Mamtaudhwani vs Indian Overseas Bank And Ors

Recently one case of another recovery officer had come up before this Tribunal(DRAT) in which the concerned recovery officer had cancelled the auction sale of a mortgaged property conducted in execution of a recovery certificate issued by the DRT with which he was attached, in favour of the highest bidder and had ordered inter se bidding between the successful bidder who had paid full sale consideration and a total stranger who had without participating in the public auction held by the recovery officer entered the court of room of the recovery officer and offered toto buy the already auctioned property at a slightly higher price. The recovery officer concerned got swayed by the stranger offering higher price and ordered inter- se bidding. The bank challenged that order of the recovery officer before the learned Presiding Officer of the DRT by way of an appeal under Section 30 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993('RDDBFI Act'). That appeal was accepted and the decision of the recovery officer for inter se bidding was set aside. The stranger then approached this appellate Tribunal by way of a second appeal under Section 20 of the RDDBFI Act. This Tribunal dismissed that appeal. That stranger thereafter approached the Hon'ble Delhi High Court with a writ petition under Section 226 of the Constitution of India(being W.P.(C) No. 2703/2020. That writ petition was thrown away at the threshold by the High Court vide order dated 13.03.2020. That was not a simple rejection of the writ petition but lot of anguish was expressed against the recovery officer concerned.

Order dated13.03.2020 of the Division Bench of the Hon'ble High Court reads like this:-

"W.P.(C) 2703/2020

"3. The present petition has been filed by the petitioner assailing an order dated 29.11.2019, passed by the Debt Recovery Appellate Tribunal (in short 'DRAT') dismissing an appeal filed by him against the order dated 16.10.2019, passed by the Presiding Officer, DRT-I, setting aside an order dated 11.03.2019, passed by the Recovery Officer-II, DRT-I, Delhi wherein an inter se bid was directed in respect of premises bearing No. T-59, DCM School Road, Karol Bagh, New Delhi 110005, a property that had already been auctioned in favour of the respondent No.1.

On enquiring from learned counsel for the petitioner as to how did his client land up at the door of the Recovery Officer and file an application, offering a sum of Rs. 63 lakhs for the subject property, when he had not even participated in the auction that was conducted earlier in respect of the subject premises, wherein the respondent No.1 was declared as the highest bidder, learned counsel for the petitioner states on instructions that the business associate of his client resides in the neighbourhood where this property is situated and based on the information furnished by him, the appellant had approached the Recovery Officer-II, DRT-I offering to purchase the subject property.

Having regard to the fact that the respondent No.1 had already been declared as the highest bidder, an auction conducted in respect of the subject property on 27.12.2017 in which he had offered a sale price of Rs. 48 lakhs in respect of the said property and, which amount was duly deposited, thus leaving the remaining formality of issuing a sale certificate in his favour, we requested learned counsel for the petitioner to explain the locus standi of his client for having approached the Recovery Officer-II, DRT-I, Delhi with this misconceived application. We are also surprised to note that the Recovery Officer- II, DRT-I, has not only entertained the said application filed by the petitioner, but has gone on to direct the highest bidder, namely, respondent No.1 herein who had participated in the bid and had deposited a sum of Rs. 48 lakhs in the Registry, to participate in an inter se bid with the petitioner, post the conclusion of the auction process.

We have serious reservations with regard to the conduct of the Recovery Officer-II, DRT-I, Delhi and are of the opinion that there is more than meets the eye in this case.

At this stage, learned counsel for the petitioner hastens to seek leave to withdraw the present petition.

While dismissing the present petition as meritless, it is deemed appropriate to direct the Registry to forward a copy of this order as also the orders dated 11.03.2019 passed by the Recovery Officer-II, DRT-I, Delhi, order dated 16.10.2019 passed by the Presiding Officer, DRT-I Delhi and the order dated 29.11.2019 passed by the DRAT to the Secretary, Department of Financial Services, Ministry of Finance, 3rd Floor, Jeevan Deep Building, Sansad Marg, New Delhi 110001 for perusal and for conducting an enquiry into the matter and if anything adverse is brought out against the Recovery Officer-II, DRT-II, Delhi, to take appropriate action in accordance with law.

As Union of India is not a party in the present proceedings, a copy of this order shall be forwarded by the Registry forthwith to the office of the Central Government Standing Counsel for perusal and compliance. An affidavit shall be filed by a Competent Senior Officer in the Ministry of Finance within four weeks, placing on record the steps taken pursuant to this order. 10. List on 23rd April, 2020, to await the affidavit."

The present appeal highlights the autocratic way of doing his job as the recovery officer by another recovery officer who is attached with Debts Recovery Tribunal-III, Delhi on deputation. In the present case the conduct of the recovery officer concerned M. Vikash Jaitlyis, in fact, more grave, as will be clear from the following narration.

This appeal challenges the order dated 30.06.2020 passed by the learned Tribunal below(DRT-III, Delhi) disposing of Appeal No. 34/2019 which was filed by the pre4sent appellant- auction purchaser under Section 30 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993('RDDBFI Act' in short) against an order passed by the Recovery Officer attached to DRT-III, Delhi. Earlier also the present appellant had approached this Tribunal by way of an appeal against some miscellaneous order passed by the DRT in the same appeal no.34/2019. That appeal was disposed of by this Tribunal on 06.06.2020 and in that order detailed factual background of the ongoing litigation at the instance of the present appellant, who is an auction purchaser of one property auctioned by the Recovery Officer in execution of recovery certificate issued by the DRT in respondent bank's Original Application under Section 19 of the RDDBFI Act against its defaulting borrowers/guarantors/mortgagor, was noticed.

It is deemed appropriate to notice the relevant portions of my order dated 06.06.2020 for better appreciation of the controversy which this Tribunal is again called upon to decide in this second round of litigation started by the appellant-auction purchaser.This appeal is against the order dated 30.06.2020 passed by the learned Presiding Officer of DRT-III whereby Appeal No. 34/2019 has now been finally decided after remand by this tribunal vide order dated 06.06.2020. The relevant parts of order dated 06.06.2020 of this Tribunal are re-produced below:-

"2. The relevant facts giving rise to the present litigation are that the appellant is an auction purchaser who had given the highest bid for purchase of property no. 17-A, Sector MahilaUdaymi Park-1, Greater Noida, Distt. Gautam Budh Nagar(U,P,) (hereinafter shall be referred as the 'property in question') in public auction conducted by the Recovery Officer attached to Debt Recovery Tribunal-III, Delhi in order to recover over twenty crores of public money found by the DRT to be recoverable from respondents 2 to 6 herein(CDs) in an Original Application No. 58/2013 which had been filed by respondent/CH bank under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act,1993('RDDBFI Act' in short) against the respondents 2 to 6 for issuance of a recovery certificate for recovery of the outstanding dues in the loan account of its defaulting borrower, respondent no. 2 herein.

Upon receipt of recovery certificate from DRT recovery case being RC No. 166/2016 was registered for execution the recovery officer put up the immovable properties, including the property in question, mortgaged with the CH Bank for auction. Two properties were sold in that auction. While the recovery officer confirmed the auction sale in respect of one property which stood successfully auctioned in the auction held on 31.05.2019 but no order of confirmation of auction in respect of the property in question purchased by the appellant herein for a sum of Rs. 2.22 odd crores was passed on 19.09.2019 even though no objections against that sale were filed within the statutory period by any one and also despite the fact that a specific application was also moved on behalf of the appellant for confirmation of sale and issuance of a sale certificate in her favour. The recovery officer still did not pass any order of confirmation of the auction sale in favour of the appellant- auction purchaser.

One fine morning some stranger out of the blue surfaced and approached the recovery officer and told him that he was ready to buy the property in question for Rs. 3 crores as against the price of Rs. 2.22 crores at which the appellant herein had purchased the same. The recovery officer obliged that stranger and vide his order dated 15.10.2019 the learned recovery officer recorded that the property in question had been sold at an inadequate price and, therefore, he cancelled the sale in favour of the appellant herein observing that a buyer had come forward to buy the property in question for Rs. three crores inclusive of the dues of NOIDA.

Feeling aggrieved by the cancellation of the sale in her favour by the recovery officer vide his order dated 15.09.2019 the appellant filed an appeal before the learned Presiding Officer of the DRT- III(being Appeal No.34/2019). In that appeal the learned Presiding Officer passed an interim order which reads under:-

"The present appeal has been filed by MamtaUdhwani i.e. auction purchaser in the present matter against the impugned order dated 15.10.2019 passed by Ld. Recovery Officer-II in R.C No. 166/16 whereby the Ld. Recovery Officer-II has put the property for sale and issued sale proclamation dated 15.10.2019.

