Allahabad H.C : Where an order for the sale of immovable property has been made, if the defaulter can satisfy the TRO that there is reason to believe that the amount of the certificate may be raised by the mortgage or lease or private sale of such property, or some part thereof, or of any other immovable property of the defaulter, the TRO may, on his application, postpone the sale of the property comprised in the order for sale, on such terms, and for such period as he thinks proper, to enable him to raise the amount.

High Court Of Allahabad

Amar Chand Agrawal & Ors. vs. CIT & Ors.

Section Sch. II, r. 66

Ravi S. Dhavan & V. P. Goel, JJ.

Civil Misc. Writ No. 1164 of 1983

25th April, 1998

Counsel Appeared

V.B. Upadhyay with V.B. Singh, for the Petitioner : M. Katju, for the Respondents

JUDGMENT

RAVI S. DHAVAN, J. :

This petition has been pending in the High Court for almost 15 years. The issues relate to the controversies under the IT Act, 1961, and to a real estate in Kanpur. The first premises on which these who have addressed the Court are agreed and not at issue is that the cause will be seen as when it was brought to the Court; on this aspect the law is clear in Rameshwar vs. Jot Ram AIR 1984 SC 49.On the facts there is not issue between the record as has been presented by the petitioners and the respondents, that is respondents No. 1 and 2, being the IT Department. Barring these parties no other person addressed the Court. The Court was not addressed by respondents Nos. 3 and 4, either.For arrears of income-tax, the assessees, as at the time, R.P. Bagla, HUF Karta, B.P. Bagla and H.S. Bagla, the HUF Karta, S.N. Bagla, were defaulters with the result that their immovable property situate at Kanpur, being several houses, big bungalows and other properties, were attached by the IT Department, as the law so provides, to realise the arrears of income-tax by sale of attached properties. At the relevant time, the gross income-tax arrears stood at Rs. 58,27,534.The subject-matter of this petition relates, specifically, to the property 7/76 Tilak Nagar, Kanpur. The property having been attached by the IT authorities, it was attempted to be sold, in the first instance in 1967. The sale did not materialise because the property would not fetch the price which the IT Department was anticipating. The bids offered at the public auction were inadequate and below the reserved price. Consequentially, those who owned the properties, the defaulters, aforesaid, also raised objection, as it was within their right to do so, that the reasonable market price was not forthcoming as a result of the public auction. Their objection was that should the properties fetch a reasonable market price and beyond the bids which were received, their income-tax liability would be reduced. It is accepted by the IT Department that with the objections of the defaulters and there being no issue on the aspect that the public auction did not fetch the price which had been reserved by the Department, due permission was granted to the defaulters, on their applying to permit the sale of the property by private negotiation so that the amount anticipated by the Department could be raised. To change the scene of the sale of property by public auction and permit a sale by the defaulters to raise the amount, the law provides that the defaulter must be invested with a sanction of a specific authorisation to negotiate a sale. The only difference is that the moneys which will represent considerations received on the sale (mortgage or lease not excluded) will not be paid to the defaulters, but the IT Department. Confirmation of the sale will also be certified by the Department. The law permits such a modality. 4. This is the subject-matter of the controversy on which the arguments have been addressed after common facts were placed by learned counsel arguing for the respective parties. This provision of law which permits change of scene from a public auction to a private negotiation by specific authorisation by the IT Department needs to be noticed. The procedure is provided under the Second Schedule to the Act. It is contained in r. 66 of this Schedule and reproduced : “66. Postponement of sale to enable defaulter to raise amount due under certificate.