Page 1 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 154 OF 2013

(Arising out of S.L.P. (C) No.21765 of 2010)

C.N. Paramsivan & Anr. …Appellants

Versus

Sunrise Plaza TR.

Partner & Ors. …Respondents

J U D G M E N T

T.S. THAKUR, J.

1.Leave granted.

2.This appeal by special leave arises out of an order

passed by the High Court of Judicature at Madras whereby

writ petition No.14594 of 2007 filed by the appellants has

been dismissed and orders passed by the Debt Recovery

Appellate Tribunal in M.A. No.90 of 2006 upheld, no matter

1

Page 2 on a ground other than the one on which that found favour

with the Appellate Tribunal.

3.Facts leading to the filing of the writ petition have

been set out at considerable length in the orders passed by

the Appellate Tribunal and that passed by the High Court.

We do not, therefore, consider it necessary to recapitulate

the entire history over again except to the extent the same

is necessary for the disposal of the present appeal. The

long drawn legal battle that has raged over the past two

decades or so has its genesis in a loan which respondent

Indian Bank advanced to M/s. Sunrise Plaza, a partnership

concern comprising respondent-S. Kalyanasundaram and

his wife - Mrs. Vasantha Kalyanasundaram. The loan was

advanced on the basis of an equitable mortgage of the

properties owned by the partners of the firm by deposit of

title deeds relevant thereto. The borrower having defaulted

in the repayment of the loan amount, the respondent-bank

filed O.A. No.238 of 1998 re-numbered as O.A. No.1098 of

2001 before the Debt Recovery Tribunal at Chennai. Failure

of the respondents to appear and contest the claim made

2

Page 3 against them culminated in the passing of an ex-parte

decree in favour of the bank on 20

th

September, 1999. An

application for setting aside of the said decree was then

made by the borrower defendants which was dismissed by

the Tribunal for default. An application for recall of the said

order too failed and was dismissed by the Tribunal.

4.Proceedings for execution of the Recovery Certificate

issued in favour of the bank were in the meantime initiated

and the property mortgaged with the bank brought to sale

in a public auction on 7

th

March, 2003 in which the

appellants emerged as the successful bidders. The

respondents then filed I.A. No.146 of 2003 for setting aside

of the auction sale, while I.A. No.150 of 2003 filed by them

prayed for an order of refusal of confirmation of the sale.

The Debt Recovery Tribunal passed a conditional order in

the said application deferring the confirmation of sale

subject to the judgment-debtor depositing a sum of

Rs.10,00,000/- with the decree holder bank on or before

25

th

April, 2003. I.A. No.146 of 2003 for setting aside the

sale was, however, dismissed by the Tribunal on 15

th

April,

3

Page 4 2003, as not maintainable. A prayer made by the

respondents - judgment-debtors for extension of time to

make the deposit of the amount directed by the Tribunal

having been rejected, the recovery officer proceeded

further and issued a sale certificate in favour of the

appellants on 28

th

May, 2003. The judgment-debtors

-respondent Nos.1 to 3 then filed an appeal challenging the

orders passed by the Debt Recovery Tribunal in which the

Appellate Tribunal directed them to pay the requisite court

fee.

5.Aggrieved by the order of the Appellate Tribunal, the

judgment-debtors filed Writ Petition No.28235 of 2003 in

which the High Court by an order dated 14

th

October, 2003

set aside the ex-parte decree on payment of costs. That

order when challenged by the decree holder bank in a

Special Leave Petition before this Court was affirmed and

the SLP dismissed in July 2004. Undeterred by the

dismissal of the Special Leave Petition, the bank filed a

Review Application before the High Court for review of its

order dated 14

th

October, 2003 setting aside the ex-parte

4

Page 5 decree. Even the appellants herein filed a review petition

against the said order which applications were dismissed by

the High Court with liberty to the auction purchaser-

appellants herein to represent their case before the Debt

Recovery Tribunal in the O.A. pending before it.

6.The appellants-auction purchasers at that stage filed

I.A. No.20 of 2005 before the Debt Recovery Tribunal at

Chennai seeking delivery of possession of the property

purchased by them. That application was allowed by the

Tribunal with a direction to the Recovery Officer to put the

auction purchasers in possession of the property in

question. The defendants-respondents herein challenged

that order before the Appellate Tribunal at Chennai on

several grounds in M.A. No.90 of 2006. The Appellate

Tribunal allowed the said appeal and set aside the order

passed by the Debt Recovery Tribunal with a direction to

the Debt Recovery Tribunal to take up I.A. No.20 of 2005

along with O.A. No.1098 of 2001 and dispose of the same

in accordance with law.

