N.THANGAVELU V. UNION OF INDIA AND OTHERS

WP(C)/19018/2010

AI Insights

The case involves N. Thangavelu, the petitioner, who defaulted on a credit facility from the Bank of India, leading to the initiation of recovery proceedings by the Debt Recovery Tribunal (DRT). The petitioner's property was sold in a public auction. Subsequent legal challenges by the petitioner regarding the sale's irregularity were dismissed by the DRT, leading to this writ petition. The High Court of Kerala, after considering the statutory appellate remedies available, dismissed the writ petition but allowed for an appeal against the DRT's order.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 722463 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 19-10-2010
• Assessment Year: misc
• Other Referred Cases: W.P.(C) No.14775/2009, W.P.(C) No.30417/2009
• Laws Referred To: Recovery of Debts Due to Banks and Financial Institutions Act, 1993, Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: MINI MENON; DEVAN RAMACHANDRAN; K M ANEESH; H ROWTHER; V K PEERMOHAMED KHAN; H SUNIL
• Assessee Lawyers: B RAMACHANDRAN; K B REKHA
• Keywords: Credit Facility; Debt Recovery; Execution Proceedings; Public Auction; Irregularity in Sale
• Section: 54; 30; 61

Judgement Text

" IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 19TH OCTOBER 2010 / 27TH ASWINA 1932 WP(C).No. 19018 of 2010(B) -------------------------- ( OA.288/2001 of DEBT RECOVERY TRIBUNAL, ERNAKULAM) .................... PETITIONER: ------------------- N.THANGAVELU, AGED 60 YEARS, S/O. NACHUMUTHU CHETTIYAR, ANGLA NIVAS, MARATH LANE, THRISSUR-680 001. BY ADVS. SRI.B.RAMACHANDRAN SMT.K.B.REKHA RESPONDENTS: ------------------------ 1. UNION OF INDIA, REPRESENTED BY THE SECRETARY, MINISTRY OF FINANCE, NEW DELHI. 2. RECOVERY OFFICER, DEBTS RECOVERY TRIBUNAL, K.S.H.B.BUILDING, PANAMPILLY NAGAR, KOCHI-682 036. 3. BANK OF INDIA, THRISSUR BRANCH, VADAKKE MADAM BUILDING, M.G.ROAD, THRISSUR. 4. P.K.ASHARAF, S/O. P.K.KUNJU, PUTHENVEETTIL HOUSE, KOORUKKANCHERRY, THRISSUR DISTRICT. R1 BY ADV. SMT.MINI R.MENON, ADDL.CGSC R3 BY ADVS. SRI.DEVAN RAMACHANDRAN,SC SRI.K.M.ANEESH R4 BY ADVS. SRI.H.HAMZA ROWTHER SRI.V.K.PEERMOHAMED KHAN SRI.H.SUNIL THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 19/10/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 19018 of 2010(B) --------------------------------------- APPENDIX ----------------- PETITIONER'S EXHIBITS ----------------------------------- EXT.P1. COPY OF THE NOTICE DATED 24.02.2009 FROM THE 2ND RESPONDENT. EXT.P2. COPY OF JUDGMENT DATED 5.8.2009 IN W.P.(C) NO.14775/2009 EXT.P3. COPY OF I.A. NO.1780/2009 DATED 14.08.2009. EXT.P4. COPY OF AFFIDAVIT DATED 07.09.2009 EXT.P5. COPY OF COUNTER AFFIDAVIT DATED 12.09.2009 FILED BY THE 4TH RESPONDENT. EXT.P6. COPY OF THE ORDER DATED 7.10.2009 IN IA NO.1780/2009 IN DRC NO.1255 IN O.A. NO.288/2001. EXT.P7. COPY OF JUDGMENT DATED 17.11.2009 IN WP.(C) NO.30417/2009. EXT.P8. COPY OF ORDER DATED 17.02.2010 IN I.A. NO.1780/2009 IN DRC NO.1255 IN O.A. NO.288/2001 OF THE 2ND RESPONDENT. EXT.P9. COPY OF SHOW CAUSE NOTICE DATED 01.06.2010. EXT.P10. COPY OF SHOW CAUSE NOTICE DATED 9.6.2010 of the 2ND RESPODENT. EXT.P11. COPY OF ORDER OF ATTACHMENT DATED 25.62010 ISSUED BY 2ND RESPONDENT EXT.P12. COPY OF OTICE DATED 25.6.2010 ISSUED BY THE 2D RESPODNENT. EXT.P13. COPY OF NOTICE DATED 20.7.2010 ISSUED BY THE 2ND RESPODENT. RESPONDENT'S EXHIBITS : NIL ---------------------------------------- / TRUE COPY / P.A. TO JUDGE VK C. K. ABDUL REHIM, J. =~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~= W.P.(C) No. 19018 of 2010 =~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~= Dated this the 19th day of October, 2010 JUDGMENT Petitioner availed a credit facility from the 3rd respondent Bank. Consequent to default committed in repayments, the Bank filed O.A. No.288 of 2001 before the Debt Recovery Tribunal and obtained a final order (Recovery Certificate). The 2nd respondent on the basis of an application filed by the Bank, initiated steps for execution and the immovable property owned by the petitioner was sold in public auction on 14-7-2009. 