Raiskhan Firozkhan Pathan vs Recovery Officer DRT II on 14 September 2023

**JUDGMENT**

1. 1. This judgment will decide the above captioned appeals.

2. 2. Both the appeals are preferred against the common impugned order dated 6.01.2023 passed by the respondent No.1-Recovery Officer.

3. 3. As the facts, circumstances and the relief /prayer sought in both the appeals are common, they are being decided together by this common judgment.

4. 4. Appeal No. 4 of 2023 has been preferred by the applicant bank against the order dated 06.01.2023 passed by the respondent No.1-Recovery Officer in Recovery proceedings No.388 to 391 of 2018, whereby the respondent No.1-Recovery Officer has allowed the interlocutory applications being IA No.480 to 482 of 2022 preferred by the thirty party i.e. respondent Nos.2 to 4 and also allowing IA Nos.483 of 2022 preferred by legal heirs of respondent No.7 i.e. respondent Nos.7(A) to 7(C).

1. 5. For the sake of convenience and clarity, the facts and circumstances of appeal No. 9 are being dealt by me in detail for disposal by common judgment.

2. 6. Appeal No.9 has been preferred by the appellants (auction purchaser), pursuant to the directions given in CAV judgment dated 05.06.2023 by the Hon'ble Gujarat High Court in writ petition being Special Civil Application No.2575 of 2023, wherein the appellants prayed for declaration of the public auction dated 06.12.2022 undertaken by the Respondent No.2 Bank as legal and valid and also prayed for issuance of sale certificate in favour of the appellants herein. In the aforesaid CAV judgment, the Hon'ble Gujarat High Court has observed as under:

"13. No doubt the submissions made by the learned counsel appearing for the petitioners are on facts attractive, but then extraordinary jurisdiction has its own self imposed limitations and these factual matrix which are posted before us by way of written arguments can well be agitated before the appellate forum and as such, we are of the opinion that these facts which are tried to be canvassed by the petitioners can be examined in detailed in appeal proceedings and as such, we desist ourselves from expressing any opinion on merits with regard to any of the contentions except on this issue of entertainability of petition in view of statutory appeal available to the petitioners. Hence, on this short ground, we deem it proper to dismiss the petition and we observe that if the appeal would be filed by the petitioners, if so desired, within a period of two weeks from today, the said appeal shall be heard and decided on merits in accordance with law on the basis of the material on record.

1. 14. In view of the fact that since auction proceedings are of December, 2022, and in view of the circumstances which are prevailing on record, we request the appellate authority to expedite the proceedings of appeal if filed within the aforesaid period, as early as possible, preferably within a period of three (3) months from the date of filing of appeal and we observe while parting with the present order that since we are not entertaining this petition on the ground of alternate remedy being available, the authority may not be influenced by the mere disposal of the present petition and shall decide the proceedings independently in accordance with law."

In view of the aforesaid observations by the Hon'ble Gujarat High Court, the appellants have preferred the present appeal before me to decide the matter.

6.1 It is the case of the appellants that the Respondent Nos. 6 to 9 are the original borrowers of respondent No. 2- Bank. On account of non-payment of dues, recovery proceedings were initiated by respondent No.2 Bank by filing Original Application Nos. 114, 115, 116 and 117 of 2014 before this Tribunal for recovering the outstanding amount.

6.2 On the aforesaid Original Applications, an order came to be passed by this Tribunal on 28.03.2014, followed by a final order dated 29.6.2018, in which it was observed that the decretal amount, if not paid, shall be recovered from the properties as described in the schedule annexed to the Original Applications. Since there was no repayment made by respondent Nos. 6 to 9, respondent No.2 Bank initiated process of recovery in furtherance of the Recovery Certificate issued by this Tribunal.

6.3 In the said proceedings, notice u/s 25(a) of the Recovery of Debts Due to Banks and Financial Institutions, Act, 1993 ('**RDBD Act**' for short), came to be issued on the respondents No.6 to 9 calling upon the parties as to why properties in question should not be ordered to be attached and sold in order to recover the outstanding dues and since at the relevant point of time, there was no objection, proceedings were ordered to be completed.

