Debt Recovery Appellate Tribunal - Allahabad
Surendra Singh Bhaduria vs Punjab National Bank And Ors. on 8 August, 2007
Equivalent citations: I(2008)BC134
JUDGMENT
R.S. Tripathi, J. (Chairperson)
1. This appeal has been preferred against the judgment dated 19th July, 2006 passed by the Presiding Officer, D.R.T., Jabalpur in Appeal No. 19/2006 which arose against an order dated 8th May, 2006 passed by the Recovery Officer-I, D.R.T., Jabalpur rejecting objection filed on behalf of the appellant for setting aside the sale.
2. In brief the present appellant preferred an objection against execution proceedings of Execution Case No. 108/2004, which was initiated by the respondent Bank on the basis of acertificate of recovery issued in pursuance to a judgment dated 7th October, 2004 passed in Original Application No. 51/2002 for the recovery against the appellant. When the recovery proceedings were taken-up after observing required formalities the proclamation of terms of auction etc. were settled. The present appellant filed above objection before Recovery Officer alleging therein that the terms of auction settled mechanically without application of mind committing several irregularities in violation of the procedure laid down under the Second Schedule of the Rules of the Income-tax Act, 1961. It was pleaded in that objection that the mandatory provision of 30 days' time of the notice as required under the law for the auction was not given and the objection filed in respect thereof was not decided properly. The valuation/reserved price of the property was also challenged on the ground that the Bank manipulated for the sale of the property at a lesser price. According to the appellant's objection, the husband of Smt. Kamaljeet Kaur Aroraauction purchaser namely K.J.S. Arora was himself working as a Branch Manager in Punjab National Bank, Govindpura, Raisen Road, Bhopal (M.P.) colluded to purchase the property in the name of his wife Smt. Kamaljeet Kaur Arora, whereas the bid was at the instance of her husband himself, who being an employee of the certificate holder Bank and gainfully employed with the certificate holder Bank as Branch Manager had no authority to do so and for that reason the auction was illegal and liable to be set aside. The plea of refusal to settle the dispute by means of one time settlement was also raised and it was pleaded that the sale in favour of the employee of the same Bank which was certificate holder was in gross violation of the Rule 17 of the Second Schedule of the Income-tax Act, 1961. Hence, they prayed for cancellation of the above sale held on 30th May, 2005.
3. The objection was resisted by the Bank, who filed reply in the form of preliminary objection to the same denying all allegations of the present appellant. It was pleaded by the Bank that for non-deposit of the amount as per the provisions of Rules 60 and 61 of the Income-tax Act, Second Schedule, the present objection was liable to be dismissed on this ground alone. It was pleaded that the order passed by the Recovery Officer in absence of compliance of the deposit was perfectly justified. According to the Bank notice for the auction was properly published and issued giving 30 days' time and that there was absolutely no inadequacy of the price which has come after the sale of the property in question. The Bank denied the applicability of Rule 17 of the Second Schedule of the Income-tax Act, 1961. They pleaded that in all six persons participated in bid and the bid finalized after 16 rounds.
4. The same objection like that of the Bank was also raised from the side of the auction purchaser against the objection preferred by the appellant before the Recovery Officer.
5. This Tribunal after hearing the learned Counsel for the appellant Mr. Satish Agarwal and Mr. V.D. Chauhan, learned Counsel for the auction purchaser and Mr. R.N. Singh, Advocate appearing on behalf of the respondent Bank at length went through the entire record including original record which has been summoned by this Tribunal.
6. At the very outset it is to be mentioned here that the learned Counsel for the appellant has laid emphasis only on the question of non-compliance of Rule 17 of the Second Schedule of the Income-tax Act, 1961 and has argued that the entire proceedings for auction are hit by above provisions of Rule 17. He has not argued any other point before this Tribunal in this appeal.
7. The point which arises for decision is as under:
The Rule 17 of the Income-tax Act, Second Schedule has been violated on account of sale in favour of Smt. Kamaljeet Kaur Arora, who happens to be wife of Mr. K.J.S. Arora an employee of the respondent Bank.
8. During the course of argument, learned Counsel for the appellant Mr. Satish Agarwal has led this Tribunal through the various rules of the Second Schedule of the Income-tax Act and has mainly remained confined towards Rule 17 for challenging the auction in question. In this connection when we take up above Rule 17 we find that it provides as under:
No officer or other persons having any duty to perform in connection with any sale under the Schedule shall either directly or indirectly, bid, if, acquire or attempt to acquire any interest in the property sold.
