Allowed

Anil Dugar And Anr. v. Indian Overseas Bank

DRAT7 May 2025REGULAR APPEAL/74/2023

Case brief

AI extract

What is this about?

Appeal against the decision of the DRT to uphold the Recovery Officer's dismissal of a claim that property was not liable for attachment. The Tribunal held the Recovery Officer failed to investigate per Rule 11 and the DRT unlawfully considered affidavits filed without cross-examination. The orders were quashed and matter remanded.

What did the court decide?

Appeal allowed; impugned orders of DRT and Recovery Officer set aside; matter remanded to Recovery Officer to decide application afresh after hearing all parties and with liberty to produce evidence.

Anil Dugar And Anr. versus Indian Overseas Bank — Banking and Recovery | DRAT (2025)

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Reportable / not reportable

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IN THE DEBT RECOVERY APPELLATE TRIBUNAL - KOLKATA HON'BLE Justice Anil Kumar Srivastava, Chairperson

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APPEAL No. 74 of 2023

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(Arising out of Appeal No. 01 of 2015 in R.C. No. 36 of 2012 in O.A. 56 of 2016 – DRT-II Kolkata)

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07.05.2025

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Mr. Anil Dugar, at 377/2, Prince Anwar Shah Road, Second floor, PS. Tollygunge, Jadavpur, Kolkata – 700068.

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Smt. Pinki Dugar at 377/2, Prince Anwar Shah Road, Second floor, PS. Tollygunge, Jadavpur, Kolkata – 700068.

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--Vs--

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Indian Overseas Bank, Teghoria Branch, 137, Poddar Vihar, PS Rajarhat, Kolkata – 700052.

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Ujjal Kumar Nandy

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3.State Bank of India

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2&3 address not in record.

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... Respondents

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For Appellant : Mr. Nemani Srinivas, Ld. Adv.

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For Respondent:Mr. Onkar Ganguly, ld. adv. for IOB Ms. Ipsita Haldar, ld. Adv. for SBI

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The Appellate Tribunal

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Instant appeal is preferred against the order dated

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24.01.2020 passed by the DRT-2 Kolkata in Appeal No. 01 of

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2015 arising out of R.C. No. 36 of 2012 in O.A. 56 of 2006 (Anil

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Dugar & Anr. Vs. Indian Overseas Bank & Ors.).

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I have heard Mr. Nemani Srinivas, ld. Advocate, for the

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appellants as well as Mr. Onkar Ganguly, ld. Advocate for

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respondent no.1, Indian Overseas Bank and Ms. Ipsita Haldar, ld. Advocate, for respondent no.3, State Bank of India and perused

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the records. Respondent no.2 is served, but not represented.

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As would appear from the records, the whole controversy and disputes revolves on an application filed by the appellant herein under Rule 11 of Second Schedule of the Income Tax (Certificate Proceedings) Rules, 1962. This application was filed

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by the appellant in a recovery proceeding R.C. No. 36 of 2012 wherein cause of action of the appellant arose when attachmentcum-sale notice dated 04.01.2012 was issued by the Recovery

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Officer, DRT-II Kolkata and the same was affixed on 22.12.2012 on the Flat owned by the appellant. On getting knowledge of the same the appellant filed the application under Rule 11 of the Income Tax (Certificate Proceedings) Rules, 1962 with a prayer for investigation into the claim of the appellant in respect of Flat admeasuring 1450 Sft. super-build area on the second floor, 377/2, Prince Anwar Shaw Road, P.S. Tollygunge, Kolkata wherein appellant resides and they are the owner of the property on the basis of an agreement for sale dated 28.09.2012 executed

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by M/s. Chowgule Vinimay Pvt. Ltd. Appellant also narrated the

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facts regarding the Title which they are holding from the erstwhile

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owner. Opposition was filed by the Certificate Holder Bank (CHB)

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before the Recovery Officer.

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On moving the application, the Recovery Officer heard the

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learned counsel for CHBas well as the appellant in R.C. No. 36 of

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Recovery Officer recorded a finding that he has to implement the Recovery Certificate issued by the Presiding Officer.

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Being aggrieved by the order, appellant preferred the Appeal

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No. 01 of 2015 before the learned Presiding Officer, DRT-II Kolkata u/s 30 of the RDB Act, 1993 which was ultimately disposed of by the impugned order dated 24.01.2020 with direction to the Recovery Officer to keep the recovery proceeding in abeyance for a period of 30 days with liberty to the parties to approach the appropriate authority for reliefs. Thereafter, on the same day Recovery Officer issued the attachment order. Hence, appellant preferred the appeal.

