M/S. R.S. INFRA-TRANSMISSION LTD.versusSAURININDUBHAI PATEL AND ORS.

930                      [2022]REPORTS
               SUPREME COURT    6 S.C.R. 930                [2022] 6 S.C.R.


A                  M/S. R.S. INFRA-TRANSMISSION LTD.
                                        v.
                   SAURININDUBHAI PATEL AND ORS.
                         (Civil Appeal No. 3469 of 2022)
B
                                  JULY 11, 2022
               [M. R. SHAH AND B. V. NAGARATHNA, JJ.]
             Income Tax Act, 1961: Second Schedule, r. 60 – Application
C     to set aside sale of immovable property on deposit – Right available
      to the judgment debtor u/r. 60 – Held: Is a valuable right and the
      last resort/opportunity to the judgment debtor to save his property
      – It is a right available to the judgment debtor after his property is
      sold in a court auction – Such a valuable right available to the
      judgment debtor to save his property should not be affected on the
D     technical ground and/or for the mistake and/or the bona fide mistake
      for which he was not at all responsible – On facts, judgment debtor
      filed an application u/r 60 to set aside the auction sale and in
      compliance thereof, deposited the amount, and the application was
      allowed by the Recovery Officer as also by DRAT which had set
E     aside the sale in favour of the auction purchasers – However, the
      High Court while dismissing the application by the judgment debtor
      u/r. 60 holding that as there was a shortfall in the deposit of the
      amount while exercising the right u/r. 60, quashed and set aside the
      order passed by the DRAT and the Recovery Officer – High Court
      did not at all appreciate and consider the fact that for the inaccuracy
F     and/or mistake on the part of the Recovery Officer, the judgment
      debtor cannot be made to suffer for no fault of his – When the
      substantial amount was deposited, there was no reason for the
      judgment debtor not to deposit the shortfall, which as such can be
      said to be very meagre amount – As and when the judgment debtor
G     was made aware about the shortfall, immediately, the shortfall
      amount was deposited by the judgment debtor – Thus, the order
      passed by the High court is unsustainable, and is quashed and set
      aside, and that of the DRAT is restored – Recovery of Debts due to
      Banks and financial Institutions Act, 1993 – ss. 25 to 29.

H
                                       930
M/S. R.S. INFRA-TRANSMISSION LTD. v. SAURININDUBHAI                   931
                   PATEL AND ORS.

      Allowing the appeal, the Court                                  A
        HELD: 1.1 In the sale certificate, the amount mentioned
was Rs.1,27,30,527/- including interest as on 30.06.2006. The
judgment debtor while exercising the right under Rule 60
deposited Rs.1,27,30,527/- alongwith Rs. 6,75,000/- for payment
to the purchaser as penalty, a sum equal to 5% of the purchase        B
money and also further deposited Rs. 3,01,290/- towards interest
@ 15% from the date of sale proclamation to the date of deposit
i.e., 25.01.2007. However, it was the case on behalf of the auction
purchasers that there was a shortfall in not making the payment
of interest from 30.06.2006 to 25.01.2007. However, it is required
to be noted that as such it was the duty cast upon the Recovery       C
Officer to mention the exact amount in the sale certificate. The
Recovery Officer mentioned the amount in the Sale Certificate
of Rs.1,27,30,527/- including the interest as on 30.06.2006,
however, did not specify any further amount towards the interest
for the period between 30.06.2006 till the date of the sale           D
proclamation, i.e., 08.01.2007, which the Recovery Officer ought
to have mentioned specifically. The said mistake and/or
inaccuracy on the part of the Recovery Officer led to the shortfall
in the deposit of the amount, which was towards the interest for
the period between 30.06.2006 to 08.01.2007, otherwise, the
judgment debtor had substantially complied with Rule 60. The          E
shortfall was Rs.3,57,647/-. When the judgment debtor deposited
the substantial amount of Rs. 1,27,30,527/- and other amounts
due and payable under Rule 60 including the penalty and the
interest, there was no reason for the judgment debtor not to
deposit Rs. 3,57,647/- which is a very small amount as against        F
the amount deposited. At this stage, it is required to be noted
that though the Bank filed its reply before the Recovery Officer
in response to the application made by the judgment debtor -
borrower made under Rule 60 and in which it was stated that
there was some shortfall in the amount deposited, but according
to the judgment debtor, no calculation sheet was attached to the      G
reply and/or supplied to the judgment debtor. [Para 6.1][944-G-
H; 945-A-E]
      1.2 At the time of hearing of the application under Rule 60,
a grievance was made before the Recovery Officer as to why the
                                                                      H
932            SUPREME COURT REPORTS                      [2022] 6 S.C.R.


