2008 Supreme(Bom) 1505

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
SWATANTER KUMAR, C.J. AND S.A. BOBDE, J.
M/s. Aatam Gems & Ors.- Appellant
Versus
Oriental Bank of Commerce- Respondent
WRIT PETITION (LODGING) NO. 2298 OF 2008
Decided ON: 16TH OCTOBER 2008

Headnote:Recovery of Debts Due to Banks and Financial Institutions Act, 1993 - Sections 25 and 28-Transfer of Property Act, 1882, Section 54-Civil Procedure Code, 1908, Section 72-Auction purchaser-Right of.-Where the auction purchaser has deposited the entire sale consideration and the objections to the sale have been dealt with and disposed of in accordance with law and the competent authority has confirmed the sale, as done in the present case by an order dated 30th October 2007, an absolute right vests in the auction purchaser and he is entitled to issue of such sale certificate. The bank has deposited higher sum as directed by the Tax Recovery Officer prior to 26th September, 2007 and their claim to the property is fully justified which cannot be frustrated by the petitioners by making a mere averment across the bar that they are willing to deposit the entire decretal amount.

       Recovery of Debts Due to Banks and Financial Institution Act, 1993 - Sections 25 and 28 - Income Tax Act, 1961, Schedule II, Rule 54 - Execution by Auction sale - Original application for recovery of due filed by Bank in D.R.T. II, Mumbai - Decreed in favour of Bank - Recovery certificate i.e. D.R.C. issued - Non-compliance of Rule 54 - Contention, objections raised by applicants before Recovery Officer, petition in cannot be permitted to raise issues for first time before this Court - Held - Petitioners, have failed to show prejudice - All proceedings over passed in presence of petitioner, they can hardly raise any objection - There is nothing on record to show that provisions were not complied with. - The arguments with regard to the non-compliance of Rule 54 of the Rules as well as non service of Form No. 17 upon the judgment-debtor and participation of the decree holder without leave of the Court were not the objections raised by the applicants before the Recovery Officer and other authorities as noticed in the impugned orders. Court is afraid that the petitioners cannot be permitted to raise these issues for the first time before the Court and question the correctness of the concurrent orders passed by the Recovery Officer, Presiding Officer, DRT-II and before the DRAT, Mumbai. The defects pointed out in the report of the Commissioner and objection in that regard had been sternly dealt with under the impugned orders. Court see no fault in the orders in question in the writ petition. The petitioners have failed to show any prejudice and thus even if there are some irregularities, the same would not vitiate the proceedings. The non-mentioning of correct figure in the notice/proclamation of sale was corrected within a very short time by issuance of a corrigendum and the main objection of the petitioners for depositing the entire decretal amount was accepted by the concerned authority which order has become final and was duly implemented as the bank had deposited the entire decretal amount. These all proceedings including the orders dated 26th September, 2007 and 30th October, 2007 were passed in the presence of the petitioners and thus can hardly raised an objection having participated in those proclamation in terms of Rule 52 has been issued and all ingredients of Rule 53 have duly been incorporated as the contents of the proclamation except the typing error in relation to reserve price which was also corrected. The provisions of Rule 54 require that the proclamation has to be made at some place on or near such property by beat of drum or other customary mode and has to be affixed on a conspicuous part of the property and will be published in the Official Gazette. There is nothing on record before us to show that these provisions were not complied with. It is, interesting to note that in the appeal filed before the Debt Recovery Appellate Tribunal, Mumbai in the grounds it has been stated that the Recovery Officer permitted the respondent Bank to participate in the auction sale and thus committed and error. In face of this argument advanced, the Bank had participated in the auction without leave to the Court falls to the ground. Lastly the other contention of the petitioners that the sale of the property is also vitiated by the fact that the complete proclamation was published on 28th August, 2007 and the sale was conducted on 25th/26th September, 2007 prior to expiry of 30th day as contemplated under Rule 54 of the Rules is also without any merit. The public notice/proclamation was issued on 25th August, 2007 and corrigendum in relation to correction was published on 28th August, 2007. Besides the fact that the period of 30th days would have to be counted from 25th August, 2007 and the sale having been completed on 26th September, 2007 both have squarely been in consonance with the said Rules and in any case, nobody has come forward with such a case and even the petitioner have also failed to show that they suffered any benefit because of two days delay i.e. 28th August, 2007 when the corrigendum was published. Thus, Court sees no merit in this contention.

