P. RADHAKRISHNAN vs STATE BANK OF INDIA on 16 May 2023

**ORDER**

1. This is an Appeal filed u/s 30 (1) of the RDB Act filed by the Appellant to set aside the sale held on 28.01.2009 by the Ld. Recovery Officer of this Tribunal.

3Appeal 03/2009

1. 2. The main grievances of the 2^nd & 3^rd Respondents being the Auction Purchasers are not heard in the Appeal and they are to be given a fresh hearing, as the 2^nd & 3^rd Respondents became ex-parte in the case only due to the mistake of the counsel, who undertake to file vakalat and failed to do so and on this ground alone, the Hon^ble DRAT held that, "for the mistake of counsel parties should not be made to suffer" and a substantial hearing to be granted to the 2^nd & 3^rd Respondents (Auction Purchaser) in the Appeal.

2. 3. The substantial part of order passed by the Tribunal, wherein the pleadings & arguments of the Appellant and the Respondents other than the 2^nd & 3^rd Respondents are the findings given by this Tribunal by its order dated 16.12.2016 are extracted and re-produced as follows:

1. 1. **Appeal 3/09--**This appeal has been filed to set aside the sale that took place on 28.01.2009 to R-2 and R-3 by R-5 / the Ld. Recovery Officer.

1. 2. The Brief averments of the Appeal memorandum are as follows:- The 1^st Respondent / Applicant Bank (SBBJ) had filed T.A. No.1431/02 under S.31(1) of the RDDBFi Act for recovery of Rs.12,21,006.40p. It was decreed by this Tribunal on 13.11.2006 and a Recovery Certificate/DRC was also issued to that effect with interest @9% per annum from 04.02.1985, the date of suit till the date of realization, and with costs.

In continuation of the DRC being issued, R.P.No.30/2007 in D.R.C.No.30/2007 had been filed before the Ld. Recovery Officer / 5^th Respondent, who proclaimed the sale was fixed firstly on 12.1.2009 and thereafter, the sale was fixed on 28.01.2009. The Appellant had mortgaged an extent of 2 acre of agricultural land SF G.S.No.435 of Velankurichi Village, Coimbatore District, which is more fully described in the Appeal Memorandum for obtaining the loan in question. But, the Ld. Recovery Officer proclaimed only an extent of 24.95 cents from the total extent of 2 acres of land, which is not in accordance with the RDDBFi Act, 1993. The property had not been properly demarcated and it was an undivided share of property which was brought to sale. The Ld. Recovery Officer / R-5 did not offer any opportunity to put forth the objections of the appellant. The valuation of the property was fixed at a very low price. Ultimately the property was sold for auction for a sum of Rs.63 lakhs. The reserve price fixed was Rs.2 lakhs especially when the guideline value was Rs.3 lakhs per cent and the market value was more than Rs.10 lakhs per cent. On 13.2.2009, a Demand Notice was received from the 4^th Respondent demanding a sum of Rs.88,00,03,529/82p and it was demanded to settle the account within sixty days. The property in question was concerned in RP No.52 of 2006 in DRC No.47/2006, in which the 4^th Respondent / UBI was the Applicant. Therefore, the property in question was brought for sale, when it was under attachment of R4. The property was brought to sale without any demarcation. The valuation fixed by the 1^st Respondent Bank was very low. When the attachment was in force the property was brought to sale which is illegal and it is ab initio and void. The encumbrance was not notified before the property was brought to sale. No proper enquiry was conducted by the Ld. Recovery Officer/ R5. Considering the prevailing the market value, the portion of 4.5 cents would have been sufficient to discharge the liability of R-1. Therefore, the proceedings initiated by R5 is against law. Hence, it has to be set aside.

1. 3. The brief averments of counter of R1 are as follows:- 4Appeal 03/2009

The appellant had an opportunity to rise the attachment by filing an application under the provisions of S.60 and S.61 of 2^nd Schedule of the Income Tax Act before R-5. But, such exercise had not been resorted to. The DRC issued by this Tribunal empowered R5 to initiate the proceedings in RP 30/2007 in DRC 30/2007. The Ld. Recovery Officer was empowered to adjourn the sale within 30 days from the proceeding date of sale. Hence re-publication was not necessary. The property is divisible in nature. The property had been valued by a competent valuer by following methods of valuation of land and the Ld. RO has no necessity to lower the price. The recovery proceedings initiated based upon the orders of this Tribunal. The charge of R-4 Union Bank of India, is not binding on the 1^st Respondent, State Bank of Bikaner and Jaipur, Coimbatore Branch. The auction was conducted on 28.1.2009. The appellant should have remitted the auction sale amount before this Tribunal while filing the appeal. The sale was also confirmed and the amount was duly adjusted by the R/Bank. Hence, this Petition has to be dismissed.

1. 4. R2 and R3 remained ex-parte.

2. 5. Brief averments of R4 are as follows:- The 4^th respondent is not a party in IA 22 and 23/2009. Therefore, Appeal is bad for mis-joinder of unnecessary parties. The 1^st Respondent had the 1^st charge and the 4^th respondent had the 2^nd charge over the property in question, by virtue of the order passed by this Tribunal in TA 1427/2002. The R4 initiated RP 52/2006 before the 5^th Respondent on 12.10.2007. Based upon the DRC the Ld. R5 / RO sold a portion of a property to an extent of 35 cents. The appellant filed I.A. No. 736/2009 before R5 to raise the attachment. The said IA 736/2009 was dismissed by the Ld. Recovery Officer/ R5. As against the order AP No.2/2010 was filed before this Tribunal and that was dismissed on 8.6.2011. An appeal was preferred before the Hon'ble DRAT which is pending for disposal. The 1^st charge holder Respondent had absolute right to realize the dues. And accordingly an extent of 24.95 cents were sold out with specific boundaries. The Recovery Officer / R5 with a view to recover the money had acted diligently. An excess amount of Rs.23,33,315.68/- was paid by the Recovery Officer to the loan account of this Respondent as per the garnishee order. Therefore, after adjusting the said amount the balance amount payable was Rs.88,03,529.82ps/- with interest and costs. The Hon'ble Supreme Court and High Court found that simultaneous proceedings could be initiated by the secured creditor. The valuation fixed for the property is Rs.2 lakhs per cent was arbitrary and baseless, is denied. The property is not an agricultural property. Hence, the appeal has to be dismissed.

1. 6. The following points arises for consideration in this Appeal:-

1. 1. Whether the appellant is entitled for the prayer as prayed for?

2. 2. What order the appellant is entitled to?

