Allowed¶52

R. Nagakrishnan v. P. Lingaraj

Madras HC29 Jan 2026CRP/3811/2025

Case brief

AI extract

What is this about?

Strike off plaint under Article 227 Constitution of India; abuse of process; relitigation; res judicata principles; income tax recovery proceedings; Tax Recovery Officer auction; Sale Certificate dated 11.04.2025; Rule 9 Schedule II Income Tax Act 1961 proviso - suit on ground of fraud; no fraud pleaded; agreement holder acquired no interest; W.P.No.7519 of 2021 - no locus standi, attained finality; O.S.No.464 of 2022 Specific Performance District Court Chengalpattu; O.S.No.114 of 2025 District Munsif Court Pallavaram; C.M.P.No.20228 of 2025 closed; no costs.

What did the court decide?

Civil Revision Petition allowed; the suit in O.S.No.114 of 2025 struck off from the file of the District Munsif Court, Pallavaram; no costs; connected civil miscellaneous petition (C.M.P.No.20228 of 2025) closed ¶52

R. Nagakrishnan Vs P. Lingaraj — Income Tax | Madras HC (2026)

What the court decided

AI extract

Outcome

¶52

Issue for consideration

Whether the suit in O.S.No.114 of 2025 challenging the Sale Certificate issued to the petitioner is relitigation and abuse of process, warranting exercise of supervisory power under Article 227 of the Constitution of India to strike off the plaint +1 more

¶40

Court's answer

The 1st respondent is not entitled to challenge the Sale Certificate issued by the 3rd respondent in favour of the petitioner by filing a separate suit, the earlier dismissal of W.P.No.7519 of 2021 (challenge to the auction notice) having attained finality unchallenged

¶37

Ratio / Principle

The present suit challenging the subsequent Sale Certificate is relitigation and abuse of process of the Court; this is a fit case to exercise supervisory power under Article 227 of the Constitution of India

¶40

Key takeaways

As no fraud against the 3rd respondent was pleaded in the plaint, the 1st respondent cannot invoke the proviso to Rule 9 of Schedule II to the Income Tax Act, 1961; the 1st respondent, being merely an Agreement Holder, had not acquired any interest in the property till date; the submission based on Rule 9 is rejectedratio¶47

Detailed headnote1 paragraphs

Madras High Court (S. Sounthar, J.) allowed a Civil Revision Petition under Article 227 of the Constitution of India and struck off the plaint in O.S.No.114 of 2025 (District Munsif Court, Pallavaram), by which the 1st respondent/agreement holder sought declaration that the Sale Certificate dated 11.04.2025 issued by the Tax Recovery Officer (3rd respondent) in favour of the auction purchaser (petitioner) was null and void, along with permanent injunction. The Court held the suit to be relitigation and abuse of process: the 1st respondent's earlier writ petition (W.P.No.7519 of 2021) challenging the very auction notice had been dismissed - holding he had no locus standi on the basis of a private Sale Agreement dated 18.07.2015 with the defaulting assessee - and that order had attained finality. Reliance on the proviso to Rule 9 of Schedule II, Income Tax Act, 1961 (civil suit permissible on the ground of fraud) failed as no fraud against the Tax Recovery Officer was pleaded; the agreement holder had acquired no interest in the property till date. The 1st respondent's right against the 2nd respondent was preserved in the pending Specific Performance suit O.S.No.464 of 2022 (District Court, Chengalpattu). No costs; connected C.M.P.No.20228 of 2025 closed.

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C.R.P.No.3811 of 2025

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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RESERVED ON : 20.01.2026

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PRONOUNCED ON : 29.01.2026

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CORAM

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THE HONOURABLE MR.JUSTICE S.SOUNTHAR

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C.R.P.No.3811 of 2025 and C.M.P.No.20228 of 2025

R.Nagakrishnan

... Petitioner

vs.

1.P.Lingaraj Son of Periyaswamy, Proprietor, M/s. New Raj Agencies, No. 17, 200 Feet Road, Ganapathy Nagar, Thuraipakkam, Pallavaram, Chennai-600 043.

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2.M/s.Vasavi Builders, Rep. by its Proprietor, Mr.P.B.Krishna Prasad, No.8A, Kandasami Street, Raja Annamalaipuram, Chennai-600 028.

¶13

3.The Tax Recovery Officer-I, Office of the Chief Commissioner of Income Tax-I, Mahathama Gandhi Salai, Nungambakkam, Chennai-600 034. ... Respondents 1/10

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https://www.mhc.tn.gov.in/judis

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C.R.P.No.3811 of 2025

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PRAYER: Civil Revision Petition is filed under Article 227 of the Constitution of India, to strike off the Plaint in O.S.No.114 of 2025, on the file of District Munsif Court, Pallavaram, as it is in gross abuse of process of law, barred by limitation and by the principles of res judicata.