The brief facts of the case is that the present appellant i.e. Mamata Udhwani is stated to have been bona fide purchaser who purchased the property i.e. industrial property bearing no. 17-A, Sector, MahilaUdaymi Park-1, Greater Noida, Distt. GautamBudh Nagar, U.P, area admeasuring 1239.300 sqmtrs. (hereinafter referred as property in question) in an auction held by the Recovery Officer-II on 31.05.2019 for an amount of Rs. 2.51 crores and the said entire amount has been paid. Infact the five properties were put on auction including the property in question on public action with reserve price of Rs. 2.51 crores on 31.05.2019 and the appellant was declared as successful bidder for an amount of Rs. 2.20 crores with respect to the property in question and deposited an amount of Rs. 33.10 lacs being the balance 15% of the highest bid and thereby deposited an amount of 25% of the sale amount and subsequent to that an amount of 75% of the sale amount i.e. Rs. 1.67 crores has also deposited. However, by the impugned order Ld. Recovery Officer -II set aside the said auction and stated by the ld. Counsel for the CDs that the factory of the CDs may not be sold as Mr. Mahesh Aggarwal, who is ready to purchase the property for an amount of Rs. 2.50 crores, therefore, the earlier price was stated to inadequate i.e. Rs. 2.21 crores. Apparently, the order passed by the Ld. Recovery Officer -II vide order dated 15.10.2019 is illegal and malafide one and the ld. Counsel for the appellant prayed for granting interim injunction.

On the other hand, ld. counsel for the CDs argued that the property was worth more than Rs. 2.20 crores and the intending buyer, i.e. Mahesh Aggarwal was interested to purchase the property in question for an amount of Rs. 2.50 crores, therefore, the ld. Recovery Officer-II rightly passed the impugned order and no ground is made out for granting interim injunction as the property in question has already been put for re-auction.

Ld. counsel for the respondent bank has filed the reply stated that the impugned order suffer irregularly and illegality and accordingly, the got permission to issue sale certificate in the name of highest bidder.

Heard and record has been thoroughly perused.

So far as interim injunction is concerned, the property in question was auctioned on public auction and amount of Rs. 2.20 crores was received. So far as the application of Mr. Mahesh Aggarwal is concerned, the same was moved later on whereas the public auction was already been deposited. Taking into consideration all the facts and circumstances, the impugned order dated 15.10.2019 passed by the Ld. Recovery Officer - II deserves to be stayed, as the legal question is involved and the same has to be decided after hearing all the parties and receiving replies on behalf of the CDs as well. Therefore, the prima facie case is made out in favour of the appellant. Accordingly, the impugned order dated 15.10.2019 passed by Ld. Recovery Officer -II stands stayed till further orders.

Now, the matter stands adjourned for filing reply and re-joinder, if any posted before Registrar on 17.04.2020."

On 08.01.2020 when this appeal was taken up for ex parte hearing the following order was passed by this Tribunal after noting the grievances raised by the learned counsel for the appellant Shri Sanjeev Bhandari:-

"Present: Mr.Sanjeev Bhandari and Mr. Ravi Data, counsel for the appellant

Appellant is seriously aggrieved by an order passed by the learned Recovery Officer attached to DRT-III, Delhi, whereby a concluded auction sale of one property of the CDs in favour of the appellant has been set aside by the Recovery Officer upon an oral objection raised against the sale by the CDs. It is contended that the sale proclamation of various properties of the CDs was issued by the Recovery Officer in order to recover over 10 crores of rupees for which a recovery certificate stood issued by the DRT. It is submitted that the learned Recovery Officer in a blatant violation of the mandatory provisions of Rules 60 and 61 of the Rules framed under the Second Schedule to the Income Tax Act has entertained the objection against the sale without insisting upon the deposit of the amount of debt recoverable from the CDs as found by the DRT in the bank's O.A. It has also been submitted that the Recovery Officer has also committed violation of Rule 63 of the aforesaid Rules.

Without going into any other aspect of the matter for the time being, I direct the Recovery Officer to come with the recovery file of R.C. No.166/2016 "Indian Overseas Bank Vs. V.D. Signages (P) Ltd. etc"., and also to submit a report as to how the concluded sale was set aside and a fresh sale proclamation was ordered to be issued at the instance of the CDs without insisting compliance of the mandatory Rules 60 and 61 of the Second Schedule to the Income Tax Act by the CDs.."

The Recovery Officer in compliance of the aforesaid direction appeared before this Tribunal alongwith the recovery file and his report which is being re-produced below:-

"A Recovery Certificate dated 4.7.2016 was issued by Hon'ble Presiding Officer, DRT with a mandate to recover an amount of Rs.09,91,17,822 along with cost, expenses and interest @14% simple from the date of filing of O.A. i.e. 03.1.2013.

A sale proclamation was issued on 6.12.2016 by the Forum having reserve price of the property in question (i.e. 17 A, MahilaUdyami Park, Greater Noida, Distt. Gautam Budh Nagar, UP) as Rs.2.40 Crore. Auctions failed hence vide order dated 27.8.2018, under Rule 25(AA) of RDBFI Act, Court Receivers were appointed to take physical possession of the property in question alongwith other properties of CD situated at Ghaziabad and Sikandrabad, 2018. The physical possession of all mortgage properties of CDs were taken by the Court Receivers as appointed by the Forum.

Counsel for CH Bank filed the details of mortgage properties including plant and hypothecated machinery in tablular manner vide diary no.3904 dated 27.3.2019, in which the Fair market value of property in question was indicated as Rs.2.19 Crore and Forced Sale Value as Rs.1.75 Crore. Sale Proclamation was issued vide order dated 27.3.2019 and the reserve price of the property in question was kept as Rs.2.19 Crore.

The auction was held on 31.5.2019 and for aforesaid property, the highest bid of Rs.2.20 Crore was given by Smt. MamtaUdwani against the Reserve price of Rs.2.19 Crore.

CD filed application vide diary no.13766 dated 29.8.2019 and submitted as they have submitted an OTS proposal but no response has been received by CH Bank. CD submitted that they had already informed CH Bank about worth of their Factory and they have a buyer for their Factory (the property in question) for Rs.3 Crore (including the dues of NOIDA Authority) and requested this Forum to issue direction of CH Bank to file present status of their mortgage properties.

CD further submitted that highest bid offered for the property in question is less than its real worth and inadequate for confirmation. To support their claim, Sh. Mahesh Aggarwal, an intending buyer as mentioned by CD, filed an affidavit/undertaking alongwith DD No.42705 dated 14.10.2019 worth Rs.75 Lakhs as 25% for an offer of Rs.3 Cr.(including the dues of NOIDA authorities)in the DRT to show his bonafide and it was further submitted that the balance 75% amount would be deposited on or before 15.12.2019, failing which he will abide by the punishment awarded by the Tribunal.

An speaking order was passed on 15.10.2019 by this Forum that in view of observation of Hon'ble Supreme Court in the matter of Navalkha& Sons Vs. Sri Ramanya Das &Ors 1970 AIR 237, 1970 SCR(3) 1' that the condition of confirmation by the Court, operates as a safeguard against the property being sold at inadequate price and it is the duty of the Court to satisfy itself that having regard to the market value of the property, the price offered is reasonable and that is because, the Court is the custodian of the interests of the Company and its creditors.

In the order dated 15.10.2019 of the Forum, it has been held that the property in question has the worth more than the bid amount and has the potential to fetch more sale consideration which needs to be explored by all possible means and consequently it is also held that bid received from Smt. MamtaUdwani for Rs.2.20 Crore is not adequate. Further in consonance with the terms & conditions (Sl.no.13) as stipulated in the ........Sale Notice dated that the Recovery Officer has the absolute right to accept or reject any bid or bids or to postpone or cancel the e-auction without assigning any reason, because vide aforesaid order dated 15.10.2019, the bid of Rs.2.20 Crore of Smt. MamtaUdwani was. by the Forum.

Fresh sale proclamation was issued with Reserve price of property as Rs.2.51 Crore. The draft of Rs.75 Lakh of intending bidder was handed over to CH Bank.

It was also directed vide order dated 15.10.2019 that the prospective bidder has to participate in the E-auction for the property in question after completing the terms & conditions of the Sale Proclamation and the demand draft of Rs.75.00 lakhs deposited by him shall be considered as EMD and part payment towardsthe bid amount if he declared as highest and successful bidder. It is also made clear that if Sh. Mahesh Aggarwal, the prospective bidder does not participate in the auction for any reason whatsoever or does not comply with the terms & Conditions of Sale Proclamation notice, the amount equivalent to EMD shall be forfeited from the deposit made by him.

It is also open for applicant Ms. MamtaUdwani (erstwhile highest bidder) to participate in the public E-Auction.

As on date, the cumulative outstanding recoverable dues of CDs are about 20 crore and the aggregate value of available mortgage properties as per last Sale proclamation dated 25.11.2019 is only Rs.6.03 Crore."