5

Page 6 7.The appellants questioned the correctness of the

above order in Writ Petition No.29356 of 2006 which was

allowed by a Division Bench of the High Court by Order

dated 29

th

November, 2006, setting aside the order passed

by the Appellate Tribunal and remitting the matter back to

the Debt Recovery Appellate Tribunal to decide the issue

whether or not the rights of a bona fide purchaser get

curtailed if the ex-parte decree on the basis whereof the

auction sale was conducted is eventually set aside. The

Debt Recovery Appellate Tribunal examined the matter

afresh and held that the appellants-auction purchasers

were not bona fide purchasers of the property as they were

aware of the pending legal proceedings between the bank

and the borrower. The Tribunal accordingly set aside the

sale with a direction to the defendants-respondents 1 to 3

to deposit the entire amount claimed in original application.

8.Aggrieved by the orders passed by the Appellate

Tribunal, the appellants filed Writ Petition No.14594 of

2007 before the High Court which writ petition has been

dismissed by the High Court as already mentioned above.

6

Page 7 The High Court approached the issues from a slightly

different angle; for instead of going into the question

whether the appellants were bona fide auction purchasers,

it examined the validity of the auction itself and came to

the conclusion that the auction conducted by the Recovery

Officer was illegal and void because of non-compliance with

the provisions of Rule 57 in the Second Schedule of the

Income Tax Act, 1961 which were in view of the provisions

of Section 29 of the Recovery of Debts Due to Banks and

Financial Institutions Act, 1993 (hereinafter referred to a

‘RDDB Act’ for short) applicable to recovery of debt dues

under the latter mentioned Act. The present appeal assails

the correctness of the above order passed by the High

Court.

9.Appearing for the appellants Mr. L. Nageshwar Rao,

learned senior counsel, made a threefold submission in

support of his case. Firstly he contended that the remand

order passed by the High Court in the earlier round was

limited to the Appellate Tribunal finding out whether the

rights of a bona fide purchaser stood curtailed in view of

7

Page 8 the setting aside of the ex-parte decree on which the

auction had been conducted. While the Tribunal had

answered that question, the High Court had failed to do so

in the writ petition filed by the appellants. The High Court

had digressed from the subject and added a new dimension

which had not been noticed or pressed in the earlier round.

10.Secondly he contended that even if the High Court

could examine a ground other than the one on which a

remand had been ordered, it failed to appreciate that the

provisions of the Income Tax Rules set out in the Second

Schedule of the Income Tax Act were applicable only “ as

far as possible and with necessary modification”. This was,

according to Mr. Rao, evident from a plain reading of

Section 29 of the RDDB Act. The use of the expressions

“as far as possible” and “with necessary modifications”,

argued the learned counsel, gave sufficient play at the

joints to the Recovery Officer to apply the said rules in the

manner considered most appropriate by him, having regard

to the facts and circumstances of a given case. The High

Court had, argued Mr. Rao, fallen in an error in ignoring

8

Page 9 the expressions appearing in Section 29 and proceeding

with the matter as if Rule 57 of the said rules was

mandatory and applicable with full force. It was also

contended by the learned counsel that if Rules 57 and 58 of

the Income Tax Rules were held applicable in the form in

which they appear in the Second Schedule, the

requirement of Rule 61 of the said Rules could not be

ignored and had to be mandatorily followed. Inasmuch as

the Interlocutory Application filed by the judgment-debtor

for setting aside the sale had been dismissed by the

Tribunal and inasmuch as there was no challenge to the

said dismissal order at any stage, the High Court ought to

have held that the condition precedent for setting aside the

sale namely filing of a proper application was not satisfied

thereby rendering the sale in favour of the appellants

immune from any challenge or interference.

11.It was thirdly argued by learned counsel for the

appellants that the appellants were bona fide purchasers,

hence protected against any interference with the sale in

their favour, no matter the decree on the basis whereof the

9

Page 10 sale had been effected had itself been set aside by High

Court. Reliance in support was placed by Mr. Rao upon the

decisions of this Court in Janak Raj v. Gurdial Singh

(1967) 2 SCR 77; Janatha Textiles and Ors. v. Tax

Recovery Officer and Anr. (2008) 12 SCC 582;

(1994) 2 SCC 364, Padanathil Ruqmini Amma Vs.

