Mandatory auction deposit rules and sale notice terms limit a Recovery Officer's power to extend payment time.

Rule 57(1) of the Second Schedule to the Income Tax Act requires immediate deposit of 25% of the bid amount on declaration of the purchaser and is mandatory, so the time for that deposit cannot be extended. While Rule 57(2), read with section 29 of the Recovery of Debts Due to Banks and Financial Institutions Act, permits application of income-tax recovery rules with necessary modifications, any extension of time for payment of the balance purchase money must be authorised by the sale notice. In the absence of such an enabling clause, the Recovery Officer has no jurisdiction to enlarge time, and the auction sale is liable to be set aside.

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Issues: Whether the Recovery Officer had power to extend the time for the auction purchaser to pay the balance purchase money under Rule 57 of the Second Schedule to the Income Tax Act, 1961, and whether the sale could be sustained when such extension was granted without any enabling clause in the sale notice.

Analysis: Rule 57(1) requires immediate deposit of twenty-five per cent of the bid amount on declaration of the purchaser and is mandatory, leaving no discretion to extend time; failure to comply attracts resale. Rule 57(2), read with section 29 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, is not absolute in the same sense because the statutory scheme permits application of the income-tax recovery rules as far as possible with necessary modifications. However, any extension of time for payment of the balance amount must be supported by the terms and conditions of the sale notice. In the absence of such a clause, the Recovery Officer cannot unilaterally enlarge the time for payment beyond the prescribed period. Since the sale notice here contained no such enabling condition, the extension granted to the auction purchaser was without jurisdiction.

Conclusion: The Recovery Officer had no authority to extend the time in the facts of the case, and the auction sale was liable to be set aside.

Ratio Decidendi: A Recovery Officer may not extend the auction purchaser's time for payment beyond the prescribed period unless the sale notice itself authorises such extension, and the mandatory requirement of immediate deposit under Rule 57(1) cannot be relaxed.

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