Case: Sunil Vasudeva and Ors Vs. Sundar Gupta and Ors

3. The facts that emerge from the multitude and collateral and exhaustive pleadings of the parties in nutshell are that Respondent Nos. 1, 2 and 3 (writ petitioners) are the grandsons of Kirodimull Lohariwala and sons of Premchand Gupta both since deceased, who constituted a H.U. F. which owned property No. 43, Prithviraj Road, New Delhi (subject property) standing in their joint names having other properties at Calcutta4. The present appellants are alleged to be the legal heirs of late V.N. Vasudeva who happens to be the income tax practitioner and lawyer of late Kirodimull Lohariwala had purchased the subject property in an open auction conducted by the Income Tax Department on 18th August, 1964 for a consideration of Rs. 2,60,000/- and the sale certificate with respect to the suit property was issued on 1st April, 19655. In August, 1957, late Kirodimull Lohariwala instituted a Suit No. 1451 of 1957 before the High Court of Calcutta against Premchand Gupta claiming the said property including other properties as his self-acquired properties and in the interregnum period, the official receiver was appointed over the subject property by the High Court of Calcutta, who took possession of the property on 1st May, 1958. The said property (43, Prithviraj Road, New Delhi) was purported to be sold under Certificate proceedings initiated by Income Tax Department for recovery of alleged income tax dues of Sambhuram Kirodimull HUF to late V.N. Vasudeva for a sum of Rs. 2,60,000/- on 18th August, 19646. At this stage, objection was raised by late Kirodimull Lohariwala against such purported sale to V.N. Vasudeva for the reason that no leave was obtained from the High Court of Calcutta which was although overruled by the Chief Commissioner, Delhi on 26th February, 1965. At the same time, application was filed by the Income Tax Department in the said Suit No. 1451 of 1957 praying for (a) condonation of the omission to obtain leave of Court before putting the Delhi property for sale and (b) leave be given to it to complete the said sale of the Delhi property in favour of V.N. Vasudeva and to give further effect thereto. A certification of confirmation of sale was issued by the District Collection Officer, Delhi purporting to confirm the said purported sale dated 18th August, 1964 in favour of late V.N. Vasudeva. At this stage, order was passed by the High Court of Calcutta on the application of Union of India dated 8th September, 1965 granting liberty to the Income Tax Department to put the Delhi property for sale by public auction or private treaty to the best purchaser or purchasers that can be got for the same. What will be the effect of the later order passed by the High Court of Calcutta dated 8th September, 1965 in reference to the order of the District Collection Officer, Delhi for confirmation of the auction sale will not be advisable for this Court to examine7. A detailed correspondence took place between the Income Tax Department and late Premchand Gupta (father of Respondent Nos. 1-3) which is not required to be dilated in the instant proceedings8. At this stage, Respondent Nos. 1-3 filed Title Suit No. 471 of 1985 (Sundar Gupta and Ors. Vs. Sita Vasudeva & Ors.) before the District Judge at Delhi on 19th May, 1985 for seeking declaration to continue to be the owners of the suit property and for injunction restraining the auction purchaser V.N. Vasudeva, predecessor of the appellants from changing the nature of the property. Indisputedly, Income tax authorities were not impleaded as parties to the suit9. Respondent Nos. 1-3 also filed Writ Petition bearing C.O. No. 18500(W) of 1985 against the Union of India and the present appellants in the High Court of Calcutta regarding the purported sale of the Delhi property to late V.N. Vasudeva under auction dated 18th August, 1964 declaring that the purported sale dated 18th August, 1964 and issuance of the certificate of confirmation of sale dated 1st April, 1965 in respect of the Delhi property be declared as null and void and the subject property be remained under attachment by income tax authorities10. Taking assistance of the order of the High Court of Calcutta dated 8th September, 1965 passed on an application filed by Union of India of which a reference has been made, affidavits/counter affidavits were filed by the respective parties and the writ petition (C.O. No. 18500(W) of 1985) was heard and judgment was reserved by High Court of Calcutta in March/April, 1986 and after almost four and a half years, the Writ Petition was dismissed by the Single Judge of the High Court on 26th October, 1990 dealing with the submissions and arriving to the conclusion that since the writ petitioners have resorted to alternative remedy of filing suit in the court of District Judge, Delhi which although was pending on the date when the judgment was reserved (Title Suit No. 471 of 1985) keeping all points raised before the High Court of which a reference has been left open to be agitated by the parties in the pending Title Suit No. 471/1985 but the fact is that Title Suit No. 471/1985 which was pending on the date when the judgment was reserved by the High Court in March/April, 1986 came to be dismissed Under Order 9 Rule 2 Code of Civil Procedure due to non-serving upon the main