P.K. Abdulla (1996) 7 SCC 668. It was further

contended that a contrary view was no doubt expressed by

a Two-Judge Bench of this Court in Chinnammal and Ors.

v. P. Arumugham and Anr. (1990) 1 SCC 513 but the

conflict between the two lines of the decisions referred to

above deserved to be resolved by a reference to a larger

Bench.

12.Mr. Rakesh Dwivedi, learned senior counsel appearing

for the respondents, per contra argued that the scope of

the proceeding before the High Court in the second round

was not in any way limited by the earlier remand order and

the High Court could have and has indeed examined the

question of validity of the auction sale. He urged that the

provisions of the Income Tax Rules in the Second Schedule

10

Page 11 of the Act were applicable in the form in which the said

rules were found in the statute book as no modification or

amendment of the said rules had been made either by any

legislative enactment or by way of Rules under the RDDB

Act. He contended that the words “as far as possible” were

incapable of conveying that the Recovery Officer could at

his discretion play with the rules without any limitations on

his power or discretion and without any guidelines under

the Act or the Rules. He submitted that decision of this

Court in Chinnammal and Ors. v. P. Arumugham and

Anr. (1990) 1 SCC 513 was not in conflict with the view

taken in the decisions relied upon by Mr. Rao inasmuch as

the said decisions had not examined the issue as to what

would constitute a bona fide purchaser to be entitled to

protection in law. We propose to deal with the contentions

raised by Mr. Rao ad seriatim.

13.The remand ordered by the High Court in Writ Petition

No.29356/2006 was an open remand which allowed the

parties to urge their respective contentions not only in

regard to the rights of a bona fide purchaser, but any other

11

Page 12 contention available to them on facts and in law. This is

evident from the operative portion of the order passed by

the High Court which was as under:

“In the above circumstances, as agreed by learned

counsel appearing for the parties, the impugned order

dated 13.7.2006 passed by the Debt Recovery

Appellate Tribunal in M.A. No.90 of 2006 is set aside

and the case is remitted to the Debt Recovery

Appellate Tribunal, Chennai, to determine the aforesaid

issues and any other issue as has been raised by one

or other party in M.A. No.90 of 2006, preferably within

two months from the date of receipt or production of a

copy of this order.”

14.The language employed in the remand order apart,

the High Court had not examined or determined the

question whether Rule 57 of the Income Tax Rules was

mandatory and if so whether there was any breach of that

provision or the effect thereof. There was no discussion

leave alone any finality to the determination of that aspect,

so as to prevent anyone of the parties from urging their

submissions on those questions. We have in that view no

hesitation in rejecting the first limb of Mr. Rao’s argument

that the High Court could not have gone into any other

question apart the rights of a bona fide purchaser in the

proceedings arising after the remand order.

12

Page 13 15.That brings us to the question whether Section 29 of

the RDDB Act do not apply the Income Tax Rules in the

Second Schedule of the Income Tax Act to the recovery

proceedings under RDDB Act with full force and that the

expression ‘as far as possible’ appearing in Section 29

vests the Recovery Officer with discretion to apply the said

Rules depending upon the fact situation of each case.

Section 29 of the RDDB Act 29 is as under:

29. Application of certain provisions of Income-

tax Act.—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:

Provided that any reference under the said provisions

and the rules to the “assessee” shall be construed as a

reference to the defendant under this Act.

16.A bare reading of the above leaves no manner of

doubt that the rules under Income Tax Act were applicable

only “as far as possible” and with the modification as if the

said provisions and the rules referred to the amount of

debt due under the RDDB Act instead of the Income Tax

Act. The question is whether the said two expressions

13

Page 14 render the provisions of Rule 57 directory no matter the

same is couched in a language that is manifestly

mandatory in nature.

17.Legislation by incorporation is a device to which

legislatures often take resort for the sake of convenience.

The phenomenon is widely prevalent and has been the

subject matter of judicial pronouncements by Courts in this

country as much as Courts abroad. Justice G.P. Singh in his

celebrated work on Principles of Statutory

Interpretation has explained the concept in the following

words:

“Incorporation of an earlier Act into a later Act is a

legislative device adopted for the sake of convenience

in order to avoid verbatim reproduction of the

provisions of the earlier Act into the later. When an

earlier Act or certain of its provisions are incorporated

by reference into a later Act, the provisions so

incorporated become part and parcel of the later Act as

if they had been ‘bodily transposed into it. The effect of

incorporation is admirably stated by LORD ESHER,

M.R.: ‘If a subsequent Act brings into itself by

reference some of the clauses of a former Act, the

legal effect of that, as has often been held, is to write

those sections into the new Act as if they had been

actually written in it with the pen, or printed in it.

