LexC.N. PARAMSIVAN & ANR. versus SUNRISE PLAZA TR. PARTNER & ORS.
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[2013] 4 S.C.R. 1 · C.N. PARAMSIVAN & ANR. v. SUNRISE PLAZA TR.. PARTNER & ORS. (Civil Appeal No.154 of 2013) JANUARY 9, 2013 [T.S. THAKUR AND GYAN SUDHA MISRA, JJ.] Recovery of Debts Due to Banks and Financial . Institutions Act, 1993 - s.29 - Income Tax Act, 1961 - A B .Second Schedule; r.57. - Auction conducted by Recovery C Officer-under the RDDB Act held il/egaland void by High Court on ground of non-compliance with r. 57 in th.e Second Schedule of'the Income Tax Act - Whether s. 29 of the RDDB Act apply the Income Tax Rules in the Second Schedule of the Income Tax Act to recovery proceedings under RDDB Act o with full force - Expression 'as far as possible' in s.29 - If vests the Recovery Officer with discretion to apply the said Rules depending upon the fact situation of each case - Held: s. 29 of the RDDB 1Act makes it clear that the rules under Income Tax Act are applicable only "as far as possible" and with the E modification as if the said provisions and the rules referred to the amount of debt due under the RDDB Act instead of the Income Tax Act - Expressions "as far as possible" and "with necessary modifications" appearing in s. 29 have been used to take care of situations where certain provisions under the F Income Tax Rules may have no application on account of the scheme under the RDDB Act being different from that of the · Income Tax Act or the Rules framed thereunder - It cannot be said that the use of the words "as far as possible" in s.29 is meant to give discretion to the Recovery· Officer under the G RDDB Act to apply the said Rules or not to apply the same in specific fact situations - While the phrase "as far as . possible': may be indicative of a certain inbuilt flexibility, the · · scope of that flexibility extends only to what is "not at all 1 2 SUPREME COURT REPORTS [2013] 4 S.C.R. A practicable" - Phrase "as far as possible" used in s. 29 of the RDDB Act can at best mean that the Income Tax Rules may not apply where it is not at all possible to apply them having regard to the scheme and the context of the legislation - r. 57 is mandatory in character - Equivalent pari materia provision B in Order XX/, rr. 84, 85 and 86 of CPC - No reason to hold that rr. 57 and 58 are anything but mandatory in nature - Breach of the requirements under those Rules will render the auction non-est in the eyes of law - Code of Civil Procedure, 1908 - Order XX/, rr. 84, 85 & 86. c Interpretation of Statutes - Legislation by incorporation - Effect - Held: The effect of legislation by incorporation of the provisions of an earlier Act into a subsequent Act is that the provisions so incorporated are treated to have been incorporated in the subsequent legislation for the first time - D Once the incorporation is made, the provisions incorporated become an integral part of the statute in which it is transposed - Thereafter there is no need to refer to the statute from which the incorporation is made and any subsequent amendment made in it has no effect on the incorporating statute. E Words and Phrases - "possible" and "practicable" - Meaning of - Held: The two words are more or less interchangeable. The partners of a firm had obtained bank loan based F on equitable mortgage of their properties. The partners defaulted in repaying the loan. The respondent-bank filed application before the Debt Recovery Tribunal whereafter an ex-parte decree was passed in favour of the bank. The property mortgaged with the bank was brought to sale G in a public auction in which the appellants emerged as the successful bidders. The auction sale was challenged. The debt recovery appellate tribunal held that the appellants-auction purchasers were not bona fide purchasers and set aside the sale and asked the partners H . to deposit the entire loan amount. C.N. PARAMSIVAN & ANR. v. SUNRISE PLAZA TR. 3 PARTNER & ORS. Aggrieved, the appellants filed Writ Petition before A the High Court. The High Court instead of going into the question whether the appellants were bona fide auction purchasers, examined the validity of the auction itself and came to the conclusion that the auction conducted by the Recovery Officer under the Recovery of Debts Due B to Banks and Financial Institutions Act, 1993 (RDDB Act) was illegal and void because of non-compliance with the provisions of Rule 57 in the Second Schedule of the Income Tax Act, 1961 which in view of Section 29 of
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