Shri. Sarang Avinash Kamtekar vs M/S. Alpha Organic And Ors
2022 Latest Caselaw 3782 Bom

                                                                                  cwp 6159-2011.doc

                      Diksha Rane/PMB

                                        IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                               CIVIL APPELLATE JURISDICTION
         Digitally
         signed by
         PRADNYA


                                                WRIT PETITION NO. 6159 OF 2011
PRADNYA  MAKARAND
MAKARAND BHOGALE
BHOGALE  Date:
         2022.04.07
         18:51:54
         +0530



                                   Shri Sarang Avinash Kamtekar
                                   Age : adult, Occupation : Service,
                                   residing at 202, Bhagyadarshan
                                   Society, Behind Ayyappa Temple,
                                   Bhosari, Pune 411 039.                      ..Petitioner

                                          vs.

                                   1.    M/s. Alpha Organic,
                                   a Proprietary concern of Shri Mukund
                                   Vasant Deshpande,
                                   Age : adult, Occupation : Business,
                                   residing at C/o. Shri Ashok Dategaonkar,
                                   having address at Raul Apartment,
                                   B5, Erandavane, Pune 411 004.

                                   2.    Bank of India, a Body Corporate,
                                   constituted under the Banking
                                   (Acquisition and Transfer of Undertaking)
                                   Act, 1970, having its office among
                                   other places at Karve Road Branch,
                                   65-1-B, Erandavane, Pune 411 004.

                                   3.    The Ld. Chairperson,
                                   The Debts Recovery Appellate Tribunal,
                                   Fourth Floor, Sindhiya House,
                                   Ballard Pier, Mumbai.                       ..Respondents
                                                            ------------
                                   Mr. Siddharth R. Ronghe for the Petitioner.
                                   Dr. Arunkumar Barthakur and Mr. Shrinivas Chopade for
                                   Respondent No.1.
                                   Mr. Rakesh Singh a/w. Purri Davda i/b. M. V. Kini and Co. for
                                   Respondent No.2.
                                                            ------------

                                                                                                 1
                                               cwp 6159-2011.doc

                 CORAM : A. A. SAYED &
                         M. S. KARNIK, JJ.

DATE : 7 APRIL, 2022

JUDGMENT : (PER M. S. KARNIK, J.) :

1. The challenge in this proceeding under Article 226 of

the Constitution of India is to the judgment and order dated

27/6/2011 of the Debts Recovery Appellate Tribunal at

Mumbai (hereafter 'DRAT' for short). Before the DRAT the

order dated 26/3/2008 passed by the Debts Recovery

Tribunal, Pune (hereafter 'DRT' for short) was under

challenge, whereby the Appeal No. 28 of 2006 filed by

Respondent No.1 under Section 30 of the Recovery of Debts

Due to Banks and Financial Institutions Act, 1993 (hereafter

'RDDB & FI Act' for short) was dismissed as being barred by

time and as being beyond the scope of Section 30 of the

RDDB & FI Act.

2. The facts of the case in brief are: -

The Respondent No.2-Bank of India (hereafter 'BOI'

for short) filed Civil Suit No.180 of 1992 before the Civil

Judge, Senior Division, Pune against the Respondent No.1-

M/s. Alpha Organic (hereafter 'Alpha Organic' for short) for

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recovery of Rs.4,96,248/- along with interest. The suit

came to be decreed on 27/9/2000. The DRT, Pune was

established on 16/7/1999 and RDDB & FI (Amendment)

Act, 2000 (hereafter 'Amendment Act, 2000' for short)

became effective from 17/1/2000. Alpha Organic filed First

Appeal No. 326 of 2001 before this Court against the

judgment and decree dated 27/9/2000. The Appeal is

admitted and pending final hearing. This Court by an order

dated 11/10/2002 passed in Civil Application ('C.A.' for

short) No. 3222 of 2001 and C. A. No. 3223 of 2002 in F. A.

No. 326 of 2001 stayed the impugned decree subject to the

condition regarding payment of the amount by Alpha

Organic in the manner stated in the order. By an order

dated 18/6/2003, this Court allowed the C.A. No. 1886 of

2003 in F. A. No. 326 of 2001 filed on behalf of BOI for

withdrawal of the amount deposited, by passing following

order:

"So far as deposit of Rs.1,50,000/- made by the Respondent herein under order of this Court dated 11/10/2002 is concerned, the applicant bank is allowed to withdraw this amount subject to furnishing an undertaking to this Court that in the event respondent succeeds, the applicant bank shall bring back the said amount with interest as may be ordered

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by this Court at the time of final hearing."

