Sujata Kapoor vs Union Bank Of India And Ors

P.K. Bhasin, J

The appellant-objector having failed to stop sale of property No. 3, Racquet Court Road, Civil Lines, Delhi (hereinafter to be referred as 'the property in question') by the learned Recovery Officer attached to Debts Recovery Tribunal-II, Delhi (DRT) in execution of Recovery Certificate No. 46/2002 sent to him by the learned Presiding Officer of DRT-II after passing of final order on 10.1.2002 in O.A. No. 653/2000 filed by Union Bank of India (hereinafter to be referred as 'the CH Bank') under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 ('RDDBFI Act' in short) whereby respondent No. 2, the borrower Company, Mr. A.C. Gulati (since expired and who is being represented by his legal heirs, respondents 3 (a to f)), Mr. B.R. Dougall, who was the father-in-law of the appellant-objector and who has also expired and is being represented by his legal heirs, respondents 4 (a to c), Mr. Atul Gulati respondent No. 5 herein and Mr. Om Parkash Gulati, respondent No. 6 herein, were held liable, jointly and severally, to pay Rs. 1,05,90,494/- with interest thereon @ 17.25% p.a. with quarterly rests (which amount of 'public money' is stated to have mounted to over ten crores by now)

In the recovery proceedings arising out of Recovery Certificate dated 17.1.2002 the property in question was attached by the Recovery Officer vide order dated 18.4.2011 treating the same to be owned by the deceased guarantor/CD Mr. B.R. Dougall, father-in-law of the present appellant and then the same was sought to be sold by auction and a sale proclamation was issued by the learned Recovery Officer. At that stage the present appellant surfaced and started legal battle to protect the property in question from being auctioned. She filed objections under Rule 11 of the Rules framed under the Second Schedule to the Income Tax Act, which Rules as per Section 29 of the RDDBFI Act are applicable to recovery proceedings initiated by the Recovery Officers attached to DRTs upon receipt of Recovery Certificates issued upon finalisation of recovery cases filed under Section 19 of RDDBFI Act by Banks and other Financial Institutions. The objections filed by the appellant-objector were, however, rejected by the learned Recovery Officer vide his impugned order dated 13.5.2016.

This order was challenged by the appellant-objector before the learned Presiding Officer of DRT by way of an appeal under Section 30 of the RDDBFI Act but that appear was also dismissed vide impugned order dated 21.9.2016 which reads as under:

"1. The appellants preferred this appeal under Section 30 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 against the order dated 13.5.2016 passed by the Recovery Officer-I, DRT-II, New Delhi in RC No. 46/02 and the factual metrics leading to the filing of the appeal are as follows:

The appellant submits that the property bearing No. 3, Racquet Court Road, Civil Lines, Delhi is purchased by the appellant initially under the agreement to sell dated 19.9.2006 and subsequently through registered sale deed dated 29.11.2006 and since then the appellant has been in possession of the property. Prior to that besides guarantor in OA No. 653/00 Mr. B.R. Dougall also stood as guarantor for financial assistance availed from IOB by his son Sh. Vivek Dougall, who was doing business in the name and style Vinayak International Inc., failed to repay the loan amount, IOB filed OA No. 15/2002 titled as Indian Overseas Bank v. M/s. Vinayak International Inc. & Ors. And during the said proceedings IOB offered OTS to the guarantors and also authorised for sale of the security to buyer for consideration. The father and brother of appellant were approached by Sh. B.R. Dougall for sale of the property and they agreed to purchase the property in question of valuation in consideration of the appellant who was facing matrimonial dispute with her husband and the appellant arranged the entire funds to pay sale consideration and executed sale deed dated 29.11.2006 in its favour. Thus, the appellant claims that she is bona fide purchaser of the property in question without notice of the claim of the UBI against the CDs therein and while so the property in question was attached in RC No. 46/02 titled Union Bank of India v. Atul Foods Products & Ors. and the property of the appellant exempt from attachment under Section 64(2) of CPC read with Rule 16 of the Second Schedule to the Income Tax Act in the peculiar facts and the doctrine of relate back under Rules 51 and 52 is not applicable and appellant cannot be deprived of benefit of Section 64(2) of CPC read with Rule 16 of Income Tax Act and thus sale in favour of the appellant cannot be treated as void. The appellant further submits that sale in favour of the appellant is for discharge of the mortgagee IOB who received the entire sale consideration, except Rs. 10 lacs and which their consent of the Hon'ble DRT before whom application for recording the comprise was filed CD#3 was left with no saleable interest in property, therefore, property in possession of appellant cannot be subject matter of attachment.

