JUDGMENT B.P. Jeevan Reddy, C.J.
1. This writ petition is filed by the auction purchasers to set aside the order forfeiting the amount deposited by them towards the sale price. It arises in the following circumstances. One Salig Ram was a defaulter to the Income-tax Department. Against him, recovery proceedings were taken and his property was brought to auction. The auction took place on March 26, 1980. At the said auction, the petitioners were the highest bidders in a sum of Rs. 45,000. As required by Rule 57(1) of Schedule II to the Income-tax Act, they deposited 25 per cent. amount on the same day, i.e., a sum of Rs. 11,250. The balance amount had to be paid within 15 days as provided by Sub-rule (2) of Rule 57. The petitioners deposited a sum of Rs. 13,343 on March 27, 1980. They say that they also deposited a further sum of Rs. 18,407 on April 2, 1980. The total of these three amounts comes to Rs. 43,000 which is two thousand short of the sale amount. Admittedly, the petitioners did not deposit the full amount within the period of 15 days, though they have an explanation therefor.
2. The widow of the defaulter deposited the entire amount due along with other amounts as provided by Rule 60 and applied for setting aside the sale. This deposit and application for setting aside the sale, according to the petitioner, was made within 15 days of the auction. Upon the said application being made by the defaulter's wife, a notice dated April 21, 1980, was issued to the petitioners asking them to intimate whether they have any objection to the sale being set aside. The notice expressly stated that the defaulter's wife has deposited Rs. 29,000 in full satisfaction of the requirement of Rule 60. At the same time, another notice of the same date was issued to the petitioners calling upon them to show cause why the amount of Rs. 24,593 (Rs. 11,250 plus Rs. 13,343) should not be forfeited to the Government after defraying the expenses of auction sale as provided by Rule 58. The petitioners submitted their explanations/objections. They did not object to the setting aside of the sale but requested that the amount of Rs. 43,000 deposited by them may be refunded to them. They denied that there was any default on their part. Thereafter, the Tax Recovery Officer passed the impugned order on May 12, 1980. After setting out the relevant facts, the Tax Recovery Officer observed and concluded thus :
"Keeping in view the fact that there has been a clear and wilful violation of Rule 57(2) of the Second Schedule of the Income-tax Act, 1961, which has also been admitted by the purchasers, vide his reply dated April 28, 1980, it is held that they are in default of the provisions of Rule 57(2) to the Second Schedule of the Income-tax Act, 1961. I, therefore, forfeit the part payment of Rs. 24,593 made to the undersigned by the purchaser on March 26, 1980, and March 27, 1980, to the Government and the sale is cancelled."
3. Thereupon, the petitioners approached this court by way of this writ petition.
4. It would be appropriate to refer to Rules 57, 58 and 60 for a proper appreciation of the contentions arising here.
5. These rules are but a mere reproduction of the relevant rules in Order XXI, Civil Procedure Code. In particular, Rule 58 corresponds, word for word, to Rule 86 of Order XXI, Civil Procedure Code. The contention of learned counsel for the petitioner is that, under Rule 58, the forfeiture of the amount deposited is not automatic in case of failure of the auction purchaser to comply with the terms of Rule 57(2) but that it is discretionary with him. Once there is a discretion, it is argued, the Tax Recovery Officer has to consider all the circumstances and facts of the case and determine whether the said amount should be forfeited and if it is to be forfeited whether it should be in full or in part. For this proposition, he relied upon the decision in Manilal Mohanlal Shah v. Sardar Sayed Ahmed Sayed Mahmad, AIR 1954 SC 349, 351, rendered under Order XXI, Civil Procedure Code. Paragraph 8 in the said decision which interprets Rules 85 and 86 reads thus :
"The provision regarding the deposit of 25 per cent. by the purchaser other than the decree-holder is mandatory as the language of the rule suggests. The full amount of the purchase money must be paid within fifteen days from the date of the sale but the decreeholder is entitled to the advantage of a set-off. The provision for payment is, however, mandatory (Rule 85). If the payment is not made within the period of fifteen days, the court has the discretion to forfeit the deposit and there the discretion ends but the obligation of the court to resell the property is imperative. A further consequence of non-payment is that the defaulting purchaser for feits all claims to the property (Rule 86)."
6. We are of the opinion that since Rule 86 of Order XXI, Civil Procedure Code and Rule 58 in Schedule II to the Act are identically worded, the principle of the said decision applies squarely therein. If so, it must be held that the forfeiture was not automatic but that it was a matter of discretion with the Tax Recovery Officer. A perusal of the impugned order shows that the Tax Recovery Officer proceeded on the footing as if the forfeiture is automatic. He stated that there was admittedly a default which, of course, he terms as clear and wilful and says that forfeiture shall follow. He has not considered the circumstances of the case, namely, that, within fifteen days of the auction, the defaulter's wife had applied for setting aside the sale under Rule 60 and once an application is made in accordance with Rule 60, there is no discretion with the Tax Recovery Officer except to set aside the sale. The petitioners further say that they had not merely deposited Rs. 24,593 but a total sum of Rs. 43,000 within fifteen days. The Tax Recovery Officer has not expressed any opinion nor has he recorded any finding about the third item of deposit pleaded by the petitioners. It is, therefore, eminently a fit case where the impugned order ought to be quashed and it is, accordingly, hereby quashed.
7. The Tax Recovery Officer shall now consider afresh whether, in the facts and circumstances of the case, it is a proper case where the amount deposited by the petitioners should be forfeited and if it is to be forfeited to what extent. While determining the said question, the Tax Recovery Officer shall also take into consideration the objection/explanations filed by the petitioners and any further representation that the petitioners may make hereafter within three weeks from today addressed to him.
8. The petition is disposed of with the above observations. No costs.