# SC 163, Rasid Ahmad v. Municipal

- **Citation:** (2012) 2 ILRA 969
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2012-08-14
- **Bench:** Devi Prasad Singh, Vishnu Chandra Gupta
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/sc-163-rasid-ahmad-v-municipal-42317
- **Pages:** 4

## Headnote

Constitution
of
India,
Article
226quashing of auction-sale proceeding -
after fall of hamper-highest bidder fail to
deposit 25% of auction sale amountadmittedly deposited 25 % amount on
next date-held-vitiate entire proceeding
of auction and sale-accordingly quashed.

Held: Para 12

In view of above, there appears to be no
room of doubt that immediately after fall
of hammer it shall be necessary for the
auction purchaser to deposit 25 per cent
of the amount of bid. Non-deposition
shall
vitiate
the
auction
and
sale
proceeding.
Accordingly,
the
writ
petition deserves to be allowed on this
solitary ground.
Case law discussed:
AIR 1950 SC 163; AIR 1969 SC 556; AIR 1954
SC 403; AIR 1953 SC 252; AIR 1961 SC 372;
AIR 1967 SC 549; 2000 (10) SCC 482; 2002
(3) SCC; AIR 1990 SC 772; 2001 (9) SCC 99;
1980 (2) SCC 437

## Text

2 All] M/S. Fartuna Foundations Engineers & Consultant (Pvt.) Ltd V. I. F.C. of India Ltd. & others
969
to cross examine PW1 but, shall not
adjourn the case so as to delay its disposal.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 14.08.2012

BEFORE
THE HON'BLE DEVI PRASAD SINGH, J.
THE HON'BLE VISHNU CHANDRA GUPTA, J.

Misc. Bench No. - 2965 of 2012

M/S. Fartuna Foundations Engineers &
Consultant (Pvt.)Ltd.

...Petitioner
Versus
Industrial Financial Corporation Of India
Ltd. And Others

...Respondents

Counsel for the Petitioner:
Sri A.P.Singh
Sri A S Rakhra

Counsel for the Respondents:
Sri G S Mishra

Constitution
of
India,
Article
226quashing of auction-sale proceeding -
after fall of hamper-highest bidder fail to
deposit 25% of auction sale amountadmittedly deposited 25 % amount on
next date-held-vitiate entire proceeding
of auction and sale-accordingly quashed.

Held: Para 12

In view of above, there appears to be no
room of doubt that immediately after fall
of hammer it shall be necessary for the
auction purchaser to deposit 25 per cent
of the amount of bid. Non-deposition
shall
vitiate
the
auction
and
sale
proceeding.
Accordingly,
the
writ
petition deserves to be allowed on this
solitary ground.
Case law discussed:
AIR 1950 SC 163; AIR 1969 SC 556; AIR 1954
SC 403; AIR 1953 SC 252; AIR 1961 SC 372;
AIR 1967 SC 549; 2000 (10) SCC 482; 2002
(3) SCC; AIR 1990 SC 772; 2001 (9) SCC 99;
1980 (2) SCC 437
(Delivered by Hon'ble Devi Prasad Singh, J.)

1. Heard Shri A.P.Singh, learned
counsel for the petitioner and Shri
G.S.Mishra learned counsel for the opposite
parties no. 1 to 3. According to office
report, notice was served on opposite party
no. 4 but he didn't turn up. There is
endorsement in the order sheet with regard
to sufficiency of service of notice on
opposite party no. 4. With the consent of
parties' counsel, we proceed to decide the
writ petition finally at admission stage.

2. Shri G.S. Mishra, learned counsel
for the respondents has vehemently argued
that the controversy may be relegated to
alternative forum i.e. Tribunal. However,
after hearing learned counsel for the parties
at length, we are of the view that the
petition may be decided on pure question of
law, hence, it is not necessary to relegate the
matter to alternative forum. It has been
settled by a catena of decisions of Hon'ble
Supreme Court that the statutory alternative
remedy is no bar for this Court to exercise
power under Art. 226 of the Constitution of
India in case petition does not involved
disputed question of facts vide AIR 1950
SC 163, Rasid Ahmad Vs. Municipal
Board Kairana; AIR 1969 SC 556, Babu
Ram Vs. Zila Parishad; AIR 1954 SC
403, Himmat Lal Vs. State of Madhya
Pradesh,AIR 1953 SC 252, State of
Bombay Vs. United Motors, Calcutta
Discount Company Vs. I.T.O. AIR 1961
SC 372; Bhopal Sugar Industry Vs. STO,
AIR 1967 SC 549,2000 (10) SCC 482,
Union of India Vs. State of Haryana,
2002
(3)
SCC,
Maharashtra
State
Judicial Services Association Vs. High
Court of Judicature at Bombay,AIR
1990 SC 772, Salonah T. Company Vs.
Superintendent of Taxes; 2001 (9) SCC
99,
T.N.Transport
Corporation
VS.
970 INDIAN LAW REPORTS ALLAHABAD SERIES [2012
Neethivalangan and 1980 (2) SCC 437,
Shiv Shankar Dal Mill VS. State of
Haryana.

