SURINDER NATH KAPOORversusUNION OF INDIA & ORS.

                    SURINDER NATH KAPOOR
                               v.
                     UNION OF INDIA & ORS.

                         ' AUGUST 3, 1988
                                    0


 [RANGANATH MISRA AND, MURARI MOHON DUTT, JJ.]                               B

        Income Tax Act, 1961-Whether a garnishee order passed by
Income-tax Officer under section 226(.J)(x)-Of-For payment of a
fictiiious sum withouc notice under section 226(3) of and whether con-
sequent sale ofproperty pursuant to such an order are null and void.

       This Civil Micellaneous Petition was filed by a firm, Raja Proper-
                                                                             c
ties, for directions consequent upon the disposal of a special leave peti-
tion (civil) filed by one Surinder l'<ath Kapoor.

      Surinder Nath Kapoor was one of the partners of M/s. Krishna
Kapoor & Co. M(s. Indo-Kashmir Carpets and Handicrafts was a sister D
concern of M/s. Krishna Kapoor & Co. The IAC (Asst!.) passed a
garnishee order under section 226(3)(x) of the Income Tax Aci ('the
Act') holding M/s. Krishna Kapoor & Co. a defaulter to the extent of
Rs.8,56.377 found due by tliat firm to the assessee M/s. lndo-Kashmir
Carpets & Handicrafts, and as a result of the garnishee order, the
property of' M/s. Krishna Kapoor & Co. was put up for sale by the Tax E
Recovery Officer, and purchased by the petitioner, Raja Properties,
and the sale was confirmed.                 ·

      · Surinder Nath Kapoor made an application under rule 61 of the
Second Schedule to the Act before the Tax Recovery Officer, for setting
aside the sale abovesaid. The application was dismissed. Surinder Nath F
Kapoor tiled an appeal before the Tax Recovery Commissioner, he also
filed an application for stay of confirmation of the sale mquestion till
the disposal of that appeal. As no stay was granted, he filed a writ
petition in the High Couri, which dismissed the same. Being aggrieved
by the dismissal of' the writ petition, he filed a petition for special leave
in this Court. This Court, llpon being informed by. petitioner's counsel G
that the amount of tax involved had already been paid to the Depart-
ment. passed an order dated October 12. 1987, setting aside the sale
aforesaid. the confirmation of which had been stayed by this court. and
disposing of the special leave petition accordingly.

     The Tax Recovery Officer did not dispose of the appeal afore-           H
                                  211
     212        SUPREME COURT REPORTS                [1988] Supp. 2 S.C.R.

  mentioned of Surinder Nath Kapoor, in view of the order of this Court
A
  setting aside the sale. Surinder Nath tiled an application for clarifica-
  tion of this Court's said order. During the pendency of the application
  l'or clarification. the petitioner Raja Properties, the auction-purchaser,
  filed the present petition for directions for recalling the order above-
  said passed in the special leave petition and for dismissing the Special
B Leave Petition. As regards the clarification of its order. the Court
  reiterated that by virtue of that order the sale stood set aside.

           It was contended by the petitioner/auction-purchaser, Raja Pro-
     perties, that the auction sale having been confirmed. the same could not
     be set aside.

c          Disposing of the petition Of Raja Properties, the Court.

