GURMEET SINGH AND ANR vs ORIENTAL BANK OF COMMERCE on 9 December 2020

**JUDGMENT**

Being time bound as per Order dated 26.08.2020 passed by Hon'ble DRAT in Misc. Appeal Nos. 37/2020, 38/2020 and 39/2020, accordingly, these appeals are hereby decided by this common order as the facts and issues involved are common and the relief claimed are also similar and all the three appeals have been arisen from the same order passed by the Ld. Recovery Officer, DRT-III Delhi which have been filed under Section 30 (1) of the Recovery of Debts and Bankruptcy Act challenging the orders dated 16.05.2017 and 20.05.2019 passed by the Ld. Recovery Officer, DRT-III Delhi in TRC No.117/2002 titled Oriental Bank of Commerce Vs M/s Regal Polymers.

2. By way of order dated 16.05.2017, the Ld. Recovery Officer has dismissed the objections filed by all the aforementioned three appellants in respect of First Floor (appeal filed by Mr. Sanjeev Ahluwalia and Another); Basement & Ground Floor (appeal filed by Smt. Poonam Sarin) and Second Floor (appeal filed by Mr. Gurmeet Singh & Another) situated in property bearing No. B-14, Friends Colony (West), New Delhi-65 (hereinafter referred to as "property-in-question"). Similarly, vide order dated 20.05.2019, the Ld. Recovery Officer has dismissed the review applications (for modification /

Sd/- recall of order dated 05.02.2016, 08.07.2016 and 16.05.2017) filed by the appellants herein.

3. The facts of all the three appeals are more or less common. Hence, appeal No.16/2019 filed by Mrs. Poonam Sarin is taken as the lead case.

4. The brief facts as culled out from the present appeal are that the appellant is claiming herself to be the bonafide purchaser of basement and ground floor of property-in-question for valuable consideration and duly registered sale deed dated 05.05.2008. The property-in-question is also neither charged nor mortgaged with the respondent bank.

5. It has been alleged by the appellant that as per the chain of title of property-in-question, originally, the property-in-question was allotted to Smt. Indrawati Khanna, Shri Sudhir Khanna and Shri Ramesh Khanna by way of Perpetual Lease Deed dated 17.05.1980 (Annexure-5). The said Smt. Indrawati Khanna, Shri Sudhir Khanna and Shri Ramesh Khanna sold the property-in-question to M/s Savitri Engineering Ancillary Pvt. Ltd., vide agreement to sell and registered GPA dated 01.06.1981 (Annexure-6). The GPA was duly registered in favour of Shri Praveen Kumar S/o Shri Virender Singh Verma on 03.06.1981 (Annexure-7). Thereafter, Shri Praveen Kumar executed a registered GPA dated 12.04.1991 (Annexure-8) in Sd- 2/12/20

favour of Shri Sandeep Ahuja and Shri Sanjeev Ahuja, both sons of Shri Ved Prakash Ahuja.

6. Thereafter, the said property was converted from leasehold basis into a freehold property on 11.10.2006 (Annexure-9) and a Conveyance Deed was issued in favour of M/s Savitri Engineering Ancillary Pvt. Ltd. On 23.10.2006. Thereafter, M/s Savitri Engineering Ancillary Pvt. Ltd., sold the property-in-question in favour of M/s Shruti and Siddharth Construction (a sole proprietorship concern of Shri Ashwani Khattar), by way of a registered sale deed (Annexure-10). Thereafter, M/s Shruti and Siddharth Construction demolished the entire structure built up on the property-in-question and constructed several dwelling units/floors thereupon. The appellant has carefully perused the entire chain of documents and after satisfying herself that the property-in-question is free from all encumbrances, purchased the basement and ground floor of the property-in-question by way of duly registered sale deed dated 05.05.2008 (Annexure-11). The appellant has made all due diligence before purchasing the two floors in the property-in-question. There were no adverse entries in the office of concerned sub registrar, MCD or Registrar of companies or any other competent authority against the property-in-question.

7. The appellants have challenged the impugned orders on the grounds that original allottees have Sd- 9/12/2010

sold the property-in-question by way of agreement to sell and GPA on 01.06.1981 in favour of M/s Savitri Engineering Ancillary Pvt. Ltd., much before the filing of OA against the borrower M/s Regal Polymers and that time, no credit facilities were availed by the borrower from the respondent bank. The facilities were extended for the first time on 20.08.2001. The applicant is a bonafide purchaser and is not aware about the pendency of recovery proceedings. The applicant came to know about the recovery proceedings only on 18.07.2016 when a notice was received by applicant issued by the Ld. RO dated 08.07.2016.

8. It has also been alleged in the present appeal that the respondent bank has concealed various facts from the Ld. Recovery Officer. The property-in-question was attached just an oral request of the respondent bank. Earlier, vide order dated 04.01.2006, the Ld. RO had directed the CDs as well as M/s Savitri Engineering Ancillary Pvt. Ltd., to disclose the source of funds for purchase of the said property. In compliance of said order, the CDs have filed two affidavits thereby disclosing the source of funds for purchasing the property-in-question and same was also recorded in order dated 30.01.2006. Further, the then Ld. Recovery Officer, vide order dated 03.04.2006 (Annexure-19) held that the property-in-question as well as another property of the CDs cannot be attached, since they are not owned by CDs. The order dated 03.04.2006 is final Sd- and binding qua the respondent bank and the principles of res judicata would also apply. The said order has already attained finality as the same has not been challenged by the bank till date.

9. It has further been alleged that on an application moved by the respondent bank (Annexure-24), the Ld. Recovery Officer has attached one property situated at Gurgaon. Against the said attachment, the spouses of CDs filed objections and the said objections were allowed by the Ld. Recovery Officer vide order dated 11.01.2016 (Annexure-26).

10. In nutshell, it is the case of the appellants that the property-in-question has already been released by the Ld. Recovery Officer vide order dated 03.04.2006. The appellant has purchased the property-in-question by availing a housing loan of Rs.1.10 crores from the HDFC Ltd.