Appearing for the appellant-auction purchaser their learned counsel Mr. Sanjiv Bhandari and Mr. Ravi Data made a very serious grievance and which grievance according to their submission was not only of theirs but of many other members of the bar who appear before this particular recovery officer Mr. Vikash Jaitly, whose illegal and arbitrary orders have given rise to the present unnecessary litigation was that Mr. Vikash Jaitly is not functioning as a quasi judicial authority which is expected to function in a judicious manner but he is acting not only in the present case but in general while performing his duties as a recovery officer in an 'autocratic' manner throwing to the winds the provisions of law which govern the functioning of recovery officers. Referring to the report submitted by Mr. Vikash Jaitly in compliance of the direction given to him by this tribunal on 08.01.2020 Mr. Bhandari and Mr. Data submitted that this tribunal had asked him to explain as to how he cancelled the sale lawfully conducted in favour of the appellant and with which he himself was fully satisfied was cancelled ignoring the compliance of the mandatory provision of pre-deposit of the debt in question by the borrower(CDs) It was also asked from him as to why the sale was not confirmed in favour of the appellant within the statutory period of thirty days from the date of auction, which in the present case was 31.05.2019, when undisputedly nobody including any of the CDs-respondents 2 to 6 herein, had come forward to file any objection petition either under Rule 60 or Rule 61 of the Rules framed under Second schedule to the Income Tax Act under which Rules recovery proceedings for recovery of public money as ordered by DRTs in O.As of banks and financial Institutions filed under Section 19 of the RDDBFI Act are to be governed, the stand taken by Mr. Jaitly was 'merimarzi'. Learned counsel submitted that Mr. Jaitly has the audacity to tell this Tribunal that it was his 'marzi' whether to confirm the sale in favour of the appellant and without even responding to the querry also raised by this Tribunal as to why compliance of the mandatory requirement of pre-deposit he has chosen not even to refer to that querry what to say of giving any explanation. Learned counsel further submitted that that none of the CDs had ever raised any objection regarding the legality of the auction sale in favour of the appellant before Mr. Jaitly then how could he cancel the sale conducted by himself as if he could act as the appellate authority over his own decisions. In these circumstances, learned counsel submitted, the only inference which could be legitemately drawn against Mr. Vikash Jaitley was that he wanted to unduly favour a third party who had come forwarded much after the date of auction in favour of the appellant to offer price of Rs. three crores which Mr. Jaitley considered to be more than the price of Rs. 2.22 crores at which the appellant had purchased the property n question when in fact there was no increase at all offered by the third party as the price of three crores offered was inclusive of the dues of NOIDA also which as per the Mr. Jaitly's file are to the tune of approximately Rs. 60 lacs.

As far as the impugned order passed by the learned Presiding Officer of first appellate forum(DRT) is concerned the grievance raised by the learned counsels for the appellant-auction purchaser was that surprisingly even after coming to the conclusion that the decision of the recovery officer Mr. Vikash Jaitly to re-auction the property in question to accommodate a third party was not justified has simply stayed the operation of that order of the recovery officer instead of quashing the same and directing the recovery officer to confirm the sale in favour of the appellant and for issue of sale certificate in her favour. The argument was that the learned Presiding Officer has given a very long date for hearing the appeal observing that a legal issue is involved without specifying the same which could be decided after giving all parties to complete their pleadings totally ignoring the fact that the appellant is already out of pocket of over two crores of rupees since last year and the appellant is suffering huge financial loss each day. It was also contended that the bank had given in writing before the recovery officer that sale certificate should be permitted to be issued in favour of the auction purchaser and sale proceeds to be appropriated has observed that parties needed to be heard in detail. It was submitted that as far as the CDs are concerned they had not at any stage raised any objection against the sale of the property in question though they had raised some objection regarding sale of their agricultural land so there was no occasion for giving any hearing to the CDs and it was a fit case where the impugned order of the recovery officer could be quashed straightaway by the learned Presiding Officer and the appeal disposed of immediately to avoid unnecessary loss to the appellant on account of loss of return on her investment. It was further contended that it is not for the first time that this particular recovery officer(Mr. Vikash Jaitly) has acted in a totally autocratic manner in the present case in other cases on his board he has been acting as if the 'recovery court' presided over by him is his 'personal fiefdom'. It was appointed out that in one case relating to a property in Sainik Farms, New Delhi the occupant of that property had cleared the entire dues of the mortgagee bank of that case since he was having an agreement to sell in his favour executed by the bank's defaulting borrower. Despite the fact entire dues of the CH bank had been satisfied the recovery officer in a totally arbitrary manner dispossessed the occupant of the mortgaged property. That matter reached the Hon'ble Delhi High Court by way of a writ petition at the instance of the person who stood dispossessed by Mr. Vikash Jaitly, recovery officer and in that writ petition(being W.P.(C) No.6546.2019) the Hon'ble High Court vide its order dated 31.05.2019 directed the recovery officer to forthwith deliver back the possession of the property in dispute to the writ petitioner from whom possession had been taken. It was stated that before approaching the High Court the dispossessed person had approached this appellate Tribunal for a direction to the recovery officer to deliver back possession to the dispossessed person but since at that time the appeal filed against the order of Mr. Vikash Jatily refusing to deliver back possession was pending before the Presiding Officer of DRT-III, where the appeal of the present appellant-auction purchaser is also pending, this tribunal had simply remanded back the matter to the Presiding Officer to decide the appeal and pass appropriate orders and no direction was given to the recovery officer to deliver back the possession to the appellant of that case. It was pointed out that the Hon'ble High Court had disposed of the writ petition without even issuing any notice of that writ petition of Darayus Nariman to the borrowers/CDs of that case. Learned counsel submitted that in the present case also the CDs have no role to play as far as the auction sale of the property in question purchased by the appellant-auction purchaser is concerned and so this appellate tribunal itself can proceed to dispose of the appellant's appeal pending before DRT-III, Delhi and issue necessary direction to the recovery officer to confirm the auction sale in favour of the appellant and also to issue necessary sale documents like sale certificate etc. and also for delivery of title documents which the respondent bank was always ready to hand over to the appellant being the successful auction purchaser. Thus, the prayer of the learned counsels for the appellant was that in the present case also there is no need of giving any hearing to the CDs of the present case as that would further add to the woes of the appellant and would amount to perpetuating the legal mistake committed by the recovery officer as well as the learned Presiding Officer by showing undue indulgence to the CDs by hearing them without their being called upon to comply with the mandatory requirement of pre-deposit as provided under Rules 60 and 61 of the Rules under Second Schedule of the Income Tax Act.

The order passed by the Hon'ble High Court in the writ petition of another victim of Mr. Vikash Jaitly's alleged 'autocratic' functioning, as submitted by the learned counsel for the appellant, is re-produced below:-

"W.P.(C.) No. 6546/2019 & CM No.27710/2019 W.P.(C) No. 6638/2019 & CM No. 28049/2019

Issue notice. Counsel for the respondent no.1 accepts notice.

In view of the order that we propose to pass, we do not consider it necessary to issue notice to the other respondents.

The petitioners are aggrieved by the order dated 27.5.2019 passed by the learned Debt Recovery Appellate Tribunal in Misc. Appeal No. 121/2019 arising out of Appeal No. 6/2019. The said appeal had been preferred by the petitioners, being aggrieved by the order dated 27.2.2019 passed by the DRAT-III, Delhi.

The petitioners claim to have entered into an Agreement to Sell with the owners/debtors i.e. respondents no. 3 and 8, against whom respondent no.1-bank had initiated the Original Application to claim recovery of debts due to it. The Original Application was allowed and a recovery certificate was issued against the debtors. The property bearing no. 127-A, Central Avenue, Sainik Farms, New Delhi in respect whereof the petitioners claimed to be the agreement purchasers, was a property mortgaged to secure the loan obtained by the debtors. With a view to effect recovery, the Recovery Officer was appointed by the DRT, who took possession of the said property from the petitioners on 28.01.2019.

With a view to secure its interest under its alleged agreement to sell, the petitioners deposited the entire amount claimed by the respondent-bank under the recovery certificate. Thus, so far as the claim of the respondentbank is concerned, the same stands completely satisfied.

There are inter se disputes between the petitioners and the original W.P.(C.) No. 6546 & 6638/2019 Page 3 of 4 owners, in respect whereof the petitioners claim for specific performance of agreement to sell, as well as the suit of the owners to claim cancellation thereof, are pending.

On 27.2.2019, the Debt Recovery Tribunal passed an order, which shows that the Tribunal is examining the statement of account filed by the respondent-bank with regard to the quantification of the liability of the borrowers. That order was assailed before the Ld. DRAT by the petitioners. The learned DRAT while passing the impugned order has remanded back the proceedings to the DRT and directed that since the petitioners have settled the claim of the bank, further proceedings towards sale of the property in question be stayed. However, no direction has been issued with regard to the delivery of possession of the property to the petitioners, despite the fact that the respondent-bank has made a statement that its claim stands satisfied and the possession of the property was taken by the Recovery Officer from the petitioner.