3. The present writ petition under
Article 226 of the Constitution of India has
been preferred by the petitioner challenging
the impugned auction and sale proceeding
dated 15.3.2012. Various grounds have
been raised by the petitioner while assailing
the impugned auction and sale proceeding,
in which the respondent no. 4 stood as the
highest bider. However, the petition may be
decided on only one ground, hence, leaving
other grounds open, we proceed to decide
finally on the solitary ground raised by the
petitioner keeping in view the averment
contained in Para 6 of the writ petition.
According to para 6 of the writ petition,
auction and sale proceeding took place on
15.3.2012. Admittedly, under the terms and
condition it was incumbent upon the highest
bidder to deposit 25 per cent of the sale
amount immediately and rest 75 per cent be
deposited within 30 days. For convenience
Para 6 of the writ petition is reproduced as
under:-

"That it is respectfully submitted that
the opposite party no. 4 was declared
successful bidder on 15.3.2012 in respect of
property, in question, and did not deposit
25% of the sale amount with the officer
conducting the sale despite the fact the
opposite party no. 4 was declared
successful bidder on 15.3.2012. The
opposite parties particularly Recovery
Officer and Recovery Inspector of Debts
Recovery Tribunal permitted the opposite
party no. 4 to deposit 25% of the sale
amount 16.3.2012 and by further permitting
the opposite party no. 4 to deposit rest of
the amount within 30 days from 15.3.2012.
It is wholly without jurisdiction and
contrary to law."

4. The averment contained in para 6 of
the writ petition has not been categorically
denied by the respondents. The reply to
Para 6 of the writ petition is reproduced as
under:-

"Para 14 to the counter affidavit:-

That the contents of para 6 as stated
are wrong, false and misleading hence
denied. The defendant no. 4 highest bidder
had deposited 25% of the bid amount in the
given time and rest 75% amount has not
been deposited within the time as provided
and they have moved an application dated
13.4.2012 to set aside the auction and
refund of Rs. 2,29,75,000.00 (25 % of the
bid amount) against it, the Opposite Party
no. 1 has filed their objection praying
therein to forfeit the earnest money as per
Section 58 and the property may be put for
sale forthwith. Application dated 13.4.2012
and its objection is being filed as Annexure
no. C-2 and C-3 respectively. However, no
prejudice
has
been
caused
to
the
petitioner."

5. During the course of hearing,
learned counsel for the respondent admits
that the auction took place on 15.3.2012 but
25 % of the total amount was deposited on
the next date i.e. 16.3.2012. Admittedly,
terms and condition with regard to deposit
of an amount was not fulfilled by the
auction purchasers.

6. Shri A.P.Singh, learned counsel for
the petitioner had invited attention to the
Schedule II and III of the Income Tax Act,
which admittedly apply in view of Section
29 of the Recovery of Debts Due to Banks
and Financial Institutions Act, 1993.

7. Section 29 of the Recovery of Debts
Due to Banks and Financial Institutions Act,
2 All] M/S. Fartuna Foundations Engineers & Consultant (Pvt.) Ltd V. I. F.C. of India Ltd. & others
971
1993, for convenience, is reproduced as
under:-

"Application of certain provisions of
Income Tax Act--The provisions of the
Second and Third Schedules to the Income
Tax Act, 1961 and the Income Tax
(Certificate Proceedings) Rules, 1962, as in
force from time to time shall, as far as
possible, apply with necessary modifications
as if the said provisions and the rules
referred to the amount of debt due under this
Act instead of to the income tax:

Provided that any reference under the
said provisions and the rules to the
"assessee" shall be construed as a reference
to the defendant under this Act."

8. In view of above, the procedure
contained in Rule 57, Part III of the Schedule
II of the Income Tax Act regulate the auction
and sale proceeding. Rule 57 of the Schedule
II of the Income Tax Act, a copy of which
has been filed as Annexure-4 to the writ
petition, is reproduced as under:-

"Deposit by purchaser and resale in
default--(1) On every sale of immovable
property, the person declared to be the
purchaser shall pay, immediately after such
declaration, a deposit of twenty-five per cent
on the amount of his purchase money, to the
officer conducting the sale; and, in default of
such deposit, the property shall forthwith be
resold.

(2)The full amount of purchase money
payable shall be paid by the purchaser to the
Tax Recovery Officer on or before the
fifteenth day from the date of the sale of the
property."

