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Judgment
P.K. Bhasin, J
The appellant Bank is aggrieved by the order dated 2.9.2016 passed by the learned Presiding Officer of Debts Recovery Tribunal-II, Delhi (DRT) in Appeal No. 67/2014 whereby the appeal filed by the respondent-objector against the order dated 15.9.2014 of the learned Recovery Officer rejecting her objections filed by her under Rule 11 of the Rules framed under the Second Schedule to the Income Tax Act, 1961 in respect of one two property which she claimed to be owned by her, attached by the Recovery Officer in execution of the recovery certificate issued by the DRT in O.A. No. 38/2009 on 13.7.2010 was allowed and the matter was remanded back to the Recovery Officer for passing a fresh order regarding the objections of the respondent-objector. In the O.A. son of the respondent-objector Mr. Maneesh Sehgal was one of the defendants as a guarantor for the repayment of loan advanced by the appellant herein. After issuance of recovery certificate by the DRT in the O.A. the Recovery Officer attached the properties in dispute treating the same as properties of the said Maneesh Sehgal being one of the legal heirs of his deceased father who died before the passing of the recovery certificate and who was the owner of those properties.
The order dated 15.9.2014 of the learned Recovery Officer which was reversed in appeal by the DRT may first be noticed. It reads as under:
"The objector in respect property bearing Nos. 119 and 120, Gangandeep Building, Rajendra Place, New Delhi-08, and factory godown at 46/1, Wazirpur Group Industrial Area, New Delhi-52, filed their objection in the Registry vide Diary No. 53 dated 3.1.2013 wherein. They have submitted that objector along with Sh. S.K Sehgal S/o. Sh. Raj Kumar Sehgal, purchased the property bearing No. 119, 1st Floor, Area 233 Sq. Ft. Plot No. 12, Rajendra Place N.D. from Sh. Monohar Lal Gandhi, R/o 32/2, East Patel Nagar, Delhi, on 10.9.1979. Before that Sh. Monohar Lal Gandhi, purchased the above said property from Punjab Properties Ltd., having office at B-45-47, Connaught Place, New Delhi, on 22.4.1975 and from Manohar Lal Gandhi.
The above said property was purchased by the objector and Sh. S.K. Sehgal, jointly on 10.9.1979 and the above said sale agreement was duly noted and entered into the record of M/s. Punjab Properties Ltd., 17.9.1979, the objector is the owner of the 50% shares of the above said property and the 50% share is in the possession of the LRs of late Sh. S.K Sehgal, viz. Shalini Sehgal.
The objector along with Sh. S.K Sehgal, R/o Sh. Raj Kumar Sehgal, purchased the property bearing No. 120, 1st Floor, Area 248 Sq. Ft. Plot No. 12, Rajendra Place, New Delhi-08, from Sh. Pritam Singh Anand, R/o 15/23, East Patel Nagar, New Delhi, on 10.9.1979. Before that, Sh. Pritam Singh Anand, purchased the above said property from the Punjab Properties Ltd.
The objector and Sh. S.K. Sehgal, jointly purchased the above said property from Sh. Pritam Singh Anand, on 10.9.1979 and the agreement to purchase was duly notes and entered into the record of M/s. Punjab Properties Ltd., on 17.9.1979. The objector is the owner of the 50% share and the rest of 50% share is under the ownership of the legal heir of late Sh. S.K. Sehgal, viz Shalini Sehgal.
It is further stated by the objector that the factory godown at B-47/1, Wazirpur Group Industrial Area. Delhi, was initially allotted by the Delhi Administration (Land and Housing Deptt.) vide perpetual lease dated 20.5.1982 to M/s. Megnotronics having office at cottage No. 13, West Patel Nagar, Delhi, in which the objector and Sh. S.K Sehgal were the partners. Later on, after the death of Sh. S.K. Sehgal, the above said property emuted transferred by DDA as undivided unspecified lease hold right in the joint name of the beneficiaries of M/s. Megnotronics. As Smt. Shalini Sehgal, W/o Late Sh. S.K. Sehgal, having 50% share and Sh. R.K Malhotra, S/o. Sh. K.L. Malhotra, having 50% share.
