K. BASAVARAJAPPAversusTAX RECOVERY COMMISSIONER, BANGALORE AND OTHERS

                         K. BASAVARATAPPA                                   A
                                    v.
      TAX RECOVERY COMMISSIONER, BANGALORE AND
                      OTHERS

                          OCTOBER 11, 1996
                                                                            B
           [DR. A.S. ANAND AND S.B. MATMUDAR, JJ.]

       Income Tax Act, 1961, Income Tax Rules,-Rule 60 of the Second
Schedule-Locus Stan di of proposed purchaser to make application for setting
aside auction sale-Deposited the amount-Held by mere agreement to sell C
the appellant got no interest in the property put to auction and cannot claim
to get the auction sale set aside by making an application and depositing the
amount.

       Rule 16(1) and 16(2) Read with Rules 51 & 48 Agreement of
sale-Defaulter-No pennission of tax recovery officer-Held entering into an D
agreement bypassing the statutory requirements cannot claim any legal interest
for setting aside the auction sale.

       D has committed default in payment of Income Tax for the relevant
assessment year. He has entered into an agreement of sale of certain E
property with the appeUant. The appellant filed a suit for specific perfor·
mance when D failed to execute the sale deed. In the meantime, tax recovery
officer attached the property and auctioned it for recovery of the tax dues
from the defaulter. The appellant within 30 days from the date of auction
sale filed an application under Rule 60 of the Second Schedule to the
Income Tax Act. The Appellant also deposited the tax dues of the defaulter F
and prayed for setting aside of the auction sale. When the application of
the appellant was refused he approached the High Court in Writ Petition
challenging the rules. The said writ petition was allowed by the High Court
holding that the application made by the appellant was maintainable
under Rule 60. The Division Bench of the High Court reversed the order G
of the Single Judge.

       In this appeal, it was contended by the appellant that he has made
an application within 30 days of the auction sale along with authority letter
entitling him to deposit the tax amount on behalf of the defaulter; that he
has sufficient locus standi as his suit for specific performance was pending H
                                   523
    524                  SUPREME COURT REPORTS [1996] SUPP. 7 S.C.R.

A on the date of auction sale and was decreed by consent of parties the very
    next day, and that the High Court erred in taking the view that his
    application under Rule 60 was not maintainable.

           Revenue contended that the application moved by the appellant could
    not have been entertained and was rightly refuted by the tax authority as
B   such agreement was violative of Rule 16 sub Rule (1) and Rule 51 read with
    Rule 48, and that the appellant could not be said to be a person having any
    legal interest in the property put to action.

          Dismissing the appeal, this court

C          HELD : 1. The original defaulter whose property was put to auction
    had locus standi to move an application himself or through general power
    of attorney holder under Rule 60 of the Income Tax Rules for getting it set
    aside. In this case, the applicant himself has moved an application as a
    prospective purchaser of property. On the date of application he was not
D   armed with any decree granting specific performance of the agreement. By
    mere agreement to sell, the appellant got no interest in the property to
    auction to enable him to apply for setting aside under Rule 60.
                                                         [530-B, 532-B, 534-C]
           2. When the defaulter agreed to sell off his property to the appellant
E   he totally bypassed the requirement of Rule 16(2). If a party with an open
    eye bypasses the statutory requirement of Rule 16(1) and gets an agreement
    to sell executed by defaulter, he cannot on the basis of such an agreement
    claim to get the auction sale of defaulter's property set aside by depositing
    the amount. It would amount to circumventing statutory provision of Rule
    16(1) and 2 read with Rules 51 and 48. Therefore the appellant had no locus
F   standi to move an application for getting the auction sale set aside. [532-E,
    533-D, 534-F]

          D.V. Satyanarayana and Others v. Tax Recovery Officer and Others,
     (1992) 197 ITR 407, approved.

G          M. Rajagopal v. Secretary, State Transport Authority, Trivandrnm and
     Others, (1978) 115 ITR 864, referred to.

           CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 13049-50
     of 1996.