A     Bank had not served a copy of the calculation sheet and in the
      meantime, the judgment debtor had himself deposited a further
      sum of Rs.2.80 lakhs towards the difference in calculation, if any.
      The Recovery Officer directed the Bank to supply the calculation
      sheet and the Bank submitted the calculation sheet before the
      Recovery Officer on 12.02.2007 and on that day, a sum of
B
      Rs.77,647/- was the shortfall, which the judgment debtor
      deposited on the very next day, i.e., on 13.02.2007. If the Bank
      would have submitted the calculation sheet earlier alongwith the
      reply on 06.02.2007, which was 29th day from the date of auction,
      the judgment debtor would have deposited the balance shortfall
C     amount. Therefore, in the facts and circumstances of the case,
      there was a substantial compliance of Rule 60. If the Recovery
      Officer would have been accurate in submitting the exact amount
      in the sale proclamation due and payable on the date of sale
      proclamation then the said eventuality would not have arisen.
      There was an absurd misconduct on the part of the Recovery
D
      Officer for which the judgment debtor should not be made to
      suffer. [Para 6.2][945-E-H; 946-A]
            1.3 The right available to the judgment debtor under Rule
      60 is a valuable right and the last resort/opportunity to the
      judgment debtor to save his property. It is a right available to the
E     judgment debtor after his property is sold in a court auction.
      Therefore, such a valuable right available to the judgment debtor
      to save his property should not be affected on the technical ground
      and/or for the mistake and/or the bona fide mistake for which he
      was not at all responsible. [Para 6.3][946-B-C]
F           1.4 The submission on behalf of respondent Nos. 1 and 2
      that according to the Bank, a sum of Rs.4.63 lakhs was the balance
      amount due and payable against which even subsequently the
      borrower has deposited Rs. 3,57,647/- and thus, still there is a
      shortfall is concerned, has no substance. On deposit of the amount
G     of Rs. 3,5,7647/-, (Rs.2,80,000/- + Rs.77,647/-) as on 13.02.2007,
      the Recovery Officer directed the Bank to hand over the original
      documents pertaining to the impugned properties and file
      compliance affidavit and thereafter the Bank was allowed to
      appropriate the decretal amount deposited by the judgment debtor

H
M/S. R.S. INFRA-TRANSMISSION LTD. v. SAURININDUBHAI                   933
                   PATEL AND ORS.

and that on 19.02.2007 itself, the Bank complied with the order       A
passed by the Recovery Officer and handed back to the judgment
debtor the documents pertaining to the properties in question
and requested to release the amount deposited, which came to
be allowed by the Recovery Officer. At that time, no dispute was
raised by the Bank that any further amount was due and payable.
                                                                      B
The Bank was satisfied with the deposit of the amount by the
judgment debtor. [Para 6.5][946-F-H; 947-A]
       1.5 The High Court erred in quashing and setting aside
the order passed by the DRAT and the Recovery Officer by which
the Recovery Officer and the DRAT set aside the sale in favour
of the auction purchasers. The view taken by the High Court is        C
too technical. The High Court did not at all consider the facts in
its true perspective. The High Court did not at all appreciate and
consider the fact that for the inaccuracy and/or mistake on the
part of the Recovery Officer, the judgment debtor cannot be made
to suffer for no fault of his. The High Court also did not properly   D
appreciate and consider the valuable right available to the
judgment debtor under Rule 60. When the substantial amount
was deposited, there was no reason for the judgment debtor not
to deposit the shortfall, which as such can be said to be very
meagre amount. As and when the judgment debtor was made
aware about the shortfall, immediately, the shortfall amount was      E
deposited by the judgment debtor. Under the circumstances, the
impugned judgment and order passed by the High court is
unsustainable, and is quashed and set aside. The order passed
by the DRAT setting aside the auction sale is restored. The
amount deposited by respondent Nos. 1 and 2 would be returned         F
to them alongwith the interest accrued thereon, if not received
by them so far. To do the substantial justice, the appellant is
directed to pay a further sum of Rupees Ten Lakhs to respondent
Nos. 1 and 2 by Demand Draft within the stipulated period. [Para
7, 8][947-B-G]
                                                                      G
      Gajadhar Prasad v. Babu Bhakta Ratan (1973) 2 SCC
      629 : [1974] 1 SCR 372; Hotel Paras Garden, Balapur
      & Anr. v. Central Bank of India, Balapur & Ors. (2015)
      SCC Online Bom 3398; M/s. National Rice and General
      Mills, Jagraon and Ors. v. Bank of India and Ors.
                                                                      H
934            SUPREME COURT REPORTS                           [2022] 6 S.C.R.


A           C.W.P. No. 19113 of 2005; Commissioner of Central
            Excise, New Delhi v. Hari Chand Shri Gopal and Ors.
            (2011) 1 SCC 236 : [2010] 13 SCR 820; Excise
            Commissioner & Ors. v. Ajith Kumar and Anr. (2008) 5
            SCC 495 : [2008] 6 SCR 778 – referred to.
B                             Case Law Reference
      [1974] 1 SCR 372                 referred to              Para 3.1
      [2010] 13 SCR 820                referred to              Para 3.13
      [2008] 6 SCR 778                 referred to              Para 3.13
C           CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3469
      of 2022.
            From the Judgment and Order dated 22.12.2015 of the High Court
      of Gujarat at Ahmedabad in Special Civil Application No.17981 of 2015.
             Guru Krishnakumar, Dhruv Mehta, Huzefa Ahmadi, Sr. Advs.,
D
      Kuriakose Varghese, Rajendra K. Salecha, V. Shyamohan, Dheeraj
      Verma, Surya Prakash, Ms. Astu Khandelwal, Martin Geomin George,
      Neeraj Shekhar, Ashutosh Thakur, Dr. Sumit Kumar, Keith Varghese,
      Abhishek Pandey, Hemant Kumar Sunny, Keshav Baheti, M/s. S. M.
      Jadhav and Company, Pranab Kumar Mullick, Mrs. Soma Mullick, Sebat
E     Kumar Deuria, Nikhil Goel, Anirudha Deshmukh Advs. for the appearing
      parties.
            The Judgment of the Court was delivered by
            M. R. SHAH, J.
F            1. Feeling aggrieved and dissatisfied with the impugned judgment
      and order dated 22.12.2015 passed by the High Court of Gujarat at
      Ahmedabad in Special Civil Application No. 17981 of 2015 by which the
      High Court has allowed the said petition preferred by the respondent
      Nos. 1 and 2 herein – original writ petitioners before the High Court and
      has set aside the order passed by the Debts Recovery Appellate Tribunal,
G     Mumbai (hereinafter referred to as “DRAT”) dated 07.09.2015 in Appeal
      No. 223 of 2007 and has consequently confirmed the sale in favour of
      the original writ petitioners, respondent No.5 – subsequent purchaser –
      M/s. R.S. Infra-Transmission Ltd. has preferred the present appeal.
            2. The facts leading to the present appeal in nutshell are as under:-
H
M/S. R.S. INFRA-TRANSMISSION LTD. v. SAURININDUBHAI                            935
             PATEL AND ORS. [M. R. SHAH, J.]