6.4 As a result of this, notice in Form No. 53 came to be issued on 10.08.2021 for settling the terms of proclamation of sale properties in question and thereby vide order dated 09.09.2022 as well as 10.10.2022 Form No. 29 was ordered to be issued to join the legal heirs of respondent No.8 .The matter was adjourned to 14.10.2022 and after perusing necessary particulars, respondent No.1-Recovery Officer issued auction sale notice for the properties in question and by way of such notice, auction was fixed on 06.12.2022 by fixing reserve price at Rs.5.50 crores.

6.5 In the auction sale dated 06.12.2022, the appellants in appeal No.9 of 2023 found to be the highest bidder and upon acceptance of their bid in principal, an amount of Rs.6.82 crores was deposited in its entirety before respondent No.1-Recovery Officer on 17.12.2022, pursuant to which the appellants requested the respondent No.2-Bank to issue sale certificate in favour of the petitioners and to hand over physical possession of the properties in question.

6.6 In the meantime, the respondent Nos.3 to 5 herein, preferred interlocutory applications being Interlocutory Applications No. 484 to 487 of 2022 seeking cancellation of auction proceedings which took place on 06.12.2022. Since respondent No. 8 passed away during the pendency of the proceedings, his legal heirs also filed another interlocutory application being Interlocutory Application No.483 of 2002 objecting to the auction sale on the ground that they have not been served the notice of Form No.29 before issuing auction sale on 4.10.2022 as Form No.29 is dated 10.10.2022.

6.7 The respondent No.2-bank filed its reply to the interlocutory applications before the recovery Officer.

6.8 However, the respondent No.1-Recovery Officer allowed the interlocutory applications filed by the respondent No.3 to 5 & 8.1 to 8.3, thereby cancelling the auction sale held on 06.12.2022 and directed to refund the amount of Rs.6.82 crores along with accrued interest to the appellants without giving any opportunity of hearing to the appellants herein.

6.9 In view of the aforesaid circumstances and upon direction by the Hon'ble Gujarat High Court and being aggrieved by /

the said order passed by the respondent No.1-Recovery Officer, the present appeal came to be filed on 16.06.2023, within the time limit as directed by the Hon'ble High Court, for my consideration as appellate forum on various grounds stated therein.

6.10 In the said appeal, it is mainly prayed that the appeal preferred by the appellants against the order dated 06.01.2023 passed by the respondent No.1-Recovery Officer in Recovery proceedings No.388 to 391 of 2018 be quashed and set aside and also to declare the public auction dated 06.12.2022 undertaken by the respondent No.2 bank as legal and valid and also to issue sale certificate in favour of the appellants.

6.11 In the appeal, it is submitted by the appellants that the order under challenge passed by the respondent No.1-Recovery Officer is in gross violation of principles of natural justice and without giving any opportunity of hearing to the present appellants since the appellants are being affected parties in the said proceedings.

6.12 It is also submitted by the appellants that in spite of having been declared as highest bidder and even after making payment of bid amount, the respondent No.1-Recovery Officer cancelled the auction sale. It is further submitted that the respondent No.1 grossly erred in passing the impugned order, in as much as, the aspect relating to the attachment of the property in question and the sale thereof in terms of Section 25(a) of the RDDB Act, have attained finality. It is further contended that the order passed by the Respondent No.1 has not been challenged by any of the respondents herein and in absence of any challenge to such orders, the respondent No.1 was not having any jurisdiction to set aside the attachment on the land in question as well as auction sale.

6.13 Appellants have placed on record Annexure K (Revenue entry Nos.11446, 11448 and 11449) at page No. 130-133 and submitted that Respondents No. 3 to 5 have relinquished their respective shares in the property in question by executing a release deed dated 16.09.2014 before the Sub-Registrar in favour of their brothers being respondent Nos.6 to 8.3 herein, who are the original borrowers of the respondent No.2-bank and therefore, they do not have any right, title and interest in the property in question.

6.14 It was contended by the appellants in the written arguments that the learned Recovery Officer failed to appreciate that without challenging the order of attachment dated 20.11.2020, as well as, orders dated 10.10.2022 and 14.10.2022 putting the property in question on sale, u/s 30 of the RDDB Act, the Respondent Nos.3 to 5 as well as the legal heirs of deceased respondent /

No.8 could not have filed the interlocutory applications questioning the attachment and sale of the property in question before the learned Recovery Officer and that too, at the stage of auction.

6.15 It is also submitted by the appellants that as per Section 29 of the RDDB Act r/w Rule 60 & 61 of the Second Schedule to the Income Tax Act, 1961, the respondent No.1-Recovery Officer was to only check and ascertain as to whether there is any material irregularity in publishing or conducting the sale. However, in the present case, the respondent No.1-Recovery Officer has held that the attachment of the property in question was bad in law and hence the same amounts to material irregularity.

