1. Both the appeals directed against the orders passed by the Recovery Officer auctioning the property and even confirming the sale are being disposed of by this common judgment.
The decree-holder Bank had obtained money decree in Suit No. 552/86 from Jullandhar Court on 28.7.1987 for Rs. 21,17,551.64 along with future interest. The said decree was sought to be executed by the sale of mortgaged property. The execution proceedings came to be transferred to Debts Recovery Tribunal, Jaipur in view of the provisions of Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
The Recovery Officer issued sale proclamation and the property which was already mortgaged with the Bank was put to auction on 6,3.1997. The highest bid for Rs. 43,47,000/- in favour of respondent No. 3 M/s.
Jogasingh Sons was accepted.
3. The objection petition for challenging the auction stood dismissed by the Recovery Officer resulting into the confirmation of the sale on 12.9.1997 and issuing of the sale certificate in favour of the auction-purchaser.
4. Jagdish Jain was one of the partners of M/s. Jindal Trading Company.
The partnership consisted of husband and wife. Master Lalit Jain, the appellant in Appeal No. 174/97 is the minor son of Jagdish Jain.
Both the appellants had raised the objections contending inter alia that the auction sale held on 6.3.1997 is liable to be set aside on the ground of illegality and material irregularity in the conduct of sale.
5. The decree-holder Bank and the auction-purchaser have resisted the claim and submitted that the sale held was quite legal and was held by following the necessary procedure. It is also contended that the objections as well as the appeals preferred by the father and again by the father in the name of his minor son respectively are nothing but an attempt to delay the recovery of the Bank.
6. On hearing the learned Advocates on behalf of the parties, the only points which arise for consideration are, whether the appeals are maintainable, and if so, whether the sale is liable to be set aside on the grounds of illegalities or material irregularities 7. The decree obtained on 28.7.1987 by the Bank in Jullandhar Court for Rs. 21,17,551.64 alongwith future interest at the rate of 20% per annum from 5.10.1984 was already sought to be executed in execution petition bearing No. 1990/91 in the Jullandhar Court. The decree was in the following terms : "..... It is ordered that the suit of the plaintiff Bank for the recovery is decreed as against M/s. Jindal Trading Company and its partners, defendant Nos. 1 to 3 with costs..... The recovery can be effected by the sale of hypothecated goods and mortgaged property." The property consisting of 20 Kanals of land was purchased by Jagdish Rai Jain and his wife Smt. Bimla Rai who floated the partnership firm in the name of M/s. Jindal Trading Company.
8. The execution petition filed in 1991 was transferred to Debts Recovery Tribunal, Jaipur in 1996. While narrating the facts in Appeal No. 174/97 by the minor son of Jagdish Jain it is referred in the para 4 that "that the learned Tribunal was pleased to issue Recovery Certificate for the amount of Rs. 2,47,30,295.95..... in Appeal No, 163/97 the averments in para 3 of the amended appeal memo are to the same effect.
9. The mortgaged property was auctioned on 6.3.1997. Apart from the question of maintainability of appeals and the delay in preferring them, let us see the nature of the objections trumpted in both the appeals, one filed on 9.3.1997 and the other on 20.9.1997 respectively.
The nature of the objections raised by the father and son through the same Advocate are practically the same.
10. Mr. Gupta, the learned Advocate appearing for both, the father and son during execution proceedings and also in these appeals contended that the property was put to auction without attachment. The provisions of the Second and Third Schedule to the Income Tax Act and the Income Tax (Certificate Proceedings) Rules, 1962 as in force from time-to-time are made applicable under Section 29 of the Act for the recovery of dues during execution proceedings. The procedure is in pari materia with the procedure laid down under Order XXI of Code of Civil Procedure. The Attachment, Service of Notice of Attachment, Sale Proclamation and the Sale by Auction is the procedure contemplated under Rules 48 lo 57 of Part-Ill of Annexure-I of the Act. Mr. Gupta vehemently urged that all these rules are observed by the Recovery Officer in breach. Initially the Bank without perusing the record had filed its reply to the objections in the most casual manner. But now in appeals on production of the relevant documents the appellants are completely exposed when they tried to raise objections about the non-compliance of the statutory provisions. We have already seen that the execution petition was filed on 8.2.1989 (vide copies annexed to the reply by the Bank in both the appeals). Not only it the property was duly attached in the year 1989 itself. The necessary entry in the Revenue Record was also effected showing attachment of the property.
"Report No. 187 Roznamcha attachment Roznamcha year 1990-91 from Smt. Bimla Rai w/o Jagdish Rai 3/4 share and Jagdish Rai s/o Shiv Lal 1/4 share favouring Punjab and Sind Bank, Bhogpur, for Rs. 41,60,925.19 ps. attached." It appears that this entry was certified on 4.11.1994. The fact remains that the property was duly attached and after attachment Smt. Bimla Rai died on 20.3.1994. It was not therefore, necessary to attach the property again when the execution proceedings were transferred to Debts Recovery Tribunal, Jaipur. The further proceedings were liable to be proceeded with under Section 31 of the Act from the same stage before the transfer. It is not even the case made out on behalf of the appellants that fresh attachment under any procedure or the rules is contemplated.
11. The second objection raised by Mr. Gupta is that the property was auctioned without bringing the L.Rs. of deceased Bimla Rai on record.
In fact, the case made out by Jagdish Jain was of partnership between him and his wife. It is not known as to what happened to this alleged partnership after the death of Bimla Rai. Looking to the nature of facts narrated by the appellants, it is apparent that the partnership was nothing but a family arrangement. The property was already mortgaged. It was not even necessary to bring the L.Rs. on record.