Learned counsel further submits that in the proceedings before the DRT in the SA, the respondent-bank had agreed to deposit the title deeds in this Court. 9. Since the admitted position is that the possession of the said property was with the petitioners before it was taken over by the Recovery Officer; the possession of the said property was taken over by the Recovery Officer only with a view to proceed with the auction sale of the said property; the respondent- bank has stated that its claim is fully satisfied meaning thereby that the auction sale of the said property is no longer required to be undertaken, there was no purpose in allowing the possession of the property W.P.(C.) No. 6546 & 6638/2019 Page 4 of 4 to remain with the Recovery Officer. In our view, the DRAT should have directed the same to be restored to the petitioners since the same was taken from the petitioners.

Accordingly, we dispose of this petition with a direction to the Recovery Officer to forthwith deliver the possession of the property to the petitioners. The respondent-bank shall deposit the original title deeds relating to the property in the suit and the counter-claim proceedings which are pending in this Court, and the release of the said title deeds shall abide by the decision in the suit/counter-claim.

The aforesaid direction is agreeable to the respondent-bank, and in our view, there is no prejudice caused to the other respondents/ owners, since merely the status quo ante has been restored as it existed before the Recovery Officer took over the possession of the property from the petitioners. The rights/claims of the petitioners and the owners i.e. Respondent Nos. 3 and 8 in the respect of the said property are preserved.

The petition stands disposed of."

It was also submitted that rights of a third party coming forward to purchase the auctioned property for a higher price without having participated in open auction have been crystallised very elaborately in a judgment 6th September, 2018 of Gujarat High Court in "RammohansinghBadshahsingh ... vs Debts Recovery Appellate Tribunal" (SPECIAL CIVIL APPLICATION NO. 3131 of 2018)."(HIGHLIGHTING HAS NOW BEEN DONE BY ME WHILE PASSING THE PRESENT ORDER).

After giving my due consideration to the submissions made by the two learned counsel for the appellant, the record of the recovery officer which was summoned I am of the view that since appeal against the impugned order dated 15.10.2019 of the recovery officer whereby the auction sale in favour of the appellant has been set aside/cancelled is still pending disposal before the learned Presiding Officer of the DRT- Page 14 of 16 Misc. Appeal No. 06 of 2020 III, Delhi it will be appropriate and in the interest of justice that the first right of deciding the various important and serious issues raised and highlighted by the learned counsels for the appellant is not taken away from the learned Presiding Officer of the DRT and it should at first instance be left to the Presiding Officer to take an independent decision. Any observation made by this tribunal even prima facie one is likely to enter the mind of the learned Presiding Officer and there is likelihood of his mind getting influenced even by the prima facie observation is appellate authority. That eventuality should thus be avoided.

This tribunal however appreciates the anxiety of the appellant that since she has already paid over two crores for buying the property in dispute the learned Presiding Officer of the DRT should have been more sensitive in such a situation by disposing of her appeal itself at the earliest instead of keeping the appeal at the bottom by fixing a very long date and that too only for completion of pleadings when the CH bank has already given in writing that it does not have any objection if sale is confirmed in favour of the appellant so that sale proceeds can be appropriated in the loan account of the defaulting borrowers. The learned Presiding Officer ought to have disposed of the appellant's appeal within a short period of time.

The appellant has raised very serious grievances against the manner the matter has been dealt with the recovery officer Shri Vikash Jaitly. Those grievances/allegations do need a deep examination/investigation by the learned Presiding Officer of DRT who not only is the first appellate authority of the recovery officers attached to his tribunal but he also has been conferred with the power of superintendence over the overall functioning of the recovery officers.

This appeal is accordingly disposed of with a direction to the learned Presiding Officer of DRT-III, Delhi to decide Misc. Appeal No.34/2019 on his board within a period of 45 days from the date of receipt of this order. I f necessary the matter can be preponed by him so as to comply this direction. While deciding the appeal the learned Presiding Officer shall specifically deal with the following aspects also in addition to what would be submitted before him by the parties:-

(a) Since the property in question appears to be leasehold owned by NOIDA it would be examined as to why the recovery officer did not mention in the sale proclamation that property being leasehold the successful bidder will also have to pay to NOIDA its dues on account of unearned increase etc. which as per the impugned order of the recovery officer himself were to the tune of Rs. 60 lacs which the third party produced by the CDs had offered to pay. Learned Presiding Officer will give his view as to why the recovery officer Shri Jaitly did not demand NOIDA dues from the appellant-auction purchaser. Was it to favour her and give undue financial benefit to her by ignoring the right of NOIDA to get unearned increase which normally is the clause in every lease deed in when leasehold lands are allotted on lease. The learned Presiding Officer shall also examine as to why the recovery officer did not confirm the sale in favour of the appellant when undisputedly no objections were raised before him by any one within a period of one month. It will also be examined as to why sale in favour of the appellant was set aside at the oral prayer of the CDs made after expiry of statutory period of one month prescribed for filing objections against an auction sale. Why the recovery officer did not insist upon payment of pre-deposit as provided under Rules 60 and 61 before entertaining the prayer of the CDs for cancellation of sale. If the learned Presiding Officer comes to the conclusion that the recovery officer Shri Vikash Jaitly committed any illegalities in the matter of conduct of auction and then its cancellation with some ulterior motives then the learned Presiding Officer shall also suggest in exercise of his power of superintendence over the functioning of his recovery officers."

The learned Presiding Officer of DRT-III, Delhi then in compliance of the said direction given in the order dated 06.06.2020 of this Tribunal took up the appeal pending before him and on 30.06.2020 has decided the appeal. Relevant parts from the impugned order are being extracted below:-

"The instant appeal has been filed by the appellants under Section 30 of the Recovery of Debts Due to Banks and Financial Institution Act, 1993 against the impugned order dated 15. 10.2019 passed by the Ld. Recovery Officer-ll of this Tribunal in RC No. 166/2016 and to quash/set aside the impugned Sale Proclamation dated 15.10.2019 issued by Ld. Recovery Office.

The brief facts of the case are that the appellant herein is a bonafide auction purchaser who has purchased the immovable mortgaged property being industrial Property bearing 17A, Sector, MahillaUdaymi Park-1, Greater Noida, Distt. GautamBudh Nagar, U.P., area admeasuring 1239.300 sq. mtrs. (hereinafter referred to as 'property-in question') in a public auction conducted by Ld. Recovery Ofier on 31.05.2019.

Further, it is stated in the appeal that the respondent no. 1 is a Nationalised Bank which is alleged to have granted certain credit facility to the respondents no. 2 t0 6 who are the principal borrowcr of respondent no. 1 and the Certificate Debtors in the Recovery Certificate no. 166/2016. In view of the defaults committed by respondents no. 2 to 6 in repayment of credit facilities, the respondent no. 1 bank filed an OA No. 58 of 2013 before Hon'ble DRT-I, Delhi against the respondent no. 2. its guarantors and mortgagors which was allowed vide Final Order and consequently, a Recovery Certificate being RC No. 166 of 2016 was issued and the recovery proceedings were initiated against the respondents no. 2 to 6. The Ld. Recovery Officer in pursuance of the RC issued the Sale Proclamation dated 27.03.2019 whereby putting 5 properties including the property-in-question on public auction wherein the date of e-auction was fixed on 31.05.2019 with reserve price of Rs. 2,51,00,000/. with respect to property-in-question. The appellant herein deposited EMD of Rs 21,90.000/. by way of Demand Draft dated 29.05.2010 and participated in the public auction. On 31.05.2019, the appellant herein was declared as successful bidder for an amount of Rs. 2.20,000. and accordingly, the appellant deposited the DD dated 01.06.2019 for an amount of Rs. 33,10,000/- being the balance of 15% of highest bid amount thereby depositing an amount of 25% of the sale amount in terms of Sale Proclamation dated 27.03.2019, Further, the appellant herein deposited an amount of Rs. 1,67,00,000/- consisting of 75% of sale amount and poundage fees.

