w w w . L a w y e r S e r v i c e s . i n



Priya Bhatia v/s State Bank of Patiala & Others


Company & Directors' Information:- S N BHATIA AND CO PRIVATE LIMITED [Active] CIN = U99999DL1976PTC008293

Company & Directors' Information:- BHATIA AND COMPANY PRIVATE LIMITED [Strike Off] CIN = U70109DL1986PTC024822

Company & Directors' Information:- K. BHATIA AND COMPANY PRIVATE LIMITED [Strike Off] CIN = U51420MH1960PTC011708

    Appeal No. 350 of 2012 In Appeal No. 33 of 2003 (Delhi-III)

    Decided On, 03 March 2015

    At, Debts Recovery Appellate Tribunal at Delhi

    By, THE HONOURABLE MR. JUSTICE RANJIT SINGH
    By, CHAIRPERSON

    For the Appellant: Rajeeve Mehra, Senior Advocate, Sumeher Bajaj, Advocate. For the Respondents: R1, S.K. Tyagi, Vikram Rawal, Advocates. R6: Pallav Saxena, Advocate.



Judgment Text

1. Ms. Priya Bhatia was one of the Appellants who alongwith Mr. N.K. Bhatia filed an Appeal under Sec. 30 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short, the RDDBFI Act) against the order dated 12th September, 2003 passed by the Recovery Officer (R.O.). The objections filed by the Appellants before the R.O. against attachment/auction/sale of immovable property bearing No. E-5, Sector 8, Noida (U.P.) have been rejected. The sale in favour of auction purchaser Shewzy Times Pvt. Ltd. (Respondent No. 6) was confirmed on 12th September, 2003. Appellant, accordingly, has challenged the sale as well as confirmation thereof in favour or Respondent No. 6.

2. State Bank of Patiala had granted certain credit facilities to the Appellant and her husband. When there was default in repayment of the credit facilities, the Bank filed O.A. No. 168/98 on 12th May, 1998. In the O.A. recovery of a sum ofRs.88,07,812.91 was sought against the Appellant and Priya Cables Pvt. Ltd., Mr. V.K. Bhatia and West Bengal State Electricity Board. The Tribunal below passed an ex parte decree on 7lh June, 1999 and Recovery Certificate was issued against Appellants, Priya Cable Ltd. and Ms. V.K. Bhatia.

3. During the course of recovery proceedings, certificate-holder Bank sought attachment of several properties including the property at E-5, Sector 8, Noida (U.P.) The Bank filed a valuation report dated 24th June, 2012. The property was valued atRs.43,15,000/-. The grievance is that the Recovery Officer did not record his satisfaction and the property came to be sold at lesser price than the circle rate of the area. As per the Appellant, the Trade Tax Department of U.P. Government has also filed objection claiming dues to the tune ofRs. 88 lacs, but ignoring all the objections, the auction of the property was held in favour of Respondent No. 6, whereas, the bid was made by Lakhia Dairy whose name is reflected in the bid sheet and no reference is contained to Respondent No. 6, Still, the auction sale has been confirmed in favour of Respondent No. 6 and sale certificate issued. The Appellant, therefore, would allege that the auction was held in violation of the rules and norms where even steps were not taken to give wide publicity. On the basis, the objections were filed before the R.O. which were rejected and against which an Appeal came to be filed. The Appeal stands rejected by the Tribunal below and Ms. Priya Bhatia has come up in this Appeal.

4. Pleas on the line noticed above are raised before me to challenge the order in Appeal. Otherwise, it is not disputed that the property put to auction sale was mortgaged in order to secure the limits granted by the Bank in favour of Priya Cables Pvt. Ltd. This property E-5, Sector 8, Noida (U.P.) mortgaged with the Bank, has been auctioned in favour of Shewzy Times Pvt. Ltd. which is the subject-matter of challenge now in the present Appeal.

5. Relevant facts to appreciate the challenge made by the Appellant, which can be noticed, are that the attachment order in the R.C. was issued on 25th February, 2002 and order of setling sale proclamation was also passed. Time was sought for filing affidavit of service on 2nd April, 2005 for setling the sale proclamation Valuation report was ordered to be filed as well. The property was evaluated atRs. 43.15 lacs. Grievance is that the notice for setting the sale proclamation was sent at Friends Colony address instead of New Friends Colony address. Thus, without recording satisfaction of service, sale proclamation was issued which would in violation of Rule 48 of the Second Schedule to the Income-tax Act. On 5th December, 2002, the reserve price was fixed atL26 lac ignoring the valuation of the property. This was done without recording any reason. This, as per the Appellant, would show material irregularity leading to substantial injury as the sale of the property was made at less than 40% of its valuation.

