Judgment ( 1. ) WRIT Petition No. 6228/02 has been filed by the petitioners calling in question legality of the order dated 13-9-2002 passed by the Recovery Officer, debts Recovery Tribunal, Jabalpur by which the objection against the attachment and auction sale has been dismissed as withdrawn without there being any consent of the Counsel or the objector. W. P. No. 7290/02 has been filed by M. P. High Court Bar Association levelling serious charges of improper judicial behaviour by Shri C. K. Solanki, the then Presiding Officer, Debts recovery Tribunal, Jabalpur. ( 2. ) THE case of petitioner in W. P. No. 6228/02 is that Shri C. K. Solanki was the then Presiding Officer, DRT, Jabalpur. His son Rishi Kumar Solanki respondent No. 4 was the auction purchaser in the auction which was held on 9th september, 2002by Recovery Officer, DRT. He was the only auction bidder and auction was finalized in his favour. There is allegation made of manipulation of order-sheet dated 13-9-2002. It is submitted that Counsel whose consent has been mentioned to withdraw the objection did not appear on the date on which his consent has been mentioned, another Counsel Shri Alok Pathak stood engaged who had filed the objection, not the previous Counsel Shri Sanjeev shukla. The order-sheet had not been dictated till 16-9- 2002. The Counsel for objector Shri Alok Pathak was told to appear on the next date, i. e. , 16-11-2002 for hearing on objection and the ante-dated order was passed dictated by Shri c. K. Solanki, as per version of respondent No. 3, Recovery Officer mentioned in his return in Paras 4 and 5. High Court Bar Association has also filed Writ petition No. 7290/2002 praying for restraining respondent No. 3 from discharging his judicial function as Presiding Officer, DRT, Jabalpur, since he has retired. This Court passed interim stay. The High Court Bar Association also intervened in W. P. No. 6228/02 and on 19-12-2002, considering that contempt proceedings were initiated against the High Court Bar Association, in that regard notice was issued by Registrar of DRT considering the serious nature of allegations levelled against respondent No. 2 Shri C. K. Solanki.
This Court passed interim stay. The High Court Bar Association also intervened in W. P. No. 6228/02 and on 19-12-2002, considering that contempt proceedings were initiated against the High Court Bar Association, in that regard notice was issued by Registrar of DRT considering the serious nature of allegations levelled against respondent No. 2 Shri C. K. Solanki. Considering rule 17 contained in IInd Schedule of Income Tax Act read with Section 29 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as "act of 1993"), this Court observed that Rishi Kumar solanki, son of Shri C. K. Solanki who was Presiding Officer could not have participated in the auction. Shri Solanki stood retired in January, 2003. When illegality committed by Shri Solanki was brought to the notice of this Court. Thereafter, the aforesaid notice of contempt was issued by Registrar, DRT, and allegedly, bargain was made to withdraw the notice of contempt in case petition was withdrawn. It was observed by this Court that respondent No. 2 may be well advised and expected not to decide any case in absentia of lawyers and proceed ex parte till next date considering the serious nature of allegations levelled and strained relationship with Bar. ( 3. ) IN W. P. No. 6228/2002, it is averred that petitioner Ramlal Gaud is the owner of property House No. 103, Shri Nagar Extension, Indore. First floor of the house bears No. 103-A. It is owned by Pradeep Kumar Gaud, son of petitioner No. 1. Petitioner No. 2 Pradeep Kumar Gaud mortgaged his portion of the house with the respondent/bank as a guarantor. The borrower failed to repay the loan consequently Bank of Baroda had filed a suit against the borrower M/s. Corro Pack Ltd. and the guarantor Pradeep Kumar. The suit was decreed by the Tribunal, it was directed to recover the amount by the sale of the mortgaged property of the guarantor. Bank had filed an Execution Application ta. Ex. Case No. 30 of 2002 before the Recovery Officer, DRT. Instead of restricting attachment of the mortgaged property, attachment of whole house bearing Nos. 103 and 103-A Shrinagar Extension, Indore was ordered including the property of petitioner No. 1 which was never mortgaged with the Bank.
