Nazims Continental rep. by its partners v. The Indian Overseas Bank Triplicane Branch Madras

1. P.Stanley Buck2. P.Seethammal3. Karthikeyan.. RespondentsWrit Petition filed for the issuance of a writ of certiorarifiedmandamus to call for the records in proceedings M.A. No.126/2007 inAppeal 2/2007 in I.A. No.1/2007 in DRC 52/2005 in OA 345/2003:DRT-I,Chennai, on the file of the 3rd respondent dated 6th May, 2008, quashthe same as illegal, incompetent and without jurisdiction and furtherset aside the sale held on 7th June, 2006, as stated therein.Civil Revision Petition filed against the order dated 19th Aug.,2008 made in I.A. No.2039/08 in Appeal No.7/2008 on the file of theDebts Recovery Tribunal, Coimbatore, as stated therein.For Petitioners : Mr. V.Ragavachari, for M/s.A.Ramakrishnan in WP 13210/08 Mr. Krishna Srinivasan for M/s. Ramasubramaniam Associates in CRP(PD)3144/08 For Respondents : Mr. F.B.Benjamin George for R-1 in WP 13210/08 Mr. P.Sreenivasalu for R-2 in WP 13210/08 Mr. M.S.Krishnan, SC for M/s.Sarvabhauman Associates for RR-1 & 2in CRP(PD)3144/08 Mr. Ananda Gomathy Sivakumar for R-3 inin CRP(PD)3144/08WP.13210/08 : R5 - NA R4 - Not readyCOMMON ORDERS.J.MUKHOPADHAYA, J.There being common question of law involved in both the cases,though they were heard separately, they are disposed of by thiscommon judgment.2. The borrower is the petitioner in W.P. No.13210/08. Whileraising question of upset price of valuation of property, theborrower has raised question of jurisdiction of recovery officer todecide a petition to set aside the sale made pursuant to the Recoveryof Debts due to Banks and Financial Institutions Act, 1993(hereinafter referred to as 'Act, 1993') under Rule 61 of the 2ndSchedule to the Income Tax Act (hereinafter referred to as 'Rule61'). According to the petitioner, such a petition to set aside thesale under the Act, 1993, is maintainable u/s 30 of the Act and notunder Rule 61. https://hcservices.ecourts.gov.in/hcservices/ In C.R. P. No.3144/08, Indian Bank has challenged the order ofthe Debts Recovery Tribunal, Coimbatore, dated 19th Aug., 2008,staying further proceeding and confirmation of sale of scheduleproperties u/s 30 of the Act, 1993. One of the ground was taken thatthe requisite amount in terms with Rule 60 of the 2nd Schedule to theIncome Tax Act (hereinafter referred to as 'Rule 60') was notdeposited.The borrowers, respondents 1 and 2, took plea that anapplication for confirmation was made against void sale made underRule 63 of the 2nd Schedule to the Income Tax Act (hereinafterreferred to as 'Rule 63') and a prior stage like Rule 60 and 61cannot be made applicable for petition under Rule 63. Further,according to them, Section 30 fo the Act, 1993, does not contemplateany deposit of either of the decreetal amount or purchase amount.3. The questions involved for determination in these casesare :-a) Whether to set aside a sale deed issued pursuant to Act,1993, application under Rule 60 or 61 are maintainable or both underthe aforesaid rules and Section 30 of the Act, 1993.b) Whether pre-deposit of proclamation of sale amount withinterest thereon, as stipulated under Rule 60, is also applicable forsetting aside a sale deed under rule 61 or Section 30 of the Act,1993.4. Learned counsel for the petitioner in W.P. No.13210/08submitted that the recovery officer draws power to execute thedecree, including power to sale u/s 25 of the Act, 1993 under thesupervision of the Tribunal, which is empowered to issue suitabledirections under Rules 26 and 27 of the DRT Rules. According to theborrower, the petitioner of W.P. No.13210/08, in view of non obstanteclause contained u/s 30 of the Act, 1993, brought into force by theRecovery of Debts due to Financial Institutions Amendment Act, 2001,which makes Section 29 and most of the rule under the 2nd Schedule tothe Income Tax Act redundant or otiose. Even a sale certificateissued by the recovery officer is an order of the recovery officerand, hence, only a petition u/s 30 of the Act is maintainable and notunder Rules 60 or 61. Therefore, the question of pre-deposit underRule 61 does not arise nor for filing a petition u/s 30 of the Act,1993.Per contra, according to the Bank, if such interpretation isgiven, it would defeat the very object of the enactment of the Act,1993. The amended Section 30 does not make Section 29 otiose.Section 25 is a substantial provision empowering the recovery officerto execute the recovery certificate and make the provisions of 2nd and3rd Schedule of the