M/s.Machine Tools & Accessories (P) Ltd. v. The Debts Recovery Appellate Tribunal

Fourth Respondent specifically asking for the details as to when the25% of the sale paid by the sixth Respondent and as to when the balance75% sale amount has been paid.9.The plea of the petitioner is that the sale itself is notaccording to law and that the details of payments made by the sixthRespondent have been withheld from the Petitioner deliberately sincethe sixth Respondent has not made the payments within the timeprescribed by law and hence, the sale itself is null and void. Thepetitioner has come to know that the balance payment has been made bythe sixth Respondent beyond the stipulated time of 15 days, only fromthe submissions made by the Respondents before this Court in theaforesaid Writ Petition and that the sale itself is not in accordancewith law, etc.,10.After the establishment of Debts Recovery Tribunal No.III,when the Fourth and Third Respondents to whom the proceedings have beentransferred, proceeded with the proceedings against the Petitioner inregard to delivery of the possession of the property and that thePetitioner filed Appeal No.38 of 2007 before the Second Respondent asagainst the order of the Fourth Respondent directing delivery ofpossession. The Second Respondent has been pleased to pass an order ofstay dated 04.05.2007 directing the Fourth Respondent to furnish aReport as to the payments made by the Sixth Respondent.11.Accordingly, the Fourth Respondent furnished a Report in andby which it is mentioned that the balance sum of Rs.3,11,16,010/- hasbeen paid by the Sixth Respondent only on 23.06.2006 i.e., for a periodof three months from the sale date. The balance payment has not beenmade within 15 days period as mentioned in Rule 57(2) of Schedule II ofthe Income Tax Act. Therefore, the sale itself is not valid. 12.The plea of the Petitioner is that the Fourth Respondent hasno authority to receive any payment from the sixth Respondent beyondthe stipulated period of 15 days. No one has been put on notice thatthe Fourth Respondent/Recovery Officer has any discretion to extend thetime beyond 15 days. The extension of time after the conduct ofauction is certainly prejudicial to the Petitioner's interest sincefor the the conduct of free and fair auction and to realise the bestpossible price for the property, an opportunity has been lost and ifsuch a condition has been made known to the prospective bidders, thereis a possibility to the property could have fetched a much higher sum.13.The stand of the Petitioner is that no proper stamp duty hasbeen paid in regard to the Sale Certificate issued in favour of theSixth Respondent and hence, no further proceedings can be taken infurtherance of such invalid Sale Certificate. Therefore, the AppealA.S.No.38 of 2007 should have been allowed by the Second Respondent,but the same has been dismissed on 16.06.2008 based on erroneous https://hcservices.ecourts.gov.in/hcservices/ grounds and on a wrong interpretation that the provisions of SecondSchedule to the Income Tax Act have been made applicable only 'as faras possible' to the recovery proceedings as per the provisions of theRecovery of Debts due to Banks and Financial Institutions Act, 1993 andalso, as if the Recovery Officer has the discretion to extend the timeeven without any such specific power being conferred upon him. Thatapart, it has been held wrongly that the sale has not been challengedby the Petitioner by filing Application to set aside the sale as perSecond Schedule to the Income Tax Act.14.Feeling aggrieved against the order of the Second Respondent,the Petitioner preferred M.A.No.l76 of 2008 before the First Respondentand the same has been dismissed by order dated 23.04.2009. Now, theFirst Respondent has passed orders directing delivery of possession ofthe property by the Advocate Commissioner appointed for that purpose,to the Sixth Respondent and pending Appeal, the valuable machinery ofthe Petitioner have been removed hastily from the property of thePetitioner and dumped in undisclosed location by the AdvocateCommissioner without any protection from the sun and rain. Themachinery has not been the subject matter of the sale. The SecondRespondent has issued far-reaching directions in favour of the sixthRespondent by exceeding his jurisdiction while dismissing the Appeal.15.According to the Learned counsel for the Petitioner, thedetails of payment have not been given to the Petitioner by the FourthRespondent and only as per the directions of this Court and only by theReport dated 08.05.2007, filed by the Debts Recovery Tribunal, the saiddetails have been furnished by the Fourth Respondent and inasmuch asthe Petitioner has been kept in dark, it could not be found fault within regard to the non filing of an application for setting aside thesale as per Rule 61 of Schedule II of the Income Tax Act.16.It is the further contention on the side of the Petitionerthat 1 and 2 Respondents have wrongly held that the Appeals are notmaintainable notwithstanding the fact that the sale is null and voidtotally since the Petitioner has not filed an Application under Rule 61and also, the further observation that the Petitioner has not raisedany objection, in regard to the alleged sale therefore, is estoppedfrom questioning the sale, is not a correct one.17.The Learned counsel for the Petitioner urges before thisCourt that the Judgments of the First Respondent and this Court inregard to the maintainability of Appeal without recourse to Rules 60 &61 of the ITCP (Income Tax Certificate Proceedings) in cases whereinthe sale itself is void having completely overlooked by Respondents 1and 2 while dismissing the Appeal.18.As regards the observation that the Appeal is barred by res https://hcservices.ecourts.gov.in/hcservices/ judicata, it is to be pointed out that the Petitioner has not furnishedwith the particulars at all and on 08.05.2007 only, the Petitioner hascome to know of the delay by virtue of the Report filed by the FourthRespondent and as such, the Appeals cannot be dismissed as barred bythe principles of res judicata.19.The Learned counsel for the Petitioner strenuously contendsthat the alleged sale is an illegal one and no proper auction has beenconducted and a very valuable property has been sold for a lower priceand even assuming that the Recovery Officer is vested with discretionfor extension of time for payment of the balance amount, the same is tobe exercised judiciously and for the reasons recorded in writing andsuch a power cannot be exercised even in the absence of any suchrequest from the bidder, the borrower must put on notice and anopportunity must be given to him as to why the prayer ought not to begranted and in short, without following any such procedure, theRecovery Officer cannot extend the time and as such, the orders passedby the Respondents 1 and 2 are unsustainable. In pursuance of theorder dated 23.04.2009 of the First Respondent, the Third Respondenthas passed an order on 09.06.2009 stating that the possession has beenhanded over to the sixth Respondent on 28.05.2009 even without anynotice to the Petitioner inasmuch as the Learned counsel for thePetitioner prays for allowing the Writ Petition in furtherance ofsubstantial cause of justice.20.The Learned counsel for the Fifth Respondent/Bank contendsthat the Petitioner cannot ask for a consequential relief of directingthe Respondents to set aside the sale of the property in favour of thesixth Respondent because such a power is unknown to law and indeed, theproperty has been sold on 23.03.2006 and also that the Petitioner hasnot questioned the auction sale dated 23.03.2006 and as such, he cannotseek for the said relief as a consequential one on this amount.21.Continuing further, it is the submission of the Learnedcounsel for the Fifth Respondent that the Bank has filed O.A.152/2003on the file of the Debts Recovery Tribunal-1, Chennai against thePetitioner for a recovery of an amount of Rs.1,29,37,540.11p in regardto the default committed by the Petitioner as to the facilities availedby it. As a matter of fact, the Petitioner has not appeared before theCourt and the Debts Recovery Tribunal-I has passed an Exparte finalorder dated 31.08.2004.22.According to the Learned counsel for the Fifth Respondent,the Petitioner has not taken any steps to set aside the Exparte finalOrder and to contest the matter and that the petitioner has brought thesecured asset for a public auction sale through the FourthRespondent/Recovery Officer, (Debts Recovery Officer I, Chennai) on23.03.2006 and that the Managing Director has been personally presentduring the auction proceedings and that the Sixth Respondent has been https://hcservices.ecourts.gov.in/hcservices/ declared as a higher bidder and the Sale Certificate has been issued inits name on 30.06.2006. Thereafter, the Fourth Respondent/RecoveryOfficer, (Debts Recovery Officer I, Chennai) has passed an order dated18.07.2006 under Rule 39 of the Income Tax (Certificate Proceedings)Rules 1962 read with Section 29 of the Debts Recovery Tribunal Actinforming about the sale of property to the sixth Respondent anddirecting the Petitioner to vacate the Petitioner within seven days.23.Expatiating his admissions, the Learned counsel for the FifthRespondent contends that the Petitioner by means of its Letter dated28.08.2006 has accepted the auction sale and also on 29.08.2006, it hassought further time to remove all the machinery and to hand over thepossession of the property and from the said sale, it is clear that thePetitioner has not challenged the auction sale but only seeking time tohand over possession of the property and by virtue of an order dated18.07.2006, vide an order dated 31.08.2006, the Fourth Respondent hasgiven a further time to the Petitioner to vacate the property and asagainst this, the Petitioner filed W.P.No.40034 of s006 to quash theorder dated 31.08.2006 of the Fourth Respondent and also seeking aReply to its letter dated 28.08.2006 and the said writ petition standsdismissed by this Court observing that without questioning the earlierorder dated 18.07.2006, the Petitioner cannot challenge the subsequentorder dated 31.08.2006, 24.The plea of the Fifth Respondent/Bank is that the Petitionerhas not questioned the auction sale of the property and therebyadmitting the sale of the property and as such, it cannot seek for adirection much less consequential direction to set aside the sale ofthe property in favour of the sixth Respondent and in the order dated03.08.2007 of the Fourth Respondent granting viz., one finalopportunity to the Petitioner to hand over the vacant possession of theproperty to the Fifth Respondent on or before dated 17.01.2007 failingwhich it has been ordered that the entire property along with machineryand movables will be handed over to the Sixth Respondent at his riskand cost. To the said order, the Petitioner sent a reply dated06.01.2007 to the Fourth Respondent asking for particulars about thesale proceeds but he has not mentioned about the sale of the propertyto the sixth Respondent.25.Proceeding further, it is the contention of the Learnedcounsel for the Fifth Respondent/Bank that the Petitioner filed A.S.38of 2007 on the file of the Second Respondent seeking to set aside theorder of the Fourth Respondent dated 03.01.2007 and obtained an interimorder and even in this Appeal, the Petitioner has not questioned theauction of the property and the Fourth Respondent has filed a detailedReport in the aforesaid Appeal with reference to the entire facts ofcase and on receipt of the Report filed by the Fifth Respondent, thesecond Respondent has dismissed A.S.No.38 of 2007 on 16.06.2008 as notmaintainable holding that the Petitioner has filed the said Appeal https://hcservices.ecourts.gov.in/hcservices/ without following the procedures enjoined in Rule 61 of the Income Tax(Certificate Proceedings) Rules and that apart, the Second Respondenthas issued directions to the Fourth Respondent to take expeditioussteps for getting delivery of the possession of the property to thesixth Respondent by employing police force if necessary, without anyfurther loss of time and that the Petitioner has preferred furtherAppeal in M.A.76 of 2009 before the First Respondent and the FirstRespondent by order dated 23.04.2009 has dismissed the Appeal therebyconfirming the order of the Second Respondent.26.The contention of the Learned counsel for the FifthRespondent/Petitioner is that the Third Respondent has passed an orderconfirming the handing over of the property to the Sixth Respondent andalso, allowing the prayer of the petitioner for release of portion ofsale proceeds towards the outstanding dues and that the Petitioner hasrequested only for extension of time to hand over the property and alsoseeking for the details of payments made by the sixth Respondent and asto the amount that has been lying with the Fourth Respondent as asurplus one and all action of the Petitioner goes to show that itadmitted the auction of the sale to the Sixth Respondent and now bymeans of consequential relief, the Petitioner cannot seek a directionto set aside the sale of the property in favour of the AuctionPurchaser.27.The Learned counsel for the Fifth Respondent/Bank submitsthat the petitioner without challenging the auction sale dated23.03.2006 as per law within the time framed, after a lapse of morethan 3 years from the sale date, it is challenging