6. Grievance is also made about sale proclamation where no description of the constructed area is given. Without satisfying about the sale proclamation having been served and published, the auction of the property was held where Lakhia Dairy was the highest bidder atRs. 26.70 lac. In this regard, the Counsel for the Appellant has made a detailed reference to the note submitted by the Court auctioneer showing that a lot of prospective buyer left the scene when a known political figure entered the scene and ultimately purchased this property. The Counsel would thus contend that the auction was marred by various irregularities like an attempt to frustrate the sale by creating an unfavourable atmosphere where parties were prevented from participating in free and fair auction. The Counsel would also plead that bid was given by Lakhia Diary and the auction was confirmed in favour of Lakhia Dairy and not in the name of Respondent No. 6, still, the sale has been confirmed in favour of Respondent No. 6 and sale certificate issued.

7. The Appellant accordingly had prayed for setting aside of the aforesaid auction on various counts pleading that no notice for setling sale proclamation was served on the Appellant. Plea also is that the auction was unfair where cartelization was done on intervention of political figure. As per the Appellant, incorrect valuation and fixing the low reserve price was done with mala fide intention, leading to sale of property at much lesser price. To further show this, the Appellant had brought in buyer who was ready to offerRs. 30 lacs and had paidRs. 3 lacs in the shape of a draft. Still, the objection and the Appeal filed have been dismissed by ignoring legal and valid objections leading to the filing of the present Appeal.

8. Respondent auction purchaser has come forward to content this Appeal alongwith the Bank. The first objection raised in this regard is that the Appellant did not comply with the requirement of deposit as contained in Rules 60 and 61 of the Second Schedule to the Income-tax Act So the objections filed by the Appellants were not maintainable. As per Respondent No. 6, the objections were jointly preferred under Rules 60 and 61 of the Second Schedule, which would be legally impermissible. It is stated that if the Appellant had proposed to produce a buyer the obvious intention was to redeem the property in a different way as there was no prayer for re-auction. Counsel for Respondent No. 6 would point out that this intending purchaser was not produced for consummating the purported proposal. He would also find fault with the attempt made by the Appellant to submit that objections preferred were only under Rule 61 of the Rules. As per the Counsel, the conditions prescribed in the aforesaid provisions were never fulfilled.

9. Continuing further, the Counsel for Respondent No. 6 would point out that R.O. has passed an order affording an opportunity to the Appellant to comply with the condition of pre-deposit, but she did not do so. In this regard, reference is made to orders dated 12th September, 2003 and 28th July, 2003. The Counsel would also point out that the CDs are members of the same family who appeared before the R.O., but subsequently stopped appearing and as a consequence thereof "warrant of arrest was also issued. It is, thus, stated that they all had the knowledge of the pendency of the recovery proceedings. It is pleaded that the order of attachment and notice of settling the sale proclamation was served on the CDs in accordance with law and in this regard, reference is made to affidavit of service. As per the Counsel, since the Appellant chose to waive her right to file objections for fixing the reserve price the objection raised at this point of time cannot be permitted to be raised as they would be estopped from doing so having acquiesced to the same. It is even pleaded that the Appellant did not challenge the order fixing the reserve price and had allowed it to acquire finality and she cannot be heard now to challenge the same as she will have to cross the hurdle of limitation in filing the Appeal under Sec. 30 of the RDDBFI Act, which is 30 days.

10. Respondent auction purchaser even justified the reserve price fixed to be valid and proper. It is urged that upset price or the reserve price does not determine the price for which the property may ultimately be sold as the purpose thereof is only to attract the intending bidders. The Counsel would also point out that even the Appellant had produced a buyer with an offer ofRs. 30 lacs which is not substantially in excess of the price of the property at which it was auctioned. The auction purchaser would also make reference to a letter dated 3rd September, 2002 of the Appellant where there was an indication that the value of the property was assessed atRs. 22 lacs.

11. As per the Respondent auction purchaser, the auction report would show that the auction was conducted in accordance with law. The report would show that Brijender Nagar, partner of Lakhia Dairy, held an authority letter to participate in the auction on behalf of Respondent No. 6. It is stated that the sale was competitive as nine bids were received and despite commotion at the auction site the sale was participative in nature. To contest that Brijender Nagar did not participate on behalf of Respondent No. 6 on the basis of auction report, it is urged that these are prepared for sake of memory. Reference is made to final report where it is recorded that Mr. Brijender Nagar was participating on behalf Respondent No. 6. As per the Counsel, the one time settlement stated to have entered with the Appellant cannot prejudice the rights of the auction purchaser. The Counsel would term his one-time settlement proposal to be illegal as vested right accrued in favour of the auction purchaser which was attempted to be defeated. It is thus stated that the one-time settlement proposal was actuated with mala fide and is illegal.