Income Tax Act applicable to the proceeding beforethe recovery officer. The procedure followed under the 2nd Scheduleto be followed by the recovery officer in addition to the procedure https://hcservices.ecourts.gov.in/hcservices/ laid down under the Act and the Rules framed thereunder to the extentit is not contrary.5. Learned counsel for the bank while relied on decision ofSupreme Court in Transcore – Vs – Union of India (2006 (5) CTC 756)to show that the NPA Act is a complete code by itself for recovery ofdebt. It was submitted that a separate provision has been made underthe Act, 1993, wherein, Section 30 is the appellate forum against anyorder passed by recovery officer. He also referred to Supreme Courtdecision in Union of India and Anr. - Vs – Delhi High Court BarAssociation (2002 (3) SCC 275 :: AIR 2002 SC 1479) to show that thejurisdiction of the recovery officer is exclusive for the purpose ofexecution of adjudication order. Reliance was placed on SupremeCourt decision in Allahabad Bank – Vs – Canara Bank (2000 (4) SCC406).Counsel for the bank submitted that the Act, 1993, providesentertaining a counter claim and set-off on the claim of othersecured creditors, as evident from the amended Act No.1 of 2000. U/s19 (19), Tribunal is empowered to pass an order for distribution ofthe sale proceeds amongst secured creditors in accordance withSection 529-A of the Companies Act. To set aside a sale, therelevant rule is Rule 61, which differentiates between a defaulterand a third party enabling a defaulter or any person interested tofile an application to set aside the sale only on the ground of non-service of notice or irregularity, but sub-rule (b) of Rule 61 makesit clear that in case of defaulter no such application could beentertained unless he deposits the amount recoverable from him inexecution of the certificate. In other words, if appeal is filed bythird party, pre-deposit is not required. For the purpose of Act,1993, the Section 17 of Securitisation and Reconstruction ofFinancial Assets and Enforcement of Security Interests Act, 2002(hereinafter referred to as 'NPA Act') cannot be pressed into servicefor construing the word “any person”. So far as Section 29 isconcerned, according to counsel for the Bank, is a non-obstanteclause, which does not mean that the whole Act to be made applicableor not applicable and it is for the Court to avoid the conflict forharmonious construction of the provision as per Supreme Courtdecision in Union of India – Vs – I.C. Lala (AIR 1973 SC 2204). Thusthe stand taken by the Bank is that Section 30 do not take away thepower of the Recovery Officer to adjudicate application under Rule61, particularly when Rule 73 of Act, 1993 mandates the RecoveryOfficer to follow the principles of natural justice.6. In C.R.P. No.3144 of 2008, Indian Bank is the petitioner,which has challenged the order dated 19th Aug., 2008, passed by theDebts Recovery Tribunal, Coimbatore, staying confirmation of sale ofschedule property and the proceeding before the Recovery Officer. Inthe said case, respondents 1 and 2, borrowers have alleged theconfirmation of sale as illegal and void. According to counsel for1st and 2nd respondent-borrowers, the present case is that of illegalconfirmation of sale amounting to void sale. Rule 63 does not https://hcservices.ecourts.gov.in/hcservices/ provide for any remedy against illegal or void confirmation. Rules60 and 61 of 2nd Schedule to IT Act, which provides for setting asidethe sale are stages prior to Rule 63. Therefore, against the orderof confirmation, as distinct from sale, only application u/s 30 ofAct, 1993 is applicable. Neither rule 63 of 2nd Schedule nor Section30 contemplates pre-deposit of decreetal amount or purchase money.Therefore, an appeal filed without pre-deposit is maintainable.Learned counsel relied on common judgment dated 10th July, 2008,in W.P. Nos.19833 and 31170 of 2007, which was filed against saleproceed covered under Rules 56, 60 and 61 and not under Rule 63,which pertains to confirmation of sale.Learned counsel specifically relied on Rule 60 of 2nd Schedule,which stipulates mandatory deposition of sale amount to entertain anappeal. Referring Rule 61 of 2nd Schedule, it was submitted that thedeposit of entire amount is not mandatory and he relied on DivisionBench decision of this Court in Hanu Reddy Realty India Pvt. Ltd. -Vs – Jignesh & Ors. (2008 (3) LW 114 :: 2008 (1) CTC 721), wherein atpara-21 the Court observed as follows :-"There is no condition for pre-deposit