11. The appellants have also invoked the provisions of Section 60 (ccc) of the CPC as applicable to New Delhi and stated that this is the only residential house available with them and the property-in-question cannot be attached and sold for recovery of the dues of respondent bank. In view of above, it has been prayed to quash and set aside the order dated 16.05.2017 and 20.05.2019 issued by the Ld. Recovery Officer passed in TRC No.117 of Sd/- [Signature]

2002 in respect of attachment of property-in-question.

12. The appellant has also filed an application being IA No.1279/2019 for condoning the delay in filing the present appeal. It has been stated that the appellant has challenged the order dated 16.05.2017 by filing appeal No.30/2017. The Ld. Recovery Officer passed an order dated 07.10.2017 with respect to property bearing No.A-53, New Friends Colony, New Delhi and on same facts, the Ld. Recovery Officer allowed the review application and withdraw the orders passed with respect to said property in the same recovery proceedings. In doing so, the Ld. Recovery Officer had observed that the subsequent order of attachment had been passed in respect of the said property without the previous order dated 03.04.2006 having been brought to his notice and the said order would operate as res-judicata. The appellant has also filed a review application before the Ld. Recovery Officer believing bonafidely. When the appeal No.30/2017 came before the Hon'ble Tribunal for hearing, the appellant withdrew the said appeal on the ground that review application is still pending before the Ld. Recovery Officer and they are pursuing the same bonafidely. The review application was dismissed on 20.05.2019. In view of this, it has been prayed to condone the delay of 729 days in filing the present appeal.

Sd. A11220

13. Reply to the appeal has been filed by the respondent bank vehemently opposing the same submitting that the appeal is highly barred by time. That the present appeal is not maintainable as the appellant had earlier filed appeal No.30/2017 against the order dated 16.05.2017, but the appellant has withdrawn the same. The delay in filing the appeal cannot be condoned on account of pendency of Review Petition. The present appeal is mis-joinder of causes of action as the appellant has challenged two orders dated 16.05.2017 and 20.05.2019 in one appeal.

14. It has further been stated that the appellants have not the bona fide owners of the property-in-question in view of Rule 2 and Rule 16 of the Second Schedule of Income Tax Act. In the case in hand, the demand notice was issued against the CDs on 19.11.2002 whereas the appellant has purchased the property-in-question on 05.05.2008. The CDs have purchased the property-in-question in the names of their wives, who had no known source of income and the same were purchased by diverting the funds borrowed from the CH bank.

15. It has further been stated that M/s Savitri Engineering Ancillary Pvt. Ltd., was owned by Ahuja family and Shri Sanjeev Ahuja was the director and the said property was purchased by M/s Savitri Engineering Ancillary Pvt. Ltd., from a loan of Rs.5,06,607.70 granted by Shri Ved Prakash Ahuja Sd.

*[Handwritten signature]*

and Sanjeev Ahuja, the CDs in the year 2001. The property has been purchased on the basis of GPA and agreement to sell and it is just a ploy to divert the loan amount. The loan facilities were granted to the CDs in January 1989 and Shri Ved Prakash Ahuja, Shri Sanjeev Ahuja and Shri Sandeep Ahuja were guarantors in their personal capacity. M/s Savitri Engineering Ancillary Pvt. Ltd., is a front company of the CDs and if the veil is pierced, the truth will be revealed.

16. It has been stated that the impugned orders passed by the Ld. Recovery Officer are well reasoned, speaking and there is no illegality or irregularity in the same. In nutshell, it has been prayed to dismiss the appeals filed by the appellant being devoid of any merit.

17. The respondent bank has also filed its reply to the application filed by the appellant under Section 5 of Limitation Act for condonation of delay vehemently opposing the same. It has been submitted that there is no provision in the RDB Act to condone the delay.

**Findings with reasons**

18. Arguments heard and the record has been thoroughly perused. In the present matter, Ld. counsel for the appellants contended that the present appeals are within limitation period as Sd- before coming by way of appeal, the parties concerned have agitated their matter by way of review as well as before the Hon'ble High Court, though the writ petition was dismissed as withdrawn and thereafter present appeal has been filed. Earlier, one appeal was pending as review petition was also subjudiced before the Ld. Recovery Officer, therefore, the appellants herein got permission from this Tribunal to withdraw the appeals and to contest the review petition. Though, thereafter the review petition was also dismissed and the said order is of-course challengeable and accordingly appeals have been filed and the time taken in approaching the Hon'ble High Court has to be deducted as per Section 14 of the Limitation Act and the Ld. counsel for the appellant fairly conceded that Section 5 of the Limitation Act is not applicable before this Tribunal as per the latest law laid down by the Hon'ble Supreme Court. But of-course Section 14 is applicable and the time spent by the appellants herein in approaching the higher forums against the order passed by the Ld. Recovery Officer.

19. Ld counsel for appellants contended that though the three appeal nos. 30/2017, 31/2017 and 32/2017 were filed against the order dated 16.05.2017 and the same were filed within 12-days against the said impugned order and there was no delay in filing the appeals before this Tribunal, but in the meantime, the objections were also filed by SA-

Smt. Shalini Ahuja w/o Sh. Sandeep Ahuja in respect of property situated at A-53, New Friends Colony New Delhi on the same legal grounds thereby relying upon order dated 03.04.2006 in TRC 117/2002, which was dismissed and, accordingly, property situated at A-53 stood attached vide order dated 21.06.2017 of Ld. Recovery Officer. During the pendency of above said appeals, on 03.08.2017, Ld. Recovery Officer issued sale proclamation. Thereafter, in the appeals no. 30/2017 to 32/2017, vide order dated 20.09.2017, stay was granted by Ld. Predecessor (Incharge) of this Tribunal qua those properties. Smt. Shalini Ahuja also filed review application before Ld. Recovery Officer against the order dated 21.06.2017 thereby relying the order dated 03.04.2006 and the Ld. Recovery Officer, vide order dated 07.10.2017, allowed the said review application qua property situated at A-53, Friends Colony and all the attachment orders were stand withdrawn. Taking note of the said fact, on the basis of the parity, the appellants on legal advice legitimately also filed an application for review in TRC No. 117/2002 thereby seeking review of Order dated 16.05.2017 and the appeal no. 30/2017 to 32/2017 were accordingly withdrawn taking note of the fact that they are pursuing the remedy of review of the order dated 16.05.2017 and after passing the order by Ld. Recovery Officer thereby dismissing the review petition immediately filed the present appeals in all the matters, hence, the time period spent legitimately in pursuing Sd- A/12/17

before Ld. Recovery Officer, after the withdrawal of the appeals from this Tribunal, as the period requires to be counted/deducted under Section 14 of Limitation Act, and accordingly, prayed that the present appeals are within limitation period.