Point No.1: There is no dispute that TA 1427/2002 was filed before this Tribunal under S.31 of the RDDBF1 which was decreed for a sum of Rs.12,21,006.40p with interest 20% per annum with costs on 13.11.2006. Accordingly, RC was also issued wherein, this Tribunal has ordered to pay interest @ 9% per annum from 04.2.1985 till the date of the order and thereafter @9% per annum till the date of realization with costs. The 1^st R/bank in consequent thereof had filed R.P. No.30/2007 in DRC No.30/2007, wherein an attachment order was obtained by the R/Bank. Subsequently the Ld. Recovery Officer proclaimed the property for sale and the sale was fixed on 12.1.2009 at 11.30 AM. Thereafter, it was postponed on 28.1.2009 without any re-publication to the public. The appellant had mortgaged 2 acres in SF 435 of Velankurchi Village, Coimbatore District, which is more fully described in the Appeal. But, according to the Appellant the Ld. Recovery Officer proclaimed an extent of 24.95 cents from out of 2 acres of land which is not in accordance with the Act and Rules as laid down by the RDDBF1 Act. The Ld. counsel for the appellant submitted that the Ld. RO, did not act in accordance with the Rules framed under the Security Enforcement Rules and proclaimed the sale without specific demarcation in r/o. part of the property, which was against his authority. The Ld. counsel further added that the Ld. Recovery Officer was not empowered to bring a portion of the property for sale and thereby, the Ld. Recovery Officer had flouted the settled position of law and auctioned the property on 28.1.2009. The Ld. counsel further added that the value of Rs.2 lakhs per cent fixed by the R/Bank was also too low, which not in consonance with the prevailing 5Appeal 03/2009

Market value of Rs.10 lakhs per cent and the guideline value was more than Rs.3 lakhs per cent then and the property which was sold for Rs.63 lakhs is very low and is arbitrary and baseless. The Ld. Counsel further submitted that the Appellant had received from Union Bank of India, Regional Office, Oppanakara Street, Coimbatore dated 13.2.2009, under the caption "Enforcement of security interest" Auction Notice in connection with our Coimbatore Branch that the account was classified as NPA and the property in question would be proceeded with if the outstanding amount of Rs.88,03,529.82ps was not discharged by the Appellant within 60 days from the date of receipt of the notice. The Ld. counsel contended that the property in question had been already attached in RP 52/2006 in DRC 47/2006 in which Union Bank of India was an Applicant and how the property was auctioned without any specific boundaries by the Ld. Recovery Officer and the value mentioned in the proclamation of sale notice at Rs.2 lakhs / cent was highly arbitrary especially when the market value was more than Rs.10 lakhs / cent and the guideline was Rs.3 / cents. According to the Ld. counsel for the appellant, the sale conducted by the R/Bank was ab initio void and illegal, when the attachment of UBI was in force. The Ld. counsel strenuously argued that it was totally surprising as to how the Ld. Recovery Officer had sold the property to an extent 24.95 cents from out of a total extent of 2 acres of land which was mortgaged in favour of the 1^st Respondent. The Ld. counsel sought to consider the circumstances projected by the Appellant and sought to set aside the sale which took place on 28.1.2009.

The Ld. counsel for the 1^st R/Bank submitted that though an opportunity was available to raise the attachment by filing an application before the Ld. Recovery Officer under S. 60 and 61 schedule II of Income Tax Act, 1961, the appellant failed to avail the opportunity and the attachment effected by the Ld. Recovery Officer was within his powers and he sold that portion of the property which was sufficient to satisfy the debts of the R/Bank was alone culled out from the total extent of the property and the same was sold by public auction which was in accordance with the Rules of the RDDBF Act. The Ld. counsel further submitted that property was assessed by a competent valuer and the Ld. Recovery Officer had no necessity to sell the property at a lower price and the charge created in favour of the UBI would not bind the proceedings, which was initiated by the Ld. Recovery Officer of the DRT. The Ld. counsel further submitted that the auction was held on 28.1.2009 itself and if the appellant wanted to set aside the sale, he should have remitted the auction sale amount before this Tribunal at the time of filing the Appeal itself and the confirmation of sale was over and the amount was adjusted towards the loan account with the R/Bank. The Ld. counsel sought to dismiss the Appeal.

The Ld. counsel for the 4^th Respondent UBI submitted that the 4^th Respondent was not at all a party in the proceedings before the Ld. Recovery Officer in IA 22 and 23/2009 and the Appeal should be dismissed for mis-joinder of unnecessary parties. The Ld. counsel further contended that the 4^th Respondent/ UBI has got a second charge over the Appeal mentioned properties to an extent of 2 acres of landed properties which is situated SF 435, Vellankurchi Village, Coimbatore and the entire property was under attachment in RP 52/2006 by the Ld. Recovery Officer on 12.10.2007. The Ld. counsel further submitted that the Appellant filed IA 736/2009 before the Ld. Recovery Officer which was dismissed by him and as against the dismissal order the Appellant had filed AP 2/2010 before this Tribunal, which was also later on dismissed as per the order of this Tribunal dated 8.6.2011 and the Appeal before the Hon'ble DRAT is still pending for disposal. According to the Ld. counsel for R-4, the 1^st Respondent had the 1^st charge over the 2 acres of landed property and in order to realize their dues they brought a portion of property to an extent of 24.95 cents which was demarcated with boundaries and in order to realize the said amount, which was due to the 1^st Respondent Bank, the Ld. Recovery Officer had sold that portion of the property and the excess sale proceeds of Rs.23.13,215.68ps was paid by the Ld. Recovery Officer to the loan account of the 4^th Respondent as per the garnishee order passed by the Ld. Recovery Officer. The Ld. counsel further submitted that after adjusting the said amount the balance due and payable as on 13.2.2009 was Rs.88,03,529.82ps with subsequent interest and costs and the R4 also had initiated SARFAESI proceedings by issuing Demand Notice dated 13.2.2009, to realize the amount and the claim of the Appellant should be rejected in toto.

7. In the light of the rival contentions raised by the Appellant, R1 and R4, the materials placed on record by the Appellant are carefully discerned by this Tribunal. The Appellant has filed stay petition and a petition to set aside the sale notice 10.12.2008 in RP 30.2007 in DRC 30/2007 in TA 1431/02 in I.A. 22

6Appeal 03/2009

and 23/2009. The Appellant in his petition had pleaded that the Ld. RO had proclaimed an extent of 24.95 cents from the whole extent of 2 acres of land for sale, which was not in consonance with the Act or the Rules laid down by RDDBFi Act, 1993 and the land had not been clearly demarcated and undivided share of the property that was brought to sale and sought to provide an opportunity to state the objections with regard to proclamation of sale with that part of the property. It was also objected that a portion of the property should not be brought to sale, when the entire property was mortgaged with the 1^st Respondent Bank. The Appellant in his petition to set aside the proclamation notice dated 10.12.2008, had pleaded as follows:- "For the reasons stated in the accompanying affidavit, the Petitioner most humbly prays that this Honourable Office may be pleased to set aside the sale notice dated 10.12.2008 in R.P.No.30 of 2007 and in D.R.C. No.30 of 2007 and pass such other orders in the circumstances of the case and render justice.

Description of property proclaimed for sale:- Coimbatore Registration District, Gandhipuram Registration Sub-District, Coimbatore Taluk, Velankurichi Village, G.S.No.435, Dry acres 5.02, in this North of Medical college lands West of other lands belonging to the vendor South of the east west road with a width of 30 ft. permitted by the vendor East of "Palaniappa Chettiar Road" (South to North Road with a width of 40 ft between the above boundaries, Dry acres 2.00 of agricultural lands)

Right of roads as per Document No.2719/1981 dated 11.06.1981 and registered on 12.06.1981 in Gandhipuram Sub Registrar's office in Book1, Volume 478, pages 89 to 96 pertaining to these lands.