6.16 It is further submitted that in the impugned order, the respondent No.1-Recovery Officer has erroneously recorded the name of one Smt. Femidaben as the applicant of the aforesaid interlocutory applications. On the contrary, Smt. Femidaben has not raised any dispute before the respondent No.1-Recovery Officer by filing any application and was not even an applicant in the aforesaid applications. It is further submitted that the said interlocutory applications were filed by respondents Nos.3 to 5 herein only, who, as aforesaid, have relinquished their respective rights in favour of the respondent Nos.6 to 8 herein.

6.17 It is further stated in the appeal that as per the revenue entry No.10406 dated 21.12.2012, there was an attachment of the property in question in favour of respondent No.2-bank's Muglisara branch, which was not challenged by anyone in the legal proceedings and therefore, the respondent No.1-Recovery Officer ought not to have set aside the auction proceedings.

6.18 Further, the appellants have placed on record the following judgments by way of compilation of judgments on 01.09.2023:

- (i) Judgment in the case of:

- (a) Shri Radhey Shyam vs. Shyam Behari Singh reported in (1970) 2 SCC 405.

- (b) In case of Desh Bandhu Gupta vs. N. L. Anand reported in (1994) 1 SCC 131.

- (c) Jespar I. Slong vs. State of Meghalaya reported in (2004) 11 SCC 485.

- (d) Adani Gas Limited vs. Petroleum and Natural Gas Regulatory Board reported in (2020) 4 SCC 529.

- (e) T. K. Ravikumar vs. Punjab National Bank reported in 2019 SCC Online Ker 1103.

- (f) T. K. Ravikumar vs. Punjab National Bank - order dated 16.08.2019 passed in SLP (C) No.19136 of 2019.

- (g) Subhash Chand vs. State of Haryana reported in 2007 SCC Online P&H 627.

- (h) Sadashiv Prashad Singh vs. Harendar Singh reported in (2015) 5 SCC 574.

(i) S. Bhaskaran vs. Sebastian reported in (2019) 9 SCC 161.

6.19 Per contra, the respondent Nos.3 to 5 filed its affidavit-in-reply on 24.07.2023 opposing the maintainability of the appeal and also opposed the prayer with regard to declaration of public auction dated 06.12.2022 undertaken by respondent No.2-bank as valid and legal on various grounds stated therein.

6.20 In the affidavit-in-reply, the respondent Nos.3 to 5 denied all the averments, statements and submissions made in the appeal. In addition thereto, the respondent Nos.3 to 5 relied on the order passed by the Hon'ble Gujarat High Court in SCA No.4600 of 2002 in the case of Jadeja Jitendrasinh Chandrasinh v/s. Tax Recovery Officer Range 3 & 2, wherein it has been held by the Hon'ble Court that:

"22. From the above rule position, it can be seen that proclamation of sale and holding a public auction are only the initial steps towards sale of immovable property of a tax defaulter to recover such amount through sale of his properties. The highest bidder, whose offer is accepted, during such public action, has the responsibility to deposit 25% of the purchase money on spot, failing which, the acceptance of offer stands revoked. However, before the sale can be confirmed in favour of the highest bidder, several steps are to be completed and intervening factors to be taken into account. For example within fifteen days from the date of public auction, the purchaser has to pay remaining 75% of the amount. Even then the sale is subject to confirmation and the tax defaulter, at various stages, has right either to intervene, pay off the tax or question the very proclamation. For example, under Rule 60, he can apply to set aside the sale of immovable property upon deposit of the amount of tax dues, of course before the confirmation of sale. He also has a right to question any order that the Tax Recovery Officer may have passed under the schedule. Rule 86(1) provides for a statutory appeal against any such order before the Chief Commissioner or the Commissioner. Sub-rule (3) empowers the appellate authority, pending its final decision in appeal, to stay the execution of the certificate.

