10.01.2003 R.O. Let sale be not confirmed. An offer of the amount shown be given to author of this letter will deposit the amount proposed as sale consideration upto 27.01.2003 and the offer be kept open. record shows that no order has been passed after 30.12.2002.
Sd./- A.S. Chaudhary, P.O.,D.R.T.,Allahabad."
19. The submission of the learned counsel for the respondent no.2 that the order dated 10.1.2003 passed by the Presiding Officer of the D.R.T. is not final and has been passed in exercise of power of general superintendence in respect of the functioning of Recovery Officer purporting to be under Sections 7(2) and 19(25) of the Act for guidance of the Recovery Officer as such the order dated 10.01.2003 passed by the Tribunal should not be construed to be a final order so as to entitle the petitioner to prefer an appeal under Section 20 of 1993 Act appears to be without any substance for the reason that by the said order, Presiding Officer has directed the Recovery Officer not to confirm the auction sale held on 18.12.2002 in favour of the petitioner and Respondent no.2 was directed to deposit the proposed amount as sale cosideration by 27.1.2003, in compliance of the said order the Recovery Officer vide his order dated 29.1.2003 has set aside the sale held on 18.12.2002 in favour of the petitioner and proceeded to hold fresh auction of the said property on 12.3.2003 and further the provisions contained under Section 20 of the 1993 Act, does not make any difference between final order or interlocutory order passed by the Tribunal to enable the aggrieved person to prefer appeal against such order. The only thing which is to be seen is that as to whether such order adversely affects the rights of person challenging such order or not. In my opinion, by the order dated 10.1.2003 passed by the Tribunal earlier auction of the same property held on 18.12.2002 stood automatically cancelled with further direction to hold a fresh auction of the same property. Therefore, in given facts and circumstances of the case, there can be no scope for doubt to hold that the right of the petitioner has been adversely affected by the said order, thus, the petitioner can be said to be aggrieved by the same so as to challenge before the Appellate Tribunal by preferring an appeal under Section 20 of the 1993 Act. It is immaterial as to whether the order dated 10.1.2003 passed by the Presiding Officer, Debt Recovery Tribunal is final in nature or it is interlocutory or conditional order.
20. Now next question arises for consideration is that as to whether the order dated 29.1.2003 passed by the Recovery Officer, Debt Recovery Tribunal, Allahabad is consequential order of Presiding Officer, Debt Recovery Tribunal dated 10.1.2003 and deemed to have been passed by the Presiding Officer, Debt Recovery Tribunal and appeal could lie before Appellate Tribunal under Section 20 of the Act or it is an independent order of Recovery Officer under the Act and appeal could lie before the Tribunal itself under Section 30 of the Act.
21. In order to answer these questions it would be necessary to examine the legal position in this regard. Section-29 of the 1993 Act deals with application of certain provisions of Income tax Act, which reads as under:
29. Application of certain provisions of Income-tax Act.- The provisions of the Second and Third Schedules to the Income-tax Act, 1961 (43 of 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."
22. Thus, from a plain reading of Section 29 of 1993 Act, it is clear that the provisions of Second and Third Schedules of Income tax Act 1961 and the Income tax (Certificate Proceedings) Rules 1962 have been adopted by the 1993 Act by way of reference with necessary modification, therefore, the aforesaid provisions of Second and Third Schedules of Income tax Act 1961 and Income tax (Certificate Proceedings) Rules 1962 as amended from time to time are fully applicable.
23. The procedure for recovery of tax has been provided in Second Schedule of Income tax Act. Part Third of Second Schedule deals with attachment and sale of immovable property. Rules 48 to Rule 59 of provided detail procedure for attachment and sale of immovable property by public auction. Rule 60 and Rule 61 of Second Schedule of Income tax Act deal with the circumstances under which the sale can be set aside. For ready reference the provisions of Rules 60 and 61 of Second Schedule of Income tax Act are quoted as under:
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) 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 fifteen per cent per annum, calculated from the date of the proclamation of sale to the date when the deposit is made; and
(b) for payment to the purchaser as penalty, a sum equal to five per cent 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 authorised 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 defaulter under this rule shall be disallowed unless the applicant deposits the amount recoverable from him in execution of the certificate."