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It is undisputed that in compliance of the order of the DRT-II

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Kolkata dated 24.01.2020 neither of the parties have approached

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appropriate authority or appropriate court having jurisdiction in the matter. However, it appears that in the appeal before the

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DRT-II Kolkata the CHB filed certain documents along with the written notes of argument. The documents were not filed by way of any affidavit in opposition. At the very outset, it is to be observed that written notes of arguments are filed to assist the Court and to make substantial arguments on record by the learned counsel for the parties. There is no provision for filing documents along with written notes of arguments. DRT cannot and should not consider the documents filed with the written notes of arguments. Because, no opportunity is given to other partis to rebut the documents filed along with written notes of arguments. Such practice,if,prevalent in the DRTs should be discouraged forthwith.

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Learned DRT has placed reliance on the documents filed with

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the written notes of arguments and passed the impugned order.

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However, without entering into the merits of the matter, we

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should go through the Rule 11 of the Income Tax (Certificate Proceedings) Rules, 1962, which reads as under :

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“Investigation by Tax Recovery Officer

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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: Provided that no such investigation shall be made where the Tax Recovery Officer considers that the claim or objection was designedly or unnecessarily delayed.

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( 2 ) Where the property to which the claim or objection applies has been advertised for sale, the Tax Recovery Officer ordering the sale may postpone it pending the investigation of the claim or objection, upon such terms as to security or otherwise as the Tax Recovery Officer shall deem fit.

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( 3 ) The claimant or objector must adduce evidence to show that—

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( a ) (in the case of immovable property) at the date of the service of the notice issued under this Schedule to pay the arrears, or

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( b ) (in the case of movable property) at the date of the attachment, he had some interest in, or was possessed of, the property in question.

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

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( 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.

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( 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 Recover Officer shall be conclusive.”

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When an application under Rule 11 of the Income Tax

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(Certificate Proceedings) Rules, 1962 was filed and objection from the appellant was made, it was the duty of the Recovery Officer

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to investigate the same and pass an appropriate order. No doubt

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role of the Recovery Officer is to ensure recovery in compliance of

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the recovery certificate, but at the same time Recovery Officer is

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also expected to act in accordance with the law and rules. When a

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particular Rule provides a particular procedure to be followed by

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the authority, then it should be followed in its true sense. A short

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cut method should not be adopted by the Recovery Officer that

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he is to simply recover dues as per recovery certificate, which is not in accordance with law. Accordingly, the order passed by the Recovery Officer is nonest and is liable to be quashed.

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Learned DRT should have considered this aspect of the matter. Learned DRT also committed an illegality in accepting

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the documents filed with the written notes of arguments.

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However, having consider the facts and circumstances of the matter, I am of the considered view that Recovery Officer has

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passed an order which cannot sustain. Accordingly, the order

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passed by the learned Presiding Officer, DRT-II Kolkata as well as

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order passed by the Recovery Officer are liable to be set aside.

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Matter is remanded back to the Recovery Officer to decide the

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matter afresh in accordance with rule.

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O R D E R

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Appeal is allowed. Order passed by the learned Presiding

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Officer, DRT-II Kolkata as well as order passed by the Recovery

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Officer are set aside. Recovery Officer is hereby directed to

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decide the application filed under Rule 11 of Second Schedule of

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the Income Tax (Certificate Proceedings) Rules, 1962 after

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affording opportunity of hearing to the appellant as well as respondent no.1 and 3 i.e. Indian Overseas Bank and State Bank of India. Needless to say, the Recovery Officer should also permit them to produce evidence in support of their case. It is expected that Recovery Officer should decide the matter expeditiously preferably within a period of three months from the date of receiptof the copy of this order or produced before him. Till then Recovery Officer shall not proceed for attachment as far as appellant is concerned. Costs easy.

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File be consigned to record room.

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Copy of the order be supplied to the appellant and the respondents and a copy be also forwarded to the concerned DRT. Copy of the judgement/Final Order be uploaded in the Tribunal’s website.

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Order dictated, signed and pronounced by me in the open Court on this the 7^th day of May, 2025.

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(Anil Kumar Srivastava, J) Chairperson

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Dated : 07.05.2025 13/pkb

Anil Dugar And Anr. v. Indian Overseas Bank

Case brief

What is this about?

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Anil Dugar And Anr. v. Indian Overseas Bank

Case brief

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