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For Petitioner : M/s.Srimathi V. For R1 : Mr.S.Mugesh For R3 : Mr.S.Abubacker Sidhic Standing Counsel for IT For R2 : Vacated

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O R D E R

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The Civil Revision Petition is filed seeking to strike off the plaint in O.S.No.114 of 2025 on the file of the District Munsif Court, Pallavaram filed by the 1^st respondent/plaintiff seeking declaration that Sale Certificate dated 11.04.2025 granted in favour of the petitioner herein by the 3^rd respondent/3^rd defendant was null and void and for permanent injunction restraining the petitioner and other defendants from interfering with 1^st respondent's peaceful possession and enjoyment of the suit property.

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2/10

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https://www.mhc.tn.gov.in/judis

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C.R.P.No.3811 of 2025

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It is the case of the 1^st respondent that there was Sale Agreement

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between 1^st respondent and 2^nd respondent, whereunder the 2^nd respondent

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agreed to sell the subject property to the 1^st respondent in lieu of amount payable by 2^nd respondent to 1^st respondent. According to the 1^st respondent, the agreement was entered into on 18.07.2015 and 1^st respondent/plaintiff was put in possession of the suit property. Thereafter, the 3^rd respondent attached the suit property standing in the name of the 2^nd respondent and sold the same to the petitioner and issued a Sale Certificate. Challenging the said Sale Certificate issued by 3^rd respondent in favour of the petitioner, the 1^st respondent herein filed the above said suit stating that auction of the 3^rd respondent after Sale Agreement between the 1^st respondent and 2^nd respondent cannot be countenanced.

¶26

The petitioner herein filed this revision seeking to strike off the

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plaint of the 1^st respondent mainly on the ground that the present suit filed by the 1^st respondent is a clear abuse of process of the Court, as earlier writ petition filed by the 1^st respondent challenging auction notice issued by the 3^rd respondent herein in respect of the suit property was dismissed by this

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3/10

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https://www.mhc.tn.gov.in/judis

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C.R.P.No.3811 of 2025 Court by holding that the Private Sale Agreement between the respondents 1 and 2 will not deter the 3^rd respondent from bringing the property standing in the name of the 2^nd respondent/defaulting assessee for auction sale.

¶31

It is not in dispute that the 3^rd respondent attached the property of 2^nd respondent for the default committed by him in payment of income tax. Earlier, when the 3^rd respondent issued Sale Notice, the said auction notice was challenged by the 1^st respondent by filing a writ petition in W.P.No.7519 of 2021. The said writ petition was dismissed by this Court by observing as follows:-

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“4.The petitioner has attempted to stall the auction that was to be taken place on 22.03.2021. The petitioner has no locus standi to question the auction of the property based on a private sale agreement dated 18.07.2015. It is open for the petitioner to workout his remedy before the District Court at Chengalpattu in O.S.No.464 of 2022 to recover the amount that has remained unpaid by the said 'M/s.Vasavi Housing Infrastructure Limited' represented by P.B.Krishna Prasad to the petitioner. If the said 'M/s.Vasavi Housing Infrastructure Limited' was in arrears of tax, the properties standing in its name can be attached by the Government to recover the due. It is open to the Income Tax Department to bring the property to

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4/10

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https://www.mhc.tn.gov.in/judis

¶35

C.R.P.No.3811 of 2025 sale in accordance with the provisions of the Income Tax Rules. Merely because there is a private agreement between the petitioner and the said 'M/s.Vasavi Housing Infrastructure Limited' represented by P.B.Krishna Prasad ipso facto would not mean the petitioner to put spokes into recovery proceedings.”

¶36

The argument made by the 1^st respondent based on the Sale Agreement Dated 18.07.2015 was repelled by this Court and 3^rd respondent was permitted to proceed with the auction. Now, pursuant to the auction sale, the Sale Certificate has been issued by the 3^rd respondent in favour of the petitioner. The order passed in W.P.No.7519 of 2021 has attained finality and

¶37

the same has not been challenged by the 1^st respondent. Therefore, the 1^st respondent is not entitled to challenge the Sale Certificate issued by the 3^rd respondent in favour of petitioner by filing a separate suit. Infact, while dismissing the writ petition, this Court observed that 1^st respondent is entitled to work out his remedy of recovering the unpaid amount from the 2^nd respondent in the pending suit in O.S.No.464 of 2022 on the file of the District Court, Chengalpattu. When the challenge to auction notice itself was rejected by this Court, the present suit filed by the 1^st respondent challenging the subsequent Sale Certificate issued by the 3^rd respondent is nothing but a 5/10

¶38

https://www.mhc.tn.gov.in/judis

¶39

C.R.P.No.3811 of 2025 relitigation and abuse of process of the Court. The right of the 1^st respondent as against the 2^nd respondent has been preserved by this Court and it is always open to the 1^st respondent/plaintiff to workout his remedy in the pending Specific Performance suit in O.S.No.464 of 2022.

¶40

In the light of the order passed by this Court in W.P.No.7519 of 2021, this Court feels that the present suit filed by the 1^st respondent challenging the subsequent Sale Certificate issued by the 3^rd respondent is nothing but relitigation and abuse of process of the Court. Therefore, this Court comes to the conclusion that this is a fit case to exercise its supervisory power under Article 227 of the Constitution of India.