It is further stated that the matter was listed before Ld. Recovery Officer on 03.06.2019 on which date ld. Recovery Officer recorded the statement of the counsel for respondent no. 1 that auction has been successfully conducted in respect of two properties and further requesting for some time to suggest further course of action for remaining properties. The Ld. Recovery Officer allowed the request and adjourned the matter to 04.07.2019. In the meantime, the appellant vide diary no. 7492 dated 17.06.2019 filed an application for confirmation of sale and other consequential relief..........................On 19.09.2019, the Ld. Recovery Officer records the statement of the counsel for the CDs that the factory of the CDs, situated a MahilaUdyami Park may not be sold as he is ready to deposit a sum of Rs.3.0croreby04.10.2019,whereas the aforesaid property has been auctioned for a sum of Rs. 2.22 crore only. Ld. Recovery Officer further recorded the statement of the respondent no. 1 bank that the auction of five properties of CDs were conducted on 31.05.2019, however, the CD neither came forward nor participated in the auction, however, the CDs neither came forward nor participated in auction however when the highest bidder have deposited the complete auction amount and the sale is about to be confirmed, the CD is offering better price for the property situated at MahilaUdyam Park of Greater Noida of S. No. 3 of Sale Proclamation dated 27.03.2019. It is pertinent to mention that on 19.09.2019, the Ld. Recovery Officer simply recorded the statement of both the respondent bank and the CDs, however, neither returned any finding or observation or passed any order with respect to the respective contentions of the parties and adjourned the matter to 04.10.2019. Thereafter, on 04.10.2019, the Ld. Recovery Officer records the submissions of counsel for the CDs that he has prepared an application with two cheques of intending bidder namely Sh. Mahesh Aggarwal, however, due to sudden death in his family, the intending bidder could not file the application and requested 10-days' time for that. The Ld. Recovery Officer further records the submissions of the CH bank that these are only delaying tactics of CDs as mortgage property has already been auctioned and awaiting confirmation from this Forum and CDs have availed sufficient opportunities and no further opportunity be given to them and the sale be confirmed. It is pertinent to note that on 04,10.2019 also the Ld. RO simply recorded the statement of both the respondent bank and the CDs, however, nether returned any finding or observation of passed any order with respect to the respective contentions of the parties and adjourned the matter to 15.10.2019, On 15.10.2019, the Ld. Recovery Officer passed the impugned order whereby the ld. Recovery Officer without assigning cogent reasons rejected the bid of the appellant on frivolous grounds and put on auction the property-in-question slated to be held on 28.12.2019. At this stage, it would be pertinent to mention that apparently the record will show that the sale notices have been duly published in newspapers and was also pasted on the conspicuous part of the mortgaged property. Moreover, this was not the first time that the sale was being conducted and prior to this, the sale had been fixed and all failed. The effort of recovery and sales is going on since 2016, through unsuccessfully. In spite of this, there was no objection either pre-sale stage or post sale stage. Moreover, once the entire sale consideration has been paid within time in terms of the Sale Proclamation dated 27.03.2019; there cannot be any contention to the contrary. Hence, feeling aggrieved by the order dated 15.10.2019 passed by the ld. Recovery Officer and to prevent any such prejudice/irreparable harm, injury to the appellant herein, the appellant is impelled to approach this Tribunal for appropriate orders/ directions.

The respondent no. 1 bank has stated in its reply that in the RC No. 166 of 2016, the respondent no. 1 bank has been trying to recover the money due to it by the CDs under the said RC by way of public auction since 2016 but has been unsuccessful in doing to. It is further stated that three Sale Proclamation were issued since 2016, dated 06.12.2016, 21.03.2017 and 12.07.2017, but all of them have led to no results as no bids were submitted. It is also stated that when the fourth Sale Proclamation was issued on 27.03.2019 and the property was sold to the appellant herein by way of public auction, however, the sale stands cancelled by the order of Ld, Recovery Officer-ll of this Tribunal dated 15.10.2019 and fifth Sale Proclamation has been issued through the said order. It is stated that the respondent no. I has been trying to sell the property and recover the dues since 2016 but the CDs have neither come forward even once to purchase the property nor have deposited any amount with the bank, however, as soon as the highest bidder became the auction purchaser and paid the money, the CDs have come forward with ta claim to pay highest amount which shows a clear malafide intent on the part of the CDs. It is also stated that the sale should be confirmed in favour of the appellant and respondent no. I bank be allowed to appropriate the sale proceeds in the loan account and if the sale was to be cancelled, the Ld. Recovery Officer should have cancelled it before the moneys were deposited by the auction purchaser. It is further stated that conducting auctions again and again requires a lot of expenditure at the end of the respondent no. I and amounts a loss to public money and since so far as 3 out of 4 auctions have been unsuccessful because of the absence of the bidder, thereisnoassurancethatthisone will be successful. Hence, no more delay and loss of public money should be caused in the process of recovery of debts and the respondent no. I bank has no objection if the present appeal is allowed by this Tribunal. It is also requested by the respondent no. I bank to issue the sale certificate to the highest bidder and allow the respondent no. I bank to appropriate the sale proceeds, lying with the bank, in the loan account.

Ld. Counsel for appellant vehemently contended that the impugned order has been passed by the Ld. Recovery Officer without going through the facts that the application moved on behalf of respondents no.2 to 6/CDs was hopelessly time barred as the same was filed at belated stage i.e. after 30-days of the auction dated 31.05.2020 whereas the present appellant had already deposited the entire amount within the stipulated period, therefore, Ld. Recovery Officer was supposed to confirm the sale, however. Ld. Recovery Officer instead of confirming the sale, adjourned the matter and thereafter on 15.10.2019 set aside the entire auction and put the property-in-question on sale and issued fresh sale proclamation. Further, it is also argued that the Ld. Recovery Officer set aside the entire auction on the ground of inadequacy of the price and also entertained an affidavit of third party i.e. Sh. Mahesh Aggarwal who never moved any application beforeRecovery Officer, therefore, the entire order suffers from severe illegality and malafide, ................................................... Accordingly, prayed that the impugned order be set aside and Ld. Recovery Officer be directed to confirm the sale and other formalities to be ordered to be completed.

On behalf of respondent no. 1 bank, Ld. Counsel argued on similar lines that of the present appellant and also stated that the bank suffered a lot as the sale has not been confirmed for the last one year and the amount is lying without fetching any interest and same cannot be used by the bank unless sale is being confirmed. He also argued that the impugned order of Ld. Recovery Officer suffers from illegality and perversity, accordingly, prayed for setting aside the same.

On the other hand, Ld. Counsel for respondent's no. 2 to 6/CDs vehemently argued that the property-in- question has been sold for a meagre amount.

....................................................Accordingly,present respondent's no. 2 to 6 moved an application on 28.08.2019, however, application could not be taken up by the Ld. Recovery Officer.....................Further, it is also argued that the respondents no. 2to 6 had proposed one intending buyer i.e. Sh. Mahesh Aggarwal who was ready & willing to pay Rs. 3.0 crore .................................

In this context, before proceeding further, it would be apposite to go through the relevant provisions of Schedule II of Income Tax Act i.e. Rule 60 & 61 which are as under:-

60(1) Where immovableproperty has been sold in execution of acertificate, the defaulter, or any person whose interests are affected by the sale, may, at any time within thirty days from the 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 one and ¼ percent for every month or part of a month, calculated from the date of the proclamation ofsaleto the date when the deposit is made: andb. for paymentto the purchaser, as penalty, a sum equal to five per cent of the purchase money, but not less than one rupee.

(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.

Where immovable property has been sold in execution of a certificate, such Income-tax Officer as may be authorised by the Principal Chief Commissioner or Chief Commissioner or Principal

Commissioner in this behalf, the defaulter, or any person whose interests are affected by the sale, may, at any time within thirty days from the date ofthe sale, applyto the Tax Recovery Officer to set aside the sale of the immovable property on the ground that notice was not served on the defaulter to pay the arrears as required by this Schedule or on the ground of a material irregularity in publishing or conducting the sale:

Provided that -

c.no sale shall be set aside on any such ground unless the Tax Recovery Officer is satisfied that the applicant has sustainedsubstantialinjury by reason of the non-service or irregularity: and

d. an application made by a defaulter under this rule shall be disallowed unless the applicant deposits the amount recoverable from him in the execution of the certificate."

Now, in the light of above said directions of Hon'ble DRAT and above said provisions of 2ndSchedule of Income Tax Act, the present facts of the matter in hand are being examined. ...................................................Undisputedly, the present appellant was declared as highest bidder for a sum of Rs. 2.20 crore as the reserved price was fixed for Rs. 2.19 crore. In response to that, present appellant deposited the entire amount within the stipulated period and there is no dispute qua that. Subsequent to that, the present appellant filed an application for confirmation of sale and other consequential relief on 17,06.2019, however, the matter was kept on adjourned for one reason or another and ultimately on 12.09.2019, it was recorded that the certificate debtors filed an application on 29.08.2019 and Ld. Recovery Officer adjourned the matter for 19.09.2019. Thereafter, on the said date the Ld. Recovery Officer recorded the statement of ld. counsel for CDs and it is being recorded that the property-in-question may not be sold as he is ready to deposit Rs. 3.0 crore by 04.10.2019, whereas the property-in-question was sold for Rs. 2.20 crore. Thereafter, on 04.10.2019, Ld. Recovery Officer recorded the statement of counsel for CDs and also obtained an affidavit of one stranger Sh. Mahesh Aggarwal and instead of confirming the auction of property-in question adjourned the matter for 15.10.2019. On the said date, the Ld. Recovery Officer passed the impugned order setting-aside the auction of the property-in-question and issued fresh sale proclamation on the ground that inadequate price was there for the property-in-question as it could be sold for Rs. 3.0 crore. ..........Further the CDs also did not prefer to raise any objection by filing an application while fixing of reserve price that the same was on the lower side. Apart that, the CDs alsodid not prefer to move an application within 30-days from the date of auction.Further, the Ld. Recovery Officer set aside the auction-in-question without accepting entire amount specified in the proclamation of sale (Rule 60 & 61 of Income Tax Act) and merely on asking of CDs & one Sh. Mahesh Aggarwal who has been shown to be intended buyer, but never come forward at any point of time to participate in the auction and also did not prefer to move an application for the same before the Ld. Recovery Officer.

