Usha Devi vs Oriental Bank Of Commerce And Ors

P.K. Bhasin, J

On 26.4.2016 the Recovery Officer attached to Debts Recovery Tribunal-III, Delhi ('DRT' in short) sold MIG Flat No. 432 (Third Floor), Block D, Pocket A, Shalimar Bagh, Delhi (hereinafter referred to as 'the flat in dispute') in order to recover the money found to be recoverable from respondent Nos. 2 and 3 herein under the recovery certificate issued by the DRT on 30.6.2015 in Original Application (OA) No. 195/2010 filed by the respondent No. 1 Bank (hereinafter to be referred as 'the Bank' under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 ('RDDBFI Act' in short) against the respondent Nos. 2 and 3 herein, who are husband and wife. This husband-wife duo had obtained loan of Rs. 12 lacs from the Bank in January, 2015 and to secure its re-payment an equitable mortgage by way of title deed of the flat in dispute was allegedly created by them in favour of the Bank on 1.2.2005. Upon their defaulting in re-payment of the loan the Bank declared the account of the two borrowers as Non Performing Asset and when they did not pay the dues as demanded from them in the Bank's notice under Section 13(2) of SARFAESI Act the Bank had filed the O.A. before the DRT to recover its dues amounting to Rs. 18,58,118/- with pendente lite and future interest thereon @ 9.25% with monthly rests.

The DRT had allowed the O.A. vide order dated 30.6.2015 and issued recovery certificate in favour of the Bank for Rs. 18,58,118/- along with interest as per the prayer made in the O.A. It was also directed in the final order that in case of non-payment of the amount being decreed by that order against Sukumar Bagh and his wife the flat in dispute, which had been equitably mortgaged by them in favour of the Bank, will be sold to recover the decretal amount. Then the DRT had sent the recovery certificate to the Recovery Officer concerned for execution of the recovery certificate. The Recovery Officer registered the recovery certificate as R.C. No. 227/2015 and vide order dated 5.8.2015 he directed issuance of notice under Rule 2 of the Second Schedule to the Income Tax Act to the certificate debtors (respondent Nos. 2 and 3 herein). By the same order they were restrained from 'alienating/transferring/mortgaging/charging in any way any of his/their assets.' The Certificate Holder Bank had sought sale of the flat in dispute. Accordingly, the Recovery Officer put it to sale by way of e-auction. First e-auction was fixed for 1.12.2015 and the reserve price was fixed at Rs. 68,00,000/- but no buyer came forward to purchase the flat at that much reserve price. The reserve price then came to be reduced to Rs. 61,20,000/- at the time of second attempt to sell the flat by the Recovery Officer. However, even then nobody came forward to buy it through e-auction fixed for 22.1.2016. The Recovery Officer again slashed the reserve price to Rs. 38,42,213/- and e-auction was fixed for 26.4.2016.

However, before the said date of third e-auction the appellant herein came forward with an application dated 19.4.2016 under Section 19(25) of the RDDBFI Act, 1993 before the Recovery Officer. However, the applicant's Counsel does not appear to have got that application under Section 19(25) listed before the Presiding Officer. Instead, another application dated 22.4.2016 was moved by her and the same also showed that it was under Section 19(25) of RDDBFI Act, 1993 and in that application it was stated the same was moved as in the earlier application dated 19.4.2016 there were some clerical errors. That second application was taken up by the Recovery Officer on being mentioned by the appellant's Counsel on 22.4.2016 itself. In that application moved by the appellant herein she claimed that she had filed one Securitisation Application (S.A. No. 555/2011) and the same was listed on 25.4.2016 before DRT-m and further that the DRT had granted interim relief in respect of the flat in dispute which was still continuing. The appellant had also pleaded in that application that during the pendency of her S.A. the Bank had filed the O.A. in which it had obtained recovery certificate and then in recovery proceedings had got sale proclamation issued in respect of the flat in dispute and the same was affixed/pasted at the flat in dispute on 20.3.2016 for the auction on 26.4.2016. The appellant also alleged that the Bank with mala fide motive had not informed the Recovery Officer regarding the interim relief granted by the DRT in her S.A. and that was why sale proclamation was issued at the instance of the Bank officials. The prayer made before the Recovery Officer in that application was not to go ahead with the auction of the flat in dispute fixed for 26.4.2016. However, the Recovery Officer had not accepted that request of the appellant and simply directed issuance of notice of that application to the CH Bank for 2.5.2016 which was the date already fixed in the recovery proceedings for awaiting the outcome of the e-auction to be held on 26.4.2016.

On 2.5.2016 the Counsel for the CH Bank informed the Recovery Officer that auction this time was successful and the successful bidder (respondent No. 4 herein) had deposited 25% of the bid in the Registry of the Recovery Officer. That amount was ordered to be released in favour of the Bank to be kept in a fixed deposit till further orders.

On 2.5.2016 the appellant herein had also filed another objection petition before the Recovery Officer and this time purporting to be under Rule 11 of the Second Schedule to the Income Tax Act. The averments made even in this application under Rule were verbatim the same as in the earlier moved second application and in fact the third application was also dated 22.4.2016 though filed on 2.5.2016 with the only difference that the same was shown to have been filed this time under Rule 11 of the Second Schedule to Income Tax Act. The prayer made in that application was for not selling the flat in dispute for which the auction dated fixed was 26.4.2016. It appears that the appellant/objector feigned ignorance about the sale which had already taken place on 26.4.2016. That date of auction sale was already known to her and so it can be safely presumed that she also aware of the sale having actually taken place before her filing that third objection petition invoking Rule 11. In any event the CH Bank, whose Counsel had informed the Recovery Officer on the same date about sale having already taken place on 26.4.2016, was directed to file reply to that objection petition and the matter was adjourned to 17.5.2016. By that date the successful auction purchaser, respondent No. 4 herein, had made the balance payment also of 75% of the bid amount and on 17.5.2016 that amount of Rs. 29,08,313/- was also directed to be released in favour of the CH Bank to be kept in a fixed deposit till further orders. Then on the request of the Counsel for the CH Bank matter was adjourned to 3.6.2016 for arguments on the objection petitions filed by the objector, appellant herein. The Bank was also granted one week's time to file reply to the objection petition which it filed praying for rejection of the objections for various reasons.

The appellant had claimed in her objection petitions that she had purchased the flat in dispute from Sukumar Bagh, respondent No. 2 herein against whom the Bank had obtained recovery certificate in its O.A. from DRT, in August, 2004 vide registered documents pursuant to which he had also put her in physical possession of the flat in dispute. However, subsequently with mala fide intentions he and his -- wife, respondent No. 3 herein, had obtained loan from the CH Bank on the security of the flat in dispute. Copy of the S.A. was annexed with the objection petition in which she claimed that she had purchased the flat in dispute from Sukumar Bagh on 11.8.2004 vide registered agreement to sell, power of attorney etc. and the Bank had in collusion with Sukumar Bagh granted loan to him without verifying his ownership in respect of the flat in dispute which he had already sold to her on 11.8.2004 and had also put her in possession of the flat. The Bank had obtained an order of possession from the ACMM under Section 14 of SARFAESI Act and then she had to file the S.A. to protect her possession which was in danger of being taken over the by the Court Receiver. In that S.A. the DRT had passed an order on 14.10.2011, copy of which order was also annexed with the objection petition, whereby the CH Bank was directed not to proceed further in respect of the flat in dispute under SARFAESI Act but subject to deposit of Rs. 3.50 lacs within 30 days by the applicant with an affidavit-cum-undertaking within one week that she shall make payment of above amount accordingly. "It was also ordered that default on the part of the applicant at any stage will entitle the respondent-Bank to proceed further in accordance law without seeking further clarification in this regard". It was claimed in the objection petition that the said interim order of the DRT was still in operation.

The Bank had filed its reply to the objection petition on 3.6.2016 and pleaded inter alia that the objector had colluded with the CDs (respondent Nos. 2 and 3 herein) to defeat the recovery certificate issued by the DRT in its O.A. and that with that objective they had forged documents being relied upon by the objector. It was claimed that the CDs had at the time of taking loan from the Bank placed at the disposal of the Bank one sale deed dated 10.1.2005 executed in favour of Sukumar Bagh by one Siddhartha Yadav who had earlier to that had purchased the same from Ms. Sashi Madan in whose favour DDA had executed conveyance deed dated 1.12.2004. The Bank pleaded that it had already "...informed the DRT-III, Delhi that the answering Bank is not taking any action under SARFAESI Act and is taking action in the recovery proceedings."

Arguments were heard on 7.6.2016 on the objection petitions of the appellant/objector. The application under Section 19(25) of RDDBFI Act, 1993 and the objection petition under Rule 11 of the Second Schedule to Income Tax Act were both dismissed by the Recovery Officer vide his common order dated 13.6.2016 which is re-produced below:

"Present: Sh. M.K. Tiwari, the Officer of the CH Bank.

Smt. Usha Devi, the objector, present in person.

Sh. V.K. Vashishtha the brother of Sh. Vikas Vashistha, the highest bidder present in person.

None for the CDs.

By this order I am disposing of the application filed under Section 19(25) of RDDBFI Act vide Dy. No. 4405 dated 22.4.2016 and application under Section 11 of RDDBFI Act, 1993 vide Diary No. 4712 dated 2.5.2016 by objector Smt. Usha Devi, w/o. Shri Vinod Rathore.

The fact of the case is that the property bearing being DDA Flat No. 432, Pocket A, Sector-D, Category-MIG, Third Floor, Shalimar Bagh, New Delhi was mortgaged with the CH Bank by Shri Sukumar Bagh, CD-I. The property was put on auction which was scheduled on 26.4.2016. The auction was successful and it was auctioned for an amount of Rs. 38,92,213/- and all the auctioned amount and poundage fees have been deposited by the highest bidder.