          HELD: Sec. 226(3J(x) of the Act provides for the issue of a notice
   on a .garnishee. Under clause (x), if a person to whom a notice is sent
   fails to make payment in pursuance thereof to the Income-tax Officer,
D he shall be deemed to be an assessee in default in respect of the amount
   specified in the notice. The amount specified in the notice in this case
   was Rs.2,86,450. The firm. M/s. Krishna Kapoor & Co., did not deny
   on oath that the said sum demanded was due by them to Indo-Kashmir
   Carpets & Handicrafts. In view of clause (x). M/s. Krishna Kapoor &
  ·Co. would be deemed to be an assessee in default in respect of the said
E sum of Rs.2,86,450 as specified in the notice and not for any other
   amount. The Income-tax Officer put up the property to sale for
   Rs.8.56,377 ;55, which was not the amount specified in the garnishee
   notice. The garnishee order was for a fictitious sum of Rs.8.56.377 .55,
   as this amount was not mentioned in the notice under section 226(3) of
   the Act. When an order is made for payment of a fictitious sum
F without giving an opportunity to the person against whom the order is
     made, to shO\\' cause against the passing of such an order, the order is a
  nullity. It will be deemed that there was no existence of such an order
  and any step· taken pursuant to that order will also be a nullity. The
  garnishee order passed by the IAC (Asst.) in this case for Rs.
  8,56.377.55 was null and void,·and the 'sale held pursuant to that order
G was also a nullity. It was immaterial that the sale had been confirmed.
  In the language of the Privy Council in Baijnath Sahai v. Ramgut Singh,
  Vol. 23 I.A. 45. there was no judgment, there was nothing correspond-
  ing to a judgment or decree for payment of the amount, and there was
  no foundation for sale. [219A, G-H; 220A-D; 221A-B]

 H          For all this, the Revenue was responsible and liable to compensate
                         S.N. KAPOOR v. U.0.1.                       213

 the auction-purchaser, a stranger to the litigation. Counsel for the
                                                                            A
 Revenue pointed out that a representation on behalf of Surinder Nath
 Kapoor had been made before the Court when it passed its order dated-
 October. 12, 1987, aforementioned that the income tax dues of the firm,
Krishna Kapoor & Co., to the extent of Rs.3,38. !Mi had already been
paid to the department, when, on the date of the said order, the amount
had not been paid, but was paid on the next day, and the said order         B
setting aside the sale had been· obtained by making a false representa-
tion to this Court. Even though there was some misrepresentation on
the part of the firm, the Court could not recall the order, setting aside
the sale which was null and void. But in view of the conduct of the firm
or its partner, they should share along with the Revenue a part of the
compensation to be allowed to ,the auction-purchaser. The auction-          C
purchaser would be entitled to withdraw unconditionally the sum of
Rs.37 ,81,000 deposited by it and would be entitled to get interest at.
specified rate on the said amount for the period the amount remained
blocked, by way of compensation, out of which a sum quantified would
be paid by the firm M/s. Krishna Kapoor & Co. and/or its partner
Surinder Nath Kapoor, and the rest, by the Revenue. [22IB-G]                D

      Baijnath Sahai v. Ramgut Singh, Vol. 231.A. 45, referred to.

      CIVIL APPELLATE JURISDICTION: Civil Miscellaneous
Petition No. 2340 of 1988.
             ---                    In
     Special Leave Petition (Civil) No. 9946 of 1987.
                                                                            E


     From the Judgment and Order dated 29.9.1986 of the Rajasthan
High Court in Civil W.P. No. 853 of 1986.

      Dr. Gauri Shanker and P.N. Misra for the Appellant.                   F

     Kuldip Singh, Additional Solicitor _General, S.C. Manchanda,
Shanti Bhushan, Ms. A. Subhashini and S.K. Jain for the Respondents.

      The followipg Order of the Court was delivered:
                                                                            G
                               ORDER

      This Civil Miscellaneous Petition has been filed by a firm, Raja
Properties, praying for certain directions, consequent upon the dis·
posal of the Special Leave Petition (Civil) No. 9946 of 1987 filed by
one Surinder Nath Kapoor against the Union of India and others.             H
    214        SUPREME COURT REPORTS               [1988] Supp. 2 S.C.R.

A Before considering the Civil Miscellaneous Petition, it is necessary to
  state a few facts.leading to the filing of the petition.

        Surinder Nath Kapoor is one of the partners of Mis. Krishna
    Kapoor & Co. consisting of the following four partners:

B         (1) Shri Shiv Dayal Kapoor (since deceased).

          (2) Shri Surinder Nath Kapoor.

          (3) Shri Ram Nath Kapoor.