2. At a stage when the matter was posted for settlement of proclamation by the 2nd respondent, the petitioner had approached this Court by filing W.P.(C) No. 14775 of 2009. In the said writ petition an interim stay was granted subject to condition of the petitioner remitting a sum of Rs.2 lakhs within one month. But the petitioner failed to comply with the condition and consequently the property was sold on 14-7-2009. The said writ petition was W.P.(C) No. 19018 of 2010 2 disposed of by Ext.P2 judgment, declining interference, reserving rights of the petitioner to challenge the sale in appropriate proceedings before the authority concerned. 3. Pursuant to Ext.P2 judgment, the petitioner approached the 2nd respondent in a petition seeking to set aside the sale, alleging irregularity in the conduct of the sale. The said petition was dismissed by the 2nd respondent, holding that there was failure on the part of the petitioner to deposit the amount, which is a pre-condition for maintaining the said petition, as per proviso (b) to Rule 61 of the Second Schedule of the Income Tax Act, 1961. The said decision of the 2nd respondent was challenged by filing W.P.(C) No. 30417 of 2009 before this Court. In Ext.P7 judgment, the order of the 2nd respondent was quashed and the 2nd respondent was directed to restore the application and to dispose of the same on merits, subject to condition of the petitioner depositing an amount of Rs.8,04,000/-, which represents the amount for which the sale was confirmed. W.P.(C) No. 19018 of 2010 3 4. Ext.P8 is the order issued by the 2nd respondent pursuant to Ext.P7 judgment. Even though the 2nd respondent observed that the petition was not maintainable without deposit of the entire amount, the application was considered on merits. The 2nd respondent found that there was no irregularity in publishing or conducting the sale and all the requirements, as contemplated under Rule 54 of the Second Schedule of Income Tax Act has been strictly complied with. 5. Subsequent to Ext.P8 order the petitioner was served with Ext.P9 notice issued by the 2nd respondent, calling upon him to show cause as to why the amount deposited shall not be appropriated against the dues payable to the certificate holder. The present writ petition is field challenging Ext.P8 order and the subsequent steps initiated by the 2nd respondent. 6. It is brought to my notice that pursuant to an interim order issued by this Court, further steps in the matter was kept in abeyance. It is noticed that Exdt.P8 is an W.P.(C) No. 19018 of 2010 4 order issued by the Recovery Officer, dismissing a petition seeking to set aside sale conducted under the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDB Act) read with the provisions contained under Second Schedule of the Income Tax Act, 1961. Going by section 30 of the RDB Act, it is evident that the petitioner has got an effective statutory remedy by way of appeal against Ext.P8. Since the matter pertains to irregularity in publishing and conducting sale, the dispute can be resolved only with advertence to the documents and other evidences available. Under such circumstances, I am of the considered opinion that the petitioner can be relegated to invoke the appellate remedy. 7. In the result, the writ petition is dismissed, without prejudice rights of the petitioner to invoke appellate remedy available under the Statute against Ext.P8. For facilitating the petitioner to avail such remedy, further action of the 2nd respondent pursuant to Ext.P8 order shall be kept in abeyance for a period of one month. W.P.(C) No. 19018 of 2010 5 8. It is made clear that if the petitioner files any appeal against Ext.P8 along with petition seeking condonation of delay, the Tribunal shall take note of time spent by the petitioner in prosecuting this writ petition, while considering the question regarding condonation of delay. C. K. ABDUL REHIM, JUDGE. mn. "