S.A. No. 24 of 2005. Case: Union of India (UOI) and Anr. Vs Janata Sahakari Bank Ltd. and Ors.. Mumbai Debt Recovery Tribunals
| Case Number | S.A. No. 24 of 2005 |
| Counsel | For Appellant: H.K. Vardhan, Adv. and For Respondents: Sanjay Antarkar, Adv., i/b., Ramanathsekhar and Co. for Respondent Nos. 1 and 2 |
| Judges | K.J. Paratwar, Presiding Officer |
| Issue | Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Sections 13(2) and 17; Income Tax Act, 1961 - Sections 156 and 245I - Schedule - Rules 2, 16, 16(2), 57, 58, 61 and 68(B) |
| Citation | II (2006) BC 211 |
| Judgement Date | October 19, 2005 |
| Court | Mumbai Debt Recovery Tribunals |
Judgment:
K.J. Paratwar, Presiding Officer
1. This appeal(application) under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short "the SRFAESI Act") pertains to Hat No. 19, 4th Floor, Fulgado Apartments, N.C. Kelkar Road, Opp. Sena Bhavan, Dadar(W), Mumbai-400028 along with parking space Nos. 2 and 9 in the said apartment.
2. The respondent No. 1 Bank through the respondent No. 3 issued proclamation of sale of the said property on 22nd November, 2004 since Mrs. Hina Bharat Khona and Mr. Bharat Somchand Khona had created equitable mortgage of said flat along with 2 parking spaces in the Bank's favour for securing its loan and had committed default in making payments despite notice under Section 13(2) of the SRFAESI Act.
3. The appellant(applicant) herein has assailed said notice in writ petition No. 561 of 2005 before the Hon'ble High Court of Judicature at Bombay which by order dated 27th April, 2005 while disposing of the petition gave liberty to the appellant(applicant) to file present proceedings.
4. The foundation of the appeal/application is that the income-tax dues over Rs. 11 crores are due from Mr. Bharat Somchand Khona since from the assessment year 1993-94. The Income-tax Department had, therefore, given demand notice dated 31st January, 1996 under Section 156 of the Income-tax Act to the respondent No. 2. On failure to make the payment, order of attachment of the said property was passed on 11th April, 1997. The equitable mortgage in the Bank's favour was created after issuance of notice under Section 156 of the Income-tax Act to be precise on 4th April, 1996 and is, therefore, said to be bad in law. The proclamation is sought to be set aside on aforesaid ground.
5. The respondent No. 1/3 in written statement at Exhibit No. 8 has resisted the appeal(application), inter alia, by contending following facts:
(a) the flat jointly belonged to Mrs. Hina and her husband Mr. Bharat S. Khona while dues of the Income-tax Department were only from Mr. Bharat S. Khona.
(b) the attachment in any case was only of the flat and not of the parking spaces.
(c) the provisions of Rule 16(2) of Second Schedule to the Income-tax Act which are the basis of the applicant's case are not attached merely on issuance of notice under Section 156 of the Income-tax Act and come into play only after notice of the attachment.
(d) the provisions of Rule 68-B does not permit the...
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