Dismissed

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

DRT14 Sept 2023APPEAL/1/2023

Case brief

AI extract

What is this about?

The court dismissed an appeal filed under Section 30(A) of the RDB Act against an order setting aside objections to a property auction. The court held the appeal inadmissible because the appellant failed to deposit the mandatory 50% of the debt.

What did the court decide?

The appeal filed by the appellant was dismissed for failure to deposit the mandatory 50% of the amount due.

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

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Appeal No.0l/2023

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DEBTS RECOVERY TRIBI.]NAL.I, CHANDIGARH

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Appeal No. 0112023

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Baba Bhagwant Bhajan Singh Vs. Recovery Officer-Il,^{DebtsRecoveryTribunal-} 1 And Ors.

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14.09.2023

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Item No.74

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Argued by: Ms. Jyoti Sareen, Counsel lor the appellant.

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Sh. Rakesh Gupta, Counsel for respondent banl</Canara^Bank. Sh. Sukhvinder Singh, Counsel for respondent no.3/ Auction Purchaser.

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Baba Bhagwant Bhajan Singh (Appellant) has filed this appeal against^the order dated 17.11.2022, whereby, Recovery Offrcer-Il, DRT-I, Chandigarh^has dismissed the objections filed by the appellant in RC No.1940/2018 titled "Canara Bank Vs. Baba Bhagwant Bhajan Singh", which had been issued in OA No.3559 of 2017 for Rs.1 ,75,73,3101-.

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The background facts are that, on 08.12.2016, Canara bank had filed OA No.3559/2017 in this Tribunal for the recovery of Rs.1,75,73,3t01 against the appellant, which was allowed er parte vide order dated 13.03.2018. In^fact, Appellant had taken some loan from Canara Bank and to secure the same, he had mortgaged some land. After the Recovery Certificate was issued by this Tribunal, on 18.12.2021, the Recovery Officer sold the mortgaged property in auction.^On 30.12.2021, appellant filed the objections before the Recovery Officer, which were dismissed on 17 .11.2022. On 13.12.2022, appellant filed CWP No.29l9l 2022 before the Hon'ble Punjab and Haryana High Court against the order^passed by the Recovery Officer on 17.11.2022. However, t}le same was disposed of 19.12.2022 and appellant was directed to approach DRT by way of appeal. 31.12.2022, appellant filed the appeal before this Tribunal against the order Recovery Offrcer dated 17 .11 .2022, which was dismissed or 09.02.2023 appellant had not deposited 50% of the amount due. Appellant had again CWP No.797l of 2023 before Hon'ble Punjab and Haryana High Court

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Appeal No.01/2023

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the order datedO9.O2.2O23,^{whichwas disposed of ort2l'04'2023 by the Hon'ble} High court with the^{directionto theappellantto file applicationfor restoration} anddeposit50%ofthemoneydue.On2T-04'2023,appellantfrledMAfor restoration of appeal along^{with depositof Rs.1,12,50,000/-'In the meanwhile'} appellant filed an application^{for setting aside the ex parteRecovery Certificate} dated 13.03.2018,^{whichwas allowed vide orderdated 13.06.2023passedby this} Tribunal.

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With this background, I^{cometo the appeal'The recordof the Recovery} officer has^{beencalled.Appellant in the present appeal has challenged the order} dated, 17.11.2022^{passedby RecoveryOfficer-Il, DRTJ,Chandigarh'A perusal} of the order dated^{17 .11.2022 passed by the RecoveryOfficer-Il'DRTJ'} ChandigarhwouldshowthattheRecoveryofficerdismissedtheobjectionsonthe ground that appellant^had not^{depositedthe amount recoverablefrom him in the} execution ofthe certificate.^{As mentioned earlier, the Recoveryoffrcer sold the} property in execution^{of the certificat e, on 18'12'2021, to Mandeep Singh i'e'} Respondent no.3^{herein for Rs.1,92,00,000/-'}

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Notice ofthe^{appeal was given to the respondents'}

