1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. WRIT PETITION NO.2463 OF 2009 M/s.G.S.P. Buildwell Pvt. Ltd. and another ..Petitioners. Vs. The Chief Commissioner of Income Tax-II and others ..Respondents. .... Mr. Gaurav Joshi with Mr. Mridul Sharma i/b M/s. Shah & Sanghavi for the Petitioners. Mr. B.M. Chatterji for the Respondents. .... CORAM : DR.D.Y.CHANDRACHUD & J.P.DEVADHAR, JJ. 2nd March, 2010. P.C. : 1. In these proceedings under Article 226 of the Constitution the Petitioner who is an auction purchaser has prayed for the issuance of a writ of mandamus for a refund of the sale consideration of Rs. 2,62,72,000/- together with interest at 18% per annum. The auction sale was set aside in a petition filed before this Court by the owners of the property. The order of this Court was confirmed upon the dismissal of the Special Leave Petition by the Supreme Court. 2 2. When the Petition came up for admission on 17th December, 2009, the Petition was posted for hearing on 11th January, 2010 and the Revenue was expected to file a counter by them. On 13th January, 2010 a Division Bench of this Court, while noting that no reply had been filed directed the Revenue to deposit a sum of Rs. 2,62,72,000/- in this Court within two weeks. By a further order of this Court dated 27th January, 2010, time to effect deposit in pursuance of the previous order was extended by a further period of two weeks. The Court noted that though the Revenue had been directed to file a counter on 17th December, 2009, none has been filed. The Petition was directed to stand over to 15th February, 2010 and parties were placed on notice that the Petition would be finally disposed of at the stage of admission. Once again the Petition was adjourned on 16th February, 2010 on the request of counsel appearing for the Revenue. In compliance with the directions issued by this Court on 13th January, 2010 and 27th January, 2010 an amount of Rs. 2,62,72,000/- has been deposited. Since sufficient opportunities have been granted to the Revenue to oppose the Petition by filing a reply, 3 and since parties were specifically put on notice that the Petition would be taken up for final disposal at the stage of admission, we have heard submissions for final disposal. 3. The property in question comprises of the Swastik Cinema at Lamington Road, Mumbai and admeasures about 821.74 sq. mtrs, comprising of C.S. No.1266 (Part). The property was notified for auction on 24th September, 2007 by the Income Tax Department, Mumbai. The Petitioner was one of the bidders at the auction. At the auction on 24th September, 2010 the bid submitted by the Petitioner in the amount of Rs.1051.08 lacs was accepted and a confirmation letter was issued. By a communication dated 25th September, 2007 the Appropriate Authority called upon the Petitioner to effect payment of 25% of the bid amount within thirty days and the balance within ninety days from the date of the auction. In paragraph 3 of the Petition there is an averment that the Petitioner has deposited an amount of Rs.2,62,72,000/- In the meantime, on 22nd October, 2007 a petition under Article 226 was filed before this Court by the owners 4 of the property in order to challenge the auction sale. By a judgment dated 6th February, 2008 the petition was made absolute in terms of prayer clause (a) which reads as follows : “that this Hon’ble Court may be pleased to issue a writ of mandamus or a writ in nature of mandamus or any other appropriate writ, order or direction under Article 226 of the Constitution calling for the records and proceedings of the entire case and after going through the same and after examining the validity, legality, propriety and correctness, be pleased to quash the said sale and auction notice dated 3rd September, 2007 published in the Issue of “Times of India” dated 10th September, 2007 (Exhibit “L” hereto).” 4. The Special Leave Petition against the judgment of this Court (Petition for Special Leave to Appeal (Civil) 17397 of 2008) was dismissed by the Supreme Court on 17th July, 2009. 