        2.1 A Bank namely, IndusInd Bank Ltd. (hereinafter referred to         A
as the “Bank”) filed an O.A. bearing No. 424 of 1999 before the Debt
Recovery Tribunal, Ahmedabad (hereinafter referred to as “DRT”) on
25.05.2006 for recovery of debt and enforcement of security against the
original respondent Nos. 3 to 5 (original borrowers). Recovery Certificate
bearing RP No.153/2006 was issued in favour of the Bank for recovery
                                                                               B
of an amount of Rs.71,88,819.87/- recoverable from the original borrowers
- respondent Nos. 3 to 5 with further interest payable at the rate of 12%
p.a. from 27.12.1999 till realization and the costs, charges and expenses
of the proceedings for recovery thereof.
       2.2 The immovable properties, being Survey No.188/P
admeasuring 36,735 square meters owned by respondent No.3 (borrower)           C
and Survey No.187/P admeasuring 8280.51 square meters owned by
respondent No.5 (borrower) situated at Mauje Karan Nagar, Tehsil Kadi,
District Mehsana got attached in pursuance of the above Recovery
Order/Certificate.
       2.3 A proclamation of sale of the properties came to be issued by       D
the Recovery Officer, DRT on 28.11.2006 fixing the public auction on
08.01.2007. As per the proclamation of the sale, the amount due and
payable was Rs.1,27,30,527/- including interests as on 30.06.2006. In
the auction held on 08.01.2007, the bid of respondent Nos. 1 and 2 herein
(original writ petitioners) being the highest offer being Rs.1.35 crores       E
came to be accepted by the Recovery Officer. The successful bidders –
respondent Nos. 1 and 2 herein deposited the bid amount on 22.01.2007.
       2.4 That the original borrowers thereafter filed an application under
Rule 60 of the Second Schedule of the Income Tax Act, 1961 read with
Sections 25 to 29 of the Recovery of Debts due to Banks and Financial          F
Institutions Act, 1993 for setting aside the above auction vide application
dated 25.01.2007 and submitted a Demand Draft for an amount of
Rs.1,27,30,527/- as specified in the sale proclamation. Respondent No.3
herein (borrower) also submitted a Demand Draft for Rs.6,75,000/- for
payment to the purchaser as penalty, a sum equal to 5% of the purchase
money and a Demand Draft for Rs.3,01,290/- towards interest @ 15%              G
from the date of the sale proclamation to the date of deposit, i.e.,
25.01.2007. The Recovery Officer adjourned the matter to 06.02.2007
directing the respondents to serve a copy of the order and the application
on the Bank and the auction purchaser. In the meantime, the appellant
herein expressed its interest in purchasing the properties which were          H
936             SUPREME COURT REPORTS                          [2022] 6 S.C.R.


A     the subject matter of the auction sale and entered into a Memorandum
      of Understanding with respondent No.3 (borrower).
              2.5 The Bank filed its reply on 06.02.2007 before the Recovery
      Officer in response to the application of the respondent No.5 (on the
      29th day from the date of auction). In its reply, the Bank claimed that
B     there was some shortfall in the amount deposited by the borrower but no
      calculation sheet was attached to the reply. The matter was adjourned
      for filing of reply by the auction purchaser and the Bank was also directed
      to file compliance affidavit. The auction purchasers - respondent Nos. 1
      and 2 herein filed its objection/reply to the application. The borrower
      also filed its rejoinder to the reply filed by the Bank. The matter got
C     adjourned to 15.02.2007 with the following order passed by the Recovery
      Officer:-
            •   “………..the bank had still not served the copy of the
                calculation sheet.

D           •   “Further, he submits a DD for an amount of Rs.2.80 lacs
                towards difference in calculations, if any. He farther submits
                that the CH Bank be directed to serve a copy of the calculation
                sheet on the CDs, so that, any further difference in interest,
                etc. in calculation may be paid. Request is allowed. CH Bank
                is again directed to serve a· copy of the calculation sheet on
E               the CDs, so that, the CDs may be able to pay the difference
                in payment, if any.’’
              2.6 Thereafter, the Bank submitted a calculation sheet before the
      Recovery Officer on 12.02.2007. According to the calculation sheet, the
      borrower - respondent No.3 deposited a further sum of Rs.77,647/- with
F     the Recovery Officer, which was over and above Rs. 2.80 lakhs deposited
      as per the order dated 15.02.2007. The Recovery Officer thereafter
      passed an order dated 15.02.2007 allowing the application submitted by
      the respondent No.3 – borrower by holding that the borrower had
      deposited the requisite amount for setting aside the sale under Rule 60
G     of the Second Schedule of the Income Tax Act. Accordingly, the sale of
      the properties in question came to be set aside. The Recovery Officer
      also directed the Bank to hand over all the original documents pertaining
      to the immovable properties in question to the borrower immediately. In
      compliance of the order passed by the Recovery Officer, the Bank handed
      back to the original borrowers the documents pertaining to the properties
H
M/S. R.S. INFRA-TRANSMISSION LTD. v. SAURININDUBHAI                              937
             PATEL AND ORS. [M. R. SHAH, J.]