H          From the Judgment and Order dated 13.2.92 of the Karnataka High
     K. BASAVARAJAPPAv. TAX RECOVERY COMMR [S.B. MAJMUDAR,J.)          525

Court in W.A. No. 293-721 of 1991.                                            A
      P.P. Rao, A.V. Palli and Mrs. Pekha Palli for the Appellant.

     Harish N. Salve, R.R. Mishra, A.A. Kulkarni, Mukul Mudgal, Y.P.
Mihajan, B.K. Prasad and S.N. Terdol for the Respondents.
                                                                              B
      The Judgment of the Court was delivered by

      S.B. MAJMUDAR, J. Leave granted in these Special Leave Petitions.

     By consent of learned advocates of contesting parties the appeals
were heard finally and are being disposed of by this Judgment.                C
      A short question falls for our consideration in these two appeals
arising out of a common judgment of Division Bench of the Karnataka
High Court in Writ Appeal No. 293 of 1991 connected with Writ Appeal
No. 721 of 1991. The question is whether the co~mon appellant in these        D
appeals who was original petitioner no. 2 in these Special Leave Petitions
had any locus standi to prefer an application under Rule 60 of the Second
Schedule to the Income Tax Act, 1'961 for setting aside the sale of immov-
able property of the defaulter income tax assessee froin whom he is alleged
to have greed to purchase the said property and which property was sold
in auction by the Income Tax Department in execution of Certificate of        E
Recovery of Income Tax issued against the defaulter, owner of the proper-
ty.

