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2010 Supreme(Mad) 5239
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE ELIPE DHARMA RAO & THE HONOURABLE MR. JUSTICE M. VENUGOPAL
M/s. Machine Tools & Accessories (P) Ltd., Rep. By its Director Balaji, Chennai
Versus
The Debts Recovery Appellate Tribunal, Rep. By its Chairman, Chennai & Others
W. P. No. 10652 OF 2009 & M. P. Nos. 2 and 3 of 2009
Decided On : 03-12-2010
For the Petitioner:S. Parthasarathy, Senior Counsel for M/s. Sai Bharath & Ilan, Advocate.
For the Respondent:Om Prakash for M/s. Ramalingam Associates, John Acquinas, Advocate.
Headnote:
[MAIN LEGAL POINT] The provisions of Second and Third Schedule to the Income Tax Act, 1961 and Income Tax (Certificate Proceedings) Rules 1962 are applicable to recovery proceedings as far as possible with necessary modifications.
Fact of the Case:
The Petitioner has filed the Writ Petition seeking to quash the order of the Fourth Respondent dated 03.01.2007 in D.R.C. No. 175 of 2004 in O.A. No. 152 of 2003 on the file of the Debts Recovery Tribunal-I, Chennai, the order of the second Respondent dated 16.06.2008 in Appeal No. 38 of 2007 on the file of the Debts Recovery Tribunal-III, Chennai, the order of the First Respondent dated 23.04.2009 in M.A. No. 76 of 2009 on the file of the Debts Recovery Appellate Tribunal, Chennai and consequently to direct the Respondents 1 to 4 in setting aside the sale in favour of the Sixth Respondent of the Petitioners property mentioned in the schedule of the present Writ Petition, etc.
Finding of the Court:
The provisions of Second and Third Schedule to the Income Tax Act, 1961 and Income Tax (Certificate Proceedings) Rules 1962 are applicable to recovery proceedings as far as possible with necessary modifications.
Issues: 1. Whether the provisions of Second and Third Schedule to the Income Tax Act, 1961 and Income Tax (Certificate Proceedings) Rules 1962 are applicable to recovery proceedings? 2. Whether the Petitioner is entitled to quash the order of the Fourth Respondent dated 03.01.2007 in D.R.C. No. 175 of 2004 in O.A. No. 152 of 2003 on the file of the Debts Recovery Tribunal-I, Chennai, the order of the second Respondent dated 16.06.2008 in Appeal No. 38 of 2007 on the file of the Debts Recovery Tribunal-III, Chennai, the order of the First Respondent dated 23.04.2009 in M.A. No. 76 of 2009 on the file of the Debts Recovery Appellate Tribunal, Chennai and consequently to direct the Respondents 1 to 4 in setting aside the sale in favour of the Sixth Respondent of the Petitioners property mentioned in the schedule of the present Writ Petition, etc.?
Ratio Decidendi: 1. Yes, the provisions of Second and Third Schedule to the Income Tax Act, 1961 and Income Tax (Certificate Proceedings) Rules 1962 are applicable to recovery proceedings as far as possible with necessary modifications. 2. No, the Petitioner is not entitled to quash the order of the Fourth Respondent dated 03.01.2007 in D.R.C. No. 175 of 2004 in O.A. No. 152 of 2003 on the file of the Debts Recovery Tribunal-I, Chennai, the order of the second Respondent dated 16.06.2008 in Appeal No. 38 of 2007 on the file of the Debts Recovery Tribunal-III, Chennai, the order of the First Respondent dated 23.04.2009 in M.A. No. 76 of 2009 on the file of the Debts Recovery Appellate Tribunal, Chennai and consequently to direct the Respondents 1 to 4 in setting aside the sale in favour of the Sixth Respondent of the Petitioners property mentioned in the schedule of the present Writ Petition, etc.