3. In the meantime, the recovery proceedings (for

execution of decree dated 27/9/2000) came to be initiated

by BOI before the DRT-II invoking the provisions of Section

31A of the RDDB & FI Act. The Presiding Officer, DRT, Pune

issued the recovery certificate dated 28/12/2001 under sub-

section 7 of Section 19 of RDDB & FI Act of Rs.14,65,500/-,

certifying that the mentioned sum of Rs.14,65,500/-

together with further interest till realization of the amount

aforesaid is due to BOI from Alpha Organic. It is further

stated in the certificate that the Recovery Officer shall

realize the amount as per such certificate in the manner

and mode prescribed under Sections 25 and 28 of the RDDB

& FI Act.

4. A show cause notice under Rule 73 of second Schedule

of Income Tax Act, 1961 read with Sections 28 and 29 of

the RDDB & FI Act was issued on 24/6/2002 as to why the

proprietor of Alpha Organic should not be committed to civil

prison in execution of the said certificate. Alpha Organic

filed an application before the Recovery Officer on

12/9/2003 informing him about the stay granted by the

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High Court to the decree and requested the Recovery

Officer to stay the proceedings. The said application was

rejected. In course of recovery proceedings, the Recovery

Officer invited offers in sealed envelope of interested parties

for auction sale on "as is where basis". The property for sale

is described as "all the piece and parcel of the property

bearing Flat no.A-14, Vijay Laxmi Society, Paud Road, Pune

411 038 (hereafter 'the said flat' for short). The last date

for receiving the bids was 29/12/2003 till 2.30 p.m. The

public notice stipulated that the tenders received after the

prescribed date and time will not be accepted. This public

notice was published in the daily newspaper "Prabhat"

circulated in Pune.

5. By its order dated 23/4/2004, the Recovery Officer

declared that in the public auction held on 23/4/2004, the

Petitioner-Shri Sarang Avinash Kamtekar (hereafter

'Kamtekar' for short) was the successful bidder of the said

flat. The order reflects that Kamtekar's bid was of

Rs.2,40,000/- which is equal to the reserve price and that

he had already deposited Rs.1,00,000/- as EMD and

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balance 25% of the bid amount. He was directed to deposit

the remaining 75% balance of the bid amount i.e.

Rs.1,40,000/- within 15 days on or before 7/5/2005. The

order confirming the sale of the said flat is dated 24/5/2004

whereupon the sale certificate is issued in respect of the

sale of the said flat.

6. Alpha Organic filed M. A. No. 55 of 2005 before the

DRT for condonation of delay of 51 days in filing the Appeal

in its challenge to the sale proceedings before the Recovery

Officer. The application was opposed by BOI. The said

application for condonation of delay came to be dismissed

by the DRT vide order dated 27/6/2005. Alpha Organic

challenged the order dated 27/6/2005 by filing Appeal No.

353 of 2006 before the DRAT. The DRAT vide order dated

11/9/2006 set aside the order dated 27/6/2005 of DRT,

thereby condoned the delay of 51 days and directed the

DRT, Pune to decide the Appeal on merits.

7. Alpha Organic filed Appeal No. 28 of 2006 before the

DRT, Pune, challenging various orders passed by the

Recovery Officer in Recovery Proceeding No. 13 of 2002.

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The DRT was of the opinion that the recovery certificate has

not been challenged by Alpha Organic and therefore, it has

become final and conclusive. It further held that the

question regarding legality of the certificate does not fall

within the scope of Appeal as provided for under RDDB & FI

Act and therefore, in the Appeal the said question cannot be

gone into. According to DRT, the scope of the Appeal is

limited by Sections 25 to 28 of the RDDB & FI Act. In its

opinion, as Alpha Organic did not take resort to Rules 60

and 61 of the second Schedule of the Income Tax Act to set

aside the sale on the ground of irregularity by depositing

the amount recoverable from it in execution of the sale

certificate, it held the Appeal to be not maintainable. It

further held that the challenge of the confirmation of the

sale is time barred. The Appeal thus came to be dismissed

as barred by time and as the same is beyond the scope of

Section 30 of RDDB & FI Act.