12. In support of their respective pleas, the parties have relied upon large number of precedents which have been extensively referred to before me.

13. The main grounds of attack are that the rules were violated while fixing the reserve price of this property and there was gross illegality in the auction itself which would be enough to vitiate the entire auction proceedings. Plea further is that the auction purchaser did not participate, but still the auction sale has been confirmed in his favour. The effect of settlement by OTS is another plea advanced which is required to be considered.

14. In order to attack that the reserve price of the property was wrongly fixed violating the rules, the Appellant would point out that attachment order in the R.C. and notice for settling sale proclamation were made on 25" February, 2002. On the next date i.e., 2nd April, 2002, the Counsel for the Bank prayed for time to file a service report of attachment order and notice for setling sale production. The case was accordingly adjourned to 29lh April, 2002. On this date, the Tribunal directed that the valuation report of the mortgage property be filed in the meanwhile. On 29th April, 2002, the Tribunal has recorded that the sale proclamation is to be issued. The Counsel requested for time to have instruction for settlement and the case was adjourned to be listed on 16th May, 2002. On this date, the objections on behalf of Priya Cables were filed stating that the property had already been attached by Delhi High Court. The Bank was directed to file reply. The Bank had also filed affidavit dated 29th April, 2002 deposing that the CDs had been served with the order of attachment in terms of the order passed by the Tribunal below in respect of properties being E-5, Sector 8, Noida (U.P.) and E-31, Sector 8, Noida (U.P.).

15. Noticing that the property had already been attached by the Hon'ble High Court of Delhi, the Bank was directed to file application before the High Court for grant of leave in respect of the property. It is on record that arrest warrants had to be issued for CD-2 and CD-4 when they failed to appear despite service. In this manner, the request of the Bank for issuing sale proclamation in respect of mortgaged property E-5, Sector 8, Noida was considered. The Recovery Officer then passed an order on 5th December, 2002 allowing the request of the Bank for putting the mortgaged property to sale. The property was directed to be sold on 23rd January, 2003. The reserve price was fixed atRs. 26 lacs. Ms. Gurkirat Kaur was appointed as auctioneer for conducting the sale. The valuation report of the property had already been placed before the Recovery Officer and as per it, the value of the property as on 26th April, 2002 wasRs. 43.15 lacs. In this case, the first grievance of the Appellant is that the reserve price of the property was fixed much below the valuation of the property which would vitiate the auction sale.

16. The Counsel appearing for the Respondent, on the other hand, would point out that the Appellant never challenged the order dated 5th December, 2012 whereby the reserved price was fixed atRs. 26 lacs and therefore the said order attained finality whereafter auction sale was also held. The said auction sale has also been confirmed in favour of the auction purchaser. The plea by the Counsel is that limitation to file Appeal under Sec. 30 of the RDDBFI Act is 30 days and any delay in filing this Appeal cannot be condoned and the Appellant cannot be permitted to raise a challenge to the order fixing the reserve price at this belated stage.

17. The Counsel would also contend that the reserve price ofRs. 26 lacs as fixed by the Recovery Officer was valid and proper and it was done on being suggested by the Appellant and, therefore, the same was never challenged by the Appellant. The plea further is that the upset price or reserve price could not determine the price at which the property ultimately could be sold as the purpose of the same is to attract the intending bidders and this would not give any actionable cause to the CDs or judgment-debtors. To highlight this fact that the reserve price was justly fixed atRs. 26 lacs, the Counsel would point out to the fact that even the Appellant had in their objection brought forward a purchaser with an offer ofRs. 30 lacs. The Counsel would also refer to a letter dated 3rd September, 2002 where the Appellant had herself shown the value of the property to beRs. 22 lacs.

18. A sum ofRs. 30 lacs does not appear to be that in excess which could give rise to any inference on the ground that the reserve price of the property was grossly inadequate. Mere fact that the reserve price fixed was 40% lower than the valuation of the property in itself is no ground to find fault with the order fixing the reserve price. I would find substance in the submission made by the Counsel for the Respondent that if the Appellant had any grievance in this regard, it ought to have the challenged the order within the period prescribed for filing the Appeal. In this regard, reference to a letter dated 3rd September, 2002 which the Respondent Priya Cables had written to the Bank for settlement would show that the Respondent Priya Cables itself had apprised the Bank that since the receipt of the acceptance of the proposal by the Bank the prices have gone down considerably. It was accordingly stated that the Respondent Priya Cables shall be able to realise onlyRs. 15 lacs for property E-31, Sector 8, Noida andRs.22 lacs for E-5, Sector 8, Noida. Priya Cables had also mentioned that they had a customer to buy this property as above. In this background, now to urge and find fault with the valuation of the property seems to be an after-thought.