Objector filed an application under Rule 11 of RDDBFI Act, 1993 although it should be the Second Schedule of Income Tax on 2.5.2016 claiming to be the owner of the property in question. Earlier, an application was filed under Section 19(25) of RDDBFI Act on 22.4.2016. In spite of wrong applications, these were considered by this Forum, in the interest of justice, in order to give an opportunity to the applicant to submit her case.

In the applications, objector has submitted that she is the owner of the property and she has purchased it from Shri Sukumar Bagh, CD-I in August, 2004 vide registered documents. It has been further submitted that an S.A. application is pending before Hon'ble Presiding Officer, DRT-II, Delhi and CH Bank has been directed not to proceed further. It has been prayed to set aside the auction.

CH Bank filed the reply vide Dy. No. 6434 dated 3-6.2016 wherein it has been stated that the plaintiff has forged and manipulated the documents in connivance with other defendants to cheat the CH Bank. The applicant has purchased the property i.e. Flat No. F-432, whereas the property in question is Flat No. 432, Pocket A, Sector-D, Category-MIG, Third Floor, Shalimar Bagh, New Delhi. CDs mortgaged the property on the basis of sale deed dated 10.1.2005 registered with Sub-Registrar. CDs have also filed the chain of documents along with the sale deed. As per the conveyance deed dated 1.12.2004 executed by DDA in favour of Shri Shashi Madan and no such 'F' number is mentioned in the conveyance deed. The objector had earlier filed a civil suit and same has been dismissed. Further, it has been stated that on 14.10.2011, Hon'ble Presiding Officer, DRT-III, Delhi restrained the Bank with the condition that the objector shall deposit an amount of Rs. 3.50 lacs within 30 days and an affidavit-cum-undertaking within one week that she will make the payment. However, Objector did not comply with the order, therefore she cannot claim that interim relief subsists in her favour. CH Bank is not taking any action in S.A. It has been prayed to dismiss the objection with a cost.

ORDER

I have gone through all the relevant documents.

Hon'ble Presiding Officer has held the property in a question as a valid mortgage vide order dated 30.6.2015 and issued recovery certificate 27.7.2015.

It is observed that the Objector had sought an interim relief in S.A. No. 555 of 2011 wherein it had been submitted that the Objector had purchased the property bearing No. MIG Flat No. F-432, Pocket A, Sector-D, Category-MIG, Third Floor, Shalimar Bagh, New Delhi from Shri Sukumar Bagh vide registered agreement to sell and purchase, registered GPA, registered SPA, Registered Deed of Will and receipt etc. Accordingly, Hon'ble Presiding Officer, DRT-III, Delhi vide order dated 14.10.2011 directed CH Bank not to proceed further subject to deposit of Rs. 3.50 lacs within a week that she shall make payment and in case of default on the part of the Objector at any stage will entitle CH Bank to proceed further. However, Objector failed to comply this order.

The Objector has filed only a copy of the order of Hon'ble Presiding Officer and a copy of a civil suit along with her application. She has not filed the copies of relevant documents pertaining to purchase of the property in question. In the Civil Suit filed before Ms. Neha Paliwal, Central District-06, Delhi the Objector has sought the relief of injunction w.r.t. to property bearing No. F-432, 3rd Floor, Block D, Pocket A, Hyderpur, Shalimar Bagh, Delhi. However no relief was granted.

Further property in question is a DDA flat and ODA has allotted it to Shri Shashi Madan through conveyance deed dated 1.12.2004. How did the objector purchase the property in August, 2004 i.e. prior to the allotment by DDA? Moreover, the Objector has failed to produce any document pertaining to the property in question in order to show her ownership.

The objection under Rule 11 has been filed after the auction although the notice for sale proclamations were earlier served in May, 2015, December, 2015 and April, 2016. It palpably makes clear that the Objector is acting at the behest of the CDs to frustrate the recovery proceedings.

In view of the above, I am of the considered view that application filed by the objector is liable to be dismissed and is hereby dismissed. Copy of this order be given dasti to all parties concerned.

(SUJEET KUMAR)

RECOVERY OFFICER-H

DRT-III, Delhi"

Feeling aggrieved by the said order of the Recovery Officer the appellant/objector preferred an appeal under Section 30 of the RDDBFI Act, 1993 before the DRT-III (being Appeal No. 44/2016). That appeal was disposed of by the DRT vide order dated 26.7.2016 which is also re-produced below:

"1. The present appeal has been filed by the appellant praying therein to restrain the respondent Bank from proceeding further in respect of the mortgaged property i.e. MIG Flat No. F-432, Third Floor, Block No. D, Pocket-A, situated at Hyderpur, Shalimar Bagh, Delhi (hereinafter the property in question)

It has also been prayed to set aside the orders dated 13.6.2016 passed by the learned Recovery Officer of this Tribunal.

In the present matter the appellant is claiming that the appellant has purchased the property in question vide registered GPA, Agreement to Sell, Deed of Will etc. whereas the respondent Bank is claiming that the property in question has been sold by the learned Recovery Officer of this Tribunal for a sum of Rs. 38.92 lacs in the recovery proceedings. The appellant is also claiming to settle this matter with the respondent-Bank by depositing the certain amount.

After hearing the learned Counsel for both the parties and perusing the records, this Tribunal is of the view that since the matter is sub judice with the learned Recovery Officer of this Tribunal and in case the appellant is interested in settling they may approach to learned Recovery Officer this matter as Bank Counsel informed that sale has been confirmed money has been deposited by auction purchaser. The learned Recovery Officer may consider the requests in accordance with law in terms of 2nd Schedule of Income Tax Act so I hereby remand back this matter to the learned Recovery Officer of this Tribunal with direction to decide immediately the objection/application of the appellant herein.

With the above observations, the present appeal is disposed of.

File be consigned to records

(ASHISH KALIA)

PRESIDING OFFICER

DRT-III, DELHI"

After the remand order of DRT the Recovery Officer passed a fresh order on 8.8.2016 which reads as under:

"1. Hon'ble Presiding Officer vide order dated 26.7.2016 passed in the Appeal No. 44/2016 has remanded back the matter with a direction that the request of the appellant/3rd party (Objector herein), who intends to settle the matter, to consider the request in accordance with law in terms of Second Schedule of Income Tax Act.

In the light of above direction, the Objector on 28.7.2016 requested to grant one week's time to file the appropriate application before this Forum, which was allowed. But, no application has been filed so far. On 6.8.2016, the Objector again requested to grant one week time but the same was disallowed and the matter was reserved for the order.

The fact of the case is that the property being DDA Flat No. 432, Pocket A, Sector-D, Category-MIG, Third Floor, Shalimar Bagh, New Delhi was mortgaged with the CH Bank by Shri Sukumar Bagh, CD-I. The property was earlier put on auction twice i.e. on 1.12.2015 and 22.1.2016 but the same failed for want of bids. During this process no objection was filed. The property was again put on sale through e-auction which was scheduled to be held on 26.4.2016. The said auction was successful auctioned for an amount of Rs. 38,92,213/-.

2.1. Objector filed an application under Rule 11 of Second Schedule of Income Tax Act, after the successful auction of the aforesaid property, vide Dy. No. 4712 dated 2.5.2016 and the said objection was dismissed vide a detailed speaking order dated 13.6.2016 by this Forum.

2.2. Thereafter, auction purchaser submitted that all the sale proceeds and poundage fees have been deposited and requested to confirm the sale in his favour. Accordingly, the sale was confirmed on 13.6.2016 in favour of the auction purchaser Shri Vikas Vashishtha S/o. Shri Harphool Singh and Sale Certificate as per ITCP-18 & 20 were issued.

2.3. On 17.6.2016, auction purchaser requested to appoint a Receiver to handover the physical possession of the auctioned property. The request of auction purchaser was allowed and a Court Receiver was appointed as per Rule 39 of the Income Tax (Certificate Proceeding) Rules to take over the physical possession of the auction property and handover the same to the auction purchaser.

Thereafter, objector filed an appeal before Hon'ble Presiding Officer. Hon'ble Presiding Officer, DRT-III, Delhi, vide order dated 26.7.2016 remanded back to consider the matter as per Second Schedule of Income Tax Act.

In compliance of the aforesaid order, dated 26.7.2016 sufficient and reasonable opportunities have been granted to the Objector to file the appropriate application but no such application has come on record so far.

It is pertinent to mention that as per Second Schedule of Income Tax Act, any person can raise the objection in respect of the property which have been put on sale or has been sold under Rule 11 and Rule 60 respectively.

Rule 60 of the Second Schedule of Income Tax states that:

(1) Where immovable property has been sold in execution of a certificate, the defaulter, or any person whose interests are affected by the sale, may, at any time within thirty days from the date of 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 sale was ordered, with interest thereon at the rate of fifteen percent per annum calculated from the date of the proclamation of sale to the date when the deposit is made; and

(b) For payment to 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 for his immovable property, he shall not unless he withdraws that application, be entitled to make or prosecute an application under this rule.

In the instant case, objection filed by the Objector under Rule 11 of the Second Schedule of Income Tax Act has already been dismissed vide a detailed speaking order dated 13.6.2016 by this Forum.

Further, it is also on record that the Objector has not filed any application as per Rule 60 of the Second Schedule of the Income Tax Act within 30 days of the sale of the property in question.

As far as settlement with third party is concerned, there is no provision in the RDDBFI Act, 1993 and Second Schedule of Income Tax Act and the Rules made thereunder to settle the matter with the 3rd party when the mortgaged property has already been sold and sale has been confirmed in favour of the auction purchaser, Now, auction purchaser has every right to enjoy the property. Moreover, any delay in the enjoyment of legally purchased property through public auction conducted by this Tribunal shall not only be against the equity, justice and fairness on the part of auction purchaser who has bestowed a faith over this Tribunal but shall also send wrong image amongst the other intended buyers. It will also be against the basic spirit of expeditious recovery as enshrined in the RDDBFI Act.

