1. This writ petition under Article 226 of the Constitution has been filed by M/s. Tikaram and Sons (P.) Ltd., Aligarh, for a writ of mandamus directing the respondents to sell the attached property towards the satisfaction of arrears of income-tax dues after evicting 'M/s. Malook Chand Cotton and Oil Mills, Aligarh (hereafter referred to as M/s. Malook Chand'). There is a further prayer for the issue of an order or direction in the nature of mandamus directing the respondents not to accept any payment from M/s. Malook Chand towards arrears of income-tax dues outstanding against the petitioner and further not to release the attachment of the business premises of the petitioner. There is yet another prayer for the issue of mandamus directing the respondents not to sell the shares of the directors of the petitioner-company towards the satisfaction of the income-tax dues outstanding against the petitioner.
2. It would be necessary to set out the facts somewhat in greater detail. The case set out by the petitioner-company in the petition is that it is incorporated under the Indian Companies Act, 1913, having its head office at Aligarh. It runs an oil mill and its property consists of oil mill premises, machinery, equipments and shares, the total assets being of the value of over Rs. 15,00,000. In between 1957-58 and 1969-70, the petitioner-company claims to have suffered heavy losses as a result of which it could not pay certain income-tax dues. Accordingly, the TRO, Aligarh, respondent No. 2, attached the movable assets of the petitioner-company on 18th October, 1972, against a demand of Rs. 1,07,402 and subsequently attached its land and buildings including fixed assets together with businesspremises on 13th February, 1974, against another demand of Rs. 4,65,194. It is also alleged that prior to the aforesaid attachments, shares of the company worth Rs. 5,80,000 belonging to the directors of the company and their relations as well had been attached against income-tax arrears of the petitioner. Subsequently another demand was raised in the sum of Rs. 1,17,540 by the ITO, A-ward, Aligarh, respondent No. 3, and recovery certificate in respect thereof was sent by him to respondent No. 2. According to the petitioner, by 1978, only a sura of Rs. 1,46,682 had remained due against the petitioner, the rest having been paid off.
3. On 10th of January, 1977, the petitioner executed a lease deed in favour of M/s. Malook Chand in respect of its business premises including plant, machinery, etc., for a period of eight months. The rent was fixed at Rs. 6,000 per month. The lease could be renewed for a further period of two years. This was done with the permission of the TRO, respondent No. 2, as required under Rule 66 of Schedule II to the I.T, Act, 1961 (hereafter 'the Act'). M/s. Malook Chand paid Rs. 48,000 by way of rent for the aforesaid period of eight months and that amount was paid by the petitioner to respondent No. 2. The approval had been given by respondent No. 2 by his order dated January 11, 1977, subject to certain conditions.
4. The respondent No. 2 by his letter dated 3rd of November, 1977, asked the petitioner to pay a sum of Rs. 18,000 being the lease money for the months of September, October and November, 1977, that is, for the period after the expiry of the aforesaid eight months' term of the lease. M/s, Malook Chand made that payment and thereafter respondent No. 2 by a letter dated 15th November, 1977, approved the extension of the lease for a period of two years. The petitioner's case is that the extension was granted without its consent and hence it made a representation on 28th November, 1977, and when no action was taken it sent a reminder on December 14, 1977, and also gave a notice to M/s. Malook Chand for vacating the business premises. When nothing was heard in the matter from respondent No. 2, the petitioner made an application under Rule 87 of Schedule II to the Act, for rectification of the order dated 15th November, 1977. That application was allowed by an order dated April 4, 1978, and the respondent No. 2 revoked the extension of lease which he had approved by his order dated November 15, 1977. During the pendency of these proceedings, M/s. Malook Chand made another payment of Rs. 24,000 directly to the Department, and the Department also served a notice under Section 226(3) of the Act, on M/s. Malook Chand on 23rd January, 1979, requiring it to pay to the Department the alleged lease money due from it to the petitioner. The amount demanded by that notice was Rs. 71,520. The petitioner has disputed the validity of the payment ofRs. 48,000 by M/s. Malook Chand as also of the aforesaid notice. It has been further alleged that after the payments made by M/s. Malook Chand there is still a sum of Rs. 1,94,000 payable by the petitioner to the Department by way of income-tax dues and the petitioner has been all along requesting the Department to put the attached property to auction but the Department has not been taking any action in that behalf with the result that they have now approached this court by way of this writ petition for the relief mentioned above.
