Dismissed

Sh. Baba Bhagwant Bhajan Singh v. Recovery Officer-Ii Debt Recovery Tribunal -I

DRT9 Feb 2023APPEAL/1/2023

Case brief

AI extract

What is this about?

The DRT-I dismissed an appeal against an order confirming an auction. The court held that the statutory requirement of depositing 50% of the debt due was not met, rendering the appeal meritless. Allegations of fraud were dismissed as the procedural bar operated.

What did the court decide?

The appeal was rejected; all pending IAs were dismissed; the auction confirmation order remained operative.

Sh. Baba Bhagwant Bhajan Singh versus Recovery Officer-Ii Debt… — Banking and Recovery | DRT (2023)

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Appeal No.01/2023

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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Appeal No. 01/2023

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Shri Baba Bhagwant Singh Vs. The Authorized Officer, Canara Bank and others

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09.02.2023

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Item No.82

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Present: Ms. Jyoti Sareen, Counsel for the appellant.

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Sh. Pancham Sharma, Counsel for respondent bank/Canara Bank.

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Shri Baba Bhagwant Singh (Appellant) has filed this appeal against the order dated 17.11.2022 passed by Recovery Officer, DRT-I, Chandigarh.

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Vide order dated 17.11.2022, whereas, the Recovery Officer on the one hand dismissed the objections of the CD, on the other hand he confirmed the auction in favour of the auction purchaser. Aggrieved by the said order, CD has filed the present appeal.

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I have heard Ms. Jyoti Sareen, counsel for the appellant.

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Ms. Jyoti Sareen, has argued that the Recovery Officer has taken into consideration extraneous material in disposing of the objections. The auction was conducted in a fraudulent manner. Fraud vitiates everything. At the time of objections, the bank never raised the plea that the CD was supposed to deposit the money. However, the Recovery Officer, without giving an opportunity to the appellant, has dismissed the objections on the ground that he has not deposited the money.

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Ms. Jyoti Sareen has placed reliance upon the judgments of Hon’ble Apex Court, in Civil Appeal No.3684 of 1996 (arising out of S.L.P. (C) No.18562 of 1195), titled ‘ Gowrishankar Vs. Joshi Amba Shankar Family Trust , decided on 22.02.1996 and in Civil Appeal No.994 of 1972, titled ‘ S.P. changalvaraya Naidu (dead) by L.Rs Vs. Jagannath (dead) by L.Rs.’ decided on 27.10.1993 and in Civil Appeal No.8216 of 2003, titled ‘ Ram Chandra Singh Vs. Savitri Devi and Others’

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Appeal No.01/2023

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decided on 09.10.2003 and also in Civil Appeal No.1334 with 1737 of 1995, titled ‘ Indian Bank Vs. M/s. Satyam Fibers (India) Pvt. Ltd.’ decided on 09.08.1996. She has further placed reliance upon the judgments of Hon’ble Bombay High Court, in W.P. Lodg. No.405 of 2004, titled ‘Keshrimal Jivji Shah and Anr. Vs. Bank of Maharashtra and Ors.’ decided on 22.04.2004 and also the judgment of Hon’ble Madras High Court, in C.R.P. N.P.D. No.518 of 2006, titled ‘Hanu Reddy Realty India Pvt. Ltd., and Ors. Vs. Jignesh and Others’ decided on 04.02.2008.

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Per contra , Sh. Pancham Sharma, counsel for the bank has submitted that the Recovery Officer has rightly dismissed the objections as the appellant has not deposited the money. Sh. Sharma, counsel for the bank has further submitted that there is no merit in the appeal and appeal be dismissed.

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I have considered the rival contentions.

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As per Rule 61 of The Second Schedule of Income Tax Act, a sale can be set aside on the ground of non-service of notice or irregularity. Rule 61 of The Second Schedule of Income Tax Act is reproduced as under:-

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“ 61. Where immovable property has been sold in execution of a certificate, such Income-tax Officer as may be authorized by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner in this behalf, the defaulter, or any person whose interests are affected by the sale, may, at any time within thirty days from the date of the sale, apply to the Tax Recovery 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.”

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It is clear from the above provisions that no application made by a defaulter under this Rule shall be allowed unless the applicant deposits the amount recoverable from him in the execution of the certificate.

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In the case in hand, appellant did not deposit the amount recoverable from him before Recovery Officer at the time of filing the objections. In this appeal, appellant had initially moved an application for waiver of the requisite pre-deposit of 50% of the amount. Later on, she withdrew the said application on 11.01.2023.

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Appeal No.01/2023

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As per Section 30(A) of the RDB Act, the appellant has to deposit 50% of the amount recoverable as pre-condition for filing of the appeal. Section 30(A) of the RDB Act is reproduced as under:-

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” 30-A. Deposit of amount of debt due for filing appeal against orders of the Recovery Officer- Where an appeal is preferred against any order of the Recovery Officer, under Section 30, by any person from whom the amount of debt is due to a bank or financial institution or consortium of banks or financial institutions, such appeal shall not be entertained by the Tribunal unless such person has deposited with the Tribunal fifty per cent. Of the amount of debt due as determined by the Tribunal.”

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The Hon’ble Apex Court in Civil Appeal Nos.8970 of 2022, 8972 of 2022, 8973 of 2022 and 8974 of 2022, titled ‘ M/s Sidha Neelkanth Paper Industries Private Limited And Another Vs. Prudent ARC Limited And Others’ decided on 05.01.02023 has also held that the borrower has to deposit 50% of the amount of “debt due” as claimed by the bank/financial institution/assignee.

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I am of the considered view that there is no merit in the contention of the appellant that there was a fraud in conducting the auction. Since, the appellant has not deposited 50% of the amount due, the present appeal is, hereby, rejected. All the pending IAs, if any, are also dismissed, accordingly.

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File be consigned to the record room after due compliance.

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(A S Narang) Presiding Officer DRT-I, Chandigarh

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Pronounced in open court Dated: 09.02.2023

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Sh. Baba Bhagwant Bhajan Singh v. Recovery Officer-Ii Debt Recovery Tribunal -I

Case brief

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Sh. Baba Bhagwant Bhajan Singh v. Recovery Officer-Ii Debt Recovery Tribunal -I

Case brief

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