—(1) Where an order for the sale of immovable property has been made, if the defaulter can satisfy the TRO that there is reason to believe that the amount of the certificate may be raised by the mortgage or lease or private sale of such property, or some part thereof, or of any other immovable property of the defaulter, the TRO may, on his application, postpone the sale of the property comprised in the order for sale, on such terms, and for such period as he thinks proper, to enable him to raise the amount. (2) In such case, the TRO shall grant a certificate to the defaulter, authorising him, within a period to be mentioned therein, and notwithstanding anything contained in this Schedule, to make the proposed mortgage, lease or sale : Provided that all moneys payable under such mortgage, lease or sale shall be paid, not to the defaulter, but to the TRO : Provided also that no mortgage, lease or sale under this rule shall become absolute until it has been confirmed by the TRO.” The Court refers to this aspect of the matter at the very outset as the controversy itself centres around the right of whoever may be the persons interested.5. The Court will now revert to certain essential facts. When between the years 1967 to 1973, that is for about six years, the IT Department could not arrange to sell the property which was already attached to the Department as arrears of income-tax had not been paid, the defaulters approached the Department for permission to negotiate a sale under r. 66. The first offer which met with satisfaction and requirement of the IT Department came from one Amar Chand Agrawal on 3rd May, 1982. The offer was addressed to the CIT, Kanpur. It was for Rs. 3,50,000. This offer stood on record for almost seven months. As an abundant caution before the offer could be considered for the purposes of being accepted or approved by the IT Department, it wrote to the defaulters through the CIT, Kanpur, by his letter dt. 20th May, 1982. It said whereas one Sri Amar Chand Agrawal had left an offer for the purchase of the property, consent of all other co-owners may be obtained and filed in the office. In response to the letter of the CIT, Kanpur, all the other co-owners joined Mr. S. N. Bagla by signifying their consent formally in writing on 3rd June, 1982. Now before the CIT, Kanpur, the record lay in a state that where the public auction resulted in inadequate consideration, subsequently, by a procedure prescribed by law, reference r. 66, an offer larger than that given at the public auction had been received. This was an offer of Rs. 3,50,000. Further, while the defaulters had signified their consent to this sale, they withdrew all their objections at various stages and recorded it so that their objections may be treated as withdrawn. The scene had changed from one of an invitation to make an offer as at a public auction to an offer, consideration and acceptance. This offer had the consent of all concerned, even the IT Department, as the latter had permitted sale by negotiation when public auction would not fetch the reserved price. The consent of all concerned was on adequate consideration. The only matter which now remained was an approval or confirmation by the authority concerned, namely, the TRO. After having received the consent of the co-owners, the TRO formally went into a dialogue with the CIT. The records show that the past history of the property was being verified. The Department went into an exercise on what the value of the property would be. The Department had the property valued. During the period when authorisation had been permitted to the defaulters to enter into negotiations, a valuation report No. 8/AEI/RP/05/80-81/39/395, dt 23rd June, 1982, valued the property at Rs. 3,14,100. As the amount which was received was beyond the price fetched at the public auction conducted by the IT Department, the TRO forwarded his report of 19th July, 1982, to the CIT, Kanpur, with the record. Another exercise went on between the TRO and the CIT, Kanpur. This was checking and rechecking on the valuation of the property, encumbrances on the property and how much of the property was possessed not by owners (the defaulters), but by tenants. This exercise is on record in a report dt. 20th Nov., 1982, submitted by the TRO to the CIT, Kanpur. By this time, the Department, within itself, was coming to the conclusion that as this property is in the hands of tenants and it is unlikely that vacant possession would be forthcoming, the offer received is beyond and better than the value of the property assessed by the official valuer. The note recorded by the TRO for the CIT, taking all the circumstances into account mentions “looking to the facts narrated above, if the proposal is approved, the private sale may be allowed in the interest of the Revenue.” On 23rd Nov., 1982, the officer of the CIT, Kanpur, recorded an endorsement for the TRO : “TRO should decide the matter on merit.” The TRO on 24th Nov., 1982, wrote to petitioner No. 1, Amar Chand Agrawal, that the offer of3rd May, 1982, upon