9911796707
TMI Blog2008 (10) TMI 688X X X X Extracts X X X X X X X X Extracts X X X X ..... rty came to be attached and affidavit of attachment was filed vide Exhibit 6 on 15th March 2007. The reserve price of the property was fixed at ₹ 7 crores and EMD was ordered to be kept at ₹ 70 lakhs in furtherance to the valuation report submitted to that forum on 7th June 2007. The sale of the property attached was scheduled for 25th September 2007. On or about 24th September 2007, the Applicants- Defendants in the main Petition, filed an application praying for deferment/postponement of the scheduled sale on the following grounds: 1. That Defendant No. 3 Anish Kothari had expired on 04.03.2007 and his legal heirs have not been brought on record. As such the execution process including Proclamation of Sale is null and void. 2. That the Reserve Price of property is R.7 crores and EMD is fixed at ₹ 7 lacs in Public Notice dated 22.08.2007 which is against Rule 53 and 54 of Schedule II of I.T. Act 1961 as EMD kept is only 1% and not 10%. 2. Both these grounds were dealt with by the Recovery Officer vide his order dated 27th September 2007 where he held that the Applicants had approached the forum late as the Warrant of Attachment was served on 15th March 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ught not have taken place. The fact is that the appellants had come to know about holding of the public auction and after the auction had taken place the only mode or the Rule under which the appellants could have challenged the auction was by complying with the conditions laid down by Rules 60 and 61 of the Second Schedule of the Income Tax Act. The appellants had not chosen to resort to that remedy by depositing the amount. As regards the allegation about the irregularity and non-service of notice is concerned, it cannot be forgotten that the property sold was mortgaged property and the respondent bank had obtained decree for mortgage against the appellants and therefore, conditions of service of notice under Rule 54 would not be strictly applicable which was basically meant for sale of the property attached by the tax authorities. It was for this reason that the said rules are made applicable as far as possible under Section 29 of the RDB Act. The sale had taken place about one year ago on 26/9/2007 and by the application which was filed by the appellants they have been able to stall the process of handing over the possession of the property in question to the purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me significance for the Court to notice that publication of notice was made on 25th August 2007. The property was put to sale on the scheduled date i.e. 25th September 2007 and the objections raised by the Petitioners were specifically rejected not only by the Recovery Officer but even by the first and the second appellate authorities under the provisions of the Act. The matter in furtherance to this sale came before the Tribunal on different dates. Vide order dated 26th September 2007, the Debt Recovery Tribunal recorded in the minutes of the order recorded in the roznamachar for that date that the Defendants had raised an objection that in case the CH bank is bidding, then the minimum offer has to be the entire decreetal amount as per the provisions of Section 72 of the CPC. Accepting this objection of the Defendants, the Tribunal directed the Bank to pay the entire decretal amount i. e. ₹ 9,51,99,931.56 i. e. ₹ 9.52 crores and not the bid amount. It was also recorded that opportunity was given to all other bidders to raise the offer at the rate of of ₹ 25 lakhs, but nobody had shown any interest and in view of the proceedings before the Tribunal, the property w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the sale, but such application is only maintainable in terms of proviso (b) to Rule 61 if they deposit the amount recoverable with the forum where execution of the certificate is pending. Admittedly, the Petitioners have not attempted to deposit the money and stall the property being put to auction or its confirmation in subsequent proceedings before the Recovery Officer and the Tribunal. Thus, the attempts of the defaulter-Petitioners lack bona fide as at no point of time had actually offered the decreetal amount to defer and/or raise objections to the conduct and confirmation of sale of mortgaged property. The application of the Petitioners, therefore, was belated, the material and effective orders were not challenged at any point of time including even in the present Petition and the application also lacks bona fide for not taking recourse to the provisions of Rule 61 of the Rules. 10. The arguments with regard to the non compliance of Rule 54 of the Rules as well as non service of From No. 17 upon the Judgment Debtor and participation of the decree holder without the leave of the Court were not the objections raised by the applicants before the Recovery Officer and other a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was conducted on 25th/26th September 2007 prior to expiry of 30 days as contemplated under Rule 54 of the Rules is also without any merit. The public notice/proclamation was issued on 25th August 2007 and corrigendum in relation to correction was published on 28th August 2007. Besides the fact that the period of 30 days would have to be counted from 25th August, 2007 and the sale having been completed on 26th September 2007, both have squarely been in consonance with the said Rules and in any case, nobody has come forward with such a case and even the Petitioners have also failed to show that they suffered any benefit because of two days' delay i.e. 28th August 2007 when the corrigendum was published. Thus, we see no merit in this contention. 11. Once the sale is confirmed, a definite right accrues in favour of the auction purchaser. Under Rule 63 where no application is made for setting aside the sale or where such an application is made and just allowed by the Recovery Officer, the Tax Officer shall upon deposit of the amount make an order confirming the sale. Thereupon, the sale shall become absolute. This is not a transaction effected between the parties privately. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as without intervention of the Court and document of transfer/title had not been registered where the Court, under Section 54 of the Transfer of Property Act, 1882, held that the mortgagor could redeem the mortgage. Here the Petitioners participated in the proceedings at all stages i.e. right from the issuance of proclamation, acceptance of bid, modification of the amount to be deposited by the Bank and finally in the confirmation of the sale. It only filed an application for deferment of the sale and never took any step under Rule 61 of the Rules to pray for setting aside of the same after depositing the requisite amount. The learned Counsel for the Petitioners also relied upon a judgment of the Supreme Court in the case of Mahakal Automobiles and Anr. v. Kishan Swaroop Sharma AIR 2008 SC 2061, to contend that no notice was given to the Judgment Debtor and thus in terms of Rules 54 and 66 of Order 21, the sale gets vitiated. The principle of law laid down by the Supreme Court in this c128) case can hardly be questioned but again on facts it has no application to the present case. There is no proceedings in the entire execution of the recovery certificate where the Petitioners have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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