Here, it is germane to refer to the decision dated 19.4.2010 passed by the Hon'ble High Court of Delhi in W.P.(C) No. 2588 of 2010 titled as Satish Chander Gupta v. State Bank of India, wherein the Hon'ble High Court of Delhi has observed that the DRAT is no one to decide as to at what value the Bank should settle its dues with the borrower especially when the Bank has Managers who have acted in pursuance to authorization in their favour and after due consideration of the proposal of the petitioners.

In view of the above, I do not find any cogent reason to review the order dated 3.6.2016 passed by this Forum and wait for the request of third party Objector to settle the matter with her as she does not have any locus standi. Thereafter, I reiterate the order dated 13.6.2016 passed by this Forum.

Accordingly, Mr. K.D. Thapliyal, Advocate having Mobile No. 9711678169, already appointed as Local Commissioner vide order dated 17.6.2016, is again directed to take the physical possession of the aforesaid auctioned property under Rule 39 of Income Tax (Certificates Proceeding) Rules and handover the same to the auction purchaser Shri Vikas Vashishtha, S/o. Shri Harphool Singh.

The Court Receiver is directed to video record the whole proceeding of taking of the physical possession and file a copy of the report along with a copy of Compact Disc (CD) of the video recording. CH Bank shall bear the expenses for video recording.

The DCP of the concerned area is directed to provide armed police force help including two lady constables to the Court Receiver to maintain law and order during taking over and delivery of the physical possession of the auctioned property.

The fee of Court Receiver is fixed at Rs. 20,000/- (50% of which to be paid in advance and 50% after compliance of assigned task) plus other miscellaneous expenses for the aforesaid assignment and same is to be borne by CH Bank.

Copy of this order be given dasti to all parties concerned.

(SUJEET KUMAR)

(Recovery Officer-II)

DRT-III, Delhi"

The appellant once again felt aggrieved and filed another appeal before the DRT under Section 30 of the RDDBFI Act, 1993 which came to be registered as Appeal No. 57/2016. That appeal was rejected by the DRT vide order dated 21.2.2017, which order is now under challenge in the present appeal Section 20 of the RDDBFI Act, 1993 The impugned order dated 21.2.2017 is also being re-produced below:

"Present: Mr. Anjani Kumar Singh, Counsel for the appellant.

Mr. S.A. Khan, Counsel for respondent Bank.

Reserved on: 19.1.2017

Pronounced on: 21.2.2017

This is an appeal preferred by appellant against the order dated 8.8.2016 of the Recovery Officer, DRT-III in RC No. 227 of 2015 under Section 30 of the RDDBFI Act, 1993.

The factual matrix leading to filing of the appeal is as follows:

The appellant submit that the property bearing MIG Flat No. F-432, 3rd Floor, Block No. D, Pocket-A, situated at Hyderpur, Shalimar Bagh, Delhi is the subject matter of the case. During the recovery proceedings the property was put to sale through e-auction held on 26.4.2016 for Rs. 38,92,213/- by the Recovery Officer. While so that objection filed objections under Order 11 of Second Schedule of Income Tax Act and the same was dismissed by the Recovery Officer vide his order dated 13.6.2016. As against the same Appeal No. 44 of 2016 was preferred by the appellant herein and this Tribunal vide final order dated 26.7.2016 directed the Recovery Officer to consider the request of the appellant in setting the matter with the Bank and remanded back the matter to learned Recovery Officer and again the learned Recovery Officer by order dated 8.8.2016 dismissed the objections.

The case of the appellant is that the property in question was allotted to Sashi Madan in 2003 and sale deed by the DDA was registered in her favour On 1.12.2004. Sashi Madan sold the property to Siddharth Yadav, who sold it to respondent No. 2 Sukumar Bagh i.e. debtor on 10.1.2005. It is further submitted that on 11.8.2004 respondent No. 2 Sukumar Bagh sold the property to appellant though he was not the owner of the property and the appellant came to know the fraudulent act of Sukumar Bagh in 2007 when he disclosed all these facts in his written statement in civil suit.

The appellant further submits that in view of provision of Section 43 of Transfer of Property Act, 1882 and Section 13 of the Specific Relief Act, 1963 the moment the vendor gets title or right over the property the vendee gets such right at that very moment and there is no need of declaration of his right by the Court and in view of the law laid down by the Hon'ble Apex Gourt in the matter of Silla Chandra v. Ramchandra Sahu, AIR 1964 SC 1789 the vendee got all incidents of the right of the Flat No. 432 on 10.1.2005 when the property was transferred to Sukumar Bagh by way of the registered deed of sale by Siddharth Yadav.

The appellant further submits that the Suit filed by the appellant against the respondent No. 2 is still pending in Suit No. 399/2017. The appellant further submits that she came to know in 2015 that respondent No. 2 has taken loan from the respondent Bank in collusion with respondent No. 3 Uma Devi w/o. Sukumar Bagh against the property in question and the Bank initiated the recovery proceedings under the provision of SARFAESI Act and appellant preferred appeal under Section 17 of the SARFAESI Act before DRT-III, Delhi in SA No. 555 of 2011 and the appellant approached the respondent-Bank for settlement and settlement dated 22.11.2014 was issued for an amount of Rs. 20.86 lacs payable by 31.12.2014 and due to financial crises the appellant could not deposit the amount and as such OA filed by the Bank was decreed and in view of the disposal of the Appeal No. 44 of 2016 remanding back the matter to the Recovery Officer the appeal filed under Section 17(1) dismissed as infructuous and as such the appellant constrained to prefer this appeal against the order of Recovery Officer dated 8.8.2016.

Heard both the sides and the point for determination is whether the appellant is entitled for setting aside the sale conducted by the Recovery Officer in pursuance of the recovery certificate issued in RC No. 227 of 2015?

In the present matter the e-auction conducted on 26.4.2016. As per provision of Second Schedule of Income Tax Act, 1961, the application to set aside the sale of immovable property on ground of non service of notice or irregularity shall be filed within 30 days from the date of sale before the Recovery Officer.

The Rule 61 of Schedule II of Income Tax Act, 1961 provides as follows:

"Where immovable property has been sold in execution of a certificate (such Income Tax Officer as may be authorized by the Chief Commissioner or Commissioner in this behalf), the defaulter, or any person whose interested are affected by the sale, may, at any time within thirty days from the date of sale, apply to the Tax Recover 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: (a) no sale shall be set aside on any such ground unless the Tax Recovery Officer is satisfied that the applicant has sustained substantial injury by reason of the non-service of irregularity and (b) 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."

Since the appellant failed to file the objections within 30 days to get the sale set aside that too by depositing the amount recoverable from DCs in the execution of the certificate. On both counts the appellant failed to fulfill the mandatory provision of Rule 61 of the Second Schedule of Income Tax Act, 1961 and as such the Recovery Officer rightly dismissed the objections upholding the sale.

In view of the appellant approach the Recovery Officer after 30 days of sale that too without making the deposit of amount due, I am of the considered opinion that the order of Recovery Officer in the facts and circumstances of the present case does not required any interference by this appellant Tribunal.

The learned Counsel for the appellant relied upon the judgments, Silla Chandra v. Ramchandra Sahu, AIR 1964 SC 1789; Harshad Govardhan Sondagar v. International Assets Reconstruction Co. Ltd., II (2014) CCR 137 (SC) : II (2014) BC 340 (SC) : II (2014) DLT (Cri) 836 (SC) : III (2014) SLT 469 : (2014) 6 SCC 1; P.K. Mohan Ram v. B.N. Ananthachary, (2010) 4 SCC 161, and Rohit Kumar @ Raju v. State of NCT, dated 5.10.2007 in Bail Appl. No. 2059/2007 in support of their contention.

The matter of Silla Chandra v. Ramchandra Sahu is a case of feeding the grant by estoppel whereas Harshad Govardhan Sondagar v. International Assets Reconstruction Co. Ltd. case related to the right of a lease holder in the secured asset and the case of P.K. Mohan Ram v. B.N. Ananthachary also is a case of feeding the grant by estoppel and the appellants case against her vendor is already pending in the Civil Court and the appellant is at liberty to pursue her remedy in the said civil case against the vendor as per law laid down by Hon'ble Apex Court in the above citations. Even otherwise the appellant is sourcing here title only through the other CD and as such the auction conducted by the Recovery Officer is binding on the appellant.

In the facts and circumstances I see no merit in the present appeal and the same is hereby dismissed.

File be consigned to records.

(G.V.K. RAJU)

PRESIDING OFFICER, DRT-II, DELHI

ADDITIONAL CHARGE

DRT-III, DELHI

(Pronounced in Open Court)

Dated: 21.2.2017"

From the aforesaid narration of the background fact leading to the filing of the present appeal one thing becomes clear that the appellant's case has been throughout in the litigation under SARFAESI Act as well as in the recovery proceedings arising out of the O.A. of the Bank that she was owner of the flat in dispute having purchased the same from one of the two Certificate Debtors, namely, Sukumar Bagh, respondent No. 2 herein, for a sum of one lac of rupees only in August, 2004 and under the sale documents, which included registered agreement to sell dated 11.8.2004, registered power of attorney, Will etc. executed by Sukumar Bagh, Sukumar Bagh had also given her possession of the flat in dispute and since then she along with her family had been living there.

Though at one time the Bank was claiming that in the so called documents of title being relied upon by the appellant Flat No. shown was 'F-432' while this litigation was in respect of Flat No. '432' and so the documents were forged documents, during the course of hearing of the present appeal that point was not pressed on behalf of the Bank and thus arguments from both the sides had proceeded with the clear understanding that there was no dispute about the identity of the property over which this litigation was going only and it is Flat No. '432' only which had been sold in auction by the Recovery Officer to respondent No. 4 and the auction purchaser was claiming possession of that flat only and the appellant was also fighting this legal battle to save Flat No. 432 only not any flat having the number as 'F-432'.