Even though only particular sections of an earlier Act

are incorporated into later, in construing the

incorporated sections it may be at times necessary and

permissible to refer to other parts of the earlier statute

which are not incorporated. As was stated by LORD

BLACKBURN: “When a single section of an Act of

14

Page 15 Parliament is introduced into another Act, I think it

must be read in the sense it bore in the original Act

from which it was taken, and that consequently it is

perfectly legitimate to refer to all the rest of that Act in

order to ascertain what the section meant, though

those other sections are not incorporated in the new

Act.”

18.In Ram Kirpal Bhagat and Ors. v. State of Bihar

(1969) 3 SCC 471 this Court examined the effect of

bringing into an Act the provisions of an earlier Act and

held that the legislation by incorporation of the provisions

of an earlier Act into a subsequent Act is that the

provisions so incorporated are treated to have been

incorporated in the subsequent legislation for the first time.

This Court observed:

“The effect of bringing into an Act the provisions of an

earlier Act is to introduce the incorporated Sections of

the earlier Act into the subsequent Act as if those

provisions have been enacted in it for the first time.

The nature of such a piece of legislation was

explained by Lord Esher M. R. in Re Wood’s Estate

[1881] 31 Ch. D.607 that “if some clauses of a former

Act were brought into the subsequent Act the legal

effect was to write those Sections into the new Act

just as if they had been written in it with the pen”.

19.To the same effect is the decision of this Court in

Mahindra and Mahindra Ltd. v. Union of India and

Anr. (1979) 2 SCC 529 where this Court held that once

15

Page 16 the incorporation is made, the provisions incorporated

become an integral part of the statute in which it is

transposed and thereafter there is no need to refer to the

statute from which the incorporation is made and any

subsequent amendment made in it has no effect on the

incorporating statute. The following passage is in this

regard apposite:

“The effect of incorporation is as if the provisions were

written out in the incorporating statute and were a part

of it. Legislation by incorporation is a common

legislative device employed by the legislature, where

the legislature for convenience of drafting incorporates

provisions from an existing statue by reference to that

statute instead of setting out for itself at length the

provisions which it desires to adopt. Once the

incorporation is made, the provision incorporated

becomes an integral part of the statute in which it is

transposed and thereafter there is no need to refer to

the statute from which the incorporation is made and

any subsequent amendment made in it has no effect

on the incorporating statute.”

20.We may also refer to the decisions of this Court in

Onkarlal Nandlal v. Rajasthan and Anr. (1985) 4 SCC

404, Mary Roy and Ors. v. State of Kerala and Ors.

(1986) 2 SCC 209 , Nagpur Improvement Trust v.

Vasantrao and Ors. and Jaswantibai and Ors. (2002)

7 SCC 657, and M/s Surana Steels Pvt. Ltd. v. The

16

Page 17 Deputy Commissioner of Income Tax and Ors.

(1999) 4 SCC 306 , which have reiterated the above

proposition of law.

