Bombay High Court Dismisses Writ Petition Challenging Auction Sale of Mortgaged Property for Non-Compliance with Recovery Rules. Court holds that failure to serve notice of sale proclamation on the judgment-debtor at his updated address vitiates the sale, but the petitioners failed to approach the Recovery Officer under Rule 61 of the Second Schedule to the Income Tax Act, 1961 within the prescribed period or seek condonation of delay with sufficient cause.

A) Recovery of Debts - Auction Sale - Non-Compliance with Rules 48, 49, 50, 52 of Second Schedule to Income Tax Act, 1961 - Service of Sale Proclamation - The petitioners alleged that the sale proclamation was not served on them at their updated address, violating mandatory rules. The court noted that the Recovery Officer had issued notices to the old address, and the petitioners had not received them due to change of address. However, the court found that the petitioners had not approached the Recovery Officer under Rule 61 within the prescribed period of 30 days from the date of sale, nor had they sought condonation of delay with sufficient cause. The court held that the writ petition was not maintainable as the petitioners had an alternative remedy under Rule 61 read with Rule 63 of the Second Schedule. (Paras 2-10)

B) Condonation of Delay - Rule 61 of Second Schedule to Income Tax Act, 1961 - Sufficient Cause - The petitioners sought condonation of delay in filing the application under Rule 61, claiming that they received notice of the auction only on 18.05.2012, after the sale on 28.03.2012. The court observed that the petitioners had not filed any application before the Recovery Officer for setting aside the sale or for condonation of delay. The court held that the question of condonation of delay could not be considered in writ jurisdiction without the petitioners first approaching the Recovery Officer. (Paras 11-15)

C) Writ Jurisdiction - Alternative Remedy - Availability of Statutory Remedy under Rule 61 and 63 of Second Schedule - The court held that the petitioners had an efficacious alternative remedy under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 read with the Second Schedule to the Income Tax Act, 1961. The court dismissed the writ petition, leaving it open to the petitioners to approach the Recovery Officer for appropriate relief, including condonation of delay, if so advised. (Paras 16-20)

Whether the sale of the mortgaged property by auction is vitiated due to non-compliance with mandatory provisions of Rules 48, 49, 50 and 52 of the Second Schedule to the Income Tax Act, 1961, and whether the petitioners are entitled to have the sale set aside under Rule 61 of the said Schedule despite delay in filing the application.

• Recovery of Debts Due to Banks and Financial Institutions Act
• 1993
• Second Schedule to Income Tax Act
• 1961
• Rules 48
• 49
• 50
• 52
• 61
• 63
• Service of notice
• Condonation of delay
• Sufficient cause
• Writ jurisdiction
• Alternative remedy