          (4) Shri Narender Nath Kapoor.
c
        Partners Nos. 2, 3 and 4 are the sons of Shiv Dayal Kapoor, since
  deceased. There is another firm Mis. Indo-Kashmir Carpets & Handi-
  crafts. It is the sister concern of Mis. Krishna Kapoor & Co. and·
  constituted with the said Shiv Dayal Kapoor, since deceased, and his
D daughters-in-law. Both the firms are assessees under the Income Tax
  Act, 1961, hereinafter rererred to as 'the Act'.     ·

          On December 12, 1954, the IAC (Astt.), Range-II, Amritsar,
    passed a garnishee order under section 226(3)(x) of the Act holding
    Mis. Krishna Kapoor & Co. a defaulter to the extent of Rs.8,56,377 on
E   the allegation that the said sum was due. by M/s. Krishna Kapoor &
    Co. to the assessee Mis. ludo-Kashmir Carpets & Handicrafts. The
    garnishee order was thereafter put into execution and the property of
    Mis. Krishna Kapoor & Co. was put up for sale by the Tax Recovery
    Officer-I, Jaipur, on January 21, 1986 and was purchased by the
    petitioner, Raja Properties, for the sum of Rs. 37 ,81,000. The sale was
F   confirmed on March 14, 1986.

           The said Surinder Nath Kapoor made an application dated
     February 15, 1986 undermle. 61 of the Second Schedule to the Act
     before the Tax Recovery Officer, Jaipur, praying for setting aside of
     the sale of the property of Mis. Krishna Kapoor & Co. The said
G    application was dismissed by the Tax Recovery Officer, Jaipur, by his
     order dated March 14, 1986. He filed an appeal in Form No. 29-A
     under rule 86( 1)( c) of the Second Schedule to the Act before the Tax
     Recovery Commissioner, Jaipur. He also filed an application praying
     for stay of the confirmation of the sale by the Tax Recovery Officer,
     Jaipur, till the disposal of the appeal. The said appeal was, however,
H    transferred by the Tax Recovery Commissioner, Jaipur, to the Tax
                           S.N. KAPOOR '· U.0.1.                         215

Recovery Commissioner, Amritsar. The said Surinder Nath Kapoor                 A
also filed an application for stay before the Tax Recovery Commis·
sioner, Amritsar. As no stay was granted, he filed a writ petition in the
Ra jasthan High Court. The writ petition was, however, dismissed by
the High Court by its order dated September 29, 1986. Being
aggrieved by the dismissal of his writ petition, the said Surinder Nath
Kapoor filed the above Special Leave Petition No. 9946 of 1986.                B

     The Special Leave Petition was disposed of by this Court by its
order dated October 12, 1987 as follows:

            "Heard learned counsel for the parties. Mr .. Manchallda
            for the Department agrees that the tax liability of the C
            petitioner has been reduced to Rs.3,38,146. Mr. P.N.
            Misra, counsel for the petitioner states in Court that this
            amount has already been paid to the Department. In that
            view of the matter, the petitioner no more owes any tax to
            the Income Tax Department. The sale already held confir-
            mation of which we had granted stay shall stand vacated. D
            Special Leave Petition is disposed of with aforesaid direc-
            tions."

       It is clear from the above order of this Court that the sale was set
aside. As the Tax Recovery Officer, Amritsar, before whom the said
Surinder Nath Kapoor had filed an appeal, did not dispose of the E
appeal, in view of the said order of this Court setting aside the sale,
Surinder Nath Kapoor filed an application for clarification of the said
order of this Court dated October 12, 1987. During the pendency of the
said application for clarification, the petitioner, Raja Properties, the
auction-purchaser, filed the said petition for direction praying for
recalling the order dated October 12, 1987 of this Court and the dis- F
missal of the Special Leave Petition.