for makingan application under Section 61 unlike theapplication under Section 60, which requires paymentof the amount shown in the proclamation of sale alongwith 5% of the purchase money payable to the auctionpurchaser."It was submitted that in the present case of respondents 1 and2, the sale being a nullity, as distinguished from irregularity, itwould be very onerous to expect the defaulter to pay the entireamount before getting the sale set aside on the ground that it is anullity.The maintainability of the revision application was alsochallenged.7. We have heard the learned counsel for the parties and perusedthe records.8. For determination of the issue, it is relevant to noticerelevant provisions as discussed hereunder :-On 27th Aug., 1993, the Act, 1993 was enacted to provide forestablishment of Tribunals for expeditious adjudication and recoveryof dues due to Banks and Financial Institutions. After about nineyears, NPA Act was enacted to regulate securitisation andreconstruction of financial assets and enforcement of securityinterests to enable the Banks and Financial Institutions to realiselong term assets, manage problems of liquidity, asset liabilitymismatch and improve recovery by exercising powers to take possessionof securities, sell them and reduce the non-performing assets by https://hcservices.ecourts.gov.in/hcservices/ adopting measures for recovery or reconstruction. It providedsetting up of Asset Reconstruction Companies, etc. In Transcore – Vs– Union of India (2006 (5) CTC 753), Supreme Court observed that NPAAct is not inherently or impliedly inconsistent with Act, 1993 interms of remedy for enforcement of securities. Amendments werebrought u/s 19 of Act, 1993 and NPA Act was brought at par with OrderXXIII of the Code of Civil Procedure, 1908. Proviso to Section 19(1) was introduced under Act, 1993, to make it more effective thanthe provisions, which were akin to Order XXIII. U/s 19, while theTribunal adjudicates the quantum of amount recoverable in favour ofthe Bank and Financial Institutions from the defendants, includingthe borrowers, it has power to recover the same by auction sale ofproperty, but Tribunal is not vested with power u/s 19 to restore theproperty in favour of the borrower or other defendants by putting theclock back, restoring status quo ante, though such power is vestedwith the Tribunal u/s 17 of NPA Act if the borrower is dispossessedfrom the secured asset or action taken for possession or sale ofproperty u/s 13 (4) is not in accordance with NPA Act or the rulesframed thereunder.There is a difference in the manner of sale of property u/s 19of Act, 1993 and sale of property u/s 13 (4) of NPA Act. U/s 19 ofAct, 1993. While Tribunal first adjudicates the quantum of amountrecoverable from the defendant in favour of the Banks/FinancialInstitutions, followed by auction sale of the scheduled property inappropriate case, such determination of recovery of quantum of amountis not made by Tribunal under NPA Act, at the initial stage, butclaim is determined by Banks/Financial Institutions u/s 13 (2) r/wSection 13 (3) and Section 13(3-A) of the NPA Act and if finally itdetermines that amount is recoverable, action is taken u/s 13 (4) ofNPA Act. It is only thereafter the borrower or the aggrieved personsmove u/s 17 of NPA Act and not the Banks or the FinancialInstitution. That is the reason, while application is filed u/s 17of NPA Act, the Tribunal is vested with power to restore the propertyin favour of the borrower/aggrieved person by putting the clock backby restoring status quo ante, if action u/s 13 (4) is against theprovisions of the NPA Act or the rules framed thereunder, but asquantum of amount recoverable in favour of the Bank/FinancialInstitution from the defendant, including the borrower is determinedby the Tribunal u/s 19 of the Act, 1993, for setting aside the sale,a party is required to file application either u/s 30 of NPA Act orrules under 2nd Schedule of IT Act.9. U/s 13 (8) of NPA Act, the borrower gets opportunity to sellor transfer of secured asset if all the costs, charges and expensesincurred by the secured creditor is tendered before the date fixedfor sale, but no such provision has been made under Act, 1993 exceptin appropriate cases the Tribunal may defer the sale if any prayer ismade u/s 19. Therefore, a special provision was made to challengethe sale under 2nd Schedule of IT Act r/w Section 29 of Act, 1993followed by Section 30 notice by amendment of Act, 1993. https://hcservices.ecourts.gov.in/hcservices/