Before proceeding further I consider it appropriate to notice here some facts about civil litigation also which the appellant had initiated before entering the legal battle before the DRT to save flat in dispute. The appellant had in the year 2005 filed a civil suit for permanent injunction against Sukumar Bagh as well as the Bank for restraining them from dispossessing her from the flat in dispute though in the plaint flat number was mentioned as 'F-432'. At that time the appellant was apprehending her dispossession from the flat in dispute by Sukumar Bagh in collusion with the Bank officials. In the plaint of that civil suit, copy of which has been filed by the appellant along with this appeal, it had been claimed by the appellant herein that she had purchased the flat in dispute from Sukumar Bagh in August, 2004 but subsequently he colluded with Bank officials and obtained some loan in February, 2005 from the Bank on the security of the flat in dispute which he had already sold to her and so he could not create any mortgage over that flat in favour of the Bank. About that loan she came to know on 5.9.2005 when some officials of the Bank came to the flat in dispute and apprised her about the loan taken by Sukumar Bagh. On 15.9.2005 Sukumar Bagh accompanied by Bank officials had visited the flat in dispute to take forcible possession of the flat in dispute.

Sukumar Bagh contested that civil suit. In his written statement he pleaded that he had been defrauded by the appellant who was his 'confidential servant' and had got certain documents signed from him and registered also on the representation that those documents were required for furnishing of the flat in dispute which he was intending to purchase during those days. She had betrayed the trust which he had reposed in her as she was employed in his educational institutes as a part time teacher being run by him as Trustee at a monthly salary of Rs. 7,000/-. She was in custody of all the keys of the locks of his properties and all important documents relating to the properties as also of the school being a 'confidential servant'. He further pleaded that in August, 2014 he was not the owner of the flat in dispute and it was within the knowledge of the appellant that he was intending to purchase the flat in dispute from one Siddharth Yadav and her intentions became mala fide and she wanted to get power of attorney from him on the pretext of getting water and electricity connections in the flat in dispute and later on she, was misusing the same to claim ownership over the flat in dispute. He further pleaded that he had cancelled the documents which she had got executed from him in good faith and got registered also with the help of her husband. He purchased the flat for Rs. 12 lacs from Siddharth Yadav on 10.1.2005 and so even otherwise that flat could be sold to her for Rs. one lac only as was being claimed by her.

In view of the aforesaid facts pleaded by Sukumar Bagh in his written statement to the civil suit the appellant amended her plaint and included the relief of declaration that the letter of cancellation of her documents by Sukumar Bagh was illegal, null and void. The Bank in that suit had filed an application under Order VII Rule 11, CPC for rejection of the plaint as the suit was barred under Section 34 of RDDBFI Act, 1993 qua the Bank. That application was allowed by the learned Civil Judge seized of the suit vide order dated 15.1.2011. Subsequently the suit qua Sukumar Bagh was dismissed for non-prosecution, as was informed by the learned Counsel for the Bank during the course of hearing of the present appeal. The Bank's stand has been that there was a collusion between the appellant therein and the Bank's borrowers firstly to defraud the Bank and secondly to deprive the auction purchaser of the enjoyment of the property which he had purchased in a legally conducted auction.

Sukumar Bagh had also filed a civil suit against the appellant herein for a decree of possession in respect of the flat in dispute and permanent injunction. That suit was, however, dismissed by the Court of Shri Sanjeev Aggarwal, Additional District Judge, Rohini Courts, Delhi vide judgment dated 17.2.2014. The appellant's Counsel had submitted an uncertified copy of that judgment alongwith the compilation of judicial precedents to be referred and relied upon at the time of final hearing of this appeal. A perusal of that judgment of the Civil Court shows that in his suit Sukumar Bagh had pleaded almost same facts which he had pleaded in his written statement in the appellant's suit for declaration and injunction. It was pleaded by him that he had purchased the flat in dispute from one Siddhartha Yadav on 10.1.2005 and then he had entrusted the job of maintenance of that flat to the appellant herein being his 'confidential employee'. He accepted having signed and getting registered on 11.8.2014 the documents which the appellant was relying upon in support of her claim of being the owner in possession of the flat in dispute and further that he had done that in good faith because she knew that he was intending to buy the flat in dispute and after he had purchased the same the appellant had started living there for carrying out the work of interior decoration and for getting water connection etc. Upon coming to know that he had been cheated by the appellant he had got the documents being relied upon by her cancelled on 23.9.2005 and about that he had informed her also on 10.10.2005 and a police complaint was also lodged on 30.11.2005.

That suit was contested by the appellant herein and in her written statement she also reiterated the same pleas which she had taken in her own suits against Sukumar Bagh which included a suit for specific performance of agreement to sell dated 11.8.2004 also. One of the objections was that the suit was not correctly valued as the value of the flat in dispute was 'more that 25 lacs'. She pleaded that the suit was false and there was no justification it being filed after about five years of the cancellation of the documents of sale in 2005. The suit appears to have been filed sometime in the year 2010). Regarding the title of Sukumar Bagh over the flat in dispute on 11.8.2004 the appellant's case in his suit was that he was ostensible owner of the flat in dispute and subsequently in collusion with Siddhartha Yadav and one Shashi Madan had got documents of sale executed from that Siddhartha Yadav on 10.1.2005 and so even if Sukumar Bagh had no documents of title in his favour on 11.8.2004 he having become the owner of the flat in dispute on 10.1.2005 the defect in her title also got perfected.

The learned Additional District Judge in his judgment had observed as under in para Nos. 22 and 23:

"22. In this regard the testimony of PW1 is quite surprising, as PW1 in his cross-examination has stated that it is correct that I have mentioned in my complaint Ex-PW1/D-10 that the defendant trapped me in her beauty net and took my objectionable photographs and then blackmailed me to execute the documents of the impugned flat. It is also correct that I have in my plaint claimed that the defendant on the pretext of doing the interiors of my house had taken the documents and obtained my signature thereof. Both the contents of the coin plaint as well as of his complaint are correct. Contrary stands have been taken by PW1 in his cross-examination regarding the nature of deception practiced upon him allegedly by the defendant, who on pretext of executing power of attorney in her favour had got those documents executed from the plaintiff, as per the stand taken in his plaint.

However, in his complaint Ex-PW1/D-10 he has taken a stand that the defendant trapped him in her beauty net and took his objectionable photographs and then blackmailed him to execute the documents of the flat in question. Therefore, plaintiff is not even sure what version/stand he had to take in the present case. The credibility of version taken by him in his plaint, that is the reason, why he had executed the power of attorney and other documents in favour of defendant is clearly in doubt, as he was not even sure about the stand to be taken and he is blowing hot and cold at the same moment in taking different stands in his cross-examination. Yet he was given opportunity to explain the said stand, but his stand remained ambivalent and he stated that both his stands were correct, which cannot be. There is no evidence on the record that the plaintiff was trapped into said transaction by practicing undue influence and representation more so, as the plaintiff was an educated person. Further in his cross-examination he has admitted that he had gone to the Sub-Registrar office with the defendant, but he does not remember the month, time and year of the same and he had gone to introduce the defendant to the Sub-Registrar so that his work should not suffer in his absence and he has further stated that he cannot tell how defendant came into possession of the suit property and he does not know about the nature of documents executed by him in favour of the defendant until in the year 2005, when he was informed by the Bank Manager. Further though the said fraud was detected by the plaintiff in the year 2005, yet the present case has been filed in the year 2009, for which no plausible explanation has been furnished, as to why the plaintiff keep mum for such a long period of time and took no action against the defendant. This also goes against the case of the plaintiff."

From the said judgment of the Civil Court it also appears that in that suit the appellant herein had taken shelter under Section 43 of the Transfer of Property Act also and the learned Judge had dealt with that legal plea in para Nos. 25 and 26 of his judgment which are also being re-produced below:-

"25. Though the defendant in the present case has not led any evidence and evidence of the defendant was closed vide order dated 3.2.14. However, it is settled law that plaintiff in order to prove its case has to stand on its own legs and he cannot rely upon the weakness of the defendant case to prove its case, With regard to the controversy in issue Section 43 of the Transfer of Property Act, 1981 is relevant which is reproduced as under:

Transfer by unauthorised person who subsequently acquires interest in property transferred--Where a person (fraudulently or) erroneously represents that he is authorized to transfer certain immovable property and professes to transfer such property for consideration, such transfer shall, at the option of the transferee, operate on any interest which the transferor may acquire in such property at any time during which the contract of transfer subsists.

Nothing in this section shall impair the right of transferees in good faith for consideration without notice of the existence of the said option.

Illustration

A, a Hindu who has separated from his father B, sells to C three fields, X, Y and Z, representing that A is authorized to transfer the same. Of these fields Z does not belong to A, it having been retained by B on the partition; not having rescinded the contract of sale, may require A to deliver Z to him.

The proposition of law laid down in said Section 43 is squarely applicable to the facts of the present case. Since the plaintiff when he executed the relevant documents Ex-PW1/D1 to Ex. PW1/D5 in favour of the defendant on 11.8.2004, which were also duly registered with the office of Sub-Registrar was not the owner of the same, but he appears to have represented to the defendant that he was the ostensible owner of the same, which he either did fraudulently or enormously to the defendant that he was authorized to transfer the suit property in her favour, thereby he executed the said documents in favour of the defendant for consideration. Consequently, the transfer in question at the option of the defendant shall operate on any interest which the plaintiff had acquired in this said property during the time when the contract for sale of suit property dated 11.8.2004 subsists. In the present case, the plaintiff had acquired the title with respect the suit property by sale deed in his favour dated 10.1.2005 executed by Sh. Siddharth Yadav. Therefore plaintiff thought at that time when he represented to the defendant that he was the owner of the suit property and was authorized to transfer the same was not having title in the same, but later on the plaintiff having acquired the title in the said suit property is bound to deliver the suit property to the defendant at the option of defendant as long as contract subsists. In the present case, there is no evidence on the record that the defendant had rescinded the contract by walking out the same, therefore the plaintiff by virtue of Section 43 of Transfer of Property Act is under an obligation to deliver the property to defendant. Section 43 clearly lays down the principal of estoppel in this regard."