       It may be stated at this stage that this Court took the view that its
order dated October 12, 1987 was quite clear and did not require any
clarification whatsoever. The Court reiterated that by virtue of that
order, the sale stood set aside.. Upon receipt by the Commissioner of          G
Income Tax, Jaipur, of a contempt notice issued by this Court, the
appeals which had been filed by Surinder Nath Kapoor, were all dis-
posed of by him on February 4, 1988 in the light of the order of this
Court setting aside the sale.

      It was contended by the petitioner auction-purchaser in support          H
    216        SUPREME COURT REPORTS               [1988] Supp. 2 S.C.R.

A of its application for direction that the auction-sale having been con-
  firmed on March 14, 1986, the same could not be set aside. During the
  hearing of the petition of the auction-purchaser, there was a dispute as
  to the amount for which the auction sale was held. It was urged on
  behalf of the firm, M/s. Krishna Kapoor & Co. that it did not owe any
  amount to Inda-Kashmir Carpets & Handicrafts and, therefore, the
B garnishee order in execution of which its property was sold was illegal.
  Further, it was urged that M/s. Krishna Kapoor & Co. was only liable
  to the extent of Rs.3,38,146 to the Income Tax Department on account
  of its own Income Tax dues which amount it had already deposited.

          The Revenue could not produce before this Court any document
    showing the exact amount in respect of which M/s. Krishna Kapoor &
c   Co. was really indebted to the Indo-Kashmir Carpets & Handicrafts. It
    was only contended on behalf of the R-evenue that the .firm, M/s.
    Krishna Kapoor & Co., was liable to the tune of Rs.10,00,000 and odd
    arising out of the garnishee order, which was emphatically denied by
    the said firm. In that state of records, on April 26, 1988, this Court
D   made the following order:

                "The matter is adjourned to 9th May, 1988. In the
                meantime, as represented by the learned Additional
                Solicitor General, the Central Board of Direct Taxes will
                hold an enquiry to find out whether on the date of sale the
E               assessee was liable to the tune of Rs.10 lakhs and odd aris-
                ing out of the garnishee order and therefore in the auction
                sale held this amount was available to be included as debt
                to the Department. The report of the Enquiry Officer shall
                be made available to us on that· day. Parties are free to
                place further materials before us."
F
           Pursuant to the above order, the Central Board of Direct Taxes
     appointed Shri K.K. Veer, Director of Income Tax (Recovery), New
     Delhi, the Enquiry Officer. After holding an enquiry into the matter,
     the Enquiry Officer has since submitted his report. The report reveals
     a startling fact which will be stated presently. The IAC (Asst.) Range-
G    II, Amritsar, issued a show cause notice Clated October 12, 1984 under
     section 226(3) of the Act to M/s. Krishna Kapoor & Co. In the show
     cause notice, a demand of Rs.2,86,450, alleged to be due from the firm
     Krishna Kapoor & Co. to the firm Indo-Kashmir Carpets & Handi-
     crafts, was made. No reply was received by the Income Tax Officer
     from M/s. Krishna Kapoor & Co. in respect of the show cause notice.
H    Curiously enough, without passing a garnishee order for the sum of
                          S.N. KAPOOR v. U.0.1.                       217

Rs.2,86,450, a garnishee order for the sum of Rs.8,56,377 was passed         A
by the IAC (Asst.), Range-II, Amritsar, under section 226(3)(x) of the
Act. This fact,. which has been clearly stated in the report of the
Enquiry Officer, has not been denied before us by the Revenue. The
basis of passing the garnishee order dated December 10, 1984 was, as
pointed out by the Enquiry Officer in his report, a copy of a statement
of accounts filed by M/s. Inda-Kashmir Carpets & Handicrafts and a           B
letter dated September 27, 1984 written by two of its partners to the
Assessing Officer, inter alia, stating that M/s. Krishna Kapoor & Co.
was indebted to M/s Indo-Kashmir Carpets & Handicrafts to the tune
of Rs.8 lacs. In this connection, it is significant to notice that the IAC
(Asst.), Range-II, Amritsar, then holdn·g the post of Dy. Commis-
sioner of Income-tax (Central), Range-II, Ludhiana, in his letter
addressed to the Enquiry Officer stated, inter alia, that on the basis of    c
the balance-sheet available on the assessment records filed after the
garnishee order was passed, no amount was payable to M/s. Indo-
Kashmir Carpets {!l. Handicrafts by M/s. Krishna Kapoor & Co. as on
31.3.1982. A copy of the letter is Annexure-VII to the report of the
Enquiry Officer. The Enquiry Officer observed in his report as               D
follows:

           "There is nothing on record to show that the Assessing
           Officer made any attempt to call for the balance-sheet and
           accounts of the firm. There is also nothing on record to
           show that the assessing officer tried to record the state-        E
           ments of any or of all the partners specially when the filing
           of balance-sheets and statement of accounts was being
           delayed intentionally or otherwise on the ground that there
           were disputes among the partners. The assessing officer
           was assessing both the firms and all th~ partners of the
           firm, yet no attempt was made by him to include the arrears       F
           of the partners also in the show cause notice issued under
           s. :226(3) on 15.10.84 ............................... -


           In view of the facts mentioned above, I express my regrets
           that I am unable to give a finding in respect of the amount G
           of Rs.8,56,377.55 mentioned in the garnishee order since
           without co-operation of assessee and books of account of
           both the firms and partners, I am unable to establish
           whether M/s. Krishna Kapoor & Co. owed this amount to
           M/s. Indo-Kashmir Carpets.& Handicrafts. I still hold that
           the Assessing Officer at the time of issue of garnishee order· H
    218        SUPREME COURT REPORTS              [1988] Supp. 2 S.C.R.

A              should· have verified the amount being mentioned by him
               both in the show cause notice as well as in the garnishee
               order passed by him u/s 226(3)(x) of the LT. Act, 1961,
               which he failed to do, with all the powers of production of
               books as well as summoning the partners of the firm uls 131
               of the LT. Act, 1961 being at his command."

        It is manifestly clear from the observations of the Enquiry
  Officer extracted above that he could not come to a finding that a sum
  of Rs. 8,56,377.55 in respect of which the garnishee order was1passed
  was actually due by Mis. Krishna Kapoor & Co. to Mis. Inda-Kashmir
  Carpets & Handicrafts. It is true that the Enquiry Officer has ob_served
C that both the firms did not co-operate in the matter, but it is equally
  true that the Revenue had failed to substantiate that the said sum was
  due by Krishna Kapoor & Co. to the other firm. The most glaring fact
  that has been found by the Enquiry Officer is that although the !AC
  (Astt.), Range-II, Amritsar, issued a show cause notice to Krishna
  Kapoor & Co. under section 226(3) in respect of Rs.2,86,450, yet he
D issued a garnishee order for Rs.8,56,377.55. It has been observed by
  the Enquiry Officer that it was due to the carelessness of the officer
  concerned that he did not issue the show cause notice for the sum of
  Rs.8,56,377.55 for which -a garnishee order was issued, but such
  carelessness, in our opinion, is unpardonable. Moreover, as stated
  already, there is no satisfactory evidence before the !AC (Asst.),
E Range-II, Amritsar, that a sum of Rs.8,56,377.55 was due by the firm,
  Krishna Kapoor & Co., to Mis. Inda-Kashmir Carpets & Handicrafts,
  inasmuch as the Enquiry Officer himself has been unable to come to a
  finding in respect of that amount. Thus, without giving the firm,
  Krishna Kapoor & Co., an opportunity of showing cause in respect of
  the sum of Rs. 8,56,377.55 under section 226(3) of the Act, a garnishee
F order in respect of that amount was passed under section 226(3)(x) and
   a very valuable property of the firm was put up to auction and sold to
   the petitioner.

