Dismissed

N.P.John v. Recovery Officer

Kerala HC20 Jun 2016WP(C)/3700/2008

Case brief

AI extract

What is this about?

Petitioner challenged the sale of his mortgaged property by the Recovery Officer, alleging lack of notice and procedural irregularity. The High Court examined record evidence showing multiple notice attempts and newspaper publications, finding substantial compliance with statutory procedure and dismissing the writ.

What did the court decide?

Writ petition dismissed holding that substantial compliance with statutory notice requirements was made through registered post and newspaper publication.

N.P.John Vs Recovery Officer — Specific Performance | Kerala HC (2016)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE

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MONDAY, THE 20TH DAY OF JUNE 2016/30TH JYAISHTA, 1938

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WP(C).No. 3700 of 2008 (M)

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----------------------------OA 12/2000 OF DEBT RECOVERY TRIBUNAL, ERNAKULAM.

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PETITIONER(S):

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N.P. JOHN, S/O. POTHAN, NARANGATHURUTHEL, KOODALLOOR P.O., KIDANGOOR, KOTTAYAM., NOW RESIDING AT 10219, WHITE OAK, TRAIL LANE, HOUSTON, TEXAS, 77064 U.S.A., REPRESENTED BY POWER OF ATTORNEY JOSE PHILIP, S/O.PHILIP, KAVUNNUKATTIL, KIDANGOOR P.O., KOTTAYAM.

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BY ADV. SRI.K.G.ANIL BABU.

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RESPONDENT(S):

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1. THE RECOVERY OFFICER, DEBTS RECOVERY TRIBUNAL (KERALA & LAKSHADWEEP), K.S.H.B. BUILDINGS, PANAMPILLY NAGAR, COCHIN - 36.

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2. THE PUNJAB NATIONAL BANK, A.R.M.B. BRANCH, ERNAKULAM, REPRESENTED BY ITS CHIEF MANAGER.

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3. SHRI.T.S. SABU, S/O.SCARIA, THEKKEDATH HOUSE, MANNANAM, KOTTAYAM - 686 561.

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4. SHRI.V.K. SREENIVASAN, S/O.HARIPRABHU, VEMBRAKKATTU, NEAR BOAT JETTY, KOTTAYAM.

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R2 BY ADVS. SRI.SAJI.P.JOSEPH, SRI.A.JOSEPH GEORGE. R3 BY ADV. SRI.K.K.CHANDRAN PILLAI. BY ADV. SRI.A.S.SAJUSH PAUL.

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 15-06-2016, THE COURT ON 20/06/2016 DELIVERED THE FOLLOWING:

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rs.

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WP(C).No. 3700 of 2008 (M)

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APPENDIX

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PETITIONER'S EXHIBITS:-

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EXT.P1 COPY OF THE NOTICE OF DEMAND TO THE CERTIFICATE DEBTOR, NAMELY THE PETITIONER ISSUED BY THE 1ST RESPONDENT DATED 27/06/2005.

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EXT.P2 COPY OF THE NOTICE FOR SETTING A SALE PROCLAMATION DATED 16/03/2006 ISSUED BY THE 1ST RESPONDENT.

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EXT.P3 COPY OF THE PROCLAMATION OF SALE STATED TO BE PUBLISHED IN MATHRUBHUMI DAILY DATED 23/09/2007.

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EXT.P4 COPY OF THE REPORT OF AFFIXATION OF PROCLAMATION OF SALE DEED NIL.

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EXT.P5 COPY OF THE CERTIFICATE O SALE IMMOVABLE PROPERTY ISSUED BY THE 1ST RESPONDENT IN FAVOUR OF THE 3RD RESPONDENT.

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RESPONDENT'S EXHIBITS:-

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EXT.R3A COPY OF THE SALE DEED NO.43/08 DATED 04/01/2008 OF THE ADDITIONAL SUB REGISTRY OFFICE, KOTTAYAM.

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EXT.R3B COPY OF THE TAX RECEIPT DATED 23/01/2008 ISSUED FROM THE PERUMBAIKAD VILLAGE OFFICE.

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EXT.R3C COPY OF THE TAX RECEIPT DATED 03/12/2009 ISSUED FROM THE PERUMBAIKKAD VILLAGE OFFICE.

