Wa/551/2015 Of Somasundaram v. The Chief Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC &THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU MONDAY, THE 24TH DAY OF JULY 2017/2ND SRAVANA, 1939 WA.No.551 of 2015 IN WP(C)27566/2008 ---------------------------------------AGAINST THE JUDGMENT IN WP(C) 27566/2008 of HIGH COURT OF KERALADATED 13.10.2014 APPELLANT/IMPLEADED PETITIONER:------------------------------- SOMASUNDARAM KESAVA VILASOM BUNGALOW, KILIKOLLOOR,KOLLAM BY ADVS.SRI.ANIL D. NAIR SMT.C.S.SULEKHA BEEVI SRI.R.SREEJITH SMT.ROSIE ATHULYA JOSEPH KUM.SOUMYA PRAKASH RESPONDENTS/RESPONDENTS:----------------------- 1. THE CHIEF COMMISSIONER OF INCOME TAX CR BUILDINGS, I.S PRESS ROAD, ERNAKULAM, KOCHI 682 018. 2. THE TAX RECOVERY OFFICER TRICHUR 680 001. 3. SMT.V.H.KUNHIPATHU, W/O.LATE T.A.MOIDEEN THINDICKAL HOUSE, EDATHURUTHY, TRICHUR DISTRICT 680 703. R1&2 BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX R1 BY ADV. SRI.CHRISTOPHER ABRAHAM,INCOME TAX DEPARTMENT R1 BY ADV. SRI.K.M.V.PANDALAI, INCOME TAX DEPARTMENT R4 BY ADV. SRI.SREELAL N.WARRIER R BY GOVERNMENT PLEADER SRI.MUHAMMED RAFIQ THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 24-07-2017,ALONG WITH WA. 588/2015, THE COURT ON THE SAME DAY DELIVERED THEFOLLOWING: ANTONY DOMINIC, J. & DAMA SESHADRI NAIDU, J. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - W.A.Nos.551 & 588 of 2015 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 24[th] day of July, 2017 Antony Dominic, J. JUDGMENT These appeals are filed against the judgments in W.P.(C)Nos.27566/08 and 14170/2005. Though the writ petitions weredisposed of by separate judgments, the subject matter beingconnected, these cases were heard together and are disposed of bythis common judgment, treating W.A.551/15 filed against W.P.(C)No.27566/08 as the leading case. 2. The writ petition was filed by the appellant’s deceased wifeSmt.Amaravathy Somasundaram, who was a defaulter under theIncome Tax personally as well as in her capacity as the Director of acompany. Proceedings were initiated against her for recovery of thetax due and notice under Rule 2 of the II[nd] Schedule to the IncomeTax Act, 1961 was issued intimating her that in default of payment ofthe amount specified in the certificate within 15 days, steps would be taken to realise the dues in terms of the Schedule. That noticewas issued on 16.5.1990. Tax was not paid and, therefore, on3.8.1990, 5.25 Acres of land in Thrissur district was attached byExt.P10. After completing all procedural formalities, on 12.5.1995property was sold in terms of Rule 52. 3. In the auction, the property was purchased by lateT.A.Moideen (hereinafter referred to as the Purchaser). On12.5.1995 itself purchaser deposited 25% of the bid amount incompliance with Rule 57. While the sale was taking place, thedefaulter had moved this court by filing O.P.No.7180/95 and thiscourt passed order dated 12.5.1995 itself staying furtherproceedings pursuant to the sale. Initially, the stay order was for onemonth, and was extended thereafter until further orders. While thestay order was in force, on 21.10.2002, the defaulter transferred theproperty to Sri.R.S.Moideen, (hereinafter referred to as theAssignee). Subsequently, the Purchaser expired on 11.7.2002. Inthis context, it may also be relevant to state that neither the Purchaser nor the Assignee were parties to O.P.No.7180/95. 4. The interim order of stay passed by this court on 12.5.1995 was vacated only on 18.12.2005. Subsequently, on 28.3.2005, thepurchaser’s wife (the third respondent in W.A.551/2015), who alsowas the power of attorney holder of the other legal heirs, remittedthe balance 75% and, accordingly, the sale was confirmed by Ext.P19order dated 29.3.2005 and Ext.P19(a) sale certificate was also issuedon 30.3.2005. Purchaser nor the Assignee were parties to O.P.No.7180/95. 4. The interim order of stay passed by this court on 12.5.1995 was vacated only on 18.12.2005. Subsequently, on 28.3.2005, thepurchaser’s wife (the third respondent in W.A.551/2015), who alsowas the power of attorney holder of the other legal heirs, remittedthe balance 75% and, accordingly, the sale was confirmed by Ext.P19order dated 29.3.2005 and Ext.P19(a) sale certificate was also issuedon 30.3.2005. 5. In terms of Rule 86 of the II[nd] Schedule, on 15.4.2005 thedefaulter filed Ext.P18 appeal and the appeal was dismissed by theChief Commissioner of Income Tax as per Ext.P22 order. It was thisorder, which was challenged in W.P.(C)27566/08 filed by thedefaulter. The writ petition was dismissed by the learned SingleJudge, mainly concluding that the defaulter having transferred theproperty, did not have locus standi to maintain an appeal under Rule86 and that if at all, the remedy available to the defaulter was toapply under Rule 60 and 61 of the Rules to set aside the sale. It is this judgment, which is under challenge in W.A.551/15, filed by thedeceased defaulter's husband. 