20. On the issue of Limitation, Ld. counsel for appellant has relied upon various judgements i.e. *C.N Paramasivam and Anr. Vs. Sunrise Plaza through partners and Others, 2013 9 SCC 460, Consolidated Engineering Enterprises Vs. Principal Secretary, Irrigation department and Ors. 2008, 7 SCC 169, M. P Steel Corporation Vs. Commissioner of Central Excise, 2015 (7) SCC 58, P. Sarathy Vs. State Bank of India, 2000, (5) SCC 355, Colgate-Palmolive Co. Vs. Hindustan Rimmer and Ors. I. Ano. 11047 of 1992, decided on 17.10.1994, Ramdhani Muchi Vs. Khakshardas Tati and Ors., decided on 29.07.2015, Standard Chartered Bank Vs. MSTC Limited, Civil Appeal no. 501 of 2020, decided on 20.01.2020.*

21. Further, Ld. counsel for the appellants herein contended that vide order dated 03.04.2006, the Ld. RO has rejected the attachment with respect to both the properties i.e. (i) B-14, Friends Colony (West), New Delhi-65 and (ii) A-53, New Friends Colony, New Delhi. However, vide order dated 05.02.2016, the property-in-question was ordered to be attached suo moto, whereas, no application was moved on SA. 9/1/2020

behalf of the respondent bank for attachment of the said property. The application dated 15.01.2015 was moved merely on behalf of the respondent bank for attachment of DLF, Gurgaon property. It is being argued that once the property has already been released from attachment vide order dated 03.04.2016, Ld. RO was not entitled to review its own order and thereafter attach the said property suo moto without any application or title documents with respect to the said property. Accordingly, the appellants herein have filed separate objections, when they came to know about the fact that property bearing No.B-14, Friends Colony (West), New Delhi-65 has been attached. But Ld. RO, illegally, malafidely ignoring the said fact that the property-in-question has already been released, dismissed the said objections vide order dated 16.05.2017, against which the review application was filed before Ld. RO and the same was also dismissed vide order dated 20.05.2019.

22. Ld. counsel for the appellants also relied upon paras 15-16 of the objections filed under Rule 11 of the Second Schedule of Income Tax Act, wherein, it was specifically stated that vide order dated 03.04.2006, the then Ld. RO has specifically held that the property bearing No.B-14, Friends Colony (West), New Delhi-65 cannot be attached and it was also mentioned in para 16 that on 23.10.2006, M/s Savitri Engineering Ancillary Pvt. Ltd., sold the Sd.

property-in-question in favour of M/s Shruti and Siddharth Construction (a sole proprietorship concern of Shri Ashwani Khattar), by way of a registered sale deed. Thereafter, M/s Shruti and Siddharth Construction constructed several dwelling units on the said property and sold second floor to Mr. Gurmeet Singh, appellant herein vide registered sale deed dated 28.11.2017. Reply to said objections were filed by the respondent bank but the same was totally wrong and evasive and is not a reply in the eyes of law. Though, CH bank has a duty to recover the public money, but the CH bank cannot be allowed to suppress the material facts, therefore, the evasive denial should be treated as admission on the part of the respondent bank that the material facts have been suppressed relating to passing of order dated 03.04.2006, vide which, the property-in-question has been released and it was also not found that M/s Polymers Ltd. has siphoned off any funds and accordingly the said property has been purchased in the names of others. Thereafter, rejoinder was also filed, wherein, the appellants herein have prayed for taking action under Sections 209 and 340 of Cr.P.C. Ld. RO vide order dated 07.10.2017, disposed off the review application in respect of property bearing No. A-53, New Friends Colony, New Delhi and withdrawn the order dated 05.02.2016. Hence, Ld. RO vide his orders dated 16.05.2017 and 20.05.2019, wrongly dismissed the objections filed on behalf of the appellants herein as well as the review application. Accordingly, prayed Sd- [Signature]

for quashing and setting aside the orders dated 16.05.2017 and 20.05.2019 passed by the Ld. RO in respect of property-in-question.

23. On these issues, Ld. Counsel for appellants relied upon various citations i.e. *Tax Recovery Officer-II Vs. Gangadhar Vishwanath Rande*, 1998, 6 SCC 658, *Lashkari Ram And Ors. Vs. Mast Ram Tanta and Another*, 1998, 6 SCC 666, *Shyam Swarup Sharma and Anr. Vs Canara Bank*, 99, 2002, *Delhi Law Times* 475 (DB), *Swaraj Kishore Arora and Anr Vs. Indian Bank* 230, 2016, *Delhi Law Times*, 269(DB), *Telecom Regulatory Authority of India Vs. Dinesh Singh Dhanik and Ors.* 230, 2016, *DLT* 296(DB), *Raj Kumar Vij Vs. Kotak Mahindra Bank*, WP(C) no. 6881/2014, on 30.05.2016, *Karsanbhai Gandabhai Patel Vs. Tax Recovery officer, Special Civil Application no. 2894/ 2004*, decided on 12.02.2014, *Shamim Bano G. Rathi and Anr. Vs. Oriental Bank of Commerce and Ors.* W.P No. 1969/2007, on 05.12.2007, *GBM Manufacturing Pvt. Ltd. And Anr Vs. Indian Overseas Bank*, W.P no. 392-393 of 2013, on 01.07.2013, *Hope Plantations Ltd. Vs. Taluk Land Board, Premade and Anr.* 1999 5 SCC 590, *District Collector and Anr. Vs. B. Suresh and Others*, 1999 5 SCC 612, *Union of India and Another Vs. Ashok Kumar Aggarwal* 2013 16 SCC 147, *Padam Singhee and Ors. Vs. SVOGL Oil, Gas and Energy Ltd. And ors.* W.P (C) no. 9616 of 2018, 18.09.2018, *Bhangoo and Co. Vs. Mittal and Garg*

sd- [Signature]

