 45 L. J. Ch 373, which was followed by Lord Roche in Nazir Ahmad v. King Emperor [1936] AIR 1936 PC 253; [1936] 63 Ind App 372, who stated as under: '[w]here a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all.' 32.. This rule has since been approved by this court in Rao Shiv Bahadur Singh v. State of Vindhya Pradesh AIR 1954 SC 322; [1954] SCR 1098, and again in Deep Chand v. State of Rajasthan [1961] AIR 1961 SC 1527; [1962 1 SCR 662. These cases were considered by a three-Judge Bench of this court in State of Uttar Pradesh v. Singhara Singh [1964] AIR 1964 SC 358; [1964] 1 SCWR 57, and the rule laid down in Nazir Ahmad case AIR 1936 PC 253; [1936] 63 Ind App 372, was again upheld. This rule has since been applied to the exercise of jurisdiction by courts and has also been recognised as a salutar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nably. While the former does not present any difficulty, the latter needs a little reiteration of its precise meaning. What does acting unfairly or unreasonably mean? Does it mean that the High Court exercising its jurisdiction under article 226 of the Constitution can sit as an appellate authority over the acts and deeds of the corporation and seek to correct them? Surely, it cannot be. That is not the function of the High Court under article 226. Doctrine of fairness, evolved in administrative law was not supposed to convert the writ courts into appellate authorities over administrative authorities. The constraints--self-imposed undoubtedly--of writ jurisdiction still remain. Ignoring them would lead to confusion and uncertainty. The jurisdiction may become rudderless. 11.. The obligation to act fairly on the part of the administrative authorities was evolved to ensure the rule of law and to prevent failure of justice. This doctrine is complementary to the principles of natural justice which the quasi-judicial authorities are bound to observe. It is true that the distinction between a quasi-judicial and the administrative action has become thin, as pointed out by this court as f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and the impugned notice are bound to set aside. In the present case, on behalf of the company, one director K.K. Gnanaprabakaran had filed an affidavit of undertaking to pay a Rs. 45,67,264 together with five per cent interest as a precondition for setting aside the sale. Therefore, the petitioner-company in W.P. Nos. 3847 and 4378 of 2008 are directed to deposit as undertaken by them vide undertaking dated June 25, 2008 within a period four weeks from the date of receipt of a copy of this order. The sale made in favour of K. Govindaraj the successful auction purchaser is hereby set aside and the Commercial Tax Department is directed to refund the amount taken from the auction purchaser within two weeks from the date of receipt of the order. It is open to the petitionercompany to move the Government for waiver of interest due to sickness faced by the company. If such a relief is not given by the Government within eight weeks from the date of receipt of the order, it is open to the department to bring the properties of the company for sale by invoking revenue recovery proceedings in accordance with law. In the light of the above, all the writ petitions are disposed of according ..... X X X X Extracts X X X X X X X X Extracts X X X X
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