Final Decision: The Writ Petition is dismissed leaving the parties to bear their own costs. It is made clear that the dismissal of the present writ petition will not preclude the Petitioner to agitate the auction sale held on 23.03.2006 before the competent forum as per the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and the Rules framed thereunder and also by complying with the Rule 60 and 61 of the Second Schedule to the Income Tax Act, 1961 and seek appropriate remedy thereto in the manner known to law, if so advised. The connected miscellaneous petitions are closed.
M. VENUGOPAL,J.
The Petitioner has filed the Writ of Certiorari in calling for the records from the Respondents pertaining to the order dated 03. 01. 2007 of the Fourth Respondent (The Recovery Officer, The Debts Recovery Tribunal-I, Chennai) in D. R. C. No. 175 of 2004 in O. A. No. 152 of 2003, the order dated 16. 06. 2008 of the second Respondent (The Debts Recovery Tribunal-III, Chennai) in Appeal No. 38 of 2007, the order dated 23. 04. 2009 of the First Respondent (The Debts Recovery Appellate Tribunal, Chennai) in M. A. No. 76 of 2009 and to quash the same and consequently to direct the Respondents 1 to 4 to set aside the sale in favour of the sixth Respondent of the Petitioners property described in the Schedule to the Writ petition and also to direct the sixth Respondent to put the petitioner in possession of the petitioners property.
2. The case of the Petitioner is that it has availed financial facilities from the Fifth Respondent/Bank and the said borrowings have been secured by the Petitioners immovable property situate in Ambattur Industrial Estate wherein the Petitioners unit has been located.
3. Due to default committed by one major customer in taking delivery of the machines manufactured by the Petitioner, the Petitioner has fallen into financial difficulty and the Fifth Respondent/Bank projected Original Application O. A. No. 152 of 2003 before the Debts Recovery Tribunal, Chennai wherein Exparte Final Order has been passed on 31. 08. 2004 in regard to sum of Rs. 1,29,37,540. 11p along with simple interest at 11% p. a. from the date of filing of the Original Application and resultantly, D. R. C. No. 175 of 2004 has been issued.
4. According to the Petitioner, there has been no proper service of summons on the Petitioner in O. A. No. 152 of 2003 and that the Fifth Respondent/Bank has obtained an Exparte Decree and sought to enforce the same through the Fourth Respondent (Recovery Officer, Debt Recovery Tribunal I, Chennai). The Petitioners land and factory measuring an extent of 16. 52 grounds at 10/9, Third Main Road, Ambattur, Chennai has been brought to the auction by the Fourth Respondent and that the auction has been taken place on 23. 03. 2006 and that no proper auction has been held and further, no publicity and advertisement has been issued regarding the intended auction.
5. Added further, the Sixth Respondent has been the successful auction bidder for bid amount of Rs. 4,10,00,000/- which is grossly lower than the market value of the property and as per the Rules of auction, the sixth Respondent has been required to pay 25% of sale amount immediately and the balance 75% within 15 days.
6. Admittedly, the Fourth Respondent has refused to default information in regard to the payment details made by the Sixth Respondent inspite of repeated demands by the Petitioner as per his Letter dated 28. 08. 2006 and 29. 08. 2006 under the provisions of the Right to Information Act and the Fourth Respondent has been issuing orders against the Petitioner in furtherance of an alleged sale in favour of the sixth Respondent.
7. The Petitioner filed W. P. No. 40034 of 2006 praying for certiorarified mandamus to quash the order dated 31. 08. 2006 of the Fourth Respondent (Recovery Officer, Debts Recovery Tribunal No. 1, Chennai) by which he has directed the Appellant to deliver the vacant possession and to direct him to furnish particulars pertaining to the alleged sale to the Petitioner as per Letter dated 28. 08. 2006. This Court passed an order in the aforesaid Writ Petition on 20. 12. 2006 by observing that the Petitioner has remedy by way of preferring an Appeal against the Fourth Respondent before the Debts Recovery Tribunal and further, this Court directed the Fourth Respondent to furnish the particulars of payment made by the bidder to the Petitioner within four weeks.
8. The Fourth Respondent (The Recovery Officer, Debts Recovery Tribunal I, Chennai) has not furnished the particulars in regard to t
