THE HON’BLE SRI JUSTICE GHULAM MOHAMMED AND THE HON’BLE SRI JUSTICE G.CHANDRAIAH W.P.NO.24034 OF 2009 O R D E R (Per the Hon’ble Sri Justice Ghulam Mohammed) Heard both the counsel. 2. Though the matter is listed under the interlocutory caption, as the counsels made elaborate arguments, toughing the merits of the case, the writ petition itself is taken up for final disposal. 3. The petitioner is one CSS Technergy Limited and it is represented by its Managing Director Ravi Vishnu. The petitioner – firm, was the lessee of the 4th respondent – Bhanu Constructions Limited, in premises bearing no.6-3-680/A/B, at plot no.8, survey no.35, Punjagutta, Hyderabad, by virtue of the registered lease deed dated 14.6.2004 and the lease was for a period of six years. The 4th respondent – firm, is the borrower from 2nd and 3rd respondents, which are Andhra Bank and State Bank of India, respectively and as the 4th respondent failed to pay the debts, the property, in which the petitioner – firm, is the lessee, was brought to sale by the 1st respondent – Recovery Officer, Debts Recovery Tribunal, A.P. by issuing necessary auction notice dated 8.8.2002. The 5th respondent – Mohd Saleem, purchased the property being the highest bidder. Challenging the auction notice, the 4th respondent, filed W.P.No.27695/2007, before this court. As the sale certificate was not issued to the 5th respondent and as he was also not delivered the possession of the property purchased by him in the auction, he filed W.P.No.9158/2008 before this court. By common order dated 22.4.2009, both the writ petitions were disposed of by dismissing the writ petition filed by the 4th respondent in W.P.No.27695/2007 and allowing the writ petition filed by the 5th respondent in W.P.No.9158/2008. The matter was carried in appeal before the Apex court and the order of this court, was confirmed. Pursuant thereto, the respondents 2 and 3 came to the property and required the petitioner- firm, which is the tenant in the said premises, to vacate and accordingly it vacated and panchanama was drafted and the possession of the schedule property was delivered to the 5th respondent. 4. Now the grievance of the petitioner is that it is the tenant under a registered lease deed since 2000 and their establishment is in three floors and as they were forced to vacate the premises without issuing any notice as contemplated under Rule 40 of the Income-Tax (Certificate Proceedings) Rules, 1962, much inconvenience is caused to them and further their firm is dealing with computer projects and at the relevant time, they were in the midst of processing of data relating to examination results of degree students and engineering students of Osmania Univesity. But they were not given any notice or sufficient time to vacate the premises and the official of the respondents visited the premises at 2.30 p.m. on 9.5.2009 and as per the court orders, sought for vacating the premises and accordingly they could remove files, chairs, servers and most of the computers, but they were not allowed to take out the A.Cs., generators, transformers and other material like networking cables, work stations etc. Further, the respondents 2 and 3 have given an understanding that they could take out all their belongings during the course of coming fortnight, only if they sign on the panchanama as a formality to show that the possession has been handed over to the 5th respondent. Based on the said understanding, the Managing Director of the petitioner – firm, signed on panchanama. The case of the petitioner is that the they were given time of only five hours and by 8.30 p.m. the signing on the panchanama was also completed and within this five hours, they could not shift the entire material from the premises and subsequently, when they sought permission of the 5th respondent, for shifting their movable assets lying in the premises, surprisingly he stated that no material is left after the conducting of panchanama. Therefore, in this writ petition, they are seeking a direction to the respondents, to permit them to shift their articles at the premises in question. 5. The official respondents and the 5th respondent filed counter affidavits and the tenor of which is that in the premises in question, no articles of the petitioner are left and further the said property was sold to subsequent purchasers by the 5th respondent and hence sought for dismissal of the writ petition. 