the same in thiswrit petition, which is not legally a valid one.28.The core contention advanced on behalf of the FifthRespondent/Bank is that the subsequent proceedings included the auctionsale of the property in favour of the sixth Respondent have been doneproperly by following the Rules.29.The Learned counsel for the Fifth Respondent/Bank submitsthat only after waiting for years together, the vacant possession hasbeen taken and handed over to the Sixth Respondent and all theRespondents have acted only within the Rules and regulations and thatthe sale cannot be construed as null and void after more than threeyears and without challenging the same in the manner known to law andin short, the Petition is a misconceived one. Also, the Petitioner hasacquiesced the auction sale of the property and therefore, now isestopped from raising the plea of the validity of the sale.30.The Learned counsel for the Sixth Respondent submits that theSixth Respondent is a bonafide Auction Purchaser in the public auction https://hcservices.ecourts.gov.in/hcservices/ conducted by the Recovery Officer, Debts Recovery Tribunal I, Chennaipursuant to a Recovery Certificate issued by the Hon'ble PresidingOfficer and further, the impugned order in the writ petition is theorder of the Fourth Respondent/Recovery Officer, Debts RecoveryTribunal 1, Chennai and that the Petitioner has been represented by theManaging Director S.Kannan, has been granted one final opportunity tohand over the land and building to the Manager of the FifthRespondent/Bank on or before 17.01.2007 failing which the possession ofland and building along with the machinery and other movables are to behanded over to the Auction Purchaser at the risk and cost of thePetitioner/Company and since the property has been sold in auction tothe Sixth Respondent, who is the successful bidder in the Auction on23.03.2006 and after removing the movables by due process of law, thepossession has been handed over to the Sixth Respondent and as such,the relief against the said order dated 03.01.2007 does not survive. 31.It is the contention of the Learned counsel for the SixthRespondent that the Petitioner in W.P.No.40034 of 2006 has challengedthe order dated 31.08.2006 passed by the Recovery Officer for handingover possession of the property mentioned in the Schedule of the writpetition and this Court has dismissed the said writ petition on20.12.2006 and as such, the Petitioner cannot challenge a consequentialorder dated 03.01.2007 passed by the Fourth Respondent/RecoveryOfficer, Debts Recovery Tribunal I, Chennai.32.According to the Learned counsel for the Sixth Respondent, bythe original order dated 18.07.2006 passed by the FourthRespondent/Debts Recovery Tribunal, the Petitioner has been directed tohand over the possession of the writ schedule property and furtherdirected by the order dated 01.08.2006 and subsequent orders have beenpassed by the Recovery Officer and the Petitioner without challengingthe original order initial orders relating to handing over of thepossession of the property, it cannot challenge the consequential orderdated 03.01.2007 passed by the Fourth Respondent and in fact, thePetitioner is making an endeavour to circumvent or nullify the previousorder of the Fourth Respondent in regard to the handing over of thepossession which cannot be permitted in law.33.The plea of the sixth Respondent is that the Petitioner isattempting to set aside the sale and confirmation of sale in favour ofthe Sixth Respondent even without challenging the same before theSecond Respondent (Debts Recovery Tribunal III) and indeed, the prayerin Appeal 38 of 2007 is only to set aside the sale dated 03.01.2007passed by the Recovery Officer and not the auction sale andconfirmation sale in favour of the sixth Respondent.34.The principal contention of the Learned counsel for the SixthRespondent is that what the Petitioner cannot achieve directly hecannot achieve the same indirectly. https://hcservices.ecourts.gov.in/hcservices/

35.The Learned counsel for the Sixth Respondent submits thatRule 60 and 61 II Schedule to the Income Tax Act is a conditionprecedent for filing any application to set aside the sale and anapplication to set aside the sale is to be filed within 30 days fromthe date of sale and on deposit of the amount as required under theRules and only to get over the aforesaid rules, the Petitioner hasopted to challenge the order of Recovery Officer in handing overpossession of the property, knowing fully well that the auction is inpursuance of a Recovery Certificate by means of a final order inO.A.152 of 2003 for recovery of the Bank dues.36.It is the contention of the Learned counsel for the SixthRespondent that a wide publicity has been given for public auction andonly after repeated bidding, the Sixth Respondent has been declared tobe the successful bidder for the highest bid amount of Rs.4,10,00,000/-and the Petitioner paid 25% of the bid amount immediately and paid thebalance 75% as per the order of the Recovery Officer and added further,on payment of entire sale consideration, the sale has been confirmedand the Sale Certificate has been issued as per the order dated30.06.2006.37.The Learned counsel for the Sixth Respondent takes a pleathat the Petitioner in his Letter dated 28.08.2006 has not only soughtfor the details of payment made by it to know the balance amount to bepaid after adjusting the Bank dues and also asked for one month time tovacate the schedule property from the date of receipt of the amount dueand even in the letter dated 29.09.1996, the Petitioner has prayed fortime in handing over possession.38.Apart from the above, the Learned counsel for the SixthRespondent submits that the Petitioner has not taken any steps as perRule 26 of the Debts Recovery Tribunal Regulation of Practice Rules1997 for inspection of records and proceedings pending before theRespondents and the Petitioner to obtain necessary information has nottaken steps as per Rules and moreover, the non furnishing ofinformation will not in any way affect the rights of the Petitioner.39.The Learned counsel for the sixth Respondent contends thatthe Petitioner paid the entire auction amount along with the poundagefees to the Fourth Respondent by 23.06.2006 and further, it paid 25% ofthe bid amount on 23.03.2006 (being the date of auction) and at thebehest of the Sixth Respondent, the Fourth Respondent extended time forpayment of the balance sum upto 30.06.2006 and it paid the balanceamount on 23.06.2006 (being the date of auction) and therefore, Rule 57(2) of the Schedule-II of the Income Tax Act has not been violatedbecause the Fourth Respondent has extended time for payment of balanceamount upto 3 months even on the date of auction itself and that theRecovery Officer as per Recovery Debts due to Bank and Financial https://hcservices.ecourts.gov.in/hcservices/ Institutions, 1993 has discretionary power in applying the provisionsof II Schedule of the Income Tax Act and the delay in payment ofremaining sale consideration will not make the sale void or non est inlaw.40.The Learned counsel for the sixth Respondent submits that theimproper stamping of the Sales Certificate will not affect the salebecause of the fact that the Petitioner is not saying the matter and bya detailed order Appeal No.38 of 2007 has been rightly dismissed by thesecond Respondent and the Petitioner has only challenged the order ofhanding over possession dated 03.01.2007 passed by the FourthRespondent in the aforesaid Appeal and not either the sale orconfirmation of the sale and the Appeal has been dismissed by theSecond Respondent since the condition specified under Rule 61 of theSecond Schedule to Income Tax Act has not been followed in entirety.41.The Learned counsel for the sixth Respondent projects anargument that the First Respondent has correctly held that the RecoveryOfficer has been given the discretion under the recovery of debts dueto Banks and Financial Institutions Act 1993 to extend the time forpayment of balance consideration.42.Finally, it is the submission of the Learned counsel for theSixth Respondent that the Sixth Respondent has paid the fullconsideration of Rs.4,10,00,000/- together with poundage charges andthat it is made to run from pillar to post to ascertain its rights andtill date, the Petitioner has not taken any steps to set aside theExparte order passed in O.A.152 of 2003 and hence, prays for dismissalof the writ petition.43.The Learned counsel for the Petitioner cites the decision ofthe Hon'ble Supreme Court in KARNATAKA STATE FINANCIAL CORPORATION V.N.NARASIMAHAIAH AND OTHERS, ((2008) 5 SUPREME COURT CASES 176, at page192) wherein at paragraph No.15, it is held that 'Right to property,although no longer a fundamental right, is still a constitutionalright. It is also human right. In the absence of any provision eitherexpressly or by necessary implication, depriving a person therefrom,the court shall not construe a provision leaning in favour of suchdeprivation, etc.,'44.Also, the Learned counsel for the Petitioner seeks in aid ofthe order of this Court dated 29.07.2009 in W.P.No.9729 of 2009 (DB)between K.RAAMASELVAM AND 2 OTHERS V. INDIAN OVERSEAS BANK, REP. BY ITSCHIEF MANAGER AND AUTHORISED OFFICER, AMINJIKARAI BRANCH, CHENNAI-30whereby and whereunder at paragraph No.28, it is held thus:"Even though Section 141 of the Code of Civil Procedure(CPC) specifically makes the provisions of the CPC areinapplicable to proceeding under Article 226 of the https://hcservices.ecourts.gov.in/hcservices/ Constitution of India, there cannot be any dispute that thebasic principles contained in CPC including the principle ofres judicata and constructive res judicata are to be appliedto the writ proceedings as a matter of public policy. Theprevious round of litigation was relating to the question asto whether stay should be granted or not during pendency ofthe proceedings under Section 17 of the Act. The DivisionBench in view of the peculiar facts and circumstances, setaside the order of stay granted by the Debts RecoveryTribunal. The Division Bench, however, nowhere finalised thematter relating to confirmation of sale. The question whichis now specifically raised was neither directly or evenindirectly raised in the earlier round of litigation andkeeping in view the fact that the writ petition has beenfiled by the Bank against the order of interim stay grantedby the Debts Recovery Tribunal, the question now raised alsocould not have been and need not have been raised.Therefore, the principles of res judicata or constructive resjudicata are not applicable. As a fact the Division Benchhad specifically gave liberty to proceed according to law.If the confirmation is contrary to law it cannot be upheld."Also, in the aforesaid decision, at paragraph No.22, it is held asfollows:"A fair reading of the provisions contained in Rule 9makes it clear that if the highest bid is higher than theupset price, such highest bid shall be confirmed by theauthorised officer in favour of the highest bidder, which,however, is subject to confirmation by the secured creditor.This provision is apparent from the provisions contained inRule 9(2). At that stage, obviously a discretion is given tothe secured creditor to accept the highest bid or even go infor a fresh bid.For example, if the secured creditor, on the basis ofthe relevant materials, comes to a conclusion that thehighest bid offered, even though higher than the reserveprice, does not reflect the true market value and there hasbeen any collusion among the bidders, the secured creditorin its discretion may refuse to confirm such highest bidnotwithstanding the fact that the highest bid is more thanthe upset price. This is because the secured creditor isnot only interested to realise its debt, but also expected toact as a trustee on behalf of the borrower so that thehighest possible amount can be generated and surplus if anycan be refunded to the borrower. The first proviso in nouncertain terms makes it clear that no sale can be confirmedby the authorised officer, if the amount offered is less thanthe reserve price specified under the Rule 8(5). However, https://hcservices.ecourts.gov.in/hcservices/ the subsequent proviso gives discretion to the authorisedofficer to confirm such sale even if the bid is less than thereserve price, provided the borrower and the secured creditoragree that the sale may be effected at such price which isnot above the reserve price. This is obviously so becausethe property belongs to the borrower and as security for thesecured creditor and both of them would be obviouslyinterested to see that the property is sold at a price higherthan the reserve price. However, if both of them agree thatthe property can be sold, even it has not fetched a pricemore than the reserve price, the authorised officer in itsdiscretion may confirm such auction."45.Apart from the above, the Learned counsel in the aforesaidorder in W.P.No.9729 of 2009 dated 29.07.2009 places reliance on theobservation made by this Court in paragraph No.26, which runs asfollows:"Though it may appear as if there was an alternativeremedy, in our considered opinion, existence of alternativeremedy may not be considered as a bar in the present caseinasmuch as the present case does not require thedetermination of any disputed question of fact and the matteris being decided purely on interpretation of the statutoryprovisions and the rules