which consent had been received from the defaulters on 3rd June, 1982, has been considered carefully and it is accepted. The purchasers were now required to deposit a sum of Rs. 3,50,000 in favour of the TRO within seven days of the receipt of the letter, copy of this letter was endorsed for information, as an abundant caution, by the TRO to : (1) the IAC, C-Range, Kanpur, (2) Mr. S.N. Bagla, Karta, a defaulter, (3) Mr. B.P. Bagla, another defaulter, and (4) the CIT, Kanpur, in compliance to his letter dt. 23rd Nov., 1982. Having verified the valuation of the property and satisfied that the offer was more than what was valued, and having assessed that the amount will be paid to the TRO, as the rule so provides, he now wrote to the defaulter, Mr. S. M. Bagla, deputing for the other co-owners and defaulters, authorising him to execute a sale within a period of seven days. The defaulters were reminded of the instructions that all the moneys payable, in the context of the sale, shall not be paid to the defaulters, but to the TRO and the sale will not become absolute until it is so confirmed by the latter. This certificate of authorisation was in keeping with the instructions of the rule of Sch. II. It is dt. 24th Nov., 1982. As only seven days had been provided in the authorisation to the defaulters, the modalities of the sale were to be concluded within this period. Rule 66 provides for authorisation and simultaneously provides the period within which the modalities are to be completed. On 25th Nov., 1982, petitioner No. 1, Amar Chand Agrawal, responding to the letter of the TRO, placed the entire sale consideration by a banker’s cheque of Rs. 3,50,000 in favour of, and before the TRO, Kanpur. On 2nd Dec., 1982, the confirmation of sale was issued by the TRO, aforesaid in favour of the petitioners.With the exercise of the offer, the acceptance, and the realisation of the consideration over, the contract was complete. Further, within the prescription of Sch. II, the sale having been confirmed the defaulters saw their tax arrears reduced by the amount of the sale and the petitioners rested on confidence that they were the owners of the property. This was December, 1982.As the next year came, the petitioners had it announced to them by a letter dt. 23rd March, 1983, from the CIT, that is to say, the TRC, Kanpur, that one D. R. Bajpayee, advocate, and another B.K. Agrawal, advocate had filed an appeal, against the sale of the same property, and had raised “certain objections”. The petitioners, by this letter on23rd March, 1983, were intimated that should they desire to have an opportunity of being heard on this appeal, they may appear on 4th April, 1983. The petitioners replied to this notice of an “appeal” against an order of the TRO, confirming the sale. Amongst many other objections which the petitioners had raised, they had also contended that the appeal needs to be rejected in limine as it is without jurisdiction, incompetent and is not maintainable. The petitioners objections to the appeal are reproduced below : “The CIT, Officer of the CIT, Kanpur Ref. : Your letter No. appeal/86/CIT/Recy/82-83/354/6638 dt. 23rd March, 1983 Sir,On the above subject we have to submit as under : The property No. 7/46, Tilak Nagar, Kanpur, with all the rights the previous owners (the vendors) had therein has vested in us (the vendees) absolutely by virtue of its release and duly authorised private sale confirmed in our name ; the sale thereby becoming conclusive and absolute. The previous owners as vendors have also in he absence of any impediment or restraint validly executed the corresponding sale deed which is duly registered and the document (title deed) is in our hands. We continue to deal with and the possessed of the said property as its absolute owners since then.We are further advised to state on legal advice that in the context of the letter under reply specific reply can be given or it called for in the absence of any intimation worth the name about the alleged grounds of objections, cause against us and other particulars which can be known only by inspection of records, and the relevant connected files. However, the writing/representation vaguely pointed out in the letter aforesaid is liable to the thrown out on the following apparent grounds : (a) that the ownership of the lot (being one of the several lots each separately valued) comprising the property in question only having vested in us exclusively and absolutely as its bona fide purchasers for value, the same cannot be divested ; (b) that the IT Department under the recovery proceedings or otherwise has ceased to have any statutory right or any other