24. Even this Court, in order dated 11.12.2009 passed in Misc. Civil Application No. 2593 of 2009, came to some what similar conclusion. We may recall that such Misc. Civil Application which was filed by a successful auction bidder who desired that the sale proclamation which was set aside by the High Court on a petition by the tax defaulter (in the said case also who happened to be present respondent no.3) be recalled since such order was passed without hearing him. In that context, the Court observed as under:

"7. Furthermore, it is an accepted position that the applicants are merely highest bidders at the auction sale conducted by the Income Tax Department. Thus, in law, till the point of time the sale is confirmed and sale certificate issued in favour of the applicants by Income Tax Department the applicants would merely be offerers whose offer may or may not be accepted by Income Tax Department. In the circumstances, it is not possible to accept the contention that the applicants are persons who are directly affected by the outcome of the dispute between the tax defaulter, whose property is put up for auction sale, and the Income Tax Department."

6.21 The respondent Nos.3 to 5 also relied on the judgment rendered by the Hon'ble Supreme Court in the case of *Desh Bandhu Gupta v/s. N. L. Anand & Rajinder Singh* reported in (1994) 1 SCC 131, wherein it is held that:

"The application to set aside the execution sale is primarily against the decree-holder since he is a person at whose instance and benefit the execution proceedings were initiated and the sale was held to discharge his decree debt. Therefore, primarily he is the person entitled to be heard and since he is in-charge of publishing the notices and to conduct the sale, it is he that lays before the court the steps taken or the procedure followed in service of notice or conducting the sale and to establish that they have been done properly, regularly and in accordance with the law. The auction-purchaser gets a right only on confirmation of sale and till then his right is nebulous and has only right to consideration for confirmation of sale. If the sale is set aside, apart from the auction-purchaser, the decree-holder is affected since the realisation of his decree debt is put off and he would be obligated to initiate execution proceedings afresh to recover the decree debt. Therefore, in the proceedings under Section 47 or Order 21 Rule 90, the decree-holder is the affected necessary party. Though the auction-purchasers need to be impleaded eo nomine as respondent as the property was purchased jointly at the court sale, it is enough that one among them had been impleaded as a party. It is not necessary to implead all the joint purchasers."

6.22 It is further contended by the respondent Nos.3 to 5 that the applicants being the auction purchasers get a right only on confirmation of sale and till then their right is nebulous and hence they cannot question the legality and validity of the order passed by the respondent No.1-Recovery Officer. It is further averred that the contentions of applicants regarding violation of natural justice and jurisdiction of the respondent No.1-Recovery Officer is not tenable as the applicants have no locus standi till confirmation of sale and issuance of sale certificate in their favour. It is further submitted that as observed in the aforesaid judgment by the Hon'ble Gujarat High Court and the Hon'ble Supreme Court when the appellants being the auction purchasers have no right till confirmation of sale, there is no irregularity in not issuing notice or not providing opportunity to the appellants by the respondent No.1-Recovery Officer.

6.23 It is further stated by the respondent Nos.3 to 5 that the respondent Nos.5 to 7 and their father have obtained the loan facility from UCO Bank, Muglisara Branch, Surat and the charge against the agricultural property which was in their names was executed for the recovery of the amount of Rs.9,00,00,000/- on 21.12.2012. The share in the said property, i.e. Block No.2, admeasuring about 9 acre 6 gunthas at Olpad, Surat, of the respondent Nos.3 to 5 and their father is:

- (i) 25% share for father of the respondent Nos.5 to 7

- (ii) 25% share for respondent No.5.

- (iii) 25% share for respondent No.6

- (iv) 25% share for respondent No.7

It is stated that the aforesaid charge of Rs.9,00,00,000/- as claimed by the respondent No.2-bank is qua other account with UCO Bank Muglisara Branch and the same has no relation with the present proceedings and the /

respondent No.2 bank has made false averments claiming charge upon the said properties.

6.24 It is further stated by the respondent Nos.3 to 5 that the father of the respondent Nos.3 to 5 was nowhere involved in the impugned proceedings, neither had he obtained loan nor he was part of the loan transactions qua the impugned proceedings and therefore, the observations and order passed by the respondent No.1-Recovery Officer sans substance. It is further contended that the respondent No.2-bank has played fraud and obtained injunction order dated 28.03.2014 against the properties in question by claiming charge upon the said properties though the charge is never created qua the loan transactions of the proceedings. In this regard, the respondent Nos.3 to 5 relied on a judgment in the case of S.P. Chengalvaraya Naidu (Dead) by Lrs. Vs. Jagannath (Dead) by Lrs. & Ors. Reported in (1994) 1 SCC 1.

