Judgment:
Indrajit Mahanty, J.
1. In the writ application under Articles 226 and 227 of the Constitution of India, the petitioner-Shri Gobinda Chandra Pattnaik who was a guarantor for a loan granted to one M/s. Barkha Industries has sought to challenge the action of the opposite party No. 3-State Bank of Hyderabad and opposite party No. 2- Recovery Officer, Debts Recovery Tribunal, Cuttack, in effecting sale of the only residential property belonging to the petitioner, even though, the petitioner had offered to pay the highest bid amount raised at the auction conducted by the opposite party No. 2 and further the petitioner seeks to challenge the rejection of his petition, under Rule 60 and 62 of the Income Tax Act, 1961 and also further seeks to challenge the consequential confirmation of sale, made in favour of the opposite party No. 4-Birendra Kumar Pattnaik.
2. The petitioner submits that he is the owner of the property under the District Khurda, SRO/PS Jatani, Mouza Ramachandrapur, Khata No. 257/11, Plot No. 143/706, area Ac O.120 decimals and the building standing thereon. It is further submitted that the petitioner, aged about 86 years, along with his wife are residing over the said property by constructing a dwelling house thereon and lives in the said dwelling house with his son, daughter-in-law as well as grand children. It is further asserted that the petitioner has spent his entire life's income as well as income of his children for the construction of the dwelling house in the said property.
It is stated by the petitioner that he learnt from an advertisement, published in the Daily News Paper 'The Samaj' dated 4.10.2008 that his property had come to be attached, through notice for settling a Sale Proclamation under Rule 53 of the Second Schedule, referred to, in Section 29 of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred as 'RDDBFI Act, 1993'). It is asserted that the sale proclamation was published in the paper in English language. It is further averred that in the same month of October, 2008, the petitioner has come across a further notice of proclamation of sale in R.P. No. 215/2006/CTC, arising out of O.A. No. 59 of 2002 before the Debts Recovery Tribunal, Orissa, Cuttack and he learnt that opposite party No. 2 was going to put his property into auction on 22.12.2008, apart from the various other properties said to have been mortgaged with the Bank (Annexure-3).
The petitioner submits that on learning of the aforesaid facts, since O.A. No. 59 of 2002 have been decreed ex-parte against the petitioner, he filed M.A. No. 488 of 2008 along with a petition for condonation of delay vide M.A. No. 565 of 2008 and sought for to stay of the recovery proceeding in M.A. No. 497 of 2008. But since the petitioner's conducting lawyer failed to take steps on the date fixed, the opposite party No. 1 dismissed the said petitions for default. Subsequently, the petitioner immediately filed petitions for restoration of the above miscellaneous applications. The Debt Recovery Tribunal, Cuttack was pleased to issue notice to the bank for their appearance and reply, and the case was posted to 2.2.2009 for further order regarding setting aside the ex-parte judgment. While the above petitions for setting aside the judgment/restoration of the miscellaneous applications were pending before the Debt Recovery Tribunal, Cuttack, the Recovery Officer, opposite party No. 2, without taking into consideration the fact of the pendency of the restoration applications for setting aside the ex-parte judgment, went ahead and conducted the auction of various mortgage of assets, including property of the present petitioner on 22.12.2008.
3. It appears that even though the valuation report for the property of the petitioner indicates for more than Rs. 10 lakhs, the reserve price of Rs. 8,50,000/- was fixed. While there were only three participants for the auction of the petitioner's property, the opposite party No. 4 (who happens to be the nephew of the petitioner and a practising lawyer of the Bhubaneswar) offered the highest bid amount, i.e. only a sum of Rs. 640/- above the reserve price and his offer was accepted on the date of the auction.
The petitioner on learning of the same, immediately filed a petition under Rule 60 of the Second Schedule of the Income Tax Act on 20.1.2009, prior to the confirmation of sale and sought for setting aside the same in favour of the opposite party No. 4. On the basis of an undertaking of the petitioner that he was ready and willing to deposit Rs. 8,50,640/- within a period of thirty days and as evidence of his bona fide, the petitioner had also furnished Bank Draft of Rs. 1,00,000/-. This was not found to be acceptable by the recovery officer, opposite party No. 2, and was rejected. The petitioner filed another petition under Rule 61 of the second schedule of procedure for recovery of tax, for setting aside the sale, on the ground that while publishing the notice for sale of the property of the petitioner, the opposite party No. 2 has not followed the mandatory provisions laid down under Rule 52, 53 and 54 of the Second Schedule of procedure for recovery of tax and had failed to serve individual notice to the petitioner and had failed to cause a proclamation of the intended sale in the language of the district i.e. Oriya. The recovery officer did not pass any orders on the petitions filed by the petitioner under Rule 60 and 61, and while same remained pending, on 23.1.2009 he passed orders of confirmation of sale in favour of the opposite party No. 4.