*Enterprises and Ors. Misc Appeal no. 101 of 2005, on 29.11.2005, Joseph John Peter Sandy Vs. Veronica Thomas Rajkumar and Another, 2013 3 SCC 801, N. Radhakrishnan Vs. Maestro Engineers and Ors. 2010 1 SCC 72, Deepak Agro Foods Vs. State of Rajasthan, decided on 11.07.2008, Balvant N. Viswamitra and Ors. Vs. Yadav Sadashiv Mule(dead) through Legal heirs, Civil Appeal no. 5617 of 1999, decided on 13.08.2004, Jaichandlal Ashok Kumar and Co. Pvt. Ltd. Vs. Yossuf and Ors. A.A no. 1572 of 2015, decided on 21.02.2017.*

24. On the other hand, Ld. counsel for respondent bank vehemently contended that the present appeals are hopelessly time barred, as the previous order dated 16.05.2017 has been challenged, though earlier appeals were filed, but the same was withdrawn from this Tribunal without any submissions that they should be given liberty to reagitiate the same. Review was filed before the Ld. Recovery Officer, which was dismissed, as the same was also hopelessly time barred. He further contended that though the review was not at all maintainable and even the limitation period cannot be condoned, as Section 5 of Limitation Act is not applicable which is also conceded by Ld. counsel for appellant. Review applications were filed knowingly that the same are not maintainable at all as the same contention was raised by the appellant herein in their earlier appeals filed before this Tribunal, SL-Tutva therefore, the appellants herein intentionally filed the review petitions before Ld. Recovery Officer as the same is not maintainable at all. Hence, benefit of Section 14 of Limitation Act cannot be availed by the appellants herein.

25. In support of their arguments, Ld. counsel for respondent bank has relied upon various citations i.e. *International Assets Reconstruction Company of India Ltd. Vs. Official Liquidator of Adrich Pharmaceuticals Limited and Others SC (Civil Appeal no. 16962/2017, on 24 October, 2017, Chandan Kumar Ambasta and Ors. Vs Central Bank of India, W.P.(C) No. 422 of 2018 on 26 February, 2018, Deena (Dead) through legal heirs Vs. Bharat Singh dead through legal heirs and ors, on 27.07.2002, Appeal(Civil) no. 2965/1992, Aarifaben Yunusbhai Patel and Ors. Vs. Mukul Thakorebhai Amin and Ors., Civil Appeal no. 16431644 of 2020, on 17 March, 2020, Rajeev Aggarwal Vs. Oriental Bank of Commerce and Ors., W.P (C) no. 7001/2015, on 11.09.2015, Standard Chartered Bank Vs. MSTC Limited CIVIL APPEAL No. 501 OF 2020, on 21.01.2020.*

26. Further, it is also argued by Ld. counsel for respondent bank that the Ld. Recovery Officer was entitled to review its own order, because of the reason, that in order dated 03.04.2006, Ld.

SL- Amin

Recovery Officer made remarks that there are doubts about siphoning of funds but the proof was not available with regard to siphoning of money from the sources of M/s Regal Polymers Pvt Ltd. / CD. However, demand notice was issued in the year 2001 and the property-in-question stood attached from that moment and there was siphoning of the funds of M/s Savitri Engineering Ancillary Pvt. Ltd. to Smt. Bela Ahuja, who was also one of director of M/s Savitri Engineering Ancillary Pvt. Ltd. who further sold the said property illegally and malafidely to M/s Shruti & Siddharth Constructions, through its proprietor Sh. Ashwani Khattar, who raised constructions and thereafter sold the said property illegally and malafidely to appellants herein. In fact, M/s Savitri Engineering Ancillary Pvt. Ltd. was owned by Sh. Sanjeev Ahuja, who was power of attorney holder of Smt. Indrawati Khanna, and was also residing in the same property-in-question. Later on, Smt. Indrawati Khanna died on 15.08.1983, but the property-in-question was later on transferred, hence, all the CDs i.e. Sh. Sandeep Ahuja, Sh. Sanjeev Ahuja and Sh. Ved Prakash Ahuja, who were directors of M/s Regal Polymers Ltd., were intentionally siphoning the said amount and purchased the property-in-question, therefore, the corporate veil has to be lifted and the same was reported in the impugned order dated 16.05.2017 and the objections were later on filed, but the same were hit by Rule 51 of 2^nd Schedule of Income Tax Act, whereby attachment would be Sd/- deemed to be from the date of demand issued by Ld. Recovery Officer, as per Rule 11(3) of 2^nd Schedule of Income Tax Act. Therefore, the same could not be transferred by the CDs by siphoning of the funds illegally and malafidely, accordingly, the same has been rightly attached by Ld. Recovery Officer, when the said fact has come to his knowledge, who are deputed to recover the same. Thus, the Ld. counsel for respondent bank contended that the present appeals are not only hopelessly time barred, but the appellants herein have also no right to challenge the same by way of second appeal, as the earlier appeals were dismissed as withdrawn and no permission was sought at that time. If any appeal, later on, was filed, this fact was also suppressed before Ld. Recovery Officer that they have filed appeal before Ld. Presiding Officer and as same has been withdrawn, therefore, there was material suppression of facts as M/s Savitri Engineering Ancillary Pvt. Ltd., through Sh. Sanjeev Ahuja / CD no. 3, sold the property-in-question to M/s Shruti and Siddharth Construction though public money has to be recovered, therefore, prayed for dismissal of present appeals.

