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2015 (9) TMI 394 - HC - Income TaxRecovery proceedings - Whether notice for recovery, as contemplated by Rule 2 was served upon the debtor ? - The prayer is, as Bank and Recovery Officer failed to comply with the mandatory provisions of Rules 48, 49, 50 and 52 of Second Schedule appended with the Income Tax Act, 1961, and did not adopt fair and proper procedure, the sale of subject property by auction, be quashed and set aside and property should be restored back to the petitioners Held that:- In this case, the petitioners did not move any application within time of thirty days though they could have done so. They have approached this Court in its extraordinary jurisdiction directly, that too without making any deposit. In prayer clause of the petition, they seek time to deposit, but till date have not chosen to deposit a single naya paisa. Period for which such an extension was sought is also not clearly spelt out. Pleadings in petition show that petitioners were always having knowledge of the public notices for sell or of proclamations of sale or of reserved price fixed therein. They do not prove that they became aware for the first time in February or March, 2012. They never raised objections either to fixation of the reserved prices or public notices / proclamations for sale. Scheme of Second Schedule as modified by the DRT Act reveal legislative intent to give the defaulter as much latitude as possible till end. He can, under Rule 60, without assigning any cause but after depositing the sum as mentioned therein within the stipulated time, avoid auction & protect his property. Process becomes difficult & he is asked to meet the ingredients of Rule 61 only thereafter. Thus after stage of Rule 60 is over, right of petitioners/borrowers get diluted & primacy is given to the creditor Bank & interest of the auction purchaser like respondent no. 3 herein. Hence, while approaching this Court directly under Art. 226 of the Constitution of India, it is axiomatic that the petitioners will have to make out an exceptional case. They will have to plead & prove their diligence & also steps taken to warn the bidders of their grievances or of status of subject property. They must see that irregularity, if any, is cured at the earliest & can not indulge in fence-sitting or wait till the proceedings are over & then jump in, in an attempt to unsettle it or to frighten the bidders away. When they want financial institutes like the Respondent no. 1 Bank to give loan to them, they also owe an obligation to it & public to see that in the unfortunate event of forced recovery, it is not unnecessarily obstructed. They must raise objections at the earliest possible opportunity & can not take recourse to any roving tactics to indefinitely delay recovery forcing the buyer to back out. Here, the petitioners have revealed same attitude which is unbecoming on their part. Moreover, their conduct & act of securing another loan from Mahavir Urban Cooperative Bank on the basis of same property dis-entitles them to any relief in extraordinary jurisdiction under Art. 226 of the Constitution of India. There is no justification to warrant dispensing with the fetters employed in the scheme of Rule 61 of the Second Schedule of the Income Tax Act. The intervention by this Court under Art. 226 is neither possible nor desirable in this matter. - Decided against assessee.
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