6. The contention raised by the learned counsel for theappellant is mainly that the rules contained in the II[nd] Schedule tothe Income Tax Act govern the procedure for sale of an immovableproperty and, according to him, the rules governing deposit of theauction money are mandatory in character. It is stated that in thiscase, these mandatory rules were not complied with and, therefore,the sale was void. In such a case, according to the counsel, he couldnot have maintained an application under Rule 60 or 61 to set asidethe sale. He also further contends that irrespective of the transfer ofthe property, which insofar as the Revenue is concerned, is a voidone, the defaulter could not have been non suited on the ground ofabsence of locus standi to maintain an appeal under Rule 86 of theRules. 7. However, this contention is refuted by the learned StandingCounsel appearing for the Revenue by inviting our attention to the fact that the purchaser had expired on 11.7.2002, at a time whenfurther proceedings pursuant to the sale were stayed by this court.According to him, the stay was vacated only on 18.12.2005 and insuch a situation, the rigor of Rule 57 or 58 requiring deposit withinthe time specified cannot be imported into the case. He alsocontended that if at all the appellant was aggrieved, the remedyavailable to was to apply under Rule 60 and 61 of the Schedule to setaside the sale. 8. The learned counsel appearing for the third respondent, thewife of the deceased purchaser, adopted the contentions of theStanding Counsel for the Revenue and also contended that havingregard to the fact that the third respondent is in possession of theproperties since 2005 and the appellant, who has not taken recourseto Rule 60 and 61, cannot be heard to contend that he is aggrieved bythe sale in question. It was also argued that since the property wastransferred when the matter was pending consideration of thiscourt, the appellant has ceased to have locus standi to maintain challenge against the sale in question. 9. We have considered the submissions made. Admittedly, theassessee, the deceased wife of the appellant in W.A.551/15 was adefaulter both in her personal capacity and also as in her capacity asthe Director of a company. That liability had become final and it wasto realize the dues that proceedings under the II[nd] Schedule to theIncome Tax Act were initiated against her. It is also the admitted factthat even after notice under Rule 2 of the II[nd] schedule was issued,the defaulter did not comply with the demand and the Revenue wereentitled to take steps to realize the amount due invoking the furtherprovisions contained in the II[nd] Schedule. challenge against the sale in question. 9. We have considered the submissions made. Admittedly, theassessee, the deceased wife of the appellant in W.A.551/15 was adefaulter both in her personal capacity and also as in her capacity asthe Director of a company. That liability had become final and it wasto realize the dues that proceedings under the II[nd] Schedule to theIncome Tax Act were initiated against her. It is also the admitted factthat even after notice under Rule 2 of the II[nd] schedule was issued,the defaulter did not comply with the demand and the Revenue wereentitled to take steps to realize the amount due invoking the furtherprovisions contained in the II[nd] Schedule. 10. When an immovable property is to be attached and sold,the Revenue has to comply with the provisions contained in Part IIIof the II[nd ]Schedule. In Part III, the Rule 56 provides that the sale of aproperty attached under Rule 48 and proclaimed under Rule 54,shall be by public auction to the highest bidder and shall be subjectto confirmation by the Tax Recovery Officer. 11. Rule 57 and 58 being relevant in the context of this case, are extracted below for reference: Rule 57. Deposit by purchaser and resale indefault--(1) On every sale of immovable property, theperson declared to be the purchaser shall pay,immediately after such declaration, a deposit of twentyfive percent on the amount of his purchase money, to theofficer conducting the sale; and, in default of suchdeposit, the property shall forthwith be resold. (2) the full amount of purchase money payableshall be paid by the purchaser to the Tax RecoveryOfficer on or before the fifteenth day from the date ofthe sale of the property. Rule 58. Procedure in default of payment--Indefault of payment within the period mentioned in thepreceding rule, the deposit may, if the Tax RecoveryOfficer thinks