8. Alpha Organic filed Appeal No. 188 of 2008 along with

M. A. No. 384 of 2008 before the DRAT, Mumbai. The DRAT,

Mumbai by the order impugned in this Petition allowed the

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Appeal and set aside the sale of the flat and the subsequent

actions of the Recovery Officer in pursuance of the sale. The

DRAT, Mumbai, directed that the possession of the said flat

be restored back to Alpha Organic on or after 29/7/2011. It

observed that further action in the Recovery Proceedings

No. 13 of 2002 will be taken in accordance with the result of

Appeal No. 326 of 2001 pending before in this Court.

9. Learned Counsel for Kamtekar, challenging the

judgment and order passed by the DRAT submits as under:-

(a) The said flat in question was acquired by

Kamtekar in accordance with the procedure prescribed

by RDDB & FI Act. Kamtekar is in possession of the

said flat for almost 17 years. To direct restoration after

such a long time is harsh and would cause serious

prejudice to Kamtekar.

(b) The rejection of the application for stay to the

recovery proceedings before the Recovery Officer filed

on behalf of Alpha Organic was not challenged in

Appeal before DRT thereby rendering the recovery

certificate final and conclusive. In these circumstances

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the finding of DRAT that recovery should proceed only

after decision in the First Appeal before the High Court

is unjustified.

(c) The DRAT has committed an error in entertaining

the Appeal in its challenge to the auction proceedings,

as according to learned Counsel, such a challenge

under Section 30 of the RDDB & FI Act is not

maintainable in the absence of Alpha Organic resorting

to the remedy provided by Rules 60 and 61 of the IT

Rules.

(d) Though the public notice is in English, the same

is published in a Marathi newspaper having wide

circulation and therefore there is substantial

compliance with the Rules of procedure.

(e) The said flat was sold after following the due

procedure prescribed by RDDB & FI Act. The stay

granted to the decree by the High Court is of no

consequence as Alpha Organic participated in both the

proceedings thus submitting to the jurisdiction of the

DRT.

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(f) Learned Counsel cited the following decisions in

support of his submissions:-

(i) Union of India and another vs. Delhi High Court Bar Association and others1.

(ii) Hill Properties Ltd. vs. Union Bank of India & Others2.

              (iii) Usha Offset Pvt.      Ltd.   vs.   Bank     of
              Maharashtra and others3.
              (iv) M/s.    Maan       Saravoar     Properties

Development Pvt. Ltd. vs. The Union of India & others4.

(v) Sadashiv Prasad Singh vs. Harendar Singh and others5.

10. On the other hand, learned Counsel for Alpha Organic

invited our attention to the findings recorded by the DRAT

and argued in support of the findings. He submits that

without a fresh public notice regarding a proclamation of

sale, the said flat is auctioned in favour of Kamtekar in

complete breach to the prescribed statutory procedure. In

support of his submissions, learned Counsel relied upon the

following decisions:

1 (2002) 4 SCC 275 2 2010 (1) AIR (BOM) R 286 3 (2016) 3 AIR BOM R 549 4 2014-5-L.W. 381 5 (2015) 5 SCC 574

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(i) Himadri Coke & Petro Ltd. vs. Soneko Developers (P) Ltd. & ors.6

(ii) M/s. Navalkha & Sons vs. Sri Ramanya Das & ors.7

(iii) FCS Software Solutions Ltd. vs. La Medical Devices Ltd. & ors.8

(iv) Chandavarkar Sita Ratna Rao vs. Ashalata S. Guram9.

(v) C. N. Paramasivam & Anr. vs. Sunrise Plaza through Partner & ors.10

(vi) Official Liquidator, Uttar Pradesh & Uttarakhand vs. Allahabad Bank & ors.11

(vii) Asha Mehta vs. Allahabad Bank12.

(viii) Mathew Varghese vs. M. Amritha Kumar & ors.13

(ix) Keshrimal Jivji Shah & anr. vs. Bank of Maharashtra & ors.14

(x) Hari Vishnu Kamath vs. Ahmad Ishawue & ors.15

(xi) Raghunath Rai Bareja & anr. vs. Punjab National Bank & ors.16

11. Heard learned Counsel at length. Perused the

pleadings and the impugned order. The DRAT allowed the

appeal finding that the High Court having granted stay to

the decree passed by the trial Court, as this decree was

6 (2005) 12 SCC 364 7 1969(3) SCC 537 8 (2008) 10 SCC 440 9 (1986) 4 SCC 447 10 (2013) 9 Scc 460 11 (2013) 4 SCC 381 Utt 12 2011 (1) Mh. L.J.