in question on 19.02.2007 and on release of the documents, the request           A
of the Bank to release the amount deposited was allowed by the Recovery
Officer. Immediately on 19.02.2007 itself, the borrowers – respondent
Nos.3 to 5 herein executed two sale deeds in favour of the appellant
herein for a sale consideration of Rs.1,40,89,855/-. That after the sale
deeds were executed in favour of the appellant dated 19.02.2007, the
                                                                                 B
auction purchasers – respondent Nos. 1 and 2 preferred an appeal bearing
No.11 of 2007 before the DRT, Ahmedabad on 20.02.2007.
      2.7 The DRT Ahmedabad by order dated 18.05.2007 allowed the
said Appeal No.11 of 2007 and set aside the order passed by the Recovery
Officer passed in Recovery Proceedings No.153 of 2006. The borrowers
then preferred the appeal bearing No.233 of 2007 before the DRAT,                C
Mumbai against the order dated 18.05.2007 passed by the DRT in Appeal
No.11 of 2007. The appellant herein moved an application bearing M.A.
No.704 of 2007 seeking impleadment in Appeal No.223 of 2007.
       2.8 Prior to the borrower preferring Appeal No.223 of 2007,
respondent Nos.1 and 2 herein moved an application before the Recovery           D
Officer on 31.05.2007 for seeking a direction to the appellant to maintain
status quo over the properties in question and to appoint the receiver to
take possession of the same from the appellant. The said application
came to be rejected by the Recovery Officer vide order dated 31.05.2007.
Against the order passed by the Recovery Officer dated 31.05.2007,               E
rejecting the application seeking status quo order in regard to the properties
in question, respondent Nos. 1 and 2 herein preferred appeal before the
DRT being Appeal No. 34 of 2007, which came to be dismissed by the
order dated 08.02.2008. Thereafter respondent Nos. 1 and 2 herein filed
an Appeal No.43 of 2008 before the DRAT, Mumbai against the order
dated 08.02.2008.                                                                F

         2.9 Further, respondent Nos. 1 and 2 moved cross objections in
Appeal No.223 of 2007 aggrieved by certain observations in the order
dated 18.05.2007 pertaining to the right of redemption of the mortgagers
till the time conveyance is not executed in favour of the successful auction
purchaser.                                                                       G
      2.10 By order dated 07.09.2015, the DRAT, Mumbai allowed
Appeal No.223 of 2007 preferred by the borrowers and set aside the
auction sale dated 08.01.2007, which was in favour of the respondent
Nos. 1 and 2 herein.
                                                                                 H
938            SUPREME COURT REPORTS                          [2022] 6 S.C.R.


A            2.11 Feeling aggrieved and dissatisfied with the order passed by
      the DRAT, Mumbai dated 07.09.2015, allowing the Appeal No.223 of
      2007 and setting aside the auction sale, respondent Nos. 1 and 2 herein
      (the auction purchasers) preferred the writ petition before the High Court
      being Special Civil Application No.17981 of 2015. By the impugned
      judgment and order, the High Court has allowed the said writ petition
B
      and has quashed and set aside order dated 07.09.2015 passed by the
      DRAT, Mumbai in Appeal No.223 of 2007 and consequently confirmed
      the sale in favour of respondent Nos. 1 and 2 herein (the auction
      purchasers).
            2.12 Feeling aggrieved and dissatisfied with the impugned judgment
C     and order passed by the High Court, the subsequent purchaser -
      respondent No.5 – M/s. R.S. Infra-Transmission Ltd. has preferred the
      present appeal.
              3. Shri Guru Krishnakumar, learned Senior Advocate appearing
      on behalf of the appellant – subsequent purchaser has vehemently
D     submitted that in the present case, as such, the appellant can be said to
      be a bona fide purchaser, who purchased the property in question on
      payment of full sale consideration. It is submitted that at the time when
      the appellant purchased the properties in question, the judgment debtor
      had already exercised the rights under Rule 60 of the Second Schedule
E     of the Income Tax Act, 1961 and after the Recovery Officer passed the
      order in favour of the Judgement Debtor and directed the Bank to hand
      over the original documents pertaining to the properties in question and
      at the time when the appellant purchased the properties in question, the
      documents pertaining to the properties in question were handed back to
      the judgment debtor. It is submitted that therefore as such any subsequent
F     order cannot defeat the rights of the appellant, who is a bona fide
      purchaser, who purchased the properties in question pursuant to the order
      passed by the Recovery Officer dated 15.02.2007.
              3.1 On merits, the learned Senior Advocate appearing on behalf
      of the appellant has vehemently submitted that if at all there was any
G     mistake in the proclamation, in not mentioning the correct amount due
      and payable by the judgment debtor, it was that of the Recovery Officer.
      It is submitted that therefore, any lacuna in the proclamation would not
      defeat the rights of the judgment debtor when the judgment debtor acted
      in a bonafide manner and deposited the entire amount mentioned in the
H     proclamation of sale.
M/S. R.S. INFRA-TRANSMISSION LTD. v. SAURININDUBHAI                              939
             PATEL AND ORS. [M. R. SHAH, J.]