6.25 The respondent Nos.3 to 5 further placed on record the judgment in the case of State of Karnataka and Anr. Vs. K.C. Subramanya & Ors. reported in (2014) 13 SCC 468.

6.26 In the written submissions filed on behalf of the respondent Nos.6, 7 & 9 on 08.09.2023, few submissions made therein are the same as submitted on behalf of the respondent Nos.3 to 5 in its affidavit-in-reply that the appellants have no locus standi in the entire dispute and cannot question the legality and validity of the order passed by the respondent No.1-Recovery Officer.

6.27 In addition thereto, the respondent Nos.6,7 & 9 have relied on a judgment in the case of Chairman-cum-Managing Director, Coal India Limited vs. Ananta Saha & Ors. Repoted in (2011) 5 SCC 142, wherein it is observed by the Hon'ble Supreme Court that:

"It is a settled legal proposition that if initial action is not in consonance with law, subsequent proceedings would not sanctify the same. In such a fact situation, the legal maxim *sublato fundamento cadit opus* is applicable, meaning thereby, in case a foundation is removed, the superstructure falls."

6.28 The respondent Nos.6,7 & 9 have also relied on another judgment in the case of Hill Properties Ltd. Vs. Union Bank of India, wherein, the Hon'ble Bombay High Court has observed that:

"3. We may firstly refer to the judgment in Keshrimal J. Shah ... .. The original application was decreed ex-parte and in consequence thereof, a recovery certificate was issued by the Tribunal. The bank had earlier obtained a temporary injunction restraining the original defendant from alienating or transferring the immovable property. In spite of the injunction, the respondent No.2 therein transferred the rights in favour of the petitioner No.2 therein which document was registered on 29^th August, 2000. It was the case of the petitioners that on coming to know on 8^th October, 2000 that the property was put up for auction by Recovery Officer, DRT-II, Mumbai, they moved an application for intervention which was heard by the Recovery Officer and rejected. An appeal was preferred which was dismissed. The petitioners preferred Misc. Appeal before the Debt Recovery Appellate Tribunal (DRAT). That appeal was dismissed. Against the said order, a writ petition came to be filed before this Court. The learned Judge took a view that the transfer was void being in contravention of the order of injunction dated 6^th March, 1998 and also that the petitioners had failed to substantiate by proof, that they are bona fide purchasers without notice. This order was challenged before the Appellate Bench of this Court. This Court framed two questions for consideration, which were:

"(i) Is transfer of an immovable property in contravention of a prohibitory or injunction order of a Court illegal or void;

(ii) Whether and to what extent, the procedure under Rule 11 of Second Schedule to Income Tax Act, 1961 is applicable in execution of a recovery certificate issued under section 19(7) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (fir short RDB Act)".

1. The learned Bench answered the 1^st question in the affirmative and thereafter went on to proceed to answer the second question. In answering the second question, this is what the learned Bench observed:- "The Parliament does not make it mandatory nor compulsory for the Recovery Officer to apply the Second and Third Schedule of I.T. Act and 1962 Rules, advisedly because the Legislature has provided safeguards after investigation of claims and obligations by Recovery Officer. This investigation can be challenged in appeal under Section 30 the Act, which has been substituted with effect from 17^th January, 2000. Even proceedings in such appeal are not final because section 20 of R.D.B. Act provides for a further appeal by person aggrieved against any order made or deemed to have been made by a Tribunal under R.D.B Act. Such an appeal lies to the Debt Recovery Appellate Tribunal. To compel banks or financial institutions to either institute or defend proceedings after all this before a Civil Court is defeating and frustrating the Legislative Intent completely.

Investigation and adjudication cannot be endless. That apart, the remedy to approach this Court in appropriate cases by invoking its jurisdiction under Articles 226 and 227 of the Constitution of India is always available. Hence, question No.2 is answered in these terms that it is not obligatory to apply second and third Schedule of I.T. Act and 1948 Rules while investigating a claim or objection to attachment and sale during the course of execution of recovery certificate under R.D.B. Act."

6.29 Further, the respondent Nos.8.1 to 8.3 have also filed their written objections, wherein it has been stated that the appeal filed by the Auction Purchaser is not maintainable as held by the Hon'ble Supreme Court in *Desh Bandhu Gupta (supra)*. It is stated that the Respondent No.1 has issued Notice of Form No.2 and prior to completion of 15 days of Form No.29 Notice, the respondent No.2 has illegally declared the auction on 14.10.2022 without having the service proof on record.

