Hon'ble Vishnu Chandra Gupta,J.
1. Heard Shri A.P.Singh, learned counsel for the petitioner and Shri G.S.Mishra learned counsel for the opposite parties no. 1 to 3. According to office report, notice was served on opposite party no. 4 but he didn't turn up. There is endorsement in the order sheet with regard to sufficiency of service of notice on opposite party no. 4. With the consent of parties' counsel, we proceed to decide the writ petition finally at admission stage.
2. Shri G.S. Mishra, learned counsel for the respondents has vehemently argued that the controversy may be relegated to alternative forum i.e. Tribunal. However, after hearing learned counsel for the parties at length, we are of the view that the petition may be decided on pure question of law, hence, it is not necessary to relegate the matter to alternative forum. It has been settled by a catena of decisions of Hon'ble Supreme Court that the statutory alternative remedy is no bar for this Court to exercise power under Art. 226 of the Constitution of India in case petition does not involved disputed question of facts vide AIR 1950 SC 163, Rasid Ahmad Vs. Municipal Board Kairana; AIR 1969 SC 556, Babu Ram Vs. Zila Parishad; AIR 1954 SC 403, Himmat Lal Vs. State of Madhya Pradesh,AIR 1953 SC 252, State of Bombay Vs. United Motors, Calcutta Discount Company Vs. I.T.O. AIR 1961 SC 372; Bhopal Sugar Industry Vs. STO, AIR 1967 SC 549,2000 (10) SCC 482, Union of India Vs. State of Haryana, 2002 (3) SCC, Maharashtra State Judicial Services Association Vs. High Court of Judicature at Bombay,AIR 1990 SC 772, Salonah T. Company Vs. Superintendent of Taxes; 2001 (9) SCC 99, T.N.Transport Corporation VS. Neethivalangan and 1980 (2) SCC 437, Shiv Shankar Dal Mill VS. State of Haryana.
3. The present writ petition under Article 226 of the Constitution of India has been preferred by the petitioner challenging the impugned auction and sale proceeding dated 15.3.2012. Various grounds have been raised by the petitioner while assailing the impugned auction and sale proceeding, in which the respondent no. 4 stood as the highest bider. However, the petition may be decided on only one ground, hence, leaving other grounds open, we proceed to decide finally on the solitary ground raised by the petitioner keeping in view the averment contained in Para 6 of the writ petition. According to para 6 of the writ petition, auction and sale proceeding took place on 15.3.2012. Admittedly, under the terms and condition it was incumbent upon the highest bidder to deposit 25 per cent of the sale amount immediately and rest 75 per cent be deposited within 30 days. For convenience Para 6 of the writ petition is reproduced as under:-
"That it is respectfully submitted that the opposite party no. 4 was declared successful bidder on 15.3.2012 in respect of property, in question, and did not deposit 25% of the sale amount with the officer conducting the sale despite the fact the opposite party no. 4 was declared successful bidder on 15.3.2012. The opposite parties particularly Recovery Officer and Recovery Inspector of Debts Recovery Tribunal permitted the opposite party no. 4 to deposit 25% of the sale amount 16.3.2012 and by further permitting the opposite party no. 4 to deposit rest of the amount within 30 days from 15.3.2012. It is wholly without jurisdiction and contrary to law."
4. The averment contained in para 6 of the writ petition has not been categorically denied by the respondents. The reply to Para 6 of the writ petition is reproduced as under:-
"Para 14 to the counter affidavit:-
That the contents of para 6 as stated are wrong, false and misleading hence denied. The defendant no. 4 highest bidder had deposited 25% of the bid amount in the given time and rest 75% amount has not been deposited within the time as provided and they have moved an application dated 13.4.2012 to set aside the auction and refund of Rs. 2,29,75,000.00 (25 % of the bid amount) against it, the Opposite Party no. 1 has filed their objection praying therein to forfeit the earnest money as per Section 58 and the property may be put for sale forthwith. Application dated 13.4.2012 and its objection is being filed as Annexure no. C-2 and C-3 respectively. However, no prejudice has been caused to the petitioner."
5. During the course of hearing, learned counsel for the respondent admits that the auction took place on 15.3.2012 but 25 % of the total amount was deposited on the next date i.e. 16.3.2012. Admittedly, terms and condition with regard to deposit of an amount was not fulfilled by the auction purchasers.
6. Shri A.P.Singh, learned counsel for the petitioner had invited attention to the Schedule II and III of the Income Tax Act, which admittedly apply in view of Section 29 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
7. Section 29 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, for convenience, is reproduced as under:-
"Application of certain provisions of Income Tax Act--The provisions of the Second and Third Schedules to the Income Tax Act, 1961 and the Income Tax (Certificate Proceedings) Rules, 1962, as in force from time to time shall, as far as possible, apply with necessary modifications as if the said provisions and the rules referred to the amount of debt due under this Act instead of to the income tax:
Provided that any reference under the said provisions and the rules to the "assessee" shall be construed as a reference to the defendant under this Act."
