Decided on April 12,2022

Kirlampudi Sugar Mills Limited Appellant
Recovery Officer-Ii, Drt, Department Respondents


C.PRAVEEN KUMAR, J. - (1.) As all these Writ Petitions are inter connected, they are heard and disposed of by this Common Order taking Writ Petition No. 3007 of 2019 as lead petition.
(2.) (i) The 3rd Respondent herein [Borrower] availed credit facilities from 2nd Respondent Bank and when the 3rd Respondent committed default in payment of loan amount, 2nd Respondent Bank approached the Debt Recovery Tribunal, Visakhapatnam, and filed O.A. No. 9 of 2006. On contest, the said O.A. was allowed and a decree came to be passed covering the subject immovable property, which is land admeasuring Acres 42.36 cents in Pitapuram Town, Pitapuram Municipal Limits, East Godavari District. (ii) The 2nd Respondent Bank took steps for execution of the said decree before the 1st Respondent by filing R.P. No. 14 of 2009 under the provisions of Recovery of Debts Due To The Banks and Financial Institutions Act, 1993, ['RDDB Act']. The subject land was put to auction on 14/6/2018. The Petitioner, namely, Sri Siddhartha Infratech and Services (I) Private Limited, became the highest bidder and on the same day he deposited 25% of the bid amount, which was to the tune of Rs.7.00 crores. He made arrangement for payment of balance bid amount within 15 days, in terms of Rule 57(2) of schedule II of income tax Act. But On 14/6/2018 itself, the 3rd Respondent filed W.P. No. 18502 of 2018, by way lunch motion, wherein, this Court on the same day passed the following order: "Ms. V. Uma Devi, learned Counsel for the Petitioner, places reliance of the decision of this court in Pochiraju Industries Ltd, Tamilnadu Vs. Punjab National bank [2018(2) ALT 128(D.B)] The issue raised in the Writ Petition in the context of the afore stated decision requires examination. There shall accordingly be interim stay of further proceedings pursuant to the auction sale held on 14-06- 2018. Respondent No.2-Bank shall receive 25% of the sale consideration from the auction purchaser, if any, and shall not confirm the sale or receive the balance sale consideration pending further orders. Post on 20/6/2018." (iii) In view of the interim order, the Petitioner was precluded from paying 75% of balance sale consideration. Thereafter, W.P. No.18502 of 2018 was contested and the same was dismissed on 26/10/2018. After receipt of copy of the judgment on 8/11/2018, the 1st Respondent herein issued a letter to the Petitioner directing him to pay balance amount on or before 23/11/2018. At that point of time, the 3rd Respondent filed W.P. No. 41658 of 2018 questioning the communication dtd. 8/11/2018 on the ground that the same is contrary to Rule 57(2) of the Act. On 19/11/2018, this Court passed an interim order, which is as under: ""Mr. Ch.Siva Reddy, learned Counsel takes notice for the respondents 1 and 2. Issue notice before admission to the 3rd respondent returnable by 7/12/2018. It appears that pursuant to the interim order passed by this Court on 14/6/2018, the highest bidder deposited 25% of the bid amount within time. After the dismissal of the writ petition on 26/10/2018, the Recovery Officer has given (15) days time by the letter dtd. 8/11/2018 to the 3rd Respondent to make payment of the balance 75%. It also appears that the balance amount has been deposited by the 3rd respondent. But, the learned counsel for the petitioner states that in terms of Rule 60(1)(a) of the Rules under Second Schedule of the Income Tax Act, the petitioner is prepared to deposit the amount indicated as due under the proclamation of sale dtd. 9/5/2018. In the proclamation of sale dtd. 9/5/2018, the amount due as on 30/4/2018 is indicated to be Rs.18,83,00,951.47 ps. The Petitioner, under Rule 60(1)(a) of the Rules, has (30) days time from the date of proclamation. In this case, the date of proclamation is 14/6/2018. The interim stay granted by this Court in the previous writ petition, was on the very dame day, namely, 14/6/2018. But, the writ petition was dismissed on 26/10/2018. On the ground that the copy of the dismissal order was received on 8/11/2018, the Recovery Officer gave to the highest bidder (15) days time from 8/11/2018. If the time to obtain a certified copy of the order, is made available to the 3rd respondent for the propose of computing the period of (15) days, the same can be made available to the borrower also under Rule 60(1)(a) of the Rules. Therefore, if the Petitioner makes payment of Rs.18,83,00,951.47 ps., on or before 7/12/2018, the sale held on 14/6/2018 may be cancelled. To given an opportunity to the petitioner to comply with this Rule, there will be an interim stay of issue of sale certificate and further proceedings thereto. If the money is not paid on or before 7/12/2018, the Recovery Officer will be at liberty to issue a sale certificate and proceed further. Call on 10/12/2018 for reporting compliance".
(3.) From a reading of the above order, it is clear that if the Petitioner i.e. borrower commits default in payment of loan amount on or before 7/12/2018, the Recovery Officer was given liberty to issue Sale Certificate and proceed further. As the Writ Petitioner committed default in payment of loan amount, the 1st Respondent issued a letter dtd. 25/1/2019 requesting the auction purchaser to pay balance amount within 15 days. Questioning the said communication dtd. 25/1/2019, W.P.No.1105 of 2019 came to be filed by the borrower contending that it is violative of Rule 57(2) of the schedule II.;

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