13 (2014) 5 SCC 610 14 2004 (3) Mh.L.J.

15 AIR 1955 SCC 233 16 (2007) 2 SCC 230

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subject matter of recovery proceedings before the DRT, the

recovery proceedings before the DRT should not have

proceeded further. It held that the Recovery Officer has

committed irregularities by not mentioning the reserve price

in the sale proclamation and further by not publishing the

sale proclamation in the language of the district.

12. The DRAT was of the opinion that the Recovery Officer

should not have proceeded with the sale in view of the

pendency of the Appeal in this Court against the decree

which was subject matter of execution before the DRT. The

premise on which the DRAT proceeded to form this opinion

is that, in the event the First Appeal filed by Alpha Organic

in this Court is allowed, it would result in complicating the

issue. The DRAT was of the opinion that the decree having

been stayed by the High Court and Alpha Organic having

complied with the conditions of the stay, it would have been

advisable for the Recovery Officer to have not proceeded

further with the execution. The relevant observations of the

DRAT in paragraph 9 are as under:-

"As noted above, the Civil Court had passed the decree on 27/7/2000. On 15/3/2001 the appeal was filed

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against the decree in the Hon'ble High Court. On 30/7/2001 the appeal was admitted by the Hon'ble High Court bearing Registration No. 326/2001. The said appeal is still pending. On 11/10/2001 the Hon'ble High Court granted stay of the decree on deposit of Rs.1.50 lacs within four weeks. The appellants deposited the aforesaid amount of Rs.1.50 lacs on 31/10/2002.

Subsequently the appellant filed application Exhibit 27 before the Recovery Officer on 12/9/2003 for stay of the recovery proceedings in R. P. No. 13 of 2002. The Recovery Officer rejected Exhibit 27 on 17/10/2003. On 3/11/2003, the Recovery Officer ordered for proclamation of sale by public auction. Subsequently this auction took place and the property was sold to the auction purchaser. The contention raised by Dr.Barthakur is that once the Hon'ble High Court was seized of the matter and had passed an effective order of stay whereby the execution of decree was stayed on deposit of Rs.1.50 lacs by the appellant, it was not proper for the Recovery Officer to have gone ahead with the execution of the decree. The order passed by the Hon'ble High Court was brought to the notice of the Recovery Officer. He still proceeded to execute the recovery certificate, in clear disregard of the fact that the decree was passed by the Civil Court and the same was stayed by the Hon'ble High Court. It was the same decree on the basis of which the Tribunal had issued the recovery certificate. The submission of Dr. Barthakur is that it is advisable to avoid such situation. For a moment he may agree that legally the Recovery Officer could execute the recovery certificate. But what will happen if the appellant ultimately succeeds before the Hon'ble High Court in its appeal? This is situation where there are two forums where the matter is pending - first appeal is pending before the Hon'ble High Court while a decree, though stayed by the Hon'ble High Court is being executed by the Recovery Officer. The submission of the appellant's learned counsel is that such a situation must be avoided. He has placed reliance upon a judgment of the Hon'ble Supreme Court reported in 2006 (12) Supreme Court Cases 484 (State of H.P. and Others V/s. Surinder Singh Banolta), where it was laid down;

"A situation, thus, may arise where two different proceedings may lie before two different authorities at the instance of two different persons. Two parallel proceedings, it is

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well settled, cannot be allowed to continue at the same time. A construction of a statute which may lead to such a situation, therefore, must be avoided. It will also lead to an absurdity if two different tribunals are allowed to come to contradictory decisions". Under the facts and circumstances that have unfolded before us, it was advisable for the Recovery Officer to have refrained from proceeding further once the order of stay granted by the Hon'ble High Court had been brought to his notice. The Recovery Officer refused to stay further proceedings of R.P. No. 13 of 2002 and rejected the appellant's application for stay. It appears that the appellant did not challenge the order before the learned Presiding Officer so as to bring the order of stay passed by the Hon'ble High Court to the notice of the learned Presiding Officer. However, the ideal situation was that Recovery Officer should have stayed his hands in R.P. No. 13 of 2002, once the order passed by the Hon'ble High Court on 11/10/2002 was brought to his notice."

