D.S. Tewatta, J.
1. Income-tax arrears amounting to Rs. 5,55,189 fell due from Messrs. Asia Electric Company, Phagwara, respondent No. 4. In order to realize the same, its factory building and the land underneath thereof situated at Phagwara was auctioned by Shri Sukh Dev Singh, Tax Recovery Officer (Income-tax), Amritsar, on May 18, 1969, for a sum of Rs. 96,000 to Kishan Chand Aggarwal, the petitioner--his bid being the highest. On June 11, 1969, the Income-tax Officer, Jullundur, filed his objections under rule 61 of Schedule II of the Income-tax Act, 1961 (hereinafter referred to as 'the Schedule'). Even before these objections of the income-tax department were decided, the Tax Recovery Officer issued the sale certificate to the petitioner on June 24, 1969. The objections of the income-tax department were rejected by him, vide his order dated October 16, 1969. That order was, however, reversed in appeal by the Commissioner, Jullundur Division. A second appeal therefrom at the instance of the petitioner was dismissed by the Financial Commissioner, Punjab, as being incompetent. This led to the filing of Writ Petition No. 3384 of 1972, at the instance of the present petitioner in this court, which was allowed by Jain J., who after quashing all the abovesaid orders including that of theTax Recovery Officer, directed the reconsideration of the departmental objections as to the validity of auction sale after giving due opportunity of producing their evidence to both the sides. The Tax Recovery Officer (Income-tax), Jullundur, accepted the objections of respondent No. 1 and set aside the auction sale in question, inter alia, on the grounds: (1) that the Tax Recovery Officer (Income-tax), Amritsar, had put the property in question to auction without first passing the requisite order for sale in Form No. ITCP 12 in pursuance of the provisions of rule 52(1) of the Schedule ; (2) that the proclamation of sale was not drawn up in accordance with the provisions of rule 53 of the Schedule requiring the same to be in the language of the district, which was in the present case Punjabi, while the proclamation of sale which was issued was in English ; (3) that adequate publicity through beat of drum and issuance of hand-bills had not been made in Phagwara with the result that very few people came to bid which consequently resulted in the property fetching only a paltry sum of Rs. 96,000 when, in fact, it was worth much more; (4) that no reserve price was fixed and, further, the sale was closed hurriedly without giving opportunity to other bidders to increase the bid amount; and finally (5) that full particulars of the property to be auctioned were not mentioned in the sale proclamation as required by the provisions of rule 53 of the Schedule.
2. This order (annexure 'E') dated July 23, 1973, of the Tax Recovery Officer (Income-tax), Jullundur, accepting the objections of respondent No. 1 was affirmed by the Additional Commissioner vide his order (annexure 'F') dated October 31, 1973. It is these two orders (annexures 'E' and 'F') that have been impugned by the petitioner in the present writ petition, inter alia, on the ground that both the Tax Recovery Officer and the Additional Commissioner acted in excess of their jurisdiction in entertaining such objections as had not been incorporated in the objection application dated June 11, 1969.
3. Since the petitioner had sought support for the above contention, even before respondents Nos. 2 and 3, from two decisions of the Lahore High Court, namely, Gopi Chand v. Benarsi Das, AIR 1919 Lah 216 and Volkart Brothers of Karachi v. Ghulam Hamdani, AIR 1932 Lah 576 and one of them being a Division Bench decision, and the point involved the consideration of the view propounded in those decisions, the writ petition in the very first instance was admitted to a Full Bench by my learned brother, Gujral J., and myself.
4. Before embarking upon an analysis of the Lahore High Courtdecisions, I may observe that the assertion of the petitioner that theobjections that prevailed with the Tax Recovery Officer (Income-tax),Jullundur, and the additional Commissioner of Income-tax, Patiala, didnot flow from the objection-application (annexure 'D') dated June 11, 1969, inasmuch as in that application material irregularity pointed out pertained to the publication of auction sale and that too only in regard to non-publication of the same by beat of drum and non-issuance of hand-bills at Phagwara is not warranted even by a cursory look at the said objection-application- In the said objection-application, the validity of the auction sale was specifically challenged on the ground of material irregularity in publishing and conducting of it. The specifications of detailed facts which either constituted material irregularity in the publishing or the conduct of the auction were more in the nature of amplification of the objections rather than alleging of additional objections to the validity of the auction sale. That the details of the nature of the irregularity could be later on supplied to the Tax Recovery Officer even at the time of hearing of the objections appears to be warranted by implication from the following observations of Shadi Lal C.J. in Volkart Brothers' case::
'In the application which he made, he merely stated that the sale was not published or conducted in accordance with the rules, but did not specifically mention any irregularity. Nor was the nature of the irregularity disclosed at the time of the hearing of the application in the court of first instance.'