8. In view of above, the procedure contained in Rule 57, Part III of the Schedule II of the Income Tax Act regulate the auction and sale proceeding. Rule 57 of the Schedule II of the Income Tax Act, a copy of which has been filed as Annexure-4 to the writ petition, is reproduced as under:-
"Deposit by purchaser and resale in default--(1) On every sale of immovable property, the person declared to be the purchaser shall pay, immediately after such declaration, a deposit of twenty-five per cent on the amount of his purchase money, to the officer conducting the sale; and, in default of such deposit, the property shall forthwith be resold.
(2)The full amount of purchase money payable shall be paid by the purchaser to the Tax Recovery Officer on or before the fifteenth day from the date of the sale of the property."
9. A plain reading of Rule 57, Schedule II of the Income Tax Act, reveals that on every sale of immovable property, the person declared to be the purchaser shall pay immediately after such declaration a deposit of twenty-five per cent on the amount of his purchase money to the officer conducting the sale.
10. Admittedly, in the present case, 25 per cent of the amount was not deposited by the auction purchaser. UPZA and LR Act and Rules framed thereunder contains para-materia provision with regard to deposit of 25 per cent of the sale amount. While dealing with the para-materia provision a Division Bench of this Court in a case reported in 2006 (24) LCD 1, M/s Swadeshi Polytex Limited Vs. Board of Revenue, U.P. and others (Judgement delivered by one of us, Hon'ble Justice Devi Prasad Singh), held that in case 25 per cent of the auction money is not deposited by the auction purchaser, it shall vitiate the auction.
11. It may be noted that in the case of Swadeshi Polytex Limited (supra) while considering the paramateria provision, the Apex Court judgement has been relied upon which deals with the similar situation. For convenience, para 38 of the said judgement is reproduced as under:-
"38. A division bench of this Court in a case reported in 2000 (2) AWC 1505, Manminder Singh Vs. Chandra Cold Storage & others held that the deposition of the entire amount by the auction purchasers will not create any right unless the auction is held in accordance to statutory provisions. It has been further held that thirty days clear notice is mandatory to hold an auction and sale in pursuance to provision contained in the Act and Rules framed thereunder. It has been further held that 25% of the amount should also be deposited immediately.
Keeping in view the infirmity in the auction and sale proceedings, the Division Bench while exercising powers under Special Appeal had upheld and affirmed the judgment of Hon'ble Single Judge of this Court whereby the auction and sale was set-aside on account of non-compliance of statutory provisions under the Act and Rules.
Relevant portion from the case of Manminder Singh (supra) is reproduced as under:-
"We agree that the view taken in Raghunath Prasad (supra) and accordingly held that the appellant herein acquired no right in the property merely because he had deposited the entire amount offered by him at the auction sale. On merit also, the auction sale was liable to be set-aside firstly due to the reason that thirty days clear notice was not given and secondly, because 25% of the amount of the bid was not deposited "immediately" as stipulated by Rule 285D of the Rules of 1952 in asmuchas the deposit by Cheque was not a valid deposit as per law laid down by the Apex Court in Mahmood Ahmad Khan (dead) through L.Rs V.Ranbir Singh and others, 1995 AWC 896. We are of the view that the auction sale was not sale at all in the eye of law and 25% of the purchased money had not been deposited "immediately" on the appellant being declared as the highest bidder. In the circumstances, it would be deemed that no sale had taken at all as held by the Apex Court in Mani Lal Mohan Lal V. Syed Ahmad, AIR 1954 SC 349."
12. In view of above, there appears to be no room of doubt that immediately after fall of hammer it shall be necessary for the auction purchaser to deposit 25 per cent of the amount of bid. Non-deposition shall vitiate the auction and sale proceeding. Accordingly, the writ petition deserves to be allowed on this solitary ground.
13. In view of above, writ petition is allowed. A writ in the nature of certiorari is issued, quashing the impugned auction and sale proceeding dated 15.3.2012 held in pursuance to sale notice/proclamation, a copy of which has been filed as Annexure-2 to the writ petition and the consequential order dated 16.3.2012, a copy of which has been filed as Annexure-1 to the writ petition with consequential benefit. Respondents may proceed a fresh with the auction and sale proceeding keeping in view the observation made hereinabove and in accordance with law expeditiously.
[Justice Devi Prasad Singh] [Justice Vishnu Chandra Gupta] Order Date :- 14.8.2012 Madhu