B SAMPATH KUMAR Vs. RECOVERY OFFICER

JUDGEMENT

(1.) WHILE W. P. No. 20484 of 2005 has been filed to quash the proclamation of sale drawn by the fiRSt respondent herein dated 21. 04. 2005 after calling for the records and puRSuing the same and direct the fiRSt respondent herein to draw a fresh proclamation of sale strictly in accordance with Rule 52 and 53 of the Second Schedule to the Income Tax Act, 1961 before bringing the property situated at Old Door No. 15, FiRSt Street, Royapuram Extension, Tirupur Taluk for resale, W. P. No. 20485 of 2005 has been filed for issuance of a writ of declaration to declare sub-rule (b) of Rule 61 of the Second Schedule to the Income Tax Act, 1961 (43/61) as unconstitutional, arbitrary and violative of Article 14 of the Constitution of India.

(2.) SINCE the petitioner has filed both the writ petitions aggrieved by the order dated 21. 04. 2005 passed by the Recovery Officer, Debts Recovery Tribunal, Ramanathapuram, Coimbatore and since both the writ petitions are inter-related, they are decided by this common order.

(3.) THE common facts, as culled out from the affidavits and which give rise to both the writ petitions are as under: the petitioner and his brotheRS who are partneRS in Gold Mines Knitting and Weaving Mills approached the Tirupur Branch of Indian OveRSeas Bank, the second respondent in W. P. No. 20484 of 2005ing credit facilities to run their firm and they were granted cash credit facility and packing credit facility for which they mortgaged their peRSonal property by way of deposit of title deeds. Due to sudden fall in business, the firm incurred loss and was in fact closed and consequently, the loan facilities availed from the bank became due. To recover its outstanding of RS. 38,01,247/- along with interest @ 19. 38% per annum, the bank filed an Original Application before the Debts Recovery Tribunal, Chennai (now transferred to Coimbatore) against the firm and its partneRS and in default of the payment, for bringing the properties mortgaged to the bank for sale. The Debts Recovery Tribunal, Coimbatore, (in short "the DRT") by its judgment and decree dated 19. 09. 2003, directed the firm and its partneRS to pay RS. 95,41,544/- towards Principal and Interest and RS. 91,059/- towards cost to the bank and in default of such payment, the same was made recoverable by sale of properties mortgaged to the bank. The partneRS had negotiated with the bank for making one-time settlement but in vain. PuRSuant to its order dated 19. 09. 2003, the DRT passed an order dated 24. 09. 2004 in and by which the partneRS' peRSonal property which was mortgaged with the bank was attached. Accordingly, the Revenue Officer of the DRT (in short "the Revenue Officer) came out with a publication of proclamation of sale without causing the proclamation of the intended sale to be made in the language of the district and without publishing therein the various contents such as revenue assessed upon the property, nature and value of the property required to be published as mandated under Rules 52 (2) and 53 of the Second Schedule to the Income Tax Act, 1961 (in short "the Second Schedule") and merely fixing the upset price as RS. 40 lakhs. The said residential bungalow of the firm's partneRS was auctioned for a meagre sum of RS. 46. 20 lakhs in favour the third respondent in W. P. No. 20484 of 2005, the auction purchaser. Though Rule 61 of the Second Schedule provides for filing an application to set aside the sale of an immovable property in the event of material irregularity before the Recovery Officer, Rule 61 (b) imposes a condition that such an application would be entertained only if the applicant deposits the entire amount recoverable from him.