4. In the background of the aforesaid circumstances, the petitioner has filed the present petition seeking exercise of the writ jurisdiction, since implementation of the aforesaid order confirming the sale/effectively took away the only shelter on the hand of the petitioner without awaiting the outcome of the pending appeal. Since the recovery officer did not accept the draft of Rs. 1,00,000/- on the ground that the petitioner had not complied with the Rule 60 of the Second Schedule, the petitioner on 27.1.2009 made out a further draft for the balance amount of Rs. 7,51,000/- totalling a sum of Rs. 8,50,000/- equal to the highest bid by the opposite party No. 4. Once again the petitioner approached the recovery officer to accept the said payment and to release the property of the petitioner from the proceeding. Such an offer of the petitioner was also not accepted by the recovery officer. A copy of the impugned order passed by the recovery officer has been annexed as Annexure-8 to the writ application, passed by the Recovery Officer in R.P. No. 215 of 2006 dated 23.1.2009. The property of the petitioner has been dealt with as Lot No. 3 of the said order and for convenience, the relevant portion is quoted below:
In respect of the Lot No. 3 property the auction purchaser had paid the total purchased money in time. However, on the 30th day i.e. 21.1.2009 C. Debtor No. 8 filed an application under Rule-60 of the second schedule of I.T. Act to set-aside the sale of immovable property.
Heard learned Counsel for the CHB and learned Counsel for the C. Debtor No. 8.
The application under Rule-60 requires deposit of the proclamation amount with interest and penalty of 5% of the purchased money.
The application filed by the C. Debtor No. 8 is bereft of the required amount of deposit.
Considering that an application under Rule-60 was filed in time, two days time was allowed to C. Debtor on request to deposit the required amount for consideration of his application under Rule-60.
Today the learned Counsel for the C. Debtor No. 8 failed to deposit required amount and instead files a petition seeking 30 days time to make the deposit.
In view of this the application filed by C. Debtor No. 8 being an incomplete one having devoid of the required amount of deposit is dismissed.
No application was filed by C. Debtor No. 8 under Rule-61.
Today C. Debtor No. 8 however has filed an application and prayed for its consideration under Rule-61 along with the application for condonation of delay.
Since the Auction Purchaser has paid the total purchased money in time and 30 days time stands completed on 21.1.2009, there being no application under Rule-61 by then and by dismissal of the application filed under Rule-60 vide today's order, the sale in respect of the lot three property is to be confirmed by operation of Rule-63 of the second schedule of IT Act. The application now filed by C. Debtor No. 8 for consideration under Rule-61 being a belated one is not available for consideration under the said provision and therefore cannot stay put operation of Rule-63.
As a consequence a confirmation of sale and sale certificate becomes due in terms of Rule-63 and Rule-65 of second schedule of IT Act.
Issue confirmation of sale and sale certificate to the auction purchaser
Apart from the aforesaid contentions, another ground has been taken by the petitioner to the effect that the petitioner's property in question has not been validly mortgaged in favour of the petitioner and hence could not have been sold by the auction of the recovery officer in such letter of the Branch Manager under Annexure-1 to the writ application dated 8.5.2000 whereby, the Branch Manager advised the Barkha Industries to provide the original title deed pertaining to the petitioner's property since the submission of original deed should have been submitted by the Bank. Under Annexure-1 to the writ petition, the Branch Manger further called upon the loanee to either submit the original deed i.e. property of the petitioner, or to replace the same by giving some other property immediately failing which, the limit extended to the loanee shall stand cancelled.
5. Separate counter affidavits have been filed by the opposite-party No. 3-State Bank of Hyderabad, Main Branch, Bhubaneswar and opposite party No. 4, the Auction Purchaser, namely-Birendra Kumar Pattnaik. The essential point raised in the counter affidavits relates to the maintainability of the writ application, in view of the availability of the alternative remedy of Appeal under Section 30 of the RDDBFI Act, 1993.