Out of the above 24.95 cents is offered for sale."

It is clear from the above pleadings that the Ld. RO had culled out an extent of 24.95 cents from the total extent of 2 acres of the secured asset, which the Ld. RO was not expected to do so under the Act or the Rules laid down in the RDDBFi Act, 1993. The Ld. Recovery Officer in his order in both the above IAs 22 and 23/2009 in RP 30/2007 in DRC 30/2007 in TA 1431/2002, dated 19.1.2009, observed in the following:- "From the contentions from both the parties it is understood the petition was filed only with a view to delay the proceeding. The valuable citation referred has to be mentioned and should be treated as proper direction. The word necessary to satisfy a decree is playing a vital role. Hence, there is no need to bring the entire property. Hence fresh sale of the property proclaiming the entire extent is not necessary. Hence the Petition IA 23 is dismissed. In view of the fact, the petitioners claim in IA 22 is also dismissed. It was initiated only to delay the proceedings which had no bearing on the recovery proceedings. Hence both petitions are dismissed on merits."

The Appellant, in their written arguments had contended that the Appellant was not offered an opportunity to draw the Lots and if, such proclamation of sale was allowed to be sold, the petitioner would not be allowed to sell the remaining portion of the land and the mortgage was created over the entire property and it could never be split as per law. The Ld.RO without considering such aspects of the contentions raised by the Appellant, assigned the only reason that the word necessary to satisfy the decree alone was playing a vital role and there was no need to bring the entire property for sale and a fresh proclamation of sale was not necessary. It was not in consonance with the mortgage, which was created against the whole extent of 2 acres of land. The 4^th Respondent/ UBI in its Demand Notice dated 13.2.009, had demanded Rs.88,03,529.82p from the appellant under S. 13(2) of the SARFAESI Act, 2002, to discharge his liability in his loan account with them. The collateral security had been mentioned as the landed property, to an extent of 2 acres in G.S. No.435 under the Doc. 2719/1981, dated 11.6.1981, Vellankurichi Village, Coimbatore, with specific boundaries.

7Appeal 03/2009

The Appellant in their legal notice dated 21.2.2009, to the Ld. RO stated that he had mortgaged 2 acre of land G.S. No.435, at Vellankuruchi village, Coimbatore District, and the Ld. RO had proclaimed a 24.95 cents of land from the said 2 acres which is not consonance of the rules laid down by the RDDBFi Act, 1993 and the property which had been proclaimed for sale had not been clearly demarcated and was mentioned as undivided share, which was brought for sale. It had been stated that instead of bringing the entire extent of the property, a portion of the property was brought to sale, with a meager sum at a time when and the property was already on attachment in RP 52/2006 in DRC 47/2006 by the Union Bank of India and the guideline value was not considered by the Ld. Recovery Officer.

The Ld. counsel for the appellant had drawn the attention of the Court to the proclamation of sale issued by the Ld. Recovery Officer in RP 30/2007 in DRC No.30/2007 wherein it was proclaimed that the property would be sold on (as is where is, under whatever there is basis), in the same conditions as the same at the time of sale. The description of the property, was mentioned as follows:- "Coimbatore Registration District, Gandhipuram Registration Sub District, Coimbatore Taluk, Velankurichi Village, G.S.No.435.Dry acres 5.02 in this North of- Medical college lands West of- Other lands belonging to the vendor South of - The East West road with a width of 30 ft. permitted by the vendor East of - "Palaniappa Chettiar Road" (South to North Road with a width of 40 ft between the above boundaries, Dry acres 2.00(two acres) Agricultural lands Right of roads as per Document No.2719/1981 dated 11.06.1981 and registered on 12.06.1981 in Gandhipuram Sub Registrar's office in Book1, Volume 478, pages 89 to 96 , Document No.2719/1981. Right to use the roads in these lands and all other rights pertaining to these lands.

Out of the above 24.95 cents is offered for sale."

It is clear from the above description of land that out of the extent of 2 acre of agricultural land, 24.95 cents was offered for sale without any specific boundaries. The boundaries mentioned in the description of the property of the entire extent of 2 acres of land were given as boundaries for the portion of the property which was proclaimed for sale.

The Ld. Counsel for the appellant contended that if the part of the property carved out by the Court, from the rest of his property, the value of the remaining property would be injuriously effected by the said carving out, in which case the judgment debtor would prefer to sell the entire property so that he could realize the real value of the property and could pay part of the sale price towards the decretal amount. The gist of the contention is that he cannot, obviously be compelled to submit to a sale of a part of the property to his disadvantage and a provision intended for his benefit cannot be construed in such a way to work to his disadvantage. But it is said that the proviso to Sec.35 of the Act indicates a contrary intention under the proviso. If the highest amount bid for the property so specified, the Court may sell such property for such amount if the decree holder consents in writing to forgo so much of the amount as it is equal to highest bid and the price so specified by the Court.

The Ld. counsel for the appellant submitted that the Ld. Recovery Officer without demarcating the property sold, with specific boundaries, had sold the property which was against the rules contemplated under the RDDBFi Act. The Ld. counsel further submitted that the Ld. Recovery Officer had fixed a portion of the property to his convenience and sold it to a 3^rd party, without any demarcation and without fixing a proper value for that portion of the property, was detrimental to the interest of the Appellant, instead he would have proclaimed the whole extent of the property which was virtually mortgaged with the 1^st Respondent. The Ld. counsel further submitted that such exercise would lead to further litigation and the 8Appeal 03/2009

proposed purchaser should file a separate Suit for partition, and for separate possession of the property, which would lead to opening up of Pandora's box of so many issues.

The Ld. counsel for the 1^st Respondent submitted that the Appellant without exhausting the remedy available to him under S.60 and 61 of the IT Act had directly approached this Tribunal which could not be considered and it should be dismissed on that score. The Ld. counsel for the Appellant, submitted that the question of electing the Forum to agitate the right of the person aggrieved, vested with the aggrieved himself, either under R.60 and 61 of the IT act or under S.30 of the RDDBFI Act. The Ld. counsel in support of his contention relied upon the ruling rendered by our Hon'ble High Court in Nazim Continental v. IOB Triplicane, Madras reported in WP 13210 of 2008, and CRP 3144/2008 dated 29.4.2009. It is a downloaded Website copy of the Judgment from the India Kanoon.org..