and to relegate the parties topursue their remedy under the Act before the Debts RecoveryTribunal and thereafter at the Debts Recovery AppellateTribunal would ultimately be an exercise in futility,whichwould unnecessarily prolong the matter."46.The Learned counsel for the Petitioner places strong relianceon the observation made by this Court in W.P.9729 of 2009 vide orderdated 29.07.2009, wherein at paragraph 17, it is held thus:"It is a well entrenched concept, that when the mannerof exercising power is laid down, such power is to beexercised in the manner prescribed or not at all as observedin the decision of the Supreme Court in INDIAN BANKASSOCIATION V. DEV KALA CONSULTANCY SERVICES (2004 (11)S.C.C.,1): "It is well settled that when a procedure is laid downstatutory Authority must exercise its power, in the mannerprescribed or not at all."and in VIMALABEN AJITBHAI PATEL V. VATSALABEN ASHOKBHAI PATEL(2008 (4) S.C.C., 649). "The right to property is no longer a fundamentalright, but still it is constitutional right. Apart fromconstitutional right it is also a human right. Theprocedures laid down for deprivation must be scrupulously https://hcservices.ecourts.gov.in/hcservices/ complied with."A bare analysis of the statutory provisions and moreparticularly the statutory rules framed under such provisionsclearly evince the intention to provide procedural safeguardswhile enabling the secured creditors to adopt speediermethods. When the statutory rules contemplate a specificprovision, it does not lie in the mouth of the securedcreditor to contend that even though the Rules lay down aparticular procedure, the secured creditor or the DebtsRecovery Tribunal or the Authorised Officer, whiledischarging their duties under the Act and the Rules, is notrequired to follow the procedure contemplated merely on theground that violation is "technical", according to the Bank.It is no doubt true that a borrower's property is put toauction only because there is default on the part of theborrower, but that does not give right to the Bank or theDebts Recovery Tribunal or the Authorised Officer to floutthe mandatory statutory provision."47.According to the Learned counsel for the Petitioner, theprinciples of Res judicata are not applicable to the present casebecause of the fact that in earlier round of litigation, the relief ofcancelling the auction sale dated 23.03.2006 has not been raised.48.The pith and substance of the Learned counsel for thePetitioner is that since the available of alternative remedy is not abar to the filing of the present Writ Petition. The subject matterinvolved in the present writ petition is to be decided purely oninterpreting the statutory provisions and the Rules made thereunder andtherefore, it may not be necessary to direct the parties to prosecutethe remedy under the Act before the Debts Recovery Tribunal, etc.,which will only be an otiose one.49.The Learned counsel for the Petitioner draws the attention ofthis Court to the decision of the Hon'ble Supreme Court in BALRAM SONOF BHASA RAM V. ILAM SINGH AND OTHERS, ((1996) 5 SUPREME COURTCASES 705 at page 706), wherein it is held that "Order 21 Rule 85 ofthe Civil Procedure Code being mandatory, its non-compliance rendersthe sale proceedings a complete nullity requiring the Executing Courtto proceed under Rule 86and property has to be resold unless theJudgment-Debtor satisfies the Decree by making the payment before theresale. The argument that it is only a material irregularity in thesale to attract Rule 90 instead of Rule 85 cannot be accepted."50.The Learned counsel for the Petitioner cites the decision ofthe Hon'ble Supreme Court in RAO MAHMOOD AHMAD KHAN THROUGH THEIR L.R.V. RANBIR SINGH AND OTHERS, (1995 SUPP (4) SUPREME COURT CASES 275 atpage 276) wherein the Hon'ble Supreme Court has held as follows: https://hcservices.ecourts.gov.in/hcservices/ "Rule 285-D casts an obligation on the purchaser todeposit 25 per cent of the bid amount immediately and if hefails to do so the property shall be resold forthwith. Theword 'immediately' connotes and implies that the depositshould be made without undue delay and within such convenienttime as is reasonably requisite for doing the thing same daywith all convenient speed excluding the possibility ofrendering the other associated corresponding act and dutycast upon the officer/authority conducting the sale asenvisaged by Rule 285-D is to put up the property for resale'forthwith' on the failure of the declared purchaser todeposit 25 per cent of the bid amount. The word'immediately' therefore, connotes proximity in time to complyand proximity in taking steps to resell on failure to complywith the requirement of deposit as first condition that is totake place within relatively short interval of time andwithout any other intervening recurrence. The meaning of theword 'forthwith' is synonymous with the word 'immediately'which means with all reasonable quickness and within areasonably prompt time. The intention of the legislature isthat as soon as it becomes known that the purchaser hasfailed to deposit 25 per cent immediately after he isdeclared as purchaser, the property shall be put to resaleforthwith without any loss of time or postponement of thedate of resale. The provisions of Rules 285-D and 285-E,which are similar in terms of the corresponding provisions ofOrder 21, Rules 84, 85 and 86 of the Code of Civil Procedure,are mandatory and sale in non-compliance with Rule 285-D is anullity.MANILAL MOHANLAL SHAH V. SAVED AHMED, AIR 1954 SC 349(1955) 1 SCR 108, relied on was not encashed on the date onwhich the person was declared purchaser but on a later date,there was no compliance of Section 285-D. Deposit of 25 percent of the bid amount by cheque will not be a valid tenderwithin the meaning of Rule 285-D. The rule does notcontemplate any payment by cheque but a cash deposit of 25per cent of the bid amount has to be made in accordance withthe requirement of the rule, otherwise the very purpose ofthe mandatory Rule 285-D would be frustrated and renderednugatory."51.To lend support to the contention that as per Rules ofauction, the Sixth Respondent is required to pay 25% of sale amountimmediately and balance 75% within 15 days and since the balance amountof 75% has not been paid within 15 days time required by law, in theinstant case, the sale is null and void and non est in law, the Learnedcounsel for the Petitioner relies heavily on the decision of theHon'ble Supreme Court in SARDARA SINGH (DEAD) BY L.RS. AND ANOTHER V.SARDARA SINGH (DEAD) AND OTHERS, ((1990) 4 SUPREME COURT CASES 90), https://hcservices.ecourts.gov.in/hcservices/ wherein it is laid down as follows:"The requirement of deposit contained in Sections 85,86 and 88 of the Punjab Land Revenue Act, which aresubstantially the same as Order 21 Rules 84 and 85 of theCivil Procedure Code, are mandatory and failure to complywith either of them renders the entire sale null and void andnon-est. Once the effect of non-payment of the amount is torender the sale non-existent, it becomes the imperative dutyof the authority to re-sell the property as the purchaserforfeits all claim to the property for default of payment.Where there is no sale in the eye of law, there can be noquestion of applying for setting aside the sale on the groundof material irregularity under Section 91 of the Act which isanalogous to Order 21 Rule 90 of the Code. No right, titleor interest passes to the auction-purchasers under the salecertificate. The owner of the land was, however, required tofile a suit to protect his possession as there was animminent threat to dispossess him on the strength of the salecertificate. During the pendency of his appeal he wasdispossessed and, therefore, he was required to amend theplaint and claim possession also. The suit was, therefore,clearly de hors the provisions of the Act and henceordinarily the Civil Court was entitled to hear and decidethe same.MANILAL MOHANLAL SHAH V. SARDAR SAYED AHMED SAYED MAHMAD,AIR 2954 SC 349: (1955) 1 SCR 108, relied onRAI RADHA KRISHNA V. BISHESHAR SAHAI, 40 IA 312 citedOnce it is held that the sale was rendered null andvoid on the failure of the auction-purchasers to comply withthe requirements of Section 88 of the Land Revenue Act, itwas the imperative duty of the authorities to put theproperty to re-sale for the law did not confer any discretionin the concerned authorities to extend the time for thepayment of the balance amount. The authority, therefore, hadno jurisdiction to accept the balance money after the expiryof the period prescribed by Section 88." He also cites yet another decision of the Hon'ble Supreme Court inGANGABAI GOPALDAS MOHATA V. FULCHAND AND OTHERS, ((1997) 10 SUPREMECOURT CASES 387 at page 388), wherein it is inter alia held hereunder:"The sale was conducted by the Municipal Council asper the Maharashtra Municipalities (Sale of Distrained orAttached Moveable and Immovable Property) Rules, 1967. Areading of Rule 8(2) in association with sub-rule (3) and https://hcservices.ecourts.gov.in/hcservices/ Rule 13 would show that the requirement to pay the balance75 per cent within 15 days is mandatory. The consequence ofnon-payment of the balance amount within the fixed periodmust peremptorily visit the purchaser. Neither the ChiefOfficer nor even the Municipal Council has power to relax oreven condone the delay and accept a delayed payment. If anyofficer accepted the money after the period fixed under subrule (2), the action of the officer has no support of lawand no legal effect would flow therefrom. The saleconsequently becomes void. Rules relating to court saleprovided in Order 21 Rules 84 and 85 are analogous and non-compliance with Rules 84 and 85 of Order 21 would render thesale void in the eye of law."52.Added further, the Learned counsel for the Petitioner relieson the decision of the Hon'ble Supreme Court in SANKARANARAYANAN POTTI(DEAD) BY L.Rs. V. K.SREEDEVI AND OTHERS, (AIR 1998 SUPREME COURT 1808at page 1809) wherein it is laid down as follows:"Where in a Civil Suit for partition and redemption ofmortgage, a preliminary decree was passed and the suit waspending at the stage of passing of final decree and theAmending Act of 1969 came into force, the direct approach madeby the Defendant claiming himself to be deemed purchaser onground that he was otti mortgagee, to the Land Tribunal underthe Amending Act must be held to be premature and incompetentand it must also be further held that consequently the ordersobtained by him from the Land Tribunal giving him purchasecertificate were rendered by a tribunal which had nojurisdiction to pass such orders and they were nullities andno question of res judicata would arise in connection withsuch orders of an incompetent authority." 53.Lastly, the Learned counsel for the Petitioner cites thedecision of the Hon'ble Supreme Court in HIMADRI COKE & PETROLTD. V. SONEKO DEVELOPERS (P) LTD. AND OTHERS, ((2005) 12 SUPREMECOURT CASES 364 at pages 365 and 366), wherein at paragraphs 9 and 10,it is held hereunder:"As far as Respondent 1 is concerned, we are of theview that it was bound by the terms and conditions of sale aswas the authority concerned. It was not up to them to extendthe dates for submission of the balance price when there wasno clause in the terms and conditions of the sale allowingthe authority to extend the time beyond the period specifiedin the advertisement for making the initial deposit or thebalance price.Consequently, we are of the view that the entire saleshould be set aside. We note that the Appellant has offered https://hcservices.ecourts.gov.in/hcservices/ now to purchase the property for Rs 1 crore. Although wewill not accept the offer of the appellant at this stage butwe will use it as a benchmark for the purpose of directing afresh sale to be held by the Recovery Officer. The saleshall be advertised in two newspapers, one having circulationthroughout the country and one having circulation in thelocal area. The advertisements may be made in local languagefor the local newspaper but the advertisements in thenational newspaper shall be made only in English. The termsand conditions of sale shall specify that the lowestacceptable offer for the purchase of the property in questionis Rs 1 crore. Both the parties before us will also beentitled to participate and bid for the property. If thereare bids over and above Rs 1 crore, the sale will be made tothe highest bidder. If on the other hand the bids do notreach Rs 1 crore, the appellant shall be obliged to purchasethe property at a price of Rs 1 crore. The parties are atliberty to withdraw any amount which they may have alreadydeposited with the authorities concerned, if they so desire.As far as Respondent 1 is concerned, the earnest moneydeposited shall be returned, after defraying the cost of thesale. The advertisements shall be made within a period ofthree weeks."54.However, the Learned counsel for the Fifth Respondent citesthe decision of the Hon'ble Supreme Court in DHIRENDRA NATH GORAI ANDSUBAL CHANDRA SHAW AND OTHERS V. SUDHIR CHANDRA GHOSH AND OTHERS (AIR1964 SC 1300) wherein at paragraph No.14, it is held as follows: "We agree with this reasoning. Another Division Benchof the Calcutta High Court, consisting of Guha andBanerjee,JJ., in Maniruddin Ahmed V. Umaprasanna (1959) 64C.W.N.20, considered the entire case law on the subject,including the decision now under appeal, and differed fromthe view expressed