Having thus noticed the relevant background facts I now come to the present appeal. When this appeal was taken up for ex parte consideration on 27.2.2017 Mr. Sanjeev Bhandari, learned Counsel for the Appellant, instructed by Ms. Shruti Aggarwal, Advocate had projected the appellant's case by submitting that the Recovery Officer had sold her property in violation of the stay order passed by the DRT in her S.A. and further that the Recovery Officer had passed an unusual order in order to take possession of the flat in dispute, which is a small MIG flat built by DDA, by directing the DCP concerned to depute 'armed force' for which kind of a direction there was no justification at all. On that date this Tribunal had while issuing notice of the appeal to respondents directed that status quo in respect of the possession of the flat in dispute shall be maintained but subject to the appellant making a deposit of Rs. 15 lacs with the Registrar of this Tribunal which direction she had complied, as informed during the course of arguments.

Oral arguments on behalf the appellant at the time of final hearing of this appeal were advanced by Mr. Rajeeve Mehra, learned Senior Counsel. The Bank's case was argued by its learned Counsel Mr. S.A. Khan while Shri Vinay Sharma, learned Counsel for the auction purchaser made his submissions for him The borrowers, however, had not participated in the appeal proceedings before this Tribunal. They had in fact not even resisted the Bank's O.A.

Written arguments were also submitted on behalf of the parties who were being represented in the appeal.

From the pleadings of the parties before the Recovery Officer, DRT and then in this appeal and other material available in the files of the Recovery Officer and DRT, which were summoned, as also the documents filed by the appellant herself in this appeal and also the submissions made at the Bar by the Counsel for the parties, the undisputed facts which have emerged out are that on 11.8.2004 respondent No. 2 Sukumar Bagh had executed one agreement to sell in respect of the flat in dispute showing himself to be the owner of the same. That agreement was in favour of the appellant herein and was got registered also. Some other documents like general power of attorney were also executed by Sukumar Bagh on 11.8.2004 in favour of the appellant in respect of the flat in dispute. The sale consideration shown in the agreement to sell was Rs. one lac only. Further undisputed fact is that as on 11.8.2004 when the above referred documents were executed by Sukumar Bagh in favour of the appellant who according to him was his 'confidential servant', he was not even the owner of the flat in dispute. It was for that reason that he has been defending the litigations initiated against him by the appellant before different forums and his stand has been that though he had executed the documents being relied upon by the appellant but the same had been got executed/registered by the appellant by breaching the trust which he had reposed in her being his 'confidential servant'.

When Sukumar Bagh repudiated the claim of the appellant herein that she had become the owner of the flat in dispute under the documents executed by him and the respondent Bank also started claiming that the flat in dispute was mortgaged in its favour by Sukumar Bagh to secure the repayment of the loan given to him for making the payment for the purchase of the flat in dispute which he had purchased vide sale deed dated 20.1.2005 allegedly executed by one Siddhartha Yadav the appellant started her legal fight initially by filing a civil suit for injunction for restraining Sukumar Bagh and the Bank from dispossessing her from the flat in suit I collusion with each other. That suit subsequently was converted into one for a declaration that Sukumar Bagh could not cancel the property documents executed by him on 11.8.2004. In that suit no interim relief appears to have been granted to her and, as noticed already, that suit eventually was dismissed for non-prosecution. Sukumar Bagh's suit for getting back possession of the flat in dispute from the appellant was also dismissed by the Civil Court. When the Bank obtained possession order from the ACMM under Section 14 of the SARFAESI Act the appellant then had invoked her another remedy under Section 17(1) of SARFAESI Act by filing an S.A. before the DRT in the year 2011. In that S.A. the DRT had granted her some conditional interim relief which condition of making payment of Rs. 3,50,000/- to the Bank was complied with by her, as claimed by her. That S.A. eventually came to be dismissed on 26.4.2046 as infructuous since on that date DRT was informed by the Counsel for the Bank that the flat in dispute had been sold in auction to respondent No. 4 herein in the auction conducted on that date itself i.e. 26.4.2016. It is to be seen that the appellant upon coming to know that the Recovery Officer attached to the DRT had issued sale proclamation for the sale of the flat in dispute on 26.4.2016 in execution of recovery certificate which the Bank had in the meantime obtained in its O.A. filed against its defaulting borrowers Sukumar Bagh and his wife, had filed an objection petition on 22.4.2016 but the Recovery Officer did not stay the auction. Consequently auction was held on 26.4.2016 and flat in dispute came to be purchased by respondent No. 4 herein.

Subsequently, the appellant had filed another objection petition purporting to be under Rule 11 of the Second Schedule to the Income Tax Act. The earlier one filed on 22.4.2016 was under Section 19(25) of the RDDBFI Act, 1993 The Recovery Officer had rejected both the objection petitions on 13.6.2016 and consequently he had also confirmed the auction sale in favour of respondent No. 4 herein.

So, the position now is that there is no civil litigation pending between the appellant Sukumar Bagh and the Bank centering around the flat in dispute. At least none was brought to my notice from either side at the time of arguments. Only the present proceedings arising out of different orders passed by the Recovery Officer and the learned Presiding Officer of DRT are pending and this Appellate Tribunal is now called upon to decide as to whether the appellant herein is entitled to be protected in any manner against her threatened dispossession by the orders of the Recovery Officer passed in R.C. No. 227/2015 arising out of the Bank's O.A. 195/2010 in which not only the respondent Nos. 2 and 3 herein were held liable to pay Rs. 18,58,118/- with interest to the Bank but the flat in dispute was ordered to be sold also for realising the said amount in case of their not paying the same on their own. The Recovery Officer has already appointed Advocate Commissioner to take physical possession with the help of 'armed force' to be provided by the DCP concerned and which order of the Recovery Officer stands upheld by the learned Presiding Officer of the DRT before whom the appellant had filed an appeal under Section 30 of the RDDBFI Act, 1993. That order was passed so that the possession of the flat in dispute could be given to the successful auction purchaser, respondent No. 4 herein.

As has been noticed earlier, the main grievance of the appellant herein in her first objection petition dated 19.4.2016 was that the Recovery Officer had put up for sale the flat in dispute on 26.4.2016 the stay granted by the learned Presiding Officer in her favour in her S.A. on 14.10.2011 against sale of her flat was continuing to operate and so the flat in dispute should not be auctioned and the Recovery Officer was requested to cancel the sale stated for 26.4.2016. Same facts were pleaded by the appellant in her second objection petition dated 22.4.2016 before the Recovery Officer. It is not in dispute that in the appellant's S.A. the learned Presiding Officer had on 14.10.2011 passed a conditional interim order of stay in respect of the flat in dispute. The CH Bank in its reply dated 3.6.2016 to the objection petition of the appellant/objector before the Recovery Officer had claimed that she had not complied with the condition imposed on her by DRT in her S.A. The Recovery Officer had also observed in his order dated 13.6.2016 that the objector (appellant herein) had not complied with the condition of stay imposed by the Presiding Officer. Then the appellant had filed appeal against the order dated 13.6.2016. In the grounds of appeal she claimed that the Recovery Officer had wrongly observed in his order dated 13.6.2016 that she had not complied with the condition for stay imposed by DRT in her S.A. As noticed already, the learned Presiding Officer simply remanded the matter back to the Recovery Officer vide order dated 26.4.2016 with the direction to "decide immediately the objection/application of the appellant herein." It appears that on being informed that sale had taken place on that day itself the appeal as well as the S.A. which was also listed same day had virtually become infructuous no detailed order in the appeal was passed and S.A. of the appellant was also dismissed as having been rendered infructuous. The learned Presiding Officer did not even examine the controversy, which was of serious nature, whether the flat in dispute had been sold by the Recovery Officer despite the subsistence of the stay order passed in the SA or whether me appellant had failed to comply with the condition imposed on the security applicant, the appellant herein, in the stay order dated 14.10.2011 in the S.A., as was being claimed by the Bank and also observed by the Recovery Officer also.

I am of the view that the Recovery Officer as well as the Presiding Officer should have enquired into this aspect of the matter instead of ignoring it.

At the time of preliminary ex parte hearing of this appeal the appellant appears to have instructed her Counsel to submit that the flat in dispute had been auctioned during the subsistence of the stay order passed in her S.A. and she had also placed on record the payment slips dated 15.11.2011 of the Bank showing payment of Rs. 3,50,000/-. Accordingly, her dispossession was stayed by this Tribunal. The Bank however claimed before this Tribunal that there was no stay in operation when the flat was put to sale since the appellant had not complied with the condition of stay. These rival contentions need to be, probed since if any of the parties had made false claim either before the Recovery Officer or Presiding Officer or before this Tribunal necessary orders can be passed as false claims have no place even in the functioning of quasi judicial Tribunals and guilty does not deserve to be left unpunished.

Now coming to the merits of the appeal. As has been noticed already, the Recovery Officer had initially rejected the objections of the appellant herein vide order dated 13.6.2016 (which I have already re-produced) and at that time he had noticed that one application was under Rule 11 but still there was no discussion even about the claim of the objector that she was in physical possession of the flat in dispute and as also as to what could be the effect of her being in physical possession and not the certificate debtor Sukumar Ejagh. When that order was challenged in appeal by the appellant herein the learned Presiding Officer of the DRT appears to have felt while remanding the matter to Recovery Officer vide order dated 26.4.2016 that the Recovery Officer had not dealt with the objection of the appellant-objector in accordance with the Rules under the Second Schedule to the Income Tax Act as the objector had invoked Rule 11 of those Rules. So, the objections needed to be investigated and disposed of afresh in accordance with law. Since the appellant also wanted to settle the matter with the Bank liberty was also given to her make efforts in that regard in case she wanted to settle and since Recovery Officer was seized of the matter she could move appropriate application before him.