19. The Counsel for the Respondent auction purchaser is also justified in stating that while challenging the reserve price fixed, no evidence has been led that the property was sold at grossly inadequate price. The submission by the Counsel for the Appellant that the Recovery Officer ought to have given reasons for fixing the reserve price of the property atRs. 26 lacs once the valuation report showed the value of the property to beRs. 43.15 lacs, may sound attractive but all these pleas ought to have been raised at relevant time and the Appellant cannot be heard on the ground at this belated stage. In view of the material available on record in the form of admission by the principal borrower Priya Cables about the value of the property, I do not find any justification in the plea now raised by the Appellant on this Court.

20. To meet the objection raised by the Appellant about service, the Counsel for the Respondent would submit that sale proclamation was duly served in accordance with law and affidavit in this regard was filed showing proof of service. The sale proclamation was served by affixation on 11th December 2002, whereas, the sale was conducted on 23rd January, 2003 thus there was more than 30 days gap in the proclamation of sale and the date of auction sale. The Counsel would also refer to the report submitted by the Court auctioneer that the auction was conducted as per law to counter the challenge that Respondent No. 6 did not participate in the auction but still auction has been concluded in his favour. It is pointed out that the report itself mention that Brijender Nagar, partner of Lakhia Dairy held authority letter dated 22:,d January, 2003 and thus participated in the auction on behalf of Respondent No. 6. The Counsel would point out that the auction was competitive as nine bids were offered despite the commotion caused at the auction site. The reference to the spot report to urge that Brijender Nagar did not participate on behalf of Respondent No. 6 is rebutted by pleading that it was prepared for sake of memory. In this regard, reference is made to final report where the Court auctioneer has clearly stated that Brijender Nagar had participated on behalf of Respondent No. 6.

21. The Counsel contents that One-Time Settlement proposal cannot prejudice the rights of Respondent No. 6 being the auction purchaser as any contractual arrangement between the Appellant and the Respondent-Bank, the vested rights of Respondent No. 6 could not be prejudiced or set at naught. The Counsel would accordingly question the One-Time Settlement dated 30th October, 2004 as illegal.

22. The application moved by Respondent No. 1 before the Recovery Officer for recording compromise and for release of the property, as per the Counsel, was misplaced, as the sale stood confirmed by order dated 12th September, 2003. The Counsel would thus term the One-Time Settlement dated 30th October, 2003 to be actuated with mala fides and illegal. It is urged that the one-time settlement arrived at during the pendency execution proceedings, the resort could be had only to the principles of Order21, Rule2of CPC. Plea is that the right of the third-party auction purchaser is insulated from post-decree developments between the decree-holder and judgment-debtor and their rights are sought to be protected, which is the public policy.

23. Both the Counsel have cited various precedents in respect of their respective pleas. Counsel for the Appellant would make reference toMathew Varghese v. M. Amritha Kumar, 2014(2) SCALE 331, to urge that though the recovery of public dues should be made expeditiously, but it should be in accordance with the procedure prescribed by law and that it should not frustrate the constitutional right as well as human right of a person. It is observed that in the event of fundamental procedural error occurred in the sale, the same can be set aside.

24. Reference is then made to the case ofDesh Bandhu Gupta v. N.L. Anand and Rajinder Singh, (1994) 1 S.C.C. 131, in support of the plea that service of notice on the judgment-debtor is a fundamental part of procedure touching upon the jurisdiction of the Executing Court to take further step for the sale of immovable property. Therefore, service of notice under Order21, Rule66(2) of CPC, unless proviso is applied (if not already issued under XXI, Rule 22) is mandatory. This was a case where the Hon'ble Supreme Court found that the procedure prescribed under Rule 66 was flagrantly violated by the Executing Court. In essence, what the Court has noticed is that on an application for execution, the Court is to ascertain compliance of pre-requisites contemplated under Rule 17 and if the notice is served on the judgment-debtor but he does not appear or does not show cause to the satisfaction of the Court, the Court shall order the decree to be executed. If any objection is raised to the execution of a decree, the Court shall consider that objection and make such order which it deems fit. It is noticed that the proclamation for sale is an important part of the proceedings and details should be ascertained and noted with care. This, as per the Court, will remove the basis for many belated objection to the sale at a later date. It is held that the judgment-debtor should have an opportunity to give his estimate of the property as the estimate of the value of the property is a material fact to enable the purchaser to know its value. It must be verified as accurately and fairly as possible so that intending bidders is not misled or to prevent them from offering inadequate price or to enable them to make a decision in offering adequate price.