//TRUE COPY//

P.S. TO JUDGE

rs.

A.M. SHAFFIQUE, J.

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============= W.P. (C) No. 3700 of 2008

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===================

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Dated this, the 20^th day of June, 2016

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J U D G M E N T

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This writ petition is filed seeking for a declaration that sale conducted by the Recovery Officer, Debts Recovery Tribunal in respect of 8.90 Ares of land belonging to the petitioner is illegal and is liable to be set aside. Petitioner also seeks for other consequential reliefs.

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The facts involved in the writ petition would disclose that the petitioner stood as guarantor for a loan availed of by the 4^th respondent from the 2^nd respondent Bank. He has also mortgaged his properties. He is a permanent resident of United States of America and when he came to India and made enquiries with reference to his properties with the Village Officer, he was told that the property was purchased by the 3^rd respondent in an auction conducted by the Recovery Officer. According to the petitioner, he did not receive any notice in respect of the recovery proceedings and the matter was pending before the Tribunal or the Recovery Officer. No information was received from the 4^th

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W.P(C) No.3700/08

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respondent as well. Thereafter, petitioner obtained certified copies of all the documents. Under such circumstances, petitioner, left with no other remedy, has approached this Court. According to the petitioner, the certificate of sale, Ext.P5, issued pursuant to the proclamation, is bad in law in so far as the Recovery Officer has not complied with any of the procedural requirements as contemplated under law.

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Counter affidavit is filed by the 3^rd respondent, auction purchaser of the property. According to him, the sale was held on 2/10/2007 and since there was no application to set aside sale, the sale was confirmed. Sale certificate has been issued in his favour. He had mutated the property in his name and thereafter he is in possession of the property. There is no basis for contending that no notice was issued in the matter. Notice was issued to the petitioner during the recovery proceedings and in the absence of any application to set aside sale as contemplated under the provisions of the Rules framed thereunder, the writ petition is not maintainable.

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As directed by this Court, the records of this case were called for and is produced before this Court.

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W.P(C) No.3700/08

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Heard the learned counsel for the petitioner and the learned counsel appearing for respondents 2 and 3.

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It is argued by the learned counsel for the petitioner on the basis of the relevant files that no notice had been served on the petitioner when the matter was pending before the Recovery Officer. As per the procedure contemplated under the Second Schedule to the Income Tax Act, which is made applicable to proceedings pending before the Recovery Officer, service of notice is mandatory. The notice sent has been returned with the endorsement “ addressee left station ”. Thereafter, no steps had been taken to serve notice on the petitioner. The publication made for settlement of proclamation is in English language and cannot be a substitute for personal service of notice. Petitioner had come to know about the sale only after the prescribed period for setting aside sale and therefore, in the absence of any other remedy, the petitioner is entitled to approach this Court seeking to set aside the sale.

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On the other hand, learned senior counsel appearing on behalf of the auction purchaser submitted that the writ petition itself is not maintainable and that apart, the sale held and

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W.P(C) No.3700/08

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confirmed as early as in 2007 is not liable to be disturbed. The records produced from the Recovery Officer's office clearly indicate that notice had been sent in the last known address of the petitioner and that apart publication has been made in local newspaper. Learned counsel appearing for the 2^nd respondent Bank also submits that the sale had been conducted after complying with all the procedural requirements as contemplated under the provisions of the Statute.

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Having heard the learned counsel on either side and having perused the records, the question to be considered is whether the writ petition is maintainable and whether this Court should interfere with the sale conducted by the Recovery Officer on the ground of absence of notice to the petitioner.

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It is not in dispute that under Chapter V of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, the Recovery Officer is appointed for executing the award passed by the Tribunal. As per Section 29, the Second Schedule to the Income Tax Act mutatis mutandi s is made applicable to the procedure to be adopted by the Recovery Officer. Second Schedule, Part III deals with attachment and sale of immovable