Bank had filed an Execution Application ta. Ex. Case No. 30 of 2002 before the Recovery Officer, DRT. Instead of restricting attachment of the mortgaged property, attachment of whole house bearing Nos. 103 and 103-A Shrinagar Extension, Indore was ordered including the property of petitioner No. 1 which was never mortgaged with the Bank. An objection was filed on 30-8-2002 on the ground that property was never mortgaged with the Bank, therefore, order of attachment as well as notice of auction are void ab initio. On 9-9-2002, Recovery Officer told the Counsel for objector that looking to the nature of objection, he has orally instructed the recovery Inspector not to proceed with the auction sale and with that understanding the case was adjourned for reply by the respondent Bank and for argument on objection and stay. It is further averred that on 13-9-2002 Counsel for objector Shri Alok Pathak appeared before the Recovery Officer twice during Court hours, but neither the bank filed reply nor the arguments on objection were heard nor the order-sheet was written by the Recovery Officer and he asked the Counsel for objector to come on any other date. 14th and 15th september were the holidays. Shri Alok Pathak, Advocate again appeared on 16-9-2002 to note the order-sheet, till that date the order-sheet was neither written nor signed by the Recovery Officer. The Counsel was informed that case has been simply adjourned for 16-11-2002, he was asked to appear on 16-11-2002. Petitioner on 4-10-02 learnt from the Bank employees about the sale of the house on 9-9-2002, therefore, he requested his Counsel to obtain the certified copy of the order dated 16-9-2002. On receiving the certified copy of the order drawn on 13-9-2002, objector was stunned to find that his objection has been stated to be withdrawn by Shri Sanjeev Shukla, Advocate who did not appear before the Recovery Officer either on 13-9-2002 or 16-9-2002. It is further averred that on 17-10-02 Counsel for objector Shri Alok Pathak with a delegation of five lawyers named in the petition appeared before the Recovery officer to clarify the situation and apprised him of correct facts. Recovery officer stated that some error might have been committed, he advised Counsel appearing on behalf of objector to move an application for recall of order dated 13-9-2002.
Recovery officer stated that some error might have been committed, he advised Counsel appearing on behalf of objector to move an application for recall of order dated 13-9-2002. On 21-10-2002 application was filed for recalling the order by mentioning all the facts and circumstances in detail. The Counsel for the objector was told to appear for hearing on the application on 23-10-2002, but filing section intimated the Counsel that no such application for recalling of the order was traceable. Petitioners learnt from own sources and on enquiry it was confirmed by the Recovery Officer that the above House No. 103 had been purchased by respondent No. 4 Rishi Kumar Solanki who is son of respondent no. 2 C. K. Solanki, Presiding Officer, DRT, Jabalpur. It is further averred that so called auction purchaser has no source of income. He is solely dependent upon his father. It was colourable action of attachment, auction, sale, etc. at the instance of Presiding Officer, DRT, Jabalpur. No auction took place on the spot on 9-9-2002, the auction sale proceedings are fictitious, it was not proceeded by any proclamation of sale. Consequently, competitive bidders did not come forward. Property worth Rs. 8,00,000/- was sold for a paltry sum of Rs. 3,50,000/-because the real purchaser was the Presiding Officer, DRT under the guise of his son. The sale proclamation notice (P-4) prohibits officers or other persons having any duty to perform in connection with sale, either directly or indirectly not to bid form, acquire or attempt to acquire any interest in the property. The action is illegal and malafide, hence the petition. ( 4. ) APPLICATION for intervention has been filed by the High Court Bar association levelling serious allegations against the conduct of Shri C. K. Solanki in various cases which we are not referring as by now Shri C. K. Solanki has retired. There are serious allegations made by M. P. High Court Bar Association in W. P. No. 7290/2002 which are also not being mentioned as the purpose of petition stands served, Shri C. K. Solanki is no more in service, he has retired. ( 5. ) IN the return filed by respondent No. 3, Recovery Officer, Shri B. M. . Sharma serious allegations have been made against Shri C. K. Solanki.
( 5. ) IN the return filed by respondent No. 3, Recovery Officer, Shri B. M. . Sharma serious allegations have been made against Shri C. K. Solanki. It is mentioned in Para 4 of the return that on the objection filed with respect to attachment and auction, matter was placed before answering respondent on 5-9-2002. He has asked Shri Sanjeev Shukla, Advocate to supply copy of the objection to the Counsel appearing for Bank of Baroda in execution proceedings. Matter was posted for hearing on 9-9-02 as 7th and 8th September, 02 were holidays. On 9-9-02 case was adjourned to 18-11 -02. In between the case was also taken up on 13-9-02 on which date the auction report was submitted by in charge Recovery Inspectors Shri Mithilesh Trivedi and Shri Anuj Singh. It was reported that Shri Rishi Kumar Solanki is successful bidder in respect of the property in question whose bid is for an amount of Rs. 4,72,000. The auction was conducted in respect of the first floor of the house No. 103, situated at Shrinagar extension, Indore. In pursuance to the auction report submitted by the said in charge Recovery Inspectors, the order-sheet was written by the answering respondent on 13-9-02 thereby narrating in detail that the successful bidder was shri R. Kumar and only Shri R. Kumar participated in the auction. Shri R. Kumar deposited an amount of Rs. 1,18,000 by way of three demand drafts, Shri r. Kumar was further directed to deposit the balance amount of 75% within a period of 15 days. It is further averred in Para 5 of the return that on 13-9-02 when he returned from lunch, he was informed by Section Officer Shri M. P. Parmar that the Counsel for the Bank of Baroda, namely, Shri Ashok Bankey and the Counsel for the Objector Shri Sanjeev Shukla came in the absence of answering respondent. It was also informed that as the answering respondent was not available, the matter was placed before Shri C. K. Solanki, Presiding officer, DRT, Jabalpur. Counsel appearing on behalf of objector Shri Sanjeev shukla had expressed before Shri Solanki that he was satisfied with the submissions made by the Counsel for the Bank and, therefore, he was withdrawing the objection filed by him.
