Sanidhya Garg & Anr. vs State Bank Of India

a)

The Registry is directed to issue show cause notices for attachment of the following assets:

I. Property No. 35, Central Drive, DLF Farms, Chattarpur, New Delhi.

II. Flat No. 102, Onyx Building, Union Park, Chembur, Mumbai.

III. Farm No. 10, Pine Drive, DLF Farms, Chattarpur, New Delhi

IV. All movable assets including FDRS, vehicles, and investments as disclosed in affidavits dated 07.12.2019 and 07.11.2022.

b)

Bailable warrant in the sum of Rs. 50,000/- with one surety of like amount be issued against CD No. 2 (Mr. Ashish Garg), to be executed by the SHO of the concerned police station for the residential address disclosed in affidavit dated 17.07.2025 filed before the Hon'ble High Court.

c)

CD No. 2 (Mr. Ashish Garg), CD No. 5 (Mrs. Ruchi Garg), along with Mr. Sanidhya Garg and Mr. Manan Garg are directed to file comprehensive affidavits of assets, disclosing all income, properties, investments, financial transactions, along with supporting documentary evidence including salary slips and complete bank statements from the date of issuance of the Recovery Certificate till the next date of hearing.

d)

The Registry is further directed to issue show cause notices for arrest against the directors of M/s. Apple Sponge and Power Limited and M/s. Apple Metal Industries Ltd, as per the Master Data filed with Application Diary No. 108 dated 07.08.2025, under Rule 73 of the Second Schedule of the Income Tax Act, 1961, calling upon them to show cause as to why they should not be committed to civil prison.

e)

M/s. Apple Sponge and Power Limited and M/s. Apple Metal Industries Ltd are once again directed to disclose on affidavit all financial and commercial transactions with CD No. 2 and CD No. 5 for the last 5 years and file all relevant documents and account statements before the next date of hearing.

14.

It is submitted that the appellants' argument that they are independent individuals with no connection to the liabilities of the certificate debtors is unsustainable. The financial trail, coupled with their relationship to the debtors and their ages at the time of acquisition, establishes that they were the direct beneficiaries of funds belonging to the certificate debtors. The Recovery Officer, in issuing the impugned order, has not adjudicated upon ownership or attachment but merely initiated a lawful inquiry to determine whether the appellants' properties are traceable to funds diverted from the judgment debtors. Therefore, the allegation that the Recovery Officer exceeded his jurisdiction or acted arbitrarily is without basis. The reliance on affidavits of assets filed before the Hon'ble High Court of Delhi is justified, as the appellants' own declarations therein reveal substantial assets disproportionate to their income and inconsistent with their declared financial status. These affidavits, therefore, form relevant material for examination in the recovery proceedings.

15.

In conclusion, the respondent bank submits that the impugned order dated 08.08.2025 has been passed after due consideration of the material available on record and in lawful exercise of powers conferred upon the Recovery Officer under the RDB Act. The appeal, being premature and devoid of merit, is a clear attempt to delay and obstruct the recovery process and to shield assets that are prima facie derived from concealed funds of the certificate debtors. The respondent prays that the present appeal be dismissed with exemplary costs as an abuse of the process of law and that the appellants be directed to comply with the Recovery Officer's directions by filing their affidavits of assets and financial details to enable a proper inquiry into the source of funds and the ownership of the properties in question.

16.

The Tribunal has carefully examined the record, the rival submissions, and the scope of appellate jurisdiction under Section 30 of the RDB Act 1993.

17.

The impugned order dated 08.08.2025 is in the nature of a show-cause notice seeking an explanation from the appellants under Rules 73 and 83 of the Second Schedule to the Income Tax Act. These provisions, when read with Sections 25 and 28 of the RDB Act, empower the Recovery Officer to call for information, examine thirdparty transactions, and trace assets suspected to have been transferred by certificate debtors to evade recovery.

18.

It is settled principle that a show-cause notice does not constitute an appealable order unless it culminates in a final determination affecting rights or imposing liability. The Recovery Officer's power to inquire into the diversion of funds to family members is integral to the enforcement of the recovery certificate. The impugned direction merely initiates such inquiry; it neither adjudicates ownership nor orders attachment.

19.

The appellants' plea that they are independent and unconnected to the certificate debtors cannot be adjudicated at this preliminary stage. They have the opportunity to place their explanation and supporting documents before the Recovery Officer to demonstrate legitimate acquisition of their properties. Premature intervention by this Tribunal would obstruct the statutory process meant to uncover concealment and diversion of assets.

20.

Further, the earlier order dated 21.05.2025 finding that Rs. 29 crores were transferred from Certificate Debtor No. 5 to the appellants remains unchallenged and has attained finality. The Recovery Officer's subsequent notice is, therefore, a lawful continuation of the enforcement process based on existing findings.

21.

In these circumstances, the appeal fails both on maintainability and merit. The appellants have not shown that the Recovery Officer exceeded jurisdiction or violated any principle of natural justice. On the contrary, the inquiry serves the public interest by ensuring that funds diverted from certificate debtors are properly traced and recovered.