right to deal with the property or have any concern with the vendee’s title and possession ; (c) that the said Sarvasri D.R. Bajpayee and B. K. Agrawal (and for that matter any other person or persons) have no locus standi or legal competence to invoke jurisdiction of this authority under the provisions of the IT Act including Sch. II to prefer any sort of objections against the said private sale ; (d) that only vendors or vendees whosoever is aggrieved can question the sale against the other by a proper action under common law in a civil Court having jurisdiction, which only is the proper forum ; (e) that the so-called appeal indicated in the letter is not and cannot be an appeal. Whatever writing/representation that might have been preferred is not worthy of being even entertained for consideration and is further liable to be thrown out being without jurisdiction and sanction of law or legal persuasion, incompetent, mala fide and not maintainable. It is merely an abuse of law and its process. Hence, our profound shock and surprise on learning of some proceedings (misconceived as an appeal) initiated by S/Shri D. R. Bajpayee and another, for the first time through your letter referred to above. However, we are confident that this preliminary reply will be to your honour’s entire satisfaction. Further, it is specifically stated that we, vendees, are not and cannot be parties to the said so-called appeal. Your honour will therefore, be graciously pleased to throw out the alleged appeal in limine, it beingwithout jurisdiction, incompetent and not maintainable. Yours faithfully, (Sd) Amar Chand Agrawal, For AmarChand Agrawal & Ors. Dt. : 4th April, 1983 (Amar Chand Agrawal)”The appeal was filed under r. 86 of the Second Schedule to the Act. In short the sale was set aside by the appellate order, impugned in this writ petition. The appellate order is dt. 1st Sept., 1983. The appellate authority was of the view that D.R. Bajpayee had made an offer on 25th Nov., 1982, for a higher amount of Rs. 4 lakhs which has been rejected by the TRO without assigning any reasons. The appellate order records that this appellant had met the TRO about ten days prior. The other appellant, B.K. Agrawal, contended that he made an offer on 27th Nov., 1982, for Rs. 4,10,000 which was illegally rejected by he TRO on 1st Dec., 1982. Both the appellants contended that they were under the impression that the property would be sold by a public auction only. The appellant, B.K. Agrawal, submitted that the requisite rule had not been followed and the contention was that a private negotiation can only be permitted if the highest bid is less than the reserved price; and Amarchand Agrawal had not authority to deal with the property on behalf of his other family members; that the offer and acceptance took place on 24th Nov.,1982; that the defaulter had left India for the U.K. where he died ; that the sale of immovable property is not complete till the sale deed is registered and that the TRO was obliged to take cognizance of the higher offer of the appellant, Mr. D.R. Bajpayee.On behalf of the petitioner, Mr. Amar Chand Agrawal, the point of jurisdiction and the maintainability of this appeal was questioned. It was negatived by the appellate authority on the ground that an appeal can be filed “by any one whose interests are prejudicially affected by such an order”. The other ground which appealed to the appellate authority on setting aside the sale was that the confirmation of the sale ought not to have been done by the TRO within 30 days of the sale. The appellate authority was of the view that the sale having been made on 24th Nov., 1982, its confirmation on 2nd Dec., 1982, by the TRO was illegal. The sale was set aside, Thus, the present writ petition.One aspect which needs to be recorded is that throughout the hearings on this writ petition no one has addressed the Court on behalf of M/s. D.R. Bajpayee and B.K. Agrawal, respondents Nos. 3 and 4, though the names of their learned counsel have been printed throughout. On behalf of respondent No. 3, D.R. Bajpayee, no one appeared at all. On behalf of respondent No. 4, B.K. Agrawal, Mr. S.P. Mehrotra, who has filed his memoranda of appearance, contended that he is without instructions as his brief stood transferred to another counsel. A party, Smt. Indumati Singh, seeking impleadment, has filed an application and is represented by Ms. Poonam Srivastava, but she made no submissions either. The arguments on behalf of the parties who addressed the Court were, in effect, i.e., the petitioner and the IT Department.On behalf of the petitioners, the arguments were addressed by Mr. V.B. Upadhyay, senior