While so the Recovery Officer-I, DRT-II, Delhi by his order dated 13.5.2016 disallowed the objections filed by the appellant vide Diary No. 5546 dated 13.9.2011 applying the provision of Rule 51 of the Second Schedule of Income Tax Act, clarified that the attachment shall relate back to, notice of demand under Rule 51 which was issued in March, 2002 and whereas the property was purchased in the year 2006 i.e. during the pendency of the attachment and as such the appellant is not entitled to raise any objections for attachment of the property.

Aggrieved by the said attachment and rejection of the objection of the appellant, the appellant preferred this appeal contending inter alia that order of Recovery Officer-I, DRT-II, Delhi dated 13.5.2016 is contra to settled proposition law and that appellant is a victim of fraud and the order of attachment of property and notice to settle the terms of proclamation are contrary to the law and the facts of the case that the learned RO-I, DRT-II, Delhi failed to see that the appellant purchased the property in question and the sale proceed utilized for redemption of the mortgage by the CD#3 which was mortgaged to IOB and the learned RO-I, DRT-II, Delhi failed to see the bona fide of the appellant and there was no declaration when the property was purchased by the appellant and the appellant is bona fide purchased and doctrine relate back cannot be applied to bona fide purchaser without notice of the claim of the UBI against the property and the property alienated to prior to attachment by the virtue of judgment rendered by Hon'ble Apex Court, (1991) 1 Supreme Court Cases 715 titled as Hamda Ammal v. Avadiappa Pathar & 3 Ors. and the order of the Recovery Officer-I, DRT-II, Delhi is unsustainable and that the sale is liable to be set aside.

On the other hand the UBI filed reply contending that the CH Bank has to recover an amount of Rs. 1,32,27,641.99 from the CDs and as per the direction of the Hon'ble Tribunal UBI sold the mortgage property bearing Plot No. 200, M.I.A., Alwar, Rajasthan measuring 20,800 sq.mts. in the public auction dated 20.2.2006 by the CH Bank for Rs. 45 lacs and still an amount of Rs. 1 crore is due and the Recovery Certificate has been served to CDs in the aforesaid matter in the year 2002 and an affidavit has been filed by the C#3, Sh. B.R. Dougall vide Diary No. 3060 dated 28.9.2004 wherein he has stated that the aforesaid property bearing No. 58, 601, Sahyog Building, Nehru Place, New Delhi and also having self occupied property at 3, Raquet Road, Civil Lines, New Delhi and affidavit was already on record and as per the Second Schedule to the Income Tax Act under Rules 2 and 16 of the said act, when a notice of demand has been served to the CDs or their representative in interest they shall not be competent to mortgage, charge, lease, transfer or otherwise deal with any movable and immovable property belonging to them except with the permission of the Tax Recovery Officer. Hence the alleged transfer of the property in question is void, illegal and is liable to be set aside. Further as per Rule 51 of the Second Schedule to Income Tax Act the attachment relate back to and from the date on which the notice to pay the arrears, issued under this schedule, was served upon the defaulter and the appellant is not entitled for any relief through her objection and also appeal is liable to be dismissed.

The appellant filed rejoinder reiterating the case stated by her in the appeal grounds.

Heard both sides.