27. In support of their arguments, Ld. counsel for respondent bank has relied upon various citations i.e. *Sarguja Transport Service Vs. State Transport 1987 AIR 88, 1987 SCR (1) 200, on 12 November*

Sd- 9/12/12

1986, *Smt. Praveen Sharma Vs. Shri Jai Prakash Sharma & Ors.* CM 19889/2013, on 18^th May 2015, *Basant Kharbanda Vs. Punjab & Sind Bank*, on 13^th December 1996, *Mohan Insurance and Financial Consultancy Pvt Ltd. Vs. HDFC Bank Ltd.*, WP No. 12126 of 2019, on 25^th July 2019, *Saurabh Exports Vs. Blaze Finlease And Credit Pvt. Ltd.* 2006 133 CompCas, on 16^th March 2006, *D.S Senthilvel Vs. Tax Recovery Officer-2*, WP no. 2932 of 2018 to 2938 of 2018 on 07.03.2018.

28. In the present matter, first of all the question, which arises before this Tribunal is whether the present appeals are maintainable against order dated 16.05.2017 as well as order dated 20.05.2019 passed on review petitions filed on behalf of present appellants and whether the present appeals are hit by limitation or not ? In this regard, it is to be mentioned that Ld. counsel for respondent bank has fairly conceded while in rebuttal arguments that the appeal against order dated 20.05.2019 regarding dismissal of review petition of course is maintainable, as the same has been filed within stipulated period. Now, it has to be seen whether the present appeals can be considered with respect to the order passed on 16.05.2017 or not, vide which, the objections filed on behalf of present appellants were dismissed by the Ld. Recovery Officer and the time spent after withdrawal of appeals can be counted / deducted or not ? In this SA- context, it is to be mentioned that against the order dated 16.05.2017, three appeals nos. 30/2017, 31/2017 and 32/2017 were filed on 28/29.05.2017 and the same were of-course filed within the limitation period of 30-days, as prescribed under Section 30 of RDDB&FI Act. After that, no doubt, the appellants herein had withdrawn those appeals and the same were dismissed as withdrawn vide order dated 07.03.2018 of this Tribunal.

29. On 05.12.2017, the appellants herein already preferred the review petitions before the Ld. Recovery Officer in view of the order passed on another review application filed by Shalini Ahuja with respect to property bearing no. A-53, New Friends Colony, New Delhi, whereas Ld. Recovery Officer, vide order dated 07.10.2017, had withdrawn the attachment order with respect to said property, which was also attached along with the property-in-question i.e. B-14, Friends Colony (West), New Delhi vide order dated 05.02.2016. Admittedly, on behalf of respondent bank, no such application for attachment of the property-in-question was filed. Rather, the application was filed with respect to property bearing no. L-4/22, DLF City Phase-II, Gurgaon. Further, Ld. Recovery Officer passed speaking order dated 03.04.2016, vide which, the properties being B-14, Friends Colony (West), New Delhi - 110 065 as well as A-53, New Friends Colony, New Delhi were ordered not to be attached, Sd- Shalini accordingly, the said properties were released. The said order was never challenged on behalf of respondent bank. Vide subsequent order dated 07.10.2017, Ld. Recovery Officer pleased to withdraw the attachment with respect to property bearing no. A-53, New Friends Colony, New Delhi, which was attached vide order dated 05.02.2016, therefore, taking note of the said fact that earlier order has been reviewed by Ld. Recovery Officer vide order dated 07.10.2017, the appellants herein fairly keeping in mind that aspect preferred to file review applications before Ld. Recovery Officer, which were ultimately dismissed vide order dated 20.05.2019.

30. Now, the question is whether Section 14 of Limitation Act can be applied to the appeal before this Tribunal or not ? It is being fairly admitted by Ld. Senior counsels for the parties that Section 5 of Limitation Act is not applicable before this Tribunal in view of *judgment of Hon'ble Supreme Court of India in the case of International Assets Reconstruction Company of India Ltd. (supra)*. Now, it is to be seen that whether due diligence and bonafide on the part of appellants herein were there for availing remedy before Ld. Recovery Officer. It is settled preposition of law that the Ld. Recovery Officer cannot review its own order despite that the appellants herein preferred to file review petitions before Ld. Recovery Officer. No doubt, the SA. amino appellants herein might be advised by their Ld. counsels and relying upon the said advise, as with respect to property bearing no. A-53, New Friends Colony, Ld. Recovery Officer reviewed the earlier order dated 21.06.2017 on 07.10.2017, taking into consideration that order of release of property i.e. A-53 in review application, every prudent man would think that it is better to approach to Ld Recovery Officer for review/recalling of order, accordingly, all the earlier appeals were immediately withdrawn by the appellants on 07.03.2018 and they filed review petitions (though, there was delay of approximately 200-days in filing the review petitions before Ld. Recovery Officer). However, of course, the said advise might be on the part of their advocates, accordingly, appellants herein preferred to file review applications before Ld. Recovery Officer, otherwise, they were entitled to pursue their appeals and could seek justice via appeals. Even otherwise, said appeals were filed within the prescribed period of 30-days against the order dated 16.05.2017 and there was no delay in filing the same. Admittedly, the review petitions were disposed off by Ld. Recovery Officer on 20.05.2019 and immediately, the present appeals have been filed on behalf of the appellants on 17.06.2019 i.e. within prescribed period of limitation.

