IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE HARUN-UL-RASHID WEDNESDAY, THE 25TH MARCH 2009 / 4TH CHAITHRA 1931 WP(C).No. 24470 of 2007(K) -------------------------- AGAINST THE ORDER IN IA 1904/06 & IA 1905/06 IN TA.1416/1997 of DEBT RECOVERY TRIBUNAL, ERNAKULAM .................... PETITIONER(S): --------------- SUJIR KESAV NAIL, 8-KASTURI BUILDINGS, CHURCHGATE, RECLAMATION, KUMBAI BY POWER OF ATTORNEY HOLDER N.RAMANKUTTY NAIR, S/O.LATE NARAYANAN NAIR, SHYLUM, 30 ARADHANA NAGAR, ULIYAKKOVIL, KOLLAM. BY ADV. SRI.T.M.CHANDRAN SRI.V.A.SASIDHARAN SRI.JOSEPH ALBIN NEDUNTHALLY RESPONDENT(S): --------------- 1. CANARA BANK, THAMARAKULAM BRANCH, KOLLAM, REPRESENTED BY THE MANAGER. 2. MATHEW FRANCIS, KATTOOKKARAN HOUSE, MANALOOR POST, THRISSUR. 3. RECOVERY OFFICER, DEBT RECOVERY TRIBUNAL, PANAMPILLY NAGAR, ERNAKULAM. 4. SMT.GEETHANJALI PAI, SUJIR VILLA, MUNDAKKAL, KOLLAM 1 NOW RESIDING AT U.S.A REP. BY HER POWER OF ATTORNEY HOLDER P.K.GOPALAKRISHNA PILLAI, PULIMOOTTU PUTHEN VEEDU, KANNIMEL CHERRI, KILIKOLLOOR, KOLLAM. ADV. SRI.K.SUBASH CHANDRA BOSE FOR R4 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 25/03/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 24470 of 2007(K) APPENDIX Ext.P1: True copy of Petition I.A. 1124/2006 filed by petitioner through his son & power of attorney dated 22.6.2006 before 3rd respondent. Ext.P2: true copy of order in I.A. 1124/2006 dated 3.11.2006. Ext.P3: True copy of notice dated 24.11.2006 in I.A. 1904 & I.A 1905/2006 in DRC 40 Ext.P4: True copy of Review petition 308/07 dated 12.2.2007 Ext.P5: True copy of Counter dated 12.3.2007 filed by 1st respondent. Ext.P6: True copy of reply dated 6.4.2007 filed by petitioner. Ext.P7: True copy of Petition in I.A. 309/2007 dated 12.2.2007 Ext.P8: True copy of petition in I.A. 310/2007 dated 12.2.2007. Ext.P9: True copy of Petition I.A. No. 311/2007 dated 12.2.2007 for stay of confirmation of sale. Ext.P10: True copy of notice dated 27.2.2007 issued by 3rd Respondent. Ext.P11: True copy of counter dated 13.2.2007 filed by 1st respondent to Ext.P6 petitioner (I.A. 309/2007) Ext.P12: True copy of counter dated 12.3.2007 filed by 1st respondent to Ext.P7 petition. Ext.P13: True copy of order dated 22.6.2007 in R.P. No. 308/2007 Ext.P14: True copy of Order dated 22.6.2007 in I.A. 309/2007 (Ext.P6) Ext.P15: True copy of order dated 22..2007 in I.A. No. 310/2007 (P7) //true copy// HARUN-UL-RASHID, J. ---------------------------------------- W.P.(C) No. 24470 of 2007 ---------------------------------------- Dated this the 25th day of March, 2009 JUDGMENT The Petitioner and his deceased brother viz. Sri.Sujir Ganesh Naik were partners of a firm, owns 2.21 acres of property with a building thereon in Survey No. 314/1 in Chiyaram Villlage, Thrissur The said property is scheduled to Recovery Certificates on the file of the 3rd respondent . On getting knowledge about the proceedings to auction the said property the petitioner filed I.A. 1124/2006 before the 3rd respondent on 22.6.2006 under Rule 66 of the 2nd Schedule of Income Tax Act 1961. Ext.P1 is the said I.A. The prayer in the said I.A. is to postpone the auction for five months and to issue a certificate authorising the petitioner to effect private sale in order to get maximum price. 2. The counsel for the petitioner submitted that the petitioner was under the impression that the notice will be served from the office of the Recovery Officer of the Debts Recovery Tribunal intimating the date of hearing on Ext.P1. But no posting was noted in the diary till October 2006. Therefore the petitioner filed writ petition No. 30836/2006 before this Court seeking a direction to the Recovery Officer to dispose of Ext.P1 petition and for stay of all proceedings. The standing counsel for the respondent No.1 in the said writ petition submitted that Ext.P1 was disposed on 3.11.2006 and auction was conducted on the same day. It is W.P.