Mandatory deposit under Rule 60 governs setting aside auction sales; late cure of shortfall does not validate non-compliance.

Rule 60 of the Second Schedule to the Income Tax Act, 1961, as applied in recovery proceedings under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, requires a certified debtor seeking to set aside an auction sale to deposit within thirty days the amount specified in the sale proclamation, together with interest at fifteen per cent per annum and a five per cent penalty. The proclamation amount must be understood from the document as a whole, not only from an earlier payable figure. On the facts, the debtor did not deposit the full amount within time, and the shortfall could not be cured later. The rule is mandatory, and equitable relaxation is unavailable.

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Issues: Whether the certified debtor had complied with Rule 60 of the Second Schedule to the Income Tax Act, 1961 by depositing, within thirty days from the date of sale, the amount specified in the sale proclamation together with the prescribed interest and penalty, so as to entitle it to have the auction sale set aside.

Analysis: Rule 60 of the Second Schedule to the Income Tax Act, 1961, as applied to recovery proceedings under Section 29 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, requires deposit within thirty days of the sale of the amount specified in the proclamation of sale, with interest at fifteen per cent per annum from the date of proclamation to the date of deposit, and five per cent of the purchase money as penalty. Reading Rule 53 and Rule 60 together, the amount specified in the proclamation must be the amount ascertainable from the proclamation as a whole, not merely the figure stated as payable on an earlier date. On the facts, the proclamation showed the recovery claim and also stated the amount payable as on 30 June 2006; the balance interest for the period up to the date of proclamation was not deposited within the statutory period. The rule was held to be mandatory and incapable of relaxation on equitable grounds, and the delay in making good the shortfall could not cure the defect.

Conclusion: The certified debtor had not strictly complied with Rule 60 and was not entitled to have the sale set aside.

Final Conclusion: The challenge to the appellate order succeeded, and the sale in favour of the petitioners stood confirmed because the statutory conditions for setting aside the auction were not met.

Ratio Decidendi: Where a statute prescribes a mandatory deposit within a fixed time for setting aside a sale, the entire amount specified by the proclamation, as properly understood from the proclamation read as a whole, must be deposited within that period; a later cure of the shortfall does not satisfy the rule.

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