       In order to answer this question the backdrop facts may be noted at
the outset. One Y.S. Devendra Murthy who was the owner of the property        F
auctioned by the Income Tax Department had committed default in pay-
ment of income tax dues assessed against him for the relevant assessment
years. The Tax Recovery Officer under the Income Tax Act issued notice
to him on 3rd September 1973 as per Rule 2 of the Second Schedule to
the Income Tax Act which deals with 'Procedure for Recovery of Tax'. The
said defaulter Shri Y.S. Devendra Murthy entered into an agreement dated      G
20th November 1982 with the common appellant to sell his property being
agricultural land being Survey No. 20 and part of Survey No. 21 for Rs.
2,80,000 and received an advance of Rs. 1,62,000. The Sale Deed was to be
executed by said Sh~i Y.S. Devendra Murthy within eight months which
time limit was further was further extended by five months. The appellant     H
    526                   SUPREME COURT REPORTS [1996) SUPP. 7 S.C.R.
A filed a suit for specific performance of the Agreement to Sell on 2nd
   January 1984 alleging that said Shri Y.S. Devendra Murthy had failed to
   execute the Sale Deed pursuant to the Agreement. Earlier an ex parte
   decre.e was passed in the said suit being Original Suit No. 5 of 1984 but
   the said decree was set aside and the proceedings remained pending. In
.B the meantime by an order dated 11th February 1988 the Tax Recovery
   Officer attached the aforesaid properties belonging to Y.S. Devendra
   Murthy and thereafter a proclamation of sale was issued for putting the
   said properties to auction sale for recovering the tax dues of the defaulter.
   The Tax Recovery Officer brought the said attached properties to sale on
   14th March 1988. The third respondent herein was the successful bidder
c  at the said auction and he became auction purchaser of these properties.
   Thereafter on 12th April 1988, that is, within thirty days from the date of
   the auction sale the appellant filed an application under Rule 60 of the
   Second Schedule to the Income Tax Act. To the said application was
   annexed a letter from the general Power of Attorney holder of the defaulter
 D Shri Y.S. Devendra Murthy authorising him to deposit the amount of tax
   arrears. The appellant along with the said application sought to deposit the
   interest and solatium at the rate of 5% with costs. The appellant also
   deposited Rs. 3,42,322 being the arrears of tax with interest and solatium
   with costs with the Tax Recovery Officer on the same day, that is, 12th
 E April 1988. He accordingly prayed for setting aside the auction sale. The
   Tax Recovery Officer by his order dated 20th April 1988 rejected the said
    application by holding that as he was directed by the Commissioner of
   Income Tax, Karnataka II, Bangalore to confirm the auction sale he had
    confirmed the auction sale and hence the application of the appellant was
 F rejected. The appellant carried the matter in appeal before the .Tax
    Recovery Commissioner who rejected the said appeal and .passed order
    dated 13th June 1988. At that stage the appellant along with the general
    Power of Attorney holder of Y.S. Devendra Murthy, named Shri Y.S.
    Surender filed a writ petition in the Karnataka High Court challenging the
    orders of the Tax Recovery Officer and Tax Recovery Commissioner. A
 G learned Single Judge of the High Court by his order dated 14th December
    1990 allowed the writ petition and quashed the orders dated 20th April
    1988 passed by Tax Recovery Officer and dated 13th June 1988 passed by
    Tax Recovery Officer and dated 13th June 1988 passed by Tax Recovery
    Commissioner. The learned Single Judge held that application moved by
 H the appellant was maintainable under Rule 60 and as he had in the
     KBASAVARAJAPPAv. TAXRECOVERYCOMMR(S.B.MAJMUDAR,J.]                   527
meantime withdrawn the deposited amount he permitted the general                 A
Power of Attorney holder of Y.S. Devendra Murthy to make deposit within
four weeks and directed the Tax Recovery Officer to deal with the matter
in accordance with law. An amount of Rs. Rs. 4,45,783 was accordingly
deposited with the Tax Recovery Officer. The aforesaid order of the
learned Single was challenged by the Tax Recovery Commissioner, Kar-             B
nataka II, Bangalore and Tax Recovery Officer by way of Writ Appeal no.
293 of 1991 while respondent no. 3 preferred Writ Appeal no. 721 of 1991
against the very judgment and order of the learned Single Judge as by the
said order of the learned Single Judge the auction sale in favour of
respondent no. 3 was liable to be set aside if the remanded proceedings
under Rule 60 were successful. Both these writ appeals were heard                C
together by a Division Bench of the Karnataka High Court consisting of
S.P. Bharucha, CJ. (as he then was) and Justice Shivraj Patil. The Division
Bench of the High Court came to the conclusion that the appellant's
Application under Rule 60 was not maintainable and he had not locus
standi to file such an application. Consequently the writ appeals were           D
allowed and the writ petition was dismissed with the result that the order
of the Tax Recovery Officer dated 20th April 1988 and the further order
of the Tax Recovery Commissioner dated 13th June 1988 came to be
confirmed. Aggrieved by the common order of the Division Bench of the
High Court in the aforesaid two writ appeals two Special Leave Petitions         E
were moved in this Court initially by two petitioners the first petitioner was
Y.S. Surendra, the general Power of Attorney holder of the defaulter and
the present appellant was petitioner no.2 But during the proceedings at
notice stage the original petitioner no. 1, the Power of Attorney holder or
the defaulter, Y.S. Surendra withdrew from contest with the result that
original petitioner no.2 remained the solitary petitioner in both the S.L.Ps     F
and has now pursued the present two appeals as the sole appellant.


       Learned senior counse~ Shri P.P. Rao, for the appellant submitted
that the Division Bench of the High Court erred in taking the view that
the appellant's application under Rule 60 of Second Schedule to the              G
Income Tax Act was not maintainable. That his application was backed up
by the author~ty letter entitling him to deposit the tax amount on behalf of
the defaulter and that authority letter was duly signed by the Power of
Attorney holder of the defaulter and that application was moved within
thirty days of the auction sale. It was, therefore, perfectly maintainable and   H
    528                  SUPREMECOURTREPORTS [1996JSU~P. 7S.C.R.