21.Applying the above principles to the case at hand

Section 29 of the RDDB Act incorporates the provisions of

the Rules found in the Second Schedule to the Income Tax

Act for purposes of realisation of the dues by the Recovery

Officer under the RDDB Act. The expressions “as far as

possible” and “with necessary modifications” appearing in

Section 29 have been used to take care of situations where

certain provisions under the Income Tax Rules may have

no application on account of the scheme under the RDDB

Act being different from that of the Income Tax Act or the

Rules framed thereunder. The provisions of the Rules, it is

manifest, from a careful reading of Section 29 are attracted

only in so far as the same deal with recovery of debts

under the Act with the modification that the ‘amount of

debt’ referred to in the Rules is deemed to be one under

the RDDB Act. That modification was intended to make the

position explicit and to avoid any confusion in the

17

Page 18 application of the Income Tax Rules to the recovery of

debts under the RDDB Act, which confusion could arise

from a literal application of the Rules to recoveries under

the said Act. Proviso to Section 29 further makes it clear

that any reference “to the assessee” under the provisions

of the Income Tax Act and the Rules shall be construed as

a reference to the defendant under the RDDB Act. It is

noteworthy that the Income Tax Rules make provisions

that do not strictly deal with recovery of debts under the

Act. Such of the rules cannot possibly apply to recovery of

debts under the RDDB Act. For instance Rules 86 and 87

under the Income Tax Act do not have any application to

the provisions of the RDDB Act, while Rules 57 and 58 of

the said Rules in the Second Schedule deal with the

process of recovery of the amount due and present no

difficulty in enforcing them for recoveries under the RDDB

Act. Suffice it to say that the use of the words “as far as

possible” in Section 29 of RDDB Act simply indicate that the

provisions of the Income Tax Rules are applicable except

such of them as do not have any role to play in the matter

of recovery of debts recoverable under the RDDB Act. The

18

Page 19 argument that the use of the words “as far as possible” in

Section 29 is meant to give discretion to the Recovery

Officer to apply the said Rules or not to apply the same in

specific fact situations has not impressed us and is

accordingly rejected.

22.In Osmania University v. V.S. Muthurangam and

Ors. (1997) 10 SCC 741, the question that fell for

consideration was whether the age of superannuation of the

non-teaching staff at Osmania University should be raised to

60 years when the same had been raised to 60 years for the

University's teaching staff. Since Section 38(1) of the

Osmania University Act, 1959 stated that the conditions of

service for all salaried staff of the University shall be uniform

“as far as possible”, the decision in the case turned on the

meaning to be given to that phrase. It was argued by the

Solicitor General on behalf of the University that the use of

this phrase in Section 38(1) indicated that the provision

could be departed from in certain situations. This Court ruled

otherwise and held as follows :

“8...Mr. Solicitor General is justified in his contention

that Section 38(1) of the Act recognizes flexibility and

19

Page 20 the expression 'as far as possible' inheres in it an

inbuilt flexibility...But if uniform conditions of service

for teaching and non teaching staff of the University is

not otherwise impracticable , the University is under

an obligation to maintain such uniformity because of

the mandate of Section 38(1) of the Act. In the instant

case, we do not find that it is not at all practicable

for the University to maintain the parity in the age of

superannuation of both teaching and non teaching

staff.”

(emphasis

supplied)

23.It follows that while the phrase “as far as possible”, may

be indicative of a certain inbuilt flexibility, the scope of that

flexibility extends only to what is “not at all practicable”. In

order to show that Rules 57 and 58 of the Second Schedule

of the Income Tax Act may be departed from under the

RDDB Act, it would have to be proved that the application of

these Rules is “not at all practicable” in the context of RDDB

Act.

24.The interchangeable use of the words “ possible” and

“practicable” was previously established by a three-judge

Bench of this Court in N.K. Chauhan and Ors. v. State of

Gujarat and Ors., (1977) 1 SCC 308 , where this Court

observed that in simple Anglo-Saxon Practicable, feasible,

20

Page 21 possible, performable, are more or less interchangeable.

Webster defines the term ‘practicable’ thus :

“1. That can be put into practice; feasible. 2. That can

be used for an intended purpose; usable.”

25.Black's Law Dictionary similarly defines ‘practicable’

as follows :

“(Of a thing) reasonably capable of being

accomplished; feasible.”

26.It is, therefore, reasonable to hold that the phrase “as

far as possible” used in Section 29 of the RDDB Act can at

best mean that the Income Tax Rules may not apply where it

is not at all possible to apply them having regard to the

scheme and the context of the legislation.

27.There is nothing in the provisions of Section 29 of RDDB

Act or the scheme of the rules under the Income Tax Act to

suggest that a discretion wider than what is explained above

was meant to be conferred upon the Recovery Officer under

Section 29 of the RDDB Act or Rule 57 of the Income Tax

Rules which reads as under:

21

Page 22 “57. (1) On every sale of immovable property, the

person declared to be the purchaser shall pay,

immediately after such declaration, a deposit of

twenty-five per cent on the amount of his purchase

money, to the officer conducting the sale; and, in

default of such deposit, the property shall forthwith

be resold.

(2) The full amount of purchase money payable shall

be paid by the purchaser to the Tax Recovery Officer

on or before the fifteenth day from the date of the

sale of the property.”