      3.2 It is submitted that in the present case, the judgment debtor          A
deposited the amount specified in the sale proclamation, i.e.,
Rs.1,27,30,527/- alongwith 5% of the purchase money as penalty for
payment to the auction purchaser and 15% interest from the date of sale
proclamation till the date of deposit as per Rule 60. In fact, an additional
sum of Rs.2.80 lakhs was also paid on 09.02.2007 (anticipated shortfall)
                                                                                 B
and further a sum of Rs.77,647/- on 13.02.2007 towards the purported
shortfall (after being supplied with the calculation sheet by the Bank).
       3.3 It is further submitted that the judgment debtor had on
25.01.2007 (about 17 days after auction) preferred an application under
Rule 60 of the Second Schedule of the Income Tax Act, 1961 seeking to
set aside the auction sale and he, in compliance thereof, had deposited          C
the amount as above. It is submitted that the Bank filed its reply before
the Recovery Officer on 06.02.2007 and in its reply, the Bank claimed
that there was some shortfall in the amount deposited by the judgment
debtor but no calculation sheet was supplied. It is submitted that the
same was on the 29th day from the date of auction. That if, on 06.02.2007,       D
the Bank would have submitted the calculation sheet and would have
pointed out the shortfall in the amount deposited by the judgment debtor,
the latter would have deposited the balance shortfall amount on the
29th day itself, i.e., within 30 days. That however, the bank submitted the
calculation sheet before the Recovery Officer on 12.02.2007 and
immediately on the very next day, i.e., 13.02.2007, the judgment debtor          E
deposited Rs.77,647/-, which was the shortfall as per the calculation
sheet. Therefore, it can be said that the judgment debtor had substantially
complied with the Rule 60.
       3.4 It is submitted that the provisions of the statute and the
legislative intent embodied in Rule 60 of the Second Schedule of the             F
Income Tax Act, 1961 provides a course of last resort to the judgment
debtor to save his property. That once Rule 60 is exercised in letter and
spirt, then the rights of the judgment debtor are crystallized and
correspondingly, the rights of the auction purchaser reach a vanishing
point. That the salient objective of Rule 60 is to provide a judgment            G
debtor a last and final opportunity to save/retain his asset. It is urged that
such right should not be defeated on a highly pedantic and hyper technical
construction. Therefore, in the facts and circumstances of the case, the
High Court ought to have appreciated that in the present case, the
judgment debtor had complied with Rule 60 in letter and spirit.
                                                                                 H
940             SUPREME COURT REPORTS                            [2022] 6 S.C.R.


A            3.5 It is contended that in the present case, the Recovery Officer
      ought to have specifically mentioned the exact amount due and payable
      in the sale proclamation. That it was the Recovery Officer, who was
      required to determine the entire amount alongwith the interest, which
      was due till the date of issuance of the proclamation. It is submitted that
      the Recovery Officer would be in a better position to know the actual
B
      value of the property and to indicate the correct upset price.
             3.6 It is urged that it is the duty of the Recovery officer to apply
      his mind for determining all the necessary particulars that should be
      inserted in the proclamation of sale. Reliance is placed on the decision
      of this Court in the case of Gajadhar Prasad Vs. Babu Bhakta Ratan,
C     (1973) 2 SCC 629.
             3.7 It is submitted by learned senior counsel that in the present
      case, at the most, it can be said that there was an ambiguity in the sale
      proclamation to extent that in the sale proclamation, it was mentioned
      that the amount due and payable is Rs.1,27,30,527/- including interests
D     as on 30.06.2006. That however, it was the duty cast upon the Recovery
      Officer to mention the exact amount alongwith interest as interest is
      paid upto the date of sale proclamation. Therefore, the judgment debtor
      has virtually believed that he is required to deposit a sum of Rs.1,27,30,527/
      - and therefore, he deposited the same alongwith 5% of the purchase
E     money as penalty for payment to the auction purchaser and 15% interest
      from the date of sale proclamation till the date of deposit. However,
      there was a shortfall of Rs.77,647/- towards the interest for the period
      between 30.06.2006 to 08.01.2007, which the judgment debtor deposited
      as soon as he was informed by the Bank.

F            3.8 It is further submitted that a mistake/inaccuracy in the amount
      specified in the proclamation, as recovery through sale was ordered,
      cannot prejudice the application filed under Rule 60. That a person, who
      makes an application under Rule 60 cannot be made to suffer due to the
      fault/shortfall, if any, in the computation of the amount sought to be
      recovered. It is submitted that the applicant is bound to go by the amount
G     specified in the proclamation. That the borrower/judgment debtor cannot
      be caused to suffer on account of a mistake on the part of the Court/
      Executing Officer/Recovery Officer.
            3.9 It is further submitted that Rule 60 is to be read with Rule 53.
      That as per Rule 60, an application to set aside a sale/auction must be
H
M/S. R.S. INFRA-TRANSMISSION LTD. v. SAURININDUBHAI                            941
             PATEL AND ORS. [M. R. SHAH, J.]