It is further stated that CH Bank has deliberately mentioned the above said property of the objector to mislead the Hon'ble Recovery Officer, that the above said properties belong to the CDs it is further submitted that the above said property under the ownership of the objector and Smt. Shalini Sehgal, from the year of the purchase and the CDs have no relation with the properties of the objector.
It is further stated that the attachment notice relating to the property in question are not maintainable in any manner as the properties are in question are in question are not belonging to the CDs and are under the control/possession of the objector and Smt. Shalini Sehgal, and CH Bank has no right to attach the above said property.
In view of the above, it is prayed by the above said objector to set aside and recall the attachment order passed with respect to the property bearing Nos. 119 and 120, Gagandeep Building, Rajendra Place, New Delhi, and Factory/Godown at B-47/1, Wazirpur Group, Industrial Area, New Delhi-110052.
The CH Bank has filed the reply to the above said objection wherein, they have submitted that the objector has stated in her objections that her husband Sh. S.K. Sehgal and Sh. R.K. Malhotra, purchased the property bearing Nos. 119 and 120, Gagandeep Building, Rajendra Place, New Delhi, from Sh. Manohar Lal Gandhi, on 10.9.1979 who in turn has purchased the same from Punjab properties an allottee of DDA.
The objector has further stated that on the demise on Sh. S.K. Sehgal, on 4.11.1993 she succeeded by virtue of succession and Will.
On perusal of the objections filed by M/s. Parsavanath Developers P. Ltd., it reveals that there is a correspondence with Mr. A.K. Nayar, one of the CDs at the address 119 & 120, Gagandeep Building, Rajendra Place, New Delhi. The CD = 1 to 3 are using the above said address or correspondence and also the same is reflected on their letterhead. It is further stated that it is not disclosed how, the CD = 1 to 3 came into existence at the above noted address and what was the relation between the objector and the CDs.
On perusal of the alleged will executed by Sh. S.K. Sehgal, filed by Smt. Shalini Sehgal, would reveal that it contain only the name of the wife of Sh. S.K. Sehgal, i.e. Shalini Sehgal, the objector herein, and has not disclosed in the Will about the other legal heirs nor any other movable or immovable property. It is further stated that for each of the properties a separate Will is prepared which goes to show that the alleged Will is manipulated, forged, fabricated and created to defeat the present RC.
It is further stated that neither any document properly stamped or registered with the Registrar, Delhi, nor there is any probate of the Will, who ascertained the genuineness of the documents of the transferring the title. If the story created by the objector is accepted the same would lead threat one of the judgment debtors Sh. Manish Sehgal, has also succeeded into shoes of Sh. S.K. Sehgal, and to void the payment of the dues of the CH Bank the ownership only of Ms. Shalini Sehgal, is shown.
It is further submitted that perusal of the Letter No. F-11-78 LSB-1910 dated 24.3.2009 produced by the objector stated to have been issued by the DDA will reveal that the said letter has been issued on the basis of the registered relinquishment deed and other documents furnished by the objector herein. It is not disclosed what were those documents and what was the notice of issuing such relinquishment deed and the documents stated in the letter.
It is also pertinent to mention here that the CD = 1 registered office address is B-47/1, Wazirpur Group Industrial Area, Delhi which is a godown also. In the said godown goods hypothecated in favour of CH Bank are lying. On the said goods NAFED is also claiming its right. The said transfer of the property in question is illegal and has been done with sole purpose to defeat the present recovery proceedings.
The objector in respect of A-5, Mahendru Enclave, Delhi, filed their written submissions/objections in the Registry vide Diary No. 519 dated 23.1.2014 wherein, the objector has stated that the property in question is a single residential property free from any mortgage with the Bank and the attachment of the property is illegal in view of Section 60 of CPC, which provided the said property is a residential property and is exempted from attachment.
It is further stated that the property in question is situated in authorized colony, where the execution of the sale deed have been prohibited by the Govt. of NCP, Delhi and the property in question in possession of the objector on the basis of GPA agreement dated 1.1.1983 in favour of Smt. Shalini Sehgal, the objector and the said property is presently accessed for the house tax purpose in the name of Smt. Shalini Sehgal.
It is further submitted that the husband of objector Sh. S.K. Sehgal had died at Delhi on 4.11.1993 and the objector herein, is the widow of Sh. S.K. Sehgal, who has succeeded in the interest of the deceased Sh. S.K Sehgal by virtue of succession and will executed by Sh. S.K Sehgal, in respect of the said property.