25. There cannot be any quarrel with this proposition of law which in any case would be binding for this Tribunal to observe. But already noticed, the Appellant ought to have raised this objection at relevant time and having not done so cannot be permitted to raise this plea at this belated stage. The provisions of the C.P.C. are not attracted to the procedures required to be followed by the Tribunals under the Act. The submission that there was no judicial application of mind recording service of notice of attachment or notice for setling sale proclamation is not made out of the facts available on record. I have already made mention in detail to the manner in which the sale proclamation came to be issued once the affidavit showing service having been effected was filed by the Bank. I have already discussed as far as the valuation of the property is concerned, and the plea of the Appellant that this was fixed much less than the valuation report obtained in this case. I am, therefore, unable to accept the submission made by the Counsel for the Appellant that the auction sale stands vitiated on this ground.

26. Reliance on the judgment in the case ofArati Daw v. Pradip Roy Chowdhury, A.I.R. 2003 Cal. 218, would be of no help as this judgment was made in an entirely different factual scenario. This was a case where shockingly low value in respect of the property was done, which was found itself as an ingredient of fraud. In the present case, the Appellant himself has assessed the worth of the property atRs. 22 lacs. He cannot now turn around and state the reserve price of the property fixed atRs. 26 lacs was less. Similarly is the case ofJainsons Export India v. Binatone Electronics Ltd., 58 (1995) Delhi Law Times 571andSisir Kumar Mukherjee v. Kanyalal Jhewar, A.I.R. 1971 Cal. 87, which may not help the cause of the Appellant in any manner. In Jainsons Export India (supra), the Court has considered the fact that soon after the order, further orders of substantially higher amount for the property were received where the valuation report of the Income-tax authority was non existent. The Court found that the maximum prince could not be fetched. That is not the facts situation in the present case. In Sisir Kumar Mukherjees (supra), the Court considering the inadequacy of the price which the decree-holder deliberately put shockingly ow in proclamation of sale and the Court has considered its effect which, again, is not the facts situation in the present case.

27. The next submission by the Counsel for the Appellant is that the entire auction process was rigged. In this regard, support is sought from he report of the auctioneer where it is recorded that the many buyers left taking their drafts back when a known political figure came to the spot. This plea is linked with the plea that offer was made by Lakhia Diary and not by Respondent No. 6 and on this ground it is pleaded that the auction has been concluded in favour of a person who did not participate in the auction as such. In this background, it is pleaded that property ofRs. 43.15 lacs value was sold for 26.70 lacs.

28. As already noticed, the auction purchaser has challenged this contention of the Appellant on the ground that she has not complied with the condition of pre-deposit as contemplated by Rules 60 and 61 of the Second Schedule to the Income-tax Act and so her objections would not be maintainable. The Counsel would also plead that the since the Appellant had proposed to introduce a buyer the obvious aim was to redeem the property, as there was no prayer made for re-auction of the same. It is highlighted that the Appellant in any case did not produce the intending purchaser. The plea that the objections preferred by the Appellant were under Rule 61 of the Second Schedule would not make any difference, as the condition predicated by the said provision was never fulfilled.

29. To plead that there is no requirement of pre-deposit for maintaining application under Rule 61 of the Second Schedule, reference is made toHanu Reddy Realty India Pvt. Ltd. v. Jignesh, III (2008) B.C. 190 (D.B.). There may not be a requirement of making deposit with the application but this may have to be made within 30 days to maintain the application so filed. Reference is also made to some of the judgments passed by DRAT, Delhi to urge that where certain material irregularities of similar nature were involved and no deposit was made while preferring objections. It is also urged that objection under Rules 60 and 61 of the Second Schedule was not the only method of Challenging the sale and under Sec. 30 of the RDDBFI Act the Tribunal has to take into consideration the entire auction process. For this, reliance is placed onAlpha Organics v. Bank of India, 2011 (2) D.R.T.C. 754 (D.R.A.T., Mum.).

30. The plea also is that a situation is also to be kept in view when borrower mortgagor has no means to make deposit. It cannot mean that sale even with full of material regularities would be irrefutable. It is urged that there are enough material irregularities in the conduct of sale which would be enough to set aside the sale.