Apparently, Rule 60 of Schedule-ll of Income Tax Act clearly lays down that objection against auction must have to be filed within 30 days from the date of sale. In the matter in hand, the auction was held on 31.5.2019 and the highest bid of the present appellant was there, whereas, the application by the respondents was moved on 29.8.2019. .........No application was moved on behalf of the respondents No. 2 to 6/ CDs within 30-days from the date of auction. Rather, the same was filed after lapse of three months approximately........ Ld. Recovery Officer was not entitled to entertain those objections beyond the prescribed period of limitation. Apparently, the objection / application moved on behalf of the respondent no. 2 to 6/Cd dated 29.8.2019 moved before Ld. Recovery Officer was hopelessly barred being filed beyond prescribed period of 30 days.

.........No doubt, the inadequacy of price may be looked into by the Ld. recovery officer, but in the present matter the reserve price, for which, the fresh proclamation is issued is not of much difference than that of highest bid received....................................

17...............................Therefore, once the property has been put on auction, unless the difference between the auction price and the offer made on behalf of either of the parties is not so much that a prudent person claim that the property-in-question has been sold or auctioned for a meagre amount, the sale cannot be set-aside merely on the ground of inadequate price.

Further, it is also to be mentioned that once the property in-question has been put on auction and even if a third party coming forward afterwards to purchase the auctioned property for a higher price without participating in the open auction, the said auction cannot be set aside..................Therefore, the Ld. Recovery Officer committed grave error while setting aside the auction- in-question merely on a time barred application of the CDs,that too without accepting the entire dues,..........Resultantly, the impugned order suffers from grave infirmity & illegality.

Now, it has to be seen whether the Ld. Recovery Officer intentionally did not prefer to mention the Noida authority dues in the auction notice and as to whether the auction purchaser is liable to pay the dues?Admittedly, the property in question has been sold on "As Is Where is Basis and As Is What Is Basis ". No doubt, the Ld. Recovery Officer while putting the property-in-question has to get verify all the dues of the various authorities including Noida authorities, which the Ld. Recovery Officer failed to do so.However, the property-in-question has been sold on "As Is Where Is Basis and As Is What Is Basis", therefore, the principle of Caveat Emptor i.e. "Let the buyer beware" comes into play and it was also the responsibility of the auction purchaser to verity the various dues i.e. electricity dues, Noida authority dues or any other various dues before participating in the auction. Once the property has been sold on "As Is Where /s Basis and As Is What Is Basis ", therefore, the responsibility casts upon the auction purchaser to pay the dues, if any, of the Authority lying due thereon..................................... Since the properties are sold under 'As it is Where it is Basis', it is the responsibility of the prospective buyer to discharge such outstanding dues...........................................

...........................hence, it could not be said that the auction purchaser is not responsible to pay the same. In these circumstances, once the property is sold on "As Is Where Is Basis and As Is What Is Basis ", then the responsibility stands of the auction purchaser to pay the dues of the authority. Even otherwise, the present appellant did not raise any question about the same, but question was raised by the Hon'ble Appellate Authority, the same is decided accordingly.

In the light of foregoing discussion, this Tribunal is of affirm view that the impugned order dated 15.10.2019 suffers from grave infirmity & perversity, accordingly, the same is hereby set asideand the Ld. Recovery Officer isdirected to issue the sale certificate in favour of the auction purchaser i.e. the present appellant-in-question forthwith and also get the same registered, as per rules.

So far as, the next specific directions given by Hon'ble DRAT. "If the learned Presiding Officer comes to the conclusion that the recovery officer ShriVikashJaitly committed any illegalities in the matter of conduct of auction and then is cancellation with some ulterior motives then the learned Presiding Officer shall also suggest in exercise of his power of superintendence over the functioning of his recovery officers" is concerned, apparently, no such direct evidence is there that the cancellation of auction was done with ulterior motive.......................therefore, without commenting much in this order about the same, this Tribunal is of view that before proceeding further, by exercising the powers under Section 7 (2) of RDDB&FI Act, it is appropriate to obtain a discreet enquiry report.

Accordingly, Ld. Registrar is directed to made a discreet enquiry and submit the report within 45 days from receipt of this order, which shall be dealt separately on Administrative side."(highlighting is by me)

From the foregoing narration the position which emerges is that despite the fact that the appellant was the successful bidder in the auction of the property in question conducted by the recovery officer Shri Vikash Jaitly. This recovery officer did not confirm the saleeven though none had objected to her being declared as the successful bidder. As per the legal position auction against the auction sale within a period of thirty days from the date of the auction. It was this inaction of the recovery officer Shri Vikash Jaitly in not confirming the auction sale in favour of the appellant herein which prompted her for starting a legal battle. That legal battle has now ended in her favourwith the learned Presiding Officer of the DRT directing his recovery officer to confirm the auction sale in favour of the appellant and also to issue necessary sale certificate in her favour and to get the same registered. In this situation, the question arose at the time of hearing of this appeal as to why has the appellant come in appeal against an order which grants her the relief which she always wanted.

Mr. Sanjeev Bhandari, learned advocate arguing for the appellant had submitted in this regard that there is no doubt that the learned DRT has now issued a direction to the recovery officer to confirmthe auction sale and also to issue the sale certificate in favour of the appellant-auction purchaser in respect of the auctioned property but at the same time has also made some observations in paras 19 and 20 of the impugned orderwhich imply that the appellant is being required to approach NOIDA In respect the dues of NOIDA on account of'unearned increase'. Mr. Bhandari submitted that unnecessarily the learned Presiding Officer observed in paras 19 and 20 of the order dated 30.06.2020 that as far as the dues of NOIDA on account of 'unearned increase'are concerned it was the responsibility of the appellant-auction purchaser to clear the same when it was no body's case at any stage that NOIDA Authority had informed the recovery officer at any stage before the auction and even thereafter till dateabout its dues, if any. Learned counsel also contended that the question of payment of dues, if any, of NOIDA Authority on account of 'unearned increase' would arise only when any demand is raised by NOIDA Authority which has not been raised till date. Mr. Bhandari also contended that the appellant is being unnecessarily forced to approach NOIDA to find out if there are any dues on account of 'unearned increase' and to clear the same if there were any such dues payable to NOIDA Authority particularly when the learned Presiding Officer himself has also observed that his recovery officer ought to have ascertained about NOIDA dues, if any, before putting the NOIDA property on sale by auction. Finally, it was also submitted by Mr. Bhandari that despite the learned Presiding Officer having ensured issuance of sale certificate in favour of the appellant the recovery officer has still not delivered physical possession of the auctioned property to her and so that should not be ensured by this Tribunal in order to give complete justice to the appellant.

Neither the bank nor the borrowers have challenged the decision of the DRT.