ORDER
On perusal of records, written submissions and the arguments advanced by the parties it reveals that the property bearing Nos. 119 and 120, Gagandeep Building, Rajendra Place, New Delhi, is purchased by the father of the CD viz. Sh. S.K. Sehgal, S/o. Sh. Raj Kumar Sehgal, along with Sh. R.K Malhotra, S/o. Sh. K.L. Malhotra, on 10.9.1979 jointly.
Accordingly, Sh. S.K Sehgal, the father of CD= 6 became the 50% owner of the above said properties and Sh. S.K Sehgal, died on 4.11.1993. After the death of Sh. S.K Sehgal, the property of Sh. S.K. Sehgal, shall devolve upon Smt. Shalini Sehgal, who is the wife of Sh. S.K Sehgal, the property of Sh. S.K. Sehgal and Sh. Manish Sehgal, S/o. Sh. S.K Sehgal. As per the Hindu Succession Act, 1956, who is CD = 6 in this matter.
The objector Smt. Shalini Sehgal, stated in their objections that by virtue of succession and the Will dated 16.3.1992 executed by Sh. S.K. Sehgal, she has succeeded a share of the Sh. S.K Sehgal and the objector has become the owner of the 50% share of the deceased Sh. S.K Sehgal in the aforesaid properties.
On investigation it is found that for the alleged will there is no letter of administration of probate of the above said alleged will hence, the above said alleged will is not valid in the eyes of law and the CD = 6 who is S/o. of Sh. S.K. Sehgal, will be entitled to the half share in the portion of the properties bearing Nos. 119 and 120, Gagandeep Building, Rajendra Place, New Delhi and factory Godown at B-47/1, Wazirpur Group Industrial Area, Delhi, by virtue of heir of Sh. S.K. Sehgal.
As per Section 11 of 2nd Schedule of Income Tax Act, 1961, Sub-section (5) it is satisfied that the properties bearing Nos. 119 and 120, Gagandeep Building, Rajendra Place, New Delhi and Factory Godown at B- 47/1, Wazirpur Group Industrial Area. Delhi, are in the possession of the objectors in trust of CD = 6 and hence, the objections of the objectors to the extent of share of CD = 6 are not allowed.
So far as, the objections qua the property bearing No. A-5, Mahendru Enclave, Delhi, is concerned, it is observed that the above said property was also in the name of S.K Sehgal, S/o. Sh. Raj Kumar Sehgal, the father of CD = 6 as per the record of MCD and after the death of Sh. S.K. Sehgal, the above said property shall devolve upon the CD = 6 and her mother by way of succession.
The objections of the objector regarding the plea of Section 60 of the Code of CPC, is also not allowed. Because after the amendment in CPC, the benefit of 60 CCC has been deleted and moreover, the CD = 6 is absconding.
In view of the above mentioned circumstance it is observed that the objections qua the property bearing No. A-5, Mahendru Enclave, to the extent of share of CD = 6 by virtue of heir of Sh. S.K. Sehgal are not allowed.
Copy of this order be given Dasti to the concerned parties.
Let this matter be listed on 17.10.2014."
Now, the impugned order dated 2.9.2016 passed by the learned Presiding Officer of the DRT whereby the aforesaid order of the recovery was set aside and the matter was remanded back for a fresh decision by the Recovery Officer, may be noticed. It reads as under:
"This appeal is directed against the order dated 15th September, 2014 passed by the learned Recovery Officer-II, Debts Recovery Tribunal-II, Delhi passed in RC No. 143/2010 titled as KMB v. M/s. Megnostar Telecommunications. The factual matrix leading to the filing of the present appeal is as follows:
The factual matrix leading to the filing of the present appeal is as follows:
This Tribunal in the matter of Kotak Mahindra Bank v. M/s. Megnostar Telecommunications Pvt. Ltd. and Others had issued recovery certificate by virtue of final order passed in O.A. No. 38/2009 vide judgment dated 13th July, 2010 and as per operation portion of the order, the O.A. was allowed for recovery of Rs. 12,95,89,589.35 along with pendente lite and future interest @ 15.5% per annum with quarterly rests and directed D-1 to D-6 to pay the same within 90 days from the date of passing of the judgment and in default the CH Bank shall be entitled to recover the same from the sale of the mortgaged properties and hypothecated assets and the balance amount, if any, shall be recovered from the personal assets of the defendants in accordance with law. During the pendency of the recovery certificate, at the instance of the CH Bank, the property bearing A-5, Mahendru Enclave, Delhi was attached.