6. The learned counsel appearing for the petitioner referring to Rule 40 of the Income-Tax (Certificate Proceedings) Rules, 1962 which are made applicable for recovery proceedings under Recovery of the Debts Due to Banks and Financial Institutions Act, vehemently contended that the petitioners are in possession of the premises in question under a registered lease deed and without following the procedure contemplated under Rule 40, the petitioner was thrown out of the property unceremoniously and they were also not allowed to take their articles viz., generators and other items stated in the annexure-I to the writ affidavit. Relying on the judgment of the Apex Court in PAUL BROTHERS (Tailoring Division) v. ASHIM KUMAR MONDAL[1] she contended that the tenant in lawful possession, could not be evicted in pursuance of the court’s orders and the necessary procedure contemplated under the rules, has to be followed. She earnestly appealed the court to permit the petitioners to take the property lying in the premises in question. 7. On the other hand, the learned counsels appearing for the official respondent and the 5th respondent contended that as per the panchanama signed by the Managing Director of the petitioner – firm, all the articles and belongings of the petitioner, were shifted and nothing is left in the premises in question and further, the 5th respondent has sold the property to the prospective purchasers and the petitioner has approached the court after a period of six months and at this stage no direction can be given. The learned counsel Sri Battacharya appearing for the official respondents submitted that the property in question was mortgaged to respondents 2 and 3. He contended under Section 65A( 2)(e) of the Transfer of Property Act, 1882, the mortgagor who is in possession of the mortgaged property, can lease the property not exceeding three years, but in the present case, the lease is for a period of six years, years and hence the lease deed on which the petitioner is relying, has no legal effect. He further contended that under Rule 11(1) of the Second Schedule for Procedure for Recovery of Tax, the petitioner ought to have brought to the notice of the Recovery Officer with regard to its claim of movable assets. He further contended under Section 29 of the Recovery of the Debts Due to Banks and Financial Institutions Act, the Income Tax (Certificate Proceedings) Rules, 1962, which are made applicable to the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, are applicable only as far as possible and hence the contention of the counsel for the petitioner that Rule 40 of the said Rules is not followed, since no notice has been issued to the tenant in possession of the property, is not enable in the above facts and circumstances of the case. With these averments, the writ petition was sought to be dismissed. 8. Before considering the contentions of the respective counsel, it is necessary to note few admitted facts. The 4th respondent – Bhanu Constitutions is the borrower and by mortgaging the property in question, it obtained the loan amount and as it failed to repay the loan amount, by following the procedure, the property was brought to sale and the 5th respondent – Mohd. Saleem became the highest bidder and he paid the amount. When the sale certificate was not being issued and when the property was also not being delivered to him, he filed writ petition before this court in W.P.No.9158/2008 and this court allowed the same by order dated 22.4.2009 and the same was also confirmed by the Apex Court. 9. The petitioner was the tenant in the schedule premises. In the affidavit filed in support of the writ petition, the Managing Director of the firm stated that the respondents 2 and 3 have given an understanding that they could take out all their belongings during the course of coming fortnight, only if they sign on the panchanama as a formality to show that possession has been handed over to the 5th respondent. Based on the said understanding, the Managing Director of the petitioner – firm signed on panchanama. Therefore, from this statement in the writ affidavit, it could be seen that the petitioner vacated the premises voluntarily, based on the alleged understanding given by the respondents 2 and 3, to remove their movable subsequently and accordingly, the panchanama was signed. The respondents 2 and 3, in their counter affidavit, denied any such understanding being given to the petitioner. The grievance of the petitioner is that they have not removed their movables and whereas in the panchanam which is signed by the Managing Director of the petitioner-firm, it is shown that all the movable are removed. The panchanama dated 9.5.2009 is extracted as under: “I, M.G.Ramanathan, Chief Manager, Andhra BHank, SARM Branch, Koti, Hyderabad, in term of directions given by the Recovery Officer-I, D.R.T., Hyderabad vide R.P.No.420/2001-DRT (H) dated 8.5.2009, visited