Now the points for consideration are:

(i) Whether the appellant/objector is bona fide purchaser of the pertly in question without notice of the attachment and entitled for removal of attachment over the property No. 3, Racquet Court Road, Civil Lines, Delhi as prayed for?

(ii), Whether the order of the Recovery Officer-I, DRT-II, Delhi is sustainable?

Both points are discussed together. The learned Counsel for the appellant relying upon the judgment (1991) 1 Supreme Court Cases 715 titled as Hamda Anmal v. Avadiappa Pathar & 3 Ors. wherein it is laid down that the "property belonged to the judgment debtors (vendors) and the sale deed had already been executed by them prior to the attachment before judgment and only its registration remains then neither the attachment before judgment nor a subsequent attachment or Court sale of the property would confer any title by preventing the relation back. The fact that the documents of sale had not been registered until after the attachment makes no difference." In the present case, demand notice dated 15.3.2002 were issued to the CDs including CD#3 in the month of March, 2002 and the CDs appeared before Recovery Officer-I, DRT-II, Delhi and CD#3 filed affidavit of assets wherein CD#3 disclosed the property in question and he was prohibited for creating any third party interest and even in the additional affidavit filed by CD#3 he disclosed that he was the owner of the property in question. As per the case of the appellant the CD#3 executed agreement of sale dated 19.9.2006 and the sale deed dated 29.11.2006 in favour of the objector in respect of the property in question whereas the demand notice were served to the CD#3 in the month of March, 2002. Now we have to analyze the legal position in respect of the property under attachment as per Rule 2 as well as Rule 51 of the Second Schedule to the Income Tax Act.

As per Rule 2 of the Second Schedule to the Income Tax Act provides as follows:

"2. When a certificate has been drawn up by the Tax Recovery Officer for the recovery of arrears under this Schedule, the Tax Recovery Officer shall called to be served upon the defaulter a notice requiring the defaulter to pay the amount specified in the certificate within fifteen days from the date of realize the amount under this Schedule."

As per Rule 51 of the Second Schedule to the Income Tax Act provides as follows:

"51. Where any immovable property is attached under this Schedule, the attachment shall relate back to, and take effect from, the date on which the notice to pay the arrears, issued under this Schedule, was served upon the defaulter."

As per Rule 16 of the Second Schedule to the Income Tax Act provides as follows:

"16(1) Where a notice has been served on a defaulter under Rule 2, the defaulter or his representative interest shall not be competent to mortgage, charge, lease or otherwise deal with any property belonging to his except with the permission of the Tax Recovery Officer, nor shall any Civil Court issue any process against such property in execution of a decree for the payment of money.

(2) Where an attachment has been made under the Schedule, any private transfer or delivery of the property attached or any interest therein and any payment to the defaulter of any debt, dividend or other moneys contrary to such attachment, shall be void as against all claims enforceable under the attachment."

Thus, the above provisions provide the doctrine of relate back of the attachment to the date of demand and if the same is taken as March, 2002 the attachment effected relate back to march, 2002 and in the present case the objector who purchased the property in the year 2006 i.e. 29.11.2006 and the claim of the objector is hit by the provisions of the Rule 16 of the Second Schedule to the Income Tax Act and as such the sale is also void under no right accrue to the objector by virtue of the sale deed dated 29.11.2006 relied by her and the citation relied on by the learned Counsel for the appellant in (1991) 1 Supreme Court Cases 715 titled as Hamda Anmal v. Avadiappa Pahtar & 3 Others were not applicable to the facts of this case and the objections raised by the appellant/objector herein before the Recovery Officer-I, DRT-II, Delhi is unsustainable and the Recovery Officer-I, DRT-II, Delhi rightly disallowed the objections on property inquiry and investigation and the appellant failed to make out any case for seeking indulgence of this Tribunal in this appeal. I see no merits in this appeal and both the points were answered accordingly. The Appeal No. 39/2016 is hereby dismissed with cost."