The claim of the appellant as seen from the appeal is that the property bearing No. A-5 Mahendru Enclave, Delhi is her single residential property and the same is free from attachment. The appellant further contends that the said property was neither hypothecated nor mortgaged with CH Bank and, as such, she is not bound by the decree passed in the O.A. and the attachment of the said property is untenable being illegal in view of the provisions of Section 60, CPC and, thus, the attachment is liable to be set aside.
During hearing of the R.C proceedings, the learned Recovery Officer vide his impugned order rejected the objections of the appellant under Section 60, CPC by observing that after the amendment in CPC, the benefit of Section 60 (ccc), CPC has been deleted, as such the claim of the appellant is negated.
In support of his submissions that the single residential house is exempt from attachment, the learned Counsel for the appellant has relied upon decision rendered by Hon'ble Delhi High Court in case V.P. Arora v. Punjab National Bank, 48 (1992) DLT 367 wherein the Hon'ble High Court has held that "The underlying object of Section 60 (ccc) is not to displace a J.D. from the main residential house in execution of a money decree. It hardly matters whether he owned the house when decree was passed or he comes to own the house at a time when it is sought to be attached or sold. That is why the law framers used the word 'or' between attachment and sale. The last relevant time would not be the date or sale if on the date of sale a residential house is owned by the J.D. is would not be sold and will have to be released from attachment". In this regard, the learned Counsel for the appellant has also relied upon a decision of the Hon'ble Debts Recovery Appellate Tribunal, Delhi in Appeal No. 370/2014 titled as Smt. Surender Kaur and Another v. Syndicate Bank, decided on 30th November, 2015.
Accordingly, the impugned order passed by the learned Recovery Officer-II is set aside and the matter is remitted back to the Recovery Officer-II for disposal in accordance with law. No order as to costs. The appeal file be consigned to the records."
Feeling aggrieved by the order of remand passed by the learned DRT the appellant Bank (certificate holder) has approached this Appellate Tribunal with the prayer that the order of remand of DRT may be set aside and the order earlier passed by the Recovery Officer rejecting the objections of the respondent-objector may be restored.
As noticed already, the objections filed by the respondent-objector before the Recovery Officer were under Rule 11 of the Rules framed under the Second Schedule to the Income Tax Act. The scope of investigation under Rule 11 was considered by the Hon'ble Supreme Court in The Tax Recovery Officer v. Gangadhar Vishwanath Ranade, VII (1998) SLT 466 : AIR 1999 SC 427 and the relevant paras of this judgment are being re-produced below:
"The powers of the Tax Recovery Officer, however, under Rule 11 of the Second Schedule to the Income-tax Act are somewhat different. Under Rule 11(1) where any claim is preferred to or any objection is made to the attachment or sale of any property in execution of a certificate on the ground that such property is not liable to such attachment or sale, the Tax Recovery Officer shall proceed to investigate the claim or objection. Under Rule 11(4), (5) and (6) it is provided as follows:
Rule 11(4) : Where, upon the said investigation, the Tax Recovery Officer is satisfied that, for the reason stated in the claim or objection, such property was not, at the said date, in possession of the defaulter or of some person in trust for him or in the occupancy of a tenant or other person paying rent to him, or that, being in the possession of the defaulter at the said date, it was so in his possession, not on his own account or as his own property, but on account of or in trust for some other person, or partly on his own account and partly on account of some other person, the Tax Recovery Officer shall make an order releasing the property, wholly or to such extent as he thinks fit, from attachment or sale.
Rule 11(5): Where the Tax Recovery Officer is satisfied that the property was, at the said date, in the possession of the defaulter as his own property and not on account of any other person, or was in the possession of some other person in trust for him, or in the occupancy of a tenant or other person paying rent to him, the Tax Recovery Officer shall disallow the claim.
