Smt. Abbu vs UCO Bank & Ors.

The present case was heard and reserved for orders on the issue of waiver as well as the maintainability of the appeal vide order dated 21.11.2025 of this Tribunal.

On the issue of waiver, learned counsel for the appellant submitted that the respondent-Bank had filed an original application No. 251/2013 before the Tribunal below, which was decreed in toto along with interest @ 12% per annum simple from 28.10.2013. It was further contented that against the said decree, the respondent-Bank has recovered a sum of Rs. 4.16 crores and odd from the auction sale of the mortgaged properties on different dates, which is more than 50% of the decreta amount. It was further contended that the appellant has not disputed the said sales, therefore, the amount realized from the auction sale may be taken into consideration towards pre-deposit in view of the judgment passed by the Hon'ble Supreme Court in Civil Appeal No. 8969 of 2022-M/s Sidha Neelkanth Paper Industries Pvt. Ltd. and Anr. Vs. Prudent ARC Ltd. and Ors., decided on 05.01.2023. It was, therefore, prayed that the waiver application may be allowed and the remaining amount, if any, towards pre-deposit may be waived off.

Learned counsel for the respondent-auction purchaser submitted that an original application No. 251 of 2013 was filed by the respondent-Bank for recovery of its dues for a sum of Rs. 6,84,20,324.33 along with interest, which was allowed by the Tribunal below vide judgment and decree dated 15.02.2016 along with interest @ 12% per annum simple from 28.10.2013 with costs till its realization and the recovery certificate was issued accordingly. It was further contended that as such 50% of the said amount is required to be deposited by the appellant for maintaining the present appeal, but she has not deposited any amount, hence it was prayed that the appeal may be dismissed for want of pre-deposit.

Learned counsel for the respondent-bank has argued the same as argued by the learned counsel for the respondent-auction purchaser, therefore, the same is not required to be detailed again.

Considered the arguments and perused the record.

Since the contention of the appellant that the respondent-Bank has already realized a sum of Rs. 4.16 crores and odd and the said sale has not been disputed and the same has not been controverted by any of the opposite parties, therefore, the same is taken into account towards pre-deposit for maintaining the present appeal in view of the judgment passed by the Hon'ble Supreme Court in Civil Appeal No. 8969 of 2022-M/s Sidha Neelkanth Paper Industries Pvt. Ltd. Vs. Prudent ARC Ltd. (Supra), which is more than 50% of the debt determined by the Tribunal below vide order dated 15.02.2016. Thus the requirement of 50% of the debt due under section 21 of the RDB Act is fully satisfied, hence the application for waiver filed by the appellant stands disposed off.

On the issue of maintainability of the appeal, learned counsel for the appellant submitted that during the pendency of Appeal No. 06/2024 before the Tribunal below, the Recovery Officer issued e-auction notice dated 30.04.2024 for sale of the property being open land having survey No. 237, Patwari Halka No. 65, village-Thatipur, Ward No. 30, City Centre, District- Gwalior measuring 31525 sq. ft. in the name of Genda Lal, who is the husband of the appellant and the same was published in the newspapers scheduling the auction of the said property on 18.06.2024. It was further contended that an objection was filed by the appellant Smt. Abbu, who is wife of late Genda Lal and Shri Shiv Singh, who is son of the said deceased before the Recovery Officer, which was disposed off vide order dated 17.01.2024.

Learned counsel also submitted that the reserve price of the property in question was fixed by the Bank at lower side, whereas the market value of the property in question is more than 38 cores. It was further contended that the respondent No. 2, who is son of the appellant, had submitted an OTS proposal for a sum of Rs. 750.00 lacs before the respondent No. 1 vide letter dated 07.06.2024 stating therein that the said OTS amount shall be deposited within 75 days from the receipt of the consent/settlement letter from the respondent-Bank.

