RAMESH MEHAR Vs. RECOVERY OFFICER

JUDGEMENT

(1.) In this case, the petitioner has called in question the validity of the order at Annexure-A dated 24.7.2009 whereby the Debt Recovery Tribunal, Bangalore ('DRT' for short), has dismissed his application seeking extension of time for depositing the balance of the bid amount. The 1st respondent had issued an auction notification dated 11.6.2009 proposing to sell property bearing No. 347-A (formed in R.S. No. 118/1), Assessment No. 114/1-A situated at Nittuvalli, P.B. Road, Davanagere, measuring East to West 66+64/2 feet and North to South 60+195/2 feet, with a reserve price of Rs. 1.25 crores. The petitioner deposited 10% of the reserve price with the Recovery Officer while submitting his bid. He being the successful bidder deposited 25% of the bid amount on the same date. The balance of Rs. 94,19,999/- + poundage fee of Rs. 1,25,610/- should have been deposited on or before 16.7.2009. The petitioner deposited a sum of Rs. 31,40,000/- on 15.7.2009. On 5.8.2009, he filed an application under Rule 18 of the Debt Recovery Tribunal (Procedure) Rules, 1993 (for short 'DRT Rules') seeking grant of thirty days to deposit the balance of the bid amount. The 1st respondent rejected the application by his order at Annexure-A dated 24.7.2009 and forfeited Rs. 31,40,000/-. He filed an appeal challenging the said order before the DRT. The DRT has rejected the appeal by order at Annexure-B dated 23.11.2009.

(2.) Learned Counsel for the petitioner would contend that petitioner was not in a position to deposit the balance of the bid amount within 15 days from the date of auction. Therefore, he made an application seeking extension of time to deposit the balance of the amount. It is argued that having regard to the expression 'as far as possible' contained in Section 29 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 ('DRT Act' for short), Rules 57 and 58 of Part III of Second Schedule of Income Tax Act, 1961 (for short Income Tax Rules) cannot be strictly applied to the instant case. The Recovery Officer has power to extend the time for payment of the balance of the bid amount. Alternatively, he submits that Rule 18 of the Debt Recovery Tribunal (Procedure) Rules, 1993 authorises the Tribunal to make such orders to give such directions as may be necessary or expedient to secure the ends of justice. Since the petitioner has deposited a part of the bid amount, the Tribunal ought to have accepted the reasons assigned and extended the time to deposit the balance of the amount.

(3.) On the other hand, Sri N. Devadas, learned Senior Counsel appearing for the third respondent submits that petitioner has failed to deposit the balance of the bid amount within the period prescribed in Rule 57 in the Second Schedule of Income Tax Rules. Therefore, the first respondent has rightly rejected the application. Rules 57 and 58 are mandatory in character. In this connection, he has relied on the decision of the Apex Court in C.N. Paramsivam & Another vs. Sunrise Plaza Tr. Partner and others - , : 2013 SCW AIR(1036) He draws my attention to Rule 60 of the Income Tax Rules and submits that an option is available to the defaulter or any person whose interest is affected by the sale to apply for setting aside the sale on deposit of the entire amount within 30 days from the date of sale. If the time is extended to the auction purchaser, the right of the defaulter or any person whose interest is affected will be defeated. Therefore, the Recovery Officer is justified in rejecting the application of the petitioner.