MITEXCO Vs. CANARA BANK

JUDGEMENT

(1.) THE petitioners seek quashing of the orders passed by the Recovery Officer, DRT -II, Mumbai in Recovery Proceeding No. 538 of 2004(i) dated 28th September, 2012 ordering a fresh attachment on the immovable property of the Petitioners; and (ii) dated 4th April, 2013 dismissing the review application filed by the Petitioners seeking a review of the order dated 28th September, 2012.

(2.) THE primary ground of challenge in this writ petition is that by virtue of rule 68B of the Second & Third Schedules to the Income Tax Act, 1961 (IT Rules) read with section 29 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (RDDB Act), the Recovery Officer seized to have jurisdiction to take any action for attachment and sale of the residential immovable property of the Petitioners as the same was sought to be done after the expiry of three years from the end of the financial year in which the Original Application was decreed in favour of the Respondent Bank. According to the Petitioners, the order giving rise to a demand as contemplated under rule 68B of the IT Rules was dated 29th July 2004 (the date on which the Original Application was decreed) and therefore, the period of three years commenced from 1st April 2005 and expired on 31st March 2008. It is on the strength of this rule that the Petitioners have challenged the orders passed by the Recovery Officer.

(3.) WE must state at the outset that under normal circumstances, we would have relegated the Petitioners to the alternate remedy available under section 30 of the RDDB Act which provides for appeals from the orders passed by the Recovery Officer. However, since an important question of law is raised in this petition viz. the applicability of rule 68B of the IT Rules, to recovery proceedings initiated under the RDDB Act, we are entertaining and deciding the writ petition without relegating the Petitioners to the alternate remedy.