fit, after defraying the expenses of the sale,be forfeited to the Government, and the property shallbe resold, and the defaulting purchaser shall forfeit allclaims to the property or to any part of the sum forwhich it may subsequently be sold. 12. Language of Rule 57 is clear that on every sale of immovable property, the person declared to be the purchaser shall,immediately after such declaration, deposit 25% of the amount of his purchase money, to the officer conducting the sale. The Rule further provides that in default of such deposit, the property shall forthwithbe resold. In addition, Sub Rule 2 further provides that the fullamount of purchase money payable shall be paid by the purchaser tothe Tax Recovery Officer on or before the 15[th] day from the date ofsale of the property. 13. Rule 58 providing for consequences of default incomplying with Rule 51 show that on default of payment within theperiod mentioned in Rule 57, the deposit may, if the Tax RecoveryOfficer thinks fit, after defraying the expenses of the sale be forfeitedto the Government, and the property shall be resold and thedefaulting purchaser shall forfeit all claims to the property or to anypart of the sum for which it may subsequently be sold. These Rules,it is to be noted are mandatory not only its language but also makesit to be so explicit by providing consequences for its non compliance. 14. Reference to Rule 60 and 61 are also necessary in this caseand, therefore, we extract these provisions also for reference; Rule 60. Application to set aside sale of immovableproperty on deposit-- (1) Where immovable property has been sold inexecution of a certificate, the defaulter, or any personwhose interests are affected by the sale, may, at any timewithin thirty days from the date of the sale, apply to theTax Recovery Officer to set aside the sale, on his depositing---- 14. Reference to Rule 60 and 61 are also necessary in this caseand, therefore, we extract these provisions also for reference; Rule 60. Application to set aside sale of immovableproperty on deposit-- (1) Where immovable property has been sold inexecution of a certificate, the defaulter, or any personwhose interests are affected by the sale, may, at any timewithin thirty days from the date of the sale, apply to theTax Recovery Officer to set aside the sale, on his depositing---- (a) [***] the amount specified in the proclamation ofsale as that for the recovery of which the sale was orderedwith interest thereon at the rate of [one fourth percent forevery month or part of a month], calculated from the dateof the proclamation of sale to the date when the deposit ismade; and (b) for payment to the purchaser, as penalty, a sumequal to five percent of the purchase money, but not lessthan one rupee. (2) Where a person makes an application underrule 61 for setting aside the sale of his immovableproperty, he shall not, unless he withdraws thatapplication, be entitled to make or prosecute anapplication under this rule. Rule 61. Application to set aside sale of immovableproperty on ground of non service of notice orirregularity--Where immovable property has been sold inexecution of a certificate, [such Income Tax Officer as maybe authorised by the Principal Chief Commissioner or]Chief Commissioner or [Principal Commissioner or]Commissioner in this behalf, the defaulter, or any person whose interest are affected by the sale, may, at any time,within thirty days from the date of the sale, apply to theTax Recovery Officer to set aside the sale of the immovableproperty on the ground that notice was not served on thedefaulter to pay the arrears as required by this Scheduleor on the ground of a material irregularity in publishingor conducting the sale: Provided that-- (a) no sale shall be set aside on any such groundunless the Tax Recovery Officer is satisfied that theapplicant has sustained substantial injury by reason of thenon-service or irregularity; and (b) an application made by a defaulter under thisrule shall be disallowed unless the applicant deposits theamount recoverable from him in the execution of thecertificate. 15. If a sale is validly conducted under Rule 57, then the procedure to get the sale set aside is enumerated in Rule 60, whichprovides that where any immovable property has been sold inexecution of a certificate, the defaulter, or any person whoseinterests are affected by the sale, may, at any time within 30 daysfrom the date of sale, apply to the Tax Recovery Officer to set asidethe sale. Such an applicant is required to deposit the amount specified in the proclamation of sale as that for the recovery of whichthe sale was ordered with interest thereon at the rate prescribed. Inaddition, for payment to the purchaser, as penalty, a sum equal to5% of the purchase money, but not less than one rupee shall also be deposited. Rule 61 provides application to set aside sale ofimmovable property on ground of non service of notice or otherirregularity. 