31. Ld. counsel for respondent bank has relied upon the citation i.e. *Aarifaben Yunusbhai Patel and*

Sd - [Signature]

*Ors. (supra)*, but the facts and circumstances appeared in the said citation are not of the same, as appeared in the present appeals, as it is held in the said citation that the execution petitions were not filed within limitation and the proceedings before High Court remained continued and there was no diligence. In the present matter review applications were filed on 05.12.2017 i.e. within two months of order passed by Ld. Recovery Officer on 07.10.2017 qua property bearing no. A-53, New Friends Colony, New Delhi and the earlier appeals no. 30/2017 to 32/2017, which were pending before this Tribunal were withdrawn on 07.03.2018, therefore, the citation is not helpful to the respondent bank. Further, from the bare perusal of the citation referred on behalf of appellants herein in the matter of *P. Sarathi (supra)*, it is held that *any authority or Tribunal having trappings of a court covered and if need not to be civil court*. Similar principle is laid down in the matter of *M.P. Steel Corp. (supra)*, wherein it is held that *Section 14 is applicable and the period excluded in other proceedings, which are bonafide / carried out by the appellants can be counted in entertaining the matters*. It is further held that *Section 14 of limitation is applicable before the authority*. Further, it is also so held in the citation of *Standard Chartered Bank (supra)*. In this regard, the reference can also be made upon the citation *Consolidated Engineering Enterprises (supra)* and in the matter of *Colgate-Palmolive Co. (supra)*. Further, in the citation of *M. P Steel Corporation*

sd. 9/12/18

*(supra)* it is held that *even if Section 5 is not applicable, Section 14 would be applicable to all quasi judicial proceedings.*

32. No doubt, the present appeals have been filed after lapse of 729-days counted from previous order dated 16.05.2017, but the appeals against the review is concerned, that have been within the limitation, however, as discussed above, apparently, the appellants herein were bonafidely and due diligently pursuing the proceeding before Ld. Recovery Officer by way of filing review applications, and there was good faith on the part of appellants herein in pursuing the same, because of the reason that they have withdrawn the appeals after filing the review applications in view of the release of the property no. A-53, New Friends Colony, New Delhi by the Ld. Recovery Officer vide order dated 07.10.2017. Therefore, the appellants bonafidely contested their applications before the Ld. Recovery Officer and immediately after passing the impugned order dated 20.05.2019 on their applications, all these present appeals were filed before this Tribunal without wasting any time.

33. Now, it is the contention of the Ld. counsel for the respondent bank that the court fees has not been paid with respect to the amount due by the appellants herein. To that extent, Ld. counsel for Sd- appellants, conceded during the course of arguments that they will pay the said court fees, as per rules. Even otherwise, under Section 148 of CPC, the said period can be enlarged as the Court-Fees Act was passed not to arm a litigant with a weapon of technicality against his opponent, but to secure revenue for the benefit of the State. This is evident from the character of the Act. It is not inter parties and does not invalidate a decision simply because the plaint or the memorandum of appeal was under-stamped. Therefore, the time period fixed to deposit the court fees even otherwise can be enlarged and court fees can be recovered during the pendency of appeal or at the time of disposal of same, if the same is deficit and merely for that purpose, the parties cannot be allowed to suffer. In this regard, reference can be made on citation i.e. *G. Rite and Co. Vs. Chadrakant Harilal Shah (1971) 73 BOMLR 423 decided on 24 September 1969*. In the present appeals, appropriate court fees has already been paid by the appellants herein as the appellants herein are third party and in view of principle laid down by Hon'ble High Court of Gujrat in the matter of *Madhukant Pranlal Shah Vs. Bank of India AIR 2013 Gujrat 262* wherein it is held that *since the Act does not prescribe any payment of fee so far as appeal filed under Section 30 of the Act is concerned and no power has been given to the Central Government to frame a Rule prescribing such fees, therefore, unless rules are framed, no fees can be charged from the appellant*. Similarly, Hon'ble High Sd/- [Signature]

Court of Delhi in the matter *Shri Bal Kishan Bansal Vs. The Jammu & Kashmir Bank Ltd. and Ors., Writ Petition No. 7205/2007, decided on 25.08.2009*, has held that "we hold that in respect of an appeal under Section 30 against an order passed by the Recovery Officer, no court fee has been stipulated in the DRT Act. Consequently, the rules prescribing the application of such a fee are ultra vires the provisions of the DRT Act and, in particular, Section 30 thereof. Thus, no fees are payable in respect of such appeals". Accordingly, there is no force in the contention raised by Ld. counsel for respondent bank that the appropriate court fees has not been paid by the appellants.

34. In the light of above discussion, this Tribunal is of affirm view that the appellants herein, who were contesting the review applications with due diligence and in good faith, are entitled to exclude the said period spent, as the same was bonafide in nature, hence, all the three appeals are being considered not only against the impugned order dated 20.05.2019 passed on review applications, but earlier order passed on 16.05.2017.

35. Now, before proceeding further, it is worthwhile to mention in this context, that the property-in-question i.e. B-14, Friends Colony (West), New Delhi – 110 065, was initially allotted to sd- [Signature]

Smt. Indrawati Khanna, Sh. Sudhir Khanna and Sh. Ramesh Khanna on 17.05.1980 and it was sold by them to M/s Savitri Engineering Ancillary Pvt. Ltd. on 01.06.1981 by virtue of Agreement to Sell and registered General Power of Attorney. Thereafter, Smt. Indrawati Khanna died on 15.08.1983, M/s Savitri Engineering Ancillary Pvt. Ltd. got the same free-hold after taking GPA dated 12.04.1991 from Praveen Kumar, who inherited the property-in-question after death of Indrawati Khanna, sold the property-in-question to M/s Shruti & Siddarth Constructions through proprietor Sh. Ashwani Khattar by registered Sale Deed dated 23.10.2006. Thereafter, M/s Shruti & Siddarth Constructions demolished the entire structure and built different floors, out of which, Basement & Ground Floor was sold to Mrs. Poonam Sarin; First Floor to Mr. & Mrs. Sanjeev Ahluwalia and Second Floor to Mr. and Mrs. Gurmeet Singh on 05.05.2008, 29.08.2008 and 28.11.2007 respectively, who are appellants herein.