5. While the findings of the Tax Recovery Officer (Income-tax), Jullundur, Shri C. L. Wali, affirmed in appeal regarding the facts constituting material irregularity in publication and in conduct of the sale, have not been challenged and rightly so, for only such findings can be challenged in the writ jurisdiction as are based on no evidence, which is not the case here, the learned counsel for the petitioner has, nevertheless, urged that mere proof of material irregularity in the publication and conduct of the auction would not by itself justify the cancellation of the sale unless the material irregularity alleged resulted in a substantial injury either to the judgment-debtor or through him to the decree-holder and since, stressed the learned counsel, no injury much less substantial, having been suffered on account of the alleged material irregularity was mentioned in the objection-application, so the auction sale cannot be held to have been vitiated. The learned counsel sought support for his above submission from the following observations of Gajendragadkar C.J. who delivered the judgment for the court, in Laxmi Devi v. Mukand Kanwar, AIR 1965 SC 834, 837:
'It is true that before an application made under Order 21, rule 90, can succeed, the applicant has to show that the impugned sale was vitiated by a material irregularity or fraud in publishing or conducting it; and as required by the proviso, it is also necessary that he should show that in consequence of the said irregularity or fraud, he had sustained substantialinjury. Therefore, Mr. Bishan Narain is right when he contends that the application made by respondent No. 1 ought to contain an allegation in regard to the material irregularity as well as an allegation as to substantial injury.'
6. While there is no dispute with the proposition enunciated in the observations abovesaid of their Lordships of the Supreme Court relied on by the petitioner, the following observations of their Lordships appearing in the same paragraph are also instructive and cannot be lost sight of:
'But, in our opinion, in a case like the present where substantial injury is alleged to be implicit in the material irregularity set out in the application, it would be too technical to hold that the application should be dismissed on the preliminary ground that no specific or express averment has been made as to substantial injury suffered by respondent No. 1'.
7. Judged in the light of the later observations of their Lordships of the Supreme Court, the allegation of substantial injury as a result of the material irregularity is implicit in the objection-application (annexure 'D').
8. Rule 53 of the Schedule, inter alia, requires that sale proclamation shall specify as fairly and accurately as possible the property to be sold. In the present case, the sale proclamation, besides mentioning the name of the factory, gave no details of the nature of the building, nature of the machinery therein, the extent of the covered area, etc. When the auction sale was held in pursuance of a proclamation which was vague and silent about the material particulars of the property, the sale would be no more than a farce and a substantial injury to the judgment-debtor and through him to the decree-holder would be implicit.
9. For the above, I receive support from the following observations of Tek Chand J., who spoke for the Bench in Bhagwan Singh v. Barkat Ram, AIR 1943 Lah 129, 138:
'A sale conducted in pursuance of a proclamation containing vague and misleading description of property is nothing but a farce and must seriously prejudice the judgment-debtor and cannot be allowed to stand.'
10. Their Lordships of the Supreme Court in Kayjay Industries (P.) Ltd, v. Asnew Drums (P.) Ltd., AIR 1974 SC 1331 have gone to the extent of holding that if in a case where auction sale is required to be confirmed, the confirming authority, without applying its mind to the adequacy and reasonableness of the price, confirmed the sale, the sale would be vitiated as the failure of the confirming authority to apply its mind to the reasonableness of the price would amount to material irregularity. It was further held that where the authority either mechanically conducted the sale or the confirming authority, routinely signed assent to the sale papers, not bothering to see if the offer was too low and a better price would have been obtained and, in fact, the price was substantially inadequate, there was the presence of both the elements of irregularity and injury.
11. In the present case, the Tax Recovery Officer (Income-tax), Jullundur, while dealing with the objections of respondent No. 1 on the basis of material on the record, came to the conclusion that the land underneath the factory building itself was worth Rs. 2,40,000, leaving aside the building which comprised a covered area of 6 kanals 13 marlas and a machinery of considerable value therein. The above conclusion regarding the price of the land was reached after taking into consideration the price which the land adjoining the factory had fetched prior to the sale of the factory in question. A perusal of the sale deeds of those properties showed a tendency of upward rise in the prices of the land, and if that trend had been taken into consideration by the Tax Recovery Officer (Income-tax), Jullundur, the price of the land alone would have been evaluated at a figure higher than Rs. 2,40,000. Sale amount of Rs. 96,000 for a property which was worth, if not more, at least Rs. 3,00,000, was unreasonably low. These circumstances, when viewed in the light of the observations of their Lordships of the Supreme Court in Laxmi Devi's case and Kayjay Industries (P.) Ltd.'s case by itself constitute a material irregularity as also substantial injury.
12. The only other legal point in the writ petition on which the challenge to the jurisdiction of the Additional Commissioner was rested was his incompetency to hear the appeal. This point, no doubt, finds mention in the petition but the same was not pressed before us by the learned counsel for the petitioner and rightly so, for no objection to his jurisdiction had been taken by the petitioner when he heard the appeal. The Additional Commissioner has pointed out in the written statement that he was vested with the functions of the Commissioner and was authorised to hear the appeals.
13. As regards the question as to whether the decisions of the Lahore High Court are of a binding nature it is unnecessary to go into that aspect as it does not directly arise here. Suffice it to say that the respondents Nos. 2 and 3 acted improperly in rejecting the two decisions of the Lahore High Court off-hand in an unceremonious manner by merely saying that the Lahore High Court is located in foreign territory and its decisions are not binding on them, for the pre-partition decisions of the Lahore High Court are entitled to the greatest respect, more so the decisions flowing from the pen of such celebrated judges as Shadi Lal C. J. and Rattigan C.J.
14. For the reasons stated, I find no merit in this writ petition and dismiss the same with no order as to costs.
Bal Raj Tuli, J.
15. I agree.
Man Mohan Singh Gujral, J.
16. I agree.