¶41

The learned counsel appearing for the 1^st respondent by relying on Rule 9 of Schedule II to the Income Tax Act, 1961, submitted that the 1^st respondent is entitled to file a suit in respect of any transaction vitiated by fraud. The relevant rule reads as follows:-

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“9. General bar to jurisdiction of civil courts, save where fraud alleged .-Except as otherwise expressly provided in this Act, every question arising between the Tax Recovery 6/10

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https://www.mhc.tn.gov.in/judis

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C.R.P.No.3811 of 2025

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Officer and the defaulter or their representatives, relating to the execution, discharge or satisfaction of a certificate or relating to the confirmation or setting aside by an order under this Act of a sale held in execution of such certificate, shall be determined, not by suit, but by order of the Tax Recovery Officer before whom such question arises:

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Provided that a suit may be brought in a civil court in respect of any such question upon the ground of fraud.”

¶47

A perusal of the said provision would make it clear that aggrieved party can always file a suit in respect of any question on the ground of fraud. However, a perusal of the plaint averment would indicate that the 1^st respondent has not pleaded any act of fraud on the part of the 3^rd respondent. The 1^st respondent is an Agreement Holder, he has not acquired any interest in the property till date. The 3^rd respondent attached and brought the property of the 2^nd respondent for sale and the same was sold in favour of the petitioner. In the absence of any pleadings that the said action of the 3^rd respondent is vitiated by any fraud, the 1^st respondent is not entitled to rely on Rule 9 of Schedule II to the Income Tax Act, 1961. Therefore, the said submission is also not acceptable to this Court.

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7/10

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https://www.mhc.tn.gov.in/judis

¶50

C.R.P.No.3811 of 2025

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In view of the same, the Civil Revision Petition stands allowed and

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the suit filed by the 1^st respondent in O.S.No.114 of 2025 is ordered to be struck off from the file of the District Munsif Court, Pallavaram. No costs. Consequently, the connected civil miscellaneous petition is closed.

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29.01.2026

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Index :Yes / No Speaking order :Yes / No Neutral Citation :Yes / No dm

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8/10

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https://www.mhc.tn.gov.in/judis

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C.R.P.No.3811 of 2025

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1.The District Munsif Court, Pallavaram.

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2.The Tax Recovery Officer-I, Office of the Chief Commissioner of Income Tax-I, Mahathama Gandhi Salai, Nungambakkam, Chennai-600 034.

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9/10

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https://www.mhc.tn.gov.in/judis

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C.R.P.No.3811 of 2025

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S.SOUNTHAR, J.

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Pre-delivery order made in C.R.P.No.3811 of 2025

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29.01.2026

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10/10

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https://www.mhc.tn.gov.in/judis

Procedural history

How this case reached the court

AI extract

Order under challenge
Plaint in O.S.No.114 of 2025 filed by the 1st respondent before the District Munsif Court, Pallavaram, seeking declaration that the Sale Certificate dated 11.04.2025 granted to the petitioner by the 3rd respondent was null and void, and permanent injunction against interference with possession of the suit property¶19
District Munsif Court, Pallavaram
Prior proceeding
Sale Agreement entered into on 18.07.2015 between respondents 1 and 2, under which the 2nd respondent agreed to sell the subject property to the 1st respondent in lieu of amounts payable; the 1st respondent was allegedly put in possession of the suit property¶25
Prior proceeding
The 3rd respondent attached the suit property standing in the name of the 2nd respondent, sold it to the petitioner in auction and issued a Sale Certificate¶25
Prior proceeding
Attachment was for the 2nd respondent's default in payment of income tax; the 1st respondent challenged the auction/Sale Notice by filing W.P.No.7519 of 2021 before this Court¶31
Prior proceeding
W.P.No.7519 of 2021 was dismissed by this Court: the writ petitioner had no locus standi based on the private sale agreement dated 18.07.2015; he was left free to pursue O.S.No.464 of 2022 before the District Court, Chengalpattu, and the Income Tax Department was free to bring the property to sale in accordance with the Income Tax Rules¶32
Prior proceeding
This Court repelled the argument based on the Sale Agreement dated 18.07.2015 and permitted the 3rd respondent to proceed with the auction; pursuant to the auction sale the Sale Certificate was issued in favour of the petitioner¶36
Prior proceeding
The order in W.P.No.7519 of 2021 attained finality and was not challenged by the 1st respondent¶37
Prior proceeding
While dismissing the writ petition this Court observed that the 1st respondent could recover the unpaid amount from the 2nd respondent in the pending suit O.S.No.464 of 2022 (Specific Performance) on the file of the District Court, Chengalpattu; the 1st respondent's right against the 2nd respondent stands preserved¶39

R. Nagakrishnan v. P. Lingaraj

Case brief

What is this about?

What did the court decide?

R. Nagakrishnan v. P. Lingaraj

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Statutes considered

Procedural history

Parties & counsel

Coram

Case details

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