10. 2nd Schedule of IT Act relates to 'Procedure for Recovery'.While Part-I is the “general provision”; Part-II relates to'attachment of sale of movable property' and Part-III relates to'attachment and sale of immovable property'. Rule 48 of Part-III of2nd Schedule relates to 'attachment'; Rule 49 relates to 'service ofnotice of attachment'; Rule 50 relates to 'proclamation ofattachment'; Rule 51 relates to 'attachment to relate back from thedate of notice'; Rule 52 relates to 'sale and proclamation of sale';Rule 53 relates to 'contents of proclamation'; Rule 54 relates to'mode of making proclamation', but the aforesaid provisions of Part-III of 2nd Schedule cannot override the specific provisions underChapter V of Act, 1993, including Section 25, as it deals with modeof recovery of debt only by way of three modes, namely, a) Attachment and sale of movable or immovableproperty of the defendant;b) Arrest of the defendant and his detention inprison ; andc) Appointing a received for the management of themovable or immovable properties of the defendant.Rule 55 (Part-III) of 2nd Schedule relates to 'time of sale',however, u/s 27 of the Act, 1993, even after issuance of certificateof recovery of amount, the Presiding Officer is empowered to grantfurther time for payment of the amount; the recovery officer is alsoempowered to stay the proceeding until the expiry of the time sogranted. Therefore, it is clear that Rule 55 of 2nd Scheduleprescribing a 'time of sale' is not mandatory for recovery of debtunder Act, 1993 and we hold accordingly.11. Rule 56 (Part-III) of 2nd Schedule deals with 'sale to bemade by public auction' to the highest bidder, subject toconfirmation by the recovery officer; Rule 57 deals with 'deposit bypurchaser and re-sale in default'. Rule 58 relates to 'procedure indefault of payment'; Rule 59 relates to 'authority to bid'. Inabsence of any specific provision in this regard made under the Act,1993, we hold that Rules 56, 57, 58 and 59 is also applicable in acase of sale of immovable property under the Act, 1993.Rule 60 (Part-III) of 2nd Schedule empowers the Recovery Officerto set aside the sale of immovable property on deposit of requisiteamount (emphasis supplied) , which reads as follows :-"Application to set aside sale of immovable propertyon deposit.60. (1) Where immovable property has been sold inexecution of a certificate, the defaulter, or anyperson whose interests are affected by the sale, may,at any time within thirty days from the date of thesale, apply to the Tax Recovery Officer to set aside https://hcservices.ecourts.gov.in/hcservices/ the sale, on his depositing --(a) the amount specified in the proclamation of saleas that for the recovery of which the sale wasordered, with interest thereon at the rate of[fifteen percent per annum], calculated from the dateof the proclamation of sale to the date when thedeposit is made; and(b) for payment to the purchaser, as penalty, a sumequal to five per cent of the purchase money, but notless than one rupee.(2) Where a person makes an application under rule 61for setting aside the sale of his immovable property,he shall not, unless he withdraws that application,be entitled to make or prosecute an application underthis rule."The other provision to set aside sale of immovable property isRule 61, which can be made only on the ground of 'non-service ofnotice' or 'irregularity', as quoted hereunder :-"Application to set aside sale of immovable propertyon ground of non-service of notice or irregularity.61. Where immovable property has been sold inexecution of a certificate, [such Income-tax Officeras may be authorised by the Chief Commissioner orCommissioner in this behalf], the defaulter, or anyperson whose interests are affected by the sale, may,at any time within thirty days from the date of thesale, apply to the Tax Recovery Officer to set asidethe sale of the immovable property on the ground thatnotice was not served on the defaulter to pay thearrears as required by this Schedule or on the groundof a material irregularity in publishing orconducting the sale :Provided that -- (a) no sale shall be set aside on any such groundunless the Tax Recovery Officer is satisfied that theapplicant has sustained substantial injury by reasonof the non-service or irregularity; and(b) an application made by a defaulter under thisrule shall be disallowed unless the applicantdeposits the amount recoverable from him in theexecution of the certificate."12. From Rule 60, it will be