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W.P(C) No.3700/08

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property. In the case on hand, the question of attachment does not arise as the sale is with reference to property which has been mortgaged in favour of the Bank and the Tribunal had permitted recovery of the amounts due to the Bank by sale of the property. Rule 52 of Second Schedule to the Income Tax Act indicates that where any immovable property is ordered to be sold, the Recovery Officer shall cause a proclamation of the intended sale to be made in the language of the District. Rule 53 relates to the contents of proclamation and as per this Rule, the proclamation of sale of immovable property shall be drawn after notice to the defaulter. Rule 54 provides the procedure for making the proclamation. It is indicated that the sale of immovable property shall be made at some place on or near such property by beat of drum or other customary mode, and a copy of the proclamation shall be affixed on a conspicuous part of the property. The contention urged by the petitioner is that there is no notice as contemplated under Rule 53 and the procedure prescribed under Rule 54 has not been complied with. Though there is an indication in the documents made available that there is compliance of procedure under Rule 54, in so far as the document has been

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W.P(C) No.3700/08

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prepared by the Officers of the Bank, there is every chance of manipulation and therefore such documents cannot be relied upon to contend that Rule 54 has been complied with. Rules 60 and 61 are the procedures prescribed for setting aside sale. If the sale has been held on the ground of non service of notice or irregularity, an application to set aside sale has to be made within a period of thirty days as contemplated under Rule 61.

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The only question now to be considered is whether there was sufficient notice to the petitioner before effecting sale of the property. The records made available indicates that notice was sent by registered post to the petitioner's address. However, it is returned with the endorsement " addressee left station ". Therefore, it is evident that the Recovery Officer had taken steps for issuing notice to the petitioner. Records also indicate that a notice dated 27/6/2005 has been published by the Recovery Officer under Sec.25 to 29 of the Act to the petitioner in the newspaper. The publication was made in the Madhyamam daily dated 2^nd July, 2005. Issuance of notice is contemplated under Rule 2 of Second Schedule, which reads as under;

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W.P(C) No.3700/08

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“Issue of notice.

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2. When a certificate has been drawn by the Tax Recovery Officer for the recovery of arrears under this Schedule, the Tax Recovery Officer shall cause to be served upon the defaulter a notice requiring the defaulter to pay the amount specified in the certificate within fifteen days from the date of service of the notice and intimating that in default steps would be taken to realise the amount under this Schedule.”

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When no objection is raised to the said notice, then the second notice is issued only for drawing of the proclamation as provided under Rule 53. Notice dated 4/10/2005 has been issued for settlement of proclamation and the same was sent by registered post to the petitioner. The same was returned with the endorsement “addressee residing at foreign country”. Hence another notice was prepared on 16/3/2006 and published in Madhyamam Daily dated 18/4/2006 proposing to settle the proclamation on 4/5/2006. Thereafter reports were called for from the Village Officer and the proclamation for sale was issued on 3/9/2007 proposing to effect sale on 23/10/2007. The proposal for sale was also published in Mathrubhumi daily dated 23/9/2007 and it is in pursuance of the same that the sale was conducted.

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W.P(C) No.3700/08

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Sale was confirmed on 27/11/2007.

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The above records clearly indicate that all necessary steps have been taken by the Recovery Officer while effecting sale. Notice issued in the address of the petitioner was returned with the endorsement that he is abroad and he is not in the said address. Therefore, publication was effected in local dailies. The sale of property was also published in the newspaper. When all such steps have been taken, petitioner cannot contend that the sale was without notice to the petitioner. It is evident that there is substantial compliance of the statutory provisions. Therefore, it has to be presumed that the petitioner was aware of the proceedings and the sale proclamation was drawn after notice to the petitioner by way of publication.

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Yet another contention urged is that the proclamation of sale ought to be in local language. Though in Rule 52, it is stated that the proclamation of intended sale is to be made in the language of the District, necessary changes can as well be made by the Recovery Officer, as provided under Section 29 of the Act wherein it is stated that the Schedule shall apply with “necessary modifications”. It is always open for the Recovery Officer to

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choose the language which is being used before the Tribunal. Petitioner does not have a case that he does not know English, in which language the notices had been published. When there is evidence to show that notices had been published in accordance with the statutory provisions, I do not think that any prejudice had been caused to the petitioner, and there is no material irregularity in the conduct of sale. That apart, petitioner had not opted to set aside the sale as provided under the statute. Hence, there is no merit in the contentions urged.

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Writ petition is dismissed.

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Sd/- A.M. SHAFFIQUE, JUDGE

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//True Copy//

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P.S to Judge

N.P.John v. Recovery Officer

Case brief

What is this about?

What did the court decide?

N.P.John v. Recovery Officer

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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