However, reply filed by the Bank shows that the L.Rs. were duly brought on record on 23.8.1994. Here again the conduct of the Bank was not proper. Because the Bank initially showed ignorance about the death of Bimla Rai, the stand taken by the Bank before the Recovery Officer was again the casual approach. Mere conduct would not help the appellants in denying the reality. The reality is that both the sons including Lalit Jain, the appellant in Appeal No. 174/97 and three daughters besides Jagdish Jain, the husband of Bimla Rai were duly brought on record. The appellants cannot make any grievance in that behalf.
12. The third objection raised in both the appeals and also before the Recovery Officer was that the property was sold at a throw-away price.
The property consisting of 20 Kanals fetched Rs. 43,47,000/- in the auction sale. Curiously enough the real price if any, was never disclosed at any time by Jagdish Jain. There is neither any valuation report nor any other documentary evidence to show that the real price was much more than the auction price. Mr. Gupta tried to suggest at the time of argument that the property was worth more than Rs. 2 crores. It has absolutely no basis. One does not know on what basis the arguments are advanced. Jagdish Jain and his Advocate were participating during the execution proceedings. The Recovery Officer in all fairness had granted an opportunity to bring the bidders who could offer more bid than the auction price.
"In case the said price appears to be less to the objector, then he could have produced some alternate purchaser for better price in the Court but since last four months no better purchaser has been produced.....
In case the Objector arranges to produce purchaser for a sum representing atleast 20% more of the sale price along with a demand draft within 15 days, then setting aside the auction can be reconsidered." Whether it was permissible or not is a different question. The fact remains that inspite of this opportunity the objector Jagdish Jain could not avail of it. He had prayed for more time which was rightly rejected.
13. The Recovery Officer had called for the valuation report from M/s.
Grover Suri Associates. It was on the basis of his report the reserve price was fixed.
14. During the appeal one of the bidders has come with a fresh offer for 10% more. The application is not only misconceived but unwarranted.
One of the bidders had no locus standi to apply in such manner. The learned Advocate presenting the said application should have resisted such attempt. What is significant from this conduct of offering 10% more is that the price at which the property was sold was not the throw-away price or was not even grossly inadequate. In fact, inadequacy of price cannot be the ground for setting aside the sale.
15. Mr. Gupta then tried to challenge the auction on the ground that the payment by the auction-purchaser was not made within the stipulated time. 25% of the auction-price was liable to be paid forthwith while the remaining amount of 75% was liable to be paid within 15 days. The auction is held on 6.3.1997. There were public holidays for three days thereafter in Punjab. Therefore, the payment was made on 10.3.1997. In the auction notice appearing at page 65 of the paper book (P-8) it was clarified that "in case due to some unavoidable circumstances the highest bidder is unable to deposit 25% of the auction money with the Court through bank draft, in that case the highest bidder can deposit the same within 24 hours....". The condition of immediate deposit was, therefore, duly relaxed under the terms of sale proclamation and the sale conditions.
16. In the copy of sale certificate or confirmation of sale annexed as P-23 at page 123 of the paper book in Appeal No. 163/97, it is mentioned that the full amount of purchase money was paid on 27.3.1997.
Taking advantage of this figure 27.3.1997, it is advanced that the remaining amount was not paid within 15 days. After all it is a true copy and not a certified copy. At the time of argument learned Advocate on behalf of the auction-purchaser has produced the copies of four drafts showing that the payment was made on 21.3.1997 itself and not on 27.3.1997.
17. In any case, therefore, the purchase price was paid within the relaxed and stipulated time.
18. Lastly, it was advanced that the property was already leased and that, therefore, it was not liable to be sold. Suffice it to say that the alleged lease was created just to hamper the sale proceedings. The application filed by the so-called lessee was dismissed by the Recovery Officer.
It is thus apparent that the property which was mortgaged was duly attached in the Civil Court itself. On transfer Mrs. Mahajan, Advocate was duly appointed as Auctioneer who had conducted the sale by following the necessary procedure. There was sufficient publication in the newspapers. The valuation report was also given and on that basis reserve price was fixed. In short, there was no illegality or material irregularity in the conduct and publishing of the sale.
19. Jagdish Jain was trying to protract the proceedings and to create obstacles during execution proceedings. Raising of similar objections through the minor son and through the same Advocate was also an attempt to thwart the proceedings. The sale was confirmed on 12.9.1997. Minor son Lalit Jain raised objections on 20.9.1997. Lalit Jain of course could not have got better guardian than his own sister even though the father is alive and happens to be the natural guardian. Seeing that all the attempts failed, Jagdish Jain had set up his son as well as daughter to raise objections on 20.9.1997. After the confirmation of sale and the issuance of the sale certificate the appeals filed on 23.10.1997 and 28.11.1997 are thus not maintainable in law. The reasons assigned for the delay are absolutely baseless and misconceived. The delay goes unexplained.
20. Contention is also raised about the calculations in the Recovery Certificate or the amount of dues. If the calculations are incorrect or if there is an error apparent on the face of record vis-a-vis a decree, J.D. may apply before the Presiding Officer. The entertainment of application shall be restricted to the correction, if any and the figure in the certificate. It shall not affect the sale and confirmation of sale in any way. Correction would be relevant to either increase or reduce the decretal liability.
21. The result is that both the appeals merit no consideration and as such they are liable to be dismissed. Looking to the casual approach of the Bank and looking to the nature of facts, there shall be no order as to costs in both the appeals.
Appeal No. 163/97, Jindal Trading Co. v. Punjab and Sind Bank and Ors., is dismissed.Master Lalit Jain (Minor) v. Punjab and Sind Bank and Ors.,