by S.R.Das Gupta and Mallick,JJ., in thedecision now under appeal and agreed with the view expressedby Akram and Chakravartii,JJ., in Mahindra Chandra V.Jagadish Chandra (1945) 50 C.W.N.266. The said decisions arein accord with the view we have expressed earlier. Thecontrary view is sustained by the High Court in the presentcase on the principle that the sale held in contravention ofthe provisions of S.35 of the Act was a nullity and,therefore, no question of setting aside the sale within themeaning of O.XXI, R.90 of the Code of Civil Procedure wouldarise. This raises the question whether such a sale is anullity. If a provision of a statute is only directory, anact done in contravention of the provision is manifestly nota nullity. Section 35 of the Act is couched in a mandatoryform and it casts in terms a duty on the court to comply with https://hcservices.ecourts.gov.in/hcservices/ its provisions before a sale is held. Prima facie theprovision is mandatory; at any rate, we shall assume it to beso for the purpose of these appeals."Continuing further, in the aforesaid decision at paragraph 22, it isobserved thus:"Where the Court acts without inherent jurisdiction, aparty affected cannot by waiver confer jurisdiction on it,which it has not. Where such jurisdiction is not wanting, adirectory provision can obviously be waived. But a mandatoryprovision can only be waived if it is not conceived in thepublic interests, but in the interests of the party thatwaives it. In the present case, the Executing Court hadinherent jurisdiction to sell the property. We have assumedthat Section 35 of the Act is a mandatory provision. If so,the question is whether the said provision is conceived inthe interests of the public or in the interests of the personaffected by the non-observance of the provision. It is truethat many provisions of the Act were conceived in theinterests of the public, but the same cannot be said ofSection 35 of the Act, which is really intended to protectthe interests of a Judgment -Debtor and to see that a largerextent of his property than is necessary to discharge thedebt is not sold. Many situations may be visualized when theJudgment-Debtor does not seek to take advantage of thebenefit conferred on him under Section 35 of the Act; forinstance, if the part of the property carved out by the Courtfor sale is separated from the rest of his property, thevalue of the remaining property may be injuriously affectedby the said carving out, in which case the Judgment Debtormay prefer to have his entire property sold so that he mayrealize the real value of the property and pay part of thesale price towards the decretal amount. He cannot obviouslybe compelled to submit to the sale of a part of the propertyto his disadvantage. A provision intended for his benefitcannot be construed in such a way as to work to hisdetriment. But it is said that the proviso to Section 35 ofthe Act indicates a contrary intention. Under that proviso,"if the highest amount bid for the property so specified isless than the price so specified, the Court may sell suchproperty for such amount, if the decree-holder consents inwriting to forego so much of the amount decreed as is equalto the difference between the highest bid and the price sospecified." This is only an option given to the Decree-holder: he may exercise this option, if he does not like togo through the entire sale proceedings overagain. In onecontingency this proviso also works for the benefit of theJudgment Debtor, for he will be relieved of part of his https://hcservices.ecourts.gov.in/hcservices/ indebtedness. But anyhow this does not show that the mainprovision is not intended for the benefit of the Judgment-Debtor. We are, therefore, satisfied, on a true constructionof Section 35 of the Act, that it is intended only for thebenefit of the judgment-Debtor and, therefore, he can waivethe right conferred on him under Section 35 of the Act."He also relies on the decision of the Hon'ble Supreme Court in NIRBHAIKUMAR V. MAYA DEVI AND ORS. (2009 (3) AWC 2233 (SC), whereby andwhereunder it is among other things laid down as follows:".....Consequently it must be held that the provisionfor six months' notice before initiation of proceedings underSection 21(1) of the Act, though is mandatory and confersprotection on the tenant concerned, it can be waived by him.On the facts of the present case there is no escape from theconclusion that the appellant, for reasons best known to it,consciously and being alive to the clear factual situationthat the suit was filed on that ground prior to the expiry ofsix months' notice, did not think it fit to pursue that pointany further and on the contrary joined issues on meritsexpecting a favourable decision in the suit and having losttherein and got an adverse decision did not think it fit evento challenge the decision on the ground of maintainability ofthe suit while filing an appeal and argued the appeal only onmerits and only as an afterthought at the stage of writpetition in the High Court such a contention was sought to betaken up for the first time for consideration. On the factsof the present case, therefore, it must be held that theappellant had waived that contention about the suit beingpremature having been filed before the expiry of six monthsfrom the date of suit notice."55.The Learned counsel for the Fifth Respondent places relianceon the decision of the Hon'ble Supreme Court in SAHEB KHAN V.MOHD.YUSUFUDDIN AND ORS. (AIR 2006 SC 1871) wherein at paragraphs 10 to12, it is laid down as follows:"We are unable to sustain the reasoning of the HighCourt. Orer XXI Rule 90 of the Code of Civil Procedureallows inter-alia any person whose interests are affected bythe sale to apply to the Court to set aside a sale ofimmovable property sold in execution of a decree on theground of "a material irregularity or fraud in publishing orconducting" the sale. Sub-Section (2) of Order XXI Rule 90however places a further condition on the setting aside of aCourt sale in the following language:No sale shall be set aside on the ground ofirregularity or fraud in publishing or conducting it unless, https://hcservices.ecourts.gov.in/hcservices/ upon the facts proved, the Court is satisfied that theApplicant has sustained substantial injury by reason of suchirregularity or fraud.Therefore before the sale can be set aside merelyestablishing a material irregularity or fraud will not do.The applicant must go further and establish to thesatisfaction of the Court that the material irregularity orfraud has resulted in substantial injury to the Applicant.Conversely even if the Applicant has suffered substantialinjury by reason of the sale, this would not be sufficient toset the sale aside unless substantial injury has beenoccasioned by a material irregularity or fraud in publishingor conducting the sale. (See:Dhirendra Nath Gorai and SuibalChandra Shaw and Ors. V. Sudhir Chandra Ghosh and Ors.MANU/SC/0018/1964 : (1964)6SCR1001; Jaswantlal NatvarlalThakkar v. Sushilaben Manilal Dangarwala and Ors.MANU/SC/0190/1991: AIR 1991SC770; Kadiyala Rama Rao V, GutalaKahna Rao (Dead) by and Ors. MANU/SC/0112/2000: (2000)1 SCR1045.A charge of fraud or material irregularity under OrderXXI Rule 90 must be specifically made with sufficientparticulars. Bald allegations would not do. The facts mustbe established which could reasonably sustain such a charge.In the case before us, no such particulars have been given bythe respondent of the alleged collusion between the otherrespondents and the auction purchaser. There is also nomaterial irregularity in publishing or conducting the sale.There was sufficient compliance with the orders of Order XXIRule 67(1) read with Order XXI Rule 54(2). No doubt, theTrial Court has said that the sale should be given widepublicity but that does not necessarily mean by publicationin the newspapers. The provisions of Order XXI Rule 67clearly provide if the sale is to be advertised in the localnewspaper, there must be specific direction of Court to thateffect. In the absence of such direction, the proclamationof sale has to be made under Order XXI Rule 67(1) "as nearlyas may be in the manner prescribed by Rule 54, Sub-Rule (2)"Rule 54 Sub-rule (2) provides for the method of publicationof notice and reads as follows:(2) The order shall be proclaimed at some placeon or adjacent to such property by beat of drum orother customary mode, and a copy of the order shall beaffixed on a conspicuous part of the property and thenupon a conspicuous part of the Court-house, and alsowhere the property is land paying revenue to theGovernment, in the office of the Collector of thedistrict in which the land is situate (and, where theproperty is land situate in a village, also in theoffice of the Gram Panchayat, if any, having https://hcservices.ecourts.gov.in/hcservices/ jurisdiction over that village).The proclamation of the sale by beat of drum was notmandatory, so long as the sale notice was proclaimed at oradjacent to the property. Admittedly, the AdvocateCommissioner distributed the pamphlets advertising the salein the locality several days prior to holding of the sale andalso affixed a copy of the sale notice on the propertyitself."56.Further, the Learned counsel for the Fifth Respondent refersto the orders of this Court in W.P.No.13210 of 2008 and C.R.P.Noo.3144of 2008 dated 29.04.2009 between NAZIMS CONTINENTAL, REP. BY ITSPARTNERS AND OTHERS V. THE INDIAN OVERSEAS BANK, TRIPLICANE BRANCH,MADRAS 5 AND OTHERS, wherein this Court held in paragraphs 22 and 23thus:"Mode of recovery of debt is prescribed u/s 25 of DRTAct, as quoted hereunder:-"25.Modes of recovery of debts:- The Recovery Officershall, on receipt of the copy of the certificate under sub-section (7) of section 19, proceed to recover the amount ofdebt specified in the certificate by one or more of thefollowing modes, namely:-(a) attachment and sale of the movable or immovable propertyof the defendant;(b) arrest of the defendant and his detention in prison;(c) appointing a receiver for the management of the movableor immovable properties of the defendant."From the aforesaid provision it will be evident that apartfrom attachment and the sale of movable or immovable propertyof the defendant, the recovery officer, under the saidprovision, may proceed to recover the amount of debt byarresting the defendant and his detention in prison or byappointing a receiver for the management of the movable orimmovable properties of the defendant. Those two provisionsmade under clauses (b) and (c) of Section 25 cannot bechallenged before the Recovery Officer under II or IIISchedule of Income Tax Act. Therefore, except by preferringan application (appeal) u/s 30 against the order of recoveryofficer, any aggrieved person has no other option. It cannotbe said that for sale of movable or immovable property asmade under II Schedule to Income Tax Act, including Rules 60or 61 or 62 of Part-III of II Schedule, then by way of appealonly u/s 30 could be preferred and no such appeal could bepreferred directly against the order of attachment and saleof movable or immovable property of the defendant, ifrecovery officer pass such order u/s 25. Therefore, we holdthat against the order of attachment and sale of movable orimmovable property of defendant, who are the defendants https://hcservices.ecourts.gov.in/hcservices/ before the Tribunal, an aggrieved person, instead of movingapplication under Rule 60 of 61 or 62, may also prefer anapplication (appeal) u/s 30 of the Act, 1993. Therefore,there being a concurrent jurisdiction, DRT u/s 30 andrecovery officer under Rules 60,61 and 62 of Part III of IISchedule of Income Tax Act in regard to movable property andjurisdiction of Tribunal under Part-II of II Schedule ofIncome Tax Act in regard to movable property, application ofany defendant cannot be entertained by Tribunal u/s 30without pre-deposit of the amount in terms with Rules 60 or61 bypassing the jurisdiction of the Recovery Officer underthe aforesaid provisions of II Schedule of Income Tax Act.Further, the auction purchaser being not a defendant in theoriginal application u/s 19, cannot file an appeal u/s 30against the order of recovery officer, if it intends toprefer an application, if under the provision of Rule 62 ofPart-III of II Schedule to Income Tax Act.So far as W.P.No.13210/08 is concerned, the borroweris the petitioner. He raised the question of upset price ofvaluation of property and jurisdiction of the recoveryofficer under Rules 60 and 61 of Part III of II Schedule toIncome Tax Act. They preferred application under Rule 61 ofPart-III of II Schedule to Income Tax before the recoveryofficer to set aside the sale without compliance of pre-deposit amount. For the said reason, amount having notdeposited as per Rule 61, the application to set aside wasdismissed against which they preferred appeal before theDebts Recovery Appellate Tribunal, which has also beendismissed by the Appellate Tribunal vide impugned order dated6th May, 2008.First of all, it is the appellant, who preferred appeal underRule 61 and, therefore, they cannot say the recovery officerhas no jurisdiction to pass order under Rule 61 and theappeal to set aside the sale is only maintainable u/s 30 ofthe Act, 1993.We have already held that an application to set aside sale isalso maintainable under Rule 61, but we have also held that adefaulter, such as borrower, is required to pre-deposit theamount