LASHMANASAMI GOUNDER Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) SPECIAL Leave is granted. This appeal is against the judgement dt. 4th April, 1991 of the Madras High Court. A sum of Rs. 12,163.50 p. was alleged to have been misappropriated by the appellant (now he was acquitted of the charge of misappropriation) and for the recovery thereof his 13.07 acres of coffee estate situated in Semmanathaputhur village was brought to sale under the Tamil Nadu Revenue Recovery Act, 1894 (short 'the ACt'). On 30th March, 1979 the sale by auction was held by the Tahsildar. The first respondent purchased for a sum of Rs. 12,225 and deposited a sum of Rs.

(2.) ,000 being 15% of the sale price. Under S. 36 of the Act, the first respondent should have deposited the balance consideration within 30 days from the date of the auction. On 23rd oct., 1981 the sale was confirmed and the balance amount was deposited on 4thh Nov., 1981. The appellant filed an application but by proceeding dt. 23rd Oct., 1981, the Revenue Divisional Officer overruled the objections and dismissed the application. On appeal the Addl. Dist. Collector, Salem set aside the sale on 13th Oct., 1982. The first respondent filed writ petition No. 246 of 1984 in the High Court. The learned Single Judge by judgement dt. 21st Aug., 1990 quashed the order of the Addl. Dist. Collector. On writ appeal, the Division Bench dismissed it. Thus this appeal. 2. The formidable objection raised by the appellant is that it is mandatory under S. 36 that the date and place of the sale shall be published in the Gazette and that the publication did not mention the place of sale. Therefore, the sale is invalid in law, It is also his further plea that it is equally mandatory that ht balance sale consideration of 85% should be deposited within 30 days from the date of sale which was done only on 4th Nov., 1981 long after one year and eight months of the date of sale. The sale and confirmation thereof are, therefore, illegal. The learned Single Judge and the Division Bench held that Form 7A of the forms prescribed under the Act read with relevant provisions of the Board Standing Order No. 41 does not prescribe the place of sale and that, therefore, the omission to specify the place of sale does not render the sale invalid nor an irregularity. Shri Selvamani, the first respondent-in-person (himself a practising Advocates) contended that it is Form 7 and not Form 7A that would be applicable to the facts of the case. Form 7 contains the place of sale and that it was complied with. Therefore, the sale is not illegal. It is also contended that the deposit was made after protracted correspondence and that, therefore, the confirmation of the sale is not illegal. We find no substance in either of the contentions. The contention that Form 7 and not Form 7A would be applicable to the facts, is not the case set up or argued either before the authorities or the Courts below. For the first time he cannot raise that plea in this Court. That apart specifically the High Court (learned Single Judge and the Division Bench) held that it is form 7A that is applicable and that it does not prescribe of place of sale and, therefore, the omission thereof does not render the sale invalid. The High Court wholly misconceived of S. 36. A reading of S. 36 manifests that the word 'shall' is mandatory in the context.

(3.) IT is settled law that the word 'shall' be construed in the light of the purpose the Act or Rule that seeks to serve. It is not an invariable rule that even though the word 'shall' is ordinarily mandatory but in the context or if the intention is otherwise, it may be construed to be directory. The construction ultimately depends upon the provisions itself, keeping in view the intendment of the enactment or of the context in which the word 'shall' has been used and the mischief it seeks to avoid. Where the consequence of failure to comply with any requirement of a provision is provided by the statute itself, the consequence has to be determined with reference to the nature of the provision, the purpose of enactment an the effect of non-compliance thereof. In its absence the consequences has to be determined with reference to the effect of the non-compliance of the provision of the legislature. Mere use of the word 'shall' need not be given that connotation in each and every case that the provision would be invariably interpreted to be mandatory or directory. But given due consideration to the object, design, purpose and scope of the legislation, the word shall be construed and interpreted in that design and given due emphasis. Sec. 36 obligates the Sale Officer (Tahsildar) that he shall publish the date and place of sale. The object thereby is an invitation to the public at large that the notified property would be brought to sale at that specified time and place and that they are invited to participate, if they so desire. To reiterate for emphasis and continuity that the object of the sale is to secure the maximum price and to avoid arbitrariness in the procedure adopted before sale and to prevent underhand dealings in effecting sale and purchase of the debtor's property. As a responsibility as sale officer and a duty towards the debtor, the sale officer should conduct the sale strictly in conformity with the prescribed procedure under the statue and the rules as the case may be. Such due and wide publicity would relieve the debtor from the maximum liability he owes and payable to the creditor. This responsibility is not only salutary to vouch safe bona fides in the conduct of the sale officer but also to ensure fairness in the procedure adopted in bringing the property of the debtor to sale. Considered from this perspective the non-compliance of S. 36, i.e., omission to mention the place of sale would visit with deprivation of the property to the debtor for an inadequate sale consideration due to absence of competing bidders. The forms either 7 or 7A are only procedural and they should be in conformity with S. 36. The form cannot prevail over the statute. The omission of specification of the place of sale in the form renders the sale not merely irregular but also invalid.