The undisputed position which has emerged from a reading of the impugned order of the learned DRT and the submissions advanced from both sides is that deceased father-in-law of the appellant-objector Mr. B.R. Dougall had stood as a guarantor for the repayment of some loan taken by respondent No. 2 herein from the CH Bank and since neither the borrower Company nor any of the guarantors repaid the loan the CH Bank filed an Original Application for recovery of its dues which was finally allowed in its favour by the DRT and a recovery certificate was issued and forwarded to the Recovery Officer attached to the DRT for execution. Mr. B.R. Dougall had also stood as guarantor for his son's Firm Vinayak International which was sanctioned and disbursed loan by another Bank, Indian Overseas Bank, and in that Finn's account he had mortgaged his property, which is now the property in question in this litigation and which as noticed already is being sought to be protected from sale in execution if the Recovery Certificate issued in respondent No. 1 Bank's O.A. No. 653/2000. That Firm had also defaulted in repayment of the lender Bank's money and, therefore, that Bank had also filed an Original Application, being O.A. No. 15/2002 for recovery of its dues. That O.A. was filed after the respondent No. 1 Bank had filed its O.A. being O.A. No. 653/2000.

The O.A. of CH Bank, respondent No. 1 herein, was decided on 10.1.2002 and undisputedly the Recovery Certificate was forwarded to the Recovery Officer in March, 2002. At that time the deceased guarantor Mr. B.R. Dougall was alive. As required under Rule 2 of the Rules framed under Second Schedule to the Income Tax Act a demand notice was served upon late Mr. B.R. Dougall but despite service of notice by the Recovery Officer he did not liquidate the liability under the Recovery Certificate dated 17.1.2002. However, no recovery of decretal amount appears to have been effected even for many years after issuance of the Recovery Certificate by the DRT.

It appears from the record that the property in question prior to its attachment in the present case could not be attached since it was mortgaged in favour of Indian Overseas Bank. As noticed already, that Bank had also filed recovery case against its borrower and mortgagors including the deceased guarantor of this case and father-in-law of the appellant-objector Mr. B.R. Dougall. During the pendency of that O.A. a settlement was arrived at between the borrower Firm of Mr. B.R. Dougall's son and lender Bank of that case. Payment was made to that Bank as per the settlement and the Bank thereafter released the property in question here from its charge vide its letter dated 18.11.2006, copy of which has been placed on record. by the appellant-objector and is available at page No. 223 of the appeal paper-book.

After the property in dispute was released from the charge of Indian Overseas Bank the CH Bank of this case, respondent No. 1 herein, then appears to have requested the Recovery Officer to attach and sell that property in execution of the Recovery Certificate issued in the present case way back in the year 2002. The Recovery Officer accepted that prayer of the CH Bank and an order for the attachment of the property in dispute was passed by him in August, 2011 and thereafter sale proclamation was also issued for the sale of that property. Then the appellant came forward and appeared before the Recovery Officer with objections under Rule 11 of the Rules under the Second Schedule to the Income Tax Act seeking Withdrawal of the attachment and sale proclamation issued by him in respect of the property in question. She had sought that relief primarily on the ground that after the compromise had been arrived at in O.A. No. 15/2002 filed by Indian Overseas Bank against her father-in-law, late Mr. B.R. Dougall, and his son's Firm by the name of Vinayak International that lender Bank had permitted the sale of the mortgaged property i.e. the property in question in the present case, by her father-in-law to her and accordingly firstly an agreement to sell was executed between her and her deceased father-in-law on 19.9.2006 and then a regular sale deed was also executed in November, 2006 which was registered also. She claimed that major part of the sale consideration payable by her under the said agreement to sell was paid by her directly to Indian Overseas Bank towards discharge of the liability of her husband's Firm M/s. Vinayak International and also that the money was given to her by her parents since her relations with her husband were trained and finally they were divorced also.

