TaxTMI 
TaxTMI 
2025 (10) TMI 675
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....bligants. T.S. Joseph again availed an Agricultural Medium Term Loan (AMTL) of Rs. 2,75,000/- (Rupees Two Lakhs Seventy-Five Thousand Only) and the Federal Kisan Credit (FKC) of Rs. 85,000/- (Rupees Eighty-Five Thousand Only). 1.1. Apart from the two items of property (27 cents & 28 cents of land) extended by the 1st petitioner as collateral security, property (3 acres) belonging to T.S. Joseph was also mortgaged to cover the 1st petitioner's liability. The liability under the account fell into arrears by January 2005, and, upon proceedings initiated before the Debt Recovery Tribunal, Ernakulam, in O.A. No. 31 of 2006, Ext. P1 Recovery Certificate dated 11.01.2012 was issued for the recovery of Rs. 76,90,252.22/- (Rupees Seventy-Six Lakh Ninety Thousand Two Hundred Fifty-Two Only) from the properties described in Schedules A to C therein. 1.2. The petitioners submit that the Recovery Officer issued Ext.P2 sale proclamation only on 24.05.2016, and the sale proclamation contained one more additional item of property which is a parcel of land having an extent of 5 Acre 2 cents and this property was not included in the Recovery certificate, which was challenged before the DRT in ....
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....te Industrial Development and Investment Corporation v. Subhash Sindhi Cooperative Housing Society & Ors. [(2013) 5 SCC 427] to contend that if a proceeding is void ab initio, it is inoperative, nugatory and without legal force; and can be ignored even in collateral proceedings, and there is no requirement to formally set it aside. Consequently, all proceedings and orders rooted in the ownership rights claimed under the auction are also nullities in the eyes of law. The petitioners also rely on Shree Chamundi Mopeds Ltd v. Church of South India Trust Association, CSI Cinod Secretariat, Madras (1992 3 SCC), to contend that principles in Ratheesh (supra) will have to be followed despite the Apex Court staying the operation of the judgment. 1.7. The petitioners submit that the acts impugned violate Article 300A of the Constitution of India, which mandates that no person shall be deprived of his property save by authority of law. The 2nd respondent, Recovery Officer, in the discharge of his statutory duties, was bound to act strictly in accordance with law and in a fair manner, and his failure to do so renders his actions amenable to the writ jurisdiction of this Court. 1.8. In t....
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.... which was dismissed on 03.01.2019 vide Ext. R1(k). 2.3. It is further submitted that W.P.(C) No. 16681 of 2022 filed by the petitioners challenging the DRAT order was dismissed by this Court on 25.07.2024 vide Ext. R1(m), and the Writ Appeal No. 1352 of 2024 preferred by them was also dismissed on 08.10.2024 vide Ext.R1(n). In the meantime, the property sold in the auction was registered in the name of the auction purchasers, and possession was delivered. 2.4. The plea now raised regarding Rule 68B of the Second Schedule to the Income Tax Act, 1961, is an afterthought, raised solely for the purpose of filing this writ petition. It is submitted that the law is well settled that the Limitation Act, 1963 applies to applications before the DRT, including execution proceedings before the Recovery Officer, by virtue of Section 24 of the RDDB Act, as held in K. Kutaguptan v. Canara Bank [MANU/KE/0834/2009], affirmed by the Division Bench reported in MANU/KE/1860/2017, and reiterated in the Ext. R1(q) judgment dated 06.07.2022 in W.P.(C) No. 13975 of 2022. The 1st respondent further relies on Geevarghese P. John v. Federal Bank [2024 KHC 7312], wherein this Court held that Rule 68B ....