36. Now, first of all, it has to be seen that whether the Ld. Recovery Officer can review its own order dated 03.04.2006 vide which, it was ordered that the property-in-question cannot be attached or not ? Vide order dated 16.05.2017, suo moto exercising the powers, Ld. Recovery Officer passed an order holding that the property-in-question along with M/s Savitri Engineering was purchased by the CDs i.e. Sh. Ved Prakash Ahuja, Sh. Sandeep Ahuja and Sh.

sd- 4/11/17

Sanjeev Ahuja as they diverted the funds from M/s Regal Polymers Ltd. to M/s Savitri Engineering Ancillary Pvt. Ltd. to the tune of Rs. 5,06,607.70 being credited to Sh. Sanjeev Ahuja and Sh. Ved Prakash Ahuja i.e. CD nos. 3 & 4, who were also directors of M/s Savitri Engineering Ancillary Pvt. Ltd. along with Mrs. Bela Ahuja. Thereafter, Smt. Bela Ahuja w/o Sh. Sanjeev Ahuja, one of Director of M/s Savitri Engineering Ancillary Pvt. Ltd., sold the property-in-question to M/s Shruti and Siddharth Constructions.

37. In this context, it is to be mentioned that the OA No. 141/1999 titled as 'Oriental Bank of Commerce Vs. M/s Regal Polymers Ltd. & Ors.' was filed by OBC against M/s Regal Polymers Ltd., Sh. Sandeep Ahuja, Sh. Sanjeev Ahuja and Sh. Ved Prakash Ahuja, who were directors of that company, also stood as guarantors and it is the case of the appellants that M/s Savitri Engineering Ancillary Pvt. Ltd. did not furnish any guarantee nor created any mortgage over the property-in-question i.e. B-14, Friends Colony (West), New Delhi-110 065. Ultimately, the OA No. 141/1999 was decreed for a sum of Rs. 4,02,30,299.53 along with interest @ 18.88% p.a. as the final order was passed on 29.08.2001 and the TRC No. 117/2002 was issued. Thereafter, Ld. Recovery Officer passed an order thereby directing the CDs to file sources of funds for incorporation of M/s Srishti Auto Engineering Pvt.

Sd- 9/11/2002

Ltd. and M/s Savitri Engineering Ancillary Pvt. Ltd. and the sources of funds for purchasing the property-in-question i.e. B-14, Friends Colony (West) as well as A-53, New Friends Colony. Accordingly, on 30.01.2006, the CDs filed affidavit in compliance of order dated 04.01.2006 inter-alia disclosing all the funds for purchasing of both the properties including copies of Conveyance Deed, Power of Attorney, WILL, Indemnity as well as Income Tax Returns from 1987 onwards of Smt. Ramesh Ahuja, Smt. Shalini Ahuja and Smt. Bela Ahuja. On the basis of Power of Attorney, M/s Savitri Engineering Ancillary Pvt. Ltd. was holding leasehold, which was got free-hold through Sh. Sanjeev Ahuja / CD no. 3. Admittedly, the shareholders of the company were Smt. Ramesh Ahuja, Smt. Shalini Ahuja and Smt. Bela Ahuja. Admittedly, the property-in-question was belonging to Indrawati Khanna, who executed WILL and GPA dated 01.06.1981 in favour of M/s Savitri Engineering Pvt. Ltd. Later on, she died on 15.08.1983 and Parveen Kumar, inherited the said property, accordingly, executed GPA dated 12.04.1991, in favour of Sh. Sandeep Ahuja and Sh. Sanjeev Ahuja both sons of Sh. Ved Parkash Ahuja in respect of property-in-question. On the basis of the said GPA, the property-in-question was got free-hold from DDA on 11.10.2006, by M/s Savitri Engineering Ancillary Pvt. Ltd., through Director Sh. Sanjeev Ahuja i.e. CD no. 3.

sd- almw

38. No doubt, after issuance of the RC, the Ld. Recovery Officer sent a demand notice under Rule 2 of IIInd Schedule of Income Tax Act on 19.11.2001 and service report was filed on 12.02.2002. Thereafter, Ld. Recovery Officer, after going through two affidavits and the relevant documents filed by the CDs on 30.01.2006, passed order dated 03.04.2006, thereby released both the properties from attachment. Admittedly, the said order was never challenged on behalf of the bank. Now, the arguments on behalf of Ld. counsel for respondent bank is that the Ld. Recovery Officer while passing the order dated 03.04.2006 raised some doubt about siphoning of funds. The relevant para of order dated 03.04.2006 is as under :- *"The properties are owned by the spouses of CDs. They are not certificate debtors in this case. Although some doubts can be raised for siphoning of money from M/s Regal Polymers Pvt. Ltd. CD no. 1 to form new company and purchasing of immovable properties. But there is no strict proof of siphoning of money from the sources of M/s Regal Polymers Pvt. Ltd. (CD no. 1). The properties of other persons cannot be attached unless there is definite proof that the properties are owned by the CDs.*

*O.L. was appointed by the order of Hon'ble Delhi High Court, Delhi to take over the possession of the assets of CD no. 1. O.L. has already taken the possession of the same and status report filed by O.L. is available on record. **Hence, the prayer of CH Bank for attachment of properties owned by the spouses of CDs is not allowed.**"*

39. From the above said order, it is apparent that while passing the order dated 03.04.2006, it is Sd/- A/10/11

specifically held that 'the prayer of CH bank for attachment of properties owned by the spouses of the CDs is not allowed'. Therefore, it is apparent that the property-in-question was not attached in view of the order dated 03.04.2006 and the said order was never challenged on behalf of the bank. Even, no request was ever made that the property-in-question should be kept attached and they are verifying the details. Though, the duty was also casted upon the Recovery Officer to call upon the record pertaining to the statement of accounts etc. from both the companies, however, the same was never called upon, hence, merely saying that some doubts were raised regarding siphoning of funds does not mean that the said order did not attain finality.