16. Once sale is validly completed, the sale is required to beconfirmed in terms of Rule 63 and sale certificate is to be issuedunder Rule 65. Rule 86 provides for an appeal and in terms of thisRule, an appeal from any original order passed by any Tax RecoveryOfficer, not being an order which is conclusive, shall lie to thePrincipal Chief Commissioner (w.e.f.1.6.13) or the ChiefCommissioner or Principal C (w.e.f.1.6.13) or Commissioner. 17. A reading of these provisions of the II[nd] Schedule to the Actshow that the requirement of deposit of 25% as contemplated inRule 57(1) immediately after a person is declared to be the purchaser and also deposit of the balance purchase money on orbefore 15[th] day of date of sale of the property in terms of Rule 57(2),are mandatory in character. 17. A reading of these provisions of the II[nd] Schedule to the Actshow that the requirement of deposit of 25% as contemplated inRule 57(1) immediately after a person is declared to be the purchaser and also deposit of the balance purchase money on orbefore 15[th] day of date of sale of the property in terms of Rule 57(2),are mandatory in character. 18. The provisions contained in Rule 57, 58, 60 and 61 of theIncome Tax Act are in pari materia with the provisions contained inrule 84, 85, 86, 87, 88, 89 and 90 of Order XXI C.P.C. Rule 84 and 85of Order XXI CPC, providing for deposit of 25% and 75%, have beenconsistently held to be mandatory in character and it has been heldthat the courts have no power to extend the time prescribed therein.The Apex Court had occasion to consider the consequence of its noncompliance Manilal Mohanlal Shah and others v. Sardar SayedAhmed Sayed Mahmad and another where ithas been held thus: 8. The provision regarding the deposit of 25 percent. by the purchaser other than the decree-holder ismandatory as the language of the rule suggests. The fullamount of the purchase-money must be paid within fifteendays from the date of the sale but the decree-holder isentitled to the advantage of a set-off. The provision forpayment is,. however, mandatory... (Rule 85). If the payment is not made within the period of fifteen days, theCourt has the discretion to forfeit the deposit, and therethe discretion ends but the obligation of the Court to re-sell the property is imperative. A further consequence ofnon-payment is that the defaulting purchaser forfeits allclaim to the property (Rule 86). 9. It is not denied that the purchasers had notobtained any decree on foot of their mortgage and theclaim of Rs. 1,20,000 which they put forward before theexecution Court had not been adjudicated upon ordetermined. The mortgagees, one of whom is a pleader,applied on the day of the sale claiming a set-off on foot ofthe mortgage. The Court without applying its mind to thequest-ion immediately passed the order allowing the set-off. This claim was obviously not admissible under theprovisions of rule 84 which applies only to the decree-holder. The Court had clearly no jurisdiction to allow a set-off. The appellants misled the Court into passing a wrongorder and obtaining the advantage of a set-off while theyknew perfectly well that they had got no decree on foot ofthe mortgage and their claim was undetermined. There was default in depositing 25 percent of thepurchase-money and further there was no payment of thefull amount of the purchase- money within fifteen daysfrom the date of the sale. Both the deposit and thepayment of the purchase-money being mandatory underthe combined effect of rules 84 and 85, the Court has thediscretion to forfeit the deposit but it was bound to re-sellthe property with the result that on default the purchaserforfeited all claim to the property. These provisions leaveno doubt that unless the deposit and the payment are made as required by the mandatory provisions of the rules,there is no sale in the eye of lawin favour of the defaultingpurchaser and no right to own and possess the propertyaccrues to him. 10. In two cases decided by the Calcutta High Court,viz., Munshi Md. Ali Meah v. Kibria Khatun(1), and Sm.Annapurna Dasi v. Bazley Karim Fazley Moula(2), the salewas held to be no salewhere the purchaser had failed todeposit the balance of the purchase-money as required byrule 85. A similar view was taken by a Division Bench ofthe Allahabad High Court in Nawal Kishore and Others v.Buttu Mal and Subhan Singh(3). The provisions of rule 86were held to be mandatory in another decision of the sameCourt, Haji Inam Ullah v. Mohammad Idris(4), and it washeld that the Court was bound to re-sell the property upondefault irrespective of any application being made by anyparty to the proceedings. 