        The contention of the petitioner auction-purchaser as well as of
  the Revenue is that the petitioner being a third party auction-pur-
G chaser, the sale could not be set aside after it was confirmed on March
  14, 1986. On the other hand, it has been strenuously urged on behalf of
  the firm, Krishna Kapoor & Co., that as no show cause notice was
  issued to it under section 226(3) of the Act in respect of the sum of
  Rs.8,56,377.55, the garnishee order passed under section 226(3)(x) for
  the amount and the sale held in execution of such an order are null and
H void.
                           S.N. KAPOOR '· U.O.l.                        219

        s·ection 226(3)(x) provides for the issue of a notice on a             A
  garnishee. Section 226(3)(vi) provides as follows:

              "S. 226(3)(vi). Where a person to whom a notice under this
              sub-section is sent objects to it by a statement .on oath that
              the sum demanded or any part thereof is not due to the
              assessee or that he does not hold any money for or on            B
              account of the assessee, then nothing contained in this sub-
              section shall be deemed to require such person to pay any
              such sum or part thereof, as the case may be, but if ii is
              discovered that such statement was false in any material
             .particular, such person shall be personally liable to the
              Income-tax Officer to the extent of his own liability to the
              assessee on the date of the notice, or to the extent of the
                                                                               c
              assessee's liability for any sum due under this Act,
              whichever is less."

        The object of serving a notice under clause (3)(vi) of section 226
 is to give the garnishee an opportunity to admit or deny his liability for    D
 the amount mentioned in the notice. Under clause (i) of section
 226(3), if the garnishee objects to the notice by a statement on oath
 that the sum demanded or any part thereof is not due to the assessee,
 then the garnishee will not be required to pay any such sum or part
 thereof, as the case may be. Thereafter, clause (x) of section 226(3)
 provides as follows:                                                          E

             "S. 226(3)(x). If the person to whom a notice under this
             sub-section is sent fails to make payment in pursuance
             thereof to the Income-tax Officer, he shall be deemed to be
             an assessee in default in respect of the amount specified in
             the notice and further proceedings may be taken against           F
             him for the realisation of the amount as if it were an arrear
             of tax due from. In the manner provided in sections 222 to
             225 and the notice shall have the same effect as an attach-
             ment of a debt by the Tax Recovery Officer in exercise of
             his powers under section 222."
                                                                               G
        Under clause (xf, if the person to whom a notice is sent fails to
  make payment in pursuance thereof to the Income-tax Officer, he shall
  be deemed to be an assessee in default in respect of the amount
· specified in the notice. The amount that was specified in the notice was
  Rs.2,86,450. The firm, M/s. Krishna Kapoor & Co., did not deny on
  oath that the said sum demanded or any part thereof was due by them          H
        2.20       SUPREME COURT REPORTS               [1988] Supp. 2 S.C.R.

        to lndo-Kashmir Carpets & Handicrafts. So, in view of clause (x),
A
        Mis.Krishna Kapoor & Co. shall be deemed to be an assessee in
        default in respect of the said sum of Rs.2,86,450 as specified in the
        notice and not for any other amount. The Income Tax Officer, how-
        ever, put up the property to sale for Rs.8,56,377.55, which was not at
        all specified in the garnishee notice. In other words, the garnishee
B       order was for a fictitious sum of Rs.8,56,377.55 inasmuch as it was not
        mentioned in the notice under section 226(3) of the Act.

       There can be no doubt that when an order is made for the pay-
  ment of a fictitious sum without giving any opportunity to a person,
  against whom the order is made, to show cause against the passing of
  such an order for the said sum, the order is a nullity. In other words, in
C the eye of law it will be deemed that there was no existence of such an
  order and any step taken pursuant to or in enforcement of such an
  order will also be a nullity. It will be tantamount to selling a property
  in execution of a decree when the decree has no factual existence. In
  such a case also, the sale will be null and void. The garnishee order
D that was passed by the !AC (Asst.), Range-II, Amritsar, for the sum of
  Rs.8,56;377.55 is, therefore, null and void.