13. Let us consider the submission of learned Counsel for

the Petitioner that the DRAT was not justified in recording a

finding that the Recovery Officer should not have proceeded

with the execution, after the order of the High Court

granting stay to the judgment and decree sought to be

executed was brought to his notice. The decree was passed

in favour of BOI on 27/9/2000. Section 31A of the RDDB &

FI Act was inserted by Act 1 of 2000 w.e.f. 17/1/2000.

Though a query was raised whether upon establishment of

the DRT, Pune w.e.f. 16/7/1999, the Civil Court would

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continue to have jurisdiction to try the suit in view of

Section 31 of the RDDB & FI Act; the learend Cousnel for

the parties submit that the decree passed by the Civil

Court, so also the initiation of the execution proceedings for

recovery under Section 31A of the RDDB & FI Act are well

justified and hence do not dispute this position. We are

satisfied that having regard to the nature of the claim, this

is not a case where jurisdiction is conferred on the DRT by

consent of the parties as the DRT has jurisdiction to

entertain the recovery proceedings. We therefore do not

deliberate on this aspect of jurisdiction any further, as in

any case none of the parties object to the jurisdiction of the

DRT or the Recovery Officer in executing the decree of the

Civil Court.

14. As indicated earlier, as per Section 31A of the RDDB &

FI Act, a Certificate for Recovery was issued by the DRT on

28/12/2001 in execution of the decree dated 27/9/2000 of

the Civil Court. On receipt of such certificate issued under

Sub-Section 2 of Section 31A of the RDDB & FI Act, the

Recovery Officer proceeded to recover the amount in terms

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of Sub-Section (3) of Section 31A of the RDDB & FI Act. No

doubt, the Recovery Officer was informed only on

12/9/2003 about the stay to the decree granted by the High

Court i.e. after the issuance of the Recovery Certificate by

the DRT. An application for stay of the recovery proceedings

was made by Alpha Organic. The said application came to

be rejected. The Recovery Certificate was not challenged by

Alpha Organic which is the basis for learned Counsel for

Kamtekar submitting that the Recovery Officer was justified

in proceeding ahead with the execution. The question is

whether in the teeth of the stay granted by the High Court

to the decree of the Civil Court, should the Recovery Officer

have at all proceeded with the execution once this was

brought to his notice. The provisions of Section 31A of the

RDDB & FI Act assume relevance in this context and hence

need to quoted, which reads thus :-

"31A. Power of Tribunal to issue certificate of recovery in case of decree or order.--

(1) Where a decree or order was passed by any court before the commencement of the Recovery of Debts Due to Banks and Financial Institutions

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(Amendment) Act, 2000 and has not yet been executed, then, the decree-holder may apply to the Tribunal to pass an order for recovery of the amount.

(2) On receipt of an application under sub-section (1), the Tribunal may issue a certificate for recovery to a Recovery Officer.

(3) On receipt of a certificate under sub-section (2), the Recovery Officer shall proceed to recover the amount as if it was a certificate in respect of a debt recoverable under this Act."

15. The Apex Court in Punjab National Bank, Dasuya

vs. Chajju Ram and ors.17 held that Section 31A is clearly

applicable to a case where the decree passed by Court

before commencement of the Amendment Act and the same

has not yet been executed.

16. We find that but for Section 31A, the decree would

have been subject matter of execution by the Civil Court as

per the provisions of Code of Civil Procedure. In the

absence of provision such as Section 31A, the executing

Court (Civil Court) would have proceeded to execute the

decree. The effect of stay of the decree by the High Court

17 AIR 2000 SC 2671

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would have had the effect of staying further execution

proceedings before the Civil Court and there is then no

question of proceeding ahead with the execution till further

orders in the Appeal by the High Court. This being the

position, upon coming into force of Section 31A, can the

DRT or the Recovery Officer despite noticing the pendency

of the Appeal and the consequent stay to the execution of

the decree by the High Court, when such decree itself is the

subject matter of execution under Section 31A, still proceed

with the execution in the face of the stay to the decree

granted by the High Court. The object of enacting the said

Act was to work out a suitable mechanism through which

the dues to the Banks and financial institutions could be

realised without delay.