Rule 11(6) : Where a claim or an objection is preferred, the party against whom an order is made may institute a suit in a Civil Court to establish the right which he claims to the property in dispute; but subject to the result of such suit (if any), the order of the Tax Recovery Officer shall be conclusive."
[italics ours]
The Tax Recovery Officer, therefore, has to examine who is in possession of the property and in what capacity. He can only attach property in possession of the assessee in his own right, or in possession of a tenant or a third party on behalf of/for the benefit of the assessee.....The provisions, therefore, of Rule 11 are analogous to those of Order XXI Rules 58 to 61 and 63 of the CPC as they stood prior to the amendment of the Civil Procedure Code in 1976. In fact, the language of Order XXI Rules 60 and 61 is similar to the language of Rule 11(4) and Rule 11(5) of the Second Schedule to the Income-tax Act. Similarly, the language of Order XXI Rule 63 is similar to the language of Rule 11(6). Rules 59 to 62 of Order XXI, prior to the amendment of 1976, provide for a summary investigation into possession as distinct from a thorough trial of ultimate right. No doubt, it is impossible to separate altogether the question of possession and of title. Thus, if the judgment-debtor was in possession, he may have been in possession as agent or trustee for another; and this has to be enquired into. To that extent title may be apart of the inquiry. Similarly, if the property attached is claimed by a third party who adduces evidence to show that he was possessed of the property under some kind of a title, the property will have to be released from attachment. The procedure is not meant to decide intricate questions of law as to title to the property. Therefore, where a claim is made to the property attached, by someone claiming to be a transferee from the judgment-debtor and the claim is disallowed, the claimant can institute a suit under Order XXI Rule 63 to establish his title to the property. In such a suit it would be open to the attaching creditor to plead in defence that the transfer was in fraud of the general body of creditors and was void under Section 53 of the Transfer of Property Act. Similarly, if the claim of the transferee is allowed, the attaching creditor may sue on behalf of himself and all other creditors under Section 53 of the Transfer of Property Act for a declaration that the transfer was void as it was in fraud of the creditors.
In the case of C. Abdul Shukoor Saheb v. Arji Papa Rao (deceased) by his heirs and LRs. & Ors., this Court considered, inter alia, the nature of proceedings under Order XXI Rules 58 to 61 prior to the amendment of the Civil Procedure Code in 1976. This Court observed, "In the summary proceedings under Order XXI Rules 58 to 61, having regard to the terms of Rule 61, the Court is concerned only with the question as to whether the transferee is in possession of the property in his own right and not on behalf of the judgment-debtor. When a transfer is real, though it is liable to be impeached as a fraud on creditors, and the transferee has entered possession, he would succeed in the summary proceedings, with the result that it is defeated attaching creditor who would have to figure as a plaintiff. In every case, therefore, where a transfer is real, but it is liable to set aside under Section 53(1) of the Transfer of Property Act, on the provisions of Order XXI Rules 58 to 61, Civil Procedure Code, the transferee is bound to succeed in the summary proceedings and the attaching decree-holder would have to figure as a plaintiff......". This Court also held that where the suit is filed by the transferee if the decision in the summary proceedings goes against him, it is open to the attaching creditor to plead in his defence that the transaction is vitiated by fraud and is void under Section 53 of the Transfer of Property Act.
In the light of this discussion about the provisions of Order XXI Rules 58 to 63, if we examine Rule 11(4) of the Second Schedule to the Income-tax Act, it is clear that the Tax Recovery Officer is required to examine whether the possession of the third party is of a claimant in his own right or in trust for the assessee or on account of the assessee. If he comes to a conclusion that the transferee is in possession in his or her own right, he will have to raise the attachment...............
In the present case the Tax Recovery Officer could not have examined whether the transfer was void under Section 281 of the Income-tax Act. His adjudication of the transfer as void under Section 281 is without jurisdiction......nor can the Tax Recovery Officer, while proceeding under Rule 11, declare a transaction of transfer as void. His jurisdiction relates to examining possession, and only incidentally, any question of right to possession as claimed by the Objector.....''
