TMI Blog1972 (1) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... o 10, carrying on the business of manufacturing electrical fans, motors and pumping sets at Kapurthala. These respondents opened cash credit accounts with the State Bank of Patiala at Kapurthala (petitioner herein), wherein the petitioner-bank had agreed to make advances to the extent of Rs. 20 lakhs. There were some other accounts of the firm in the bank. In order to secure the said cash credit accounts and some medium term loans, respondent No. 5 mortgaged all the lands, structures, buildings, plant and machinery situate at Jullundur Road, Kapurthala, with the bank by way of equitable mortgage by depositing title deeds. On May 15, 1968, the petitioner-bank filed a suit for the recovery of Rs. 22,59,137.28 and interest thereon against respondents Nos. 5 to 10 in the 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 wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it for the recovery of Rs. 22,59,137.28 on the basis of the mortgage against the said respondents on May 15, 1968, but that the present outstandings were Rs. 13,34,158.21 plus interest and other charges due from May 15, 1968, together with future interest, etc. It was also mentioned that the said respondents had been restrained by the Civil Court from alienating, removing or damaging in any way the mortgaged properties and that an appeal against that order had been rejected by a Division Bench of this court. The Tax Recovery Officer sent the objections of the petitioner-bank to the Income-tax Officer for his comments and after receiving the same called upon the petitioner-bank to prove its interest in the attached properties. On May 25, 1971, the petitioner-bank filed photostate 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 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und that such property is not liable to such attachment or sale, the Tax Recovery Officer shall proceed to investigate the claim or objection: Provided that no such investigation shall be made where the Tax Recovery Officer considers that the claim or objection was designedly or unnecessarily delayed. (2) Where the property to which the claim or objection applies has been advertised for sale, the Tax Recovery Officer ordering the sale may postpone it pending the investigation of the claim or objection, upon such terms as to security or otherwise as the Tax Recovery Officer shall deem fit. (3) The claimant or objector must adduce evidence to show that-- (a) (in the case of immovable property) at the date of the service of the notice issued under this Schedule to pay the arrears, 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s with the bank and what was under dispute was the extent of the amount due to the petitioner-bank from them, which was being determined in the suit filed by the petitioner-bank against them referred to above. On the basis of this fact the Tax Recovery Officer, in my opinion, should not have proceeded to determine the objections filed by the petitioner-bank because the extent of the interest of the petitioner-bank in the attached properties was already under adjudication in a civil suit. Under rule 11, the adjudication made by the Tax Recovery Officer with regard to the extent of the interest of the objector in the attached properties is final subject to an adjudication by a civil court in a suit. Where the suit has already been filed and is pending, it is in the fitness of things that the Tax 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 Reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. that the income-tax authorities are not strictly bound by the rules of evidence. The Tax Recovery Officer ought to have applied his mind to the documents and should have rejected them only if he was not convinced of their genuineness or authenticity. He could not reject them on the ground that no evidence has been produced to prove those documents. That conclusion he could arrive at only after affording an opportunity to the petitioner-bank of leading evidence to prove those documents or affording them an opportunity of filing certified copies of those documents in accordance with the provisions of the Indian Evidence Act. It has been stated in the petition that on that very day, that is, June 15, 1971, the counsel for the petitioner-bank, offered to file the certified copies of certain documents 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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