A it was too much to contend that the defaulter cannot get the amount
  deposited through anyone much less through the appellant who had inter-
  est in the property as his suit for specific performance was not only pending
  on the date of the auction' sale but had got decreed by consent on the very
  next day of moving such application. Shri P.P. Rao submitted that the
B application was moved on 12th April 1988 and the suit in favour of the
  appellant was decreed by consent of parties on the next day, that is 13th
  April 1988. Thus on the day on which the Tax Recovery Officer rejected
  the appellant's application he was already having the full title in this
  property as successor-in- interest of the defaulter. It was vehemently sub-
C milted that even assuming it is held that the defaulter through his Power
  of Attorney holder had not filed a separate application! under Rule 60 and
  had merely supported the application of the appellant even then as per_ the
  said Rule the appellant had sufficient locus standi as he was interested in
  the property which was subject- matter of the auction sale and that
  Revenue was only concerned with its tax dues. Once the deposit fully met
D the said claim of the Revenue it could not insist on such a technicality that
  the appellants' application was not maintainable qua the auction purchaser
  respondent no. 3 who did not get any better right by the auction in his
  favour which was liable to be set aside on payment of tax dues within thirty
  days of the auction by the defaulter on by any of his agents. In support of
E this contention strong reliance was placed on the decision of a learned
  Single Judge of the Kerala High Court in the case of M. Rajagopal v.
  Secretary, State Transport Authority, Trivandrnm and others, (1978) 115
  I.T.R. 364.

F       On t)te other hand learned counsel for the Revenue as well as
  learned senior counsel Shri SalVo for respondent no. 3, auction purchaser
  vehemently contended that the Division Bench of the High Court was
  perfectly justified in taking the view that appellant's application was not
  maintainable under Rule 60 of the Rules as his alleged agreement to
  purchase the property was void from the inception as the said agreement
G dated 20th November 1982 flew in the face of statutory prohibition
  engrafted by Rule 16 sub-rule (1) of the Rules in the Second Schedule of
  the Income Tax Act. It was also submitted that once the defaulter's
  property was attached on 11th February 1988 as per Rule 51 of the Rules
  the attachni.ent related back to the date of service of notice that is 3rd
H september 1973 and, therefore, the agreement itself became void. In any
     KBASAVARATAPPAv. TAXRECOVERYCOMMR(S.B.MAJMUDAR,J.]                 529

case according to Shri Salve the application moved by the appellant could A
not have been entertained and was rightly rejected by the Tax authorities
as because of such an agreement which was violative of provisions of Rule
16 sub-rule (1) and Rule 51 read with Rule 48 the appellant cold not be
said to be a person having any legal interest in the property put to auction.
That such an interest must be of a person who had acquired some legal B
right or interest in the property prior to the issuance of notice under Rule
2 of the Second Schedule and would not cover a person whose transaction
with the defaulter was within the sweep of the prohibition of Rule 16
sub-rule (1) and Rule 51 read with Rule 48 of th.e Rules. In Rejoinder
learned senior counsel Shri Rao for the appellant submitted that the
application moved by the appellant could not be said to be by an un-           c
authorised person or a stranger to the property as he was having sufficient
legal interest in the property and his agreement was not void ab initio but
was subject to the superior right of recovery of the tax by the Revenue and
once that was assured by the appellant by depositing the entire amount
with interest and costs the Revenue could not contend that it would still .D
insist on going ahead with the auction and getting it confirmed. That the
appellant had moved application under Rule 60 within the permissible limit
of thirty days from the date of auction.

      In the light of the aforesaid rival contentions we now proceed to deal
with the question posed for our consideration. Rule 60 of the Rules in the     E
Second Schedule to the Income Tax Act reads as under :

        "60. (1) Where immovable property has been sold in execution of
        a certificate, the defaulter, or any person whose interests are
        affected by the sale, may, at any time within thirty days from the     p
        date of the sale, apply to the Tax Recovery Officer to set aside the
        sale, on his depositing.

        (a) the amount specified in the proclamation of sale as that for
            the recovery of which the sale was ordered, with interest
            thereon at the rate of fifteen per cent per annum, calculated G
            from the date of the proclamation of sale to the date when
            the deposit is made; and

        {b) for payment to the purchaser, as penalty, a sum equal to five
            per cent of the purchase money, but not less than one rupee.       H
    530                  SUPREME COURT REPORTS [1996] SUPP. 7 S.C.R.
                                                                                        I-
A           (2) Where a person makes an application under rule 61 for setting
            aside the sale of his immovable property, he shall not, unless he
            withdraws that application, be entitled to make or prosecute an
            application under this rule."