I will now refer to some judgments wherein scope of investigation of objections by Recovery Officers under Rule 11 was considered. Bombay High Court in the case of Gangadhar Vishwanath Ranade v. Income Tax Officer, 1989 177 ITR 163 (Bom.), had observed as under:

"18. Where property is this attached by the Tax Recovery Officer and any claim is preferred to him in that behalf, then the rules provide for investigation of such claims. The procedure for preferring an objection and its disposal is to be found on a combined reading of Rules 9 and 11. We do not propose to refer to these rules in detail except to Sub-rule (6) of Rule 11 which provides as follows:

"Where a claim or an objection is preferred, the party against whom an order is made may institute a suit in a Civil Court to establish the right which he claims to the property in dispute; but, subject to the result of such suit (if any), the order of the Tax Recovery Officer shall be conclusive."

Sub-rule (4) of Rule 11 lays down:

"Where, upon the said investigation, the Tax Recovery Officer is satisfied that, for the reason stated in the claim or objection, such property was not, at the said date, in the possession of the defaulter or of some person in trust for him or in the occupancy of a tenant or other person paying rent to him, or that, being in the possession of the defaulter at the said date, it was so in his possession, not on his own account or as his own property. But on account of or in trust for some other person, or partly on his own account and partly on account of some other person, the Tax Recovery Officer shall make an order releasing the property, wholly or to such extent as he thinks fit, from attachment or sale."

We may mention that the provisions of Sub-rules (1) to (6) of Rule 11 of the Second Schedule are analogous to the provisions of Order 21 and Rules 58 to 63 of the Civil Procedure Code.

It will thus be seen that where property is attached by the Tax Recovery Officer, the procedure contemplated by the Income-tax Act contemplates filing of objections by the claimant who claims that the property does not belong to the defaulter, but belongs to him. The claim or objection can be preferred apparently both to the attachment as well as sale as Sub-rule (1) of Rule 11 indicates, once the claimants make an objection and claim the property as belonging to them, the Tax Recovery Officer has to decide that objection and record his conclusion....................."

Hon'ble Supreme Court also had also in the case of The Tax Recovery Officer v. Gangadhar Vishwanath Ranade, VII (1998) SLT 466 : IV (1998) CLT 6 (SC) : AIR 1999 SC 427, dealt with the scope of Rule 11 of the Rules framed under the Second Schedule to Income Tax Act and observed as under:

"The powers of the Tax Recovery Officer, however, under Rule 11 of the Second Schedule to the Income-tax Act are somewhat different. Under Rule 11(1) where any claim is preferred to of any objection is made to the attachment or sale of any property in execution of a certificate on the ground that such property is not liable to such attachment or sale, the Tax Recovery Officer shall proceed to investigate the claim or objection. Under Rule 11 (4), (5) and (6) it is provided as follows:

Rule 11(4) : Where, upon the said investigation, the Tax Recovery, Officer is satisfied that for the reason stated in the claim or objection, such property was not, at the said date, in possession of the defaulter or of some person in trust for him or in the occupancy of a tenant or other person paying rent to him, or that, being in the possession of the defaulter at the said date, it was so in his possession, not on his own account or as his own property, but on account of or in trust for some other person, or partly on his own account and partly on account of some other person, the Tax Recovery Officer shall make an order releasing the property, wholly or to such extent as he thinks fit, from attachment or sale.

Rule 11 (5) : Where the Tax Recovery Officer is satisfied that the property was, at the said date, in the possession of the defaulter as his own property and not on account of any other person, or was in the possession of some other person in trust for him, or in the occupancy of a tenant or other person paying rent to him, the Tax Recovery Officer shall disallow the claim.

Rule 11(6) : Where a claim or an objection is preferred, the party against whom an order is made may institute a suit in a Civil Court to establish the right which he claims to the property in dispute; but subject to the result of such suit (if any), the order of the Tax Recovery Officer shall be conclusive."