5. The respondents originally were, the Commissioner of Income-tax, Agra, the TRO, Aligarh, and the ITO, A-Ward, Aligarh. Subsequent to the filing of this writ petition, it appears that respondent No. 2 by letter dated 4th April, 1978, cancelled his earlier order requiring Malook Chand to vacate the disputed premises. The petitioner, hence, by means of an amendment, added a further relief for a direction in the nature of certiorari for quashing the said order.
6. On behalf of the respondents two counter-affidavits, were filed, one by Sri D. N. Saxena, Inspector, attached to the TRO, respondent No. 2 and the other by Sri T. S, Raghav, Inspector, attached to the ITO, A-Ward, Aligarh, respondent No. 3. So far as the relevant facts set out in the petition are concerned, they have not been seriously disputed in these counter-affidavits. The averment that the shares of the company had been attached is of course not admitted. On the contrary, it has been stated that the shares had been kept by the petitioner as security with respondent No. 3. According to Sri D. L. Saxena the auction proceedings are under consideration and as per TRO's records a sum of Rs. 77,281 is still outstanding up-to-date after taking into consideration Rs. 42,000 out of Rs. 1,14,000 mentioned by the petitioner. It has also been stated that after the withdrawal of the extension of the lease deed the TRO has not taken any payment from the lessee. Lastly, it had been stated that it is expedient for the Revenue to recover the amounts due to it by sale of the shares. Sri D. S. Raghav as well has denied that the shares of the company had been attached. According to him the petitioner voluntarily kept 1,721 shares of the value of Rs. 100 each with the Department as security along with a signed blank application. Further, according to him, in compliance: with the notice under Section 226(3) of the Act, M/s. Malook Chand did not obtain the challan for Rs. 71,520 from the Department, but made payment of this amount on January 25, 1979, against a challan for self-assessment. The credit for this amount has been given by adjusting it against the demand for the assessment years 1957-58 and 1975-76 amounting to Rs. 55,441 and Rs. 16,078 respectively and thus there remains a demand of Rs. 560 only for 1975-76 being interest under Section 220(2) for the said year against the petitioner. However,the total demand outstanding against the company and its managing director and other directors as on the date of the filing of this affidavit amounted to Rs. 1,25,999. Lastly, it has been stated that it is open to the Department to sell any property of the defaulter which it thinks proper. The petitioner filed rejoinder-affidavits on November 2, 1979, to the counter-affidavits of Sarvasri D. N. Saxena and D. S. Raghav and apart from reiterating what had been said in the petition, averred that shares of the value of Rs. 5,83,000 had been given in security and in support of this assertion it filed a copy of its letter dated May 13, 1966, addressed to the I.T.O. A-ward, Aligarh, in which in paragraph 3, this fact was stated.