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....2.02.2015 and the auction on 25.07.2016, which is within three years. Further, the time under Rule 68B runs from when the order giving rise to the demand becomes conclusive, which, in this case, was only after the dismissal of W.A. No. 1352 of 2024 on 08.10.2024. Moreover, by the amendment effective from 01.09.2019, the period in Rule 68B was extended from three years to seven years, and the sale completed before 2024 falls within this extended period. 3.3. The 3rd respondent relies on the decisions in Nandlal Jaiswal (supra), Acre Polymers Private Limited v. M/s Alphine Pharmaceuticals Private Limited and Others (2021 KHC 6783), Forward Construction Co. v. Prabhat Mandal (Regd), Andheri (1986 KHC 598). 4. Heard Sri. Titus Mani Vettom, the learned counsel for the petitioners, Sri. Mohan Jacob George, the learned counsel for the respondent bank, Sri Gracious Kuriakose, the learned Senior Counsel for the 3rd respondent, instructed by Sri. Pranoy K Kottaram and Sri. Arun Thomas for the 4th respondent. 4.1. The essential contention raised by the writ petitioners, challenging the sale dated 25.07.2016 conducted by the 1st respondent, Federal Bank, is that the sale is vitiated a....
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....said order has become conclusive or, as the case may be, final. (4) Where the sale of immovable property is not made in accordance with the provisions of sub-rule (1), the attachment order in relation to the said property shall be deemed to have been vacated on the expiry of the time of limitation specified under this rule." 4.2. While the petitioners rely on the judgment of the Hon'ble Supreme Court in C.N. Paramsivam (supra) and Ratheesh (supra), the 1st respondent relies on the judgment of this Court in K. Kutaguptan (supra), affirmed by the Division Bench as reported in MANU/KE/1860/2017, South Indian Bank Ltd. v. Recovery Officer (W.P.(C) No. 13975/2022) and Geevarghese (supra). 5. Going through the provisions, judgments rendered by the Supreme Court, this Court, and other High Courts, namely C.N. Paramsivam (supra), K. Kutaguptan (supra), South Indian Bank Ltd. (supra), Gheeverghese P. John v. Federal Bank (supra), Mitexo v. Canara Bank [MANU/MH/0668/2014], J.N. Krishnan v. Branch Manager, Canara Bank [2011 SCC OnLine Mad 828], and V. Chakrapani v. State Bank of India [AIR 2011 AP 27], it follows that the RDDB Act itself provides for attachment and sale of prop....
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....nistrative functioning of the Recovery Officer, and hence it would be highly unjust to preclude recovery merely because the Officer was unable to complete the sale within the time frame contemplated under Rule 68B. Delays may occur due to circumstances such as a vacancy in the office of the Recovery Officer, transfer of jurisdiction, administrative backlog, or even obstructive tactics by the debtor, factors beyond the creditor's control. To penalise the bank or financial institution for such procedural delays would defeat the purpose of the statute and unjustly enrich the defaulter. 5.3. It has, therefore, to be held that Rule 68B of the Second Schedule to the Income Tax Act, 1961, has no mandatory application to recovery proceedings under the RDDB Act. It is also relevant that under Sections 19(22) and 25 of the RDDB Act, the Recovery Officer derives jurisdiction to initiate recovery measures only after the recovery certificate attains finality. Hence, the time frame in Rule 68B, which is linked to the 'order giving rise to demand' under the Income Tax Act, cannot logically apply to proceedings initiated upon a recovery certificate under the RDDB Act. The consistent view emergi....
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....gned. Under such circumstances, even if they are found to be illegal, they cannot be said to be void. The illegal orders passed are to be correct in appeal, invoking the statutory scheme and not by challenging them as void. The petitioners, having failed in their attempts to challenge the actions of the secured creditor, cannot be allowed to contend that their actions are void at this distance of time. The learned counsel also relies on the following judgments: Rafique Bibi (supra), Balvant (supra). 6.1. The principle emerging from the decisions on the point, including those in Rafique Bibi (supra) and Balvant (supra), is that not every illegality or procedural irregularity renders a decree void or without jurisdiction. A decree becomes a nullity only when it is passed by a court that inherently lacks jurisdiction over the subject matter or the parties, and such a lack of jurisdiction is apparent on the face of the record. Mere errors in the exercise of jurisdiction, including those arising from incorrect appreciation of law, limitation, or procedure, at best render the decree illegal or irregular, but not void. Such decrees must be challenged through appropriate appellate or re....