IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOTTATHIL B.RADHAKRISHNAN MONDAY, THE 23RD NOVEMBER 2009 / 2ND AGRAHAYANA 1931 WP(C).No. 37846 of 2007(E) --------------------------------------- PETITIONER(S): ---------------------- C.A. UNNIKRISHNAN, AGED 40 YEARS, S/O.APPU GUPTHAN, CHEMPAMPADATH HOUSE, VAKKADAPPURAM P.O., PALAKKAD DISTRICT. BY ADV. SRI.A.F.SEBASTIAN RESPONDENT(S): ------------------------ 1. THE CANARA BANK, REP. BY ITS MANAGER SULTANPET, PALAKKAD. 2. SHRI.T.S.VIJAYAN, S/O.T.S.NAMBOODIRI, R/O 85, CHANDRANAGAR, PALAKKAD. 3. SMT.SANDHYA ASOKAN, W/O.SHRI.T.S.ASOKAN, CHANDRANAGAR, PALAKKAD. 4. THE RECOVERY OFFICER, DEBT RECOVERY TRIBUNAL, ERNAKULAM. 5. UNION OF INDIA, REP. BY THE SECRETARY TO THE GOVERNMENT, MINISTRY OF BANKING AFFAIRS, CENTRAL SECRETARIATE, NEW DELHI. R1 BY ADV. MR.P.GOPINATH. R4 & R5 BY ADV. MR.P.PARAMESWARAN NAIR, ASST.SG. R2 & R3 BY MR.V.CHITAMBARESH, SENIOR ADVOCATE, ADV. MR.T.C.SURESH MENON, MR.JIBU P THOMAS, MR.P.S.APPU. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 20/11/2009, ALONG WITH WP(C) NO. 1867 OF 2008 AND WP(C) NO. 31276 OF 2008, THE COURT ON 23/11/2009 DELIVERED THE FOLLOWING: WP(C) NO. 37846/2007-E APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF THE SALE PROCEEDINGS DATED 21/11/2007 FILED BEFORE THE 4TH RESPONDENT. EXT.P2: COPY OF THE I.A.2142/07 DATED 01/12/2007 FILED BEFORE THE 4TH RESPONDENT. EXT.P3: COPY OF THE STATEMENT DATED 11/12/2007 FILED BEFORE THE 4TH RESPONDENT. EXT.P4: COPY OF THE DOCUMENT WHICH WAS PRODUCED AS ANNEXURE A3 IN THE O.A.202/01. EXT.P5: COPY OF THE JUDGMENT IN WP(C) NO. 8110/2006 DATED 20/03/2006. RESPONDENT'S EXHIBITS: EXT.R1(a): COPY OF THE JUDGMENT IN WP(C) NO. 14251 OF 2006 OF THE HONOURABLE HIGH COURT OF KERALA. //TRUE COPY// P.S. TO JUDGE rs. THOTTATHIL B. RADHAKRISHNAN, J. = = = = = = = = = = = = = = = = = = = = = = = = W.P.(C).No.37846 of 2007-E = = = = = = = = = = = = = = = = = = = = = = = = Dated this the 23rd day of November, 2009. JUDGMENT 1.The petitioner is the first defendant in an application filed by the first respondent bank before the Debts Recovery Tribunal. He is resultantly the certificate debtor No.1 in the recovery certificate issued in that case. The substantial relief sought for in this writ petition is for a direction to consider and dispose of Ext.P2 application filed by him to set aside the sale of 'A' schedule property without insisting on payment in terms of proviso (b) to Rule 61 in Second Schedule of the Income Tax Act, 1961, hereinafter referred to as the “IT Act”. He also seeks a declaration that the sale proceedings is void in view of Rule 68B of the Second Schedule to the IT Act. To support this, is the plea that proviso (b) to Rule 61 in the WPC37846/07 -: 2 :- Second Schedule to the IT Act may be declared as violative of Articles 14 and 21 of the Constitution in so far as it relates to Recovery of Debts Due to Banks and Financial Institutions Act, 1993, hereinafter referred to as the “RDB Act”, for short. 2.Before proceeding further, it needs to be noted that 'A' schedule property which was sold in auction in question belonged to the second defendant and not to the petitioner. The owner of it, who is the father-in-law of the petitioner, had filed different other matters and ultimately, his application to set aside that sale stands dismissed today vide separate judgment in WP(C). 1867/2008. This crucial fact is noticed, having regard to the contention of the bank in its counter affidavit, particularly in paragraph 3 thereof, that the petitioner has no locus standi to file an application to set aside the sale under Rule 61 of the Second Schedule as he is not the owner of the property that was sold in WPC37846/07 -: 3 :- auction. 