advocate, assisted by Mr. V.B. Singh, advocate. The contention of counsel for the petitioners was that respondents Nos. 3 and 4 had no locus standi in the matter, regard being had to the circumstances, that the property was being permitted to be sold after a public auction did not fetch the desired result that the public auction had been postponed to enable the defaulters to raise the amount due under the certificate, on authorisation by the TRO as the law so provides. The contention was that these respondents have nothing to lose except to disturb and unsettle settled matters. They contended that these respondents watched the entire proceeding only to interfere at the last stage, and the contention of these respondents that they were not aware of what was on and that everything done was in a hurry is not bona fide. On facts it was placed before the Court that the amount as an offer and a commitment from the petitioners lay on record since May, 1982. Only orders for depositing the amount were passed in November, 1982, a period of seven months has elapsed and the record was very clear that proceedings under r. 66 were in process and the defaulters had been authorised to raise the money, in effect, by private negotiations and the IT Department was checking and rechecking whether the offer received from the petitioner met with the valuation report, was more than what the Department had evaluated and beyond the last offer received in the public auction. It is contended that the facts on record show that these respondents were watching the entire proceedings and that they say so themselves that prior to the order requiring the petitioners to deposit the amount, at least ten days before, if not more, the respondents had met the TRO. What is relevant, it is contended, is that the respondents had met the TRO. The assertion of the respondents that they had enquired or were told by the TRO that the matter will come up for public auction again is irrelevant. The fact of the matter is that the record is straight that a public auction as a modality had been abdicated or postponed and this matter also lay on record since May and June of that year. The contention that these respondents were given to understand that there would be another public auction is refuted as a submission of irresponsibility. Further, on behalf of the petitioners it is contended that there was no occasion for these respondents to file an appeal under r. 86. Taking resort to file an appeal under r. 86 as was done surreptitiously and stealthily without notice to the petitioners was not bona fide. It only delayed matters. The delay had affected the petitioners adversely as the amount which was deposited with the TRO in November, 1982, remains in deposit for the last 16 years. Insofar as these respondents are concerned, except making bald objections and having filed a misplaced appeal under r. 86, otherwise not maintainable, they neither had any risk nor anything to lose as all that they did was that in lieu of Rs. 3.5 lakhs deposited by the petitioners under the directions of the TRO after the matter had been negotiated as a tripartite arrangement between the TRO, the defaulters and the petitioners, one respondent offered Rs. 50,000 more and then the other added Rs. 10,000 over this.8. It was contended on behalf of the petitioners that Sch. II itself provides remedies to any person who may be aggrieved or may feel that his interests are affected by a sale. In the circumstances, any person whose interests may be affected, has remedies laid out. The Court’s attention was invited to r. 61 and it was submitted that the affected persons could be : (a) the Revenue, as the expression used in this rule are “such ITO as may be authorised by the Chief CIT or CIT in this behalf”, (b) the defaulter, or (c) any person whose interests are affected by the sale, and may, at any time within thirty days from the date of the sale, apply to the TRO to set aside the sale of immovable property on the ground that notice was not served on the defaulter to pay the arrears as required by this Schedule or on the ground of a material irregularity in publishing or conducting the sale. In the circumstances, it was contended that apart from the defaulter should any other person satisfy that he has sustained substantial injury for reason of non-service or irregularity, then, upon the TRO being satisfied that that is so, he may set aside the sale. The contention on behalf of the petitioners was that resort to r. 61 was never taken by these respondents because it had been the petitioners who had made a deposit of Rs. 3.5 lakhs, logically on a notice to act on the Department’s