The Tax Recovery Officer, therefore, has to examine who is in possession of the property and in what capacity. He can only attach property in possession of the assessee in his own right, or in possession of a tenant or a third party on behalf of/for the benefit of the assessee.........The provisions, therefore, of Rule 11 are analogous to those of Order XXI Rules 58 to 61 and 63 of the CPC as they stood prior to the amendment of the Civil Procedure Code in 1976. In fact, the language of Order XXI Rules 60 and 61 is similar to the language of Rule 11(4) and Rule 11(5) of the Second Schedule to the Income-tax Act. Similarly, the language of Order XXI Rule 63 is similar to the language of Rule 11(6). Rules 59 to 62 of Order XXI, prior to the amendment of 1976, provide for a summary investigation into possession as distinct from a thorough trial of ultimate right. No doubt, it is impossible to separate altogether the question of possession and of title. Thus, if the judgment -debtor was in possession, he may have been in possession as agent or trustee for another; and this has to be enquired into. To that extent title may be a part of the inquiry. Similarly, if the property attached is claimed by a third party who adduces evidence to show that he was possessed of the property under some kind of a title, the property will have to be released from attachment. The procedure is not meant to decide intricate questions of law as to title to the property................

In the light of this discussion about the provisions of Order XXI Rules 58 to 63, if we examine Rule 11(4) of the Second Schedule to the Income-tax Act, it is clear that the Tax Recovery Officer is required to examine whether the possession of the third party is of a claimant in his own right or in trust for the assessee or on account of the assessee. If he comes to a conclusion that the transferee is in possession in his or her own right, he will have to raise the attachment................"

The legal position which becomes clear from a reading of the above-referred judgments dealing with Rule 11 of the Rules framed under Second Schedule to the Income Tax Act is that upon receipt of a Recovery Certificate from the Presiding Officer of DRT, the Recovery Officer is expected to serve upon the certificate-debtors a demand notice as provided under Rule 2, requiring them to make payment within a period of 15 days. In case of default in payment by the CDs, the CH Bank can request the Recovery Officer to attach any movable or immovable assets of the CDs and in case of attachment order is passed and some third party feels aggrieved by that attachment, he or she can file objections before the Recovery Officer under Rule 11 and if upon investigation of the claim of the objector the Recovery Officer finds that on the date of service of demand notice under Rule 2, the property attached was in occupation of the CD in his or her own right, the attachment will not be lifted and the sale, if conducted, will not be set aside. Further, in case the objector is able to show that on the date of service of demand notice under Rule 2 he or she was in possession in his or her own right and his or her possession was not on behalf of CD, then the Recovery Officer will lift the attachment or set aside the sale. In the present case, undisputedly, demand notice under Rule 2 of the Rules was served upon the deceased CD Mr. B.R. Dougall in March, 2002. At that time, he undisputedly was in possession of the property in question in his own right as its owner and not on behalf of any third party including the present appellant-objector. Therefore, the appellant-objector being not in possession of the property in question on the date of service of demand notice under Rule 2 upon the deceased CD, she could not have asked for lifting of the attachment order passed by the Recovery Officer in April, 2011 despite the fact that she claims to have purchased the property in question from the CD, Mr. B.R. Dougall in the year 2006. The crucial date is the date when the concerned CD is served with a demand notice as provided under Rule 2, which admittedly in the present case was served in March, 2002, and not the date of attachment. Therefore, even if it is accepted that the appellant-objector was in possession of the property in question in April, 2011 when the learned Recovery Officer had attached the property, which she was claiming to be her matrimonial home also that possession and even the sale deed allegedly executed in her favour by her father-in-law before that attachment order of the Recovery Officer will not confer any interest upon her for the purpose of getting an order of Withdrawal of attachment under Rule 11.

Mr. D.K. Malhotra, the learned Counsel for the appellant, had mainly argued while challenging the finding of the learned Presiding Officer that the sale in her favour by late Mr. B.R. Dougall was hit by Rule 16(1) of the Rules framed under Second Schedule to the Income Tax Act (as extracted in the impugned judgment of the DRT) that the sale in favour of the appellant-objector was for discharge of pre-existing liability of the deceased Mr. B.R. Dougall towards a mortgagee Bank, namely, Indian Overseas Bank, and, therefore, the prohibition against sale of any property belonging to the CD by him after he has been served with a demand notice under Rule 2 is not attracted in respect of the sale transaction finalised with the consent of Indian Overseas Bank and, therefore, the finding of the learned Presiding Officer that the transaction was hit by Rule 16(1) is erroneous finding.