3.Along with the counter affidavit of the bank, it has placed on record Ext.R1(a), judgment issued by this Court in WP(C).14251/2006. That writ petition was filed by the petitioner challenging the refusal to set aside the order on the original application. This Court affirmed the proceedings from the original application and noticed that the petitioner had not availed of the opportunities extended by the DRAT or by this Court as interim measures and is only attempting to buy more time. The confirmation of the sale was ordered to be deferred to let the petitioner to have a further opportunity of 45 days to pay the amounts. It was also clarified that if amounts are not deposited, the competent authority will be entitled to confirm the sale. 4.It is after all the aforesaid exercises and different other litigations that the writ petition in hand was filed. WPC37846/07 -: 4 :- 5.The right to complain about the sale is definitely only with the person whose property has been sold. While applying Rule 68B in the Second Schedule in the IT Act, it needs to be remembered that in so far as proceedings under the IT Act are concerned, those rules would apply against the property of the defaulter which means that the person entitled to apply would be the assessee against whom the order has become final or the person liable to pay under the orders issued under the IT Act. The rules, as they apply in Income-tax matters, would show that it is the property of the defaulter that would be attached for being proceeded against. But, when those rules in Second Schedule to the IT Act are, as far as may be, made applicable to proceedings under the RDB Act, by virtue of Section 29 of the RDB Act, they would apply to different defaulters who, by reason of the contract, would have been the principal debtor, guarantor, co-obligant etc. They may include persons who would or would not WPC37846/07 -: 5 :- have offered property, movable or immovable, either as hypotheca or under mortgage to provide collateral security. Properties of different persons may also be susceptible to attachment during the course of recovery proceedings by the Recovery Officer in enforcement of the recovery certificate. Therefore, the fact of any breach of Rule 68B, if at all, could operate or arise for consideration, only in relation to a plea in that regard, by the person whose property has been sold or is being brought to sale. Not only that, as held by this Court in WP(C).1867/2008, Rule 68B in the Second Schedule does not apply mutatis mutandis in the case of recovery proceedings under the RDB Act. Therefore, at any rate, the petitioner does not have the right to complain about any alleged violation of Rule 68B of the Scheduled Schedule. 6.With that, Rule 61 which provides for application to set aside sale also has to be applied in relation to proceedings before the Recovery Officer under the RDB Act as providing the right WPC37846/07 -: 6 :- to sue in that regard being confined to the person whose property has been sold. If property of 'A', a co-obligant, is sold in recovery proceedings, another co-obligant, 'B', who holds no title to the property that has been sold, will not have a right to file an application to set aside the sale of that property. Therefore, the question whether such an application should be supported by deposits equivalent to the amount recoverable in execution of the certificate is not a question that could be raised by the petitioner because he had no right to file an application to set aside the sale of 'A' schedule property which belonged to his father-in-law, the co-obligant. 7.In the absence of the need to answer a question as to the validity of a provision of law with reference to the facts of a given case, the courts would not step in, to consider the constitutional validity and answer that issue. Therefore, the question of validity of proviso WPC37846/07 -: 7 :- (b) to Rule 61 in the Second Schedule or any abridgement in its application to proceedings under the RDB Act, does not arise for decision in the case in hand. For the aforesaid reasons, this writ petition fails. The same is accordingly dismissed. No costs. THOTTATHIL B.RADHAKRISHNAN, JUDGE. Sha/171109