28.It is clear from a plain reading of the above that the

provision is mandatory in character. The use of the word

“shall” is both textually and contextually indicative of the

making of the deposit of the amount being a mandatory

requirement. The provisions of Rules 57 and 58 of the

Income Tax Rules, have their equivalent in Order XXI Rules

84, 85 & 86 of the C.P.C. which are pari materia in language,

sweep and effect and have been held to be mandatory by

this Court in Manilal Mohanlal Shah and Ors. v. Sardar

Sayed Ahmed Sayed Mahmed and Anr. (AIR 1954 SC

349) in the following words:

“8. The provision regarding the deposit of 25 per cent.

by the purchaser other than the decree-holder is

mandatory as the language of the rule suggests. The

full amount of the purchase-money must be paid

within fifteen days from the date of the sale but the

decree-holder is entitled to the advantage of a set-off.

22

Page 23 The provision for payment is, however, mandatory...

(Rule 85). If the payment is not made within the

period of fifteen days, the Court has the discretion to

forfeit the deposit, and there the discretion ends but

the obligation of the Court to re-sell the property is

imperative. A further consequence of non-payment is

that the defaulting purchaser forfeits all claim to the

property (Rule 86)...

9...These provisions leave no 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 law in favour of the defaulting purchaser

and no right to own and possess the property accrues

to him.

xx xx xx xx

11. Having examined the language of the relevant

rules and the judicial decisions bearing upon the

subject we are of opinion that the provisions of the

rules requiring the deposit of 25 per cent. of the

purchase-money immediately on the person being

declared as a purchaser and the payment of the

balance within 15 days of the sale are mandatory and

upon non-compliance with these provisions there is no

sale at all. The rules do not contemplate that there can

be any sale in favour of a purchaser 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 these rules, there

can be no question of material irregularity in the

conduct of the sale. Non-payment of the price on the

part of the defaulting purchaser renders the sale

proceedings as a complete nullity. The very fact that

the Court is bound to resell the property in the event

of a default shows that the previous proceedings for

sale are completely wiped out as if they do not exist in

the eye of law. We hold, therefore, that in the

circumstances of the present case there was no sale

and the purchasers acquired no rights at all.”

29.Relying in Manilal Mohanlal’s case (supra) Rules 84,

85 and 86 of Order XXI were also held to be mandatory in

23

Page 24 Sardara Singh (Dead) by Lrs. and Anr. v. Sardara

Singh (Dead) and Ors. (1990) 4 SCC 90.

30.Similarly in Balram, son of Bhasa Ram v. Ilam

Singh and Ors. (1996) 5 SCC 705 this Court reiterated

the legal position in the following words:

“7...it was clearly held [in Manilal Mohanlal] that Rule

85 being mandatory, its non-compliance renders the

sale proceedings a complete nullity requiring the

executing court to proceed under Rule 86 and property

has to be resold unless the judgment-debtor satisfies

the decree by making the payment before the resale.

The argument that the executing court has inherent

power to extend time on the ground of its own mistake

was also expressly rejected...”

31.We may also refer to the decisions of this Court in Rao

Mahmood Ahmed Khan v. Sh. Ranbir Singh and Ors.

(1995) 4 SCC 275, Gangabai Gopaldas Mohata v.

Fulchand and Ors. (1997) 10 SCC 387, Himadri Coke &

Petro Ltd. v. Soneko Developers (P) Ltd. And Ors.

(2005) 12 SCC 364 and Shilpa Shares and Securities

and Ors. v. The National Co-operative Bank Ltd. and

Ors. (2007) 12 SCC 165, wherein the same position has

been taken.

24

Page 25 32.In the light of the above we see no reason to hold that

Rules 57 and 58 of the Income Tax Rules are anything but

mandatory in nature, so that a breach of the requirements

under those Rules will render the auction non-est in the eyes

of law.

33.That leaves us with the third and the only other

submission made by Mr. Rao touching the rights of bonafide

purchaser and whether there is any conflict between the

decisions of this Court on the subject to call for a reference

to a larger bench. There is, in our opinion, no doubt that

there is an apparent conflict between the decisions upon

which reliance was placed by learned counsel for the parties.

But having regard to the view that we have taken on the

question of the validity of this auction itself, we do not

consider it necessary to make a reference to a larger bench

to resolve the conflict. The cleavage in the judicial opinion is

for the present case only of academic importance, hence

need not be addressed by us or by a larger bench for the

present.

25

Page 26 34.In the result, this appeal fails and is hereby dismissed

but in the circumstances without any order as to costs.

……..………….……….…..…J.

(T.S. Thakur)

………………………… ..…..…J.

(Gyan Sudha Misra)

New Delhi

January 9, 2013

26