defendants vide order dated 3rd October, 1986 and either of the party has not brought this fact to the notice of the Court about the later developments of which reference has been made. Immediately thereafter, Respondent Nos. 1-3 filed an application for recalling/setting aside the order dated 26th October, 1990 and for deciding the writ petition on merits11. After hearing the parties, Single Judge of the High Court of Calcutta under its order dated 20th November, 1998 allowed the application filed by Respondent Nos. 1-3 and recalled the Order dated 26th October, 1990 by restraining Vasudevas from dealing with the subject property with the direction to hear the matter on merits12. The present appellants preferred appeal against the Order dated 20th November, 1998. The Division Bench of the High Court of Calcutta in M.A.T. No. 87 of 1999 disposed of the appeal under its Order dated 17th August, 2001 without interfering with the order of recalling on review application dated 20th November, 1998 but as it reflects from the record, the present appellants after taking note of the Order dated 17th August, 2001 considered appropriate to prefer SLP(C) No. 22491 of 2001 before this Court which came to be dismissed at the motion stage on 10th January, 200213. The present appellants thereafter filed application being C.A. No. 3557 of 2005 in the disposed of Writ Petition No. 18500(W) of 1985 inter alia praying that the Respondents be restrained from proceeding with any advertisement for sale of suit property as no such liberty has been given by the Court. Single Judge of the High Court, after hearing the parties, held that there was nothing pending before the Court and thus the aforesaid miscellaneous application was held to be not maintainable under its Order dated 31st March, 200614. The Order dated 31st March, 2006 passed by the Single Judge of the High Court came to be assailed by the Respondents in appeal that came to be dismissed vide Order dated 19th October 2012 with liberty to the Respondents to file a fresh suit on the self-same cause of action in Delhi, if so advised. The Respondents preferred Review Application being RVW No. 272/2012 against the impugned judgment dated 19th October, 2012 and also the Order dated 31st March, 2006. By the impugned order dated 24th September, 2014, the Order dated 19th October, 2012 was reviewed and in consequence, the order dated 31st March, 2006 was set aside and directed the Writ Petition No. 18500(W) of 1985 to be heard on its own merits which is a subject matter of challenge at the instance of the appellants in the instant appeal.

Court's reasoning:
29. Taking note of the exposition of the above principles let us consider the facts on record and it reveals that the effect of Section 293 of the Income Tax Act has been mistakenly omitted under the judgment in review and that apart, the consequential effect of the order of the High Court on an application filed by the Union of India in Civil Suit No. 1451 of 1957 dated 8th September, 1965 was open to be examined in the writ proceedings and it was the defence of the Income Tax Department in the reply to the review application and also before this Court in their counter affidavit that in the auction sale which was held in the month of August, 1964, the permission from the Court was not obtained and after the order came to be passed on their application by the Single Judge of the High Court in Suit No. 1451 of 1957 dated 8th September, 1965, it will certainly affect the auction sale held by the Income Tax Department in reference to the subject property in question and it was their stand throughout in the proceedings30. We find that the Single Judge of the High Court of Calcutta heard and reserved the judgment in Writ Petition No. 18500(W) of 1985 in March/April 1986 and after nearly four and half years, the judgment pronounced on 26th October, 1990 relegating the parties to raise all the contentions to their defence in the pending civil suit before the District Judge, Delhi itself indicates that the Single Judge was not inclined to express its opinion on merits obviously for the reason that if the finding was recorded, it would have prejudiced the rights of the parties to the litigation to be examined in the alleged pending civil suit in the District Court, Delhi which although was dismissed on 3rd October, 1986 much before the pronouncement of the judgment dated 26th October, 1990 by the Single Judge of the High Court31. In the given facts and circumstances, we are not inclined to dilate the issues on merits raised in the Writ Petition No. 18500(w) of 1985 filed at the instance of the Respondents before the High Court of Calcutta, but if the civil suit was not maintainable as alleged in view of Section 293 of the Income Tax Act and this was the purported defence of the Respondents and of the Income Tax Department and consequential effect to the Order dated 8th September, 1965 of which a reference has been made by us, no party could be left remediless and whatever the grievance the party has raised before the Court of law, has to be examined on its own merits. In our considered view, there appears no error being committed by the High Court in passing the impugned judgment dated 24th September, 2014 in exercise of its review jurisdiction and that needs no interference by this Court.