S.K.JAIN, J. - (1.) HINDU undivided family (hereinafter referred to 'HUF') comprised of Janak Raj Malik as its Karta and his wife Smt. Sudarshan Malik and three sons, namely, Inder Raj Malik, Sanjiv Kumar and Anil Kumar Malik (a minor, date of birth being 20th March, 1960) as its members were assessed to income tax. It committed default in making payment of tax for the asst. years 1964 65, 1965 66, 1966 67, 1971 72 and 1973 74. The ITO in exercise of his power under S. 222 of the IT Act, 1961 forwarded to the Tax Recovery Officer a certificate dt. 25th March, 1975 under his signatures specifying the amount of arrears due from the above said assessee. The Tax Recovery Officer on receipt of such certificate proceeded under the said section to recover from said assessee the amount specified therein by attachment and sale of the assessee's immovable property, namely, Eros Cinema, subsequently named as Jay Cinema, alongwith land appurtenant thereto, situated in Khasra No. 571, old Railway Road, Gurgaon in accordance with part III of the Second Schedule of the IT Act.
(2.) ON 27th Aug., 1975 Smt. Sudershan Malik wife, Inder Raj Malik, Sanjiv Kumar sons and Janak Raj Malik, respondents No. 5 to 8 respectively, entered into an agreement to sell the above said property in dispute to M/s Sujeta Consultants and Sales Pvt. Ltd., through Mr. D.P. Mehta respondent No. 2 for a sale consideration of Rs. 7,25,000. On 21st Oct., 1975 respondents No. 5 to 8 entered into another agreement to sell the property in dispute in favour of M/s Jayanti Films (India) Pvt. Ltd. respondent No. 1 through respondent No. 2 for a sale consideration of Rs. 4,75,000. The possession of the property in dispute was delivered to respondents No. 1 and 2 by respondents No. 5 to 8. Respondents No. 1 and 2 had paid Rs. 2,75,000 towards the sale consideration to the proposed vendors on two occasions and the balance amount of Rs. 2,00,000 was yet to be paid. The Tax Recovery Officer proceeded under S. 222 of the IT Act read with the rules contained in Part III of the II Schedule of the Act and sold the above said property of the assessee by public auction on 28th March, 1977 for Rs. 4,06,000 in favour of respondents No. 1 and 2. The sale was confirmed on 29th April, 1977.
(3.) INDER Raj Malik, Sanjeev Kumar Malik and Smt. Sudershan Malik filed Civil Suit No. 791 of 27th March, 1980 against the respondents M/s Jayanti Films (India) Pvt. Ltd., Shri D.P. Mehta, Managing Director, and Tax Recovery Officer. Anil Kumar Malik and Janak Raj Malik were also arrayed as proforma respondents. Anil Kumar Malik filed an independent Civil Suit No. 792 of 27th March, 1980 against the respondents. Both the suits were for declaration to the effect that they were owners to the extent of 1/4th share each and they sought a decree for possession as a consequential relief. They had also challenged the proceedings of auction sale, confirmation of sale and adjustment of the amount of Rs. 2,75,000 paid by respondents No. 1 and 2 under the agreement.;