in view of proviso to Rule 61. The petitioners beingthe defendant-borrowers, as they failed to comply by pre-depositing the amount, we hold that the recovery officerrightly rejected the application under Rule 61 preferred byborrowers and the Appellate Tribunal rightly affirmed thesame."Also, in the aforesaid common order in W.P.No.13210 of 2008 andC.R.P.Noo.3144 of 2008 dated 29.04.2009 between NAZIMS CONTINENTAL,REP. BY ITS PARTNERS AND OTHERS V. THE INDIAN OVERSEAS BANK, TRIPLICANEBRANCH, MADRAS 5 AND OTHERS, in paragraphs 24 to 26, it is held as https://hcservices.ecourts.gov.in/hcservices/ follows:"So far as CRP No.3144/08 is concerned, the revisionapplication has been preferred by Indian Bank against interimorder of Debts Recovery Tribunal, Coimbatore, passed u/s 19(25) of Act, 1993. In this case, one time settlement wasagreed between the parties and sale, which was fixed wasconducted. The matter moved up on appeal before theAppellate Tribunal, wherein certain orders were passed andbeing aggrieved, the bank moved a petition before the HighCourt on the ground that the appeal before the AppellateTribunal was not maintainable, but appeal against sale shouldhave been preferred before the recovery officer. The HighCourt passed order in favour of the Bank as appeal againstsale was not maintainable before the Appellate Tribunal.Thereafter, an appeal was preferred u/s 30 against order ofrecovery officer, but it was not filed within 30 days becauseof the pendency of the writ petition and after disposal ofthe writ petition before preferring the application u/s 30,the recovery officer confirmed the sale. Against the saidorder, the respondent-borrowers preferred appeal, wherein anapplication u/s 19(25) was filed by the borrowers and prayedfor staying the proceeding. The Bank appeared and brought tothe notice of the Tribunal that sale has been confirmed on13th Aug., 2008 and time was sought for to file reply and inthat view of the matter, the Tribunal passed interim order on19th Aug., 2008 in I.A.No.2039/08 u/s 19(25) of the Act, 1993in Appeal No.7/08, (appears to have been filed u/s.30)There is nothing on the record that for setting asidethe sale the borrowers deposited any amount as pre-deposit asrequired under Rules 60/61 r/w Section 30 as required underthe law and held by us in the preceding paragraph. Inabsence of such deposition of amount as pre-deposit to setaside the sale or confirmation of sale, the impugned orderdated 19th Aug., 2008, cannot be upheld. However, if pre-deposit amount is deposited within 30 days, it will be opento the Tribunal to pass final order in the appeal u/s 30 madeto set aside the sale, if found illegal or against law or ifperverse.In view of our finding, while we dismissW.P.No.13210/08, but set aside the order dated 19th Aug., 2008in I.A.No.2039/08 in Appeal No.7/08 and allow C.R.P. (PD)No.3144/08 preferred by Indian Bank. However, there shall beno order as to costs. Consequently, connected miscellaneouspetitions are closed."57.It is seen from the letter dated dated 28.08.2006 of thePetitioner addressed to the First Respondent/Tribunal's RecoveryOfficer that the Petitioner has stated that its Bankers informed them https://hcservices.ecourts.gov.in/hcservices/ that the last date for vacating their premises is fixed as 31.08.06 andthat they have not received any communication from the FirstRespondent's office and also that inspite of their address forcorrespondence being know to the first Respondent, the last notice hasbeen addressed to their residence, even though it is belated and theabove reason has been the main cause for the Ex-parte Judgment issuedby the First Respondent/Debts Recovery Tribunal I, Chennai, againstthem, etc.,58.The Petitioner in the Letter dated 28.08.2006 addressed tothe First Respondent, the Recovery Officer has also proceeded to statethe following:"We are in the process of locating an alternative place forshifting, the difficulties being-Location, Size of Plant, PowerRequirement, Finance for Advance towards the same and subsequentagreements thereafter, in addition to the Technical difficultiesexpressed in our earlier letter, as we want to continue our business,in that location, for manufacturing Special Purpose Machines.We fail to understand the delay of 5 months, from the date of Auctionand Bidding on 23.3.06, for payment of the balance due to us afterdeducting the Bank dues from the BID AMOUNT, as other statutory duesare to be paid by the Bidder.With reference to vacating our factory premises we request to provideus a minimum of ONE MONTH from the Date of Receipt of the amount due tous, in one lot, by way of Demand Draft in our favour.Under the Right to Information Act, we request you to provide us withthe details of the payments made by the bidder in our favour in theformat below, by Return Post without fail.SI.NO.Date ofreceipt ofDD/ChequeDate ofDepositDate ofCredit inDRT-1 A/cBank, Branch& Acc DetailsAll this is WITHOUT PREJUDICE to our efforts to retrieve the possessionof our property, as we were denied of an opportunity of being heardwhich is against the Principles of Natural Justice enshrined in Section22 of the Debt Recovery Act."59. Again, the Petitioner has sent a Letter dated 29.08.2006addressed to the Recovery Officer of the First Respondent in and bywhich a request has been made to grant them time till 31.10.2006 forarranging temporary finance facilities of a few Crores and otherrequirements explained in detail in their earlier letters. https://hcservices.ecourts.gov.in/hcservices/

60.In W.P.No.40034 of 2006 filed by the Petitioner against theFirst Respondent/Debts Recovery Tribunal's Recovery Officer and theRespondents 5 and 6, this Court on 20.12.2006 has directed the FirstRespondent to issue a proper reply to the letter of the Petitionerdated 28.08.2006 in regard to the seeking particulars of the details ofpayment made by the bidder and the balance repayable to them, etc., andallowed the writ petition to that extent and as regards the prayer ofthe petitioner to quash the order of the First Respondent dated31.08.2006, the same has been dismissed.61.The Fourth Respondent/Recovery Officer, DRT-1, Chennai by hisorder dated 03.01.2007 addressed to the Managing Director of thePetitioner's company has granted one final opportunity to thePetitioner Company represented by its Managing Director S.Kannan(Second Defendant therein) to hand over possession of land and buildingto the Fifth Respondent/Manager of the State Bank of India, AmbatturIndustrial Estate Branch, Chennai on or before 17.01.2007 failingwhich the possession of land and building along with the machinery andother movables are to be handed over to the auction purchaser at therisk and cost of the Petitioner Company.62.The Petitioner's Company has addressed a Letter dated06.01.2007 to the Fourth Respondent/Recovery Officer, Debts RecoveryTribunal -1, Chennai wherein it has asked for the approximate surplusamount that the Fourth Respondent will be retaining in his hands afterthe proceedings to complete, etc., In the said letter, it is alsomentioned that the details sought for is to when the initial amount of25% has been paid and that when the Fourth Respondent accepted thebalance payment and it has also goes on to add that the reply of theFourth Respondent is absolutely vague without any letting thePetitioner to know when the entire sale consideration has been paid.63.On 04.05.2007, the Second Respondent/Debts Recovery Tribunal-III) represented by the Recovery Officer, Chennai has passed an interimorder by inter alia observing that the basic issue of making paymentbeyond the prescribed period of 15 days has not been disputed either bythe Respondent Bank or by the Auction Purchaser, etc., and granted stayof all further proceedings in R.P.No.1 of 2007 in DRC. No.175 of 2004and the Bank viz., the Fifth Respondent and the Advocate Commissionerhave been restrained to proceed further till further orders from theTribunal.64.On 08.05.2007, the Fourth Respondent/Recovery Officer, DebtsRecovery Tribunal I, Chennai has given a Report mentioning among otherthings as follows:"...Consequent on the establishment of Debts TribunalRecovery III, Chennai w.e.f. 16.1.2007, the above proceedingswas transferred to this Tribunal for further proceedings. https://hcservices.ecourts.gov.in/hcservices/ The Auction Purchaser, vide his letter dated 29.01.2007prayed for issue of orders so as to enable them to get thephysical possession of the property. A notice was issued toall persons affected directing them to appear before theundersigned on 16th February, 2007 at 11.00 a.m. to show causewhy the obstruction being caused by them or any one elseacting on their behalf should not be removed with theassistance of police for putting the auction purchaser intopossession of the said property, under Rule 39 of the IncomeTax (Certificate Proceedings) Rules,1962. On the said dateof hearing i.e., 16.2.2007, Shri K.Vivekanandan, Advocaterepresenting Shri K.S.Natarajan, Advocate for the DefendantCompany submitted that they have taken up the issue ofpayment of court fee on appeal before the Hon'ble High Court,Madras by way of W.P.No.5489 of 2007, therefore prayed toawait the orders of the Hon'ble High Court by another week.Applicant Bank was represented by one Shri S.Kalyanasundaram.After hearing the respective parties, the case was reservedfor orders. Shri K.S.Natarajan, Advocate for the DefendantCompany vide his Letter dated 20.02.2007 informed about theorders of the stay granted by the Hon'ble High Court on16.2.2007 in M.P.No.1/2007 in W.P.No.5849 of 2007. In viewof the stay granted by the Hon'ble High Court, furtherproceedings in the matter was deferred. On 26th April, 2007,the Auction Purchaser i.e. M/s.Saravana Foundations Ltd.,informed that the Hon'ble High Court, Madras has dismissedthe W.P.No.5489 of 2007 & M.P.No.1 of 2007 and thereforeprayed to arrange to hand over the possession immediately.Since the W.P.No.5489 of 2007 & M.P.No.1 of 2007 hasbeen dismissed by the Hon'ble High Court, Madras vide itsorder dated 17.4.2007, and there is no legal impediment forthe undersigned to proceed further, the undersigned onperusing the records and keeping in view specifically theobservations made the Hon'ble High Court, Madras in para 31of the order dated 20.12.2006 passed in W.P.No.40034/2006,the undersigned passed an order on 27th April, 2007 appointingan Advocate Commissioner to take inventory/valuation of themovables lying in the suit premises and file a report beforethe undersigned.Appeal under Sec.30 of RDDB & FI Act, 1993 has beenfiled to stay the order of RO, DRT-I, Chennai dated 3.1.2007in DRC No.175/2004 in O.A.No.152 of 2003." 65.In the Appeal filed by the Writ Petitioner A.S.38 of 2007 inDRC 175/2004 in O.A.112 of 2007 dated 16.06.2008, the SecondRespondent, the Debts Recovery Tribunal-III, Chennai has passed anorder of dismissing the Appeal with the following directions beingissued to the Recovery Officer: https://hcservices.ecourts.gov.in/hcservices/ "1.The First Respondent is directed to take expeditioussteps for getting delivery of possession of the vacant landand building to the Third Respondent by employing policeforce if necessary without any further loss of time.2.The Recovery Officer may release the amount due to theSecond Respondent and withhold the surplus amount in the saleproceeds as per the direction dated 14.03.2008 of Hon'bleHigh Court of Madras passed in I.A.No.1409 of 2008 inC.S.No.288 of 2008 (in M/s.Kali Steel & EngineeringIndustries (P) Ltd. Vs. M/s.Machine Tools & Accessories (P)Ltd.) until further orders of the Hon'ble High Court.3.The Recovery Officer is directed to furnish completedetails of the sale, recoveries made and disbursementscaused, to the Appellant Company under due acknowledgment.4.The above exercise must be completed by the RecoveryOfficer immediately on receipt of copy of this order andsubmit compliance report forthwith.5.The I.A.22/2008 is closed in view of my opinionexpressed in the order dated 23.11.2007 in I.A.No.129/2007filed by Centurion Bank of Punjab Limited.6.The Registry is directed to communicate a free copy ofthis order to all the parties in this appeal."66.The Petitioner has filed M.A.76 of 2008 against A.No.38 of 2007in DRC.No.175 of 2004 in O.A.112/2007 on the file of the Debts RecoveryTribunal – III, Chennai under Section 20 of the Recovery of Debts Dueto the Banks and Financial Institutions Act, 1993 and an interim orderin IN.531 of 2008 has been passed by the Debts Recovery AppellateTribunal, Chennai in A.S.38/2007 in D.R.C.175/2004 in O.A.112/2007 onthe file of the Debts Recovery Tribunal – III, Chennai wherein anAdvocate Commissioner has been appointed by the FourthRespondent/Recovery Officer, Debts Recovery Tribunal I, Chennai andhe has been directed to keep possession of the schedule property withhim, till further orders.67.On 23.04.2009, in M.A.76 of 2009, the Debts Recovery AppellateTribunal, Chennai has dismissed A.S.No.38 of 2007 filed by thePetitioner with costs among other things observing that on account ofthe request made by the Auction Purchaser, the Third Respondent (SixthRespondent in the Writ Petition) on the date of sale itself i.e.,23.03.2006, the First Respondent/Recovery Officer has exercised thediscretion and allowed the time upto 30.06.2006 for payment of thebalance 75% of sale price but the Third Respondent therein (SixthRespondent in the Writ Petition) paid the same on 