7. After these affidavits had been filed, M/s. Malook Chand made an application for impleadment on October 5, 1979, along with affidavits. That application was opposed by the petitioner. After hearing the parties, the application was allowed and M/s. Malook Chand was impleaded as respondent No. 4,
8. On behalf of respondent No. 4, the main counter-affidavit is the one filed on January 21, 1980, sworn by Ashok Kumar. The substance of the case set out in this affidavit is that the board of directors of the petitioner-company by a resolution dated November 18, 1976, approved the transfer of the entire 7,000 shares and management of the company for a total consideration of ,Rs. 10,50,000 and also resolved that pending finalization of the transfer a lease be granted in favour of respondent No. 4. This resolution was approved by the shareholders in the extraordinary general meeting of the company held on December 16, 1976. Thereafter, on January 10, 1977, a lease agreement was duly executed and registered and there was also an agreement to sell the shares executed on the same date. The TRO approved the lease on March 11, 1977, for a period of eleven months expiring on 31st August, 1977. Clause 7 of the lease deed conferred an option upon the lessee to extend the period of lease for a further period of two years. This clause reads as under :
'That initially, this lease is agreed upon for a period of 8 months subject to an extension of two years at the option of the lessee and the lessors will have no objection to the same. That the lessee is not legally bound to pay for any liability of the lessors but if the lessee is compelled to pay any amount on behalf of the lessors and in case the lessors are unable to repay the same, the lessee shall be legally entitled to continue to remain in possession and continue to run the mill till the time their money, spent on repairs, paid as advance and other payments made or money paid for and on behalf of lessors is not fully adjusted, and lessors shall have no objection to the same or entitled to claim possession of the mill premises under any circumstances whatsoever.'
9. Clause 9 of the deed further provided :
'Any amount received by the lessor as an advance or in any manner whatsoever will be confirmed to be an advance received to the lease money.'
10. It has been averred that the lease rent was duly deposited by the lessees with the lessors who in turn deposited that amount with the TRO. The answering respondent exercised its option for extension of the lease under Clause 7 aforesaid by means of a registered letter dated 25th August, 1977, addressed to the petitioner and further intimation was conveyed by means of telegram dated July 28, 1977.
11. It has been further set out that the other agreement which was in respect of sale of 7,000 shares for a sum of Rs. 10,50,000 was an independent agreement and it was stipulated that whatever money would be paid as part of the sale consideration or for clearing the liabilities of the petitioner as also the lease rent, will be adjusted against the aforesaid price of Rs. 10,50,000. Respondent No. 4 claims to have made a total payment of Rs. 3,75,000 to the petitioner under the agreement to sell the shares out of which the petitioner deposited a sum Rs. 1,44,000 towards the dues payable by it, with the Revenue. The total amount claimed to have been paid by respondent No. 4 comes to Rs. 4,91,148*58 and a chart containing the details of the same was subsequently filed with a supplementary counter-affidavit during the course of the hearing of the case.
12. It has been further contended that respondent No. 4 was entitled to the extension of the lease for a further period of two years after the expiry of the period of 8 months and consequently paid lease money to the TRO who by his order dated 15th of November, 1977, approved such extension. According to respondent No. 4, the petitioner was not entitled to have the extension cancelled in any circumstance whatsoever and the respondent No. 4 gave a reply to the petitioner's notice in this behalf. It has been averred that there was a subsisting lease between the parties and further that the TRO had no jurisdiction to review his earlier order and revoke the extension of the lease. In doing so, the TRO overlooked Clause 7 of the lease agreement, which has been reproduced above. After the TRO revoked the approval by his order dated April 4, 1978, the respondent No. 4 made a representation to the Commissioner and the IAC, Agra, and it was thereafter that the direction to vacate the premises issued to respondent No. 4 was withdrawn. It has been averred that even after the expiry of the period of lease the respondent No. 4 is entitled to continue in possession of the disputed properties in view of Clause 7 of the lease deed as also the terms of the agreement to purchase the shares dated January 10, 1977. In regard to notice dated January 22, 1979, which had been given by the Department to respondent No. 4 under Section 226(3) of the Act bywhich the respondent was required to deposit a sum of Rs. 71,520, it has been averred that respondent No. 4 in compliance with that notice deposited the said amount on January 25, 1979, and the same was adjusted towards the liability of the petitioner. Thus, in view of huge payments made by respondent No. 4 towards the liability of the petitioner-company, there was no occasion for taking possession of the mill premises and selling the same for the recovery of the tax liability of the petitioner. It has also been averred that the plant and machinery were never attached by the TRO and that the latter never put respondent No. 4 in possession of the same or of the land and building. He merely approved the lease and in pursuance of Clause 7 of the same, respondent No. 4 was entitled to make payments of the dues of the petitioner-company. Thus, in all, respondent No. 4 has paid a total sum of Rs. 4,91,148.58 and it has been averred that on the basis of the aforesaid two transactions respondent No. 4 is entitled to retain possession of the mill premises, plant and machinery, etc., and it is also entitled to enforcement of the agreement for sale of the shares.