    It is no doubt true that original defaulter Shri Y.S. Devendra Murthy whose
B
    property was put to auction had sufficient locus standi to move an applica-
    tion under Rule 60 within thirty days of the sale for getting it set aside on
    his depositing the requisite amount as laid down by the said provision and
    his general Power of Attorney holder could also legitimately contend that
    he had locus standi to move such an application on behalf of the defaulter.
c   However for reasons best known to him he had not done so. It is not the
    case of the appellant that Shri Y.~. Devendra Murthy or his Power of
    Attorney holder S:\iri Y.S. Surendra had moved such an application. On
    the contrary his consistent case is that he himself had moved such an
    application but he was supported by the authority given by the Power of
    Attorney holder of Y.S. Devendra Murthy to deposit the amount of tax
D
    arrears. Shri P.P. Rao, learned senior counsel for the appellant was right
    when he contended that once an appropriate application is moved by the
    defaulter or his Power of Attorney holder under Rule 60, the further
    question as to from which source he gets money for being deposited or
    through whom he gets the money deposited would pale into insignificance .
E   and that even a peon of the defaulter can also carry out the ministerial act
    of actually depositing the money on his behalf. But unfortunately for the
    appellant such is not the case here. When we turn to the application dated
    12th April 1988 moved by the appellant under Rufo 60 it becomes at once
    clear that it was not the defaulter or his Power of Attorney holder who was
F   moving this application but it was only the appellant who was armed with
    an agreement to purchase the property put to auction who was moving this
    application and the moneys were being deposited by him on his own behalf
    and for which action he had got authority from the power of Attorney            '
    holder of the defaulter. The following pertinent recitals in the application    .,.
    made this position clear :
G
                "I am the prospective purchaser of the properties bearing Nos.
            20/1, 2, 3 and 21. situated at Byaderahalli village. Viswaneedam
            Post, Bangalore - 560 091, and Y.S. Devendra Murthy has executed
            an agreement in this behalf agreeing to sell the properties. I have
H           filed the suit for specific performance of the contract to enforce
     KBASAVARAJAPPAv. TAXRECOVERYCOMMR(S.B.MAJMUDAR,J.)               531

        the said agreement in O.S. No. 5/1984 on the file of the Additional A
        Civil Judge, Bangalore. I have paid the amount also in advance. In
        the meantime, your Hon'ble Authority was pleased to hold auction
        on 14.3.1988 in respect of Survey No. 201, 2, 3 for the recovery of
        arrears due in respect of Sri Y.S. Devendra Murthy. Still there is
        time to pay the amount by the said Y.S. Devendra Murthy. As I
                                                                            B
        am having right and interest over the property that has been
        auctioned I am ready and willing to pay the amount in full. To this
        effect. Shri Y.S. Surendra the brother and the Power of Attorney
        Holder of Sri Y.S. Devendra Murthy has authorised me to pay the
        amount. The said authorisation letter is enclosed herewith. Ac-
        cordingly. I am prepared to pay the amount that your Hon'ble        c
        Authority is entitled to recover from Y.S. Devendra Murthy. The
        amount detailed below may kindly be accepted and the sale may
        kindly be set aside."