31. On the other hand, the Counsel for the Respondent would refer to the case ofP.K. Unni v. Nirmala Industries, A.I.R. 1990 S.C. 933;Surbhi Chemicals through Shri Inder Kapoor, Proprietor v. State Bank of Patiala, I (2010) B.C. 65, andAjaib Singh v. Bank of Punjab Ltd., IV (2006) B.C. 555, in support of his plea that objections filed by the Appellant were not maintainable for want of pre-deposit as contemplated by Rules 60 and 61 of the Second Schedule to the Income-tax Act.

32. In the case of P.K. Unni (supra), the Court has considered the question as to what is the period of limitation for making deposit to make application under Order21, Rule89of CPC of setting aside the sale of immovable property sold in execution of a decree. The Court has held that the correct construction of Order21, Rule92(2) of CPC leads to an irresistible conclusion that time for making deposit in terms of Order21, Rule89of CPC is 30 days. The Court did not see any merit in the argument that Article 127 must override Rule 92(2) of Order 21 in respect of limitation. The judgment passed by the High Court in this case was set aside. In Surbhi Chemicals case (supra), this Tribunal had considered the question as to what are the rights of the borrowers/Appellants after the property concerned is sold in an auction sale which is confirmed and the possession of the premises in dispute is with the auction purchaser. While relying on P.K. Unnis case (supra), this Tribunal has held that when the statute provides for a particular procedure, the authority has to follow the same and cannot be permitted to act in contravention of the same. On the basis of law laid down in the case ofBasavantappa v. Gangadhar Narayan Dharwadkar, A.I.R. 1987 S.C. 63, the Court has held that it must be borne in mind that the objection must be filed within 30 days. While taking this view, reference is made to a number of other judgments also. The issue in this case was also in regard to the valuation of the property and fixing of the reserve price. After noticing the submissions made before it, the Tribunal has observed that no objection was filed against the confirmation of sale under Rules 60 and 61 of the Second Schedule to the Income-tax Act, which was to be filed within 30 days. The period prescribed was taken as mandatory with no Judge having power to enlarge the same. It is accordingly observed that if the property had been sold for lesser value, the Appellant could have taken benefit of Rules 60 and 61 of the Second Schedule.

33. In Ajaib Singhs case (supra) the objection filed by the Petitioner before the Tribunal was dismissed by the DRT. The Appeal filed against the order was held not maintainable with liberty to file a Civil Suit. Once the Civil Suit was dismissed, the Petitioner filed an Appeal, which was also dismissed, against which he filed a revision. It was held that the Petitioner had no locus to file the revision as he was not a defaulter or party to the proceedings. The Court in this case has observed that the property was put to auction pursuant to the Recovery Certificate and the deposit made by the Petitioner being beyond the period of 30 days available to the defaulter, he cannot be heard on this Count. Reliance in this regard is placed on P.K. Unnis case (supra).

34. From the precedents cited before me it would emerge that the proper course to challenge the auction once it was held and was also confirmed is to make approach under the rules contained in the Second Schedule to the Income-tax Act. The appropriate course for the Appellant, therefore, was to raise an objection under Rules 60 or 61 of the Rules under the Second Schedule to the Income-tax Act. Whether the objection filed by the Appellant under Rule 61 could be entertained without deposit, again, is purely a legal question. The reading of the provision in the light of law laid down by the Court, however, would show that it may not be easy to dispense with the requirement of pre-deposit even if the objection are filed under Rule 61 of the said Rules. No doubt that Rule 60 provides for application to set aside sale of immovable property on deposit and thus deposit would be a pre-condition to file this application. Rule 61, however, talks of setting aside the sale of immovable property on the ground of nonservice of notice or on irregularities. But, it contains a proviso that application made by the defaulter under this rule shall be disallowed unless the Applicant deposits the amount recoverable from him under Recovery Certificate. The submission that such amount has to be deposited on the determination by the Recovery Officer may not seem plausible as the period for filing the application is within 30 days, but to maintain such an application, the objector may have to make the deposit within this period and he may not be required to make the deposit with the application as such. The filing of application and maintaining the same has to meet this requirement as well. I am, thus, not impressed with the submission made by the Counsel for the Appellant on this count as well.