Apart from the above common contention, the opposite party No. 3 in order to dispel the contention of the petitioner regarding non-existence of the alleged mortgage, placed reliance upon a letter purported to have been written by the petitioner dated 22.7.2000 under Annexure-A/3 to establish the fact that the petitioner had in fact, created equitable mortgage by delivering documents of title to the immovable property on 7.5.1993. It is further pleaded that while the petitioner claims not to have been issued with notice before the proceeding by the Debt Recovery Tribunal nor the Recovery Officer yet he has pleaded that since the petitioner avoided to receive such notice to be served by the paper publication had to be made and only thereafter he was set ex parte by the DRT on 3.2.2003 and had not taken any steps in the matter thereafter. It is further contended that even though the petitioner had been noticed by the Recovery Officer in the matter, he could not now make complain for non-service of notice. It is contended that while there can be no doubt the Bank had fixed the market value of the property in question to Rs. 10,93,225/-, but the Government value had been determined to Rs. 8,52,481/- and, therefore, the recovery officer fixed the reserve price or realizable value at Rs. 8,50,000/-. Therefore, it is asserted that no objection to the above by the petitioner should be entertained. Further it is contended that the recovery officer who rejected the petitions under Rule 60 and 61 of the Second Schedule was fully justified. The petitioner had not made the deposit of the entire auction value along with the interest under Rule 16 along with the application, the recovery officer was fully justified in rejecting the same. Similarly, the petition under Section 61 had been filed beyond the period of limitation, which has been rejected by the recovery officer as barred by the law of limitation. In the counter affidavit filed by the opposite party No. 4-Birendra Kumar Pattnaik (Auction purchaser) further submitted that since in the present case, the sale in favour of the opposite party No. 4 has been confirmed by the Recovery Officer, the opposite party No. 4 became the lawful title holder of such property and since the petitioner was the alternative remedy by way of filing the appeal before the DRT against the orders of the recovery officer, the writ application at his behest should entertained. In support of his contention raised in the counter affidavit, it is asserted by the opposite parties that, the writ petition be rejected in limine.
6. In the light of the fact and the pleadings noted hereinafter, it became necessary first to deal with the objection of the maintainability of the present proceeding raised by the opposite parties.
The opposite parties have raised an objection on the ground of maintainability of the present writ application due to the availability of alternative remedy available to the petitioner under Section 30 of the RDDBFI Act, 1993.
The learned Counsel appearing for the opposite parties submits that a writ of mandamus cannot be issued without exhausting alternative remedy. Learned Counsel placed reliance on a judgment of the Hon'ble Supreme Court in the case of State of U.P. v. Mohammad Nooh AIR 1958 SC 86, and in particular, the following:
There is no rule, with regard to the certiorari as there is with mandamus, that it will lie only where there is no other equally effective remedy. Provided the requisite grounds exist, certiorari will lie although a right of appeal has been conferred by statute.
7. It is submitted that since the petitioner has challenged the order of sale, confirmation of sale, etc. passed under Sections 25 and 28 of the RDDBFI Act, 1993, and all the impugned orders being independent orders are appealable under Section 30 of the RDDBFI Act, before the Debt Recovery Tribunal and since the petitioner has not availed such efficacious alternative remedy, no writ of mandamus can be issued.
Reliance was also be placed by the opposite party No. 4 on a judgment of the Hon'ble Supreme Court in the case of Titaghur Paper Mills Co. Ltd., and Anr. v. State of Orissa and Anr. with Pinaki Sengupta v. State of Orissa and Ors. : AIR 1983 SC 603, which stipulates that where an Act provides for a complete machinery to challenge an order of assessment and the impugned orders of assessment can only be challenged by the mode prescribed by the Act and not by a petition under Article 226 of the Constitution. Apart from the above, the learned Counsel for opposite party No. 4, while conceding that the writ of certiorari would lie even though an appeal has been conferred by statute yet, advanced his argument that the order of Recovery Officer being 'administrative in nature', no writ of certiorari can lie against such an order.
8. In view of the aforesaid contention being raised by the counsel appearing for the opposite parties, it first becomes incumbent upon us to determine the nature of the order passed by the Recovery Officer which is impugned before us, i.e. whether such an order is an administrative order as contended by the learned Counsel for opposite party No. 4 or a quasi judicial order, since that would determine whether a writ of certiorari would lie or not.
