9911796707
TMI Blog1972 (1) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... Court of the Senior Subordinate judge, Kapurthala, on the basis of the said mortgage and prayed for a preliminary decree in terms of Order 34, rule 4, read with Order 34, rule 2, of the Code of Civil Procedure, and some other reliefs including a declaration that the said aggregate sum of Rs. 22,59,137.28 was due from the defendants jointly and severally to the plaintiff as on May 15, 1968. Other reliefs claimed were with regard to the interest on the said amount from May 15, 1968, up to the date of the decree at the rate of 7 per cent. per annum above the Reserve Bank of India rate with a minimum of 12 per cent. per annum with monthly rests, and interest on the decreed amount from the date of the decree up to the, date of payment at the rate mentioned above. It is, thus, clear from the plaint, a copy of which has been filed with the petition as annexure, " E ", that the suit filed, by the petitioner-bank was on the basis of the mortgage referred to above. That suit is still pending, but the amount has been reduced to Rs. 13,34,158.21, as the bank has received the remaining amount from the insurance company on account of the loss occasioned by a fire, which occurred in the factory o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... state copies of certain documents and typed copies of others to prove the mortgage in its favour. On June 15, 1971, the case was taken up for arguments when it was objected by the representative of the income-tax department that the original documents had not been filed and the documents filed could not be taken into evidence as no witness had been produced to prove them. The Tax Recovery Officer accepted this contention of the representative of the imcome-tax department and, dismissed the objections as unproved. The present petition has been filed by the bank challenging the validity of the said order of the Tax Recovery Officer. Written statement has been filed on behalf of the Tax Recovery Officer in which it has been pleaded that the writ petition is not competent as under rule 11(6) of the rules contained in the Second Schedule to the Income-tax Act, 1961, the proper remedy of the petitioner-bank is to file a suit in the Civil Court to establish the right which it claims to the property in dispute. On the merits it has been pleaded that the petitioner-bank did not prove its interest in the attached properties in accordance with the provisions of the Evidence Act. The provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or (b) (in the case of movable property) at the date of the attachment, he had some interest in, or was possessed of, the property in question. (4) Where, upon the said investigation, the Tax Recovery Officer is satisfied that, for the reason stated in the claim or objection, such property was not, at the said date, in the possession of the defaulter or of some person in trust for him or in the occupancy of a tenant or other person paying rent to him or that, being in possession of the defaulter at the said date, it was so in his possession, not on his own account or as his own property, but on account of or in trust for some other person, or partly on his own account and partly on account of some other person, the Tax Recovery Officer shall make an order releasing the property, wholly or to such extent as lie thinks fit, from attachment or sale. (5) Where the Tax Recovery Officer is satisfied that the property was, at the said date, in the possession of the defaulter as his own property and not on account of any other person, or was in the possession of some other person in trust for him, or in the occupancy of a tenant or other person paying rent to him, the Tax Recovery Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Recovery Officer should not launch upon an investigation into the claim of the objector which enquiry will be parallel to the enquiry being made by the civil court in a suit. According to rule 11(6), it is the adjudication by the civil court that prevails over the adjudication of the Tax Recovery Officer. Once he is informed that the matter is already sub judice in a civil court, the Tax Recovery Officer should not take upon himself the responsibility of deciding the extent of the interest of the objector in the attached property and should await the decision of the civil court. In the instant case the Tax Recovery Officer erred in proceeding to decide the objection-petition of the petitioner-bank in spite of the fact that it was brought to his notice that a civil suit in the same matter was pending and the impugned order is liable to be quashed on that ground. The learned counsel for respondents Nos. 1 to 4, has only argued that this petition should be dismissed as the petitioner has got an alternative statutory remedy under rule 11(6) ibid and in view of the dispute on facts this petition should be dismissed leaving the petitioner-bank to file the necessary suit. I find no subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uments which he had obtained to prove that the attached properties were mortgaged with the bank but the Tax Recovery Officer did not allow him to produce the same. In the return, it has been stated that the application for producing the documents was filed by the counsel for the petitioner-bank on June 15, 1971, but after the Tax Recovery Officer had pronounced the orders. Be that as it may, the procedure followed by the Tax Recovery Officer is violative of the principles of natural justice and the consequent order passed by him cannot be upheld. For the reasons given above, this petition is accepted and the impugned order of the Tax Recovery Officer dated June 15, 1971, a copy of which is annexure "Z" to the writ petition, is hereby quashed. The Tax Recovery Officer should await the decision of the civil suit or sell the attached properties subject to the claim of the petitioner-bank as may be found due in the civil suit. In the proclamation of sale, it is necessary to mention the encumbrances to which the attached properties, which are sought to be sold, are subject in order to enable the prospective purchasers to assess the proper value of the interest that is being sold. If t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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