Back
SUPREME COURT OF INDIA
T.S. Thakur and Gyan Sudha Misra, JJ.
C.N. Paramsivan & Anr. —Appellants
versus
Sunrise Plaza TR. Partner & Ors. —Respondents
Civil Appeal No. 154 of 2013
Arising out of S.L.P. (C) No.21765 of 2010
Decided on 9.1.2013
IMPORTANT POINT
Provisions of Income Tax Rules are attracted only in so far as same deal with recovery of debts under RDDB Act.
Headnote:(i) Recovery Officer under Recovery of Debts due to Banks and Financial Institutions Act, 1993—Section 29—Auction sale of mortgaged asset—Provisions of Income Tax Rules are attracted only in so far as same deal with recovery of debts under the Act with modification that ‘amount of debt’ referred to in the Rules is deemed to be one under RDDB Act—Any reference “to the assessee” under the provisions of Income Tax Act and Rules shall be construed as a reference to defendant under RDDB Act—Income Tax Rules make provisions that do not strictly deal with recovery of debts under the Act—Such of the cannot possibly apply to recovery of debts under RDDB Act—Phrase “as far as possible” used in Section 29 of RDDB Act can at best mean that Income Tax Rules may not apply where it is not at all possible to apply them having regard to scheme and context of legislation—No reason to hold that Rules 57 and 58 of Income Tax Rules are anything but mandatory in nature, so that a breach of the requirements under those Rules will render auction non-est in eyes of law. (Paras 21, 26, 27 and 32)
(ii) Statute Law—Legislation by incorporation is a device to which legislatures often take resort for sake of convenience—The phenomenon is widely prevalent and has been subject matter of judicial pronouncements by Courts in this country as much as Courts abroad. (Para 17)
T.S. Thakur, J.—Leave granted.
2. This appeal by special leave arises out of an order passed by the High Court of Judicature at Madras whereby writ petition No.14594 of 2007 filed by the appellants has been dismissed and orders passed by the Debt Recovery Appellate Tribunal in M.A. No.90 of 2006 upheld, no matter on a ground other than the one on which that found favour with the Appellate Tribunal.
3. Facts leading to the filing of the writ petition have been set out at considerable length in the orders passed by the Appellate Tribunal and that passed by the High Court. We do not, therefore, consider it necessary to recapitulate the entire history over again except to the extent the same is necessary for the disposal of the present appeal. The long drawn legal battle that has raged over the past two decades or so has its genesis in a loan which respondent Indian Bank advanced to M/s. Sunrise Plaza, a partnership concern comprising respondent-S. Kalyanasundaram and his wife - Mrs. Vasantha Kalyanasundaram. The loan was advanced on the basis of an equitable mortgage of the properties owned by the partners of the firm by deposit of title deeds relevant thereto. The borrower having defaulted in the repayment of the loan amount, the respondent-bank filed O.A. No.238 of 1998 re-numbered as O.A. No.1098 of 2001 before the Debt Recovery Tribunal at Chennai. Failure of the respondents to appear and contest the claim made against them culminated in the passing of an ex-parte decree in favour of the bank on 20th September, 1999. An application for setting aside of the said decree was then made by the borrower defendants which was dismissed by the Tribunal for default. An application for recall of the said order too failed and was dismissed by the Tribunal.
4. Proceedings for execution of the Recovery Certificate issued in favour of the bank were in the meantime initiated and the property mortgaged with the bank brought to sale in a public auction on 7th March, 2003 in which the appellants emerged as the successful bidders. The respondents then filed I.A. No.146 of 2003 for setting aside of the auction sale, while I.A. No.150 of 2003 filed by them prayed for an order of refusal of confirmation of the sale. The Debt Recovery Tribunal passed a conditional order in the said application deferring the confirmation of sale subject to the judgment-debtor depositing a sum of Rs.10,00,000/- with the decree holder bank on or before 25th April, 2003. I.A. No.146 of 2003 for setting aside the sale was, however, dismissed by the Tribunal on 15th April, 2003, as not maintainable. A prayer made by the respondents - judgment-debtors for extension of time to make the deposit of the amount directed by the Tribunal having been rejected, the recovery officer proceeded further and issued a sale certificate in favour of the appellants on 28th May, 2003. The judgment-debtors-respondent Nos.1 to 3 then filed an appeal challenging the orders passed by the Debt Recovery Tribunal in which the Appellate Tribunal directed them to pay the requisite court fee.
5. Aggrieved by the order of the Appellate Tribunal, the judgment-debtors filed Writ Petition No.28235 of 2003 in which the High Court by an order dated 14th October, 2003 set aside the ex-parte decree on payment of costs. That order when challenged by the decree holder bank in a Special Leave Petition before this Court was affirmed and the SLP dismissed in July 2004. Undeterred by the dismissal of the Special Leave Petition, the bank filed a Review Application before the High Court for review of its order dated 14th October, 2003 setting aside the ex-parte decree. Even the appellants herein filed a review petition against the said order which applications were dismissed by the High Court with liberty to the auction purchaserappellants herein to represent their case before the Debt Recovery Tribunal in the O.A. pending before it.
6. The appellants-auction purchasers at that stage filed I.A. No.20 of 2005 befor