23.03.2006 itself,etc., and further, since the Appellant Company (Writ Petitioner) makesout a case that loss or damage has been caused on account of theprocedure involved in the conduction of the auction, it cannot be heardto contend that the exercise of discretion by the First Respondent ingranting time for payment of balance sale price is irregular and https://hcservices.ecourts.gov.in/hcservices/ resultantly, confirmed the order passed by the Debts Recovery TribunalIII, Chennai in A.S.No.38 of 2007 in DRC 175/2004 in O.A.112/2007 dated16.06.2008 and vacated the interim stay already granted.68. On 09.06.2009, the Third Respondent/Recovery Officer, theDebts Recovery Tribunal III, Chennai has passed an order in the matterof State Bank of India, Ambattur Industrial Estate Branch, Chennai-58V. M/s.Machine Tools and Accessories P Ltd. and 2 others among otherthings mentioning that the prayer of the Certificate Holder i.e., CityCase Officer, State Bank of India, Stressed Assets Resolution Centre,Chennai State Bank of India for release of Rs.1,76,27,464/- is herebyallowed and as regards the release of surplus amount from and out ofsale proceeds, has further stated that the same shall be subject to thedisposal of C.S.288 of 2008 by this Court.69.It is to be pointed out that Section 17 of the Recovery ofDebts Due to Banks and Financial Institutions Act, 1993 speaks ofJurisdiction, Powers and Authority of the Tribunals. As a matter offact, Section 17 of the Act enjoins that the Tribunal is to decide theapplications of Banks and Financial Institutions for recovery of debtsdue to them. Section 17(1) of the Act specifies that a Tribunal shallexercise, on and from the appointed day, the jurisdiction, Powers andauthority to entertain and decide applications from the Banks andFinancial Institutions for recovery of debts due to such Banks andFinancial Institutions. Sub Section (2) of Section 17 of the Act dealswith the Jurisdiction, Powers and Authority of the Debts RecoveryAppellate Tribunal mentioning that such Appellate Tribunal shallexercise, on and from the appointed day, the jurisdiction, powers andAuthority to entertain an Appeal against any order made or deemed tohave been made by the Debt Recovery Tribunal under the Act. In short,the adjudication of liability and the recovery of the amount byexecution of the Certificate are respectively within the exclusivejurisdiction of the Tribunal and the Recovery Officer and no otherCourt or Authority much less the Civil Court or the Company Court cango into the said question relating to the liability and the recoveryexcept as mentioned in the Act as per decision of the Hon'ble SupremeCourt in ALLAHABAD BANK V. CANARA BANK, (AIR 2000 S.C. 1535). TheTribunals are established as a substitute to the Civil Courts to trythe suits filed by the Bank and all the applications arising out of thesame, etc., as per decision VENKATESWARA TEXTILES TRADERS & PRINTERS V.CANARA BANK (A.I.R. 1998 ANDHRA PRADESH 282: (1998) 3 A.L.D. 209).70.Section 18 of the Recovery of Debts Due to Banks and FinancialInstitutions Act, 1993 deals with 'Bar of Jurisdiction'. The ouster ofjurisdiction is by virtue of Section 18 of the Act which sets out thatno Court or other Authority can try matters for recovery of debts.However, in regard to the reliefs which do not relate to debts on aplain reading of Section 17 of the Recovery of Debts Due to Banks andFinancial Institutions Act, 1993 are concerned, there can be no doubt https://hcservices.ecourts.gov.in/hcservices/ that the Civil Court will still retain jurisdiction as per decisionCENTURION BANK LTD. V. INDIAN LEAD LTD. ((2000) 100 COMP.CAS.537 :(1999-3) 101 BOM.L.R.556).71.Admittedly, the Recovery of Debts Due to Banks and FinancialInstitutions Act is a special statute. It overrides the provisions ofgeneral law. The Tribunal is competent to pass interim orders as perSection 19(6) of the Act. The Tribunal and the Appellate Tribunal arenot tied down by the procedure prescribed under the Civil ProcedureCode. However, they shall be guided by the principles of NaturalJustice. Indeed, the Tribunal and the Appellate Tribunal are empoweredto regulate their own procedure of course subject to the provisions ofthe Act and the Rules.72.The issue of insufficiency of stamp duty cannot be agitatedbefore the Tribunal or the Appellate Tribunal as per decision ASSETRECONSTRUCTION COMPANY (INDIA) LIMITED V. KUMAR METERLURGICALCORPORATION OF INDIA, (2005 III B.C. 44 at pg.45) (DRAT/DRT) CHENNAI.73.A Reading of Section 18 of the Act goes to show that the DebtsRecovery Tribunal shall exercise the powers of all the Courts exceptthe Hon'ble High Court and the Supreme Court under Article 226 and 32of the Constitution of India. To put it precisely, the Tribunal is asubstitute for Civil Courts in the matters relating to Debts due toBanks and Financial Institutions.74. The Tribunal is constituted under the Recovery of Debts Due toBanks and Financial Institutions Act, 1993 in substitution of the CivilCourt but without the trappings of the Civil Court. Therefore, aTribunal can pass any kind of final or interim order to achieve theobject of the Act without any procedural ramifications but it has tofollow the principles of Natural Justice as per Section 19(6) of theAct. Of course, a Tribunal may also pass an ad interim orders withouthearing the other side and later on, it can give a subsequent hearingto the other side and pass final orders as per decision ALLAHABAD BANKV. RADHA KRISHNA MAITY, (AIR 1999 SUPREME COURT 3426)75. A scrutiny of the ingredients of Sections 17 to 20 of the Actwill clearly point out that any order passed by the Tribunal is anappealable one before the Appellate Tribunal, except the order passedby the Tribunal with the consent of the parties. Even against apreliminary order passed by the Tribunal under the Act, there is aremedy of preferring an Appeal. Therefore, filing of the writ Petitionis not maintainable for challenging the order passed by the DebtsRecovery Tribunal.76.Moreover, in the decision S.RAVICHANDRAN V. DEBTS RECOVERYTRIBUNAL, (1999) 95 COMPANY CASES 825 (KARNATAKA)), it is held that'the mere fact that an Appellate Tribunal is situated at a distance https://hcservices.ecourts.gov.in/hcservices/ place, cannot be a ground for holding that Appeal is not an efficaciousalternative remedy.77.In GANGA NARAYAN MISHRA V. STATE BANK OF INDIA, (2001) 1M.P.L.J 27), it is observed that 'the remedy of Appeal before theAppellate Tribunal is an adequate and efficacious remedy and thePetitioner cannot be permitted to abandon to resort the statutoryremedy of an Appeal and to invoke the extraordinary jurisdiction of theHon'ble High Court as per Article 227 of the Constitution of India.78.In OM PRAKASH CHAUTALA V. STATE OF HARYANA, (AIR 1999 P & H 80(DB)), the contention raised to the effect that the provisions ofSection 21 of the Recovery of Debts Due to Banks and FinancialInstitutions Act, 1993 were ultra vires as it enjoined upon theAppellant to deposit 75% of Debt as a condition precedent and that thepre-condition deposit of 75% is onerous and thus, violative of Article14 of the Constitution of India has been negatived and it is held that'an Appeal is a creature of statute. If no grouse can be made for notproviding an Appeal, obviously no grouse can equally be made ifconditions are imposed for filing the same.79.Continuing further, in KAVITA PIGMENTS AND CHEMICALS (PVT.)LTD. V. ALLAHABAD BANK, (AIR 2000 PAT. 43), confirmed in KAVITAPIGMENTS AND CHEMICALS (PVT.) LTD. V. ALLAHABAD BANK, (AIR 2001 PAT. 66(D.B.), the requirement of pre-deposit as per Section 21 of theRecovery of Debts Due to Banks and Financial Institutions Act, 1993does not militate against the maintainability of Appeal against anInterlocutory order.80.Section 22 of the Recovery of Debts Due to Banks andFinancial Institutions Act, 1993 prescribes the procedure and powers ofthe Tribunal and that of the Appellate Tribunal. Even though aTribunal is clothed with the powers as is possessed by a Court of law,yet the powers of the Tribunal are undoubtedly limited. Itsjurisdiction area is clearly specified and within the limits of itsjurisdiction, it has all the necessary express and implied powers. Theimplied grant is limited by the express grant and as such, it can onlybe powers that are ancillary/incidental for performing necessary actsor using all such means as are essentially and reasonably necessary tomake the grant effective and an efficacious one.81.In the decision SUSHIL KUMAR JAIWAL V. BANK OF INDIA, (AIR 1996CALCUTTA 323 at pages 324, 325), it is held that 'Writ Petition is notmaintainable for bypassing the provisions of Section 21 of theRecovery of Debts Due to Banks and Financial Institutions Act, 1993 inregard to the deposit, as alternative remedy of Appeal is available,etc., In TIMES GUARANTEE LIMITED, MUMBAI V. BRANCH MANAGER, INDUSTRIALDEVELOPMENT BANK OF INDIA, CHENNAI, (2007 (1) DRTC 39 at page 47(MAD)), it is observed that "When the Petitioner has an alternative https://hcservices.ecourts.gov.in/hcservices/ statutory remedy of Appeal provided under the Act, the writ petition isnot maintainable."82.In OM KANT AGGARWAL AND ANOTHER V. PUNJAB NATIONAL BANK ANDOTHERS, (AIR 1999 PUNJAB AND HARYANA 80 at pages 81, 82 and 83 inparagraphs 4 to 7, it is held as follows:"4.The Court would have probed the issues raised byMr.Mohanta if an alternative remedy was not available to thepetitioners. It would be recalled that the Petitioners didavail of an alternative remedy bud did not pursue the sameafter the Appellate Tribunal had passed an interim orderdirecting the Petitioners to deposit a sum of Rs.5 lacs aspre-condition for hearing appeal on merits. It is thus acase where not only an alternative remedy was available tothe Petitioners, but the same was also availed of. Theappeal preferred by the Petitioner was not heard by theAppellate Tribunal as concededly an amount of Rs.5 lacs asordered by the Appellate Tribunal vide interim order was notdeposited. In the facts fully detailed above, thePetitioners cannot be permitted to challenge the orderspassed by the Civil Court or by the Tribunal at Jaipur,having availed of an alternative remedy of filing an appealwhich as referred to above, was not taken to its logicalends. Faced with this situation Mr.Mohanta, the Learnedcounsel appearing for the Petitioners then urged that theorders passed by the Appellate Tribunal directing thePetitioners to deposit Rs.5 lacs as condition precedent wasillegal and without jurisdiction. He is, however, unable tosupport his contention either from the provisions of thestatute i.e. The Act of 1993 or from any judicial precedent.On the contrary the order of the Appellate Tribunal can wellbe supported from the provisions of the statute i.e. The Actof 1993 which requires deposit of 75% of the amount of debtas a condition precedent for filing an appeal provided theAppellate Tribunal reduces the amount to be deposited.Section 21 of the Act reads as follows:-"Deposit of amount of debt due, on filing appeal:-Where an appeal is preferred by any person from whom theamount of debt is due to a bank or a financial institutionor a consortium of banks or financial institutions, suchappeal shall not be entertained by the Appellate Tribunalunless such person has deposited with the Appellate Tribunalseventy-five per cent of the amount of debt so due from himas determined by the Tribunal under Section 19.Provided that the Appellate Tribunal may, for reasonsto be recorded in writing, waive or reduce the amount to bedeposited under this Section."5.Mr.Mohanta, however, contends that the provisions of https://hcservices.ecourts.gov.in/hcservices/ Section 21 are ultra vires as it enjoins upon the appellantto deposit 75 per cent of debt as a condition precedent.The pre-condition of deposit of 75 per cent is onerous andthus violative of Article 14 of the Constitution of India.We find no merit in this contention. Appeal is creature ofstatute. If no grouse can be made for not providing anappeal obviously no grouse can be equally be made ifconditions are imposed for filing the same. In Anant MillsCo. Ltd. V. The State of Gujarat, (AIR 1975 SC 1234: 1975Tax LR 1540 the Apex Court observed as under at page 1249 ofAIR:-"The right of appeal is the creature of statute.Without a statutory provision creating such a right theperson aggrieved is not entitled to file an appeal. We failto understand as to why the legislature while granting theright of appeal cannot impose conditions for the exercise ofsuch right. In the absence of any special reasons thereappears to be no legal or constitutional impediment to theimposition of such conditions. It is permissible, forexample, to prescribe a condition in criminal cases thatunless a convicted person is released on bail, he mustsurrender to custody before his appeal against the sentenceof imprisonment would be entertained. Likewise, it ispermissible to enact a law that no appeal shall lie againstan order relating to an assessment of tax unless the tax hadbeen paid."6.The Apex Court in Navin Chandra Chhotelal V. TheCentral Board of Excise and Customs, (AIR 1971 SC 2280:(1971Tax LR 1528)) while dealing with sub-section (1) of Section129 of the Customs Act, 1962 held that "the said Sectionmakes it obligatory on appellant to deposit duty or penaltypending the appeal or to comply with the order passed underthe Proviso. On failure of the appellant to comply