Learned counsel further submitted that one Shri Pramod Kumar had filed a Suit before the Additional Judge, Gwalior for specific performance of the agreement dated 10.11.2004 with regard to the property No. 1, which was scheduled for auction pursuant to the sale notice dated 17.10.2023, in which the interim relief was granted vide order dated 26.09.2013 staying the said auction sale, but the said Suit was dismissed vide order dated 20.03.2023, against which the plaintiff filed First Appeal No. 1191/2023 before the Hon'ble High Court at Gwalior Bench, in which the status quo order was granted vide order dated 14.06.2023 and as such without granting permission of Hon'ble High Court, the Tribunal below has no power to auction the said property. It was further contended that refusal of the respondent no. 1-Bank to accept the proposal of the objectors is malafide and contrary to the guidelines of Reserve Bank of India. It was also contended that the fixing of reserve price on such a lowest rate i.e. 3.5 times less than the Collector guidelines of District Gwalior may entitle the Tribunal below to cancel the auction sale dated 24.11.2023.

Learned counsel further submitted that an application was filed by the appellant before the Tribunal below on 09.01.2024 for taking on record additional documents i.e. application and orders passed by the Hon'ble High Court and the said documents clearly show that the respondent-Bank was party in the second appeal No. 211/2006 and after death of Genda Lal, the appellant filed an application dated 02.07.2015 in the said appeal for bringing on record the legal heirs of deceased Genda Lal before the Hon'ble High Court and as such the respondent-bank was well aware about the death of Genda Lal before passing the judgment and decree dated 15.02.2016 in O.A. No. 251/2013 filed by the Bank. It was thus contended that the said decree/judgment was passed against a dead person, hence the same is not executable against the appellant.

It was lastly contended on behalf of the appellant that the Recovery Officer of the Tribunal below without dealing with the aforesaid objection and without waiting for the decision of the second appeal pending before the Hon'ble High Court at Gwalior Bench vide order dated 17.01.2024 has decided the objection of the appellant and issued the notice to the legal heirs of late Genda Lal and the Tribunal below has passed the decree dated 15.02.2016 without impleading them as party, which is contrary to the law. It was, therefore, prayed that the order of the Recovery Officer as well as the order impugned passed by the Tribunal below are liable to be set aside and the appeal filed by the appellant may be allowed.

Learned counsel for the respondent-auction purchaser submitted that after allowing the objection, the appellant has sold the property in question in favour of Vishnu Jain vide sale deed dated 24.03.2024. It was further contended that the appellant has not challenged the proceedings arising out of order dated 30.04.2024 passed by the Recovery Officer nor the sale certificate/sale deed which was executed in favour of the auction purchaser either before the Tribunal below or before this Tribunal below, therefore, on this ground alone, the appeal is liable to be dismissed.

Learned counsel further submitted that when the Recovery Officer proceeded for auction of the property, then two sets of objection were filed, one by the legal heirs of defendant No. 3-Genda Lal and another by a third party namely M/s M.K. Narayan Contractor Pvt. Ltd. It was also contended that the Recovery Officer had allowed the objections of the LRs of defendant No. 3 and rejected the objection filed by third party vide order dated 17.01.2024 by cancelling the auction sale dated 24.11.2023 and auction money was directed to be refunded to the auction purchaser Sanjay Garg and notices were also directed to be issued, but despite this favourable order, the appellant has challenged the same by filing the appeal before the Tribunal below under section 30 of the RDB Act, 1993 along with relief with regard to declare the judgment and decree passed in the O.A. to be null and void.

Learned counsel further submitted that the Tribunal below has dismissed the appeal filed by the appellant holding that the order passed by the Recovery Officer is in favour of the appellant and the same does not affect any right of the appellant and the appellant cannot be considered to be an aggrieved person under the definition of section 30 of the RDB Act, 1993 and as such the present appeal is also not maintainable.

The next limb of the argument of the learned counsel is that the Tribunal below has rightly rejected the second prayer of the appellant with regard to declaration of the judgment and decree passed in O.A. to be null and void, as the said prayer is not maintainable under section 30 of the said Act. It was, therefore, prayed that the present appeal may be dismissed as not maintainable.