made to the Recovery Officer by depositing, inter alia, the amount             A
specified in the proclamation, as that with the recovery of which the sale
was ordered. That as per Rule 53, the proclamation shall be drawn by
the Tax Recovery Officer, after notice to the defaulter. The proclamation
shall state the time and place of sale and shall specify as fairly and
accurately as possible the amount for the recovery of which the sale is
                                                                               B
ordered. It is submitted that therefore the legislative intent is that the
amount to be specified in the proclamation of sale must be a fair estimate
of the amount due from the borrowers. That once the provision provides
that a specific amount prescribed in the proclamation is to be deposited
and the same is deposited, it would be unjust to hold that the provisions
have not been complied with. It is submitted that an applicant/judgment        C
debtor cannot be compelled to deposit any unspecified demands.
        3.10 It is further submitted by the learned senior counsel appearing
on behalf of the appellant that even the bona fides of the judgment debtor
are also required to be considered. That in the present case, the auction
of the subject properties took place on 08.01.2007. On the 17th day of         D
the auction sale, the borrower filed the requisite application under Rule
60 and deposited the amount specified in the proclamation alongwith
other amounts to be deposited under Rule 60, i.e., interest @ 15% p.a.
from the proclamation of date of sale to the date when the deposit is
made and a sum equal to 5% of the purchase money as penalty. That on
28th/29th day of the auction, the Bank filed its reply to the application      E
under Rule 60. However, in its reply, the bank did not specifically state
the exact amount of shortfall. That upon the request of the borrowers,
vide order dated 09.02.2007, the Recovery Officer directed the Bank to
serve a copy of the calculation sheet so that the judgment debtor may be
able to pay the amount of difference, if any. In fact, even without waiting    F
for the supply of the calculation sheet, the borrower deposited Rs.2.80
lakhs in anticipation of the shortfall. Subsequently, the Bank submitted
the calculation sheet on 12.02.2007 and it was found that an amount of
Rs.77,647/- was the shortfall. Therefore, immediately on the very next
day, i.e., 13.02.2007, the judgment debtor deposited the shortfall amount,
i.e., Rs.77,647/- with the Recovery Officer. It is submitted that therefore,   G
all throughout the judgment debtor acted promptly and in a bonafide
manner. Therefore, it cannot be said that there was any deliberate and/
or wilful non-compliance of the provisions of Rule 60, which defeats the
valuable right of the judgment debtor provided under Rule 60.
                                                                               H
942             SUPREME COURT REPORTS                            [2022] 6 S.C.R.


A            3.11 It is further submitted by the learned counsel appearing on
      behalf of the appellant that the provisions of Rule 60 ought to be interpreted
      in favour of the borrower liberally, as it is the last chance to save his
      property without assigning any cause. Reliance is placed upon the decision
      of Bombay High Court in the case of Hotel Paras Garden, Balapur
      & Anr. Vs. Central Bank of India, Balapur & Ors., 2015 SCC
B
      Online Bom 3398.
             3.12 Relying upon the decision of the Punjab & Haryana High
      Court in the case of M/s. National Rice and General Mills, Jagraon
      and Ors. Vs. Bank of India and Ors., C.W.P. No. 19113 of 2005, it
      is submitted that as observed and held by the High Court while considering
C     compliance of Rule 60, the Court has to consider, firstly, that the deposit
      has been made in compliance of Rule 60 with regard to the deposit of
      the money and then, to see, whether, such irregularity, which has surfaced
      has caused any substantial injury to the objector.
            3.13 It is submitted that in any case, there has been substantial
D     compliance of Rule 60. From the aforesaid facts, it can be seen that the
      borrower has substantially complied with the provisions of Rule 60 so as
      to accomplish the reasonable objectives for which the provision was
      passed. Reliance is placed upon the decision of this Court in the case of
      Commissioner of Central Excise, New Delhi Vs. Hari Chand Shri
E     Gopal and Ors., (2011) 1 SCC 236 and Excise Commissioner &
      Ors. Vs. Ajith Kumar and Anr., (2008) 5 SCC 495.
             3.14 It is submitted that in the present case, the alleged deficit
      amount was nominal and in fact was due to the mistake on the part of
      the Recovery Officer in specifying the accurate amount for the recovery
F     of which the sale was ordered. Therefore, the right of the borrower to
      save his property conferred under Rule 60 can be said to be a valuable
      right and the same shall not be affected on the technical ground and/or
      should not be made to suffer due to the mistake on the part of the
      Recovery Officer.

G            3.15 It is further submitted on behalf of the learned counsel
      appearing on behalf of the appellant that the right of redemption of
      mortgage under Section 13(8) of the Securitization and Reconstruction
      of Financial Assets and Enforcement of Security Interest Act, 2002 is to
      enable the borrower to protect his constitutional right guaranteed under
      Article 300A of the Constitution of India. That in fact the borrower’s
H     right to redeem his property survives till there has been completion of
M/S. R.S. INFRA-TRANSMISSION LTD. v. SAURININDUBHAI                            943
             PATEL AND ORS. [M. R. SHAH, J.]