the subject premises D.No.6-3-680/A/B in Survey No.35, ward No.6, Plot No.8 at Panjagutta, Hyderabad at about 2.30 p.m. on 9.5.2009 (Saturday) along with Mr.A.Ramesh Rao, Deputy Manager, Mr. G.R.Sastry, Manager of SBI, SAM Branch, Secunderabad and also along with Mr. M.Malla Reddy, Inspector of Police, Mr. N.Tirupathi Reddy, Sub-Inspector of Police of Panjagutta Police Station, Mr. Mohammed Adeem, brother and representatives of the purchaser Mr.Mohammed Saleem was also present. It was brought to the notice of Mr.R.Vishnu, Managing Director of CSS Technology Ltd., who are the occupants of all the floors of the premises, that we have come to the premises for the purpose of delivering physically vacant possession of the subject premises to the purchaser Mr. Mohammed Saleem and requested them to peacefully vacate possession of the subject premises to the purchaser Mr. Mohammed Saleem and requested them to peacefully vacate and deliver possession. Accordingly, the occupants agreed and initiated the process of removing all the movable items from each floors of the premises on their own. After completion of the entire process of vacating all the movables, peaceful physical possession of the entire building property was delivered by the occupants to the purchaser Mr. Mohammed Saleem on this ninth day of May, 2009 in the presence of witnesses present.” The above extracted portion of the panchanama clearly shows that the occupants agreed and initiated the process of removing all the movable items for each floor of the premises on their own and after completing the entire process of vacating all the movable, peaceful possession of the entire building was delivered to the purchaser – 5th respondent – Mohd Saleem. The panchanama is signed by the Managing Director of the petitioner – firm, by name Vishnu and also the Bank officials and the witnesses present. But now the grievance of the petitioners, there are still certain movables like A/C, generators etc., lying in the premises in question. The respondents are denying this averment. Therefore, this is a pure disputed question of fact, which this court cannot go into. 10. Further, it is to be noticed that the petitioner ought to have brought their claim before the Recovery Officer under Rule 11 of Annexure 1 to the Second Schedule, which Deals with Procedure for Recovery of Tax and, the Recovery Officer would have been in a position to consider the claim of the petitioner and pass orders under Rule 11(4) and under Section 30 of the Act, an order made by the Recovery Officer in exercise of his powers under sections 25 to 28, which deals with recovery of debts, shall be deemed to have been made by the Tribunal, and an appeal against such an order shall lie to the Appelate Tribunal. The petitioner failed to avail this remedy. 11. As already noted above, as per the panchanama, the petitioner delivered the possession after removing all their movables on their own and they did not bring to the notice of the Recovery Officer about their claim or with regard to non- issuance of any notice. Hence, the contention of the petitioner relying on Rule 40 of the Rules is not tenable and the judgment of the Apex Court relied on by the counsel for the petitioner in this regard, is not applicable to the facts of the present case. Furthermore, as per Section 29, which deals with application of certain provisions of Income-Tax Act, the second and third schedules to the Income-Tax Act, 1961 (43 of 1961) and the Income-Tax (Certificate Proceedings) Rules, 1962, shall apply only as far as possible. Therefore, in the present set of facts and circumstances, the non-issuance of notice under Rule 40, which are applicable only as far as possible, is not fatal to the case of the respondents. The said provision is extracted as under for better appreciation: 29. Application of certain provisions of Income-tax Act: The provisions of the Second and Third Schedules to the Income- tax Act, 1961 (43 of 1961) and the Income-tax (Certificate Proceedings) Rules, 1962 as in force from time to time shall, as far as possible, apply with necessary modifications as if the said provisions and the rules referred to the amount of debt due under this Act instead of to the income-tax: Provided that any reference under the said provisions and the rules to the “assessee” shall be constructed as a reference to the defendant under this Act.” 12. For the foregoing reasons, we do not find any merit in the writ petition and the same is misconceived and accordingly dismissed. No costs. --------------------------------- GHULAM MOHAMMED,J ----------------------------------- G.CHANDRAIAH,J DATE:17—08—2010 AVS [1] AIR 1991 SC 796