10. In two cases decided by the Calcutta High Court,viz., Munshi Md. Ali Meah v. Kibria Khatun(1), and Sm.Annapurna Dasi v. Bazley Karim Fazley Moula(2), the salewas held to be no salewhere the purchaser had failed todeposit the balance of the purchase-money as required byrule 85. A similar view was taken by a Division Bench ofthe Allahabad High Court in Nawal Kishore and Others v.Buttu Mal and Subhan Singh(3). The provisions of rule 86were held to be mandatory in another decision of the sameCourt, Haji Inam Ullah v. Mohammad Idris(4), and it washeld that the Court was bound to re-sell the property upondefault irrespective of any application being made by anyparty to the proceedings. The case of Bhim Singh v. Sarwan Singh (5) was acase of failure to make a deposit as required by section306of the Code of 1882 (corresponding to rule 85 of thepresent Code). The Court treated it as a materialirregularity in conducting the sale which must be enquiredinto upon the application undersection 311,(corresponding to rule 90 of the present Code), and not bya separate suit to set aside the sale. The Court did notapply its mind to the question whether the provisions ofsection 306being mandatory the sale should not betreated as a nullity for non-compliance with thoseprovisions. The decision of a single Judge (app J.) in Nathu Mal v.Malawa Mal and Others (1) is distinguishable upon itsfacts. There the auction-purchaser had actually tendered the money but the payment was postponed by consent ofparties pending the disposal of the objection by thejudgment debtor. We do not agree with the remark madein that case that the provisions of rule 85 are intended "tobe directory only and not absolutely mandatory." ADivision Bench of the same Court (Tek Chand and AbdulRashid JJ.) held in A. R. Davar v. Jhinda Ram (2), that theCourt had no jurisdiction to extend the time for thepayment of the balance of the purchase- money under rule85 and must order resale under rule 86. 11. Having examined the language of the relevantrules and the judicial decisions bearing upon the subjectwe are of opinion that the provisions of the rules requiringthe deposit of 25 per cent. of the purchase-moneyimmediately on the person being declared as a purchaserand the payment of the balance within 15 days of the saleare mandatory and upon non-compliance with theseprovisions there is no sale at all. The rules do notcontemplate that there can be any sale in favour of apurchaser without depositing 25 per cent. of the purchase-money in the first instance and the balance within 15 days.When there is no sale within the contemplation of theserules, there can be no question of material irregularity inthe conduct of the sale. Non- payment of the price on thepart of the defaulting purchaser renders the sale.proceedings as a complete nullity The very fact that theCourt is bound to resell the property in the event of adefault shows that the previous proceedings for sale arecompletely wiped out as if they do not exist in the eye oflaw. We hold, therefore, that in the circumstances of thepresent case there was no sale and the purchasersacquired no rights at all. 19. These principles have been followed in Balram son of Bhasa Ram v. Ilam Singh and others , it wasagain held thus: 19. These principles have been followed in Balram son of Bhasa Ram v. Ilam Singh and others , it wasagain held thus: 10. It is also to be noted that the duty to pay thefull amount of purchase money the prescribed period of15 days from the date of sale of the property is cast onthe purchaser by virtue of Rule 85 of Order XXI andtherefore, the entire responsibility to make fullcompliance of the mandatory provision is his. Theproviso to Rule 85 is enacted for the benefit of thepurchaser when he is the decree-holder and is entitledto the advantage of any set off under Rule 72. Theproviso giving this benefit to the decree-holderpurchaser merely relieves him of the requirement ofdepositing that amount of which he is entitled to claimset off, but it does not relieve him of they duty to depositthe full amount taking advantage of the set off. Anymistake made while claiming the set off which results infailure to deposit the full amount of purchase moneywithin 15 days of the date of sale renders the decree-holder purchaser liable to the same adverseconsequences which would ensue to any other purchaserdue to non-compliance of Rule 85. No distinction ismade between a decree-holder purchaser entitled toclaim set off under Rule 72 and any other purchaser forthe purpose of strict compliance with the requirementunder Rule 85. The contentions of learned counsel forthe appellant have not merit. 