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TMI Blog2014 (12) TMI 1295X X X X Extracts X X X X X X X X Extracts X X X X ..... de in M.A. No. 130 of 2013 against Appeal No. 16 of 2012 dated 6.5.2014 on the file of the Debt Recovery Appellate Tribunal, Chennai/first respondent herein. (2) THE case of the petitioner in both the writ petitions are as follows: (a) The property comprised in Survey No. 7/2A, 110 Kulathur Village, Pollachi Taluk, Coimbatore District, belonged to one Kuttiammal. Petitioner is her son and he is the Cultivating Tenant in respect of the property to an extent of 4.40 acres. The said Kuttiammal stood as Guarantor for the loan availed by M/s. Sabari Paper Products and executed a guarantee agreement on 6.10.1998 for raising loan of ₹ 7,17,716/- in Indian Overseas Bank, Pollachi Branch. Petitioner was recognised as a Cultivating Tenant in respect of the said property by order dated 28.11.1988. (b) The loan amount having not been repaid by the borrower, the bank filed civil suit in O.S. No. 123 of 1989 before the Sub Court, Udumalapet for recovery of a sum of ₹ 7,14,653.99 with interest at the rate of 12% per annum and in the said suit an exparte preliminary decree was passed against the said Kuttiammal on 18.7.1994. Thereafter, final decree application was filed in I. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aying for direction to the Presiding Officer to issue copy of the proceedings, wherein an order of stay dated 19.4.2012 was granted staying the order made on 13.3.2012. This Court by order dated 26.4.2012 disposed of the writ petition ordering transfer of Appeal No. 1 of 2009 on the file of DRT, Coimbatore to DRT-II, Chennai. Based on the said order, the appeal was transferred to DRT-II, Chennai and re-numbered as Appeal No. 16 of 2012 and thereafter petitioner obtained certified copy of the order dated 3.4.2012. (h) On 21.12.2012 petitioner filed appeal before DRAT against the order in I.A. No. 278 of 2012 dated 3.4.2012. Petitioner also preferred I.A. No. 34 of 2013 to defer hearing of Appeal 16 of 2012. (i) It is the contention of the petitioner that on 19.3.2013 petitioner filed I.A. No. 82 of 2013 for permitting the petitioner to redeem the mortgaged properties. DRT-II, Chennai, without deciding the said application, having proceeded with the hearing of the Appeal No. 16 of 2012, petitioner filed W.P. No. 6679 of 2013 and obtained an interim stay on 19.3.2013 on condition that the petitioner shall deposit a sum of ₹ 15 lakhs within a period of four weeks. Petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , father of the petitioner, availed credit facilities from the Bank, for which petitioner's mother Kuttiammal stood as Guarantor. She had mortgaged the properties stated under sale proclamation dated 18.3.2009 and the said mortgage was created in the year 1981. (ii) The borrower committed default, pursuant to which suit bearing O.S. No. 123 of 1989 was filed before the Sub Court, Pollachi for recovery of ₹ 7,17,716.78, which was decreed on 18.7.1994 and a final decree proceeding was initiated and final decree was also passed on 20.10.2003. Before the said final decree proceedings, the defendant in the suit died and the petitioner and other legal heirs, were brought on record. Petitioner was shown as 8th defendant in the final decree proceedings. (iii) As the recoverable amount exceeded ₹ 10 lakhs, third respondent applied for recovery certificate by filing O.A. No. 43 of 2005 and DRT issued recovery certificate on 13.3.2008 for recovery of ₹ 17,15,633/- together with interest at the rate of 12% per annum from 4.2.2005. Based on the recovery certificate, a demand notice was issued by the Recovery Officer on 9.4.2008 for recovery of a sum of ₹ 20,35, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner has no right to agitate in these writ petitions as he has not filed the application within the stipulated time by depositing the entire amount. (4.) THE 4th respondent also filed common counter affidavit and supported the contention of the petitioner. According to the 4th respondent, notice of proclamation of sale was issued on 31.7.2008 pertaining to total extent of 4.9 acres of land and called upon the petitioner and legal heirs of Durairaj and Kuttiammal to repay a sum of ₹ 20,35,823/- as ordered by the DRT, Coimbatore. The said amount having not been paid, proclamation of sale of the entire extent of scheduled property measuring 4.9 acres was issued on behalf of the Bank by the Recovery Officer, DRT, Coimbatore. 