Our Hon'ble High Court in the above ruling observed in the following:- "22. Mode of recovery of debt is prescribed u/s 25 of DRT Act, as quoted hereunder:- .....Therefore except by preferring an application (appeal) u/s 30 against the order of recovery officer, any aggrieved person has no other option. It cannot be said that for sale of movable or immovable property as made under II Schedule to Income Tax Act, including Rules 60 or 61 or 62 of Part-III of II Schedule, then by way of appeal only u/s 30 could be preferred and no such appeal could be preferred directly against the order of attachment and sale of movable or immovable property of the defendant, if recovery officer pass such order u/s 25. Therefore, we hold that against the order of attachment and sale of movable or immovable property of defendant, who are the defendants before the Tribunal, an aggrieved person, instead of moving application under Rule 60 or 61 or 62, may also prefer an application (appeal) u/s 30 of the Act, 1993. Therefore, there being a concurrent jurisdiction, DRT u/s 30 and recovery officer under Rules 60,61 and 62 of Part-III of II Schedule of Income Tax Act in regard to movable property and jurisdiction of Tribunal under Part-II of II Schedule of Income Tax Act in regard to movable property, application of any defendant cannot be entertained by Tribunal u/s 30 without pre-deposit of the amount in terms with Rule 60 or 61 bypassing the jurisdiction of the recovery officer under the aforesaid provisions of II Schedule of Income Tax Act....."

The Ld. counsel for the appellant relying upon yet another ruling by our Hon'ble High Court in Machine Tools vs. DRAT, in W.P. No.10652 of 2009 dated 3.12.2010, Our Hon'ble High in the above ruling observed as follows:- "54. However,..... for instance, if the part of the property carved out by the Court for sale is separated from the rest of his property, the value of the remaining property may be injuriously affected by the said carving out, in which case the Judgement Debtor may prefer to have his entire property sold so that he may realize the real value of the property and pay part of the sale price towards the decretal amount. He cannot obviously be compelled to submit to the sale of a part of the property to his disadvantage. A provision intended for his benefit cannot be construed in such a way as to work to his detriment. But it is said that the proviso to Section 35 of the Act indicates a contrary intention. Under that proviso, & quot; if the highest amount bid for the property so specified is less than the price so specified, the Court may sell such property for such amount, if the decree-holder consents in writing to forego so much of the amount decreed as is equal to the difference between the highest bid and the price so specified & quot;....."

"55. The Learned counsel for the Fifth Respondent.....Therefore, we hold that against the order of attachment and sale of movable or immovable property of defendant, who are the defendants before the Tribunal, an aggrieved person, instead of moving application under Rule 60 of 61 or 62, may also prefer an application (appeal) u/s 30 of the Act, 1993. Therefore, there being a concurrent jurisdiction, DRT u/s 30 and recovery officer under rule 60,61, and 62 of Part III of II Schedule of Income Tax Act in regard to movable property and jurisdiction of Tribunal under Part-II of II Schedule of Income Tax Act in regard to movable property, application of any defendant cannot be entertained by Tribunal u/s 30 without pre-deposit of the amount in terms with Rule 60 or 61 bypassing the jurisdiction of the Recovery Officer under the aforesaid provisions of II Schedule of Income Tax Act.....We have already held that an application to set aside sale is also maintainable under Rule 61, but we have also held that a defaulter, such as borrower, is required to pre-deposit the amount in view of proviso to rule 61. The petitioners being the defendant-borrowers, as they failed to comply by pre-depositing the amount we hold that the recovery officer rightly rejected the application under Rule 61 preferred by borrowers and the Appellate Tribunal rightly affirmed the same. & quot;....."

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Further, our Hon'ble DRAT in P.K. Janardhanan vs. SBI and V. Shantha in MA 227 of 2008 (Appeal 8/2008 in OA 337/2002 on the file of DRT, Coimbatore), dated 10.7.2015, has relied upon the ruling rendered by our Hon'ble High Court in Duraisrinivasan vs. the Registrar, DRAT and others, in reported in CDJ MHC 5562, and ordered that Rules under Schedule II of the Income Tax Act have become redundant once S.29 of the RDDBFi Act is enacted and found that the appeal was maintainable before DRT questioning the sale.

Therefore, after taking into consideration of the ruling rendered by our Hon'ble High Court and our Hon'ble DRAT stated supra, with great respect this Tribunal is also of the view that the Appeal under S.30 is maintainable before this DRT. The appellant has filed a memo on 17.2.2015, that he has deposited Rs.88,25,834/- by way of DD in favour of the Registrar, DRT in compliance of the order of this Tribunal in the Appeal towards proclamation of sale. When the matter was reopened for clarification in r/o the relief sought in this Appeal, the Ld. counsel for the Appellant has filed a calculation memo in support of his contention as to how the amount has to be appropriated towards the loan account as well as towards the auction purchaser. The order of the Ld. Recovery Officer is devoid of application of mind and it is not in consonance with the rules laid down in RDDBFi Act and therefore, it is liable to be set aside. Point No.1 is answered accordingly.

8. Point No.2: In the result, in view of the observations stated supra, this Appeal is allowed. The sale took place on 21.8.2009, is ordered to be set aside. No costs.

As per the calculation, the date of auction was fixed on 28.01.2009. The total auction amount is Rs.63.75 lakhs, out of which the certificate holder- State Bank of Bikaner and Jaipur, is entitled to receive Rs.40,41,684.38p, which has first charge over the property. The balance amount of Rs.23,33,315.68p has been received in excess by the Ld. Recovery Officer, on 30.3.2009. Therefore, the said amount has to be appropriated towards Union Bank of India. If the entitlement of State Bank of Bikaner and Jaipur of Rs. 40,47,547.38p and Union Bank of India- Rs.23,33,315.68p, added together, it would be Rs.63.75 lakhs, which is the auction amount secured by sale of the secured assets. The principal amount due to State Bank of Bikaner and Jaipur is Rs.40,41,684.32p, if 6% interest per annum is calculated for the principal amount, i.e. from 28.1.2009, the date of auction till 19.8.2015, (78 months and 22 days) it would be Rs.15,91,077.00/- . If the interest and principal are added together, i.e. Rs.40,41,684.32ps/- plus interest Rs.15,91,077/- it would be Rs.56,32,761.32p, which State Bank of Bikaner and Jaipur is entitled to. The principal amount due to Union Bank of India i.e. the balance amount is Rs.23,33,315.68p, if 6% per annum is calculated for the said principal amount from 30.3.2009 till 19.8.2015 (76 months and 20 days), it would be Rs.8,94,437.72ps/- . If both are added together it would be Rs.32,27,753.40p. If both entitlement of the State Bank of Bikaner and Jaipur and Union Bank of India, are added together, it would be Rs.88,60,514.72ps/-, which the Appellant has already deposited before this Tribunal in compliance of R.60 and R.61 of the Income Tax Act. Admittedly, the said amount is lying in the deposit of Indian Overseas Bank, Saravanampatti Branch, Coimbatore, from 17.02.15. The accrued interest shall be calculated till the date of its encashment and it has to be apportioned to both Banks i.e State Bank of Bikaner and Jaipur & Union Bank of India and in proportion to their entitlement. In view of the impugned Sale is being set aside today, the Registry is directed to apportion the amount, as stated supra to State Bank of Bikaner and Jaipur and Union Bank of India. The calculation Memo dated 19.8.2015 shall form a part of this Appeal Order, and it shall be the basis for calculating the entitlement of the respective Banks i.e. State Bank of Bikaner and Jaipur and Union Bank of India. The accrued interest shall be apportioned proportionately as per the above calculation on the date of apportionment.

This Appeal is disposed of accordingly. No costs.