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I have heard Ms.^{JyotiSareen,counselfor the appellant;Mr' Rakesh} Gupta, counsel^{for the CanaraBank and Mr' SuktrvinderSingh' counselfor} respondent^{no.3/ AuctionPurchaser.}

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Assailing the^{impugned order, Ms'Sareen,counselfor theappellanthas} argued that the^{RecoveryOffrcer has dismissedthe objectionson the ground'} which were never^{raisedby the bank.The RecoveryOfficerhas held that} appellant had^{not depositedthe arnount recoverablein the executionof the} certificate. The^{RecoveryOffrcer never pointedout this fact to the appellant'} Had the Recovery^{Officer pointed out this fact to the appellant' the latter} have complied^{with the same.The act of the Recovery Officer has} consequences.^{As per the principles of natural justice, the Recovery}

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Appeal No.01/2023

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shouldhavepointedoutthisfacttotheappellant.Shefirtherarguedthatthesale was not conducted^{properly.Therewere litchiplantson the property' While} valuing the^{property,this factwas not taken intoconsideration' There alsoexisted} a house on the^{property, whichwas also not taken into consideration'The} property was worth^{more than Rs'5.00crore. However, it was soldfor a song at} Rs.l ,92,00,000/-.^{In fact, the bank had played ftaud with the RecoveryOfftcer'} Accordingly,^{the impugnedorder be set aside'}

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Per contra,sh.^{RakeshGupta, counsel for the bankhas arguedthatas per} Section 30(A) of^{the RDBAct, in case an amount is due froma personto any} bank, the Tribunat^{shall not be entertainthe appeal unlesssuch personhas} depositedwithtlreTribunalfiftypercentoftheamountofdebtasdeterminedby the Tribunal.^{In thiscase, the amountdue from the appellantis more thanRs'3'25} crores. Appellant^{should havedepositedat leastRs'l'50crores'However'} appellant had^{depositedonly Rs.1,12,50,000/-' Accordingly' the appealof the} appellant^{is liable to the dismissed on this very ground'}

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Mr. Gupta, further^{arguedthat appellant had filed the objections before the} Recovery Officer^{underRule 6l of theSecond Schedule of Income TaxAct on} the ground that^{there was materialirregularityin publishingand conductingthe} sale. The^{appellant was supposed to deposit the amountdue fromhim' It was not} thedutyoftheRecoveryofficertobringthisfacttothenoticeoftheappellant that he was^{supposed to deposit the money due from him' Mr' Gupta further} argued that the^{mere circumstance that the RecoveryCertificate has beenset} aside, is not^{ground to set aside the sale, as third-partyinterest has been created} favor of the Auction^{Purchaser.Mr' Guptafurtherarguedthat bank has not} committed^{any fraudwith the Recoveryofficer' In fact' the appellant' himself'} dragging his^{feet and not making the payment'Further' the appellantdid not} any steps^{for settingasidethe ex parteorder dated 17'03'2018 beforethe sale} the Recovery Officer'^{Windingup his arguments,Mr' Gupta submittedthat} is no merit in^{the present appealandthe samebe dismissed'}

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Appeal No.01/2023

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g. I have considered^{the rival contentions'}

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As^per Section 30(A)^{oftheRDBAct, the appellanthas to deposit 50% of} the amount^{recoverable as pre-condition for filing the appeal.Section 30(A) of the} RDB Act is^{as under:-}

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"30-A. Deposit of amount^{oJ debt itue} lor liling^{appealagainstordery} 9f the Recovery Of/icer"Wh"r"^{on appeal is preferued againstany orderof the} irrirrry oiJicei under^{Section 30, by any person} from^{whomthe amountofdebt} is due io i bank^or financial^{instiiution or consortiumof banks or financial} instit tions, such apieal^{shall not be entertainedby the Tribunal unlesssuch} person has depositid with^{the Tribunal} Jifty^{percentof the amountof debt due as} determined bY the^Tribunal."

