PUSHPA BUILDERS LTD. Vs. PUNJAB NATIONAL BANK

JUDGEMENT

(1.) SINCE Mr. Nabi is present for the respondent/caveator, the caveat is discharged. Heard parties' Counsel on admission. The instant appeal has been directed against the order dated 28.2.2013 passed by DRT -I, Delhi, whereby the interim relief sought by the appellant in Appeal filed vide Dy. No. 1110 dated 26.2.2013 against the order of the RO in RC No. 19/2008 has been declined.

(2.) ACCORDING to Mr. Gupta, proceedings under Section 19(1) of the RDDBFI Act are only proceedings for the recovery of debt and not for enforcement of mortgage and there is no provision for filing a mortgage suit of immovable property under the said Act, like a suit relating to mortgages of immovable property under Order 34, CPC, therefore, no suit for the recovery of any amount against a mortgaged property can be filed under that Act. He contends that Section 25 of the RDDBFI Act, provides for the recovery of debt, inter alia, by attachment and sale of the movable or immovable property of the CD and not by the sale of the charged or mortgaged property. He also contends that the Second Schedule to the Income Tax Act is the continuation to the provisions of Section 25 and Rules 4, 48 and 52 of the said Schedule mandate the attachment of the property before the sale and since the R.O. had sold the property in question without the attachment, therefore, the sale is a nullity and is liable to be set aside. Mr. Gupta has placed reliance upon the judgments in Amish Jain v. ICICI Bank Ltd., IV : (2012) BC 552, Union of India & Anr. v. Delhi High Court Bar Association & Ors., : II (2002) BC 194 (SC) : II (2002) SLT 556 : 96 (2002) DLT 726 (SC) : (2002) 4 SCC 275, V. Chakrapani v. State Bank of India, : II (2011) BC 516 : AIR 2011 A.P. 27, Mahakal Automobiles & Anr. v. Kishan Swaroop Sharma, : II (2008) CLT 421 (SC) : (2008) 13 SCC 113, Raghunath Rai Bareja & Anr. v. Punjab National Bank & Ors., : I (2007) SLT 245 : I (2007) CLT 1 (SC) : (2007) 2 SCC 230 and Swasti Agency & Ors. v. State Bank of India, Bhubaneswar & Ors., : AIR 2009 Ori 147, in support of his contentions.

(3.) MR . Hashmat Nabi, on the other hand, contends that it is an admitted case of the appellant that it had challenged the auction sale dated 25.1.2011 by filing an application/objections under Rule 61 of the Second Schedule to the Income Tax Act, which provides that the sale of an immovable property sold in execution of the recovery certificate can be set aside if the CD or any person, whose interests are affected by the sale, applies within 30 days from the date of sale to the Recovery Officer to set aside the sale on the ground of material irregularity or fraud in publishing or conducting the sale and the sale of the property without attachment can only be said to be a material irregularity. He points out that as per the proviso to Rule 61, no sale shall be set aside on any such ground unless the Recovery Officer is satisfied that the applicant has sustained substantial injury by reason of such irregularity and the application shall be disallowed unless the applicant deposits the amount recoverable from him in the execution of the recovery certificate. According to him, as the CD/appellant had neither filed the application for setting aside the sale within 30 days from the date of sale, i.e., 25.1.2011, as it was filed after about 9 months thereof on 19.10.2011, nor the appellant had alleged or shown that it had sustained any substantial injury due to the alleged irregularity and had also not deposited any amount recoverable from it under the recovery certificate and only an application seeking waiver of such deposit was filed after more than a year on or about 17.11.2012, therefore, the objections/application under Rule 61 is liable to be disallowed and the sale cannot be set aside. He, however, submits that there is no provision in the Second Schedule to the Income Tax Act for the waiver of the deposit as required under Clause (b) to the proviso to Rule 61.