witheither requirement, the Appellate Authority is competent todismiss appeal though dismissal is not expressly providedfor in Section 129."7.The last contention of Mr.Mohanta is that even thoughthe appeal was competent and the same was filed, this Courtis not debarred from entertaining a petition under Article226 of the Constitution of India. Once the orderscomplained of are without jurisdiction, despite the factthat an alternative remedy is available, the petitioners canyet file a Writ Petition under Article 226 of theConstitution of India. He further contends that when theorders of the Appellate Tribunal directing the Petitionersto deposit a sum of Rs.5 lacs was earlier challenged in thisCourt by way of Revision Petition under Article 227 of theConstitution of India, the Learned Single Judge of thisCourt held that scope of Article 227 is limited and, https://hcservices.ecourts.gov.in/hcservices/ therefore, petition under Article 226 should have beenfiled. The operative part of the order dated 3-4-1998passed by single Judge of this Court read as under:-"I am of the opinion that the Petitioners cannot invokeArticle 227 of the Constitution of India. The RevisionPetition is, therefore, dismissed with liberty to thePetitioners to file a Writ Petition, if so advised underArticle 226 of the Constitution of India.""83.In RAMCO SUPER LEATHERS LTD., REP. BY ITS DIRECTOR,MR.S.RAMASWAMY, CHENNAI AND OTHERS V. UCO BANK, REP. BY ITS AUTHORISEDOFFICER, INTERNATIONAL BANKING BRANCH, CHENNAI AND ANOTHER, ((2007) 5MLJ 986), the Division Bench of this Court has held that 'There is nospecific provision under Section 17 or any other provision ofSecuritisation and Reconstruction of Financial Assets and Enforcementof Security Interests (SARFAESI) Act empowering the Tribunal to pass aninterim order, but under Sub Section (12) of Section 19 of theRecovery of Debts Due to Banks and Financial Institutions Act, 1993 aTribunal is empowered to pass an interim order. Further, if SubSection (7) of Section 17 of SARFAESI Act is read along with subSection (12) of Section 19 of the RDDB & FI Act and Rule 7 framedthereunder (Debt Recovery Tribunal (Procedure) Rules, 1993) it will beevident that the DRT has also jurisdiction to pass interim order underSection 17 of the SARFAESI Act in appropriate cases."84.In this connection, this Court relevantly points out that asper Section 22 of the Recovery of Debts Due to Banks and FinancialInstitutions Act, 1993 a Tribunal can travel beyond the Civil ProcedureCode and Tribunal's fetter put on its powers is to observe theprinciples of Natural Justice. Also, that a Tribunal cannot passorders over and above what has been enjoined by the statute.85.In B.SAMPATH KUMAR V. RECOVERY OFFICER, OFFICE OF THE RECOVERYOFFICER, DEBTS RECOVERY TRIBUNAL, RAMANATHAPURAM, COIMBATORE ANDOTHERS, ((2007) 6 MLJ 1199), this Court has held that 'To escape theliability under Rule 61(b) of the Second Schedule to Income Tax Act,1961, to pay the deposit and contest the matter, the Petitioner hasfiled the Writ Petition, without exhausting his remedy by way of anAppeal and therefore, there is no 'loco standi' for him to file theWrit Petition.' Also in the aforesaid decision, it is held that 'Theprovisions of Second and Third Schedule to the Income Tax Act, 1961 andIncome Tax (Certificate Proceedings) Rules 1962 are applicable torecovery proceedings as far as possible with necessary modifications.'86.In JANARDHANAN PILLAI V. INDIAN OVERSEAS BANK, (2003 (1) KLT293 at page 294) (DB), in paragraphs 5 and 6, it is held as follows:"5.The Act has been primarily enacted to secure publicfunds. A summary procedure has been provided to ensure that https://hcservices.ecourts.gov.in/hcservices/ adjudication of proceedings for recovery of debt due to Banksand other financial institutions is expedited. The obviouspurpose is to ensure that one party does not retain the fundsfor ever so as to deprive others from getting the financialhelp. Even while providing for the remedy of appeal, aprovision has been made in S.21 that such an appeal "shallnot be entertained by the Appellate Tribunal unless suchperson has deposited ............. seventy five percent ofthe amount of debt so due from him as determined by theTribunal...................". Thus, the statute postulates apre-deposit. Still further, by adding the proviso, theParliament has conferred a discretion on the AppellateTribunal to "waive or reduce the amount to bedeposited............". However, this discretion has to beexercised in a judicial manner. The Tribunal is required torecord the reasons in writing. Thus, the exercise ofdiscretion under the proviso has to be for good reasons.What is the position in the present case?6.The Tribunal, on examination of the relevant factors,had come to the conclusion that the appellants had, incollusion with the Bank Officers, managed to evade thepayment for more than a decade since 1990. Yet, the Tribunalhas not totally rejected the petition for waiver. It hasgranted partial relief and permitted the appellants to fileappeals on deposit of 60% of the decretal amount. Theexercise of discretion is not shown to be arbitrary.Relevant factors have been noticed. Thereafter, the Tribunalhad passed the impugned order. The reasons given by theTribunal are germane to the issue. We find no infirmity inthe order."87.In WESTERN EXPORTS INDIA (P) LTD. V. INDIAN OVERSEAS BANK ANDOTHERS, ((2003) 117 COMPANY CASES 319), this Court has held hereunder:"Where an auction sale has been notified in accordancewith the recovery certificate issued by the Debt RecoveryTribunal in exercise of powers conferred under Chapter V ofthe Recovery of Debts Due to Banks and Financial InstitutionsAct, 1993 read with the provisions of the Second and ThirdSchedules to the Income Tax Act, 1961, and the Income-Tax(Certificate Proceedings) Rules 1962, remedy if any againstthe proceedings of the Tribunal or the action of the RecoveryOfficer, has to be exhausted under the provisions of theRecovery of Debts Due to Banks and Financial InstitutionsAct, 1993, and not by way of judicial review under Article226/227 of the Constitution."88.In HANU REDDY REALTY INDIA PVT. LTD. V. JIGNESH AND OTHERS,((2008) 2 MLJ 896 at page 897) (DB), this Court has held as follows: https://hcservices.ecourts.gov.in/hcservices/ "The Recovery Officer being a creature of the statute isobliged to act fairly and in a reasonable manner, whiledealing with the property of the defaulters. As per theprovisions of Act 51 of 1993, wide powers are given to theRecovery Officer including power of distraint and sale ofproperty and when there are enormous powers conferred on anauthority, the law expects much more responsibility from suchauthorities. The function of the Recovery Officer is not tosell the property for a paltry sum, but he should see thatthe property is sold for its maximum value which wouldotherwise be termed as market price and if there is anybalance after discharging the dues to the bank or financialinstitutions, it should go to the defaulter. Merely becausethe defaulter is in arrears to the bank or financialinstitutions, it cannot be said that his property has to besold irrespective of its worth, and he should not have thebenefit of the balance sale consideration after meeting theliabilities. Therefore, utmost care has to be taken by theRecovery Officer in the matter of sale of the property of thedefaulters and due publicity should be given for such sale asotherwise the property will be snatched away by the realestate agents by forming cartel, and there will be stillbalance to be paid to the bank and the defaulter willcontinue to be debtor through out his life. On the otherhand, if an attempt is made by the Recovery Officer to getthe maximum price for the property, it will be in theinterest of both the Bank as well as the defaulter. As notedearlier, the Recovery Officer is empowered to effect recoveryby various modes as made mentioned under Section 25 of theAct and the said power coupled with the relevant provisionsof the Income Tax Act, 1961 made applicable to recoveryproceeding under Debts Recovery Tribunal Act, the RecoveryOfficer enjoins wide powers in the matter of sale ofproperty. As per Section 63 (1) of Schedule to the IncomeTax Act which is made applicable to the recovery proceedingsunder the Debts Recovery Tribunal Act, the confirmation ofsale is also to be made by the Tax Recovery Officer." 89.In PUNJAB NATIONAL BANK V. O.C.KRISHNAN AND OTHERS, ((2001) 6SUPREME COURT CASES 569), the Hon'ble Supreme Court has held asfollows:"The order passed by the Tribunal directing sale of themortgaged property was appealable under Section 20 of theRecovery of Debts Due to Banks and Financial InstitutionsAct, 1993 (for short "the Act"). The High Court ought not tohave exercised its jurisdiction under Article 227 in view ofthe provision for alternative remedy contained in the Act.The correctness of the High Court's decision is not examined https://hcservices.ecourts.gov.in/hcservices/ herein. Whether the order passed by the Tribunal was corrector not has to be decided before an appropriate forum.The Act has been enacted with a view to provide aspecial procedure for Recovery of Debts due to the banks andFinancial Institutions. There is a hierarchy of appealprovided in the Act, namely, filing of an appeal underSection 20 and this Fast-Track procedure cannot be allowed tobe derailed either by taking recourse to proceedings underArticle 226 and 227 of the Constitution or by filing a Civilsuit, which is expressly barred. Even though a provisionunder an Act cannot expressly oust the jurisdiction of theCourt under Articles 226 and 227 of the Constitution,nevertheless, when there is an alternative remedy available,judicial prudence demands that the Court refrains fromexercising its jurisdiction under the said constitutionalprovisions." 90.In the decision UNION OF INDIA AND ANOTHER V. DELHI HIGH COURTBAR ASSOCIATION AND OTHERS, ((2002) 2 M.L.J.122 at page 123 (S.C.)),the Hon'ble Supreme Court has held that 'Sections 25, 28, 29 and 30 ofthe Recovery of Debts Due to Banks and Financial Institutions Act, 1993are not bad in law' and it is also held that "the Tribunals and theAppellate Tribunals will be independent and that the legislation is avalid one."91.Rule 52 of Second Schedule to the Income Tax Act, 1961 empowersthe concerned Officer to attach and then to proceed to sell theproperty and in this regard, he can issue proclamation. Rule 53 enjoinsas to what ought to be the contents of proclamation. One of thenecessary ingredients in the proclamation is the Upset Price/ReservePrice. As per Rule 56, the sale is to be by means of a public auctionand the highest bidder will be given the opportunity of taking theproperty.92.As per Section 30 of the Recovery of Debts Due to Banks andFinancial Institutions Act, 1993, any person aggrieved by an order ofRecovery Officer passed under the Recovery of Debts Due to Banks andFinancial Institutions Act, 1993 has a right of preferring an Appeal tothe Tribunal. As such, a person has an alternative, effective andefficacious remedy before the Tribunal itself. In short, the Recoveryof Debts Due to Banks and Financial Institutions Act, 1993 provides forforum of preferring an Appeal and therefore, one is not supposed to by-pass the procedure by taking recourse to relevant proceeding with aview to avoid and evade the same, in the considered opinion of thisCourt. Indeed, the procedural wrangle cannot be allowed to be shaked orshackled with, in the considered opinion of this Court.93.It is not in dispute that the Petitioner has not takennecessary steps to set aside the Exparte Order dated 31.08.2004 passed https://hcservices.ecourts.gov.in/hcservices/ in O.A.152 of 2003 on the file of the Debts Recovery Tribunal I,Chennai. As per Section 22 (2)(g) of the Recovery of Debts Due toBanks and Financial Institutions Act, 1993, there is a remedy to aparty to file an Application in regard to setting aside any order ofdismissal of any application for default or any order passed by theTribunal or Appellate Tribunal Exparte. In the instant case on hand,the Petitioner has taken necessary steps to set aside the Exparte Finalorder dated 31.08.2004 passed in O.A.152/2003 by the Debts RecoveryTribunal-I, Chennai. The impugned order in the present Writ Petitionrelates to the order of the Fourth Respondent/the Recovery Officer,Debts Recovery Tribunal-I, Chennai dated 03.01.2007 in and by which thePetitioner/Company represented by Managing Director S.Kannan has beengranted one final opportunity to hand over possession of land andbuilding to the Fifth Respondent/Branch Manager, State Bank of India,Ambattur Industrial Estate Branch, Chennai on or before 17.01.2007failing which it has been mentioned that the possession of land andbuilding along with machinery and other movables will be handed over tothe Auction Purchaser at the risk and cost of the Petitioner Company.94.The Upset Price for the sale of property has been fixed at Rs.1Crore and 3 Lakhs. 