20. Similar are the principles laid down in Gangabai Gopaldas Mohata v. Fulchand and others ,where the sale has been held to be void. 15. Rules relating to Court sale provided in Order21, Rules 84 and 85 are analogous. They require thepurchaser to make deposit of 1/4th of the purchasemoney immediately after sale and the balance shall bedeposited within 15 days. This Court held in ManilalMohanlal Shah v. Sardar Sayed Ahmed Sayed Mahamad.1966 (1) SCR 108: (AIR 1954 SC 349), that non-compliance with Rules 84 and 85 of Order 21 wouldrender the sale void in the eye of law. The contention inthe said case, that non-compliance with the aforesaidrule only renders the sale irregular, was repelled by thisCourt. The same principle would apply to the saleregulations contained in the above quoted MaharashtraRules. 21. The legal position in the context of Rule 57 itself hasalready been clarified by the Apex Court in its judgment inC.N.Paramsivan and Another v. Sunrise Plaza Tr. Partner andOthers [2013] 4 S.C.R. 1. That was a case arising under theRecovery of Debts Due to Banks and Financial Institutions Act, 1993where sale of the properties are to be held in terms of the II[nd] Schedule to the Income Tax Act. In that context, the provisionscontained in the II[nd] Schedule came up for consideration of the Apex Court and the paragraphs to the extend it is relevant read thus: 27. There is nothing in the provisions of Section 29of RDDB Act or the scheme of the rules under the IncomeTax Act to suggest that a discretion wider than what isexplained above was meant to be conferred upon theRecovery Officer under Section 29 of the RDDB Act orRule 57 of the Income Tax Rules which reads as under: “57. (1) On every sale of immovable property,the person declared to be the purchaser shall pay,immediately after such declaration, a deposit oftwenty-five per cent on the amount of his purchasemoney, to the officer conducting the sale; and, indefault of such deposit, the property shall forthwithbe resold. (2) The full amount of purchase moneypayable shall be paid by the purchaser to the TaxRecovery Officer on or before the fifteenth day fromthe date of the sale of the property.” 28. It is clear from a plain reading of the above thatthe provision is mandatory in character. The use of theword “shall” is both textually and contextually indicativeof the making of the deposit of the amount being amandatory requirement. xx xx xx xx “57. (1) On every sale of immovable property,the person declared to be the purchaser shall pay,immediately after such declaration, a deposit oftwenty-five per cent on the amount of his purchasemoney, to the officer conducting the sale; and, indefault of such deposit, the property shall forthwithbe resold. (2) The full amount of purchase moneypayable shall be paid by the purchaser to the TaxRecovery Officer on or before the fifteenth day fromthe date of the sale of the property.” 28. It is clear from a plain reading of the above thatthe provision is mandatory in character. The use of theword “shall” is both textually and contextually indicativeof the making of the deposit of the amount being amandatory requirement. xx xx xx xx 32. In the light of the above we see no reason tohold thatRules 57 and 58 of the Income Tax Rules areanything but mandatory in nature, so that a breach ofthe requirements under those Rules will render theauction non-est in the eyes of law. 22. It is in the light of these binding principles that we have toappreciate the case before us. Admittedly, the sale was on 12.5.1995.On 12.5.95 purchaser was declared to be successful and, therefore,she deposited 25% of the purchase money and thus complied withRule 57(1). She ought to have deposited the balance amount within15 days thereafter. It is the contention of the Department and thepurchaser that the interim order passed by this court on 12.5.95 inO.P.7180/95 prevented the authorities from accepting the balancesale consideration within the 15 days period. Even if we accept theaforesaid contention in favour of the Income Tax Department and thepurchaser, that benefit can extend only till 18.2.2005 when the staywas vacated by this court. Then also, the Purchaser or it being theestate left behind by the Purchaser, who had expired in the meantime, his legal heirs, had the duty to comply with therequirements of Rule 57(2) within 15 days thereafter. However, what transpired thereafter is revealed from paragraph 19 of Ext.P22, the order passed by the Commissioner, thus: “The TRO contacted Smt.V.H.Kunhipathu, wife ofthe deceased, to know the details of legal heirs. A“heirship certificate” from Tahsildar, Kodungallur wasfiled. Copies of power of attorney executed by each of thelegal heirs on various dates in 2003 and 2004 givingSmt.Kunhipathu the authority to act and deal with allthe properties of Sri.T.A.Moideen were filed.Smt.Kunhipathu informed the TRO, vide letter dated8.3.2005, that she was willing to remit the balance, butshe asked for a time of one month, as her sonDr.Mubarak was away in UAE. The balance amount ofthe price fixed in auction was paid on 28.3.2005. TheTRO issued a sale certificate dated 30.3.2005 in formNo.ITCP 20 in respect of the property, in favour ofSmt.V.H.Kunjipathu, the power of attorney holder for thelegal heirs of Sri.T.A.Moideen.” 