5. During the pendency of the proceedings the Petitioner, by a letter dated 20th February, 2008, sought a refund of the amount deposited and made a request that in the event that the Revenue was intending to move the Supreme Court the earnest money of Rs.52.55 lacs may be held in deposit and the balance be refunded. On 14th 5 April, 2008 the Petitioner requested the Revenue to hold the deposit in fixed deposit in order to obviate a loss of interest. This was followed by a further request dated 28th April, 2008. On 5th November, 2009 after the dismissal of the Special Leave Petition, an advocate’s notice was addressed on behalf of the Petitioner to the appropriate authority seeking a refund of the amount of Rs. 2,62,72,000/- together with interest at 18% per annum. Since the request was not acceded to and there was no response to the representation submitted by the Petitioner, these proceedings have been instituted. 6. The only defence which has been urged at the hearing of the Petition is that the Petitioner should be relegated to the remedy of instituting a suit for recovery. 7. The facts as they stand are admitted. The fact that the Petitioner was the highest bidder at the auction sale and that it had deposited an amount of Rs.2,26,72,000/- is not in dispute. The 6 record before the Court would bear out the submission of counsel appearing on behalf of the Petitioner that the Petitioner at all material times was desirous of proceeding with the auction sale. The auction sale came to be set aside on a petition instituted before this Court by the owners of the property. Thereupon the entitlement of the Petitioner to receive the monies paid in pursuance of the confirmation of the sale cannot be disputed. As a matter of fact, the amount due and payable to the Petitioner ought to have been refunded by the Revenue without compelling the Petitioner to have recourse to the available remedy in law of instituting the petition under Article 226. The intransigence of the Revenue to do so is inexplicable. There is absolutely no plausible justification forthcoming on the part of the Revenue for not refunding the amount which is due and payable admittedly to the Petitioner upon setting aside of the auction sale. Relegating a Petitioner to the remedy of a suit for recovery is a matter where the Court has to exercise its discretion under Article 226 of the Constitution judiciously. In a case such as the present where neither the facts are in dispute nor is the entitlement of the 7 Petitioner to receive the amount disputed, it would neither be in the interests of justice nor within the parameters of a judicious exercise of discretion to relegate the Petitioner to the remedy of a civil suit. No other defence has been urged on behalf of the Revenue at the hearing of the Petition. 8. In the circumstances, we are of the view that this is a fit and proper case where the Petition should be allowed and the Respondent should be directed to refund to the Petitioner the amount of Rs.2,62,72,000/- paid by the Petitioner under and in pursuance of the auction sale which was set aside by the order of the Division Bench as noted earlier. Having regard to the circumstances of the case, we are of the view that an order for the payment of interest would be warranted. The Petitioner has been deprived of the use of its own money, which was deposited in pursuance of the auction sale, even after the auction sale was set aside by this Court and the order was confirmed by the Supreme Court. We direct that the Petitioner would be entitled to interest at the rate of 8% per annum with effect 8 from 18th July, 2009, upon the dismissal of the Special Leave Petition by the Supreme Court. The Petition is accordingly made absolute by permitting the Petitioner to withdraw the amount of Rs.2,62,72,000/- deposited before this Court in pursuance of the order dated 13th January, 2010. The Respondents shall also pay interest to the Petitioner at the rate of 8% per annum with effect from 18th July, 2009 until the date of payment within a period of four weeks from today. 9. The Court has been informed that though the interim order dated 13th January, 2010 required the Revenue to deposit an amount of Rs.2,62,72,000/-, an amount of Rs.2,62,77,000/- has been deposited by the Revenue in Court. Counsel appearing on behalf of the Revenue states on instructions that an excess amount of Rs. 5,000/- was deposited since that was the actual amount deposited by the Petitioner. Be that as it may, since the prayer in the Petition is confined to the amount of Rs.2,62,72,000/-, we have allowed the Petitioner to withdraw that amount from what has been deposited 9 before this Court. The balance shall be refunded to the Revenue. Rule is made absolute in these terms. There shall be no order as to costs. (Dr. D.Y. Chandrachud, J.) (J.P. Devadhar, J.)