4th respondent participated in the auction and the bid amount quoted by her being ₹ 20.20 lakhs, the same was confirmed and the said amount was also paid before the DRT, Coimbatore on 22.4.2009. Though interim stay in I.A. No. 887 of 2009 was granted by DRAT, Chennai on condition to deposit a sum of ₹ 4 lakhs, the said conditional order was not complied with by the petitioner and further direction to clear the entire dues was stayed at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property is to follow the mandatory conditions contained in Rule 60 and 61 of the Income Tax Act, 1961. The deposit of entire amount is a precondition for filing application to redeem the property within 30 days. The learned counsel relied on the judgment of the Supreme Court Janatha textiles v. Tax Recovery Officer, 2008 12 SCC 582 and argued that the Auction Purchaser being a bona fide purchaser, should be given the property sold through auction. (7.) MR . F.B. Benjamin George, learned counsel appearing for the Bank submitted that the petitioner's request to proceed against the first schedule property was not considered as the value of the entire property was only ₹ 19.50 lakhs. The learned counsel also supported the stand of the Auction Purchaser and submitted that though I.A. No. 82 of 2013 is filed on 19.2.2013, no amount was deposited by the petitioner and the interim application itself was filed after the period of limitation and therefore the petitioner's right to redeem the property no longer survives. (8.) WE have considered the rival submissions made by the learned counsel for the respective parties. (9.) IT is not in dispute that the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... condition. The applicability of Rule 61 of the Income Tax Act read with Section 30 of RDDB FI Act, 1993 is not in dispute and in fact the Division Bench of this Court in the decision Maan Saravoar Properties Development Pvt. Ltd. v. Union of India, 2014 5 LW 381 upheld the constitutional validity of Rule 60 of Income Tax Act, 1961. In the said judgment it is held that Auction Purchaser does not make a bid for fun of it and it has financial consequences. The said rules are applicable to the RDDB FI Act, 1993, by virtue of Section 29 of the Act, which reads as follows: 29. Application of certain provisions of Income-tax Act:- The provisions of the Second and Third Schedules to the Income-Tax Act, 1961 and the Income-tax (Certificate Proceedings) Rules, 1962, as in force from time to time shall, as far as possible, apply with necessary modifications as if the said provisions and the rules referred to the amount of debt due under this Act instead of to the Income-tax: Provided that any reference under the said provisions and the rules to the Assessee shall be construed as a reference to the defendant under this Act. From the above referred statutory provision it is eviden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iv Prasad Sinha on 22.9.2008. Thereafter possession of the property was also handed over to the auction-purchaser on 11.3.2009. Applying the law declared by this Court in the judgments referred in the foregoing paragraphs irrespective of the merits of the lis between the rival parties, namely, the Allahabad Bank and the partners of M/s. Amar Timber Works, it is not open for anyone to assail the purchase of the property made by Sadashiv Prasad Sinha in the public auction held in furtherance of the order passed by the Recovery Officer on 28.8.2008. In the above view of the matter, especially in the absence of any allegation of fraud or collusion, we are of the view that the High Court clearly erred while setting aside the auction ordered in favour of the auction-purchaser, Sadashiv Prasad Sinha in the impugned order dated 17.5.2010. (14.) THE Division Bench of this Court in P. Shuyjaath Raheed v. State Bank of India, 2012 3 CTC 724hile considering the scope of Section 29 of the RDDB FI Act, 1993 read with Second Schedule to Rule 61 of the Income Tax Act, 1961, held that any person, who seeks to set aside the sale of the immovable property being a defaulter in repayment, has to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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