The Registry is directed to prepare DRT's final order. The applicant bank shall file memo of costs within 15 days from the date of this order. The Registry is directed to communicate copy of this order to both parties as provided in the Debts Recovery Tribunal (Procedure) Rules, 1993, as amended in 2003.

10Appeal 03/2009

1. 4. The Appellant and the 1^st & 4^th Respondent having advanced the arguments by and large on the same lines, in which an order was passed by this Tribunal in this Appeal by its order dated 29.09.2015 and hence, the said pleadings, averments, arguments and the findings are already form part of the order which is extracted in this Appeal. Therefore, the arguments advanced by the 2^nd & 3^rd Respondents are also heard by this Tribunal so as to pass an order afresh in terms of the order passed by the Hon'ble DRAT, Chennai.

2. 5. It is the contention of the Ld. Counsel for the 2^nd & 3^rd Respondents is that the Appeal itself barred by limitation and therefore, it is liable to be dismissed in limipi.

3. 6. It is the further contention of the Ld. Counsel for the 2^nd & 3^rd Respondents that the Respondents having participated in an auction sale held by the 5^th Respondent and having paid the entire sale consideration and the sale certificate having issued and Registered the same and equally the Respondents are in possession of the property, since the year 2009 and therefore, the Appellant has lost the right of redemption over the property.

4. 7. It is the further contention of the Ld. Counsel for the 2^nd & 3^rd Respondents that the Ld. Recovery Officer having passed an order on 21.01.2009 in rejecting the claim of the Appellant, the Appellant is preferred this Appeal on 02.09.2011 and hence, the Appeal is barred by limitation as contemplated under section 30 of the RDB Act.

5. 8. It is the further contention of the Ld. Counsel for the 2^nd & 3^rd Respondents that the Respondents were not made as a party initially to the proceedings and the Respondents were made as a party subsequently in the case.

6. 9. It is the further contention of the Ld. Counsel for the ~~2^nd & 3^rd~~ Respondents that ~~1~~ ~~ed by this~~

11Appeal 03/2009

Hon'ble Tribunal and the DRC was also issued and hence, the portion of the property to satisfy the debt amount alone, the demarcated portion of the property to an extent of 24.95 cents from the larger extent of 2 acres of land was sold by the Ld. Recovery Officer in favour of the Respondents, who became the successful Auction Purchaser and paid the sale consideration and the sale certificate was also issued and registered the same with the concerned sub-Registrar Office. Furthermore, the Appellant has deposited the Sale Consideration during the year 2015 against the sale consideration paid by the 2^nd & 3^rd Respondent during the year of 2009 and hence, no right of redemption what so ever can be exercised by the Appellant.

1. 10. It is the further contention of the Ld. Counsel for the 2^nd & 3^rd Respondents that the Ld. Recovery Officer has rightly dismissed the petition filed by the Applicant as the Appellant failed to make out a prima-facie case before the Ld. Recovery Officer.

2. 11. It is the further contention of the Ld. Counsel for the 2^nd & 3^rd Respondents that the Respondents having purchased the 24.95 cents demarcated vacant land for a valuable consideration of Rs.63,75,000/- through the Auction sale conducted by the Ld. Recovery Officer in RP No.30/2007 and the auction was held on 28.01.2009 and the sale certificate was issued on 03.03.2009 and having registered the same before the Sub-Registrar, Ganapathy, Coimbatore - 641 006 vide Document No.1096/2009 on 04.05.2009 and subsequently, the physical possession of the property was also handed over to the Respondent on the same day of the registration of the property. The Respondents are in peaceful possession and enjoyment of the property. Therefore, the procedure prescribed under the RDB Act and second schedule of Income Tax Rules are duly complied by the Respondent and the dismissal of the petition filed by the Appellant by the Ld. Recovery Officer is also in conformity with the same.

12Appeal 03/2009

1. 12. It is the further contention of the Ld. Counsel for the 2^nd & 3^rd Respondents that the Appellant shall not introduce additional facts and grounds while the matter is posted for arguments and as such the Appellant cannot introduce additional new facts in the absence of the pleading to that effect. The Appellant himself even could have participated in the auction in the auction sale, if the Appellant is serious about his property and paying the dues to the bank.

2. 13. It is the further contention of the Ld. Counsel for the 2^nd & 3^rd Respondents that the Appellant having thorough knowledge that the Auction Purchasers have paid the entire sale consideration with the stipulated time and the Ld. Recovery Officer has issued sale certificate to the auction purchaser after receipt of the 75% of the sale consideration on 11.02.2009 and hence, the Appellant is fully aware of the fact that, he has lost the right of redemption of the property.

3. 14. It is the further contention of the Ld. Counsel for the 2^nd & 3^rd Respondents that the Ld. Recovery Officer has only sold the property to an extent of 24.95 cents fully demarcated out of the total extent of 2.00 acres of the land which is strictly in accordance with the law and the settled decision(s) of the Hon'ble Apex Court and various High Courts and therefore, the sale is held by the Ld. Recovery Officer in a transparent manner in a way that the access to the adjacent lands and the right of way to the adjacent properties are also not affected by the demarcation of the sold properties by the Ld. Recovery Officer.

4. 15. It is the further contention of the Ld. Counsel for the 2^nd & 3^rd Respondents that the Respondents having entrusted an Advocate to file the vakalat and participate in the subsequent proceedings, the Advocate neither filed the vakalat nor participated in the proceedings and hence, the Respondents were became ex-parte and the Respondents were also not made as a party in the Appeal filed by the Appellant at the initial stage wherein, this Hon'ble Tribunal by its proceedings dated 18.11.2010 held that *"It is not all understood as to why after the sale of the property,*

13Appeal 03/2009

*the auction purchaser has not been joined as a party to the Appeal at very instance*". The copy of the order passed by the Hon'ble DRT by its order dated 29.09.2015 is also not communicated to the Respondents. Hence, the Respondents preferred an Application before this Tribunal in MA No.68/2016 to set aside the ex-parte order dated 29.09.2015. However, the said MA No.68/2016 dismissed by this Tribunal and held that *"if at all the Applicants/Auction Purchasers are aggrieved, it is open to them to file Appeal before the competent forum for their relief"* and hence, an Appeal was preferred before the Hon'ble DRAT and the Hon'ble DRAT set aside the order passed by this Tribunal in MA No.68/2016 and ordered for a fresh hearing of the Appeal by this Hon'ble Tribunal.

1. 16. It is the further contention of the Ld. Counsel for the 2^nd & 3^rd Respondents that the Appellant has not approached this Hon'ble Tribunal with clean hands and equally not complied with section 60 & 61 of the 2^nd Schedule of Income Tax Rules and hence, in the absence of the same, the Appeal ought not to have been numbered by this Hon'ble Tribunal. The Appellant seems to have deposited a sum of Rs.88,25,834/- on 09.02.2015 belatedly after a gap of 6 years of the Appeal being preferred before this Hon'ble Tribunal.