Learned counsel for the respondent-Bank has supported the arguments as advanced by the learned counsel for the respondent/auction purchaser, adding further that the present appeal has not been filed by the appellant with clean hands, as the appellant has not disclosed the fact that she has already sold the mortgaged property in favour of Shri Vishnu Kumar Jain and Sachin Jain through registered sale deed dated 03.03.2024. It was therefore, prayed that the present appeal may be rejected summarily.

I have considered the rival contentions of the learned counsels for the parties and perused the material available on record.

So far as the auction sale dated 18.06.2024 is concerned, the same has not been challenged by the appellant either before the Recovery Officer or before the Tribunal below, therefore, the same cannot be permitted to be challenged directly before this Tribunal. However, the said sale has been confirmed and the sale certificate has been issued in favour of the auction purchaser pursuant to the order dated 11.11.2024 passed by the Hon'ble High Court. However, the order of the Hon'ble High Court has never been challenged by any of the parties, therefore, the same has attained finality.

It appears that after filing the Original Application No. 251/2013 by the respondent-Bank, the notices were served upon the defendants including the defendant No. 3 Genda Lal Singh through paper publication in the newspapers, but no one had appeared on behalf of the defendants, therefore, they were directed to be proceeded ex-parte by the Tribunal below vide order dated 07.12.2015.

Undisputedly the said O.A. was decreed vide order and judgment dated 15.02.2016 and the recovery certificate was issued, which was instituted as RC No. 97/2016 before the Recovery Officer. In the said execution proceedings, the Recovery Officer proceeded for auction of the properties and accordingly, issued auction sale notice dated 17.10.2023 scheduling the auction of the same including the property of the appellant on 24.11.2023. Against the said auction, the appellant filed objection before the Recovery Officer on 06.11.2023 praying as under:-

The Recovery Officer vide order dated 17.01.2024 allowed the objection of the appellant. The relevant portion of the said order is as under:-

From the above, it is clear that the objection filed by the appellant was allowed and the reliefs sought was granted by the Recovery Office by cancelling the auction sale dated 24.11.2023 in respect the property pertaining to the appellant and the notice was directed to be issued to the legal heirs of the deceased defendant No. 3. As such the said order does not affect any interest of the appellant.

Undoubtedly, the Recovery Officer has not gone beyond the instructions given in the recovery certificate because the recovery certificate is issued pursuant to the suit/O.A. decreed under section 19 of the RDB Act and the Recovery Officer has been empowered to execute the same under the second Schedule of the Income Tax Act 1963. When the Recovery Officer came to know about the death of defendant No. 3 through the objection filed by the legal heir of the said defendant, the Recovery Officer has issued summons to them for raising their grievance so that they may protect their interest. Thus the Recovery Officer has not erred in allowing the objection of the appellant and in issuing the notice to the legal heirs of the defendants No. 3, which does not cause any prejudice to the appellant. As such the Tribunal below has rightly dismissed the appeal of the appellant to this extent vide order impugned.

It is to be seen, as to whether the relief sought by the appellant with regard to declare the judgment and decree dated 15.02.2016 to be null and void in the appeal filed under section 30 of the RDB Act is maintainable or not?

In this regard, section 30 of the RDB Act says as under:-

From the above, it is clear that any order passed by the Presiding Officer under section 19 of the RDB Act cannot be challenged before it under section 30 of the RDB Act. The said section is only for the purpose of filing an appeal by a person, who is aggrieved by an order passed by the Recovery Officer and not by the Tribunal below. As such the relief sought by the appellant under section 30 against the judgment and decree passed under section 19 of the said Act is held to have been sought without jurisdiction. Thus the Tribunal below has rightly dismissed the appeal of the appellant as not maintainable to this extent also vide order impugned.

In view of the aforesaid, the present appeal is dismissed as not maintainable with no order as to costs.

A copy of this order be forwarded to the parties as well as the DRT concerned and be also uploaded on e-DRT portal.