evident that application to setaside sale of immovable property on any ground can be made by the https://hcservices.ecourts.gov.in/hcservices/ defaulter or any person, whose interests are affected by the sale,within 30 days from the date of sale. In such case, the amountspecified in the proclamation of sale with interest thereon @ 15%p.a., from the date of proclamation of sale to be deposited apartfrom payment of penalty @ 5%.Per contra, under rule 61, any person, whose interests areaffected, may, apply within 30 days to set aside the sale ofimmovable property only on the ground of 'non-service of notice' or'irregularity' and has to show that notice was not served on thedefaulter to pay the arrears as required by the schedule or on theground of a material irregularity in publishing or conducting thesale. However, no sale can be set aside on any of such ground unlessthe recovery officer is satisfied that the applicant has sustained"substantial injury" by reasons of non-service or irregularity. Suchapplication made by defaulter under rule 61 is to be disallowedunless the DEFAULTER deposits the amount recoverable from him in theexecution of the certificate. (Emphasis added).13. Therefore, 'in the case of a defaulter', for filing apetition under Rule 61 to set aside the sale of immovable property,the defaulter is required to deposit the 'amount recoverable from himin the execution of the certificate', as distinguished from the'amount specified in the proclamation of sale' as stipulated underRule 60. Under Rule 61, only if a person, whose interests isaffected by sale, but is not a defaulter, is not liable to make anypre-deposit to set aside the sale of immovable property.14. Similar matter fell for consideration before a DivisionBench of this Court in Sakura Prime Tanning Company - Vs – CentralBank of India & Ors. in W.P. No.14581/06, disposed of on 28th Sept.,2007, wherein the Court held as follows :-"3. The provisions of the Second Schedule to IncomeTax Act, 1961 is applicable in this case in view ofSection 29 of the Recovery of Debts due to Banks andFinancial Institutions Act, 1993. Rule 60 to theSecond Schedule of Income Tax Act, 1961, whilepostulates time limit to file application to setaside the sale, under Clause (b) of Proviso to Rule61 to the Second Schedule of the Income Tax Act,1961, an application made by the defaulter under therule cannot be allowed unless the defaulter depositsthe amount recoverable from them in the execution ofthe certificate."In another case of M/s.Indian Bank – Vs – Stanfrose Agvet Farms,W.P. No.19833/07 and analogous cases, a Division Bench, by itsunreported judgment dated 10th March, 2008, held as follows :-"13. Under Section 30 of the RDB Act, 1993, appealcan be preferred against the order of the Recovery https://hcservices.ecourts.gov.in/hcservices/ Officer within 30 days' from the date on which copyof such order is issued. As the borrowers intended tochallenge the auction-sale pursuant to the orderpassed by the Recovery Officer, it was open for themto prefer such appeal under Section 30, but suchappeal could have been only before the DRT and notbefore the DRAT.14. Under Section 29 of the RDB Act, 1993, theprovisions of Second and Third Schedule to the IncomeTax Act, 1961 are applicable, as far as possible.Under Rule 60 of the Second Schedule to the IncomeTax Act, 1961, it is mandatory to deposit the amountspecified in the proclamation of sale as that for therecovery of which sale was ordered with interestthereon, at the rate prescribed under the said Rulesfor setting aside the sale of immovable property."15. The provisions of rule 60 and 61 fell for considerationbefore a Division Bench this Court in Hanu Reddy Realty India Pvt.Ltd. - Vs – Jignesh & Ors. (2008 (3) LW 114 :: 2008 (1) CTC 721).Having noticed the provision of Rules 60 and 61, the Bench observed--"There is no condition of pre-deposit for making anapplication under rule 61 unlike an application underRule 60, which required payment of the amount shownin the proclamation of sale along with 5% of thepurchase money payable to the auction purchaser."We have already discussed Rules 60 and 61 (Part-III) of 2ndSchedule of the Income Tax Act and the difference between the saidrules. It is true that there is no condition of pre-deposit formaking an application under Rule 61 unlike an application under Rule60, but such observation made in Hanu Reddy Realty India Pvt. Ltd.