The Recovery Officer is a statutory authority and is vested with powers under Sections 25 and 28 of the RDDFBI Act, 1993. In the exercise of such statutory authority, the Recovery Officer is vested with authority to effect auction sale of mortgaged property and confirm such sale and to execute the sale certificate in favour of the successful bidder. We also take note of the fact that if any person is aggrieved of any such order passed by the Recovery Officer, remedy is available under Section 30 of the RDDBFI Act, 1993 to file an appeal before the D.R.T.. It is important here to note that, when a Recovery Officer effects direct auction/sale of mortgage property, he in fact, acts as an Executing Court for executing a decree that has been passed in an original application, by the Debt Recovery Tribunal. Therefore, the essential rule of Recovery Officer in such circumstances is ore of execution of a decree passed by the Tribunal. Therefore, the Recovery Officer exercises his authority to execute the decree of the Tribunal and also has a authority to put the mortgage assets to be auctioned and upon deposit of the sale consideration by the successful bidder is also further empowered to issue orders of confirmation of sale, as well as to issue sale certificate. This is very well settled in law that this act by Recovery Officer of putting mortgage property to sale, confirming such sale and issuing sale certificate having the legal effect of extinguish the title of the mortgagor and creating fresh title in favour of the successful auction purchaser. Therefore, in the exercise of such authority by a Recovery Officer is clearly quasi judicial in nature. We are of the considered view that while the Recovery Officer may be vested with other administrative duties under the Act, yet, the actions of the Recovery Officer while putting mortgaged property to sale, confirming such sale and issuing certificate of sale, is clearly 'quasi judicial in nature'. Therefore, the preliminary contention of the opposite party No. 4 that the impugned action of the Recovery Officer is not susceptible a writ of certiorari since such auction is purely administrative in nature is noted, only to be rejected. We reiterate that all such actions of the Recovery Officer as impugned before us, is clearly 'quasi judicial' in nature and not 'administrative' and, therefore, clearly amenable to a writ of certiorari.
9. Therefore, since we have come to a conclusion that the impugned order passed by the Recovery Officer is in his exercising of quasi judicial functions, obviously, a writ of certiorari is clearly maintainable. Apart from the above, the very judgment relied upon by the learned Counsel for opposite parties, i.e. the case of State of U.P. (supra), the Constitutional Bench has categorically noted that, 'the pre-condition for issue of mandamus do not apply the writ of certiorari and if requisite grounds exists, certiorari would lie even after a right of appeal has been conferred by the statute.'
10. On the face of the pleadings and submissions made by the learned Counsel for both the parties, the following issues arise for determination:
(1) Whether proceedings had been conducted and concluded in accordance with the statutory Rules, and if not, what are the consequences and
(2) Whether an auction sale can be quashed after it stood confirmed and sale certificate has been issued ?
11. At the out set it is necessary to note here that both the aforesaid issues have been dealt with and covered by a judgment of a Division Bench of this Court presided over by the Hon'ble Chief Justice Dr. B.S. Chauhan, in the case of Swastik Agency 2 otners v. State Bank of India, Main Branch, Bhubaneswar and 3 Ors. reported in : 2009 (I) CLR 629 : 2009 (ii) OLR 201 and in terms of the aforesaid judgment, this Court has come to conclude as follows:
(a) 'Possession notice' is mandatorily required to be published in two leading newspapers having wide circulation in the concerned area and one of them must be in vernacular language. After having the valuation report, the authority has to then take a decision as to whether the property is to be sold as a whole or in part and accordingly reserve price is to be fixed. It further provides the various modes of alienation of the property including through tenders, holding public auction and even by private negotiation. Notice of sale is to be served upon the borrower. In case property is to be disposed of by auction, 'notice of auction sale' is also to be published in two leading newspapers having wide circulation in the said locality and one of them is to be in vernacular language.
(b) Public money should be recovered and recovery should be made expeditiously. But it does not mean that the financial institutions which are concerned only with the recovery of their loans may be permitted to behave like property dealers and be permitted further to dispose of the secured assets in any unreasonable or arbitrary manner in flagrant violation of statutory provisions.
(c) The essential ingredients of sale remain a correct valuation report and fixing the reserve price. In the event proper valuation has not been made and the reserve price is fixed taking into consideration the inaccurate valuation report the intending buyers may not come forward treating the property as not worth purchase by them since a moneyed person or a big businessman may not like to involve himself in small sales/transactions.