17. The recovery proceedings under the RDDB & FI Act

provides for a mechanism through which the dues of the

bank could be realised in execution of the decree without

delay. No doubt that the Recovery Officer has to recover the

dues as per the recovery certificate issued by the DRT. In

the course of recovering the dues under Section 31A of the

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RDDB & FI Act, the Recovery Officer is effectively executing

the decree of the Civil Court. The recovery certificate under

Section 31A of the RDDB & FI Act is a consequence of the

decree. In simple words, the decree is the main order. Once

the decree is stayed by the High Court, it cannot be gain

said that the recovery proceedings can continue on the

basis of the recovery certificate. If the Recovery Officer

proceeds to recover the dues in execution of the recovery

certificate, it will have the effect of virtually rendering the

stay granted to the decree by a Superior Court otiose. Such

a course is impermissible. The decree which was a subject

matter of recovery proceedings before the DRAT was

stayed, in which case, the Recovery Officer ought not to

have proceeded with the recovery proceedings once this

was brought to his notice. Merely because the application

made by Alpha Organic for staying the recovery proceedings

is rejected, or that the recovery certificate is not

challenged, will not authorise the Recovery Officer to

overreach the orders passed by the High Court. We

therefore have no hesitation in endorsing the view taken by

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the DRAT for these additional reasons as well.

18. On 3/11/2003, the DRT, Pune, issued a public notice

for sale of the said flat. Last date for receiving the bids was

29/12/2003 till 2.30 p.m. and the tenders were to be

opened on the same date at 3.00 p.m. Final bids were to be

conducted on the same day at 3.30 p.m. In the public

notice dated 3/11/2003, there is no mention of the reserve

price. The public notice further stipulated that the tenders

received after the prescribed date and time will not be

accepted. No bids were received on 29/12/2003 and auction

was postponed. Even on the subsequent dates i.e.

20/1/2004, 5/2/2004, 3/3/2004 and 26/3/2004 no bids

were received. In the roznama dated 23/4/2004, it is

recorded that one bid received was opened at 3.30 p.m.

The bid of Mr. Kamtekar at Rs.2.40 lakhs being equal to the

reserve price fixed for this property was accepted. Perusal

of the order passed by the DRAT reveals that the reserve

price finds mention in the roznama dated 23/4/2004 for the

first time. The DRAT was of the opinion that the reserve

price should have appeared in the proclamation of sale

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published on 6/11/2003 in the Daily 'Prabhat'.

19. Rule 53 of Second Schedule to the Income Tax Act

provides for the contents of proclamation which also include

the reserve price below which the property may not be sold.

In this context, it would be profitable to rely on the decision

in the case of FCS Software Solutions Ltd. (supra). We

may usefully refer to paragraphs 14, 36 and 37 of the said

decision, which reads thus: -

"14. The learned counsel for the appellant contended that the Company Judge as well as the Division Bench of the High Court were wholly wrong in setting aside the auction sale in favour of the appellant. It was submitted that pursuant to sale notice, tenders were invited, twelve persons offered their bids. The bid of the appellant was highest. In consonance with law, therefore, the said bid was accepted and the appellant deposited amount of 25% as required by law. It also paid the remaining amount of 75%. Sale was confirmed in favour of the appellant and direction was issued by the Company Judge to the Official Liquidator to hand over possession of the property to the appellant. The Official Liquidator, however, with mala fide intention and oblique motive, refused to do so.

36. In Gajraj Jain v. State of Bihar & Ors., (2004) 7 SCC 151, this Court reiterated that in absence of valuation report and reserve price, the auction sale becomes only a pretence. If there is no proper mechanism and if the intending purchasers are not able to know details of the assets or itomised valuation, auction sale cannot be said to be in accordance with law. If publicity and maximum participation is to be attained, all bidders must know the details of the assets and the valuation thereof.

37. In the present case, it was alleged that there

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were several irregularities in the first auction. The tender notice did not state valuation of movable and immovable property; reserve price was not fixed, inventory of plant and machinery was not made available, etc. If on consideration of these facts, the Company Judge ordered fresh auction, in our considered opinion, no complaint can be made against such action."