40. In this context, Ld. counsel for appellants herein relied upon the citation in the case of *C/N Paramasivam (supra)*, it is held that the Recovery Officer does not have jurisdiction to review its own order. Though, as discussed above, the appellants also filed review applications before Ld. Recovery Officer and there was also delay in filing the same, but said jurisdiction was exercised on behalf of appellants herein due to the reason that vide order dated 07.10.2017, after attachment of A-53 property on 21.06.2017 was reviewed/recalled by Ld. Recovery Officer. Hence, merely on the basis that the Ld. counsel for appellants raised the question in Sd- A.W.

earlier appeal that the Recovery Officer does not have jurisdiction to review its own order and even then they have availed the same remedy, but it does not mean that they could not bona fide contested the review applications that too once Ld. Recovery Officer passed favorable order on those applications thereby releasing the property i.e. A-53, New Friends Colony, New Delhi. Further, *Hon'ble Supreme Court of India in the case of C.N Paramasivam (supra)* has clearly laid down that the Ld. Recovery Officer has no jurisdiction to review its own order, then of course, the order dated 16.05.2017, vide which, the order dated 03.04.2006 stands reviewed, is without jurisdiction. Though, vide earlier order dated 05.02.2016, Ld. Recovery Officer attached both the properties i.e. property-in-question and property bearing no. A-53 and sale proclamation was issued on 03.08.2017. Whereas, on objections filed on behalf of present appellants on 01.08.2016, the impugned order was passed on 16.05.2017, whereby the same were dismissed stating that there was siphoning of funds, whereas, the order dated 03.04.2006 remained un-challenged for about 10-years. Even, prior to that number of opportunities were given to the respondent bank till 2015 to file the details.

41. Further, the said powers were also exercised by Ld. Recovery Officer suo moto, as no application was moved on behalf of respondent bank qua Sd- A/Inw attachment of property-in-question i.e. B-14, Friends Colony (West) New Delhi and an application for attachment was only for property situated at L-4/22, DLF City Phase-II, Gurgaon. No doubt, the property situated at Gurgaon was also attached by the Ld. Recovery Officer on 03.06.2015 and on 31.07.2015, Smt. Bela Ahuja and Smt. Shalini Ahuja filed the objections qua property situated at Gurgaon and the same were also allowed by Ld. Recovery Officer vide order dated 11.01.2016 and the said property was released from attachment by recording that there was no evidence of siphoning or diversion of funds.

42. Subsequently, Ld. Recovery Officer, vide order dated 10.12.2019 in RC No. 12/2002 (BOI Vs. Regal Polymers) again released the property-in-question i.e. B-14, Friends Colony (West), New Delhi, on the objections filed by Smt. Poonam Sareen, Sh. Sanjeev Singh Ahluwalia and Sh. Gurmeet Singh, present appellants. The question before this Tribunal is now only to the extent whether the Recovery Officer can review its own order. In view of settled principle of law laid down by Hon'ble Supreme Court of India, Ld. Recovery Officer does not have jurisdiction to review his own order. Even, Hon'ble High Court of Delhi in the case of *Padam Singhee (supra)*, it is held that *Tribunal/DRAT does not have inherent powers and Power of Tribunal / DRAT require to function within statutory parameters.*

sd.

Similar, preposition has been laid down in the matter of *Bhangoo and Company (supra)*. Further, reliance can also be placed on citation i.e. *Deepak Agro Foods (supra)*, wherein, it is held that *where an authority making order lacks inherent jurisdiction such order would be without jurisdiction, null, non est, void and incapable of being cured, whereas an order passed in exercise of jurisdiction in wrongful manner is illegal and capable of being cured in legal proceedings*. Therefore, in view of settled principle of law, it is apparent that the order dated 16.05.2017 passed by Ld. Recovery Officer was beyond jurisdiction, as Ld. Recovery Officer was not entitled to exercise "suo moto powers" to review its own order.

43. Apart that, the present appellants purchased the property-in-question vide respective Sale Deeds dated 05.05.2008, 29.08.2008 and 28.11.2007 and on those dates, no such order of attachment was in existence. Though, it is being contended by Ld. counsel for respondent bank that by virtue of Rule 51 of 2^nd Schedule of Income Tax Act, the property-in-question is deemed to be attached, but vide order dated 03.04.2006, Ld. Recovery Officer passed specific order that the property cannot be attached, then it is apparent that no attachment order was in existence on the said dates, therefore, the present appellants are also bonafide purchasers of the same, as the property-in-question could not be deemed to SL- 9/12/17

be attached merely by Rule 51 of 2^nd Schedule of Income Tax Act, once the order dated 03.04.2006 was specifically passed that the property cannot be attached and the same remained unchallenged for about 10-years.

44. In sequel of abovesaid discussion, this Tribunal is of affirm view that present appellants are entitled to exclude the time spent bonafidely and due diligently in pursuing review petition before Ld. Recovery Officer and Hon'ble High Court under Section 14 of Limitation Act and thereby, after excluding the said period, the present appeals are within limitation. Further, it is also held that the appellants herein are bonafide purchasers of the property-in-question as on the date of purchasing the same i.e. 05.05.2008, 29.08.2008 and 28.11.2007, no such attachment order was there in existence as the Ld. Recovery Officer was not entitled to exercise "suo moto powers" to review its own order dated 03.04.2006 by virtue of order dated 05.02.2016, though the review applications (for modification / recall of order dated 05.02.2016, 08.07.2016 and 16.05.2017) were rightly dismissed vide order dated 20.05.2019, to the extent that the same are not being maintainable.

45. Accordingly, it is held that the impugned order dated 16.05.2017 suffers from illegality and Sd/- perversity, accordingly, the same is hereby set aside. Resultantly, all the appeals stand allowed, with no order to costs.

Further, it is also directed that the appellants herein will not dispose off the property-in-question in any manner and also shall not change the nature of the same till the expiry of the period of limitation for filing an appeal before Hon'ble Higher authorities and in case of appeal, the same shall be subject to the order of Hon'ble Higher authorities.

A copy of order be placed in connected appeals as well.

Files be consigned to records.

Sd-

(DHARMINDER SINGH) PRESIDING OFFICER DRT-III, DELHI

Dated: 09.12.2020

AB