(d) There must be application of mind by the authority concerned by accepting and fixing of reserve price as the failure to do so may cause substantial injury to the borrower/guarantor and that would amount to material irregularity and ultimately vitiate the subsequent proceedings.
(e) The law mandates a proper valuation report and its acceptance by the authority concerned must be after due application of mind and then fixing the reserve price accordingly. An auction should be conducted in a manner where there is no possibility of collusion amongst the bidders apart from the authority being duty bound to decide as to whether sale of part of the property would meet the outstanding demand or not.
(f) The authority is under a legal obligation to be satisfied itself that price fetched is reasonable and sale has been conducted giving strict adherence to the procedure prescribed by the statute and if the sale is confirmed without considering the issue the confirmation stands vitiated and/or material irregularity in conduct of the sale would vitiate the proceedings. Therefore, auction sale can be set aside even after confirmation.
(g) When the statute provides for a particular procedure, the authority has to follow the same and cannot be permitted to act in contravention of the same. It has a legal position that, where a statute requires to do a certain thing in a certain way, the thing must be done in that way or not at all. The other methods or mode of performance are impliedly and necessarily forbidden. The aforesaid settled legal proposition is based on a legal maxim 'Expression unius est exclusio alterius' which means if a statute provides for a thing to be done in a particular, then it has to be done in that manner and in no other manner.
(h) It is the settled legal proposition that if initial action is not in consonance with law, the subsequent proceedings would not sanctify the same. In such a fact situation, the legal maxim 'sublato fundamento credit opus' is applicable which means thereby in a case where foundation is removed, the superstructure has to fall.
(i) The writ jurisdiction is discretionary in nature and must be exercised in furtherance of justice. The Court has to keep in mind that its order should not defeat the interest of justice nor it should permit an order to secure dishonest advantage or perpetuate an unjust gain or approve an order which has been passed in contravention of the statutory provisions. When the action of the State or its instrumentalities is not as per the rules or regulations and supported by the statute, the Court must exercise its jurisdiction to declare such an act to be illegal and invalid.
(j) The legal position remains that every statutory provision requires strict adherence, for the reason that the statute creates rights in favour of the citizens, and if any order is passed de hors the same, it cannot be held to be a valid order and cannot be enforced. As the statutory provision creates legal rights and obligations for individuals, the statutory authorities are under a legal obligation to give strict adherence to the same and cannot pass an order in contravention thereof, treating the same to be merely decoration pieces.
(k) Rules of interpretation requires that construction, which carries on objectives of the statute, protects interest of the party and keeps the remedy alive, should be preferred looking into the text and context of the statute. It must be so as to further the ends of justice and not to frustrate the same. Construction given by the Court must promote the object of the statute and serve the purpose, for which it had been . enacted and should not efface its very purpose.
(l) The highest bidder at the auction may be entitled for refund of the amount already deposited by him with interest.
In the light of the aforesaid principles of law laid down in the case of Swastik Agency (supra), relying on various decisions of the Hon'ble Supreme Court, the instant case requires to be decided in the light of the said settled legal position.
The said judgment of this Court in Swastik Agency stood affirmed by the Hon'ble Apex Court in SLP (Civil) No. 7548 of 2009 (State Bank of India and Anr. v. Swastik Agency and Ors.) vide its judgment and order dated 9.4.2009.
12. For the purpose of the present case, relevant Rules prescribing the procedure for recovery in Schedule-II of the I.T. Act, 1961 are quoted herein below:
Rule-52 : Sale and proclamation of sale : (1) The Tax Recovery Officer may direct that any immovable property which has been attached, or such portion thereof as may seem necessary to satisfy the certificate, shall be sold.
(2) Where any immovable property is ordered to be sold, the Tax Recovery Officer shall cause a proclamation of the intended sale to be made in the language of the district.
Rule-53. Contents of proclamation : A proclamation of sale of immovable property shall be drawn up after notice to the defaulter, and shall state the time and place of sale, and shall specify, as fairly and accurately as possible,:
(a) the property to be sold;
(b) the revenue, if any, assessed upon the property or any part thereof;
(c) the amount for the recovery of which the sale is ordered;
(cc) the reserve price, if any, below which the property may not be sold; and
(d) any other thing which the Tax Recovery Officer considers it material for a purchaser to know, in order to judge the nature and value of the property.
Rule-54. Mode of making proclamation : (1) Every proclamation for the sale of immovable property shall be made at some place on or near such property by beat of drum or other customary mode, and a copy of the proclamation shall be affixed on a conspicuous part of the property and also upon a conspicuous part of the office of the Tax Recovery Officer.