20. It is, thus, seen that the proclamation for sale does

not include the reserve price below which the property may

not be sold, thereby contravening Rule 53. There is no

disclosure of the reserve price in the proclamation dated

6/11/2003. We find that Kamtekar had not responded to

the advertisement of the sale of the property published in

the newspaper dated 26/11/2003 within the period

stipulated therein. The advertisement expressly stated that

the tenders received after the prescribed date and time i.e.

29/12/2003 till 2.30 p.m. will not be accepted. The sale was

postponed. The Recovery Officer recorded that the

Kamtekar's bid was received only on 23/4/2004 and

therefore, the bid was accepted. From the record, we do not

find that a fresh advertisement for sale was made though

no bids were received in response to the advertisement

dated 26/11/2003. The sale was simply postponed by the

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Recovery Officer on different dates without a further public

notice of proclamation of sale and on one such date, upon

Kamtekar submitting his bid, the same was accepted. We

find substance in the contention of learned Counsel for

Alpha Organic that on this ground alone the sale is vitiated.

If any authority is required in support of this proposition,

we may usefully refer to (1) Himadri Coke & Petro Ltd.

vs. Soneko Developers (P) Ltd. and others 18; (2)

Bajaranglal Shivchandrai Ruia vs Shashikant N. Ruia

And Ors.19 and (3) A.V. Papayya Sastry & Ors. vs

Government Of A.P. & Ors.20

21. We note that the DRAT has not recorded a finding on

the issue whether Kamtekar was entitled to participate in

the auction which was held on 23/4/2004 without there

being a fresh advertisement for sale. Nonetheless, from the

records we find that the auction held subsequently on

23/4/2004 was completely in breach of the provisions of the

Rule 15(2) of the Second Schedule of IT Act. The bid is

accepted in a postposed auction after a much longer period

18 (2005) 12 SCC 364 19 2004(3) SCR 373 20 (2007) 4 SCC 221

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than one calendar month from the date of proclamation of

sale. The sale was adjourned by one month for which there

is no consent on record of the defaulter (Alpha Organic).

The DRAT found that on several dates when the sale came

to be postponed, no bids were received and the sole bid of

Kamtekar was received on 23/4/2004. The circumstance

that reserve price was mentioned in the roznama dated

23/4/2004 for the first time is found to be suspicious by the

DRAT. We do not find any perversity in the finding to

warrant any interference.

22. So far as the contention raised by learned Counsel on

behalf of Kamtekar that Alpha Organic failed to invoke the

provisions of Rules 60 and 61 of the Second Schedule of the

IT Act, in the absence of which, the Appeal is not tenable,

we find that the DRAT for the reasons mentioned in

paragraph 12 rightly came to the conclusion that the said

contention on behalf of Kamtekar deserves to be rejected.

Rule 60 of the Second Schedule of the IT Act provides for

setting aside of the sale of the immovable property by

deposit of the amount specified in the proclamation of sale

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and interest thereon along with penalty for payment to the

purchasers within 30 days from the date of the sale. Rule

61 provides for setting aside the sale on ground of non-

service of notice or irregularity. Section 30 (1) of the RDDB

& FI Act provides for an Appeal. It reads thus : -

"30(1)Notwithstanding anything contained in section 29, any person aggrieved by an order of the Recovery Officer made under this Act may, within thirty days from the date on which a copy of the order is issued to him, prefer an appeal to the Tribunal."

23. Section 30 (1) starts with a non-obstante clause. The

DRAT in support of its conclusion that Section 30 (1)

overrides Section 29 of the RDDB & FI Act, took support

from the observation of this Court in Hill Properties Ltd.

(supra). We may usefully refer to paragraph 29 of the said

decision which reads thus: -

"29. Section 30 as now substituted by Act 1 of 2000 begins with a non-obstante clause. A person aggrieved by an order of the Recovery Officer may within thirty days from the date on which a copy of the order is issued to him, prefer an appeal to the Tribunal. Under Sub- section (2) of Section 30 a power is given to set aside or modify an order made under Sections 25 to 28. Section 30 co-jointly with Section 29 would mean that irrespective of the Appellate remedy provided in Part VI of IInd Schedule (Rule 86) to the I. T. Act an

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Appeal would lie to the Tribunal in respect of orders made under the Second Schedule to the I. T. Act. We may clarify that considering the language of Rule11(6) an appeal would not lie under Rule 86 of the Second Schedule. Therefore, under Section 30 even if an appeal as provided under Rule 86 is not available because of Rule 11(6) making the order of the Recovery Officer conclusive, nevertheless Section 30 of the Act provides a remedy by way of Appeal against the order passed under the IInd Schedule. We may clarify here that Section 20 is a provision for Appeal from an order of the Tribunal, when Section 30 is a provision for appeal against the order of the Recovery Officer."