(supra) is applicable only to a person whose interests are affectedby sale but is not a defaulter, the observation aforesaid is notapplicable to a defaulter. As the aforesaid distinction between anyperson and a defaulter has not been deliberated nor discussed byDivision Bench in Hanu Reddy Realty India Pvt. Ltd. (supra), we holdthe said judgment per incurium, not applicable to a defaulter. Adefaulter cannot derive advantage of the judgment in Hanu ReddyRealty India Pvt. Ltd. (supra) in an application under Rule 61.16. Under Rule 62 of 2nd Schedule, the purchaser can apply torecovery officer to set aside the sale on the ground that thedefaulter has no saleable interest in the property sold. No pre-deposit condition laid down therein as the purchaser supposed to havepaid the amount of sale proceed. Rule 63 relates to confirmation ofsale where no application is made for setting aside the sale u/s 60or 61 or when such application made is disallowed, the sale could beconfirmed, which becomes absolute. Rule 64 relates to return ofpurchase money in certain cases whereas Rule 65 deals with sale https://hcservices.ecourts.gov.in/hcservices/ certificate of immovable property where sale has become absolute.In absence of any corresponding provision under the Act, 1993 orrules framed thereunder, we hold that Rules 62, 63, 64 and 65 of 2ndSchedule of Income Tax Act, 1961, still holds the field. 17. Rule 66 of of 2nd Schedule empowers the recovery officer topostpone sale to enable defaulter to raise amount due undercertificate. The presiding officer of the Tribunal is also empoweredto stay proceeding under certificate and amendment or withdrawalthereof of certificate by granting time for payment of the amount,whereupon the recovery officer is to stay the proceeding until expiryof the time so granted. If such order is passed under sub-section(2) of Section 27 of the Act, 1993, the Presiding Officer to informsuch order to the recovery officer. The Presiding Officer of theTribunal is also liable to modify the certificate of recovery evenafter receipt of same by recovery officer if the amount ofoutstanding demand is reduced or enhanced as a result of appeal byAppellate Tribunal in view of sub-sectiuon (4) of Section 27 of Act,1993. Section 28 deals with other modes of recovery by recoveryofficer, which being not conflicting to the procedure prescribedunder Part-III of II Schedule, except to the extent as discussedabove, both could be applied simultaneously, but in case of anycontradiction, the procedure of recovery prescribed under the DRT Actshall prevail over the procedure of recovery by way of sale ofmovable or immovable property prescribed under II Schedule of IncomeTax Act.18. By virtue of Section 29 of Act, 1993, the provisions of 2ndand 3rd Schedule if IT Act, 1961 and Income Tax (CertificateProceedings) Rules, 1962, were made applicable for realisation ofdues by recovery officer. At that stage, there was no other mode ofrecovery except the under Chapter V (Sections 25 to 28) and the Rulesunder 2nd and 3rd Schedule of Income Tax Act, 1961 r/w Income Tax(Certificate Proceedings) Rules, 1962. Subsequently, Section 30 ofAct, 1993, was substituted w.e.f. 17th Jan., 2000. to prefer appealagainst order of recovery officer within 30 days before DRT.19. In the case of Union of India – Vs – Delhi High Court BarAssociation (2002 (4) SCC 275 :: AIR 2002 SC 1479), the Supreme Courtnoticed Section 29 and Section 30 substituted vide Amendment Act 2000and held as follows :-“30. By virtue of Section 29 of the Act, theprovisions of the Second and Third Schedules to theIncome Tax Act, 1961 and the Income Tax (CertificateProceedings) Rules, 1962, have become applicable forthe realisation of the dues by the Recovery Officer.Detailed procedure for recovery is contained in theseSchedules to the Income Tax Act, including provisionsrelating to arrest and detention of the defaulter. Itcannot, therefore, be said that the Recovery Officerwould act in an arbitrary manner. Furthermore, https://hcservices.ecourts.gov.in/hcservices/ Section 30, after amendment by the Amendment Act,2000, gives a right to any person aggrieved by anorder of the Recovery Officer, to prefer an appeal tothe Tribunal. Thus now an appellate forum has beenprovided against any orders of the Recovery Officerwhich may not be in accordance with law. There is,therefore, sufficient safeguard which has beenprovided in the event of the Recovery Officer actingin an arbitrary or an unreasonable manner. Theprovisions of Sections 25 and 28 are, therefore, notbad in law.”20. In view of the provisions of law and finding