However, I do not find any substance in the above argument of Mr. D.K. Malhotra. In the present case Rule 2 notice stood served upon the deceased Mr. Dougall in March, 2002 and thereafter on 18th November, 2006 the Indian Overseas Bank had released the property in dispute from its charge after it had been -paid its full dues by late Mr. B.R. Dougall as per the settlement between the Bank and the borrower Firm through its proprietor, who is his son. The property in question then became free from the charge of the mortgagee Bank but since Rule 2 demand notice had already stood served upon Mr. Dougall in March, 2002 he was not competent to execute the sale deed in favour of his daughter-in-law and for that matter in favour of anybody in view of the prohibition contained in Rule 16(1) (which Rule has been extracted by the DRT in its impugned order). In the grounds of appeal it has been pleaded that the deceased Mr. Dougall had in fact redeemed his property. If that was so it becomes all the more a more strong reason to reject the story cooked by the appellant because redemption could be by the mortgagor with his own money may be mustered by taking money from the in-laws of his son, as is the case of the appellant. The argument of Mr. Malhotra which he kept on repeating again and again during the course of arguments that since the sale in her favour had been effected by a mortgagor to discharge his pre-existing contractual liability towards his secured creditor (Indian Overseas Bank) the sale was not hit by Rule 16(1) does not deserve to be accepted at all because the deceased CD had already paid the entire dues of his mortgagee and had redeemed the property before transfer of the property by way of sale in favour of his daughter-in-law, the appellant herein, and the sale deed was executed by the deceased father-in-law of the appellant only after the Bank had received all its dues as per the settlement with him and borrower and it had given a letter to the mortgagor releasing its charge over the property in dispute. When the sale deed was executed in favour of the appellant the pre-existing contractual liability towards Indian Overseas Bank had already been cleared by the deceased mortgagor and only thereafter he executed the sale deed in favour of his daughter-in-law. So, this sale transaction between father-in-law and daughter-in-law cannot be said to have been entered into by a mortgagor in order to discharge pre-existing contractual liability towards mortgagee Bank.

Learned Counsel for the CH Bank had submitted that the so called story of sale of the property in question in favour of the appellant-objector by none other than her own father-in-law is nothing but a 'cock and bull story' and highly improbable and not worth acceptance. It was submitted that it is highly improbable that a daughter-in-law, who is having strained relations with her husband and in-laws will pay crores of rupees to her in-laws and purchase the property which she was herself claiming to be her matrimonial home over which she had a legal right of occupation. It was also submitted that these days daughters-in-law who have genuinely strained relations with their husbands or in-laws and are seeking divorce demand properties and money for giving divorce and therefore in the present case the position is opposite and the daughter-in-law claims to have given money to her father-in-law. Learned Counsel also submitted that father-in-law of the appellant had guaranteed repayment of different loans running into crores of rupees in early nineties disbursed by different Banks to bis son's Firm and his own Company also, respondent No. 2 herein but repayment of loans was not made by any of the borrowers and so a game plan was finalised by the deceased father-in-law of the appellant so that crores of 'public money' could be pocketed by the borrowers/guarantors and which money would remain within the family. It was submitted that when settlement was arrived at with Indian Overseas Bank late Mr. B.R. Dougall knew that he owed crores to Union Bank of India also and to evade repayment all plans must have been conceived well in advance.

In the facts and circumstances I am inclined to accept these submissions of the learned Counsel for the CH Bank. The story cooked by the appellant-objector does appear to be highly improbable.

For the aforesaid reasons, I do not find any merit in this appeal and any illegality in the orders of the learned Recovery Officer as well as of the Presiding Officer of DRT. Consequently, this appeal is dismissed.