offer. Further, it was contended that if the provision of r. 61, to which these respondents always had access, for some reason was not the recourse, then, these respondents, insofar as their case was concerned, of an order which affected or aggrieved them, could be reviewed under r. 87 on the ground that the matter before the TRO suffered from a mistake apparent on the fact of record. But, these respondents never took recourse to this remedy because if sought the application would not be considered except after notice to the persons interested. The contention is that insofar as the petitioners were concerned, no one could say after they had been required to deposit Rs. 3.5 lakhs that they were not persons interested. Insofar as the respondents are concerned, it was contended, their status was that of meddlers. They attempted to enter the proceedings belatedly without having made any investment in it and for fifteen long years the petitioners had suffered with their deposit still lying with the TRO. Again, it was submitted that an appeal in any case was not maintainable, insofar as these respondents are concerned. Insofar as their status lay, any order which may have been passed by the TRO, “not being an order which is conclusive”, the provisions for appeal was resorted to not wrongly but deliberately for no other reasons than that the petitioners should not have prior notice. The order of the TRO under r. 66 permitting and authorising the defaulter to negotiate a sale was not an order which was lacking in authority nor without jurisdiction. To support the arguments on behalf of the petitioners, four cases were cited in D.V. Sathyanarayana vs. TRO (1992) 103 CTR (Kar) 251 : (1992) 194 ITR 409 (Kar) : TC 52R.802; Tax Recovery Commissioner vs. K. Basavarajappa (1992) 197 ITR 398 (Kar) : TC 52R.676; Boddpati Ramachandra Rao vs. Special Deputy Tahsildar (1969) 71 ITR 277 (AP) : TC 52R.815 and K. Basavarajappa vs. TRC (1997) 138 CTR (SC) 202 : (1997) 223 ITR 297 (SC) : TC 52R.669. The last is a case decided by the Supreme Court by which the decision in Tax Recovery Commissioner vs. K. Basavarajappa (supra), has been affirmed and the matter of D.V. Satyanarayana vs. Tax Recovery Commissioner (1992) 103 CTR (Kar)261 : (1992) 197 ITR 407 (Kar) : TC 52R.815, has been approved. Regard being had to the overall circumstances of the four cases, the net result on the law on who may be a person interested is best summed up by the decision of the Supreme Court in the matter of K. Basavarajappa vs. Tax Recovery Commissioner (supra). The Supreme Courtobserved that “It is axiomatic that mere agreement to sell creates no legal interest or right in the property which is the subject-matter of the agreement”. The Supreme Court came to the conclusion that “a person who had obtained an agreement to sell which is hit by r. 16 of the Second Schedule to the IT Act cannot make an application under r.61 for setting aside the sale as a person holding interest in the property.” In reference to a person who had a mere claim under an agreement to sell, the Supreme Court’s observation was that “he has to swim or sink on his own. Under these circumstances, therefore, the appellant must be held to be devoid of any locus standi for moving an application under r. 60 of the Rules for setting aside this auction sale.”The summing up of the petitioners was to the effect that with the public auction having failed to deliver the desired result the IT Department having checked and rechecked that the inadequacy of consideration could only be made adequate if private negotiations were to be permitted to the defaulters, as prescribed, and further having scrutinised that the offer received was beyond and better than the valuer’s report, what the petitioners were required to deposit has surpassed the valuation of the property and, thus, the petitioners were required to conclude the sale by depositing a sum of Rs. 3.5 lakhs by a bankers’s cheque, which they did. There has been no allegation of lack of bona fides on behalf of any one of any surreptitious deal. Thus, the allegations whether it is the TRO, the defaulters or the petitioners as purchases, the argument was wound up with the submission that these respondents were watching the proceedings all the time and when they found that the sale was concluded, they only jumped in with a better offer of rupees fifty thousand more and the next offer of rupees ten thousand more. It was contended that all that these respondents did was to make an offer without investing a paisa. They did not even have an invitation to make an offer. They are busy-bodies and meddlers. Under the law the sale was complete.