6.30 The respondent No.8.1, 8.2 and 8.3 have also placed on record the following two judgments:

- (i) *Jadeja Jitendrasinh Chandrasinh vs. Tax Recovery Officer Range 3 & 2* reported in 2012 SCC Online Guj 4975; and

- (ii) *Gopal Krushna Panda alias Gopal Krishna Panda vs. Manager, Utkal Grameen Bank & Anr.* Reported in 2019 SCC Online Ori 34 : (2019) 196 AIC (Sum 17) 7.

6.31 Respondent No.2 Bank has not filed any reply in the present Appeal no. 9/2023. It has filed a separate appeal No 4/2023 which is being decided by this common judgment.

7. I have carefully perused all the documents placed on the record of the proceedings and also heard Ld. Counsels for the parties. Upon conclusion of the arguments and /

tendering the written submissions by the learned Advocates, the following aspects emerged:

1. 7.1 It is emerged from the record that as per the final order dated 29.06.2018 passed by this Tribunal, the respondent No.1 recovery officer initiated recovery proceedings through auction sale as provided in the RDDB Act. In the auction sale held on 06.12.2022, the bid of the appellants which was found highest, came to be accepted and therefore, the bid amount was deposited by the appellants on 17.12.2022 in entirety before the respondent No.1-Recovery Officer / bank.

2. 7.2 It is also emerged from the record that thereafter, the respondent Nos.3 to 5 filed interlocutory applications before the Recovery officer seeking cancellation of auction proceedings

3. 7.3 It is also emerged from record that Respondent No. 3 to 5 have executed a release deed dated 16.09.2014 before the Sub-Registrar relinquishing their respective shares in the property in favour of their brothers being respondent Nos.6 to 8.3 herein, who are the original borrowers of the respondent No.2-bank.

4. 7.4 It is also emerged that the respondent Nos.3 to 5 have deliberately suppressed the aforesaid fact of relinquishing /

their respective shares in the property before the respondent No.1-Recovery Officer.

7.5 It is worth noting that respondent No.1-Recovery Officer has observed that the names of respondent Nos.3 to 5 are reflecting in revenue records and therefore they have right, title and interest in the property in question. On the contrary, it has been argued that no such revenue record has even been placed on the record by the said respondent Nos.3 to 5. Hence, the observations made by the respondent No.1-Recovery Officer are factually incorrect.

7.6 In addition to the above, it is further observed from the record that in the present proceedings, none of the parties have challenged the order of attachment or order of putting the property on sale before this Tribunal or any other fora and therefore, the respondent No.1-Recovery Officer should have rejected the objection raised by the respondents Nos.3 to 5 by way of interlocutory application.

7.7 It is also emerged from the record that the order dated 14.10.2022 is in substantial compliance of the provisions of the Act, in as much as on 10.10.2022, the advocate on behalf of the legal heirs i.e. respondent No.8.1 to 8.3 ensured the learned Recovery Officer that "he will file vakalatnama on behalf of the legal heirs and consequently, the matter was listed on 14.10.2022, however, no vakalatnama came to be filed as ensured. Thereafter, on

14.10.2022, in presence of the said Advocate appearing on behalf of the legal heirs, necessary order came to be passed. Pertinently, the said order dated 14.10.2022 was also not challenged before this Tribunal u/s 30 of the RDDB Act and hence, the same has attained finality.

7.8 It is also emerged from the record that the respondent Nos.3 to 5 or the legal heirs of respondent no.8 did not take any objection with regard to the order of attachment dated 20.11.2020 and the order of putting the property in question on sale u/s 30 of the RDDB Act. In this regard, it is well settled in the judgment rendered by the Hon'ble Apex Court in the case of Sadashiv Prashad Singh vs. Harendar Singh reported in (2015) 5 SCC 574, wherein it is held that:

*"23. At the time of hearing, we are thinking of remanding the matter to the Recovery Officer to investigate into the objection of Harendar Singh under Rule 11 of the Second Schedule to IT Act, 1961. But considering the delay, such a remand may cause, we have ourselves examined the objections of Harendar Singh and reject the objections for a variety of reasons.*

23.1 ... ..

23.3 ... ..