24. Section 30 thus provides for an appellate forum

against any orders of the Recovery Officer which may not

be in accordance with law. The contention of learned

Counsel on behalf of Kamtekar that unless the provisions of

Rules 60 and 61 are resorted to, the Appeal under Section

30 is not maintainable can only be stated to be rejected.

25. Relying upon the decision in Usha Offset (supra),

learned Counsel for Kamtekar contended that Alpha Organic

never had any intention to repay the dues and somehow is

attempting to thwart the sale of the said flat which has now

become absolute and possession of which has also been

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handed over to Kamtekar as far back as in the year 2004.

Learned Counsel also relied upon the observations made in

paragraphs 21 to 25 of the decision of the Division Bench of

this Court in Usha Offset (supra) to contend that Alpha

Organic is not justified in placing reliance on Rule 15 of the

Second Schedule of IT Act, thereby, in an indirect fashion

challenge the sale giving a complete go by to the

mandatory provisions of Rules 60 and 61 of the Second

Schedule to the Income Tax Act, 1961. According to him, if

this submission of Alpha Organic is accepted, it would

effectively mean that Alpha Organic is now allowed to

challenge the sale of the mortgaged property without

complying with the mandatory provisions of Rules 60 and

61.

26. We are afraid, the decision of this Court in Usha

Offset (supra) has no application in the present facts. Their

Lordships after taking into consideration the totality of the

circumstances arrived at a finding that the Petitioners

therein never had any intention of honouring any settlement

arrived at with the Bank and the arguments are being

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canvassed only to somehow thwart the sale of the

mortgaged property which has become absolute and the

possession of which has also been handed over to the

auction purchaser long back. Thus, Usha Offset (supra) is

rendered in a fact situation where there was a settlement

which was not honoured. There was an attempt to thwart

the sale of the mortgaged property somehow or the other

and in those circumstances, the co-ordinate Bench of this

Court held that since the Petitioner had no intention to

deposit the decreetal amount, the Petitioners preferred not

to challenge the sale of the mortgaged property but instead

only made an application for deferment of the confirmation

of sale. It is in these circumstances, having regard to such

course of action adopted by the petitioners, Their Lordships

did not entertain the challenge to the sale of mortgaged

property without complying with the mandatory provisions

of Rules 60 and 61. It is in these facts that the co-ordinate

Bench in Usha Offset (supra) did not find substance in the

arguments of the petitioners and hence, held that the

decision in Mathew Varghese (supra) is inapplicable in the

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facts and circumstances.

27. Thus, the fact situation in the present case is

completely different. Alpha Organic has challenged the

decree passed by the Civil Court by way of the First Appeal

in this Court which is pending. This Court has stayed the

decree subject to the deposit of the amount as directed.

The said order has been duly complied with by Alpha

Organic and even BOI has been permitted to withdraw the

amount so deposited subject to conditions. It is in these

circumstances, we are of the firm opinion that this is not a

case where Alpha Organic is attempting to thwart the sale.

Alpha Organic is justified in contending that the Recovery

Officer should have stayed his hands in view of the stay to

the decree which is subject matter of recovery proceedings.

Usha Offset (supra) has no application in the present

facts.

28. We do not find any infirmity in the order passed by

DRAT. The view cannot be said to be so perverse to warrant

interference in the exercise of writ jurisdiction under Article

226 of the Constitution of India. We, therefore, do not find

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any reason to interfere with the order passed by the DRAT.

We find that the order passed by the DRAT can be sustained

on the grounds discussed herein before.

29. The Petition is dismissed.

30. Rule is discharged with no order as to costs.

31. Learned Counsel for the Petitioner requested for

continuation of the interim order passed by this Court. The

request is opposed by the learned Counsel for M/s. Alpha

Organic. Considering that Kamtekar is in possession of the

asset flat since 2004 and the interim order is in operation

since 2011, in the interest of justice, we continue the

interim order passed by this Court for a period of three (3)

months from today.

(M. S. KARNIK, J.)                        (A. A. SAYED, J.)