TMI Blog2017 (8) TMI 749X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Department and the purchaser, that benefit can extend only till 18.2.2005 when the stay was vacated by this court. Then also, the Purchaser or it being the estate left behind by the Purchaser, who had expired in the meantime, his legal heirs, had the duty to comply with the requirements of Rule 57(2) within 15 days thereafter. The wife of the deceased Purchaser, who also held power of attorney of the other legal heirs of the deceased, did not deposit the balance amount within the 15 days period specified in Rule 57(2), even if the said period is reckoned from 18.2.2005, when the order of stay was vacated by this court. Evidently, therefore, there is non compliance of the mandatory provisions of Rule 57(2) attracting the consequences of such default. This means that the confirmation of sale, ordered on 29.3.2005 is of a void sale and the sale certificate issued on 30.9.2005 being a dependent order is also void and is of no consequence. Any private alienation after notice under Rule 2 has been served on the defaulter, except with the permission of the Tax Recovery Officer shall be void. Sale admittedly was without the permission of the Tax Recovery Officer. Therefore, and as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en (hereinafter referred to as the Purchaser). On 12.5.1995 itself purchaser deposited 25% of the bid amount in compliance with Rule 57. While the sale was taking place, the defaulter had moved this court by filing O.P.No.7180/95 and this court passed order dated 12.5.1995 itself staying further proceedings pursuant to the sale. Initially, the stay order was for one month, and was extended thereafter until further orders. While the stay order was in force, on 21.10.2002, the defaulter transferred the property to Sri.R.S.Moideen, (hereinafter referred to as the Assignee). Subsequently, the Purchaser expired on 11.7.2002. In this context, it may also be relevant to state that neither the Purchaser nor the Assignee were parties to O.P.No.7180/95. 4. The interim order of stay passed by this court on 12.5.1995 was vacated only on 18.12.2005. Subsequently, on 28.3.2005, the purchaser s wife (the third respondent in W.A.551/2015), who also was the power of attorney holder of the other legal heirs, remitted the balance 75% and, accordingly, the sale was confirmed by Ext.P19 order dated 29.3.2005 and Ext.P19(a) sale certificate was also issued on 30.3.2005. 5. In terms of Rule 86 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o has not taken recourse to Rule 60 and 61, cannot be heard to contend that he is aggrieved by the sale in question. It was also argued that since the property was transferred when the matter was pending consideration of this court, the appellant has ceased to have locus standi to maintain challenge against the sale in question. 9. We have considered the submissions made. Admittedly, the assessee, the deceased wife of the appellant in W.A.551/15 was a defaulter both in her personal capacity and also as in her capacity as the Director of a company. That liability had become final and it was to realize the dues that proceedings under the IInd Schedule to the Income Tax Act were initiated against her. It is also the admitted fact that even after notice under Rule 2 of the IInd schedule was issued, the defaulter did not comply with the demand and the Revenue were entitled to take steps to realize the amount due invoking the further provisions contained in the IInd Schedule. 10. When an immovable property is to be attached and sold, the Revenue has to comply with the provisions contained in Part III of the IInd Schedule. In Part III, the Rule 56 provides that the sale of a propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce. 14. Reference to Rule 60 and 61 are also necessary in this case and, therefore, we extract these provisions also for reference; Rule 60. Application to set aside sale of immovable property on deposit-- ( 1) Where immovable property has been sold in execution of a certificate, the defaulter, or any person whose interests are affected by the sale, may, at any time within thirty days from the date of the sale, apply to the Tax Recovery Officer to set aside the sale, on his depositing ---- ( a) [***] the amount specified in the proclamation of sale as that for the recovery of which the sale was ordered with interest thereon at the rate of [one fourth percent for every month or part of a month], calculated from the date of the proclamation of sale to the date when the deposit is made; and ( b) for payment to the purchaser, as penalty, a sum equal to five percent of the purchase money, but not less than one rupee. ( 2) Where a person makes an application under rule 61 for setting aside the sale of his immovable property, he shall not, unless he withdraws that application, be entitled to make or prosecute an application under this rule. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .6.13) or the Chief Commissioner or Principal C (w.e.f.1.6.13) or Commissioner. 17. A reading of these provisions of the IInd Schedule to the Act show that the requirement of deposit of 25% as contemplated in Rule 57(1) immediately after a person is declared to be the purchaser and also deposit of the balance purchase money on or before 15th day of date of sale of the property in terms of Rule 57(2), are mandatory in character. 