23. The above paragraph of the order would show that despite the fact that the Department had no obligation to have issued anynotice or other intimation to the legal heirs of the deceasedpurchaser, the Department in fact informed the wife of the deceased 23. The above paragraph of the order would show that despite the fact that the Department had no obligation to have issued anynotice or other intimation to the legal heirs of the deceasedpurchaser, the Department in fact informed the wife of the deceased purchaser, SmtV.H.Kunhipathu, the third party respondent inW.A.551/15 and that she, vide her letter dated 8.3.2005, informedthe Department that she was willing to remit the balance but askedfor one month's time. It was, accordingly, that she deposited thebalance 75% of the amount on 28.3.2005. In other words, the wife ofthe deceased Purchaser, who also held power of attorney of the otherlegal heirs of the deceased, did not deposit the balance amountwithin the 15 days period specified in Rule 57(2), even if the saidperiod is reckoned from 18.2.2005, when the order of stay wasvacated by this court. Evidently, therefore, there is non complianceof the mandatory provisions of Rule 57(2) attracting theconsequences of such default as contained in Rule 58 and explainedby the Apex Court in the judgments referred to above. This meansthat the confirmation of sale, ordered on 29.3.2005 is of a void saleand the sale certificate issued on 30.9.2005 being a dependent orderis also void and is of no consequence. 24. It was argued before us that if at all the appellant wantedto avoid the sale, the remedy available was to take recourse to Rule60 or 61 of the Rules by making an application to set aside the saleand not an appeal under Rule 86. We are unable to accept thiscontention. Apex Court has repeatedly held that confirmation of salein contravention of Rule 57 and 58 is void and that as a result of thedefault committed by the purchaser or his legal heirs, the sale itselfis wiped out, to borrow the expression used by the Apex Court. In acase where a sale held under Order XXI of CPC pursuant to a decreewhich was a nullity, there is no question of any party having to resortto the provisions of Rule 89 and 90 of Order XXI C.P.C. to have thesale set aside and any claim based on a void sale can be resistedwithout having the sale set aside. This principle has beenrecognized by the Apex Court in its judgment in Ram Chandra Aryav. Man Singh and another where it, inter alia,held thus: “In the present case the decree being a nullity, hasto be treated as non est and, consequently the sale, whenheld, was void ab initio. In such a case, there is noquestion of any party having to resort to the provisions ofRr. 89 and 90 of O. 21, C.P.C. to have the sale set aside. Anyclaim based on a void sale can be resisted without havingthat sale set aside. The decision of this Court in that caseitself bring out this distinction by stating: “It is to be noted however, that there may be cases inwhich, apart from the provisions of Rr. 89 to 91 the Courtmay refuse to confirm a sale, as, for instance, where a saleheld without giving notice to the judgment-debtor, orwhere the Court is misled in fixing the reserve price orwhen there was no decree in existence at the time whenthe sale was held.” This Court, thus, in that case, clearly recognisedthat, if there be no decree in existence at the time whenthe sale is held, the sale can be ignored and need not beset aside under the provisions of Rr. 89 to 91, C.P.C. In thepresent case, as we have held, the decree passed againstRam Lal was void and has to be treated as non-existentand, consequently, the sale must be held to be a nullity. ” 25. Reference should, in this context be made again to the principles laid down in Manilal Mohanlal Shah's case [AIR 1954 SC 349] (supra). Paragraphs 9, 10 and 11 already extracted aboveshows that default in remittance of purchase money, renders a sale in execution of a decree, a nullity. This Court, thus, in that case, clearly recognisedthat, if there be no decree in existence at the time whenthe sale is held, the sale can be ignored and need not beset aside under the provisions of Rr. 89 to 91, C.P.C. In thepresent case, as we have held, the decree passed againstRam Lal was void and has to be treated as non-existentand, consequently, the sale must be held to be a nullity. ” 25. Reference should, in this context be made again to the principles laid down in Manilal Mohanlal Shah's case [AIR 1954 SC 349] (supra). Paragraphs 9, 10 and 11 already extracted aboveshows that default in remittance of purchase money, renders a sale in execution of a decree, a nullity. 