- (1.) THIS appeal has been preferred against the judgment dated 19th July, 2006 passed by the Presiding Officer, D. R. T. , Jabalpur in appeal No. 19/2006 which arose against an order dated 8th May, 2006 passed by the Recovery Officer I, D. R. T. , Jabalpur rejecting objection filed on behalf of the appellant for setting aside the sale.
(2.) IN brief the present appellant preferred an objection against execution proceedings of execution case No. 108/2004, which was initiated by the respon dent bank on the basis of a certificate of recovery issued in pursuance to a judg ment dated 7th October, 2004 passed in Original Application No. 51/2002 for the recovery against the appellant. When the recovery proceedings were taken up after observing required formalities the proclamation of terms of auction etc. were settled. The present appellant filed above objection before Recovery Officer alleging therein that the terms of auction settled mechanically with out application of mind committing several irregularities in violation of the procedure laid down under the Second Schedule of the Rules of the INcome-lax Act, 1961. It was pleaded in that objection that the mandatory provision of 30 days time of the notice as required under the law for the auction was not given and the objection filed in respect thereof was not decided properly. The valua tion/reserved price of the property was also challenged on the ground that the bank manipulated for the sale of the property at a lesser price. According to the appellant's objection, the husband of Sml. Kamaljeet Kaur Arora auction purchaser namely K. J. S. Arora was himself working as a Branch Manager in Punjab National Bank, Govindpura, Raisen Road, Bhopal (M. P.) colluded to purchase the property in the name of his wife Smt. Kamaljeet Kaur Arora, whereas the bid was at the instance of her husband himself, who being an em ployee of the certificate holder bank and gainfully employed with the certifi cate holder bank as Branch Manager had no authority to do so and for that rea son the auction was illegal and liable to be set aside. The plea of refusal to set tle the dispute by means of one time settlement was also raised and it was pleaded that the sale in favour of the employee of the same bank which was certificate holder was in gross violation of the Rule 17 of the Second Schedule of the INcome- tax Act, 1961. Hence, they prayed for cancellation of the above sale held on 30th May, 2005. The objection was resisted by the bank, who filed reply in the form of preliminary objection to the same, denying all allegations of the present appel lant. It was pleaded by the bank that for non-deposit of the amount as per the provisions of Rules 60 and 61 of the Income-tax Act, Second Schedule, the present objection was liable to be dismissed on this ground alone. It was pleaded that the order passed by the Recovery Officer in absence of compliance of the deposit was perfectly justified. According to the bank notice for the auction was properly published and issued giving 30 days' time and that there was abso lutely no inadequacy of the price which has come after the sale of the property in question. The bank denied the applicability of Rule 17 of the Second Schedule of the Income-tax Act, 1961. They pleaded that in all six persons par ticipated in bid and the bid finalized after 16 rounds. The same objection like that of the bank was also raised from the side of the auction purchaser against the objection preferred by the appellant before the Recovery Officer. This Tribunal after hearing the learned Counsel for the appellant Shri Satish Agarwal and Mr. V. D. Chauhan, learned Counsel for the auction pur chaser and Shri R. N. Singh, advocate appearing on behalf of the respondent bank at length went through the entire record including original record which has been summoned by this Tribunal.
(3.) AT the very outset it is to be mentioned here that the learned Counsel for the appellant has laid emphasis only on the question of non-compliance of Rule 17 of the Second Schedule of the Income-tax Act, 1961 and has argued that the entire proceedings for auction are hit by above provisions of Rule 17. He has not argued any other point before this Tribunal in this appeal. The point which arises for decision is as under: - "the Rule 17 of the Income-tax Act, Second Schedule has been violated on account of sale in favour of Smt. Kamaljeet Kaur Arora, who happens to be wife of Shri K. J. S. Arora an employee of the respondent- bank. ";