(Emphasis supplied)
The following observations made by Bombay High Court in respect of investigation of objections under Rule 11 in the case of Ganpati Ram Bhande and Ors. v. Baliram Raghunath Jadhav and Ors., AIR 1974 Bom 155 may also be noticed:
"(7) The lower Court has committed an error of jurisdiction in not trying the issue which arises under Order XXI Rule 58 of the Code of Civil Producer, that is, who is in possession of the property liable to attachment on the property liable to attachment on the date of attachment, i.e. 12th of February 1969, and whether the petitioners had some interest in the property on the date of the attachment.
On the basis of the facts which have been set out and the rival contentions which have been raised by the Advocates for the parties, two questions arise for consideration:
(1) Has the lower Court properly exercised its jurisdiction under Order XXI Rule 58 and investigated the claim or objection according to law? and
(2) Whether the civil revision application is maintainable against such an order?
It is appropriate to first appreciate the scope and content of the inquiry under Order XXI Rule 58, which is admittedly of a summary nature. It is therefore necessary to set out in extensor the provisions of Order XXI Rules 58 to 61 as to notice that Rule 63 enables the aggrieved party to file a substantive suit after an order under Order XXI Rule 58 has been made. Rules 58 to 61 of Order XXI are as follows:
"58. (1) Where any claim is preferred to or any objection is made to the attachment of any property attached in execution of a decree on the ground that such property is not liable to such attachment, the Court shall proceed to investigate the claim or objection with the like power as regards the examination of the claimant or objector, and in all other respects as if he was a party to the suit:
Provided that no such investigation shall be made where the Court considers that the claim or objection was designedly or unnecessarily delayed.
(2) Where the property to which the claim or objection applies has been advertised for sale, the Court ordering the sale may postpone it pending the investigation of the claim or objection."
The claimant or objector must adduce evidence to show that at the date of the attachment he had some interest in, or was possessed of the property attached.
"60. Where upon the said investigation the Court is satisfied that for the reason stated in the claim or objection such property was not, when attached, in the possession of the judgment-debtor or of some person in trust for him, or in the occupancy of a tenant or other person paying rent to him or that, being in the possession of the judgment-debtor at such time, it was so in his possession, not on his own account or as his own property, but on account of or in trust for some other person, or partly on his own account and partly on account of some other person, the Court shall make an order releasing the property, wholly or to such extent as it thinks fit, from attachment".
"61. Where the Court is satisfied that the property was, at the time it was attached, in the possession of the judgment-debtor as his own property and not on account of any other person, or was in the possession of some other person in trust for him, or in the occupancy of a tenant or other person paying rent to him, the Court shall disallow the claim ".
Now while considering the scope of Order 21 Rule 58, C.P. Code the Supreme Court in Sawai Singhai v. Union of India., had occasion to observe as follows:
"In this connection, we ought to bear in mind that the scope of the inquiry under Order 21 Rule 58, is very limited and is confined to question of possession as therein indicated while suit brought under Order 21 Rule 63 would be concerned not only with the question of possession, but also with the question of title. Thus the scope of the suit is very different from and wider than that of the investigation under Order 21 Rule 58. In fact, it is the order made in the said investigation that is the cause of action of the suit under Order 21 Rule 63......"
Apart from the observations of the Supreme Court in the aforementioned case, where the question at issue was as to whether a notice under Section 80 of the Civil Procedure Code was necessary before a suit under Order XXI Rule 63 could be filed, there is considerable authority to show that in an investigation under Order XXI Rule 58, the most important fact to be noticed is with regard to possession.
The words in Rule 58 are: "the Court shall proceed to investigate the claim or objection ". It is, therefore, the duty of the Court to investigate a claim preferred to it under this Rule, unless it sees reason to reject it on the ground of delay. It is not in dispute that question of delay does not arise in the case before me.