13. It has been further averred that in spite of the fact that all the liabilities in respect of which the mill premises had been attached, had been adjusted/paid off by respondent No. A, the Department in league with the petitioner-company had not credited the same towards the liability of the petitioner and had not adjusted the same towards the outstanding dues and that was with a view to help the petitioner for defeating the claim of respondent No. 4. This inference was further strengthened by the fact that even though, in appeals, the Income-tax Appellate Tribunal, Delhi, granted major relief to the petitioner-company by its order dated 30th October, 1976, effect, had not given to that order. According to respondent No. 4 if effect is given to that order and if payments made by it are taken into consideration, it would be seen that there is no outstanding liability against the petitioner-company. It has been alleged that respondent No. 4 moved an application under Rule 12 of Schedule II to the Act on January 26, 1979, for release of the property so that respondent No. 4 may be able to enforce the aforesaid two agreements but that had not been done. It is claimed that the resolutions passed by the board of directors of the company on 16th November, 1976, and by the general body of the company at its extraordinary general meeting held on 16th December, 1976, are valid and the lease deed and the agreement to sell the shares executed on 10th January, 1977, in pursuance thereof are valid and enforceable in law.
14. It has further been averred that the petitioner suppressed material facts from the court in its writ petition and hence disentitled itself from the grant of any equitable or discretionary relief under Article 226 of the Constitution.
15. Rejoinder affidavits have been filed to this counter-affidavit by the petitioner and also on behalf of respondents Nos. 2 and 3.
16. On behalf of the petitioner it was submitted before us by his learned senior counsel, Shri Shanti Bhushan, that the payments made by respondent No. 4 cannot be taken notice of for writing oft the petitioner's liabilities, the reason being that no one can pay the income-tax dues payable by a person without his consent except, of course, when a notice is served on him under Section 220(3) of the Act. It was emphasised that it is not correct to say that the entire dues for which the disputed properties were attached stand satisfied. After the order was passed by the Appellate Tribunal, the ITO has certainly worked out the consequential refund which has become due to the petitioner, but the same has not been adjusted as yet and apart from that, the Department has moved the Tribunal for a reference. That matter has thus not become final. It was emphasised by Shri Shanti Bhushan that whatever payments have been made by respondent No. 4 after the expiry of the period of lease, that is, after August 31, 1977, cannot be taken into consideration to wipe off the petitioner's liability. Another submission made was that a lease of attached properties with the approval of the TRO under Rule 66 of Sch. II to the Act is not a private matter. The petitioner never gave its consent to the renewal of the lease. It is only the owner of a property who can create interest in the property in favour of a third person and even if it can be said that respondent No. 4 had a right of renewal, he would have to file a suit for specific performance of the contract. There would be no question of respondent No. 4 being a tenant by holding over or a tenant at sufferance or a statutory tenant. It was emphasised that there was no legal relationship subsisting between the petitioner and respondent No. 4 after the expiry of the period of lease and particularly when notice under Section 226(3) was served on respondent No. 4 in pursuance of which he claims to have made payment of Rs. 71,520.
17. Shri Shanti Bhushan further urged that since the petitioner did not want his dispute with respondent No. 4 to be settled in this writ petition, the petitioner did not implead respondent No. 4 as a party and it is only respondent No. 4 who has projected these disputes in this petition; the lease having expired, respondent No. 4 is only a trespasser and his anxiety is that the property should not be put to auction. According to the counsel the purpose of attachment implies an obligation to sell the property attached for realisation of the dues payable by the person whose property is attached.
