NARAYANKARWA Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioners who claim to be the tenants of a bungalow known as Kamal Kunj, situated at Bomanji Petit Road, Mumbai - 400 036 ('disputed property' for short) have filed this petition mainly to challenge two orders passed by the Tax Recovery Officer ('TRO' for short), namely order dated 9th July, 1991 and order dated 11th July, 1991. By order dated 9th July, 1991, the TRO has rejected the application made by the petitioner under Rule 60 of the Second Schedule to the Income Tax Act, 1961 ('the Act' for short) for setting aside the auction sale of the disputed property held on 7th November, 1990. By order dated 11th July, 1991, the TRO has confirmed the auction sale of the disputed property in favour of the respondent No.4. During the pendency of this writ petition, the appeal filed by the petitioners against the order dated 9th July, 1991 has been dismissed by the C.I.T. Hence, the petition has been amended to challenge the said order passed by C.I.T. as well.

(2.) The facts relevant for the present petition are that one Sultan Karim Mithani was the owner of the disputed property. The said Mithani appears to have gifted the disputed property to Mrs.Kamala Chandwani by executing a gift deed on 20th February, 1974. The said gift deed was lodged for registration on 28th February, 1974. Mrs.Kamla Chandwani inducted the petitioners as tenants in the disputed property during the period from 1974-75. The petitioners are in peaceful possession and enjoyment of the disputed property since 1974-75.

(3.) On 3rd November, 1979, the TRO attached the disputed property with a view to recover the tax arrears payable by the tax defaulter Sultan Karim Mithani. Mrs.Kamla Chandwani objected to the attachment of the disputed property by filing an application before the TRO contending that she is the owner of the disputed property and that the disputed property belonging to her cannot be attached for the tax default committed by Sultan Karim Mithani. The said application was rejected by the TRO on 28th February, 1984 under Rule 11 of the second Schedule to the Act and a proclamation of sale was issued to sell the disputed property by auction sale. Thereupon Mrs.Kamla Chandwani filed a suit bearing Long Cause Suit No.713 of 1984 in the High Court at Bombay to challenge the order dated 28th February, 1984 passed by the TRO under Rule 11 as well as the proclamation of sale. On a draft Notice of Motion taken out by Mrs.Kamla Chandwani in the said suit, this Court passed an order on 30th March, 1984 to the effect that the TRO may proceed to auction the disputed property but the sale shall not be confirmed until further orders of the Court.