As to the extent of the investigation, it was pointed out by Lord Hob House in Sardhari Lal v. Ambika Prasad, (1888) 15 Ind App 123 (PC):
"The Code does not prescribe the extent to which the investigation should go; and though in some cases it may be very proper that there should be as full an investigation as if a suit were instituted for the very purpose of trying the question, in other cases it may also be the most prudent and proper course to deliver an opinion on such facts as are before the Subordinate Judge at the time, leaving the aggrieved party to bring the suit which the law allows to him. "
It is of course possible to define the extent of the inquiry which would constitute such an investigation as that would depend on the facts of each case. But the next aspect which requires to be noticed is as to what is to be investigated. This is indicated by the Rules 58, 59, 60 and 61, reproduced above. As Rule 58 says, first of all the investigation is of the claim or objection and Rule 59 enjoins the claimant or objector to adduce evidence to show that he had either some interest in, or was possessed of, the property attached on the date of the attachment. Rule 60 provides for release of the property from attachment, if the Court by reason of having made the investigation is satisfied, (a) that the property, when attached, was not in the possession of the judgment-debtor or some person in trust for him, or in the occupancy of a tenant or other person paying rent to him, that is to say, the judgment-debtor or (b) that if it is found that the judgment-debtor was at the time of the attachment in possession of the property, then such possession was not on his own account or as his own property but on account of someone else, and if these conditions are satisfied, then it would be the duty of the Court to make an order releasing the property. Conversely Rule 61 provides as to when the claim to the property attachment shall be disallowed. This happens when the Court is satisfied that the property at the time of the attachment was in the possession of the judgment-debtor as his own property and not on account of any other person, or was in the possession of some other person who was holding the property in trust for the judgment-debtor, or that the property was in physical possession of a tenant or other person who was paying rent to other person who was paying rent to him, that is to say, the judgment-debtor. In that event, the Court is enjoined to disallow the claim.
In my view, these Rules clearly set out the matters requiring investigation and it is the duty of the Court to apply its mind to these points or factors in order to come to a determination whether the objection petition should be allowed or disallowed.
It is substantially clear that on a proper construction of these Rules the question to be decided is whether on the date of the attachment it was the judgment-debtor who was in possession or it was the objector who was in possession and further when the Court comes to a finding that the property was in the possession of the objector, then the Court must proceed further to find whether that possession of the objector was on his own account for himself or as trustee or on account of the judgment-debtor. It requires to be emphasised that the direction of the investigation, which the Court has to carry out, points to possession being the criteria. It is, of course, possible that in the course of such an investigation as to who is in possession of the property subjected to attachment, the question of some legal right or interest or title may also arise and if such legal right affects the determination of the question as to who is the real person in possession in fact or in law, then such a legal right or interest will naturally have to be taken into account. But it is also settled law that complicated questions as to titled are not to be gone into under the summary procedure of the investigation under Order XXI Rule 58.
It is to be noticed that in the case before me, the learned Civil Judge seems to have been oblivious of what in fact the provisions of Order XXI Rules 58 to 61 required form him with regard to the investigation of the claim or objection. It is obvious that the learned Civil Judge instead of directing his inquiry into finding out as to who was in possession has concerned himself with a somewhat collateral question as to who had a superior claim. Now, it is, of course, possible that in a substantive suit under Order XXI Rule 63 that may be a material question, because that would revolve on the question of title. But whether the petitioners or the decree-holders had superior claim over the property was a question which really did not fall for consideration in the proceedings under Order 21 Rule 58, C.P. Code.
The record before the learned Civil Judge, including the averments of the decree-holders in the plaint in Special Civil Suit No. 58 of 1967, clearly showed that there were tenants who were in possession on the land. We are not concerned in this civil revision petition with Survey No. 2 but only with Survey No. 10. But it cannot be disputed that Survey No. 10 was also in the possession of tenants who had certain statutory rights under the various tenancy enactments and it is also on record that is was because Gopalrao, the judgment-debtor, was unable to obtain a surrender from these very tenants that the transaction between him and the decree-holders Baliram and Jaiwant fell through, resulting in the suit being filed and thereafter the consent decree being obtained.
If, therefore, it was obvious or should have been obvious to the learned Civil Judge that there was tenants on the land, then taking into accounts the fact that the objection petitioners had in their claim or objection clearly set out their interest in the land by reasons of the three registered sale deeds executed in their favour by Gopalrao, the previous owner of the land, the learned Civil Judge should have proceeded to direct his inquiry into finding out as to on whose behalf these tenants were in possession and to whom these tenants were paying rent. In other words, if due regard had been paid to the provisions of Rules 59, 60 and 61 the learned Civil Judge had to investigate the claim on the footing that the petitioners were bona fide purchasers for value under registered sale deed. It is not clear as to whether the decree-holders Baliram and Jaiwant ever challenged the validity of these sale deeds, but assuming that they had, then that would have still been a question of title, But it could not be gainsaid that on the basis of the registered sale deed, the petitioners "had some interest in the property attached" within the meaning of Rule 59. The question which was required to be investigated was if the possession of the tenants who were admittedly on the land was on account of Gopalrao, the judgment-debtor or on account of the petitioners as the purchasers of the property from Gopalrao.