26. We have already held that Rule 60 and 61 of the II[nd]Schedule to the Income Tax Act are pari materia with the provisionscontained in Rule 89 and 90 of Order 21 C.P.C., and as held by theApex Court the principles which govern the rules under Order XXIwould apply to the rules in the II[nd] Schedule to the Act also.Therefore, the principles of law laid down by the Apex Court in thecontext of Rule 89 and 90 are equally applicable in interpreting Rule60 and 61 of the I[st] Schedule. 27. If that be so, the law as laid down in the case of RamChandra Arya (supra)has to answer the contention now raisedbefore us. 28. Apparently, as a last resort, an argument was raised, thatthe Purchaser who had alienated the property in favour ofR.S.Moideen on 21.10.2002 had no proprietary interest in theproperty to maintain an appeal under Rule 86 of the Rules.Therefore, according to the respondents, not only the appeal filed by her before the Commissioner but also the writ petition and the writ appeal are liable to be dismissed for want of locus standi. 29. Admittedly, it was the default of the deceased defaulterwhich led to the sale and the consequential proceedings. It was the defaulters property, which came to be proceeded against and wasultimately sold. According to the Revenue, such a sale is hit by Rule16 of the Rules in the II[nd] Schedule which reads thus: 16. Private alienation to be void in certain cases-- (1) Where a notice has been served on a defaulterunder rule 2, the defaulter or his representative-in-interestshall not be competent to mortgage, charge, lease orotherwise deal with any property belonging to him exceptwith the permission of the Tax Recovery Officer, nor shallany civil court issue any process against such property inexecution of a decree for the payment of money. (2) Where an attachment has been made under thisSchedule, any private transfer or delivery of the propertyattached or of any interest therein and any payment to thedefaulter of any debt, dividend or other moneys contraryto such attachment, shall be void as against all claimsenforceable under the attachment. 30. This rule provide that any private alienation after noticeunder Rule 2 has been served on the defaulter, except with thepermission of the Tax Recovery Officer shall be void. Sale admittedlywas without the permission of the Tax Recovery Officer. Therefore,and as rightly contended by the counsel for the Revenue, the sale isvoid at least as against the Revenue. If that be so, insofar as theproceedings between the appellant and the Revenue are concerned,the appellant is fully entitled to maintain legal proceedingsimpugning the sale and the further proceedings. Therefore, thiscontention is only to be refuted and we do so. 31. For all these reasons, we are inclined to think that thelearned Single judge erred in dismissing the writ petition filed by theappellant. Accordingly, the judgment under appeal in W.A.551/2015is set aside and Ext.P22 order passed by the first respondent is alsoset aside. The writ appeal is allowed as above. 32. Turning to W.A.588/15 filed by the assignee of theproperty Sri.R.S.Moideen, that assignment, according to us, is hit by Rule 16 of the II[nd] Schedule to the Act. 33. If that be so, he could not derive any benefit consequent on 31. For all these reasons, we are inclined to think that thelearned Single judge erred in dismissing the writ petition filed by theappellant. Accordingly, the judgment under appeal in W.A.551/2015is set aside and Ext.P22 order passed by the first respondent is alsoset aside. The writ appeal is allowed as above. 32. Turning to W.A.588/15 filed by the assignee of theproperty Sri.R.S.Moideen, that assignment, according to us, is hit by Rule 16 of the II[nd] Schedule to the Act. 33. If that be so, he could not derive any benefit consequent on the transfer in his favour. In that view of the matter, we are notinclined to entertain any challenge against the proceedings initiatedby the Income Tax Department at the instance of the appellantherein. Consequently, W.A.588/15 has to fail and is dismissed. Resultantly, W.A.No.551/15 is allowed and W.A.588/15 isdismissed. SD/- ANTONY DOMINIC JUDGE jes SD/-DAMA SESHADRI NAIDU JUDGE