*23.4. Fourthly, Harendar Singh could not be allowed to raise a challenge to the public auction held on 28.08.2008 because he had not raised any objection to the attachment of the property in question or the proclamations and notices issued in newspapers in connection with the auction thereof.*

23.5. All the facts cumulatively lead to the conclusion that after 26.10.2005, Harender Singh had lost all interest in the property in auction and had therefore, remained a silent spectator to various orders which came to be passed from time to time. He had, therefore, no equitable right in his favour to assail the auction-purchase made by Sadashiv Prasad Sinha on 28.8.2008.

24. For the reasons recorded hereinabove, we are of the view that the impugned order dated 17.5.2010 passed by the High Court allowing Letters Patent Appeal No.844 of 2010 deserves to be set aside. The same is accordingly set aside. The right of the appellant Sadashiv Prasad Sinha in Plot No.2722, Exhibition Road, P.S. Gandhi Maidan, Patna, measuring 1289 sq. ft. is hereby confirmed. In the above view of the matter, while the appeal preferred by Sadashiv Prasad Sinha stands allowed, the one filed by Harender Singh is hereby dismissed."

7.9 In the case of Radhey Shyam (supra), the Hon'ble Apex Court has held as under:

"There can be no doubt that an application under O. XXI, r. 90 to set aside an auction sale concerns the rights of a person declared to be the purchaser.' If the application is allowed, the sale is set aside and the purchaser is deprived of his right to have the sale confirmed. by the Court under r. 92. Such a right is a valuable right, in that, upon such confirmation the sale becomes absolute, and the rights of ownership in the property so sold become vested in him. A decision 'in such a proceeding, therefore, must be said to be one determining the right of the auction purchaser to have the sale confirmed and made absolute and of the judgment-debtor, conferred by r. 90 to have it set aside and a resale ordered...."

7.10 In the case of Desh Bandhu Gupta (supra), the Hon'ble Supreme Court has held that:

"5. .... The application to set aside the execution sale is primarily against the decree-holder since he is a person at whose instance and benefit the execution proceedings were initiated and the sale was held to discharge his decree debt. Therefore, primarily he is the person entitled to be heard and since he is in-charge of publishing the notices and to conduct the sale, it is he that lays before the court the steps taken or the procedure followed in service of notice or conducting the sale and to establish that they have been done properly, regularly and in accordance with the law. The auction-purchaser gets a right only on confirmation of sale and till then his right is nebulous and has only right to consideration for confirmation of sale. If the sale is set aside, apart from the auction-purchaser, the decree-holder is affected since the realisation of his decree debt is put off and he would be obligated to initiate execution proceedings afresh to recover the decree debt. Therefore, in the proceedings under Section 47 or Order 21 Rule 90, the decree-holder is the affected necessary party. Though the auction-purchasers need to be impleaded eo nomine as respondent as the property was purchased jointly at the court sale, it is enough that one among them had been impleaded as a party. It is not necessary to implead all the joint purchasers."

7.11 In the case of T.K. Ravikumar (supra), the Hon'ble Apex Court has held that:

"7. ... I can unhesitatingly hold that the auction purchaser is a necessary party to the proceedings under Order XXI Rule 90 of the Code. The expression "necessary parties to an action" is well-known to law. Necessary parties are parties who ought to have been joined in a legal action and such parties are necessary to the constitution of the suit or proceedings, without whom no decree or order can be passed at all. ... For the above reasons, I affirmatively find that the auction purchaser is a necessary party to the proceedings under Order XXI, Rule 90 of the Code and without his junction, the application is not maintainable..... "

7.12 In the said proceedings, the respondent Nos.8.1 to 8.3 has placed two judgments in the case of Jadeja Jittendrasinh Chandrasinh (supra) and another one being Gopal Krushna Panda alias Gopal Krishna Panda (supra). The judgment of

Gopal Krushna Panda (supra) is on different footing and not applicable to the facts and circumstances of the present case/appeal. Similarly, the judgment of Jadeja Jitendrasinh Chandrasinh is distinguishable from the present case as in Jadeja case, before payment of entire bid amount, the concerned party preferred an appeal before the appellate authority, whereas in the present case, the entire amount was deposited on 17.12.2022 by the auction purchaser (appellants herein) within a period of eleven days of the auction.

7.13 It was contended before the respondent No.1 Recovery Officer by the CH Bank that under Rule 60, it is mandatory to set aside the sale of immovable property on deposit:

**"Rule 60.** (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 the sale, apply to the Tax Recovery Officer to set aside the sale on depositing:

- (a) The amount specified in the proclamation of sale as that for the recovery of which the sale was ordered, with interest thereon ... .. ; and

- (b) For payment to the purchaser, as penalty, as much as equal to five percent of the purchase money, but not less than one rupee.