18. On behalf of respondent No. 4, his learned counsel, Sri L.M. Singhvi, made the following submissions before us that the petition has become infructuous inasmuch as no demand of the I.T. Dept. is left, for therecovery of which the Revenue can be directed to sell the property ; that the petitioner has no legal right to have the attached property put to auction and the court would not grant a futile writ; that there has been palpable suppression of facts on the part of the petitioner ; the facts suppressed are the agreement to sell executed on January 10, 1977, the lease deed and the resolution of the board of directors and its approval at the extraordinary general meeting were not mentioned in the writ petition nor filed along with it. The person sought to be evicted was not impleaded as a party. According to counsel the court will not assist the petitioner to circumvent his legal obligation or wriggle out of the contracts made. The next submission made was that no writ petition is maintainable for settling private disputes and eviction can be sought in appropriate forum. Highly disputed questions of facts are involved and alternative remedy is also available and that being so the petitioner cannot be granted any relief.
19. There can be no manner of doubt that Article 226 of the Constitution is not meant to circumvent private contracts and agreements. Further, if there has been suppression of facts and the petitioner has not come with clean hands, the court will not exercise its discretion under Article 226 in his favour. It is not necessary to refer to any authority for these two propositions because they are well settled. We agree that when by means of reliefs (a) and (b) the petitioner was seeking some relief against M/s. Malook Chand, the petitioner should have made M/s, Malook Chand a party to the petition and should also have set out the relevant facts relating to the execution of the lease deed as also the deed of agreement dated 10th of January, 1977. However, for the reasons which we will set out in the subsequent paragraphs, we do not agree that because of these defects the petition is liable to be thrown out.
20. It also cannot be disputed that normally disputed questions of fact ought not to be gone into in a writ petition under Article 226. Thus we have to steer ourselves clear of the quagmire of disputed facts, and then to see what position emerges in the case and whether after taking cognizance of that position does the petition remain maintainable. If after this exercise we find that it is so, then further it would have to be seen as to whether the petitioner can be granted any relief and if so against whom.
21. With this background, we do not involve ourselves in any way with the following controversial aspects. The nature and rights of parties under the agreement to sell certain shares dated January 10, 1977, whether or not the lessee, respondent No. 4, had a unilateral right to have the lease extended for a further period of two years after the expiry of the agreed period of eight months, that is, for the period after August 31, 1977, or whether respondent No. 4 would have had to file a suit for specific performance of the contract for renewal of the lease. The fact remains thatthe agreed term of lease was of eight mouths which expired on March 31,1977. Thereafter by an order dated November 15, 1977, the TRO approved the extension of the lease for a further period of two years, but on the petitioner's representation and also on an application, under Rule 87 of Schedule II to the Act, that order was recalled by an order dated April 4,1978. and respondent No. 4 was required to vacate the premises by April 15, 1978. However, the later part of that order was withdrawn by order dated April II, 1978. We are also not inclined to enter into the question as to whether payments made by respondent No. 4 after August 31, 1977, can be accepted towards the liabilities against the petitioner even though those payments had been made without the petitioner's consent. We have thus to see as to whether after adjusting these payments there is any amount left due from the petitioner and whether the petitioner can ask the Department to put the attached property to auction and realise the dues outstanding.
