IMPORTANT POINT
When the subject property is already mortgaged by deposit of title deeds & is encumbered, it is obvious that it need not be attached again.

B.P. Dharmadhikari, J.—This Court has issued notice for final disposal on 29.8.2012. Accordingly, we have heard Shri Sadavarte, learned counsel for the petitioners, Shri Almelkar, learned counsel for respondent Nos. 1 & 2 and Shri Ghate, learned counsel for respondent No. 3 finally, by issuing Rule and making it returnable forthwith. We have also perused the orders dated 14/02/2013 and 27.6.2013 passed by us in this matter.

2. Petitioner No. 1 a Hotel establishment and Petitioner No. 2, its proprietor, question before this Court, recovery of loan by Respondent No. 1 Secured creditor in Recovery Proceedings No.9 of 2006. The prayer is, as Bank and Recovery Officer failed to comply with the mandatory provisions of Rules 48, 49, 50 and 52 of Second Schedule appended with the Income Tax Act, 1961, and did not adopt fair and proper procedure, the sale of subject property by auction, be quashed and set aside and property should be restored back to the petitioners. In the alternative, prayer is to condone delay in preferring an application under Rule 61 of the above mentioned Second Schedule and to direct the Recovery Officer to accept the said application for setting aside of sale dated 28.3.2012 and to set it aside. The petitioners also seek a direction to allow it to deposit the amount in terms of said provision within a period of 30 days of issuance of appropriate writ, order or direction by this Court. Respondent No. 3 before this Court claims to be the auction purchaser and is placed in possession by Respondent Nos. 1 & 2.

3. Petitioner No.2 borrowed sum of Rs.15 lakh from Respondent No. 1 and mortgaged the property as described in para 2 of writ petition i.e. Survey No. 7/4 located at Mouza Kastakhed, Tahsil Balapur, District Akola, which holds a Hotel building of Hotel Paras Garden, in favour of Respondent No. 1 Bank. Said property is mentioned as subject property hereafter. Petitioner No. 2 claims that he met with an accident and became paralysed, therefore, he was required to close down the establishment and shifted to his native place i.e. District Jalgaon. He had notified this change in address to Respondent No. 1 Bank. He never received notice of Recovery proceedings or any other notice at his Jalgaon address. For the first time he got a notice dated 1.5.2012 on 18.5.2012. By this notice, he was called upon to hand over possession after auction.

4. Shri Sadavarte, learned counsel submits that as per knowledge of the petitioner, first public notice for sale of property was issued on 20.09.2006 and it was not forwarded to Petitioner No. 2 at his Jalgaon address. After this sale proclamation, there were 9 more sale proclamations and none was received by the petitioners. Last such proclamations is dated 15.2.2012. This proclamation was published in Marathi and in English daily. The petitioners got this proclamation only. He points out that in Recovery proceedings, address of petitioner at Jalgaon finds mention. According to him, Order 21, Rule 54(1A) of the Civil Procedure Code, are applicable and as there is no proof of service of notice on the petitioner at Jalgaon, the auction and sale must fall to ground. He placed reliance upon the judgment in the case of M/s. Mahakal Automobiles & Anr. v. Kishan Swaroop Sharma, AIR 2008 SC 2061, to substantiate his contention. He points out that the provisions of Rules 49, 50 and also Rule 68(b) are violated in the matter. He submits that the authorities which conducted sale are quasi judicial and, therefore, they should have taken due care to find out whether the petitioner has been served with auction notice and the sale is being held within stipulated time. He draws support from the judgment in the case of Manchhabhai Fakirbhai v. Tax Recovery Officer, (1997) 228 ITR 393, Boeing Company v. R.M. Investment & Trading Co. Pvt. Ltd. 1995 (1) Civil LJ 263. He also attempts to point out that subject property was never mortgaged by the petitioner with the Central Bank of India.

5. O