SATHYANARAYANA D V Vs. TAX RECOVERY OFFICER

JUDGEMENT

(1.) THREE petitioners entered into an agreement to purchase a house property, No. 57, Manager Ranganna Lane, Bangalore City, from the third respondent. The agreement of sale was entered into on February 23, 1984 and, as against the total consideration of Rs. 2,80,000, the petitioners paid Rs. 1,30,000 as advance.

(2.) THE third respondent was a defaulter to the Income-tax Department and the property which the petitioners intended to purchase under the agreement was brought to sale by the Income-tax Department. Auction was held on August 19, 1987, pursuant to the proclamation of sale dated July 8, 1987. THE sale was confirmed on September 21, 1987, in favour of respondents Nos. 6, 7 and 8, who were the highest bidders.

(3.) THE contention of the petitioners is that both the Tax Recovery Officer and the Commissioner erred in dismissing the application on the ground that the petitioners are not "persons interested" to maintain an application under Rule 61. THEir argument is that, by virtue of the agreement of sale between them and the defaulter, they are to be treated as persons whose interests are affected and thus they have locus standi to file an application under Rule 01 of the Act for setting aside the sale for the reasons stated in the application. THEy have challenged the orders made by the Tax Recovery Officer as well as the Commissioner on various grounds referred to in the writ petitions. THEy have urged and highlighted the several material irregularities in the conduct of the sale. It is unnecessary to enumerate in detail the said irregularities urged before the Tax Recovery Officer. However, the Tax Recovery Officer rejected the application holding that the petitioners "did not sustain any substantial injury" within the meaning of proviso (a), Rule 61, of the Second Schedule to the Act. THE request to set aside the sale in favour of respondents Nos. 6, 7 and 8 was, therefore, rejected by his order dated September 17, 1987 (annexure-D). THE sale was also confirmed on September 21, 1987, pursuant to the rejection.