24. Thus, from a plain reading of Rules 60 and 61 of Second Schedule of Income tax Act, it is clear that the defaulter, or any person whose interests are affected by the sale, may, at any time, within thirty days from the date of sale, apply to the Tax Recovery Officer, herein in this case, the Recovery Officer to set aside the sale on his depositing-- (a) 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 fifteen per cent per annum, calculated from the date of proclamation of sale to the date when the deposit is made; and (b) for payment to the purchaser as penalty, a sum equal to five per cent of the purchase-money, but not less than one rupee. Such sale can also be set aside on the ground that notice was not served on the defaulter to pay the arrears as required by Second Schedule or on the ground of a material irregularity in publishing or conducting the sale provided the Recovery Officer is satisfied that the applicant has sustained substantial injury by reason of the non-service or irregularity but such application of defaulter shall be disallowed unless the applicant deposits the amount recoverable from him in execution of certificate.
25. From the material on record there can be no dispute that no application for setting aside the sale was either moved by defaulter or the respondent no.2 before the Recovery Officer on the afore-stated grounds instead thereof a letter dated 19.12.2002 was sent by the respondent no.2 to the Presiding Officer, Debt Recovery Tribunal, offering a sum of Rs. 15 Lacs as sale consideration with request that the auctioned property may be handed over to him, whereupon he had passed aforesaid order dated 10.1.2003. In compliance of said order the Recovery Officer has passed the order dated 29.1.2003, whereby the auction sale held in favour of the petitioner was set aside and fresh auction of the same property was scheduled to be held on 12.3.2003, therefore, in my considered opinion, the order dated 29.1.2003 passed by the Recovery Officer cannot be held to be his independent order under Rules 60 and 61 of Second Schedule of Income Tax Act.
26. Now next question arises for consideration as to whether the order dated 29.1.2003 passed by Recovery Officer is in compliance of direction of Presiding Officer, Debt Recovery Tribunal in general superintendence of the functioning of Recovery Officer or is in compliance of the order dated 10.1.2003 passed by the Tribunal?.
27. In order to examine the aforesaid controversy, it would be useful to extract the order dated 29.1.2003 passed by Recovery Officer as under :-
" Case taken up today.
The following order was passed on 10.11.2002 (correct date was 10.1.2003) by the Hon'ble Tribunal, Allahabad on an application dated 19.12.2002 received from S. Ranjan and Company, Chartered Accountants, D-47/178, Luxa Road, Varanasi.
In compliance of the above order an offer was issued to applicant for depositing Rs.15.00 lacs as proposed by him as Sale consideration upto 27.1.2003.
In response to this offer the applicant S. Ranjan and Company deposited the amount of Rs.15.00 lacs on 24.1.2003.
As per the provisions in Rule 56 of Second Schedule of Income Tax Act, 1961 read with Section 29 of Recovery of Debts Due to Banks & Financial Institutions Act, 1993 the sale of immovable property shall be by public auction.
Since the offer has to be kept open, the applicant or any other person has to be offer his bid only in a public auction.
No terms of proclamation of sale has been offered by the parties.
The Jds have till date not liquidated their debt.
i). In view of the above, and in compliance of the order passed by Hon'ble Tribunal on 10.1.2003 in the instance case, the auction sale held at Varanasi on 18.12.2002 is hereby set aside. The auction purchaser Smt. Lal Bai Patel is hereby directed to receive the purchase money deposited with the undersigned.
ii) S. Ranjan and Company or any other person, is required to offer his bid in the public auction scheduled to be held on 12.3.2003 on the following terms and conditions:
iii) The immovable property already been attached by the DRT, Allahabad by its order dated 02.09.2002 shall be sold by Recovery Inspector, DRT, Allahabad by public auction on 12.3.2003 at 11.00 A.M. onwards at the premises of Central Bank of India, Mahanager Palika Branch, Varanasi.
iv) The property shall be sold in one lot.
Lot No.1 House/Plot No.B 37/115, Birdopur, Rathyatra, Varanasi admeasuring 3600 sq. ft. owned by Smt. Luxmi Devi (JD No.3).
Reserve Price - 15.00 lacs
v) The proclamation of sale shall be made in the following manners by Recovery Inspector, DRT, Allahabad.
a) Proclamation of sale shall be made at some place on or near such property by beat of drum or other customary mode and a copy of the proclamation shall be affixed at conspicuous part of the property and also upon a conspicuous part of the office of the Tribunal at Allahabad.
b) Proclamation for sale shall also be published in a local newspaper and the cost of such publication shall be deemed to be cost of sale.
c) The proclamation shall be made in the presence of independent witnesses and also in the presence of senior officers of the applicant bank and defendants.
vi) The applicant bank and the defendant shall assist in execution of this order of proclamation.
vii) A copy of proclamation of sale be sent to the concerned defendants and the bank by registered post with acknowledgment due.
viii) Let a copy of this order be sent by Registered post to all concerned.
Fix on 25.3.2003 for further order.