Counsel appearing on behalf of objector Shri Sanjeev shukla had expressed before Shri Solanki that he was satisfied with the submissions made by the Counsel for the Bank and, therefore, he was withdrawing the objection filed by him. The Section Officer Shri Parmar further informed the answering respondent that accordingly the order-sheet had been dictated by Shri Solanki, Presiding Officer and case was fixed for 24-9-2002. The answering respondent has simply singed the order-sheet dictated by Shri solanki. He has further submitted that he was not provided with any stenographer or Typist and the order-sheets were written by him in execution proceedings by hand. Order-sheet dated 13-9-02 which was dictated by Shri solanki was typed one. Signature of Shri Sanjeev Shukla, Advocate were not taken by Section Officer on the order sheet about withdrawal of his objection. Answering respondent was informed by Shri Sanjeev Shukla, Advocate that he never appeared before the Presiding Officer Shri Solanki and had never withdrawn objection which was filed on behalf of the objector. However, Shri alok Pathak and some other Advocates came and contacted the answering respondent and enquired about the order-sheet dated 13-9-02. The answering respondent admitted before the said Advocates that mistake had been committed and asked them to file an application for recalling entire sale. Case was fixed for confirmation of sale on 9-10-02, sale was confirmed on 9-10-02 and delivery of possession was directed to the successful bidder on 21-10-02. He came to know that auction purchaser is the son of Presiding Officer through the newspaper report published in the daily newspaper "dainik Bhaskar" on 27-11-2002. Thereafter he received summons of writ petition on 11-12-02 and came to know that an application for setting aside auction sale was also filed on 21-10-02 which application was earlier not available on record and same was never placed for consideration before the answering respondent. It was also stated that Bank officials were not present at the time when the property was put to auction. Complaint (R-3/2) was filed by Recovery Inspector Mithilesh Trivedi against Bank officials. Application for recalling the order dated 13-9-02 was not available in the record of execution case. ( 6.
It was also stated that Bank officials were not present at the time when the property was put to auction. Complaint (R-3/2) was filed by Recovery Inspector Mithilesh Trivedi against Bank officials. Application for recalling the order dated 13-9-02 was not available in the record of execution case. ( 6. ) IN the return filed by Shri C. K. Solanki, Presiding Officer, DRT, jabalpur, it is submitted that he would not like to be either judged or clubbed with the action of his son which has been taken by him independently. He has unblemished record of service and was appointed as Presiding Officer of DRT, jabalpur till the age of 62 years or for a period of five years whichever is earlier. He would have superannuated in June, 2001, the extended service is only by virtue of Section 6 of the Act of 1993. No case was pending in his Court. Bank of baroda had moved an application for attachment and for sale of mortgaged property. Recovery Officer had passed the order for auction. Public Notice dated 31-7-2002 was published in Free Press dated 17-8-2002, date of sale was fixed as 9-9-02, reserved price was Rs. 4,62,000. He was not connected with the proceeding, he became functus officio with passing of final order and issuing certificate of recovery. Recovery Officer recorded the satisfaction in order dated 13-9-02 of the auction proceedings, objections were withdrawn. As per record an application for recall of order was filed on 20th October, 02 supported by affidavit of a lawyer, such application was not maintainable before Recovery officer. Petitioner No. 1 was not the owner of ground floor. This part of property in question was not affected by auction sale. ( 7. ) RESPONDENT No. 4 in his return has submitted that he has participated in the public auction at his own instance. Incorrect facts have been mentioned in the application. He is in the employment of Indus Industrial Bank ltd. , as Junior Manager from 24-7-02 at a package of Rs. 1,00,020/- per annum and also served the same as Home Banking Relationship Executive previously for some time. He is an income tax payee having permanent Account no. ARNPS 8354 B. Sale was proclaimed in the newspaper namely "free Press journal", Indore, on which basis he participated in the public auction at DRT premises, c/o State Bank of Indore, Indore on 9-9-2002. ( 8.