(2) Where the Tax Recovery Officer so directs, such proclamation shall also be published in the Official Gazette or in a local newspaper, or in both; and the cost of such publication shall be deemed to be costs of the sale.
(3) Where the property is divided into lots for the purpose of being sold separately, it shall not be necessary to make a separate proclamation for each lot, unless proper notice of the sale cannot, in the opinion of the Tax Recovery Officer, otherwise be given.
13. Undoubtedly, the loanee failed to repay the loan in terms of the agreement entered into with Opp.Party No. 2-Bank and therefore, the Bank had every right to seek recovery as expeditiously as possible, keeping in mind the legislative intent for a speedy recovery of loan advanced by the financial institutions.
However, all such institutions are legally bound to ensure strict compliance of the statutory requirement, particularly of those provisions which have been enacted to protect the interest of borrower/guarantor. Thus, the legislature in its wisdom to protect the pubic interest at large from any kind of misrepresentation or fraud, enacted the provisions of Rule-52(2) with the mandatory requirement that where any immovable property is ordered to be sold, the same must follow by a proclamation of the intended sale to be made in the language of the district. The aforesaid Rule read with Rule 53 requires that proclamation of sale shall be drawn up after notice to the defaulter and shall state the time and place of sale and shall specify, as fairly and accurately as possible, the property to be sold, the revenue, if any, assessed upon the property or any part thereof, the amount for the recovery of which the sale is ordered, the reserve price, if any, below which the property may not be sold and any other thing which the Tax Recovery Officer considers It materials for a purchaser to know, in order to judge the nature and value of the property. Thereafter, Rule-54 mandates that every proclamation . for the sale of immovable property shall be made at some place on or near such property by beat of drum or other customary mode, and a copy of the proclamation shall be affixed on a conspicuous part of the property and also upon a conspicuous part of the office of the Tax Recovery Officer. Under Sub-rule (2) to Rule-54, where the Tax Recovery Officer so directs, such proclamation shall also be published in the Official Gazette or in a local newspaper, or in both. The requirement of such public notice as required under Rule-52 is 'in the language of the district'. Under Rule-54(2), proclamation must be in local newspaper, that means to invite maximum number of bidders, so that the property can fetch higher price.
14. The natural corollary of compliance of the aforesaid statutory provisions is that there has to be a proper valuation of the property on the basis of which the set up price may be fixed and auction may be held only after having wide publication. The intent behind the aforesaid legislation is to protect the borrower and guarantor from any kind of depressed sale of their property and to certain extent to prevent any kind of collusion or fraud either by the authorities or by the auction bidders. The non-compliance of the statutory provisions would vitiate the proceedings altogether and from the point of non-compliance of the statutory requirement proceedings would render invalid, if not nullity.
15. From the pleadings in the petition and the submissions made by the learned Counsel for the parties, it appears that the notice of sale/proclamation as required under Rules 52 and 53 of Schedule-II of the Income Tax Act, 1961 was published in local daily 'The Samaj' dated 4.10.2008, a copy of which has been annexed as Annexure-2 to the writ application. On a perusal of the same, it is seen that the said publication though in a vernacular daily, was made in English language and not in the language of the district as required under Rule-52(2). So the admitted position is that the publication of the notice for settling a sale proclamation was not in conformity of the requirement of Rule-52(2). Even apart from the same, the so called notice for settling the proclamation does not contain the details as required under Clauses (a) to (d) of Rule-53 inasmuch as the said notice does not contain the amount of recovery for which the same was being ordered nor the reserve price, if any, fixed for sale of such property.
16. From the records of the Recovery Officer it appears that the proclamation of sale under Rule-52(2) was stated to have been published in the daily vernacular 'Sambad' dated 27.11.2008 in English and not in the language of the district i.e. 'Oriya'.
17. Apart from the aforesaid facts, it is clear from the pleadings of the parties that while valuation report for the property of the petitioner was indicated to be Rs. 10 lacs, no justifiable reason was given as to why the reserve price less than Rs. 10 lacs i.e. Rs. 8,50,000/- was fixed in the case. There were only three participants for the auction of the petitioner's property of whom Opp.Party No. 4 (who happens to be the nephew of the petitioner and a practising lawyer of Bhubaneswar) offered the highest bid amount i.e. Rs. 640/- above the reserve price fixed by the Opp.Party-Bank. This fact itself creates a great doubt in the veracity of transaction in question and is clearly indicative of a possible collusion/complicity between the authorities concerned and the bidders on the other hand.