Then, when the Recovery Officer took up the matter after remand by the Presiding Officer on 28.7.2006 (which order also I have already re-produced) he observed that the DRT had asked him to consider the request of the objector "in accordance with law in terms of Second Schedule of Income Tax Act". Same day the Counsel for the Bank had stated that the Bank was not willing to settle with the third party i.e. the appellant herein. It may be noticed here that earlier in November, 2014 the Bank had agreed to settle the matter with the same objector for a sum of Rs. 20.86 lacs in the Recovery Camp organized by the Bank. However, the appellant claims that she could not make the settled payment to the Bank as she was having financial problem. The appellant, however, despite that refusal by the Bank to enter into any fresh settlement talks had sought time from the Recovery Officer to move some application before the Recovery Officer which apparently appears to be for some kind of settlement but she did not move any application and on 6.8.2016 the Recovery Officer reserved the matter for his order on the objections of the objector before him after rejecting the request of the objector for some more time to move appropriate application. Then the order dated 8.8.2016 came to be passed by the Recovery Officer rejecting the objections of the appellant herein. In that order also the Recovery Officer had observed that the DRT had remanded back the matter "to consider the matter as per Second Schedule of Income Tax Act."

The appellant had raised her grievance before the Recovery Officer that the Bank in collusion with its borrowers had obtained a recovery certificate against them in the O.A. without disclosing the pendency of her S.A. in which she was fighting to save the flat in dispute which she had purchased from Sukumar Bagh on 11.8.2004 vide registered agreement to sell etc. Her grievance in a way was that fraud had been played upon the Tribunal below by the Bank and Sukumar Bagh by the said concealment of a very material fact from the DRT and, therefore, her flat could not be sold in execution of the recovery certificate issued in the O.A. against respondent Nos. 2 and 3 herein and they had fraudulently got a direction from the DRT for sale of the flat in dispute treating it as the mortgaged property. The Recovery Officer had taken note of the fact that the DRT had in its final order in the O.A. held that the flat in dispute was mortgaged in favour of the Bank and so it was ordered to be sold in execution proceedings to realise the amount decreed in favour of the Bank. Obviously the Recovery Officer could not have commented whether the DRT could have given that direction in the absence of the appellant/objector in those proceedings or that the Bank ought to have impleaded the appellant/objector in its O.A. because it was aware that she was claiming to be in lawful possession of the flat in dispute as its owner. It is well settled that Recovery Officer cannot go behind the recovery certificate received by him from the DRT for execution. He has simply to obey the command of his Presiding Officer and to sell the property mentioned in the recovery certificate as the mortgaged property. So, rightly the recovery did not enter into that aspect urged by the objector before him who had invoked before him Section 19(25) of the RDDBFI Act, 1993

It is not that the appellant had no remedy to ventilate her grievance that the Bank in collusion with and playing fraud upon the DRT had obtained an ex parte order of issuance of recovery certificate from DRT with a direction for sale of the flat in dispute. Playing fraud upon DRT amounts to abuse of its process and the DRT on being informed by anyone that fraud had been played upon it either by the Bank alone or in collusion with its borrower or anyone else the DRT in that event can look into mat aspect and pass appropriate orders including recalling of any order passed by it, final or interlocutory, shown to have been obtained from it playing fraud or abusing its process. That course of action is available to the DRT under Section 19(25) of the RDDBFI Act.

This was held to be so even by the Bombay High Court also in a judgment in the case of Dr. Anil Nandkishor Tiberewala v. Jammu and Kashmir Bank, I (2007) BC 6 : 2006 (133) Comp. Cases 645 (Bom). The relevant paras of this judgment re-produced below:-

"17. The other remedy which is available in respect of an order passed by Recovery Officer, is Section 30 of the Act. By virtue of Section 30 notwithstanding anything contained in Section 29, any person aggrieved by an order of the Recovery Officer made under the Act has to challenge that order within thirty days. Section 26(1) of the Act will also have to be considered, which reads as under:

26(1). It shall not be open to the defendant to dispute before the Recovery Officer the correctness of the amount specified in the certificate, and no objection to the certificate on any other ground shall also be entertained by the Recovery Officer.

In other words, it is not open to the Recovery Officer to go beyond the certificate. The grant of declaration in favour of a financial institution, cannot be gone into by the Recovery Officer. The Recovery Officer having no power to go in that issue, the question of Section 30 being an effective remedy would again be elusive. In our opinion, therefore, the remedy under Section 30 in a case where the Tribunal has given a declaration would again be elusive and non-effective, as the Recovery Officer cannot go behind the order or certificate issued by the Tribunal and/or Recovery Officer.

We may now refer to the provisions of Section 29 of the RDB Act. Section 29 makes applicable the provisions of the Second and Third Schedules of the Income-tax Act and the Income-tax (Certificate Proceedings) Rules, 1962, applicable for execution of the recovery certificate under the RDB Act. Under the Second Schedule, proviso, recovery of tax in the instant case for the recovery of amount under the order/certificate various modes of recovery have set out under Rule 4. Under Order 38, Rule 11 of the Code of Civil Procedure, if a claim is preferred or objection is preferred for attachment or sale in execution of the certificate on the ground that such property is not liable for such attachment or sale, it is open to the Investigating Officer to examine the same. Here also, the same difficulty would arise inasmuch as what the Investigating Officer can do is to hear the challenge to the attachment. It will not be open to the Investigating Officer to go behind the order or certificate. If the order and/or the certificate has given a declaration that the property is validly mortgaged in favour of the financial institution, such an exercise cannot be undertaken by the Investigating Officer. It is only in the event, if there been order/certificate for money and pursuant to that certificate, property of the judgment debtor is sought to be recovered in terms of Rule 4 or recovery by attachment or sale of immovable property then only Rule 11 apply. That rule will not apply in a case where the property was mortgaged and where the declaration was given in favour of the financial institution. The remedy, therefore, under Section 29 also is not available to a party like the petitioners. Our attention is invited to the judgment of a learned Judge of the Karnataka High Court in the case of Actia Technologies (P.) Ltd. v. Canara Bank, (2005) 126 Comp Cas 917 : (2006) 2 Bank CLR 169. In that case the property was put for sale by the Recovery Officer. The contention of the petitioners was that the property never belonged to the judgment debtor nor was mortgaged with the Bank as a security of payment of loan amount. The Court after observing the various provisions of the Act, came to the conclusion that a writ petition could not be entertained, as an alternate remedy was available to the petitioners before it. In that case on the facts we may note that there appears to have been no declaration given by the Tribunal that the property was validly mortgaged.

Does the Act provide any remedy to a person like the petitioners. The Court while considering the legislation which has created a special mechanism for recovery of dues of financial institution and bearing in mind the various provisions earlier referred which exclude the jurisdiction of other Courts and Tribunals will have to examine, whether an effective remedy is available under the Act itself. If a remedy is not available under the Act, a party may have a remedy at civil law. If an aggrieved person was not party to the proceedings before the Debts Recovery Tribunal, and a party to the proceedings has secured a decree, based on a fraudulent document, the jurisdiction of the Civil Court in such a case normally should not be ousted. For examining whether there is a provision under the Act, let us consider Section 19(25) of the RDB Act, which reads as under:

19(25). The Tribunal may make such orders and give such directions as may be necessary or expedient to give effect to its orders or to prevent abuse of its process or to secure the ends of justice.

A reading of this provision would indicate that there is a power in the Tribunal to give orders or directions to prevent abuse of its process or to secure the ends of justice. It is open to the Tribunal to lay down its own procedure and it is not hidebound by the procedural provisions of the Code of Civil Procedure. At the same time certain provisions of the Code of Civil Procedure have been conferred on the Tribunal. The expression "prevent abuse of its process" "or to secure the ends of justice" in our opinion would be wide enough to cover a case where a financial institution has obtained an order or the certificate pursuant to a mortgage created by the judgment debtor based on a fraudulent document, like for instance the property not belonging to the judgment debtor. If such party comes before the Court and points out to the Court that the mortgage created is sham and/or bogus, the Tribunal to prevent abuse of its process, can assume jurisdiction under Section 19(25) to decide that issue and for that purpose exercise powers conferred under Section 22 of the Act. On aggrieved person being allowed to participate in the proceedings, it will be open to the Tribunal to review the order or pass such other order to secure the ends of justice. We are, therefore, of the clear view that in those cases where the Recovery Officer cannot go beyond the certificate, a party like the petitioners who claims title in the property or interest in the property can move the Tribunal by invoking jurisdiction of the Tribunal under Section 19(25), and in such cases if a prima facie case is disclosed before the Tribunal, the Tribunal is bound to consider the application so moved and dispose it of according to law, after giving an opportunity to all parties before it."

Therefore, for the reason being put forth by the appellant that the Bank in the present case had obtained an ex parte recovery order in collusion with its borrowers, who had obtained loan from it by creating equitable mortgage in its favour of the flat in dispute despite the fact that he had already in the year 2004 sold it to the appellant and both the Bank and Sukumar Bagh were fully aware that claim of hers and so she ought to have been impleaded also in the O.A. for a fair trial, the appellant could have approached the DRT itself with a petition under Section 19(25) of the RDDBFI Act, 1993, She could not have expected any relief from the Recovery Officer on these allegations. Nothing was argued also from the appellant's side during the course of arguments by her learned Senior Counsel Mr. Rajeeve Mehra on this aspect and in my view very rightly. In fact, in her written arguments the appellant herself had admitted that the Bank had in its O.A. referred to her civil suit filed for injunction etc.

Mr. Rajeeve Mehra, learned Senior Counsel for the appellant had, however, vehemently argued that since the appellant was undisputedly in physical possession of the flat in dispute since 11.8.2004 and the recovery certificate was issued in favour of the Bank many years thereafter by the DRT with a direction of sale of the flat in dispute being the secured asset of the Bank she could not be dispossessed by the Recovery Officer in execution of that recovery certificate. Relying upon one recent Division Bench judgment dated 13.5.2016 of Hon'ble Delhi High Court in the case of Swaraj Kishore Arora v. Indian Bank & Ors., 30 (2016) DLT 269 (DB), W.P.(C) No. 4505/2015 and also an earlier judgment of another Division Bench of same High Court in the case of Shyam Swarup Sharma & Anr. v. Canara Bank, 99 (2002) DLT 475 (DB) : III (2002) BC 535 (DB) : 2002 (65) DRJ 7. Mr. Mehra had argued that the appellant had a 'possessory title' which she could definitely protect by filing objections under Rule 11 of the Second Schedule to Income Tax Act which she had done. However, the Recovery Officer had wrongly referred to Rule 60 and illegally rejected her objections filed as a third party bona fide owner of the flat in dispute.