In the prayer clause of the said application it has been stated that above D
application is filed under Rule 60 of Schedule II of Income Tax Act. 1961
and the sale be set aside by accepting the amount deposited by him. It is,
of course, true as contended by learned senior counsel Shri Rao for the
appellant that along with this application he also annexed the authority
letter given to him by the Power of Attorney holder of the defaulter. He E
invited our attention to the said letter annexed to the appellant's applica-
tion under Rule 60. The said letter is addressed to the Income Tax
Commissioner by the Power of Attorney holder of the defaulter Shri Y.S.
Devendra Murthy. By the said letter the Power of Attorney holder has
informed the Income Tax Commissioner that he WdS prepared to pay the
amount that was due to his brother as his Power of Attorney holder and
                                                                              F
in this behalf he had authorised K. Basavarajappa, plaintiff in Original Suit
No. 5 of 1984 on the file of Additional Civil Judge, Bangalore (the appel-
lant herein), to pay the amount. Now it becomes clear that this letter
addressed to the Income Tax Commissioner, Third Circle, Bangalore,
could by no stretch of imagination be considered to be an applicatfon G
under Rule 60, moved by the defaulter or his Power of Attorney holder
Shri Y.S. Surendra as such an application has to be moved before the Tax
Recovery Officer who has conducted the auction sale with the prayer to
get it set aside. This letter is merely an intimation to the Income Tax
Commissioner that he had authorised the appellant, Plaintiff of the suit, to H
    532                  SUPREME COURT REPORTS [1996] SUPP. 7 S.C.R.
A make payment on behalf of his defaulter brother. Such a letter, therefore,
  could not constitute an appropriate application under Rule 60 by the
  defaulter or his Power of Attorney holder for getting the auction sale set
  aside. So far as the appellant is concerned he no doubt moved that
  application under Rule 60. But his application was moved on the basis that
B he head already filed a civil suit for specific performance of his agreement
  to purchase the suit property which was subject-matter of auction. Thus he
  was putting forward his own claim as prospective purchaser of the propr.r-
  ty. On the date of the application he was not armed with any decree
  granting specific performance of the agreement. We also find considerable
C substance in the submission of Shri Salve, learned senior counsel for the
  auction purchaser that when equities are to be balanced between the two
  rival claimants, namely, the prospective purchaser of the auctioned proper-
  ty under an agreement to sell on the one hand and the auction purchaser
  who had purchased the property in the tax recovery proceedings on the
D other, it has to be seen whether the appellant could claim any legal interest
  and even a preferential interest in the property which would entitle him to
  get the auction sale set aside. In this connection Rule 16(2) on which strong
  reliance was placed by Shri Salve, is found clearly to have hit the said
  agreement in favour of the appellant. To recapitulate, notice under Rule 2
  of the Second Schedule of the Income Tax Act was issued to the defaulter
E on 3rd September 1973. It may be that the attachment might have taken
  place years afterwards but on 20th November 1982 when the defaulte!
                                                                                  -
  agreed to sell off his property to the appellant he totally bypassed the
  requirement of Rule 16(2) which lays down that where a notice has been
  served on the defaulter under Rule 2 the defaulter or his representative-
F in-interest shall not be competent to mortgage, charge, lease or otherwise
  deal with any property belonging to him except with the permission of the
  Tax Recovery Officer, nor shall any civil court issue any process against
  such property in execution cf a decree for the payment of money. By
  entering into such an agreement to sell his property the defaulter had
G clearly committed breach of Rule 16(1) and had bypassed the procedure
  laid down therein for getting permission of the Tax Recovery Officer. In
  this connection Shri P.P. Rao, learned senior counsel for the appellant was
  right when he contended that such dealing with the· property by the
  defaulter was not absolutely prohibited but it was subject to the permission
H of the Tax Recovery Officer while under sub-rule (2) of Rule 16 once an
       KBASAVARAJAPPAv. TAX RECOVERY COMMR. [S.B.MAJMUDAR,J.]            533