9. He has also taken this Tribunal towards Rules 54 to 56 also drawing the attention of this Tribunal towards Rules 60 and 61 of the aforesaid Second Schedule. His submission is that Rule 61 is a different provision wherein the sale can be challenged on ground of non-service of notice or irregularities etc. as provided therein and in the instant case according to his submission as the ground taken by the appellant is violation of Rule 17, the provisions of Rule 61 are not attracted so as to require the appellant to deposit the amount envisaged under Rules 60 and 61 of the aforesaid Second Schedule. According to his submission the Recovery Officer as well as D.R.T. have not been able to appreciate the fact that the requirement for Rule 17 makes the entire auction nullity and for that no deposit can be pressed whereas Rules 60 and 61 are on different footings, therefore, the requirements of the Rule 60 cannot be applied for the objection under Rule 17. His contention is that the arguments advanced from the other side before the D.R.T. that the husband of the auction purchaser Smt. Kamal Jeet Kaur Arora cannot be taken to be the officer within the meaning of Rule 17 is without any justification and for this reason the evasive reply from the side of the auction purchaser to the objection filed by the appellant before the Recovery Officer has to be considered seriously. His further submission is that the amount of sale through above auction was required to go to the respondent Bank through its branch concerned and the husband of the auction purchaser admittedly being an employee of the respondent Bank, which is being benefited through this auction comes within the meaning of provisions of above Rule 17. He has also tried to argue that the wife (auction purchaser) got prepared Bank Drafts for the auction from the Govindpura Branch of the rcspondenl-Bank, where her husband is Branch Manager and to the best knowledge of the appellant, the husband of the auction purchaser stood guarantor in giving his personal guarantee for the loan said to have been taken by the wife from her place of employment. Therefore, under the circumstances it cannot be said that the husband of the auction purchaser did not actively participate in this auction. He has relied upon the rulings Saurangini Dasi v. Kali Pada Chatterjee I.L.R. 1948 Cal. 70 of Hon'ble Calcutta High Court. In this ruling the facts were that the pleader who was deputed by his client to participate in the auction on his behalf himself (client) participated in the auction and purchased the property in his name instead of in the name of his client and under these circumstances, Hon'ble Court took the view that a person in a fiduciary and confidentially situation like him could not be permitted to make himself an interested party to the same transaction which he was in trust bound most vigilantly to superintend on behalf of his client. Another ruling cited from the side of the appellant is, Sunderabai v. Bapuna , wherein the Counsel got the sale finalized in favour of his son through his another family member without filing any application and verified statement required under the law. These two rulings are not at all attracted in the instant case to help the appellant on facts as well as on law. Learned Counsel for the auction purchaser and Bank both have argued vehemently that under Rule 1 (e) of the Second Schedule of the Income-tax Act, 1961, the word officer has been defined as under:
"Officer" means a person authorised to make an attachment or sale under this Schedule.
10. They both have argued that when we take up this definition to apply the provision of Rule 17 as argued from the side of the appellant we find that the husband of the auction purchaser cannot be taken to be an officer within the meaning of above Rule 1(e). The argument from the side of the appellant that the person, who physically participates as an officer of the respondent Bank should alone cannot to be taken as officer within the meantime of Rule 17 but also should be considered as officer under Rule 1(e). In the light of above provisions of Rule 1(e) the argument of respondents should not be accepted. The argument that the husband's Bank prepared the Bank Draft or that he stood a guarantor for the loan taken by his wife for this auction. In the light of above, definition of officer is not worth appreciation for applying Rule 1(e) in this case. In the opinion of this Tribunal, the definition of officer as provided under Rule 1(e) cannot be stretched in the manner in which the Counsel for the appellant has tried to stretch before this Tribunal. Moreover, from the objection and application moved on behalf of appellant before the Recovery Officer to summon the papers required for the loan said to have been taken by the auction purchaser, it is very clear that at that time what the appellant wanted to assert was that the husband of the auction purchaser had actually taken loan for this purchase, but in the prayer part of that application, the appellant went to the extent of praying for summoning the papers relating to such loan taken by husband or his wife to show that aforesaid husband of the auction was guarantor. His argument is that Rule 17 is a provision making the auction nullity and is independent of Rule 60 or 61 and presupposes the position prior to the requirements of deposit as provided under Rules 60 and 61, therefore, appellant has committed no mistake in not depositing the amount as required under the above Rules 60 and 61. In this very connection the learned Counsel for the Bank has tried to rely upon a ruling of Saheb Khan v. Mohd. Yusufuddin 2006 A.I.R. S.C.W. 2210, wherein the matter related to service of notice under the provisions of CPC. Learned Counsel for the Bank has also cited a ruling, Vishwanath Prasad Bajpai v. Vth Additional District Judge, Deoria 2007(1) A.L.J. 295. Learned Counsel for the auction purchaser has cited a judgment of this Tribunal delivered by my learned predecessor Mr. Justice P.K. Deb in Appeal No. R-497/2005 decided on 13th December, 2005, Shyama Devi Chaurasia v. State Bank of India; Bhupinder Kaur v. Punjab National Bank, I (2001) B.C. 26 (D.R.A.T./D.R.T.). These all rulings are based on different set of facts and law are not at all attracted in this case. One another ruling, Comet Garments (P.) Ltd. v. Recovery Officer, D.R.T. II (2000) B.C. 610 (Delhi)(D.B.), of Hon'ble Delhi High Court has been cited by the Counsel for the appellant, wherein it has been observed that if there is an objection against sale regarding irregularity in conduct of sale, the deposit of amount is required. Also similar view has been taken in the case reported as Anto Nito v. South Indian Bank Ltd. 1999(2) Bank C.L.R. 479 (Ker.), wherein a Division Bench of Hon'ble Kerala High Court has taken the view in a case wherein the objection was against the sale under Rule 72-A of the CPC which is like Rule 17 given above and the Hon'ble Division Bench considered the requirement of deposit necessary. In view of these rulings, the above contention advanced from the side of the appellant that the deposit was not required is of no force.
Under these circumstances, this Tribunal is of the opinion that as argued from the side of the respondents, the appellant having failed to deposit any amount as required under Rule 61 of the Second Schedule of the Income-tax Act was not entitled to be heard. Apart from this, the Rule 17 of the aforesaid Second Schedule of the Income-tax Act is not at all attracted to hit auction in question.
11. The result of above discussions is that this appeal has no force and it deserves dismissal.
ORDER Appeal is hereby dismissed. Let a copy of this judgment be sent to the concerned D.R.T. as well as to parties also.