of the Courtand discussions made above, we hold that the recovery officer hasalso jurisdiction to entertain an application under rules 60, 61 and62 of Part-III of 2nd Schedule to the Income Tax Act and in case anyperson is aggrieved against such order, may prefer appeal u/s 30 ofthe Act, 1993. As the defaulter or any person whose interests areaffected by sale is supposed to pay the pre-deposit amount under Rule60 and a defaulter required to pay pre-deposit amount under Rule 61except the person whose interests are affected due to non-service ofnotice on defaulter to pay the arrerars or material irregularity inpublishing or conducting the sale should apply under Rule 61 or thepurchaser, who may file application under Rule 62, who are not liableto pre-deposit any amount, in such case, for preferring an appeal u/s30 of Act, 1993, against an order of recovery officer under Rules 60,61 or 62, no pre-deposit amount required to be deposited.21. Section 30 starts with non obstante clause, as evident fromthe said provision and quoted hereunder :-"30. Appeal against the order of Recovery Officer. (1) Notwithstanding anything contained in section29, any person aggrieved by an order of the RecoveryOfficer made under this Act may, within thirty daysfrom the date on which a copy of the order is issuedto him, prefer an appeal to the Tribunal.(2) On receipt of an appeal under sub-section (1),the Tribunal may, after giving an opportunity to theappellant to be heard, and after making such enquiryas it deems fit, confirm, modify or set aside theorder made by the Recovery Officer in exercise of hispowers under sections 25 to 28 (both inclusive)."In the case of Union of India – Vs – I.C.Lala (AIR 1973 SC2204), Supreme Court held that non obstante clause does not mean thatthe whole of the said provision of law has to be made applicable orthe whole of the other law has to be made inapplicable. It is theduty of the Court to avoid the conflict and construe the provisionsto that they are harmonious. https://hcservices.ecourts.gov.in/hcservices/

22. Mode of recovery of debt is prescribed u/s 25 of DRT Act, asquoted hereunder :-"25. Modes of recovery of debts. - The RecoveryOfficer shall, on receipt of the copy of thecertificate under sub-section (7) of section 19,proceed to recover the amount of debt specified inthe certificate by one or more of the followingmodes, namely:-(a) attachment and sale of the movable or immovableproperty of the defendant;(b) arrest of the defendant and his detention inprison;(c) appointing a receiver for the management of themovable or immovable properties of the defendant."From the aforesaid provision it will be evident that apart fromattachment and sale of movable or immovable property of thedefendant, the recovery officer, under the said provision, mayproceed to recover the amount of debt by arresting the defendant andhis detention in prison or by appointing a receiver for themanagement of the movable or immovable properties of the defendant.Those two provisions made under clauses (b) and (c) of Section 25cannot be challenged before the Recovery Officer under II or IIISchedule of Income Tax Act. Therefore, except by preferring anapplication (appeal) u/s 30 against the order of recovery officer,any aggrieved person has no other option. It cannot be said that forsale of movable or immovable property as made under II Schedule toIncome Tax Act, including Rules 60 or 61 or 62 of Part-III of IISchedule, then by way of appeal only u/s 30 could be preferred and nosuch appeal could be preferred directly against the order ofattachment and sale of movable or immovable property of thedefendant, if recovery officer pass such order u/s 25. Therefore, wehold that against the order of attachment and sale of movable orimmovable property of defendant, who are the defendants before theTribunal, an aggrieved person, instead of moving application underRule 60 of 61 or 62, may also prefer an application (appeal) u/s 30of the Act, 1993. Therefore, there being a concurrent jurisdiction,DRT u/s 30 and recovery officer under Rules 60, 61 and 62 of Part-IIIof II Schedule of Income Tax Act in regard to movable property andjurisdiction of Tribunal under Part-II of II Schedule of Income TaxAct in regard to movable property, application of any defendantcannot be entertained by Tribunal u/s 30 without pre-deposit of theamount in terms with Rules 60 or 61 bypassing the jurisdiction of therecovery officer under the aforesaid provisions of II Schedule ofIncome Tax Act. Further, the