Instead of directing himself to such a kind of inquiry, which is clearly contemplated and enjoined by Rules 58, 59, 60 and 61, the learned Civil Judge misdirected himself by proceeding to determine a collateral question as to whose claim was superior.
In the result, it appears to me that the learned Civil Judge failed to carry on the investigation enjoined by Order XXI Rule 58 of the Code of Civil Procedure, he failed to enquire as to who was in possession and on whose account. I am, therefore, satisfied that the essential question which had to be decided by the learned Civil Judge has not at all been decided by him and the conclusion is, therefore, inescapable that the learned Civil Judge failed to exercise jurisdiction vested in him under Order XXI Rule 58 and otherwise acted with material irregularity and that, therefore, the order dated 24th December, 1970 is liable to be set aside.
........In this connection it may not be out of place to refer to an observation of the House of Lords in Bench, H.M. Inspector of Taxes v. Doncaster Amalgamated Colliery Ltd., (1946) 27 Tax Cas 296, which is as follows:
"Unless the Commissioners, having found the relevant facts and put to themselves the proper questions having proceeded to give the right answer, they may be said on this view to have erred in point of law".
There can be no disagreement with this said proposition of law and applying it to the facts of the present case one can only come to the conclusion that the learned Civil Judge did not at all ask himself the proper question. He thus failed to exercise the jurisdiction vested in him under Order XXI Rule 58 read with Rules 59, 60 and 61 of the Civil Procedure Code. The error committed by the learned Civil Judge was clearly in relation to the jurisdiction of the Court. On this finding this revision petition is not only maintainable but ought to be allowed.
In the circumstances, I allow the revision petition and set aside the order of the trial Court and remand the matter back to it to be tried in accordance with law."
After noticing these views of Hon'ble Apex Court and Hon'ble Bombay High Court regarding the scope and ambit of investigation of claim filed by a third party, like the respondent-objector herein, under Rule 11 I need not lose much breath in dismissing this appeal since I find that the learned Recovery Officer had not proceeded to dispose off the objections of the respondent-objector in accordance with the law laid down in the above referred two judgments. The Recovery Officer did not specify in his order as to when demand notice under Rule 2 of the Rules under Second Schedule to Income Tax Act was served on the concerned certificate debtor Maneesh Sehgal son of the deceased Shri S.K. Sehgal, who had died in 1993 while O.A. was decided in 2010 and so is son also had acquired ownership rights in the properties of his deceased father after his death, and as to who was in occupation of the properties in dispute and in what capacity, as was expected of him keeping in mind Rule 11 which has been extracted by the Hon'ble Supreme Court in Ranade's judgment (supra). In facts attention of the Recovery Officer to those judgments should have been drawn by the learned Presiding Officer himself while remanding back the matter to the Recovery Officer so that after remand at least correct order was passed. Now, it is hoped that the learned Recovery Officer will pass an order in accordance with the legal position laid down in the above referred two judgments. The Recovery Officer shall also involve Maneesh Sehgal and other legal heirs, if any, of deceased owner of the disputed properties in the investigation since in their absence no finding can be given that the objector alone had acquired ownership rights in the properties in dispute after the death of her husband and none else. Investigation cannot be done only by involving the Bank and the objector whose claim of being the only owner of her deceased husband's properties after his death is to be investigated. Undisputedly Maneesh Sehgal is one of the certificate debtors but he may not be keen to have the attachment of the properties lifted under the impression that since he has to make the payment of the Bank's dues the same could be recovered from the sale of his share in the attached property. But in case the objector succeeds without any notice of the investigation to Maneesh Sehgal he will become liable to clear the Bank's dues from his other personal assets also.
This appeal is, therefore, dismissed. The learned Recovery Officer, however, should decide the remanded matter within a period of two months from the date of receipt of copy of this order.
Copy of this order be sent to DRT along with its record as well as to the Recovery Officer for compliance.