            In this connection, we may refer to a decision of the Privy
      Council in Baijnath Sahai v. Ramgut Singh, Vol. 23 I.A. 45. In that
      case, a property was sold in execution of a certificate issued under the
    E Bengal Public' Demands Recovery Act, 1880, when, as a matter of
      fact, there was no existence of any certificate. The Privy Council
      observed as follows:

                    "If no such certificate is given then the whole basis of the
                    proceeding is gone. There is no judgment, there is nothing
    F               corresponding to a judgment or decree for payment of the
                    amount, and there is no foundation for the sale. The
                    authority to proceed to the sale is based on the certificate
                    which has the effect, as has been already pointed out, of a
                    judgment or decree, and if no judgment or decree is given,
                    and no certificate is filed having the force or effect of a
    G               judgment or decree, there can be no valid sale at all."

             In the instant case, the garnishee order that was passed was a
      nullity and any sale held pursuant to such an order is also a nullity. It is
      quite immaterial that the sale was confirmed. When a decree or order
      is illegal, any sale held in execution of such a decree or order and
    H confirmed cannot be set aside on the ground that it was illegal when
                         S.N. KAPOOR v. U.0.1.                        221

the sale is in favour of a third party. But, when a decree or order is a     A
nullity, it will be deemed to have no existence at all and any sale held
in execution of such a decree or order must also be held to be null and
void. In the language of the Privy Council in the above case, there is nci
judgment, there is nothing corresponding to a judgment or decree for
payment of the amount, and there is no foundation for the sale.

      For all this, the Revenue is responsible and is liable to com-
pensate the auction-purchaser who is a stranger to the litigation. Our
attention has been drawn by the learned Additional Solicitor General
to the order dated October 12, 1987, which has already been extracted
above, showing that a representation on behalf of the said Surinder
Nath Kapoor, had been made to this Court that the Income Tax dues
of the fitm, Krishna Kapoor & Co., to the extent of Rs.3,38, 146 had
                                                                             c
already been paid to the Department, when, admittedly, on the date
the said order was passed it was not paid, but on the next day. It is
pointed out by the learned Additional Solicitor General that by mak-
ing a false representation to this Court the firm and/or its partner,
Surinder Nath Kapoor, got an order setting aside the sale. In the            b
circumstances, it is submitted that the order setting aside the sale
shouid be recalled.

      We are unable to accept the contention. It has already been held
by us that the sale is a nullity and even though there was some misre-
presentation on the part of the firm, it is difficult for us to recall the   E
order setting aside the sale which is null and void. We are, however, of
the view that in view of the conduct of the firm and/or its said partner,
they should share along with the Revenue a part of the compensation
that may be allowed to the auction-purchaser.

       It has already been noticed that a snm of Rs.37 ,81,000 was de- F
posited by the auction-purchaser. The auction-purchaser will be en-
titled to withdraw the said amount unconditionally. The Revenue shall
see that the said amount is refunded back to the auction-purchaser.
Further, the auction purchaser will be entitled to get interest on the
said amount at the rate of fifteen per cent per annum for a period of
two years and a half, during which the amount remained blocked, by G
way of compensation. The amount of interest calculated at the said·
rate fot ihe said period comes to Rs.14,17,875. Out of the said
amount, the Revenue shall pay to the auction-purchaser a sum of
Rs. il,17,875 and the remaining sum of Rs.3,00,000 shall be paid to the
auction-purchaser by the firm M/s. Krishna Kapoor & Co. and/or the
said Surinder Nath Kapoor, who was the petitioner in the Special H
    222         SUPREME COURT REPORTS               [1988] Supp. 2 S.C.R.

A Leave Petition. The said firm and/or Surinder Nath Kapoor shall pay
  the said amount of Rs.3 lacs to the auction-purchaser within three
  months from date, in default the auction-purchaser will be entitled to
  execute this order and realise the same by the sale of the self-same
  property or such portion thereof as will be sufficient for the realisati\)n
  of the said amount. The Revenue is also directed to pay the said sum of
B
  Rs.11, 17,875 to the auction-purchaser within a period of two months
  from date.

         The C.M.P. is disposed of as above. There will, however, be no
    order as to costs.

    S.L.



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