22. As noted above, according to the case set up by respondent No. 4, it made a payment of Rs. 3,75,000 to the petitioner out of which the latter paid Rs. 1,44,000 to the Revenue. Further, respondentjNo. 4 directly paid to the Revenue on behalf of the petitioner a total sum of Rs. 1,13,520 in all. Apart from these payments it is claimed that refunds have become due to the petitioner as a result of the decisions in the appeals. The ITO has revised the assessments for 1972-73 to 1977-78 by an order made on February 26, 1980. A copy of this order is annex. A with Ashok Kumar's affidavit dated March 10, 1980. As a result of revision a net sum of Rs. 1,38,263 has been worked out as payable to the petitioner out of which adjustment has been given for Rs. 31,951. The remaining amount of Rs. 1,06,312 has not been adjusted so far. It is not possible for this court to work out the adjustment of this amount. The Revenue has not accepted the stand taken by respondent No. 4 that there is no amount outstanding against the petitioner. As noted above Sri D. L. Saxena, who has filed affidavit on behalf of the TRO, has stated in para. 25 that as per the TRO's records the demand of Rs. 77,781 is outstanding up to date after considering the Rs. 42,000 out of Rs. 1,44,000 mentioned by the petitioner. Sri D S. Raghav, who filed the affidavit on behalf of the ITO, Agra, has averred in para. 24 that after making all the adjustments there remains a demand of Rs. 560 for the assessment year 1975-76 under Section 220(2) for the said year against the company and the total demand outstanding against the company, its managing director and other directors on date amounted to Rs. 1,25,299. As noted above, these counter-affidavits had been filed before the impleadment of respondent No. 4. After respondent No. 4 had been impleaded and affidavits were filed on its behalf, the Department did not file any supplementary counter-affidavit accepting ordenying the averment made in this behalf by respondent No. 4. It cannot, therefore, be said that there is no outstanding demand due from the petitioner.
23. The question for consideration is as to what are the requirements of the relevant provisions.
24. Section 222(1) of the Act provides that when an assessee is in default or is deemed to be in default in payment of tax, the ITO may forward to the TRO a certificate under his signature specifying the amount of arrears due from the assessee. On receipt of such certificate the TRO shall proceed to recover from such assessee the amount specified in the certificate by one or more of the modes mentioned below, in accordance with the rules laid down in Sch. II. These modes are :
(a) attachment and sale of the assessee's movable property ;
(b) attachment and sale of the assessee's immovable property;
(c) arrest of the assessee and his detention in civil prison ; and
(d) appointment of a receiver for the management of the assessee's movable and immovable properties.
25. Then we come to Sch. II which lays down the procedure for recovery of tax. Under Rule 2, on receipt of certificate from the ITO for the recovery of arrears due from an assessee-defaulter, the TRO has to first serve a notice upon the defaulter requiring the defaulter to pay the amount specified in the certificate within fifteen days from the date of the service of the notice. In the event of the amount mentioned in the notice not being paid, he is to proceed under Rule 4 to realise the amount by one or more of the four modes which have been mentioned above. Rule 8 provides for disposal of proceeds of execution. It says that whenever assets are realised, by sale or otherwise in execution of a certificate, they shall be disposed of in the following manner :
(a) there shall first be paid to the ITO the costs incurred by him ;
(b) there shall in the next place be paid to the ITO the amount due under the certificate in execution of which the assets were realised ;
(c) if there remains a balance after these sums have been paid, there shall bo paid to the ITO therefrom any other amount recoverable under the procedure provided under this Act which may be due upon the date upon which the assets were realised; and
(d) the balance, if any, remaining after payment of the amount, if any, referred to in Clause (c) shall be paid to the defaulter.
26. Rule 12, which occurs in Ft. I 'General Provisions', provides that where the amount due, with costs and all charges and expenses resulting from the attachment of any property or incurred in order to hold a sale, are paid to the TRO or the certificate is cancelled, the attachment shall be deemed to be withdrawn. It may be noted at this very place that in thepresent case it cannot be accepted, as contended by Dr. Singhvi, that in view of the fact that the entire amount due has been satisfied, the attachment stands withdrawn. The Revenue has not accepted that the amount due with costs, all charges and expenses, etc., have been paid to the TRO. The certificate has not been cancelled and, therefore, the attachment cannot be deemed to be withdrawn.