2. 17. It is the further contention of the Ld. Counsel for the 2^nd & 3^rd Respondents that the Appellant having created mortgage in favour of the 4^th Respondent (Union Bank of India) by suppressing the prior mortgage created in favour of the 1^st Respondent Bank and has effected a publication to the effect that the original document of the mortgage property is lost whereas, the said documents were held by the 1^st Respondent Bank and hence, the Appellant has approached this Hon'ble Tribunal with tainted hands. It is also relevant to say that the Ld. Recovery Officer granted an opportunity to the Appellant to deposit the entire dues within 30 days from the date of auction sale wherein, the Appellant failed to deposit any money in order to exercise his right of redemption and therefore, the Appellant has no locus to question the auction sale held by the Ld. Recovery Officer.

14Appeal 03/2009

18. It is the further contention of the Ld. Counsel for the 2^nd & 3^rd Respondents that the Ld. Recovery Officer has sold the demarcated portion of the property on obtaining the proper valuation report and therefore, the Appellant cannot bring any additional valuation report obtained by him during the time of arguments.

19. It is the further contention of the Ld. Counsel for the 2^nd & 3^rd Respondents that the Appellant having failed in compliance of the mandatory condition as contemplated under Rule 60 & 61 of the II^nd schedule of Income Tax Act, the right of redemption cease to exist as and when the sale certificate is issued and registered in favour of the Auction Purchaser. Therefore, the Appeal lacks on merits and is liable to be dismissed by this Hon'ble Tribunal with exemplary costs.

20. The Ld. Counsel for the 1^st Respondent Bank submitted that the property having sold by the bank on 28.01.2009, the present Appeal filed by the Appellant is not maintainable and the Appellant has not made any effort to redeem the property as mandated under the Act and therefore, at this belated stage the Appeal has been filed without any basis under the law and hence, the Appeal is liable to be dismissed. The money paid by the Auction Purchaser is already adjusted towards the loan account dues of the bank and hence, the Appeal may be dismissed by this Hon'ble Tribunal.

21. The Ld. Counsel for the 4^th Respondent submitted that the Ld. Recovery Officer having sold the property to an extent of 24.95 cents out of the total extent of 2.00 acres of land in Vilankurunchi Village, Coimbatore, the excess amount received by the Ld. Recovery Officer after the sale of the property to an extent of 24.95 cents out of 2.00 acres is also credited to the loan account of the 4^th Respondent after fully discharging the liability due and payable to the 1^st Respondent (State Bank of Bikaner & Jaipur now merged with State Bank of India). The present Appeal filed by the Appellant is liable to be dismissed in so far as the 4^th Respondent is 15Appeal 03/2009

concerned and hence, prayed for the dismissal of the same with costs by this Hon'ble Tribunal.

**ANALYSIS & POINTS FOR DETERMINATION**

1. 22. The Ld. Counsel for the Appellant has argued before this Tribunal on the main grievances that the Appellant having mortgaged an extent of 2.00 acres of land with the 1^st Respondent bank, the selling of 24.95 cents of land without demarcation is not proper and valid under the law and hence, the sale is liable to be set-aside by this Hon'ble Tribunal.

2. 23. This Tribunal having considered the arguments, pleadings and the averments made by the parties is constrained to note that the property having sold by the 1^st Respondent Bank in the year of 2009 and the Sale Certificate having issued and Registered and the Possession is also handed over to the Auction Purchaser in the year of 2009 itself, yet the case is pending before this Tribunal even after about 14 years, which is considered to be very strange in so far as the Recovery Proceedings are concerned before the Debts Recovery Tribunal(s).

3. 24. The alleged cause of action arised in this Appeal is against the IA No.23/2009 filed before the Ld. Recovery Officer in R.P.No.30/2007 in DRC No.30/2007 in TA No.1431/2002 by the Appellant which is dismissed by the Ld. Recovery Officer. The Ld. Recovery Officer in his order clearly held that the selling of property of an entire extent of 2.00 acres is not necessary to recover the loan amount of 1^st Respondent Bank and hence, an extent of 24.95 acres demarcated and sold for the recovery which is in consonance with the law.

4. 25. This Tribunal having allowed the SA filed by the Appellant and the Appellant found to have deposited a sum of Rs.88,25,834/- on 17.02.2015 against the sale held in respect of the property wherein, the property was given possession to the Auction Purchaser during the year 16Appeal 03/2009

2009 itself. The money deposited by the Appellant is held by this Tribunal in a fixed deposit with a Nationalized Bank.

1. 26. This Tribunal has not found the Appeal allowed on the basis of any fraud committed while selling the property and proved the same before this Tribunal. The Appeal came to be allowed by this Tribunal on the basis of certain decision(s) of the Hon'ble High Court of Madras relied upon by the Appellant in the case.

2. 27. The setting aside of the sale if any, is made on the basis of a proved fraud in a case, then alone, the party, the Appellant herein in this case has a right of redemption as stipulated under the law or has deposited the amount due within the stipulated period under the law by the Appellant whereas, in the present case, either of the parameters are found to have applied or complied in this case.

3. 28. The Appeal was allowed by my Ld. Predecessor in office on the basis of concurrent jurisdiction/power exist under section 29 & 30 of the RDB Act on the basis of the judgment of the Hon'ble High Court of Madras relied upon by the Appellant that the Recovery Officer and the Presiding Officer can take up a case and decide the matter independently. However, with due respect to my Ld. Predecessor in office, I beg to differ on this point.

4. 29. It is to be seen that the section 29 only state that the provisions of the Second & Third schedules to the Income Tax Act, 1961 and the Income Tax (Certificate Proceedings) Rules, 1962 as in force from time to time, as far as possible, apply with necessary modifications .....and whereas, under section 30 of the Act, an order of the Recovery Officer is a precondition and hence, the section 29 and 30 cannot fall under the concurrent jurisdiction and it is distinct each other.

5. 30. The relevant provision under the second schedule to the Income Tax Act being the Rule 60 & 61 which read as follows:

17Appeal 03/2009

60. Application to set aside sale of immovable property on deposit:- (1) Where immovable property has been sold in execution of a certificate, the defaulter, or any person whose interests are affected by the sale, may at any time within thirty days from the date of the sale, apply, to the Tax Recovery Officer to set aside the sale, on his depositing., - (a) [x x x] the amount specified in the proclamation of sale as that for the recovery of which the sale was ordered, with interest thereon at the rate of [one and one-fourth percent for every month or part of a month], calculated from the date of the proclamation of sale to the dte when the deposit is made ; and (b) for payment to the purchaser, as penalty, a sum equal to five percent of the purchase money, but not less than one rupee.

(2) Where a person makes an application under Rule 61 for setting aside the sale of his immovable property, he shall not, unless he withdraws that application, be entitled to make or prosecute an application under this rule.

61. Application to set aside sale of immovable property on ground of non-service of notice or irregularity: - Where immovable property has been sold in execution of a certificate, [such Income Tax Officer as may be authorized by the Chief Commissioner or Commissioner in this behalf], the defaulter, or any person whose interests are affected by the sale, may, at any time within thirty days from the date of the sale, apply to the Tax Recovery Officer to set aside the sale of the immovable property on the ground that notice was not served on the defaulter to pay the arrears as required by this Schedule or on the ground of a material irregularity in publishing or conducting the sale :

Provided that –

(a) no sale shall be set aside on any such ground unless the Tax Recovery Officer is satisfied that the applicant has sustained substantial injury by reason of the non-service or irregularity ; and (b) an application made by a defaulter under this rule shall be disallowed unless the applicant deposits the amount recoverable from him in the execution of the certificate.