18. Apart from the above, it also appears that white the petitioner had, in fact, filed M.A. No. 488 of 2008 before the D.R.T. seeking to set aside the ex parte decree passed against him on O.A. No. 59 of 2002 and the same has dismissed for default for non-appearance of the counsel for the petitioner on the date fixed, an application for restoration of the aforesaid M.A. was pending consideration before the D.R.T. and the D.R.T. had issued notice to the Bank for their appearance and reply and the case had been posted to 2.2.2009. While keeping the aforesaid matter pending, the property of the petitioner/Guarantor was sought to be sold on 22.12.2008. On 20.1.2009, a petition under Rule-60 was filed by the petitioner along with a Bank Draft of Rs. 1,00,000/. and an undertaking to deposit the further bid amount made by the highest bidder within 30 days, but the same came to be rejected. Thereafter, the petitioner filed a second petition under Rule-61 of the Second Schedule for setting aside the sale on the ground of non-compliance of the mandatory provisions. While the Recovery Officer did not pass any order on the said petition and while keeping the same pending, on 23.1.2009, passed orders of confirmation of sale in favour of Opp.Party No. 4. As noted herein above, on 27.1.2009, the petitioner had made out a further draft for the balance amount of Rs. 7,51,000/- apart from the earlier draft of Rs. 1,00.000/- totalling Rs. 8,51,000/- and when the petitioner approached the Recovery Officer to accept the said amount, the said offer of the petitioner was turned down by the Recovery Officer.
19. In the light of the aforesaid facts, it is clear that while the petitioner made every attempt to save his property from sale and having failed to ensure that, once again had approached the Recovery Officer under Rules 60 and 61 for setting aside the sale by producing Drafts of Rs. 8,51,000/-, but the same having been turned down, he has approached this Court.
20. In the light of the aforesaid facts, it is clear that while the statutory requirements of Rules, 52,53 and 54 have not been strictly complied with, the reserve price seems to have been perfunctorily arrived at Rs. 8,50,000/- while the Valuation Officer had indicated its value at Rs. 10 lacs and there is no justifiable reason whatsoever for such reduction. More so, non-publication of notice in 'Oriya language' is also fatal as it has clearly deprived the persons who do not know English language from participating in the auction proceeding.
21. In the facts of the present, since the petitioner had already prepared the Draft of Rs. 8,51,000/- and offered the same to the Recovery Officer, no justification exists for not having dealt with the petitions filed by the petitioner prior to confirming the same in favour of Opp.Party No. 4 and the facts of the case, clearly establish the petitioner's bona fide in trying to deposit the price of the property attempted to be sold.
22. The statutory notice under Rules-52 and 53 was published in English language, and not in 'the language of the district', which clearly indicate non-compliance of the statutory requirements. The object behind such requirement is that if the notice is published in English though in a newspaper printed in vernacular language, it would definitely not sub-serve the purpose for which the Rule has been grafted. Therefore, notice has to be published in vernacular language in the newspaper published in vernacular language. The property mortgaged and the secured creditor may be situated in 'rural area' and the persons residing in rural areas may be interested in purchasing it. Therefore, the need was considered to have the publication of the notice in vernacular language and non-compliance of such a mandatory requirement vitiated the proceedings.
23. In view of the above, the writ petition succeeds and is allowed. The sale of the petitioner's assets in Lot No. Ill and confirmation of the same in favour of Opp.Party No. 4 are quashed. This case is squarely covered by the judgment of this Court in the case of Swastik Agency (supra). In such facts situation, Opp.Party No. 4 is entitled to get refund of the amount deposited by him with interest @ 10% per annum within a period of four weeks from today. The petitioner is directed to deposit the bank draft of Rs. 8,51,000/- with the Bank within a period of one week from today. Opp.Party No. 1 is directed to re-calculate the amount due from the petitioner including interest in terms of Rule-60 and thereafter raise fresh demand after adjustment of the amount to be deposited by the petitioner in terms of our directions and the balance amount shall be deposited by the petitioner within four weeks therefrom, failing which the Opp.Party-Bank shall be at liberty to proceed against the petitioner for recovery of its outstanding dues in accordance with law.
B.S. Chauhan, C.J.
24. I agree.