He is an income tax payee having permanent Account no. ARNPS 8354 B. Sale was proclaimed in the newspaper namely "free Press journal", Indore, on which basis he participated in the public auction at DRT premises, c/o State Bank of Indore, Indore on 9-9-2002. ( 8. ) SHRI Ashish Pathak, learned Counsel appearing for petitioners has submitted that entire proceedings are illegal and void. Shri C. K. Solanki had in fact purchased the property in the name of his son, there was no other auction bidder, Recovery Inspector as per choice of Shri Solanki was appointed to hold the proceeding, no public auction was held, objection was never withdrawn by objector Shri Sanjeev Shukla, without deciding the objection auction could not have been held. Order sheet dated 13- 9-02 was surreptitiously drawn, it was dictated by Shri Solanki as apparent from the return filed by the Recovery officer, Recovery Officer had made serious allegations against Presiding officer, DRT in his return Paras 4 and 5 which vitiates the entire proceedings relating to sell. ( 9. ) SHRI R. Maindiratta, learned Counsel appearing for Recovery officer/respondent No. 3 has submitted that Shri C. K. Solanki was responsible for recording the facts mentioned in order-sheet dated 13-9-02. Respondent no. 3 had not drawn the order-sheet, Shri Sanjeev Shukla, Advocate never appeared before him, objection was not withdrawn by Shri Sanjeev Shukla, in his presence order-sheet was dictated by Shri Solanki, Presiding Officer, DRT, jabalpur. Application for recalling of the order dated 13-9-02 was not on record as mentioned in the return. ( 10. ) SHRI Anubhav Jain, learned Counsel appearing for respondent no. 5/bank has submitted that property was liable to be sold in execution of the decree which was passed. ( 11. ) SHRI Gourav Sharma, learned Counsel appearing for respondent no. 4 has supported the auction proceedings. ( 12. ) SHRI Anil Khare, learned Counsel appearing for M. P. High Court bar Association has submitted that it was unbecoming of Shri C. K. Solanki to act in the manner in which he had acted in several cases of which facts have been mentioned in the writ petition and when intervention application filed by the high Court Bar Association, proceedings for contempt were also illegally initiated by Shri Solanki of which a notice was served through Registrar, DRT on the President, High Court Bar Association for initiating contempt.
Thus, proceedings stood vitiated in W. P. No. 6228/02 and the auction held in favour of son of respondent No. 2 deserves to be quashed. ( 13. ) IT is not disputed that purchaser Rishi Kumar Solanki is son of Shri c. K. Solanki, the Presiding Officer, DRT, Jabalpur. It is also apparent that he was the only auction bidder in the so called auction held on 9-9-02. In the complaint (R-3/2) filed by respondent No. 3 Recovery Officer along with his return, it was mentioned that none of the Bank Officials were present on 9-9-02. It is also apparent from return of respondent No. 3 Recovery Officer that recovery Inspectors, namely, Mithilesh Trivedi and Anuj Singh were picked up by Shri C. K. Solanki for holding the auction. It is also apparent that order-sheet dated 13-9-02 was not drawn on 13-9-02. It is also clear that the objection on behalf of Ramlal Gaud was filed through Shri Alok Pathak, Advocate not by Shri sanjeev Shukla, Advocate. The objection has been placed on record along with petition as well as with the return of respondent No. 2 as P-2 = R-2/8. R-2/8 bears the signatures of Shri Alok Pathak, Advocate not that of Shri Sanjeev shukla, Advocate. It is also apparent that Shri Sanjeev Shukla did not appear before the Recovery Officer Shri B. M. Sharma and order-sheet had been dictated by Shri C. K. Solanki, Presiding Officer, DRT, Jabalpur himself. It is also apparent that Recovery Officer was not provided with the Typist or stenographer, thus, we find substance in the allegations levelled against the presiding Officer, DRT, Shri C. K. Solanki that he had drawn the order-sheet and Recovery Officer had signed it. Recovery Officer ought not to have acted in a manner in which he has himself acted. Obviously, he had acted in collusion with presiding Officer, DRT, Jabalpur. He has mentioned the facts in the return which goes to indicate that entire proceeding relating to sell which was held, stood vitiated and Presiding Officer as well as Recovery Officer acted in collusion including the Recovery Inspectors Mithilesh Trivedi and Anuj Singh. No Bank Officer was also present when so called auction was held, thus, it could not be said to be a competitive sale at all. Only the son of Presiding Officer, DRT had participated is not in dispute.
