M/S. R.S. INFRA-TRANSMISSION LTD. versus SAURININDUBHAI PATEL AND ORS.

Citation: [2022] 6 S.C.R. 930 · Decided: 11-07-2022 · Supreme Court of India · Bench: M.R. SHAH · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2022] 6 S.C.R.
M/S. R.S. INFRA-TRANSMISSION LTD.
v.
SAURININDUBHAI PATEL AND ORS.
(Civil Appeal No. 3469 of 2022)
JULY 11, 2022
[M. R. SHAH AND B. V. NAGARATHNA, JJ.]
Income Tax Act, 1961: Second Schedule, r. 60 – Application
to set aside sale of immovable property on deposit – Right available
to the judgment debtor u/r. 60 – Held: Is a valuable right and the
last resort/opportunity to the judgment debtor to save his property
– It is a right available to the judgment debtor after his property is
sold in a court auction – Such a valuable right available to the
judgment debtor to save his property should not be affected on the
technical ground and/or for the mistake and/or the bona fide mistake
for which he was not at all responsible – On facts, judgment debtor
filed an application u/r 60 to set aside the auction sale and in
compliance thereof, deposited the amount, and the application was
allowed by the Recovery Officer as also by DRAT which had set
aside the sale in favour of the auction purchasers – However, the
High Court while dismissing the application by the judgment debtor
u/r. 60 holding that as there was a shortfall in the deposit of the
amount while exercising the right u/r. 60, quashed and set aside the
order passed by the DRAT and the Recovery Officer – High Court
did not at all appreciate and consider the fact that for the inaccuracy
and/or mistake on the part of the Recovery Officer, the judgment
debtor cannot be made to suffer for no fault of his – When the
substantial amount was deposited, there was no reason for the
judgment debtor not to deposit the shortfall, which as such can be
said to be very meagre amount – As and when the judgment debtor
was made aware about the shortfall, immediately, the shortfall
amount was deposited by the judgment debtor – Thus, the order
passed by the High court is unsustainable, and is quashed and set
aside, and that of the DRAT is restored – Recovery of Debts due to
Banks and financial Institutions Act, 1993 – ss. 25 to 29.
[2022] 6 S.C.R. 930
930
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Allowing the appeal, the Court
HELD: 1.1 In the sale certificate, the amount mentioned
was Rs.1,27,30,527/- including interest as on 30.06.2006. The
judgment debtor while exercising the right under Rule 60
deposited Rs.1,27,30,527/- alongwith Rs. 6,75,000/- for payment
to the purchaser as penalty, a sum equal to 5% of the purchase
money and also further deposited Rs. 3,01,290/- towards interest
@ 15% from the date of sale proclamation to the date of deposit
i.e., 25.01.2007. However, it was the case on behalf of the auction
purchasers that there was a shortfall in not making the payment
of interest from 30.06.2006 to 25.01.2007. However, it is required
to be noted that as such it was the duty cast upon the Recovery
Officer to mention the exact amount in the sale certificate. The
Recovery Officer mentioned the amount in the Sale Certificate
of Rs.1,27,30,527/- including the interest as on 30.06.2006,
however, did not specify any further amount towards the interest
for the period between 30.06.2006 till the date of the sale
proclamation, i.e., 08.01.2007, which the Recovery Officer ought
to have mentioned specifically. The said mistake and/or
inaccuracy on the part of the Recovery Officer led to the shortfall
in the deposit of the amount, which was towards the interest for
the period between 30.06.2006 to 08.01.2007, otherwise, the
judgment debtor had substantially complied with Rule 60. The
shortfall was Rs.3,57,647/-. When the judgment debtor deposited
the substantial amount of Rs. 1,27,30,527/- and other amounts
due and payable under Rule 60 including the penalty and the
interest, there was no reason for the judgment debtor not to
deposit Rs. 3,57,647/- which is a very small amount as against
the amount deposited. At this stage, it is required to be noted
that though the Bank filed its reply before the Recovery Officer
in response to the application made by the judgment debtor -
borrower made under Rule 60 and in which it was stated that
there was some shortfall in the amount deposited, but according
to the judgment debtor, no calculation sheet was attached to the
reply and/or supplied to the judgment debtor. [Para 6.1][944-G-
H; 945-A-E]
1.2 At the time of hearing of the application under Rule 60,
a grievance was made before the Recovery Officer as to why the
M/S. R.S. INFRA-TRANSMISSION LTD. v. SAURININDUBHAI
PATEL AND ORS.
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SUPREME COURT REPO

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