On behalf of the Revenue, learned senior standing counsel, IT Department, reiterated all the submissions which were recorded by the appellate authority on the appeal of respondents Nos. 3 and 4. He contended that the sale so concluded with the petitioners suffer from an error inasmuch as it had remained open before being concluded for a period of 30 days within which any person interested could lay an objection. It was contended that should the TRO in such circumstances conclude the sale within a period of 30 days then any person who may be offering more than that, excluding the person with whom negotiations were in process, the defaulter, would be a person interested. As arguments concluded on 22nd April, 1998, the next day learned senior advocate fairly acknowledged that r. 66 was a code in itself as a whole unaffected by any other provision. The Court will take up the submission as presented on behalf of the parties. The Court will take up the last submission as now there appears to be only an academic issue on what the nature of the proceedings under r. 66 are. Suffice it to say that the Court finds that the provisions of r. 66 do not appear different in principle and content than O. 21, r. 83 of the CPC. Similar provisions analogous to r. 66 as are contained under O. 21, r. 83 stipulate the principle that should a public auction be lacking in getting a reserve price or an anticipated price, a Court if not satisfied with the price fetched may permit a judgment debtor facing a decree to authorise him to arrange a better price by negotiating a sale. Likewise, this has been done in the present case, when the TRO authorised the defaulters to negotiate a private sale. Insofar as the period of 30 days is concerned, it is in the context of a public auction. The appellate authority apparently, failed and did not notice the all important expressions in r. 66, also to be found, under O. 21, r. 83. When the TRO grants a certificate to the defaulter authorising him to negotiate a sale within a period to be mentioned therein, the qualifying words, “notwithstanding anything contained in the Schedule” is not without meaning. If the words “notwithstanding anything contained in the Schedule” were not there, then the interplay of the other qualification of the sale being concluded not earlier than 30 days would come into play. It is in these circumstances, whether it is O. 21, r. 83 of the Code or r. 66 of the IT Act, both these provisions, in context, are independent, composite and rest without qualification of any provision of the Code or the Act.The legislative intent also is very clear that if the TRO is to authorise a period within which the negotiations are to be concluded, then, it is that period during which the defaulter must conclude the sale. Rule 66, thus, is not qualified by other provisions of Sch. II relating to a public auction insofar as a sale in the context of this case is concerned. Clearly, the appellate authority had made not only an apparent, but a manifest error in permitting and being impressed by an argument that the respondents D.R. Bajpai and B.K. Agrawal had a right to object within a period of 30 days. The TRO had concluded the sale as on date when the money was deposited by the person who agreed to the sale, that is when the petitioners, who negotiated under the authority of the TRO. There is another aspect of the matter which has been noticed in the judgment cited. The respondents have no locus standi in any of the negotiations permitted to the defaulters by law. On the sale of an immovable property, thus, Chapter II of theTransfer of Property Act, 1882, applies. Sec. 54 clearly lays out that in reference to the sale of an immovable property the fact that it is a contract and shall take place on terms settled between the parties, yet it does not, of itself, create any interest in or charge on such property. Nothing was settled with these respondents and the question of their having an interest does not arise. They were neither persons interested nor had any interest and they had no right to file an appeal. They do not even have a right to move an application under r. 86 or seek review of any order.The appellate order of the learned CIT is without jurisdiction as the appeal was otherwise not maintainable. Further, it suffers from a manifest error apparent on the face of the record. Respondents Nos. 3 and 4 had no interest in the immovable property. The Court is concerned that these persons did not deposit even a rupee but were permitted to thwart the negotiation, otherwise authorised by law in the defaulters with a sale concluded. The matter remained in deep freeze for 16 long years. The order of the appellate authority dt. 1st Sept., 1983. F. No. Appeal/86/CIT(R) of 1982-83, appended as Annexure-XII to the writ petition, being an order under r. 86(1) of the Second Schedule to the IT Act, 1961, is quashed. At the beginning of this judgment, the Court mentioned that the cause is being reckoned on the day when it was brought to the Court. The Court again reiterates this aspect that there should be no complication in reference to sale which was negotiated between the petitioners, under the scrutiny of the TRO with the defaulters. Schedule II has seen an amendment in 1992 by insertion of r. 68B. The time-limit for sale of attached immovable property expires after three years. The amendment is prospective. But the Court mentions this so that in this matter there will be no further complications.The petition is allowed with special costs against two sets of respondents at Rs. 5,000 each set. AgainstrespondentsNos. 1 and 2 one set and respondents Nos. 3 and 4 another set. Petition allowed with costs, as above.

[Citation : 238 ITR 240 ]

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