Similarly, Mr. Mehra submitted, even the DRT had wrongly dismissed her appeal under Section 30 of the RDDBFI Act, 1993 against the order of the Recovery Officer by not giving any importance to the fact that the appellant had a 'possessory title' being in continuous possession of the flat in dispute since the year 2004. Learned Senior Counsel submitted that the appellant had filed objections only under Rule 11 and so the Recovery Officer had only to satisfy himself if she was in actual physical possession of the flat in dispute on the date of attachment of the same and issuance of demand notice under Rule 2 of the Second Schedule to the Income Tax Act and since she was even as per the Bank's own valuation reports got prepared many years ago and filed before the Recovery Officer for issuance of sale proclamation the Recovery Officer after allowing the objections filed by the appellant ought to have left the auction purchaser to invoke appropriate remedies to get possession of the flat in dispute instead of himself passing an order for the taking over of the possession by appointing a Receiver with the help of armed police force. Learned Senior Counsel strongly contended that the Recovery Officer even on the second occasion after remand by the Presiding Officer had not conducted any 'investigation' worth the name and in the present case only if he had taken the botheration of looking to the Bank's own documents like valuation reports he would have found out that the Bank had been misleading him to get an order of sale from him and that in fact it was the appellant along with her family was in occupation of the flat in dispute. Failing to perform the statutory task of carrying out investigation into the claim of the appellant the Recovery Officer had committed a serious illegality. To buttress this contention Mr. Mehra had cited a Division Bench judgment of Hon'ble Delhi High Court in the case of Shyam Swarup Sharma v. Canara Bank (supra) wherein it was held that the objections under Rule 11 cannot be rejected summarily.

The appellant having invoked Rule 11 only of the Second Schedule to the Income Tax Act (hereinafter to be referred as 'the Rules') all that was expected of the Recovery Officer to do was to carry out the investigation into the claim of the third party objector, appellant herein. Let us now see of he did his job as per law. The relevant portions from his orders dated 13.6.2016 and subsequent order after remand by DRT passed on 8.8.2016 are being re-produced here again for appreciating if he had done his duty in accordance with law:

ORDER DATED 13.6.2016

"The Objector has filed only a copy of the order of Hon'ble Presiding Officer and a copy of a civil suit alongwith her application. She has not filed the copies of relevant documents pertaining to purchase of the property in question. In the Civil Suit filed before Ms. Neha Paliwal, Central District-06, Delhi the Objector has sought the relief of injunction w.r.t. to property bearing No. F-432, 3rd Floor, Block D, Pocket A, Hyderpur, Shalimar Bagh, Delhi. However no relief was granted.

Further property in question is a DDA flat and DDA has allotted it to Shri Shashi Madan through conveyance deed dated 1.12.2004. How did the objector purchase the property in August, 2004 i.e. prior to the allotment by DDA? Moreover, the Objector has failed to produce any document pertaining to the property in question in order to show her ownership.

The objection under Rule 11 has been filed after the auction although the notice for sale proclamations were earlier served in May, 2015, December, 2015 and April, 2016. It palpably makes clear that the Objector is acting at the behest of the CDs to frustrate the recovery proceedings.

In view of the above, I am of the considered view that application filed by the objector is liable to be dismissed and is hereby dismissed."

ORDER DATED 8.8.2016

"Hon'ble Presiding Officer vide order dated 26.7.2016 passed in the Appeal No. 44/2016 has remanded back the matter with a direction that the request of the appellant/3rd party (Objector herein), who intends to settle the matter, to consider the request in accordance with law in terms of Second Schedule of Income Tax Act.

xxx xxx xxx

The fact of the case is that the property being DDA Flat No. 432, Pocket A, Sector-D, Category-MIG, Third Floor, Shalimar Bagh, New Delhi was mortgaged with the CH Bank by Shri Sukumar Bagh, CD-I. The property was earlier put on auction twice i.e. on 1.12.2015 and 22.1.2016 but the same failed for want of bids. During this process no objection was filed. The property was again put on sale through e-auction which was scheduled to be held on 26.4.2016, the said auction was successful auctioned for an amount of Rs. 38,92,213/-.

2.1. Objector filed an application under Rule 11 of Second Schedule of Income Tax Act, after the successful auction of the aforesaid property, vide Dy. No. 4712 dated 2.5.2016 and the said objection was dismissed vide a detailed speaking order dated 13.6.2016 by this forum.

xxx xxx xxx

Thereafter, objector filed an appeal before Hon'ble Presiding Officer, Hon'ble Presiding Officer, DRT-III, Delhi, vide order dated 26.7.2016 remanded back to consider the matter as per Second Schedule of Income Tax Act.

xxx xxx xxx

It is pertinent to mention that as per Second Schedule of Income Tax Act, any person can raise the objection in respect of the property which have been put on sale or has been sold under Rule 11 and Rule 60 respectively.

Rule 60 of the Second Schedule of Income Tax states that:

(1) Where immovable property has been sold in execution of a certificate, the defaulter, or any person whose interests are affected by the sale, may, at any time within thirty days from the date of 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 sale was ordered, with interest thereon at the rate of fifteen percent per annum calculated from the date of the proclamation of sale to the date when the deposit is made; and

(b) For payment to 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 for his immovable property, he shall not unless he withdraws that application, be entitled to make or prosecute an application under this rule.

In the instant case, objection filed by the objector under Rule 11 of the Second Schedule of Income Tax Act has already been dismissed vide a detailed speaking order dated 13.6.2016 by this Forum.

Further, it is also on record that the objector has not filed any application as per Rule 60 of the Second Schedule of the Income Tax Act within 30 days of the sale of the property in question.

As far as settlement with third party is concerned, there is no provision in the RDDBFI Act, 1993 and Second Schedule of Income Tax Act and the Rules made thereunder to settle the matter with the 3rd party when the mortgaged property has already been sold and sale has been confirmed in favour of the auction purchaser. Now, auction purchaser has every right to enjoy the property. Moreover, any delay in the enjoyment of legally purchased property through public auction conducted by this Tribunal shall not only be against the equity, justice and fairness on the part of auction purchaser who has bestowed a faith over this Tribunal but shall also send wrong image amongst the other intended buyers. It will also be against the basic spirit of expeditious recovery as enshrined in the RDDBFI Act.

Here, it is germane to refer to the decision dated 19.4.2010 passed by the Hon'ble High Court of Delhi in W.P.(C) No. 2588 of 2010 titled as Satish Chander Gupta v. State Bank of India, wherein the Hon'ble High Court of Delhi has observed that the DRAT is no one to decide as to at what value the Bank should settle its dues with the borrower especially when the Bank has Managers who have acted in pursuance to authorization in their favour and after due consideration of the proposal of the petitioners.

In view of the above, I do not find any cogent reason to review the order dated 13.6.2016 passed by this Forum and wait for the request of third party Objector to settle the matter with her as she does not have any locus standi. Thereafter, I reiterate the order dated 13.6.2016 passed by this Forum."

The claim of the appellant/objector before the Recovery Officer being that she was in physical possession of the flat in dispute as its owner and further that her possession was not on behalf of Sukumar Bagh on the date of service upon Sukumar Bagh of demand notice under Rule 2 of the Rules the Recovery Officer was expected to conduct investigation into the objections of the appellant. The Recovery Officer could not have rejected her objections on the ground of non-compliance of Rule 60 or 61 of the Rules which she had not pressed into service at all. Similarly, the learned Presiding Officer also ought not to have referred to Rule 60 or 61 for sustaining the order dated 8.8.2016 of the Recovery Officer. He also did not notice that the objections were filed by the appellant before him under Rule 11 and not under Rule 60 or 61 of the Rules. The Recovery Officer ought to have called upon to produce evidence before him in support of her claim that she was not only in physical possession of the flat in dispute but was also its owner. That was not done by the Recovery Officer nor did the Presiding Officer tell him to do while remanding the matter back to him when the appeal against order dated 13.6.2016 was disposed of. Only after the parties had led evidence in support of their respective claims the Recovery Officer was expected to give his decision as to whether the appellant was in actual possession of the flat in dispute on the date when demand notice under Rule 2 of the Rules under the Second Schedule to Income Tax Act was served upon the certificate debtor Sukumar Bagh. Further, the Recovery Officer was also to give finding whether the appellant had any ownership right in the flat in dispute or was a rank trespasser.

There is no quarrel about the proposition of law laid down in the three Division Bench judgments of Hon'ble Delhi High Court cited by Mr. Rajeeve Mehra, learned Senior Counsel for the appellant. 'Possessory title' is also recognized in law to be a good title in case the person in possession of some property is in danger of being dispossessed by a Recovery Officer executing recovery certificate received by him from the Presiding Officer of the DRT to which he is attached. According to Mr. Mehra, the appellant being in possession of the flat in dispute needed to be protected from being dispossessed at the hands-of the Recovery Officer because she had a lawful 'interest' as full owner and was 'possessed' also of the flat in dispute. However, while making elaborate submissions on this aspect Mr. Mehra failed to appreciate and ignored the legal position that even though 'possessory title' has been held to be good title in the judgments cited by him but in none of those judgments it has been held that even a 'rank tress passer' is also entitled to protect her possession by filing objections under Rule 11 of the Second Schedule to the Income Tax Act Rules merely relying upon her 'possessory title' and the moment it is shown that she is in actual possession, and not the certificate debtors (Sukumar Bagh and his wife in this case) of the property sought to be sold in execution of the recovery certificate received by the Recovery Officer from the Presiding Officer an order of setting aside of the sale has to be passed by the Recovery Officer without going into the question as to whether her claim was a bona fide claim or not. Certainly, even during the investigation contemplated under Rule 11 the Recovery Officer the objector has to satisfy Recovery Officer that the objector was not a 'rank tresspasser'.