auction purchaser being not a defendantin the original application u/s 19, cannot file an appeal u/s 30against the order of recovery officer, if it intends to prefer an https://hcservices.ecourts.gov.in/hcservices/ application, if under the provision of Rule 62 of Part-III of IISchedule to Income Tax Act. 23. So far as W.P. No.13210/08 is concerned, the borrower is thepetitioner. He raised the question of upset price of valuation ofproperty and jurisdiction of the recovery officer under Rules 60 and61 of Part-III of II Schedule to Income Tax Act. They preferredapplication under Rule 61 of Part-III of II Schedule to Income Taxbefore the recovery officer to set aside the sale without complianceof pre-deposit amount. For the said reason, amount having notdeposited as per Rule 61, the application to set aside was dismissedagainst which they preferred appeal before the Debts RecoveryAppellate Tribunal, which has also been dismissed by the AppellateTribunal vide impugned order dated 6th May, 2008.First of all, it is the appellant, who preferred appeal underRule 61 and, therefore, they cannot say the recovery officer has nojurisdiction to pass order under Rule 61 and the appeal to set asidethe sale is only maintainable u/s 30 of the 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 the amount inview of proviso to Rule 61. The petitioners being the defendant-borrowers, as they failed to comply by pre-depositing the amount, wehold that the recovery officer rightly rejected the application underRule 61 preferred by borrowers and the Appellate Tribunal rightlyaffirmed the same.24. So far as CRP No.3144/08 is concerned, the revisionapplication has been preferred by Indian Bank against interim orderof Debts Recovery Tribunal, Coimbatore, passed u/s 19 (25) of Act,1993. In this case, one time settlement was agreed between theparties and sale, which was fixed was conducted. The matter moved upon appeal before the Appellate Tribunal, wherein certain orders werepassed and being aggrieved, the bank moved a petition before the HighCourt on the ground that the appeal before the Appellate Tribunal wasnot maintainable, but appeal against sale should have been preferredbefore the recovery officer. The High Court passed order in favour ofthe Bank as appeal against sale was not maintainable before theAppellate Tribunal. Thereafter, an appeal was preferred u/s 30against order of recovery officer, but it was not filed within 30days because of the pendency of the writ petition and after disposalof the writ petition before preferring the application u/s 30, therecovery officer confirmed the sale. Against the said order, therespondent-borrowers preferred appeal, wherein an application u/s 19(25) was filed by the borrowers and prayed for staying theproceeding. The Bank appeared and brought to the notice of theTribunal that sale has been confirmed on 13th Aug., 2008 and time wassought for to file reply and in that view of the matter, the Tribunalpassed interim order on 19th Aug., 2008 in I.A. No.2039/08 u/s 19 (25)of the Act, 1993 in Appeal No.7/08, (appears to have been filed u/s https://hcservices.ecourts.gov.in/hcservices/ 30).25. There is nothing on the record that for setting aside thesale the borrowers deposited any amount as pre-deposit as requiredunder Rules 60/61 r/w Section 30 as required under the law and heldby us in the preceding paragraph. In absence of such deposition ofamount as pre-deposit to set aside the sale or confirmation of sale,the impugned order dated 19th Aug., 2008, cannot be upheld. However,if pre-deposit amount is deposited within 30 days, it will be open tothe Tribunal to pass final order in the appeal u/s 30 made to setaside the sale, if found illegal or against law or if perverse.26. In view of our finding, while we dismiss W.P. No.13210/08,but set aside the order dated 19th Aug., 2008 in I.A. No.2039/08 inAppeal No.7/08 and allow C.R.P. (PD) No.3144/08 preferred by IndianBank. However, there shall be no order as to costs. Consequently,connected miscellaneous petitions are closed. Sd/- Asst. Registrar / True Copy / Sub.Asst Registrar GLNTo.1.The Indian Overseas Bank,Triplicane Branch,Madras - 5.2.The Debts Recovery Appellate Tribunal,Chennai-2.3.The Debts Recovery Tribunal,Coimbatore.+ 1 CC to Mr.K.A.Ramakrishnan,Advocate,SR.18956+ 1 CC to Mr.F.B.Benjmin George,Advocate,SR.19229+ 1 CC to Mr.P.Sreenivasulu,Advocate,SR.19622+ 2 CC to M/s.Sarvabhauman Associates,SR.19270 W.P. NO. 13210 OF 2008 AND C.R.P. (PD) NO.3144 OF 2008 KV(CO)EM/26.5