35. Similarly, the plea advanced by the Counsel for the Appellant that the price fetched in the auction is inadequate and this would be enough to show fraud or irregularity on the basis there was disturbance at the time of auction are all pleas raised merely somehow to get foothold to challenge the auction. The Counsel for the Respondent would refer to the cases ofShri Radhey Shyam v. Shyam Behari Singh, A.I.R. 1971 S.C. 2337, andValji Khimji and Company v. Official Liquidator of Hindustan Nitro Produd (Gujarat) Ltd., IV (2008) B.C. 536 (S.C.), to urge that auction cannot be set aside merely on the ground that it has not fetched adequate price. Relying in the case of Radhey Shyam (supra), the Court has made a reference to Order21, Rule90which provides that no sale shall be set aside merely on ground of irregularity or fraud unless upon facts proved and satisfies Court that Applicant has sustained injury by reason of such irregularity. Similar are the provisions contained in Rule 61 of the Second Schedule, which also states that no sale shall be set aside on any ground of material irregularity in publishing and conducting the sale unless the R.O. is satisfied that the Applicant has sustained substantial injury by reasons of non-service or irregularity. The Court has held that mere proof of material irregularity is not sufficient. In this case, the Appellant failed to show inadequacy of price or that such inadequacy was occasioned by material irregularity and so, the impugned order was held justified. The Court in the case of Valji Khimji (supra) has held that entertaining objection after sale is confirmed should not be allowed, except on limited grounds like fraud. As is observed in this case, if it is viewed that every confirmed sale can be set aside the result would be that no auction sale will ever be complete because somebody can always come up after the auction or its confirmation offering a higher amount. The Court has observed that when an auction sale is advertised in well-known newspapers having wide circulation, all eligible persons can come and bid for the same, and they will themselves be to blame if they do not come forward to bid at the time of auction.

36. It is then urged before me that as under Order21, Rule90it is imperative under Rule 61 of the Second Schedule also to plead and establish fraud and material irregularities with sufficient particulars and also to show that the affected person has sustained substantial injury. This plea is made on the basis of the ratio of law emerging from the case ofRadhey Shyam (supra), Saheb Khan v. Mohd. Yasufuddin, A.I.R. 2006 S.C. 1871, andAasra Industries Ltd. v. Bank of Baroda, III (2010) B.C. 80.

37. In Saheb Khans case, the Appellant had purchased certain property in Court sale. The disputed property was subject-matter of a Suit for partition. Trial Court directed sale of the Suit property, which was conducted by the Commissioner appointed. Highest bid was given by the Appellant who deposited one-fourth of the bid amount. Respondent filed application for setting aside the auction. By then, the Appellant had deposited the offered price. The Trial Court found that the procedure followed by the Commissioner did not suffer from fraud or irregularity. On an Appeal filed, the High Court set aside the sale against which an SLP was filed before the Honhle Supreme Court. The Hon'ble Supreme Court has held that charge of fraud or material irregularity under Order21, Rule90must be specifically made with sufficient particulars. It is observed that wide publicity does not necessarily mean publication in the newspapers, and order of the High Court was set aside on the ground that the Respondent was unable to establish any substantial injury by reasons of fraud or material irregularity.

38. This Tribunal, in the case of Aasra Industries (supra), has noted the observation in the case ofT.A. George v. DDA, A.I.R. 1995 Delhi 131, where it has, inter alia, observed that injunctions are a form of equitable relief and have to be adjusted in aid of equity and justice to the facts of each particular case. No Court has ventured to lay down absolute propositions and thereby forge fetters. However, some principles are too well entrenched, they are : (1) whether the Petitioner has made out a prima facie case; (2) whether the balance of convenience is in his favour i.e. whether it should cause greater inconvenience to him if the injunction is not granted than the inconvenience which the opposite party or persons claiming through the opposite party would be put to if the temporary injunction is granted; and (3) whether the Petitioner would suffer irreparable injury. The mere circumstance that the party has a prima facie case does not necessarily mean that the order of temporary injunction must follow. The Court has also to consider the question of irreparable or serious injury and the balance of convenience. With the first condition as sine qua non, the party must satisfy at least two conditions conjunctively. A mere proof of one of the three conditions would not take the party out of wood.

39. On this basis, it would be reasonable to view that inadequacy of the price itself is no ground to set aside the sale unless it is pleaded and is established that there was fraud or that less price has resulted in any serious injury to the Applicant, This cannot be made out from the pleadings and has also not been pointed out by the Counsel. The auction held in favour of Respondent No. 6, therefore, cannot be interfered with on this ground.

40. The objection by the Appellant that effect of one-time settlement was required to be considered is also seriously contested by the Counsel for the Respondent No. 6. The Counsel for the Respondent No. 6 would plead that the right of third party auction purchaser ought to be protected even if the decree itself is set aside as the same is a rule of public policy. As per the Counsel, even if decree is reversed before confirmation of sale conducted in the execution of such decree, the same is protected. It is also urged that the interest of the auction purchaser comes into being immediately on the auction of the property and ought not be disregarded and that the right of third-party cannot be set to naught by the consent. In support of these submissions, the Counsel has relied upon the judgments in the casesJanatha Textiles v. Tax Recovery Officer, III (2008) B.C. 372 (S.C.);Padanathil Rugmini Amma v. P.K. Abdulla, A.I.R. 1996 S.C. 1204;ICICI Limited (Debenture Trustees) formerly known as The Industrial Credit and Investment Corporation of India Ltd. v. Hico Products Ltd., III (2007) B.C. 695;Janak Raj v. Gurdial Singh, A.I.R. 1967 S.C. 608;Nanhe Lal v. Umrao Singh, A.I.R. 1931 P.C. 33, andRama Chandra Singh v. Savitri Devi, 2003 (8) S.C.C. 319.