Sd/-(Manoj Sinha) Recovery Officer Debts Recovery Tribunal Allahabad"
28. Thus, from a careful reading of the order dated 29.1.2003 passed by the Recovery Officer, Debt Recovery Tribunal, Allahabad, it appears that aforesaid order was passed by him in compliance of the order dated 10.1.2003 passed by the Presiding Officer of the Tribunal, whereby the Recovery Officer has set aside the auction sale held at Varanasi on 18.12.2002 and the petitioner was asked to receive purchase money and a fresh auction of same property was scheduled to be held on 12.3.2003. By order dated 10.1.2003 the Tribunal had directed the Recovery Officer not to confirm the auction sale held on 18.12.2002 in favour of the petitioner and the respondent no.2 was directed to deposit the offered amount as sale consideration upto 27.1.2003. The Recovery Officer was further directed to keep the aforesaid offer open. Therefore, in my opinion, the decision with regard to re-auction of the property in question and non-confirmation of auction sale was already taken by the Presiding Officer Debt Recovery Tribunal, Allahabad. However, the aforesaid decision was given effect to by the Recovery Officer vide his order dated 29.1.2003, whereby earlier auction held on 18.12.2002 was set aside and a fresh auction of the property in question was scheduled to be held on 12.3.2003, as such it cannot be said that the Recovery Officer, has passed the order dated 29.1.2003 on his own motion independently bereft from the order dated 10.1.2003 passed by the Presiding Officer, Debt Recovery Tribunal, Allahabad or it was passed in general superintendence or guidance of the Presiding Officer of the Tribunal rather the order dated 29.1.2003 was passed by the Recovery Officer to effectuate the order dated 10.1.2003 passed by the Presiding Officer, Debt Recovery Tribunal, Allahabad and as such the same is treated to have been passed by the Presiding Officer, Debt Recovery Tribunal under the Act as contemplated by Section 17 (2) and Section 20(1) of the Act under legal fiction created by Legislature by using deeming provisions under aforesaid Sections so as to entitle the petitioner to file appeal under Section 20 (1) of 1993 Act. Any other interpretation made by the Appellate Tribunal contrary to the interpretation given by this court appears to be wholly misconceived and cannot be sustained.
29. The observation of Appellate Tribunal that it has no jurisdiction in the matter also appears to be wholly erroneous and misconceived for the reason that by virtue of Sections 17 (2) and 20 (1) of 1993 Act, an appeal shall lie, against any order made, or deemed to have been made by Tribunal under this Act, before the Appellate Tribunal and under Section 20(4) the Appellate Tribunal is empowered to pass such orders thereon as it thinks fit by confirming, modifying or setting aside the order appealed against. Therefore, it is wholly incorrect to say that against such orders passed by Tribunal, the Appellate Tribunal has no jurisdiction to hear the appeal. It is also necessary to make it clear that under Section 17-A the power of Chairperson of Appellate Tribunal appears to be of administrative in nature and it has no material bearing with the judicial powers. The judicial power has been conferred upon the Chairperson of Appellate Tribunal under Sections 20 of 1993 Act, therefore, the view taken by Appellate Tribunal that petitioner has her remedy elsewhere and not before it under the provisions of Section 20 of the Act is wholly erroneous and cannot be sustained. In my view, the Appellate Tribunal has jurisdiction to entertain and decide the appeal on merit under Section 20 of the Act against the order dated 10.1.2003 passed by Tribunal and order dated 29.1.2003 passed by the Recovery Officer by treating the same to have been passed by Presiding Officer, Debt Recovery Tribunal under the Act as contemplated by Sections 17 (2) and 20(1) of 1993 Act. Accordingly, the order dated 11.3.2003 passed by the Chair Person, Debt Recovery Appellate Tribunal, Allahabad in Appeal No. 279 of 2003 (Smt. Lal Bai Patel Vs. Central Bank of India and others), can not be sustained and the same is hereby quashed.
30. The appeal is restored to the file of Chair Person, Debt Recovery Appellate Tribunal, Allahabad with the direction to him to decide the appeal on merit in accordance with law and in the light of observations made hereinbefore after hearing the parties by dealing with their contention raised before this Court and to be raised before the Appellate Tribunal within a period of two months from the date of production of a certified copy of this order before the Appellate Tribunal. It is made clear that I have not decided the lis on merit. The observations made herein before should be confined to the question of maintainability of appeal against impugned orders before the Appellate Tribunal.
31. With the aforesaid directions/observations, the writ petition succeeds and is allowed to the extent indicated hereinbefore.
Order Date:-18.12.2012 LJ/-