31. The Ld. Predecessor of mine considered the decision laid down by the Hon'ble High Court of Madras in the following cases:

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18Appeal 03/2009

- (i) Nazims Continental and Ors. Vs. The Indian Overseas Bank and Ors.- 2009 -3-LW-792

- (ii) Machine Tools and Accessories (P) Ltd., Vs. The Debts Recovery Appellate Tribunal and Ors. – MANU/TN/3572/2010

In the case of Nazims Continental and Ors. Vs. The Indian Overseas Bank and Ors.- 2009 -3-LW-792, this Tribunal relied upon the para 22 of the judgment wherein it is stated that:

*"22. Mode of recovery of debt is prescribed under Section 25 of DRT Act, as quoted hereunder:*

.....Therefore, except by preferring an application (appeal) under Section 30 against the order of recovery officer, any aggrieved person has no other option. It cannot be said that for sale of movable or immovable property as made under II Schedule to Income Tax Act, including Rules 60 or 61 or 62 of Part-III of II Schedule, then by way of appeal only under Section 30 could be preferred and no such appeal could be preferred directly against the order of attachment and sale of movable or immovable property of the defendant, if recovery officer pass such order under Section 25. Therefore, we hold that against the order of attachment and sale of movable or immovable property of defendant, who are the defendants before the Tribunal, an aggrieved person, instead of moving application under Rule 60 of 61 or 62, may also prefer an application (appeal) under Section 30 of the Act, 1993. Therefore, there being a concurrent jurisdiction, DRT under Section 30 and recovery officer under Rules 60, 61 and 62 of Part-III of II Schedule of Income Tax Act in regard to movable property and jurisdiction of Tribunal under Part-II of II Schedule of Income Tax Act in regard to movable property, application of any defendant cannot be entertained by Tribunal under Section 30 without pre-deposit of the amount in terms with Rules 60 or 61 bypassing the jurisdiction of the recovery officer under the aforesaid provisions of II Schedule of Income Tax Act.

.....

Whereas at Para No.23 of the judgment it is also stated as follows:

- 23. So far as W.P. No. 13210/08 is concerned, the borrower is the petitioner. He raised the question of upset price of valuation of property and jurisdiction of the recovery officer under Rules 60 and 61 of Part-III of II Schedule to Income Tax Act. They preferred application under Rule 61 of Part-III of II Schedule to Income Tax before the recovery officer to set aside the sale without compliance of pre-deposit amount. For the said reason, amount having not deposited as per Rule 61, the application to set aside was dismissed against which they preferred appeal before the Debts Recovery Appellate Tribunal, which has also been dismissed by the Appellate Tribunal vide impugned order dated 6th May, 2008.

First of all, it is the appellant, who preferred appeal under Rule 61 and, therefore, they cannot say the recovery officer has no jurisdiction to pass order under Rule 61 and the appeal to set aside the sale is only maintainable under Section 30 of the Act, 1993.

We have already held that an application to set aside sale is also maintainable under Rule 61, but we have also held that a defaulter, such as borrower, is required to pre-deposit the amount in view of proviso to Rule 61. The petitioners being the defendant-borrowers, as they failed to comply by pre-depositing the amount, we hold that the recovery officer rightly

19

Appeal 03/2009

*rejected the application under Rule 61 preferred by borrowers and the Appellate Tribunal rightly affirmed the same.*

Therefore, a conjoint reading of Para 22 & 23 clearly say that an Appeal shall be preferred under section 30 of the RDB Act 1993, against the order of the Recovery Officer passed under Rule 60/61 to the second schedule of the Income Tax Act.

In the case of Machine Tools and Accessories (P) Ltd., Vs. The Debts Recovery Appellate Tribunal and Ors. – MANU/TN/3572/2010 this Tribunal relied upon the para 54, 55 & 56 of the judgment wherein it is stated that:

"54. However, ..... for instance, if the part of the property carved out by the Court for sale is separated from the rest of his property, the value of the remaining property may be injuriously affected by the said carving out, in which case the judgment Debtor may prefer to have his entire property sold so that he may realize the real value of the property and pay part of the sale price towards the decretal amount. He cannot obviously be compelled to submit to the sale of a part of the property to his disadvantage. A provision intended for his benefit cannot be construed in such a way as to work to his detriment. But it is said that the proviso to Section 35 of the Act indicates a contrary intention. Under that proviso, "if the highest amount bid for the property so specified is less than the price so specified, the Court may sell such property for such amount, if the decree-holder consents in writing to forego so much of the amount decreed as is equal to the difference between the highest bid and the price so specified." .....

55 & 56. The Learned Counsel for the Fifth Respondent ..... Therefore, we hold that against the order of attachment and sale of movable or immovable property of Defendant, who are the Defendants before the Tribunal, an aggrieved person, instead of moving application under Rule 60 of 61 or 62, may also prefer an application (appeal) Under Section 30 of the Act, 1993. Therefore, there being a concurrent jurisdiction, DRT Under Section 30 and recovery officer under Rules 60, 61 and 62 of Part III of II Schedule of Income Tax Act in regard to movable property and jurisdiction of Tribunal under Part-II of II Schedule of Income Tax Act in regard to movable property, application of any Defendant cannot be entertained by Tribunal Under Section 30 without pre-deposit of the amount in terms with Rules 60 or 61 bypassing the jurisdiction of the Recovery Officer under the aforesaid provisions of II Schedule of Income Tax Act. .... We have already held that an application to set aside sale is also maintainable under Rule 61, but we have also held that a defaulter, such as borrower, is required to pre-deposit the amount in view of proviso to Rule 61. The Petitioners being the Defendant-borrowers, as they failed to comply by pre-depositing the amount, we hold that the recovery officer rightly rejected the application under Rule 61 preferred by borrowers and the Appellate Tribunal rightly affirmed the same & quot;....."

Whereas, the Hon'ble High Court at para 103 & 104 held as:


20Appeal 03/2009

103. ".....the Petitioner has not followed Rule 60 and 61 of the Second Schedule to the Income Tax Act, 1961 in not filing an application to set aside the auction sale dated 23.03.2006 is not entitled to project the present writ petition seeking to quash the order of the Fourth Respondent dated 03.01.2007 in D.R.C. No. 175 of 2004 in O.A. No. 152 of 2003 on the file of the Debts Recovery Tribunal-I, Chennai, the order of the second Respondent dated 16.06.2008 in Appeal No. 38 of 2007 on the file of the Debts Recovery Tribunal-III, Chennai, the order of the First Respondent dated 23.04.2009 in M.A. No. 76 of 2009 on the file of the Debts Recovery Appellate Tribunal, Chennai and consequently to direct the Respondents 1 to 4 in setting aside the sale in favour of the Sixth Respondent of the Petitioner's property mentioned in the schedule of the present Writ Petition, etc., .....Even in respect of an Auction sale dated 23.03.2006 (which is said to be a void one on the side of the Petitioner) the strict adherence to the Rule 60 and 61 of the Second Schedule to the Income Tax Act, 1961 is to be complied with by the Petitioner....."