For aforesaid view I find support from the judgment of Bombay High Court in its judgment in the case of Mt. Aziz Jahan Begam v. Sardar Singh, AIR 1955 All 241. Though in this judgment the High Court was considering the provisions relating to attachment and sale of immovable properties in execution of money decrees and the objections against attachment as provided under Order XXI of the Code of Civil Procedure (CPC) but since those provisions are pari materia with Rule 11 of the Second Schedule to the Income Tax Act, with which we are concerned in the case in hand, judgments rendered while dealing with those provisions of CPC have often been referred to and relied upon by higher Courts while dealing with Rule 11. In this respect, before proceeding to notice the views of Allahabad High Court in the above referred judgment in the case of Mt. Aziz Jahan Begam v. Sardar Singh, let me notice the following observations of the Bombay High Court in the case of Gangadhar Vishwanath Ranade v. Income-Tax Officer, (1989) 177 ITR 163 Bom.:

"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 of 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. Whereupon, under Sub-rule (6), the parties would be entitled to take out proceedings as contemplated therein. We may note that in Sub-rule (6), the words "the party against whom the order is made" clearly connote and are capable of embracing both the Revenue as well as the claimant. Therefore, where the Tax Recovery Officer records a finding against the Department, it is the Department which would be entitled to institute a suit in the Civil Court. On the other hands, where the finding is against the claimant, the claimant would be entitled to file a suit."

The relevant paragraphs from the judgment of Allahabad High Court in Mt. Ajij Jahan Begam (supra) are now being re-produced below:

"If a property is sought to be attached and a person claims to be in possession of it under a 'bona fide' claim of title, the Court has to be satisfied that he has such a 'bona fide' claim. If the Court decides in favour of the objector, the decree-holder or the judgment-debtor will have to file a suit under Order 21, Rule 63 to establish his claim that the judgment-debtor has a saleable interest in the property. In my opinion, learned Counsel has gone too far in his submissions that even if the Court found that the objector had no bona fide claim, to the property merely on the basis of his wrongful possession the Court would decide in his favour. The language of Order 21, Rule 59 read with the subsequent rules indicates that both the question of interest claimed as also the question of possession of the property can be raised and can be investigated by the Executing Court.

Rule 59 provides that:

"The claimant or objector must adduce evidence to show that at the date of the attachment he had some interest in, or was possessed of the property attached."

The claim or objection to be investigated under Rule 60 is set out in Rule

58 as follows: "......any property attached in execution of a decree......is not liable to such attachment..." and the property will not be liable to attachment if the judgment-debtor has no saleable interest in it. What property is liable to attachment is mentioned in Section 60 of the Code and that section does not provide that property in which a judgment-debtor has a saleable interest cannot be attached or sold merely because the judgment-debtor is not in possession or because a trespasser is in wrongful possession of the property. Whether a judgment-debtor is or is not in possession of the property, if he has a saleable interest therein, such interest can be sold. Proceedings under Rules 60, 61 and 62 being more or less of a summary nature, they deal mainly with possession but a claim of an objector on the basis of possession can be allowed only if he is in possession under a 'bona fide' claim of title. If the objector is in possession of the property, 'prima facie' it would be assumed that he has a right to such possession but if it is established that the objector is not in possession under a 'bona fide' claim of title and the judgment-debtor has a saleable interest in the property then there appears to be no good reason why that saleable interest should not be attached and sold.

I am inclined, therefore, to agree with the decision of a Bench of the Patna High Court in 'Premsukh Das v. Satyanarain Singh', AIR 1945 Pat. 485 (F), and the observations made by Rankin, C.J. in 'Najimunnessa Bibi v. Nacharaddin Sardar, AIR 1924 Cal 744 (E), that it was impossible to separate altogether the question of possession and of title.............

In execution of a decree........though the proceedings under Order 21, Rules 58 to 63 being summary proceedings the Court may not enter into an elaborate inquiry into the question of title the Court will have to be 'prima facie' satisfied that the person objecting to the attachment and sale was in possession under a 'bona fide' claim.

.....The mere proof that the plaintiff was in possession on the date of the attachment, even though, he was in possession as a rank trespasser, would not avail in defeating the claim of the decree-holder to attach and sell up the right, title and interest of the judgment-debtor if the judgment-debtor had a saleable interest in the property....."

(Emphasis supplied)

Even the Hon'ble Supreme Court also has taken the view in its judgment in the case of Tax Recovery Officer v. Gangadhar Vishwanath Ranade, VII (1998) SLT 466 : IV (1998) CLT 6 (SC) : AIR 1999 SC 427, while considering Rule 11 of the Second Schedule to Income Tax Act that its not that while investigating claim of an objector in possession of the property sought to attached question of 'title' is not to be considered at all and that becomes evident from the following observations made in the judgment:

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

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

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

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

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. Therefore, where a claim is made to the property attached, by someone claiming to be a transferee from the judgment-debtor and the claim is disallowed, the claimant can institute a suit under Order XXI Rule 63 to establish his title to the property. In such a suit it would be open to the attaching creditor to plead in defence that the transfer was in fraud of the general body of creditors and was void under Section 53 of the Transfer of Property Act. Similarily, if the claim of the transferee is allowed, the attaching creditor may sue on behalf of himself and all other creditors under Section 53 of the Transfer of Property Act for a declaration that the transfer was void as it was in fraud of the creditors.

In the case of C. Abdul Shukoor Saheb v. Arji Papa Rao (deceased) by his heirs and LRs. & Ors., this Court considered, inter alia, the nature of proceedings under Order XXI Rules 58 to 61 prior to the amendment of the Civil Procedure Code in 1976. This Court observed. "In the summary proceedings under Order XXI Rules 58 to 61, having regard to the terms of Rule 61, the Court is concerned only with the question as to whether the transferee is in possession of he property in his own right and not on behalf of the judgment-debtor. When a transfer is real, though it is liable to be impeached as a fraud on creditors, and the transferee has entered possession, he would succeed in the summary proceedings, with the result that it is defeated attaching creditor who would have to figure as a plaintiff. In every case, therefore, where a transfer is real, but it is liable to set aside under Section 53(1) of the Transfer of Property Act, on the provisions of Order XXI Rules 58 to 61, Civil Procedure Code, the transferee is bound to succeed in the summary proceedings and the attaching decree-holder would have to figure as a plaintiff...."This Court also held that where the suit is filed by the transferee if the decision in the summary proceedings goes against him, it is open to the attaching creditor to plead in his defence that the transaction is vitiated by fraud and is void under Section 53 of the Transfer of Property Act.

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

In me present case the Tax Recovery Officer could not have examined whether the transfer was void under Section 281 of me Income-tax Act. His adjudication of the transfer as void under Section 281 is without jurisdiction. The Tax Recovery Officer has relied upon the earlier order of the Income Tax Officer dated 9.5.1974 declaring that the transaction is void under Section 281 of the Income-tax Act. In the earlier proceedings, however, although the High Court has not set aside tins order of the Income Tax Officer, the High Court has expressly held that the order amounted only to an intention of declaration on the part of the Department to treat the transaction as void under Section 281. Such a declaration cannot affect the legal rights of the parties affected under Rule 11. The High Court expressly held mat the rights of the parties under Rule 11 were not affected in any way by this declaration. The Department, therefore, cannot proceed on the assumption that the transaction is void under Section 281, nor can the Tax Recovery Officer, while proceeding under Rule 11, declare a transaction of transfer as void......His jurisdiction relates to examining possession, and only incidentally, any question of right to possession as claimed by the Objector.................."

Since I am satisfied that the Recovery Officer had not either before passing the first order dated 13.6.2016 or the second order dated 8.8.2016 after remand by the DRT conducted any 'investigation' into the claim of the appellant/objector that she was in occupation of the flat in dispute as its lawful owner the matter will have to be remanded again to the Recovery Officer with a direction to conduct proper investigation into the claim/objections of the appellant herein under Rule 11 of the Rules framed under the Second Schedule to the Income Tax Act and also keeping in mind the three Division Bench judgments of the Hon'ble Delhi High Court noticed in the earlier paras of this order and which were cited by the learned Senior Counsel for the appellant as also of the Hon'ble Supreme Court, in Ranade's case (supra) and one judgment of Allahabad High Court in Mt. Aziz case (supra) and of DRAT, Madras in the case of State Bank of India (supra) all of which deal with Rule 11 under which the Recovery Officer will have now to conduct proper investigation into the claim/objections of the appellant herein.

In the result, this appeal is allowed. The orders dated 8.8.2016 and 26.7.2016 passed by the Recovery Officer and the Presiding Officer respectively are set aside. The matter is remanded back to the Recovery Officer for conducting an investigation, as noticed in the preceding paragraph, into the objections of the appellant under Rule 11 of the Rules under Second Schedule to the Income Tax Act keeping in mind the observations made in this order on the scope of investigation under Rule 11.

Parties shall appear before the Recovery Officer for receiving further directions on 19.2.2018 at 2:00 p.m. Since this Tribunal had stayed the dispossession of the appellant from the flat in dispute that stay shall continue till 19.2.2018 on which date it will be open to the appellant to request the Recovery Officer to grant interim protection against her dispossession. If such a prayer is made before the Recovery Officer, he will deal with the same in accordance with law and uninfluenced by anything said in any of the earlier orders passed in this litigation either by himself or by the Presiding Officer of the DRT. All the parties will be at liberty to place before the Recovery Officer any material which they would like to rely upon in support of their respective cases already pleaded. The Recovery Officer will pass a fresh order on the objections of the appellant herein within a period of 60 days from the date of receipt of this order and will then also submit a report of compliance to this Tribunal immediately on passing of the final order by him.

Record of the DRT and Recovery Officer be sent back with a copy of this order.