No Bank Officer was also present when so called auction was held, thus, it could not be said to be a competitive sale at all. Only the son of Presiding Officer, DRT had participated is not in dispute. It is trite law that justice should not only be done, but it appears to have been done. The entire action suffers with malice on facts. Thus, the sale proceedings stood vitiated and liable to be set aside. All illegal efforts were made to ensure that sale was confirmed, even objection which was filed with respect to recall of order dated 13-9-2002 was stated to be missing by the filing department. It was done in order to ensure that auction sale was finalized and possession was delivered to respondent No. 4 in an illegal manner. ( 14. ) SECTION 29 of the Act of 1993 provides the provisions of the Second and Third Schedules to the Income Tax Act, 1961 and the Income Tax (Certificate Proceedings) Rules, 1962, as in force from time to time shall, as far as possible, apply with necessary modifications as if the said provisions and the rules referred to the amount of debt due under this Act instead of to the Income tax Act. Rule 17 in IInd Schedule of Part I provides no Officer or other person having any duty to perform in connection with any sale under this Schedule shall, either directly or indirectly, bid for, acquire or attempt to acquire any interest in the property sold. Rule 17 is quoted below:- "17. Prohibition against bidding or purchase by Officer.- No officer or other person having any duty to perform in connection with any sale under this Schedule shall, either directly or indirectly, bid for, acquire or attempt to acquire any interest in the property sold. " It is apparent that Shri C. K. Solanki, Presiding Officer, DRT, Jabalpur has purchased the property in the name of his son. What he could not have done directly, he could not have done indirectly. There is total embargo against bidding or purchase by an Officer either directly or indirectly carved out in Rule 17 of the Rules. Action of Shri C. K. Solanki and his son Rishi Kumar Solanki could not be said to be permissible within the parameter of conduct and fairness enjoined upon them to be observed as per aforesaid Rule 17. ( 15.
Action of Shri C. K. Solanki and his son Rishi Kumar Solanki could not be said to be permissible within the parameter of conduct and fairness enjoined upon them to be observed as per aforesaid Rule 17. ( 15. ) IT passes comprehension that how the order-sheet dated 13-9-02 could have been drawn without there being any withdrawal of objections on behalf of objector. Respondent No. 3 has clearly stated that Shri Sanjeev Shukla, advocate had not withdrawn the objection in his presence. Shri C. K. Solanki has taken the stand that proceedings were drawn by Recovery Officer not by him. However, the facts are writ large that Shri Alok Pathak, Advocate had appeared on 13-9-02 and on 16-9-2002 order-sheet was not shown to him, obviously it was drawn in clandestine manner and there is possibility of it being ante-dated which cannot be ruled out in the facts of the instant case, on 9-9-02 the next date fixed was 18-11-02. Respondent No. 3 has alleged that order sheet was drawn by C. K. Solanki and he had signed it. ( 16. ) IN the facts and circumstances, we deprecate conduct of Shri C. K. Solanki and also that of Recovery Officer. They have acted in collusion. We set aside the auction proceedings. It is held to be illegal and void including the rejection of objection vide order dated 13-9-02 as having been withdrawn. We direct the appropriate departmental proceedings to be drawn as Shri B. M. Sharma and Shri C. K. Solanki have acted in collusion in illegal manner. ( 17. ) WITH respect to various allegations made by M. P. High Court Bar association in the writ petition, though there was serious allegations levelled against Shri C. K. Solanki in various cases referred to in the writ petition, but we refrain from entering into those allegations as Shri C. K. Solanki has by now retired. But we are constrained to observe that it was not proper to have initiated proceedings for contempt against the lawyers. It was not proper for the registrar, DRT to issue notice of contempt due to levelling of allegations in the intervention application by the M. P. High Court Bar Association and in the writ petition. It was also unbecoming on part of Shri C. K. Solanki to have threatened the lawyers with the contempt proceedings.
It was not proper for the registrar, DRT to issue notice of contempt due to levelling of allegations in the intervention application by the M. P. High Court Bar Association and in the writ petition. It was also unbecoming on part of Shri C. K. Solanki to have threatened the lawyers with the contempt proceedings. The lawyers have full right to take recourse to the appropriate legal proceedings or to approach the Higher administrative Authorities when there are complaints of misconduct of such a nature. ( 18. ) WRIT Petition No. 6228/02 is hereby allowed. Order dated 13-9-02 and the auction proceedings held are hereby quashed. Writ Petition No. 7290/02 also stands disposed of. However, we leave the parties to bear their own costs as incurred of the petitions.