30 bidders have participated in the auction saleheld on 23.03.2006. The Sixth Respondent/Auction Purchaser has beenthe successful bidder in the auction sale held on 23.03.2006, bypurchasing it at Rs.4 Crores and 10 Lakhs. After removing themovables, the Sixth Respondent has been handed over of the possessionof the property in issue. On the date of auction sale held on23.03.2006, time for payment of balance purchase money has been grantedtill 30.06.2006. The Petitioner's Managing Director has been presenton 30.06.2006. The Petitioner filed W.P.40034 of 2006 challenging theorder dated 31.08.2006 passed by the Recovery Officer in regard to theWrit Schedule property and the said writ petition has been dismissed bythis Court and 20.12.2006 and further, this Court has directed thePetitioner to hand over possession of the Writ Schedule property. Infact, the Petitioner in W.P.40034 of 2006 has challenged the orderdated 31.08.2006 passed by the Recovery Officer and that it has notchallenged the earlier order dated 18.07.2006. The order dated18.07.2006 has been passed by the Fourth Respondent/Recovery Officer,Debts Recovery Tribunal I, Chennai as per Rule 39 of the Income Tax(Certificate Proceedings) Rule 1962 read with Section 29 of the DebtsRecovery Tribunal Act informing the Petitioner about the sale of theproperty to the Sixth Respondent and directing the Petitioner to vacatethe property within seven days. In short, the Petitioner haschallenged the order dated 18.07.2006 passed by the Fourth Respondentbut only assailed the letter dated 31.08.2006 passed by the RecoveryOfficer and in sum and substance, the Petitioner has only challengedthe consequential order sent in reply to the request of the Petitionerrequiring time asking for explanation.95.The order passed in W.P.40034 of 2006 has become final. It is https://hcservices.ecourts.gov.in/hcservices/ to be remembered that the Petitioner filing the present Writ PetitionW.P.10652 of 2009 seeking inter alia one of the reliefs that the orderof the Fourth Respondent dated 03.01.2007 is an invalid one, is hit bythe principle of constructive Res judicata because of the simple factthat it is not open to the Petitioner as it likes to urge one or twopoints every time and this type of the Petitioner's conduct is clearlyin violation of the public policy on which the principle of resjudicata has been founded and certainly it will mean hardship to theother side.96.At this juncture, this Court worth recalls the decision DEVILALMODI V. SALES TAX OFFICER, RATLAM AND OTHERS, wherein in paragraphs 10to 12, it is laid down as follows:"Though the Courts dealing with the questions of theinfringement of fundamental rights must consistentlyendeavour to sustain the said rights and should strike downtheir unconstitutional invasion, it would not be right toignore the principle of Res judicata altogether in dealingwith writ petitions filed by citizens alleging thecontravention of their fundamental rights. Considerations ofpublic policy cannot be ignored in such cases, and the basicdoctrine that judgment pronounced by the Supreme Court arebinding and must be regarded as final between the parties inrespect of matters covered by them must receive dueconsideration.Assessee challenged the validity of sales tax imposedupon him for a particular year by a petition under Art.206.The petition was rejected upon merits. An appeal also wasdismissed by the Supreme Court upon merits. The assessee hadattempted to raise two more additional grounds before theSupreme Court. But the Supreme Court did not allow them onthe ground that they had not been specified in the writpetition before the High Court and had not been raised at anearlier stage. Subsequently by writ petition under Art, 226before the High Court the assessee once again challenged thesame assessment order but on grounds which the Supreme Courthad not permitted to be raised by the assessee in the appealbefore them in the previous writ petition. The High Courtrejected the petition on merits. On an appeal to the SupremeCourt:Held that the second writ petition was barred byconstructive res judicata. (Para 12)The result of the decision of the Supreme Court in theearlier appeal brought by the assessee before it was clearand unambiguous and that was that the assessee had failed tochallenge the validity of the impugned order which had beenpassed against him. In other words, the effect of theearlier decision of the Supreme Court was that the assessee https://hcservices.ecourts.gov.in/hcservices/ was liable to pay the tax and penalty imposed on him by theimpugned order. It would be unreasonable to suggest thatafter this judgment was pronounced by the Supreme Court, itshould still be open to the assessee to file a subsequentwrit petition before the High Court and urge that the saidimpugned order was invalid for some additional grounds. Incase the high Court had upheld these contentions and hadgiven effect to its decision, its order would have beenplainly inconsistent with the earlier decision of theSupreme Court, and that would be inconsistent with thefinality which must attach to the decisions of the SupremeCourt as between the parties before it in respect of thesubject-matter directly covered by the said decision. Ifconstructive res judicata were not applied to suchproceedings. A party could file as many writ petitions as heliked and take one or two points every time. That clearlywas opposed to considerations of public policy on which Resjudicata was based and would mean harassment and hardship tothe opponent. Besides, if such a course were allowed to beadopted, the doctrine of finality of judgments pronounced bythe Supreme Court would also be materially affected. AIR1961 SC 1457, Ref. 1964 SC 1013. Distinguished."97.The Petitioner has to follow Rule 60 and 61 of the SecondSchedule to the Income Tax Act which is a condition precedent forprojecting any application to set aside the auction sale in favour ofthe Sixth Respondent. As per rule 60 of the Second Schedule to theIncome Tax Act, 1960(1), an application to set aside the sale of animmovable property on deposit has to be filed by a party within 30days, from the date of sale and as per Rule 61 of the Second Scheduleto the Income Tax Act, an application to set aside the sale ofimmovable property on ground of non service of notice or irregularitycan be challenged and as per Rule 60(1) (a) of the Second Schedule tothe Income Tax Act, an amount specified in the proclamation of the saleas that for recovery of which the sale was ordered with interestthereon at the rate of 15% p.a. calculated from the date ofproclamation of sale to the date when the deposit is made and further,as per (b) proviso for payment to the Purchaser has penalty a sumequivalent to three but not less than the one Rupee, etc., will have tobe deposited as a pre-condition before projecting any application toset aside the sale but the Writ Petitioner has not adhered to Rule 60(1)(a) and (b) and Rule 61 of the Second Schedule to the Income TaxAct but it has projected the present writ petition by making anendeavour to by pass the said Rules and in fact, the Petitioner hasremained silent after knowing the factum of auction sale, etc.,98.Even when the Fourth Respondent has passed an order on03.08.2007 by giving one final opportunity to the Petitioner in regardto the handing over of vacant possession of the property to the Fifth https://hcservices.ecourts.gov.in/hcservices/ Respondent on or before 17.01.2007, etc., the Petitioner has only senta letter dated 06.01.20076 calling for certain particulars about thesale proceeds but it has not made mention of about the sale of propertyto the Sixth Respondent.99.In this connection, we deem it appropriate to point out thatthe Petitioner's relief in Appeal No.38 of 2007 before the SecondRespondent is only to set aside the order dated 03.01.2007 passed bythe Recovery Officer and the Petitioner has not sought either therelief of auction sale or the confirmation of the sale in favour of theSixth Respondent. As per Rule 57(1) of the Second Schedule to theIncome Tax Act, 25% of the purchase money has to be paid by thePurchaser of the immovable property and as per Rule 57(2) of theSecond Schedule to the Income Tax Act, the full amount of the purchasemoney shall be paid by the Purchaser to the Tax Recovery Officer on orbefore 15th day from the date of sale of the property. In the presentcase, the Sixth Respondent has remitted 25% of the bid amount on dateof auction sale on 23.03.2006 but the Fourth Respondent/RecoveryOfficer, Debts Recovery Tribunal I, Chennai granted time upto30.06.2006 in regard to the payment of the balance amount. The factremains that the Sixth Respondent has paid 75% of the balance amount ofpurchase money on 30.06.2006, long beyond 15 days from the date of saleof the property viz., 23.03.2006. 100.It is true that a Tribunal or the Appellate Tribunal canexercise its discretion for reasons to be recorded in writing but theFourth Respondent/Recovery Officer, Debts Recovery Tribunal I, Chennaihas extended the time limit for payment of the balance amount upto30.06.2006 and although the Sixth Respondent has remitted the balancepurchase money together with poundage fees on 23.06.2006 itself, yetthe discretion is to be exercised by the Fourth Respondent/RecoveryOfficer, Debts Recovery Tribunal I, Chennai in accordance with Rule 57(2) of the Second Schedule to the Income Tax Act by exercising itsincidental or ancillary powers enjoined under the statute.101. To put it precisely, the Rule 57(2) of the Second Schedule tothe Income Tax Act refers to full amount of purchase money to be paidon or before 15th day from the date of sale of property and the samemust be within the purview of Rules conferred by a Statute though aTribunal is entitled to regulate its own procedure.102. Though on the side of the Sixth Respondent, it is contendedthat the Recovery Officer/Fourth Respondent has discretionary powers inapplying the provisions of the Second Schedule to the IncomeTax Act, 1961 such discretion in our opinion must be exercised inconformity of Rules. Even in M.A.76 of 2009, the Writ Petitioner haschallenged in Appeal No.38 of 2007 in DRC.175/2004 in O.A.112/2007dated 16.06.2008. Here again, the Petitioner has no grievance abouteither the bid amount or the public auction. https://hcservices.ecourts.gov.in/hcservices/

103.In view of the fact that the Petitioner has not followed Rule60 and 61 of the Second Schedule to the Income Tax Act, 1961 in notfiling an application to set aside the auction sale dated 23.03.2006 isnot entitled to project the present writ petition seeking to quash theorder of the Fourth Respondent dated 03.01.2007 in D.R.C.No.175 of2004 in O.A.No.152 of 2003 on the file of the Debts Recovery Tribunal-I, Chennai, the order of the second Respondent dated 16.06.2008 inAppeal No.38 of 2007 on the file of the Debts Recovery Tribunal-III,Chennai, the order of the First Respondent dated 23.04.2009 inM.A.No.76 of 2009 on the file of the Debts Recovery Appellate Tribunal,Chennai and consequently to direct the Respondents 1 to 4 in settingaside the sale in favour of the Sixth Respondent of the Petitioner'sproperty mentioned in the schedule of the present Writ Petition,etc., Moreover, the Petitioner has an alternative, effective remedy ofquestioning the auction sale held on 23.03.2006 under the Recoveryof Debts Due to Banks and Financial Institutions Act, 1993. Withoutexhausting the said remedy, it is not open to the Petitioner to projectthe present Writ Petition after a gap of more than 3 years and 3 monthsfrom the date of conduct of an Auction sale dated 23.03.2006. Even inrespect of an Auction sale dated 23.03.2006 (which is said to be a voidone on the side of the Petitioner) the strict adherence to the Rule 60and 61 of the Second Schedule to the Income Tax Act, 1961 is to becomplied with by the Petitioner. Admittedly, the Petitioner cannotderail the fast track procedure enunciated under the Recovery of DebtsDue to Banks and Financial Institutions Act, 1993. The validity orinvalidity of Auction Sale dated 23.03.2006 or what is the effect ofAuction sale dated 23.03.2006 and what right has accrued to the SixthRespondent/Auction Purchaser are all these points are only to be raisedby either of the parties under the Recovery of Debts Due to Banks andFinancial Institutions Act, 1993, the Rules framed thereunder and alsoas per Rule 60 and 61 of of the Second Schedule to the Income Tax Act,1961. Looking at from point of view, the Writ Petition filed by thePetitioner is not per se maintainable. Viewed in that perspective, theWrit Petition fails.104. In the result, the Writ Petition is dismissed leaving theparties to bear their own costs. It is made clear that the dismissalof the present writ petition will not preclude the Petitioner toagitate the auction sale held on 23.03.2006 before the competent forumas per the Recovery of Debts Due to Banks and Financial Institutions https://hcservices.ecourts.gov.in/hcservices/ Act, 1993 and the Rules framed thereunder and also by complyingwith the Rule 60 and 61 of the Second Schedule to the Income Tax Act,1961 and seek appropriate remedy thereto in the manner known to law, ifso advised. The connected miscellaneous petitions are closed.Sd/Asst.Registrar/true copy/Sub Asst.RegistrarvriTo1.The Chairman,Debts Recovery Appellate Tribunal, Chennai.2.The Presiding Officer,Debts Recovery Tribunal-III, Chennai.3.The Recovery Officer, The Debts Recovery Tribunal-III, Chennai.4.The Recovery Officer, The Debts Recovery Tribunal-I, Chennai.5.The Branch Manager,State Bank of India,Ambattur Industrial Estate Branch,Chennai-6000 058.+1cc to M/s. Sai, Bharath & Ilan, Advocate Sr 86709+1cc to Mr.John Acquinas, Advocate Sr 86689+2ccs to M/s. Ramalingam & Associates Advocate Sr 86862KSK(CO)km/20.12.W.P.10652 OF 2009