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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 ..... ood 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 Rs. 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 Rs. 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.A. No. 358 of 2002, which was also decreed on 20.10.2003. In the said final decree application, petitioner herein was impleaded as one of the legal heir of the deceased Kuttiammal, who died during pendency of the suit. (c) For realisation of the decree amount, Bank filed an application before the Debt Recovery Tribunal, Coimbatore in O.A. No. 43 of 2005 on 24.1.2005 and a recovery certificate was issued in DRC. 45 of 2008 on 24.3.2008. As per the recovery certificate, a demand notice was issued followed by p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.12.2012 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 Rs. 15 lakhs within a period of four weeks. Petitioner deposited the said sum of Rs. 15 lakhs in compliance with the condition of stay order on 4.4.2013. (j) W.P. No. 6679 of 2012 was disposed of on 30.4.2013 by giving direction to DRT-II, Chennai to dispose of I.A. No. 34 and 82 of 2013 along with Appeal No. 16 of 2012. DRT dismissed the said appeal as well as interim applications by order dated 28.7.2013 and the said orders were challenged by filing appeals before the DRAT. The same were disposed of on 6.5.2014. The said orders are challenged in these writ petitions. (k) The con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Rs. 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 Rs. 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 Rs. 20,35,823.72 together with subsequent interest. In spite of receiving notice, the petitioner failed to pay the amount. (iv) Proclamation notice was issued on 31.7.2008 and only thereafter petitioner filed I.A. No. 2113 of 2008 claiming that he is the Cultivating Tenant of Schedule-II property. His contention was that sale of Schedule-I property is sufficient and sale certificate in respect of Schedule-II property may be issued in his favour. The Recovery Officer considered the said plea and having noticed that valuation of both the lands put together is around Rs. 17.10 lakhs as aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Rs. 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 Rs. 4 lakhs, the said conditional order was not complied with by the petitioner and further direction to clear the entire dues was stayed at the instance of the petitioner on the ground that the 4th respondent filed implead petition. It is also the contention of the 4th respondent that the sale having been completed and the sale proceeds having been deposited by the 4th respondent, the remedy open to the petitioner is only to file an application seeking redemption of the property under Rule 60 of Schedule-II of Income Tax Rules by depositing the entire dues and the petitioner having not chosen to avail the said remedy, petitioner is not entitled to get any relief from the Court. Interim application filed seeking redemption of the property was belate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the value of the entire property was only Rs. 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's mother viz., Kuttiammal stood as a Guarantor for the loan availed by M/s. Sabari Paper Products and a decree was passed in the civil suit at the instance of the Bank in O.S. No. 123 of 1989 before the Sub Court, Ulundurpet for recovery of a sum of Rs. 7,17,716.78 against the said Kuttiammal. The said suit was filed on 24.4.1989. A preliminary decree was passed on 18.7.1994. When final decree proceeding was pending the said Kuttiammal died on 7.1.2003 and the petitioner got himself impleaded as legal heir along with other legal heirs in I.A. No. 358 of 2002 in O.S. No. 123 of 1989. Final decree was passed on 20.10.2003 and for issuing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 evident that Schedule-II to Rule 60 or 61 of the Income Tax Act, 1961 is bound to be complied with by the judgment debtor, whose property was sold in exercise of powers conferred under the RDDB & FI Act, 1993. (12.) IN this case, admittedly the petitioner has not filed the application for redemption within 30 days from the proclamation of sale of Schedule-II property and admittedly the proclamation was made on 15.3.2009. Thirty days time was available only upto 14.4.2009. Therefore, I.A. No. 82 of 2013 filed on 19.2.2013 is beyond the period permitted under the said rule and the petitioner also failed to deposit the amount within the stipulated time, even though he c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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 necessarily deposit the amount specified in the proclamation of sale. In the said Division Bench Judgment several decisions of the Honourable Supreme Court and of this Court have been relied on. Considering the above judgments as well as the provisions contained in RDDB & FI Act, 1993 read with the procedure contemplated under Rule 60 and 61 of Schedule-II of Income Tax Act, 1961 and the petitioner having not exercised his right to set aside the sale of the property under Section 30 of the Act within the stipulated time, we are of the view that the Auction Purchaser is entitled to have the sale certificate of Schedule-II property and the petitioner is entitled to get refund of ..... 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