9. A plain reading of Rule 57, Schedule
II of the Income Tax Act, reveals that on
every sale of immovable property, the person
declared to be the purchaser shall pay
immediately after such declaration a deposit
of twenty-five per cent on the amount of his
purchase money to the officer conducting the
sale.

10. Admittedly, in the present case, 25
per cent of the amount was not deposited by
the auction purchaser. UPZA and LR Act
and Rules framed thereunder contains paramateria provision with regard to deposit of
25 per cent of the sale amount. While dealing
with the para-materia provision a Division
Bench of this Court in a case reported in
2006 (24) LCD 1, M/s Swadeshi Polytex
Limited Vs. Board of Revenue, U.P. and
others (Judgement delivered by one of us,
Hon'ble Justice Devi Prasad Singh), held that
in case 25 per cent of the auction money is
not deposited by the auction purchaser, it
shall vitiate the auction.

11. It may be noted that in the case of
Swadeshi Polytex Limited (supra) while
considering the paramateria provision, the
Apex Court judgement has been relied upon
which deals with the similar situation. For
convenience, para 38 of the said judgement
is reproduced as under:-

"38. A division bench of this Court in a
case reported in 2000 (2) AWC 1505,
Manminder Singh Vs. Chandra Cold
Storage & others held that the deposition of
the entire amount by the auction purchasers
will not create any right unless the auction is
held in accordance to statutory provisions. It
has been further held that thirty days clear
notice is mandatory to hold an auction and
sale in pursuance to provision contained in
the Act and Rules framed thereunder. It has
been further held that 25% of the amount
should also be deposited immediately.
972 INDIAN LAW REPORTS ALLAHABAD SERIES [2012

Keeping in view the infirmity in the
auction and sale proceedings, the Division
Bench while exercising powers under Special
Appeal had upheld and affirmed the
judgment of Hon'ble Single Judge of this
Court whereby the auction and sale was setaside on account of non-compliance of
statutory provisions under the Act and Rules.

Relevant portion from the case of
Manminder Singh (supra) is reproduced as
under:-

"We agree that the view taken in
Raghunath Prasad (supra) and accordingly
held that the appellant herein acquired no
right in the property merely because he had
deposited the entire amount offered by him at
the auction sale. On merit also, the auction
sale was liable to be set-aside firstly due to
the reason that thirty days clear notice was
not given and secondly, because 25% of the
amount of the bid was not deposited
"immediately" as stipulated by Rule 285D of
the Rules of 1952 in asmuchas the deposit by
Cheque was not a valid deposit as per law
laid down by the Apex Court in Mahmood
Ahmad Khan (dead) through L.Rs V.Ranbir
Singh and others, 1995 AWC 896. We are of
the view that the auction sale was not sale at
all in the eye of law and 25% of the
purchased money had not been deposited
"immediately" on the appellant being
declared as the highest bidder. In the
circumstances, it would be deemed that no
sale had taken at all as held by the Apex
Court in Mani Lal Mohan Lal V. Syed
Ahmad, AIR 1954 SC 349."

12. In view of above, there appears to
be no room of doubt that immediately after
fall of hammer it shall be necessary for the
auction purchaser to deposit 25 per cent of
the amount of bid. Non-deposition shall
vitiate the auction and sale proceeding.
Accordingly, the writ petition deserves to be
allowed on this solitary ground.

13. In view of above, writ petition is
allowed. A writ in the nature of certiorari is
issued, quashing the impugned auction and
sale proceeding dated 15.3.2012 held in
pursuance to sale notice/proclamation, a
copy of which has been filed as Annexure-2
to the writ petition and the consequential
order dated 16.3.2012, a copy of which has
been filed as Annexure-1 to the writ petition
with consequential benefit. Respondents may
proceed a fresh with the auction and sale
proceeding keeping in view the observation
made hereinabove and in accordance with
law expeditiously.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 06.08.2012

BEFORE
THE HON'BLE RAJIV SHARMA, J.
THE HON'BLE SURENDRA VIKRAM SINGH
RATHORE, J.

Writ Petition No.1034 (S/B) of 2012

Amitabh Thakur

 ...Petitioner
Versus
Union of India and others

 ...Opposite parties

Constitution
of
India,
Article
226Alternative Remedy-petitioner seeking
remedy
to
from
Rules/Regulationsregarding promotion of the members of
all India Services-plea that the petitioner
not seeking any personal relief-hence
direction
to-approach
before
Central
Administrative Tribunal-can not be an
alternative forum-at most Writ Petition
be
converted
in
Public
Interest
Litigation-held-in
view
of
L.Chandra
Kumar case only Tribunal has jurisdiction
to entertain such original applicationsecond prayer for conversion into P.I.L.