  att~chment has been made under this sub-rule any private transfer or A
  delivery of the property attached or of any interest therein and any pay-
  ment to the defaulter of any debt, dividend or other moneys contrary to
  such attachment, shall be void as against all claims enforceable under the
  attachment. However this dos not improve the situation for the appellant
  for the simple reason that once attachment was levied on 11th February B
  1988 by virtue of Rule 51 it related back to the date of the notice, that is,
  3rd september 1973 and the appellant's agreement was in between. It was
  contended by Shri P.P. Rao relying on the judgment of the Kerala High
  Court in the case of M. Rajgopal (supra) that all that Revenue was
  concerned with was security of its dues and consequently even though any
  transaction which was hit by the provisions of Rules 16(1) and (2), the
                                                                               c
  parties to such transaction would have sufficient interest to move an
  application under Rule 60 for setting aside the auction sale on offer to
  deposit full tax dues. It is not possible to countenance this submission. If
  a part); within open eyes bypass the statutory requirement of Rule 16(1)
  and gets an agreement to sell executed by the defaulter, it cannot on the D
  basis of such an agreement claim to get the auction sale of defaulter's
  property set aside by depositing the amount after the property is put to
  auction for recovering the tax dues of the department. It would amount to
  circumventing statutory provisions of Rule 16(1) and (2) read with Rule 51
  and 48 of the Rules. It must, therefore, be held as rightly submitted by Shri E
  Salve, learned senior counsel for respondent no.3 that the appellant had
  no locus standi to move the application dated 12th April 1988 for getting
  the auction sale set aside. It is also to be noted that he had no legal interest
  in the said property on the date of the application. It is axiomatic that mere
  agreement to sell creates no legal interest or right in the property which is p
  the subject-matter of the agreement. In this connection a Division Bench
  of the Karnataka High Court in D. V. Satyanarayana & Ors. v. Tax Recovery
  Officer & Ors., (1992) 197 I.T.R. 407 has taken the view that a person who
  had obtained an agreement to sell which is hit by Rule 16 of the second
  schedule to the Income Tax Act cannot make an application under Rule
  61 for setting aside the sale as a person holding interest in the property. G
  On the scheme of the Rules aforesaid this view represents the correct legal
  position. On the same analogy such an agreement holder cannot equally
  apply under Rule 60 in his own right to get such auction sale set aside. The
  decision of the learned Single Judge of the Kerala High Court heavily
' relied upon by learned senior counsel for the appellant is of no assistance H
    534                   SUPREME COURT REPORTS (1996) SUPP. 7 S.C.R.
A to him for the simple reason that in that case the court was not concerned
    with any attachment following the notice under Rule 2 of Schedule II to
    the Income Tax Act. The Court was concerned with the short question
    whether the Tax Recovery Officer could issue any notice to the transferee
    from the defaulter who had received notice under Rule 2 and whether such
B   a power flew from rule 16 sub-rule (1). It is no doubt true that it has been
    observed that there would be time lag between the service of notice and
    attachment of property and such time lag was fairly long since the Revenue
    might take time to ascertain the properties the defaulter is possessed of.
    And because of Rule 51 any attachment of immovable property is made
    operative from the date of service upon the defaulter to pay the arrears.
C   The question in the present case is entirely different. By mere agreement
    to sell the appellant got no interest in the property put to auction to enable
    him to apply for setting aside such auction under Rule 60 and especially
    when his transaction was hit by Rule 16(1) with Rules 51 and 48. Conse-
    quently he cold not be said to be having any legal interest to entitle him to
D   move such an application. Consequently no fault could be found with the
    decision of the Division Bench of the High Court rejecting the entitlement
    of the appellant to move such an application. It is, however, pertinent to
    note that though originally the power of Attorney holder of the defaulter
    was also a party to these proceedings as petitioner no. 1, pending these
    proceedings he had withdrawn from these proceedings and he has ac-
E   quiesced in the order of the High Court rejecting the appellant's claim
    from being entitled to move such an application. The order of the High
     Court qua the defaulter and his Power of Attorney holder has become
     final. Therefore, as on date the appellant is not supported by the defaulter
     or his Power of Attorney holder either. He has to swim or sink on his own.
F    Under these circumstances, therefore, the appellant must be held to be
     devoid of any locus standi for moving an application under Rule 60 of the
     Rules for setting aside this auction sale.

          In the result these appeals fail and are dismissed. In the fact and
    circumstances of the case there will be no order as to costs.
G
    S.V.K.I.                                                  Appeals dismissed.