the sale by the mortgagee, i.e., the bank by registered deed. That in the      A
present case, the auction sale was not confirmed in favour of the auction
purchasers as the title and ownership of the subject property has been
crystallised in favour of the appellant and sale deeds have been executed
and registered in favour of the appellant.
       3.16 Making the above submissions, it is prayed to allow the present    B
appeal and quash and set aside the impugned judgment and order passed
by the High Court.
       4. Present appeal is vehemently opposed by learned counsel
appearing on behalf of the respondent Nos. 1 and 2. It is submitted by
the learned counsel appearing on behalf of respondent Nos. 1 and 2 –           C
auction purchasers that in the present case, the Hon’ble High Court has
rightly observed and held that there was a non-compliance of Rule 60, in
as much as, the entire amount mentioned in the sale proclamation was
not deposited and there was a shortfall.
      4.1 That in the present case, in the said proclamation itself, it was    D
mentioned that as on 30.06.2006, the amount due and payable would be
Rs.1,27,30,527/- including interest. Therefore, it was for the borrower to
calculate and deposit the amount alongwith the interest on
Rs.1,27,30,527/- from the date of recovery certificate till the date of
deposit. It is contended that it is an admitted position that the borrower
deposited a sum of Rs.1,27,30,527/- only and did not deposit the interest      E
from the date of recovery certificate till the actual deposit. Therefore,
there was a shortfall and hence, it can be said that there was non-
compliance of Rule 60.
       4.2 It is further submitted that in the present case, the notice on
the application under Rule 60 was issued on 06.02.2007 itself, which           F
was within 30 days as contemplated by Rule 60. That on the returnable
date, the Bank filed a reply pointing out that the amount paid by the
judgment debtor was less than what was required to be paid and annexed
a calculation sheet. It is submitted that despite the fact that the judgment
debtor was having knowledge about what was the shortfall, he made a            G
statement before the DRT that he was not aware of the amount/
difference claimed by the Bank and offered to pay Rs. 2.8 lakhs and no
basis of the said amount was shown. It is submitted that this attempt
was clearly dishonest. That according to the Bank, Rs. 4.63 lakhs was
outstanding, which the borrower refused to pay. Therefore, the amount,
                                                                               H
944             SUPREME COURT REPORTS                            [2022] 6 S.C.R.


A     which was due and payable was Rs. 4.63 lakhs, which was not deposited
      by the judgment debtor. That as there was a breach of Rule 60, the High
      Court has not committed any error.
             4.3 It is further submitted by the learned counsel appearing on
      behalf of respondent Nos. 1 and 2 – auction purchasers that even the
B     acquisition is also in favour of the respondents. It is submitted that
      respondent Nos. 1 and 2 have deposited a sum of Rs. 1.35 crores in
      2007. It is urged that the land in question is a very valuable land so far as
      the respondent Nos. 1 and 2 are concerned, as they purchased the land
      through Court auction for their business purpose as it already has a
      factory adjacent to this plot of land. That on the other hand, the appellant
C     is a buyer by an internal agreement between the borrower and the
      appellant whereas the auction purchaser bought it by auction in court
      and by following due process of law. It is submitted that even the borrower
      and the appellant did not wait for the appeal period against the order
      passed by the Recovery Officer and the appellant and the borrower
D     executed the sale deeds without waiting for appeal period to defeat the
      rights of auction purchaser.
            4.4 Making the above submissions, it is prayed to dismiss the
      present appeal.
             5. We have heard the learned counsel appearing for the respective
E     parties at length.
             6. At the outset, it is required to be noted that by the impugned
      judgment and order, the High Court has set aside the order passed by
      the DRAT and has confirmed the sale in favour of respondent Nos. 1
      and 2 – auction purchasers by dismissing the application submitted by
F     the judgment debtor under Rule 60 of the Second Schedule of the Income
      Tax Act, 1961 by observing that as there was a shortfall in the deposit of
      the amount while exercising the right under Rule 60 and hence, there
      was non-compliance of the provisions of Rule 60.
             6.1 However, it is required to be noted that in the sale certificate,
G     the amount mentioned was Rs.1,27,30,527/- including interest as on
      30.06.2006. The judgment debtor while exercising the right under Rule
      60 deposited Rs.1,27,30,527/- alongwith Rs. 6,75,000/- for payment to
      the purchaser as penalty, a sum equal to 5% of the purchase money and
      also further deposited Rs. 3,01,290/- towards interest @ 15% from the
      date of sale proclamation to the date of deposit i.e., 25.01.2007. However,
H
M/S. R.S. INFRA-TRANSMISSION LTD. v. SAURININDUBHAI                           945
             PATEL AND ORS. [M. R. SHAH, J.]

it was the case on behalf of the auction purchasers that there was a          A
shortfall in not making the payment of interest from 30.06.2006 to
25.01.2007. However, at this stage, it is required to be noted that as such
it was the duty cast upon the Recovery Officer to mention the exact
amount in the sale certificate. The Recovery Officer mentioned the
amount in the Sale Certificate of Rs.1,27,30,527/- including the interest
                                                                              B
as on 30.06.2006, however, did not specify any further amount towards
the interest for the period between 30.06.2006 till the date of the sale
proclamation, i.e., 08.01.2007, which the Recovery Officer ought to have
mentioned specifically. The aforesaid mistake and/or inaccuracy on the
part of the Recovery Officer led to the shortfall in the deposit of the
amount, which was towards the interest for the period between                 C
30.06.2006 to 08.01.2007, otherwise, the judgment debtor had substantially
complied with Rule 60. The shortfall was Rs.3,57,647/-. When the
judgment debtor deposited the substantial amount of Rs. 1,27,30,527/-
and other amounts due and payable under Rule 60 including the penalty
and the interest, there was no reason for the judgment debtor not to
                                                                              D
deposit Rs. 3,57,647/- which is a very small amount as against the amount
deposited. At this stage, it is required to be noted that though the Bank
filed its reply before the Recovery Officer in response to the application
made by the judgment debtor - borrower made under Rule 60 and in
which it was stated that there was some shortfall in the amount deposited,
but according to the judgment debtor, no calculation sheet was attached       E
to the reply and/or supplied to the judgment debtor.
        6.2 At the time of hearing of the application under Rule 60 on
09.02.2007, a grievance was made before the Recovery Officer as to
why the Bank had not served a copy of the calculation sheet and in the
meantime, the judgment debtor had himself deposited a further sum of          F
Rs.2.80 lakhs towards the difference in calculation, if any. The Recovery
Officer directed the Bank to supply the calculation sheet and the Bank
submitted the calculation sheet before the Recovery Officer on
12.02.2007 and on that day, a sum of Rs.77,647/- was the shortfall, which
the judgment debtor deposited on the very next day, i.e., on 13.02.2007.
If the Bank would have submitted the calculation sheet earlier alongwith      G
the reply on 06.02.2007, which was 29th day from the date of auction,
the judgment debtor would have deposited the balance shortfall amount.
Therefore, in the facts and circumstances of the case, it can be said that
there was a substantial compliance/compliance of Rule 60. If the
Recovery Officer would have been accurate in submitting the exact             H
946             SUPREME COURT REPORTS                            [2022] 6 S.C.R.