       Recovery of Debts Due to Banks and Financial Institution Act, 1993 - Sections 25 and 28 - Income Tax Act, 1961, Schedule II, Rules 54 and 63 - Execution of Decree - Suit for recovery of dues filed by Bank before D.R.T. Mumbai - Decree in favour of Bank - Recovery certificate issued - Execution of decree by auction sale - Petition filed against praying for stay as non-compliance of Rules 54 of Income Tax Rules - Held - Once sale is confirmed a definite right accrues in favour of auction purchaser - Petition dismissed. - Once the sale is confirmed, a definite right accrues in favour of the auction purchaser. Under Rule 63 where no application is made for setting aside the sale or where such an application is made and just allowed by the Recovery Officer, the Tax Officer shall upon deposit of the amount make an order confirming the sale. Thereupon the sale shall become absolute. This is not a transaction effected between the parties privately. The entire sale of the property is effected through the process of law i.e. the provisions of the Debt Recovery and the Rules specified under Schedule II of the Income Tax Act 1961. Where the auction purchaser has deposited the entire sale consideration and the objections to the sale have been dealt with and disposed of in accordance with law and the Competent Authority has confirmed the sale, as done in the present case by an order dated 30th October, 2007, an absolute right vests in the auction purchaser and he is entitled to issue of such sale certificate. The Bank has deposited higher sum as directed by the Tax Recovery Officer prior to 26th September, 2007 and their claim to the property is fully justified which cannot be frustrated by the petitioners by making a mere averment across the bar that they are willing to deposit the entire decretal amount.

       Recovery of Debts Due to Banks and Financial Institution Act, 1993 - Sections 25 and 28 - Income Tax Act, 1961, Schedule II, Rule 61 - Question of decree by auction sale - Suit for Recovery of money filed by Bank - Suit decreed in favour of Bank - Recovery certificate issued - Question by question sale - Petition filed by J.Ds. for stay - Contention, about his right to redemption and as matter of legal right sale could not have been confirmed in favour of Bank - Held - Petitioner participated in proceeding right from issuance of proclamation there is no proceedings in entire question of recovery certificate when petitioners her not participated effectively - Hence, petition dismissed. - The counsel appearing for the petitioners while relying upon the judgment of the Supreme Court in Narandas Karsondas v. S.A. Kamtam, 1976 DGLS (soft) 470 : AIR 1977 SC 774 : 1977 (3) SCC 247 has argued that the he still has right to redeem the mortgage and as a matter of legal right the sale could not have been confirmed in favour of the Bank. According to him till the registered sale deed is executed infavour of the Bank the petitioners will have a right to redeem the property. Firstly, on facts, the case of Narandas Karsondas has no application to the present case. That was a case where sale of the mortgaged property was without intervention of the Court and document of transfer/ title had not been registered where the Court, under Section 54 of the Transfer of Property Act, 1882 held that the mortgagor could redeem the mortgage. Hence the petitioners participated by the proceedings at all stages i.e. right from the issuance of proclamation acceptance of bid modification of the amount to be deposited by the Bank and finally in the confirmation of the sale. It only filed an application for deferment of the sale and never took any step under Rule 61 of the Rules to pray for setting aside the same after depositing the requisite amount. The counsel for the petitioner also relied upon a judgment of the Supreme Court in the case of M/s. Mahakal Automoblies v. Kishan Swaroop Sharma, AIR 2008 SC 2061, to contend that no notice was given to the judgment-debtor and thus in terms of Rules 54 and 66 of Order XXI, the sale gets vitiated. The principles of law laid down by the Supreme Court in this case can hardly be questioned but again on facts it has no application to the present case. There is no proceedings in the entire execution of the recovery certificate where the petitioners have not participated effectively. Nothing was done in the absence of the petitioners and in fact the material objection with regard to deposit of the entire decretal amount and proper declaration to be made was accepted by the Recovery Officer. Court is afraid that both these judgments of the Supreme Court are hardly of any help to the case of the petitioner.

       No merit in the writ petition and the same is dismissed, leaving the parties to bear their own costs.