After giving my due and serious consideration to the submissions made by Mr.Sanjeev Bhandari, learned counsel for the appellant who was assisted by Mr. Ravi Data, learned advocate, I am of the view that the submission that the learned Presiding Officerhas asked the appellant to approach NOIDA authority and to pay the dues on account of 'unearned increase' has no substance. This Tribunal had asked the learned Presiding Officer to examine as to why the recovery officer had not demanded from the appellant 'unearned increase' money. Mr. Bhandari himself had also contended that this question posed by this Tribunal gets answered from the fact that NOIDA authority has never raised any demand on this account and so there is no occasion so far arisen for making any payment to NOIDA authority. Thus, the apprehension of the appellant that she is being asked by the learned Presiding Officer to approach NOIDA authority to pay its non-existent dues istotally misplaced and unfounded. This way her grievance stands taken care of. Mr. Bhandari himself had also contended that it will be the headache of the appellant to deal with NOIDA authority as and when she approaches NOIDA authority for mutation etc. Of course that is true but she should not harbour under the impression that she can start to claim herself as the lessee of the leasehold land in question without approaching the NOIDA authorities alongwith the sale certificate now directed by the learned Presiding Officer to be given to her. She should not expect delivery of possession of the factory premises purchased by her in auction without first getting a go- ahead from NOIDA authority. So, sooner she approaches NOIDA authority on her own better it would before for her only. DRT's order nowhere requires her to approach NOIDA authorities to make any payment to it. That will also ward off the doubt which was lurking in the mind of this Tribunal even when this Tribunal had disposed of the earlier appeal of the appellant-auction purchaser vide order dated 06.06.2020 to the effect that perhaps recovery officer Shri Jaitly had arrived at some understanding with this appellant that he will bury under the carpet issue of payment of 'unearned increase' money to NOIDA authority whereby she will get huge monetary benefit for which suspicion the learned Presiding Officer was asked to examine why the recovery officer had not demanded unearned increase money from the appellant herein. It is seen that these days whenever sale of a public property, like the property in question in the present case, takes place by way of auction by any public authority and the property auctioned property actually is owned by the State and is leased out to the defaulter of a bank etc. and under the terms of lease 'unearned increase' is payable to the superior lessor which in case of big properties runs into lacs of rupees, the buyers avoid approaching the Government body for mutation etc. in order to avoid the payment of 'unearned increase' dues. In such circumstances it also becomes the duty of selling authority to find out about unearned increase dues so that the State does not lose its dues particularly when the State is not kept in the loop. Learned Presiding Officer has rightly criticized his recovery officer for not making proper enquiries from NOIDA before ordering the auction owned by NOIDA. This has not been ensured either by the recovery officer or even by the learned Presiding Officer in the case in hand. This Tribunal, however, cannot shut its eyes and become a privy to the possibleloss of statutory dues to NOIDA authority. In fact, even now the recovery officer would do well in sending copies of all relevant papers including the latest order dated 30.06.2020 of the DRT as well as the present order of this Tribunal to NOIDA authorityso that it at least comes to know that leasehold rights in its property are being sought to be transferred to a third party auction purchaser without keeping the Authority in the loop. This takes care of the grievance of the appellant regarding dues of NOIDA.

Now, I come to other aspect of the matter which has been bothering this Tribunal and which has been taken very seriously even by the Hon'ble Delhi High Court. I am talking about the 'autocratic' way of functioning of some of the recovery officers attached to different DRTs under the superintendence and control of this Tribunal. Case of one such recovery officer attached to another DRT under the jurisdiction of DRAT, Delhi,as noticed already, had come to be examined recently by the Hon'ble Delhi High Court in a writ petition when the beneficiary of a perverse order of the recovery officer-II of DRT-II, Delhi had approached the High Court for setting aside the order of the DRT and affirmed by this Tribunal setting aside the order of the recovery officer concerned whereby a confirmed was set aside just because a third who had not even participated in the auction process and had offered meagre higher price to buy the already auctioned mortgaged property in execution of the recovery certificate issued by the DRT in recovery case of another bank. That writ petition, as noticed in the first para of the present order, came to be dismissed as meritless and Hon'ble Division Bench while noticing the autocratic way of functioning of the recovery officer concerned had ordered the Central Government to hold an enquiry against the concerned recovery officer and to take appropriate action against him in accordance with law, if anything adverse was found against him.

As has been observed by me in the earlier part of this order, the actions of the recovery officer Shri Vikash Jaitly attached to DRT- III, Delhi with whose orders passed in recovery proceedings the appellant-auction purchaser was seriously aggrieved, are more graver than the order passed by theother recovery officer attached to another DRT, Delhi against whom the Hon'ble High Court haordered an enquiry.The High Court had passed that order because the recovery officer concerned had set aside a confirmed auction sale conducted by him and had ordered an inter-se bidding between the successful bidder of that case and a total stranger who had after successful completion of auction process knocked at the door of the recovery officer concerned to buy the same property which already stood sold to the auction purchaser of that case and the recovery officer had obliged him by passing the order of inter-se bidding.

Let us now come to the facts of the present case. The recovery officer whose conduct is being questioned by the appellant and who considers herself to be a victim of the illegalities committed by that recovery officer is one Mr. Vikash Jaitly who had come to the DRT-III on deputation to effect recoveries of public monies ordered by the Presiding Officer of the DRT to be recovered from the Certificate Debtors(CDs) against whom recovery certificates have been issued in Original Applications filed by banks under Section 19 of the RDDBFI Act, 1993. In the present case respondent bank herein had filed Original Application against its defaulting borrower-guarantors- mortgagors for recovering crores of rupees on account of unpaid loans. That Original Application was allowed in favour of the respondent bank and thereafter recovery certificate was forwarded to the recovery officer attached to the DRT for execution by selling the mortgaged properties involved in the case including the industrial property(factory) involved in the present appeal. In the initial attempts to sell the mortgaged some of the properties could be sold but property in question did not attract any buyers. However, in the auction conducted on 31.05.2019 under the aegis of Shri Vikash Jaitly, who had by that time joined the DRT as the recovery officer, the present appellant MamtaUdhwani participated in the auction process and emerged as the higher bidder.She paid the entire auction money within the prescribed period. The recovery officer was supposed to wait for a period of thirty days before confirming the sale in favour of the appellant and to see if within thirty days period any objections to the auction sale are filed by anyone. If nobody comes forward within the period of thirty days from the date of auction with any objection against the auction sale the recovery officer is bound to confirm the auction in favour of the highest bidder, who in the present case was the present appellant and sale in whose favour was not confirmed by Shri Vikash Jaitly within the prescribed period despite the fact neither any of the defaulting borrowers/mortgagor nor any third party had lodged any objections with Mr. Jaitly. That inaction of Mr. Jaitly was highlighted by the appellant before the learned Presiding Officer under whose supervisory jurisdiction he was working. As noticed already, the appellant in that battle, which could be easily avoided by Mr. Vikash Jaitly by faithfully following the law, has emerged victorious. The learned Presiding Officer has in his order dated 30.06.2020 has held his recovery officer's refusal to confirm the sale in favour of the appellant herein as illegal and perverse.

Not only the recovery officer Shri Vikash Jaitly dragged on the matter of confirmation of the sale in favour of the appellant herein , as observed by the learned Presiding Officer in his order dated 30.06.2020 by adjourning the case for one reason or the other, he entertained the oral request of the borrowers(CDs) for not selling the property in question after the same had already been auctioned in favour of the appellant herein. The learned Presiding Officer has observed in this regard also that his recovery officer committed grave illegality in entertaining the request of the CDs for not confirming the sale in favour of the successful auction purchaser i.e. the appellant herein. Learned Presiding Officer has also rightly come to the conclusion that the auction sale in any event could not be set aside at the instance of defaulting borrowers without ensuring compliance of the mandatory requirement of deposit of the amount which was being sought to be recovered by sale of mortgaged properties. The learned Presiding Officer has taken note of Rules 60 and 61 of the Second Schedule to the Income Tax Act which require the defaulting borrower asking for cancellation of the auction sale of any of the auctioned properties. So, for this reason also the learned Presiding Officer has rightly criticised Shri Vikash Jaitly's order dated 15.09.2019 as perverse while setting aside that order and directing him to issue sale certificate in favour of the appellant-auction purchaser herein.

Thus, from the foregoing narration it becomes clear that the recovery officer Shri Vikash Jaitly has been found by his Presiding Officer to have ignored the legal provisions right from the first step by not making enquiries from NOIDA Authority which is undisputedly is the superior lessor/owner of the property which was being auctioned, regarding NOIDA's dues, if any, and not confirming the sale in favour of the appellant herein even when no objections were filed before him by anybody against the auction sale within the statutory period of thirty days from the date of auction and further in entertaining the oral request of the CDs belatedly made for cancellation of the sale in favour of the appellant herein and finally accepting that request of the defaulting borrowers(CDs) without insisting upon payment of bank's dues running into over ten crores at that time as was the mandatory requirement of Rules 60 and 61, noticed by the learned Presiding Officer in his order dated 30.06.2020.

While holding the actions/decisions taken by the recovery officer Shri Vikash Jaitly to be 'perverse' the learned Presiding Officer also observed that apparently there appeared to be no ulterior motive behind those perverse orders including the order whereby he had cancelled the auction sale of the property in question in favour of the appellant.