It is emerged from the record that the respondent No.8 i.e. respondent No.8.1 to 8.3 herein have not deposited any money before filing their objections before the respondent No.1-Recovery Officer. In spite of such being the position, the respondent No.1-Recovery Officer allowed the objections made by the aforesaid respondents, which is contrary to settled law, as mentioned above.

7.14 With regard to Revenue Entries No 11446, 11448 and 11449 produced on record by appellants by which it is proved that Respondent Nos. 3 to 5 had relinquished their rights in favour of their brothers (Respondent Nos. 6 to 8.3), it has been argued by the respondents that no additional evidence can be placed on record in appeal which has not been placed before the Original authority. In this regard, I deem it proper to refer to section 22 of the RDB Act 1993 which is reproduced as under:- **"22 Procedure and powers of the Tribunal and the Appellate Tribunal:**

1. (1) *The Tribunal and the Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure 1908, but shall be guided by the principles of natural justice and, subject to the other provisions of this act and any rules, the Tribunal and the Appellate Tribunal shall have powers to regulate their own procedure including the places at which they shall have their sittings*

2. (2) *The Tribunal and the Appellate Tribunal shall have, for the purposes of discharging their function under this Act, the same powers as are vested in a Civil Court under the Code of Civil Procedure 1908, while trying a suit in respect of the following matters, namely:-*

1. a) *summoning and enforcing the attendance of any person and examining him on oath.*

2. b) *requiring the discovery and production of any documents.*

- *c) receiving evidence on affidavits*

- *d) issuing commissions for the examination of witnesses or documents*

- *e) reviewing its decisions*

- *f) dismissing an application for default or deciding it ex-parte*

- *g) setting aside any order of dismissal of any application for default or any order passed by it ex-parte.*

- *h) any other matter which may be prescribed."*

7.15 In view of the aforesaid discussion, this Tribunal is of the considered view that the revenue entry which proves that the respondents No.3 to 5 had relinquished their rights is an entry in a public document and cannot be disbelieved. None of respondents have denied the execution of the said document. Therefore, for the just adjudication of the case, I take cognizance of the said document and hold that Respondent Nos. 3 to 5 had no locus standi to file the interlocutory applications before the Recovery officer as they had lost all rights, title and interest in the property in consequence of the Relinquishment deed executed by them on 16.09.2014.

7.16 For the reasons mentioned herein above, the order dated 06.01.2023 passed by the respondent No.1-Recovery Officer in Recovery Proceedings Nos.388 to 391 of 2018 cancelling the auction sale process on the basis of the interlocutory application filed by the respondent Nos.3 to 5 is ex-facie illegal and requires to be quashed and set aside.

7.17 Accordingly, I pass the following order:

**ORDER**

- • Both the appeals are allowed.

- • The impugned order dated 06.01.2023 passed by the respondent No.1-Recovery Officer, DRT-II, Ahmedabad to the extent of rejecting the objections filed by CD's in IA No 480/2022, 481/2022 and 482/2022 is confirmed.

- • The order dated 06.01.2023 passed by the respondent No.1-Recovery Officer, DRT-II, Ahmedabad to the extent of allowing the objections raised in:

- a) Interlocutory application No 483/2022; and

- b) Interlocutory Applications No 484/2022, 485/2022, 486/2022 and 487/2022, are hereby quashed and set aside.

- • The order of cancellation of public auction held on 06.12.2022 and further directions thereof in respect of the property in question dated 06.01.2023 passed by the respondent No.1-Recovery Officer, DRT-II, Ahmedabad are hereby set aside.

- • The public auction dated 06.12.2022 undertaken by the respondent No.2-bank is declared as legal and valid. The respondent No.1-Recovery Officer is further directed to confirm the sale of the property in question in favour of the appellants herein and also allow the respondent bank to execute the sale deed in favour of auction purchasers.

- • The Registry of this Tribunal is directed to place this judgment in the record of the appeal No.4 of 2023.

- • The present appeals accordingly stand disposed of with no order as to cost.

- • File be consigned to records.

Pronounced in Open Court on 19^th September, 2023.

(Laxman Madnani) Presiding Officer DRT-II, Ahmedabad.