¶25

Admittedly, bank^{had filedthe OA for recoveryof Rs'1,75,73'310/-on} 08.12.2016, which^{was allowed withintereston 13'03'2018' On 17'll'2022'} appellant ha<l^{frled the objections before the RecoveryOfficer'Certainly'a lot of} sum had accumulated^{as interestfrom 13.07'2018to l7 j12022' However'}

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appellant had deposited^{only Rs.1,12,50,000/''As per law,appellanthad to} deposit 50% of the^{amount due from him. It is not understandable as to on what} basis, the appellant^{had depositedRs.1,12,50,000/-'Certainty,it is not 50% of the}

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amount due from^{him' Accordingly, the appealof the appellant is liable to be} rejected on^{this very ground.}

¶28

Be^{thatas it may be, appellant had filed the objections on the groundthat} Recovery Officer^{had not fixedthe reserveprice of the property be sold properly'} TheRecoveryoffrcerhadfailedtotakeintoconsiderationthatt}rerewerelichi plants and there^{was alsoexisted a house on the mortgaged property'}

¶29

The^{RecoveryOffrcer had sold the propertyon 18'12'2021' Appellanthad} filed the objections^{before RecoveryOfficeron 30'122021' Certainty'the} objections of the^{appellant were under Rule 61 of The Second Scheduleto the} Income Tax Act.^{Appellanthad challengedthesale on the ground of}

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inegularity.^{As perRule 61 of TheSecond Scheduleto the Income Tax Act'} appellant was^{supposedto deposit the amount due from him'However'}

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Appeal No.01/2023

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appellant had not deposited^{any money' Rule 6l of The SecondSchedule of}

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Income Tax Act is as under:-

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"61. llhere immovable^{propertyhas been sold in executionof a} certificate, such^Income-tax fficer^{as may be authorizedby the PrincipalChief} Commissioner or Chief Commissioner^{orPrincipalCommissioner or} commissioner in this beha$^{the defaulter,or any person whose interests are} afficled by the sale,^may, at^{any timewithin thirtydays} from^{the dateof the sale,} ippty to ih, T* Rrrourry Officer^{to set asidethe sale of the immovableproperty} ii the ground that notice^{was notservedon the defaulterto paythe arrearsas} required by this Schedule or^{on the groundof a materialirregularityin} publishing or conducting the sale:

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Provided that-

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(a) no sale shall be set aside on^{any suchgroundunlessthe Tax Recovery} Officer is satisJied that the applicant^{has sustainedsubstantialinjury by} reason of the non-service or^{irregularity;and}

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ft)^{an appticationmadeby a defaulter under thisrule shall be disallowed} unless iie applicant deposits^{the amountrecoverable} from^{him in the} execution of the certiJicate.^"

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Accordingly, the^{RecoveryOfficer had no optionexceptto dismiss the} objections. I am of^{the considered view that there is no force in tle contentionof} the counsel for the appellant^{that Recoveryofficer should have broughtthis fact} to his notice. The^{circumstancethat bank hadnot raised this issuebeforethe} Recovery Offrcer^is also ofno^{consequence. The depositof money due from the} appellant before the^{RecoveryOffrcer was a condition precedent' Thatapart,} there is no force in the^{contentionof the counselfor the appellantthat the} Recovery offrcer should^{have firstcometo the findingthat there was material} irregularity in conducting^{the auctionandonlythen, appellantwas supposed to} deposit the amount^{due ftom him. In case,the contention of the counselfor the} appellant is accepted,^{it wouldamountto putting the cart before the Horse.I am} ofthe considered^{viewthat there is no meritin the contentionof the appellantthat} there was fraud in conducting^{the auction'Havingconsidered all the facts' I}

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of the considered^{viewthat there is no merit in the present appeal and the same is}

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hereby dismissed.

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File be consigned^{to the record room after due} ""''([""

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Pronounced in open court Dated: 14.09.2023

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

Case brief

What is this about?

What did the court decide?

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

Case brief

What is this about?

What did the court decide?

What the court decided

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