Mr. Sanjeev Bhandari, learned counsel for the appellant in his usual vociferous way of arguing submitted and which argument was backed by Mr. Ravi Data, learned counsel also, that quite strangely despite saying everything against his recovery officer including the decision to entertain the CDs and then setting aside the auction in favour of the appellant without ensuring compliance of the mandatory requirement of deposit of the entire amount of debt mentioned the sale proclamation, which was to the tune of over ten crores, whereby huge benefit accrued to the defaulters and corresponding loss to public exchequer.The decision of not ensuring compliance of Rules 60 and 61 was considered by the Hon'ble Delhi High Court to be a strong circumstance of corrupt motive while dismissing a petition of a recovery officer involved in that case who had approached the High Court before for quashing of his prosecution under Prevention of Corruption Act ('Kushal Kumar vs C.B.I.' , Crl.Rev.P.No.67/2009 decided on 17 February, 2009). Learned counsel thus submitted that in the facts of the present case the finding of the learned Presiding Officer that apparently no case of ulterior motive was made of despite accepting the position that recovery officer Mr. Jaitly had iIlegally set aside the auction without insisting upon the CDs to deposit the amount of debt recoverable from them for which the property had been auctioned, is also perverse. The recovery officer Mr. Jaitly when he had appeared before this Tribunal to claim his conduct had not claimed that he did not know the provisions of Rules 60 and 61. In any case, even if had pleaded so the maxim "Ignorantiafactiexcusat; ignorantialegisneminemexcusat?, Ignorance of fact is an excuse; Ignorance of law is ,no excuse.'would have come into play. Thus, he passed the of cancellation of auction knowing that it was against the law and, therefore, prima faciehe can be attributed malicious and corrupt intention also in passing the order of cancellation of the auction sale in favour of the appellant herein as mentioned even in Section 219 IPC. Offence under Section 166 IPC can also, prima facie, be said to have been committed by the recovery officer Mr. Vikash Jaitly.Learned counsel further contended that the learned Presiding Officerhas strangelyasked his Registrar to hold a discreet enquiry into that aspect which task this Tribunal in the order dated 06.06.2020 directed to be performed by the Presiding Officer himself. He was asked to examine whether the impugned decisions of his recovery officer, which he has finally found to be perverse and reversed also, were for some ulterior motives or not. That direction was given by this Tribunal while exercising judicial function as an appellate forum and so the direction was a command to the learned Presiding Officer which he himself was expected to comply with. The task assigned to the learned Presiding Officer was a task to be performed in the discharge of judicial proceedings as the first appellate forum against the order passed by the recovery officer attached to his DRT. Thus, submitted by Mr. Bhandari as well as Mr. Data, this is a case of total abdication of judicial function by the learned Presiding Officer and in fact is also a clear case of disobedience of the direction of this Tribunal given in the order dated 06.06.2020. The argument was thatwhen it is a settled position in law by a number of judicial pronouncements of the Hon'ble Supreme Court and various High Courts that judicial functions cannot be delegated by a Judge to any other authority the decision of the learned Presiding Officer to ask his subordinate staff member to hold an enquiry cannot be approved by this appellate Tribunal.Learned counsel submitted that the Registrar was not competent to complete the unfinished job of the learned Presiding Officer more particularly when he was commanded by his appellate authority to do that job himself. Hon'ble Supreme Court has held that judicial functions cannot be delegated by a Judge. That judgment was rendered in the caseof "Jamal Uddin Ahmad vs Abu Saleh Najmuddin And Anr" , reported in(2003) 4 SCC 257. Mr. Bhandari also contended that more shocking is the fact that after having expressed a view that apparently no ulterior motive appeared behind passing of perverse orders by his recovery officer Shi Jaitly the learned Presiding Officer could not expect a decision from his subordinate to come to a contrary decision particularly when the conclusion regarding the motive behind passing of perverse orders had to be arrived at from the records of Mr. Jaitlyn the recovery case in question and the facts noticed by the learned Presiding Officer while holding all the decisions of Shri Vikash Jaitly gravely illegal and perverseit is a case of res ipsa loquitur requiring no discreet enquiry at all and the learned Presiding Officer himself could arrive at appropriate conclusion. Learned counsel also argued that normally discreet enquiry is ordered when a prima facie view of culpability of the concerned officer is formed but here the learned Presiding Officer illogically ordered a discreet enquiry after holding that apparently there was no evidence of any ulterior motives behind passing of perverse orders of setting aside the auction and that too without ensuring deposit of debt in question as per Rules 60 and 61 by Shri Vikash Jaitly.

I have given my serious consideration to the facts and circumstances of the case leading to the setting aside of the auction sale of the property in question by Shri Vikash Jaitly, which decision of his has been found to be totally perverse and gravely illegal by the learned Presiding Officer, as also the serious arguments advanced by Mr. Bhandari and the brief submissions made on behalf of the CH Bank which in fact had before the DRT fully supported the case of the appellant herein. This tribunalis in full agreement with the conclusions of the learned Presiding Officer that the decisions of his recovery officer Shri Vikash Jaitly firstly not to confirm the auction sale in favour of the appellant herein even when none had objected to that auction and then to cancel the sale were totally 'perverse'. However, the conclusion of the learned Presiding Officer that ".......apparently, no such direct evidence is there that the cancellation of auction was done with ulterior motive " cannot be said to be a sound conclusion. In arriving at this conclusion the learned Presiding Officer seems to have ignored the well settled legal position that in such like cases there will hardly be any direct evidence forthcoming. Only inferences can be drawn depending upon the circumstances surfacing on record. In the present case there are tell-tale circumstances suggesting, at least prima facie, that the decisions of Shri Vikash Jaitly right from day one were not in accordance with law and appear to have taken to 'hoodwink' the system and aimed at causing 'loss' to bank and undue benefit to the defaulting borrowers.

It is significant to note that the requirement of deposit of the debt amount mentioned in the sale proclamation has a purpose behind it. A borrower who approaches the recovery officer within a period of thirty days of the auction for cancellation of the auction can simply tender the debt sought to be recovered and the recovery officer upon receiving the amount involved has to cancel the auction sale. That way the 'public money' gets recovered without confirmation of the auction. But no way the auction of any property can be cancelled by the recovery officer without receiving the amount of debt which was being sought to be recovered from the CDs by selling their properties. In the present case, Shri Vikash Jaitly, prima facie, can be said to have obliged the defaulters pf public dues (CDs) by setting aside the auction sale in favour of the appellant herein without insisting upon the payment of amount of debt recoverable which was to the tune of ten crores odd as mentioned in the sale proclamation issued by him. When Mr. Jaitly set aside the auction sale without requiring the CDs to first make the mandatory deposit then what could be the motive of Mr. Jaitly, if not ulterior, as has been held by the learned Presiding Officer. Motive of a wrong doer is not written on his forehead. It has to be inferred from the conduct of the concerned quasi judicial authority in not following the law while passing quasi judicial orders knowing the law and which knowledge can be attributed to Mr. Jaitly. He has in any case not claimed when he had appeared before this Tribunal that he was not aware of the requirement of law which mandates that auction sale cannot be set aside at the instance of CDs without getting the amount of debt first deposited from the CDs. It was rightly submitted by Mr. Bhandari that from the setting aside of the auction sale in favour of the appellant by Mr. Jaitly and which decision has been held by the Presiding Officer to be perverse, the only inference whichcan be raised is that that was done to benefit the defaulting borrowers.

Learned counsel Mr. Bhandari and Mr. Data had ended up their submissions by saying that in the facts and circumstances now this Tribunal only should take the final decision as to what action needs to be taken against the erring recovery officer Mr. Vikash Jaitly since his supervisory authority has virtually shown its disinclination to suggest any action against Mr. Jaitly and the Chairperson is the supervisory authority of all DRTs under the jurisdiction of Delhi DRAT who also is vested with over-all control over the functioning of DRTs, their Presiding Officers and also the staff provided by the Central Government for the effective functioning of DRTs. I am in full agreement with this submission also of the learned counsel Mr. Bhandari and Mr. Data. One thing is clear that the learned Presiding Officer at least wanted to order 'discreet enquiry' into the actions of his recovery officer which he had found to be perverse. To hold an enquiry was the correct decision in the facts and circumstances of the case. However, by entrusting the enquiry to his Registrar the learned Presiding Officer went wrong. Enquiry ought to have been recommended to the disciplinary authority of Mr. Vikash Jaitly or even by any investigating agency or by both.

This second chapter is accordingly closed by directing the Registrar of this Tribunal to place this order as also of the learned Presiding Officer of DRT-II, Delhi before the Competent Authority/Disciplinary Authority of Shri Vikash Jaitly, who is on deputation with DRT-III. Delhi, with the recommendation for taking appropriate action in accordance with law against Mr. Vikash Jaitly, recovery officer, keeping in mind the observations made hereinabove by this Tribunal as also those made by the learned Presiding Officer in his order dated 30.06.2020 regarding his perverse decisions in this case.

As a consequence of this order, the enquiry proceedings before the Registrar of DRT-III which were initiated pursuant to the directions of the learned Presiding Officer and which proceedings were ordered by this Tribunal to remain abeyance would now stand terminated and it will now be open for the competent authority/disciplinary authority in respect of Shri Vikash Jaitly to take any appropriate decision in the matter.

The present appeal stands disposed of accordingly in terms of various observations made hereinabove..

Copies of the present order shall be forwarded by the Registry of this Tribunal to the Secretary, Ministry of Finance, Department of Financial Services, Government of India, Presiding Officer, DRT-III, Delhi, Registrar of DRT-III, Delhi, to whom the learned Presiding Officer of DRT-III, Delhi had entrusted the job of conducting discreet enquiry', and also to Shri Vikash Jaitly, the concerned recovery officer of DRT-III, Delhi.