(C) No.24470 of 2007 -2- submitted that in the auction conducted, the property was sold for an amount of Rs. 1,86,67,110/- (Rupees One Crore Eighty Six lakhs, Sixty seven thousand One hundred and Ten only) 3. The petitioner challenges Ext.P2 order passed by the Recovery Officer and other consequent orders The petitioner contended that Rule 66 of the second schedule to the Income Tax Act 1961 is not mandatory that if the said Rule is discretionary the said power ought to have been exercised in a reasonable and legitimate manner. 4. In Ext.P2 order it is stated that the property is proposed to be sold in public auction scheduled to be held on 23.6.2006 at 2.30 P.M. I.A.1124/2006 was filed on 22.6.2006. So it can be assumed that the petitioner is aware of the stages of the proceedings initiated by the Recovery Officer for the sale of the property The sale was conducted on 3.11.2006 and confirmed on 17.1.2007.i.e after a period of two months Apart from the 2nd respondent, the auction purchaser, and five other bidders were also participated in the public auction. Being the highest bidder, the sale was confirmed in favour of the 2nd respondent . An application was filed by the petitioner for setting aside the sale. The same was dismissed on merits. No appeal was preferred and therefore the sale has also become final . 5. In the counter- affidavit filed by the certificate holder bank it is stated that the property was put to auction as per proclamation of sale W.P.(C) No.24470 of 2007 -3- dated 14.2.2006 with notice of demand to the legal representatives of late Sujir Ganesh Naik,which was issued on 13.3.2006, and that sale notice was published in the Mathrubhumi Daily, Kollam Edition dated 8.6.2006. The reserve price of Rs. 1,23,00,000/- was fixed by the Recovery Officer taking into consideration the prevailing market price, that the recovery certificates are more than 5 years old etc. The petitioner has no reasonable explanation as to why he did not appear before the Recovery Officer to submit his excuses before passing Ext.P2 Order. Now the lame excuses stated for not prosecuting the case seems not convincing to me. Ext.P2 order was passed on 3.11.2006 . . This Court is of the view that the petitioner is aware of the auction proceedings and did not try to bring up Ext.P1 application to the notice of the Recovery Officer at any time before passing Ext.P2 order on 3.11.2006. On 3.11.2006 when the matter was taken up the petitioner was not present. Ext.P2 order was passed by the Debt Recovery Officer on merits It is also noted that the property in question has been scheduled in three more recovery proceedings and therefore the Recovery Officer held that it is not feasible to permit the private sale. The petitioner did nothing to avoid the sale of the property having aware of the initiation of recovery proceedings. Even though the petition to set aside the sale stands dismissed nothing has been done to prefer appeal against the order passed confirming the sale. Besides the said factor the sale was confirmed after 7 months from the date publication W.P.(C) No.24470 of 2007 -4- of the sale notice. . He has got sufficient opportunity to remit the amount and to avoid the sale by preferring appeal against the order confirming the sale. So all the above circumstances shows that there is bonafides in the initiation of the action against sale proceedings and confirmation of the sale. I find no reason to interfere with Ext.P2 passed by the Debt Recovery Officer. This writ petition fails and accordingly dismissed (HARUN-UL-RASHID, JUDGE) es. HARUN-UL-RASHID, J. --------------------------- W.P.(C) No. 24470 of 2007 ---------------------------- JUDGMENT 25th March, 2009