18. The provisions contained in Rule 57, 58, 60 and 61 of the Income Tax Act are in pari materia with the provisions contained in rule 84, 85, 86, 87, 88, 89 and 90 of Order XXI C.P.C. Rule 84 and 85 of Order XXI CPC, providing for deposit of 25% and 75%, have been consistently held to be mandatory in character and it has been held that the courts have no power to extend the time prescribed therein. The Apex Court had occasion to consider the consequence of its non compliance Manilal Mohanlal Shah and others v. Sardar Sayed Ahmed Sayed Mahmad and another [AIR 1954 SC 349] where it has been held thus: 8. The provision regarding the deposit of 25 per cent. by the purchaser other than the decree-holder is mandatory as the language of the rule sugg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of the purchase-money as required by rule 85. A similar view was taken by a Division Bench of the Allahabad High Court in Nawal Kishore and Others v. Buttu Mal and Subhan Singh (3). The provisions of rule 86 were held to be mandatory in another decision of the same Court, Haji Inam Ullah v. Mohammad Idris (4), and it was held that the Court was bound to re-sell the property upon default irrespective of any application being made by any party to the proceedings. The case of Bhim Singh v. Sarwan Singh (5) was a case of failure to make a deposit as required by section 306 of the Code of 1882 (corresponding to rule 85 of the present Code). The Court treated it as a material irregularity in conducting the sale which must be enquired into upon the application under section 311, (corresponding to rule 90 of the present Code), and not by a separate suit to set aside the sale. The Court did not apply its mind to the question whether the provisions of section 306 being mandatory the sale should not be treated as a nullity for non-compliance with those provisions. The decision of a single Judge (app J.) in Nathu Mal v. Malawa Mal and Others (1) is distinguishable upon its facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 72. The proviso giving this benefit to the decree-holder purchaser merely relieves him of the requirement of depositing that amount of which he is entitled to claim set off, but it does not relieve him of they duty to deposit the full amount taking advantage of the set off. Any mistake made while claiming the set off which results in failure to deposit the full amount of purchase money within 15 days of the date of sale renders the decreeholder purchaser liable to the same adverse consequences which would ensue to any other purchaser due to non-compliance of Rule 85. No distinction is made between a decree-holder purchaser entitled to claim set off under Rule 72 and any other purchaser for the purpose of strict compliance with the requirement under Rule 85. The contentions of learned counsel for the appellant have not merit. 20. Similar are the principles laid down in Gangabai Gopaldas Mohata v. Fulchand and others [AIR 1997 SC 1812] , where the sale has been held to be void. 15. Rules relating to Court sale provided in Order 21, Rules 84 and 85 are analogous. They require the purchaser to make deposit of 1/4th of the purchase money immediately after sale and the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n non-est in the eyes of law. 22. It is in the light of these binding principles that we have to appreciate the case before us. Admittedly, the sale was on 12.5.1995. On 12.5.95 purchaser was declared to be successful and, therefore, she deposited 25% of the purchase money and thus complied with Rule 57(1). She ought to have deposited the balance amount within 15 days thereafter. It is the contention of the Department and the purchaser that the interim order passed by this court on 12.5.95 in O.P.7180/95 prevented the authorities from accepting the balance sale consideration within the 15 days period. Even if we accept the aforesaid contention in favour of the Income Tax Department and the purchaser, that benefit can extend only till 18.2.2005 when the stay was vacated by this court. Then also, the Purchaser or it being the estate left behind by the Purchaser, who had expired in the meantime, his legal heirs, had the duty to comply with the requirements of Rule 57(2) within 15 days thereafter. However, what transpired thereafter is revealed from paragraph 19 of Ext.P22, the order passed by the Commissioner, thus: The TRO contacted Smt.V.H.Kunhipathu, wife of the decease ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention of Rule 57 and 58 is void and that as a result of the default committed by the purchaser or his legal heirs, the sale itself is wiped out, to borrow the expression used by the Apex Court. In a case where a sale held under Order XXI of CPC pursuant to a decree which was a nullity, there is no question of any party having to resort to the provisions of Rule 89 and 90 of Order XXI C.P.C. to have the sale set aside and any claim based on a void sale can be resisted without having the sale set aside. This principle has been recognized by the Apex Court in its judgment in Ram Chandra Arya v. Man Singh and another [AIR 1968 SC 954] where it, inter alia, held thus: In the present case the decree being a nullity, has to be treated as non est and, consequently the sale, when held, was void ab initio. In such a case, there is no question of any party having to resort to the provisions of Rr. 89 and 90 of O. 21, C.P.C. to have the sale set aside. Any claim based on a void sale can be resisted without having that sale set aside. The decision of this Court in that case itself bring out this distinction by stating: It is to be noted however, that there may be cases in w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds thus: 16. Private alienation to be void in certain cases-- ( 1) Where a notice has been served on a defaulter under rule 2, the defaulter or his representative-in-interest shall not be competent to mortgage, charge, lease or otherwise deal with any property belonging to him except with the permission of the Tax Recovery Officer, nor shall any civil court issue any process against such property in execution of a decree for the payment of money. ( 2) Where an attachment has been made under this Schedule, any private transfer or delivery of the property attached or of any interest therein and any payment to the defaulter of any debt, dividend or other moneys contrary to such attachment, shall be void as against all claims enforceable under the attachment. 30. This rule provide that any private alienation after notice under Rule 2 has been served on the defaulter, except with the permission of the Tax Recovery Officer shall be void. Sale admittedly was without the permission of the Tax Recovery Officer. Therefore, and as rightly contended by the counsel for the Revenue, the sale is void at least as against the Revenue. If that be so, insofar as the proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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