41. In Janatha Textiles case (supra), the Court has considered the right of bona fide purchaser for value in regard to the property purchased in auction. The Court has held that it is an established principle of law that in a third party auction purchasers interest in the auctioned property continues to be protected notwithstanding that the underlying decree subsequently' gets set aside or otherwise. Law makes a clear distinction between a stranger who is a bona fide purchaser of the property at an auction sale and a decree holder purchaser at a Court auction. The stranger to the decree is afforded protection by the Court because he is not connected with the decree. It is observed that unless the protection is extended to them, the Court sales would not fetch market value or fair price of the property.

42. In Padanathil Rugmini Ammas case (supra), it is held that person who purchases at a Court auction and is stranger to the decree is afforded protection by the Court because he is not in any way connected with the decree. It is observed that such a purchaser has no protection from the Court and is liable to return the property in case of the reverse decree. In this case, an ex parte decree was set aside and the judgment-debtor was entitled to seek restitution of the property which had been sold in Court auction in execution of the ex parte decree. In this background, the Court has observed that there is no doubt that when the decree-holder himself is the auction purchaser in a Court auction sale held in execution of a decree which is subsequently set aside, restitution of the property can be ordered in favour of the judgment-debtor. The decree-holder auction purchaser is bound to return the property. The Court has further observed that it is equally well-settled that if at a Court auction sale in execution of a decree, the properties are purchased by bona fide purchaser who is stranger to the Court proceedings, the sale in his favour is protected and he cannot be asked to restitute the property to the judgment-debtor if the decree is set aside. The ratio behind this distinction between the sale to the decree-holder and a sale to the stranger is that the Court, as a master of policy, will protect honest outside purchasers at sales held in the execution of its decrees, although the sales may be subsequently set aside, when such purchasers are not parties to the Suit. But for such protection, the properties which are Sold in Court auctions would not fetch a proper price and the decree-holder himself would suffer. The same consideration does not apply when the decree-holder is himself the purchaser and the decree in his favour is set aside. He is a party to the litigation and is very much aware of the vicissitudes of litigation and needs no protection.

43. In the case of Nahnelal (supra), the Court has considered whether it has no jurisdiction to confirm sale in view of the fact that decree-holder

45. I am persuaded to accept the line of submissions made by the Counsel for the Respondent which are on the basis of law emerging from various judgments relied upon by him. Once the Appellant has not shown that he has suffered substantial injury, the material irregularities pleaded by him, even if taken to be established, would not be sufficient to set aside the auction sale. As per the law laid down by the Hon'ble Supreme Court in the case of Valji Khimji (supra), the confirmed auction sale can only be set aside on the ground of fraud. Though the Appellant had made an attempt to bring his case within the purview of fraud, but merely because there was some disturbance at the time of auction or that it is noticed in the auctioneers report that a known political figure appeared at the time of auction should not in itself be sufficient to establish fraud. If such grounds are accepted it would be very easy to frustrate the auction by bringing some person to create ruckus at the time of auction and then come back to plead before the Tribunals to urge that the auction was not held in a conducive atmosphere or that it was actuated with fraud. The report of Court auctioneer shows even after some persons having withdrawn from the bid by withdrawing their drafts there were still sufficient number of persons who gave bid for the property and all these grounds would not reveal fraud or any irregularity. In any case, in order to succeed to raise a challenge to the auction sale, the Appellant was required to prove and show that these material irregularities had caused substantial injury to her, before any interference on this count is called for. Merely because the fixation of reserve price of the property is stated to be less in the absence of a challenge at the relevant time and not raising a challenge in proper manner by invoking the provisions of law under the Second Schedule would be enough to repel the challenge raised by the Appellant to the auction sale. It has been rightly submitted before me that the right of the auction purchaser would have to be protected even if decree is reversed either before or after confirmation of sale. The right of third-party auction purchaser cannot be set at naught either because of one-time settlement which is on the basis of consent of the borrower and the creditor. I am thus not been able to accept the submission ma^e on behalf of the Appellant and, therefore, would dismiss the Appeal.

Appeal dismissed.