Adjournments of auction sales within one month do not require fresh proclamations under Rule 15 of the Income Tax Act, validating the sale and sale certificate.

COMMON ORDER

1. These appeals are filed under Section 20 of RDDB & FI Act, challenging the order dated 30.7.2021 passed in AOR 7/2017 in DCP 5003 in OA 209/2023 by Learned Presiding Officer, DRT-I, Bangalore.

2. Respondents 1 and 2 in MA 4/2023 have filed AOR 7/2017 in DCP No.5003 under Section 30 of the RDDB & FI Act to set aside and quash the sale certificate dated 4.12.2017 and stay all further DCP Proceedings. After contest, AOR 7/2017 was allowed and sale conducted on 6.10.2007 and sale certificate dated 4.12.2017 have been set aside. Karnataka Bank Limited was ordered to refund the sale consideration to the auction purchaser Shri Narendra Kumar Lodha with simple interest at 9% per annum from the date of receipt of the same till the date of repayment. There was also a direction to the bank and the auction purchaser to get the sale certificate cancelled before the jurisdiction of concerned sub- Registrar within 30 days from the date of the order. The amounts deposited by the applicants in the said AOR 7/2017 are permitted to be appropriated towards the loan dues of the appellants with Karnataka Bank Ltd. . As against this order, Auction Purchaser Shri Narendra Kumar Lodha filed Appeal MA 4/2023 and Karnataka Bank filed MA 5/2023.

3. Learned Counsel for appellants submitted that Learned Presiding Officer had rejected all the grounds raised by the respondents 1 and 2 before the Tribunal below and allowed the AOR 7/2017 only on the ground of technical plea raised that there was non compliance of Rule 15 of Schedule II of Income Tax Act. It was held that when the first sale held on 7.9.2017 had not taken place for want of bidders, Recovery Officer ought to have gone for a fresh proclamation and not adjourned the case. In view of the fact that no fresh sale proclamation was issued. There is violation of Rule 15 of Schedule II of Income Tax Act. Rule 15 of Schedule II of Income Tax Act, reads as follows:

15. (1) The Tax Recovery Officer may, in his discretion, adjourn any sale hereunder to a specified day and hour; and the officer conducting any such sale may, in his discretion, adjourn the sale recording his reasons for such adjournment:

Provided that, where the sale is made in, or within the precincts of, the office of the Tax Recovery Officer, no such adjournment shall be made without the leave of the Tax Recovery Officer.

(2) Where a sale of immovable property is adjourned under sub-rule (1) for a longer period than one calendar month, a fresh proclamation of sale under this Schedule shall be made unless the defaulter consents to waive it.

(3) Every sale shall be stopped if, before the lot is knocked down, the arrears and costs (including the costs of the sale) are tendered to the officer conducting the sale, or proof is given to his satisfaction that the amount of such arrears and costs has been paid to the Tax Recovery Officer who ordered the sale.

4. It is submitted by Learned Counsel for appellant that fresh sale proclamation is required only when the sale is adjourned for more than a month. In the case before hand, sale was adjourned within a month from the date of failure of the first sale. Therefore, there is no violation of Rule 15 of II Schedule of Income Tax Act and Learned Presiding Officer misconstrued the provision and wrongly allowed AOR No.7/2017. Thus contending, Learned Counsel for appellants prayed to set aside the order of Learned Presiding Officer and allow these appeals.

5. Learned Counsel for respondents 1 and 2 submitted that adjournment was not given on the date of failure of the sale, but on a future date. In that case, fresh proclamation ought to have been issued. When it was not done, setting aside the sale and consequently the sale certificate by Learned Presiding officer is factually and legally in order. Thus contending, he prayed for dismissal of the appeal.

6. I have considered the rival submissions and perused the records

7. It is seen from the appeal filed in AOR 7/2017, respondents 1 and 2 have raised