A     amount in the sale proclamation due and payable on the date of sale
      proclamation then the eventuality which has arisen in the present case
      would not have arisen. There was an absurd misconduct on the part of
      the Recovery Officer for which the judgment debtor should not be made
      to suffer.
B             6.3 At this stage, it is required to be noted that the right available
      to the judgment debtor under Rule 60 is a valuable right and the last
      resort/opportunity to the judgment debtor to save his property. It is a
      right available to the judgment debtor after his property is sold in a court
      auction. Therefore, such a valuable right available to the judgment debtor
      to save his property should not be affected on the technical ground and/
C     or for the mistake and/or the bona fide mistake for which he was not at
      all responsible.
            6.4 The legislative intent of Rule 60 has been dealt with and
      considered in detail by the Bombay High Court in the case of Hotel
      Paras Garden, Balapur & Anr. (supra). In the aforesaid case, it is
D     observed that the legislative intent of Rule 60 is to give the defaulter as
      much latitude as possible till the end and he can, under Rule 60, without
      assigning any cause but after depositing the sum therein mentioned as
      mentioned in the sale proclamation within the stipulated time, avoid the
      auction and protect his property. Thus, the right which is available to the
E     judgment debtor under Rule 60 is a most valuable right available and the
      same shall not be permitted to be affected on the technical ground and/
      or bona fide mistake for which he cannot be said to be at fault.
             6.5 Now, so far as the submission on behalf of respondent Nos. 1
      and 2 that according to the Bank, a sum of Rs.4.63 lakhs was the balance
F     amount due and payable against which even subsequently the borrower
      has deposited Rs. 3,57,647/- and therefore, still there is a shortfall is
      concerned, the aforesaid has no substance. At this stage, it is required to
      be noted that on deposit of the aforesaid amount of Rs. 3,5,7647/-,(i.e.,
      Rs.2,80,000/- + Rs.77,647/-) as on 13.02.2007, the Recovery Officer
      directed the Bank to hand over the original documents pertaining to the
G     impugned properties and file compliance affidavit and thereafter the Bank
      was allowed to appropriate the decretal amount deposited by the judgment
      debtor and that on 19.02.2007 itself, the Bank complied with the order
      passed by the Recovery Officer dated 15.02.2007 and handed back to
      the judgment debtor the documents pertaining to the properties in question
H     and requested to release the amount deposited, which came to be allowed
M/S. R.S. INFRA-TRANSMISSION LTD. v. SAURININDUBHAI                           947
             PATEL AND ORS. [M. R. SHAH, J.]

by the Recovery Officer. At that time, no dispute was raised by the           A
Bank that any further amount was due and payable. The Bank was
satisfied with the deposit of the amount by the judgment debtor.
       7. In view of the above discussion and for the reasons stated
above, the High Court has committed a grave/serious error in quashing
and setting aside the order passed by the DRAT and the Recovery Officer       B
by which the Recovery Officer and the DRAT set aside the sale in
favour of the auction purchasers. The view taken by the High Court is
too technical. The High Court has not at all considered the facts narrated
hereinabove in its true perspective. The High Court has not at all
appreciated and considered the fact that for the inaccuracy and/or mistake
on the part of the Recovery Officer, the judgment debtor cannot be            C
made to suffer for no fault of his. The High Court has also not properly
appreciated and considered the valuable right available to the judgment
debtor under Rule 60. As observed and held hereinabove, when the
substantial amount was deposited, there was no reason for the judgment
debtor not to deposit the shortfall, which as such can be said to be very     D
meagre amount. As and when the judgment debtor was made aware
about the shortfall, immediately, the shortfall amount has been deposited
by the judgment debtor.
       Under the circumstances, the impugned judgment and order passed
by the High court is unsustainable and the same deserves to be quashed        E
and set aside.
       8. In view of the above and for the reasons stated above, present
appeal succeeds. The impugned judgment and order passed by the High
Court is hereby quashed and set aside. The order passed by the DRAT
dated 07.09.2015 setting aside the auction sale dated 08.01.2007 is hereby    F
restored. The amount deposited by respondent Nos. 1 and 2 shall be
returned to them alongwith the interest accrued thereon, if not received
by them so far. To do the substantial justice, we also direct that the
appellant shall pay a further sum of Rs. 10,00,000/- (Rupees Ten Lakhs)
to respondent Nos. 1 and 2 by Demand Draft within a period of four
weeks from today.                                                             G
      Present appeal is allowed accordingly. However, in the facts and
circumstances of the case, there shall be no order as to costs.


Nidhi Jain                                                  Appeal allowed.   H