104. "..... also by complying with the Rule 60 and 61 of the Second Schedule to the Income Tax Act, 1961 ....."

Therefore, in this case is also a conjoint reading of para 54 to 56 and 103 & 104 make it necessary that the Appellant is liable to make a pre-deposit under Rule 60/61 of the second schedule to the Income Tax Act, 1961 and without which the Appeal is not maintainable before the Tribunal under section 30 of the RDB Act.

32. It is also relevant to note that the Hon'ble Apex Court in the case of Union of India (UOI) and Ors. Vs. Delhi High Court Bar Association and Ors. – AIR 2002 SC 1479 held that at para 30 which read as follows:

30. "..... Section 30, after amendment by the Amendment Act, 2000, gives a right to any person aggrieved by an order of the Recovery Officer, to prefer an Appeal to the Tribunal. ...."

Therefore, a prerequisite of deposit by the Appellant is necessary while filing an Appeal under section of the Act. Furthermore, at present in view of the section 30-A of the Act as amended in the year 2016, it is mandatory for deposit of 50% of the claim amount irrespective of the nature of the Appeal arise from the order of the Recovery Officer.

33. The grievances of the Appellant i.e., the petitioner in IA No.22 of 2009 filed before the Recovery Officer is that, the Recovery Certificate is issued against the entire property of an extent of 2.00 acres of land and therefore, the entire property to be brought for sale. If the property is sold to an extent of 24.95 cents out of 2.00 acres of land, the value of the 21Appeal 03/2009

remaining property shall diminish and therefore, irreparable loss and substantial legal injury shall be caused to the Appellant. Hence, the sale proclamation is bad in law. Further, selling the portion of the property by the Ld. Recovery Officer shall exceed his jurisdiction and thus, the sale is liable to be set-aside. But this Tribunal's humble view is that the said contention by the Appellant is against the settled proposition of law and equally against the mandate of order 21 Rule 64 of the CPC and the Ld. Recovery Officer can exercise his discretion.

1. 34. It is observed by this Tribunal that the IA No.22/2009 is filed only against the proclamation of sale fixed on 12.01.2009 against the Sale Notice dated 10.12.2008. Whereas, no sale is held against the Sale Notice dated 10.12.2008 and the sale is held only on 28.01.2009, the adjourned date by the Ld. Recovery Officer. The provisions of the statute and the legislative intent embodied in Rule 16 of the second schedule of the Income Tax Act, 1961 provides a last resort to the judgment debtor to save his property and therefore, the Rule 60 is to be exercised in letter & spirit by the judgment debtor to save his property. But there was no compliance of deposit of money in terms of Rule 60 of second schedule of Income Tax Act, 1961 in the present case.

2. 35. The Rule 60 of second schedule of the Income Tax Act, 1961 is to be read with Rule 53 of the second schedule of the Income Tax Act, 1961 wherein, the proclamation is drawn by the Recovery Officer wherein, the amount for the Recovery of which sale is ordered, the said amount to be deposited by the judgment debtor (borrower) while preferring an Application under Rule 60 of the second schedule of the Income Tax Act, 1961.

3. 36. It is also observed by this Tribunal that the Appellant has filed this Appeal on 26.02.2009 on the assumption that the sale held on 28.01.2009, is the cause of action for the Appeal and the same is filed without even impleading the necessary parties wherein, it is only filed against the State Bank of Bikaner and Jaipur (now State Bank of India) alone as a Respondent. Subsequently, it is found that this Appeal having amended 22Appeal 03/2009

by impleading the Respondent 2 to 5 and presented an Amended Appeal on 02.09.2011 before this Tribunal on making an adverse comment by this Tribunal for not impleading the necessary parties in the case wherein, the 2^nd & 3^rd Respondent also taken an objection that the Appeal fails on mis-joinder of parties in the case and equally barred by limitation.

37. The contention made by the 2^nd & 3^rd Respondent that the Respondent having purchased the property in the year of 2009 and paid the sale consideration within the statutory period and having issued the Sale Certificate and registered the same and is in peaceful enjoyment of possession of the property since the year of 2009 and whereas the money paid by the Appellant in the year of 2015, almost after a gap of 6 years and the Appeal having allowed by this Tribunal as the Appellant has paid a sum of Rs.88,25,834/- and the sale is set-aside by this Tribunal is not valid in the eye of law has found to have some force in the facts and circumstances involved in the case.

38. The crux of the issue raised by the Appellant in the case is that the selling of the portion of the property by the Ld. Recovery Officer without bringing the property of the entire extent of 2.00 acres of land is not liable to be accepted by this Tribunal as in the normal circumstances, it will be always the allegation(s) from the borrower(s) side that the excessive execution of the decree amount will be the question before the courts, whereas, in the present case, it is in the reverse order. This Tribunal is the view that the Ld. Recovery Officer has sold the property to the extent of money to be recovered by the certificate creditor bank and the Ld. Recovery Officer rightly discussed the petition filed by the Appellant in IA No.22 & 23 of 2009 on strength of decision(s) laid down by the Hon'ble Apex Court and Hon'ble High Court which is also not disputed by the Appellant and hence, the said order cannot be faulted with by the Appellant. Furthermore, the Appellant was given an opportunity even by postponing the sale which was originally scheduled on 10.01.2009 wherein, the subsequent sale is held on 28.01.2009 on the adjourned date. Even then the Appellant failed to make any deposit before the selling 23Appeal 03/2009

of the property. Hence, it is the considered view of this Tribunal that sufficient time was granted to the Appellant (judgment debtor) to redeem the property and having failed to exercise the right of redemption as mandated under the law, the setting aside the sale at this belated stage shall not meet the end of justice. It is strange to note that the Appellant has deposited a sum of Rs.88,25,834/- on 17.02.2015 after a period of 6 years without establishing any valid reason to set-aside the sale in a manner known to the law. The Appellant is also not pleaded any allegation of fraud in the Appeal except made a submission in the written arguments before this Tribunal so as to set-aside the sale at this belated stage. Therefore, this Tribunal hold that the sale is not liable to be set aside by this Tribunal in the given facts and circumstances involved in the case.

39. The Appellant and the Respondent Bank(s) (R1 & R4) are relied upon the written arguments which are nothing but the substantial part of the pleading in the case and hence, the written arguments filed by the parties shall form part of the record.

40. The Appellant having made a deposit of sum of Rs.88,25,834/- which is lying with this Tribunal, it is the liberty of the Appellant to receive back the money with the interest accrued if any, from this Tribunal.

41. In the result, this Appeal No.03/2009 stands dismissed with no order to costs. The parties will suffer their respective costs.

A copy of the order be communicated to all the parties concerned by the Registry of this Tribunal.

(Dictated to my PA directly on the Computer, corrected and pronounced by me in the Open Tribunal on this the 16^th Day of May, 2023).

[M.P. BALASUBRAMANIAN] PRESIDING OFFICER