27. In the present case, as has been stated above, the movable properties of the petitioner were attached on October 18, 1972, and land, buildings and other fixtures were attached on February 13, 1974. As regards attachment and sale of movable property provisions have been made in Rules 20 to 47 occurring in Pt. II and in respect of immovable property in Rules 48 to 68 of Pt. III. It is not necessary for us to mention the various provisions contained in these rules. They prescribe the mode in which various types of movable and immovable properties are to be attached and then the mode in which they are to be sold. The question is as to whether the purpose of attachment implies an obligation to sell the attached properties and to realise the dues within reasonable time or can it be said that the matter of sale should be left to the discretion of the TRO absolutely. In our opinion, after making the attachment, proceedings should be taken for sale of the property within reasonable time. It is not possible to say what would constitute reasonable time. That would depend on the facts and circumstances of each case. For instance, in the present case, with the approval of the TRO, under Rule 66, a lease was granted by the petititioner-company in favour of respondent No. 4. In other words, that transaction stood as a supervening factor which could have postponed the sale of the property. The movable properties have been under attachment since October 18, 1972, and the immovable properties since February 13, 1974. Shares of considerable value have also been given in security. Certainly no direction can be given to the TRO by the court in regard to the manner in which he is to proceed to realise the dues from the sale of these properties, but certainly it cannot be accepted that once the properties are attached, the attachment is to continue for as long as the TRO desires. The petitioner has been again and again inviting the attention of the TRO to put the properties to auction and realise the dues, but that is not being done. No valid and sound reason has been given by the TRO for not accepting this request. Certainly the action of the TRO can be said to be arbitrary in this behalf and the court can give a direction to him under Article 226 of the Constitution. We have also shown above that under Rule 8, from the assets realised by sale, it is not only the amount specified in the certificate in execution of which the assets were realised, which is required to be paid to the ITO. At first the costs incurred in attachment and sale of the property are to be paid. After that, the amount dueunder the certificate is to be paid. From the balance, if any, any other amount recoverable under the procedure provided under this Act which may be due upon the date upon which the assets were realised, is to be paid and the balance, if any, is to be paid to the defaulter. It is simplifying the proposition to say that, since the amounts paid by respondent No. 4 on behalf of the petitioner-company and the refunds which have become due to it as a result of the appellate order, the amount mentioned in the certificate stands satisfied and, therefore, no relief should be given to the petitioner. The reason is that apart from the amount due under the certificate, costs of attachment and sale, if made, are to be paid and then if any other amount recoverable under this Act is due from the petitioner upon the date on which the sale takes place, that is also to be recovered from the assets realised.
28. In our opinion, therefore, the petitioner is entitled to a direction from this court to the TRO to proceed to sell the attached properties for realisation of the outstanding liability. In other words, the TRO shall first determine the extent of the outstanding liability payable by the petitioner-company to the Department. In doing so he shall take into consideration the various payments which have been made by respondent No. 4 towards the adjustment of the disputed liabilities as also give credit for the relief which has been allowed by the Income-tax Appellate Tribunal in the appeals filed by the petitioner-company. If after doing so, it is found that there still remains any amount due from the petitioner, the TRO shall then determine the property from which that amount can be realised. Of course, this court cannot lay down the order in which the TRO is to proceed against the attached properties. It shall be for him to decide the order in which he proposes to proceed against the attached properties, keeping in view the amount of the outstanding liability and probable value of the property intended to be proceeded against. In so far as the shares are concerned, they cannot be sold because they were given by way of security only. They were never attached by the Department in realisation of the disputed liabilities. The petitioner is certainly not entitled to any direction or relief in this petition in so far as respondent No. 4 is concerned. It is expected that the TRO shall carry out the directions mentioned above within reasonable time, that is three months from the date of this order.
29. The writ petition is thus allowed in part and the TRO is directed to proceed in the matter and to carry out the directions given above within the period mentioned above. In the circumstances, we make no order as to costs.