Mr Yar Mohammed Salimulla Momin others vs Union Bank Of India and ors on 30 September 2026

Final Order

This appeal under Section 30 of the Recovery of Debts and Bankruptcy Act, 1993 (‘RDB Act’) assails the order dated 20.05.2025 passed by the Recovery Officer in Recovery Proceeding No. 110 of 2010. By that order, the Recovery Officer dismissed at the admission stage the Intervener Application at Exhibit-127, read with the Amendment Application at Exhibit-133, by invoking the proviso to Rule 11(1) of the Second Schedule to the Income-tax Act, 1961. The restraint on delivery of possession was withdrawn and the DRT Receiver was directed to deliver possession of the auctioned property to the auction purchaser.

The appellants seek not only reversal of that threshold order, but also cancellation of the sale certificate issued in respect of the auctioned property, inquiry into title and mortgage documents, and protection against dispossession. The appeal must therefore be examined within its statutory confines, whether the order dated 20.05.2025 warrants interference on the material properly forming part of the appellate record.

The subject property is described in the record as Plot Nos. 26 and 27, Survey Nos. 27A, 28A and 30- 5, admeasuring about 1,529 square yards or 1,278.44 square metres, Assbibi Compound, Village Kaneri, Taluka Bhiwandi, District Thane (‘subject property’). The appellants assert rights in identified residential units situated on the subject property.

Facts of the case:

Union Bank of India instituted Original Application No. 301 of 2002. Consent terms were filed on 17 July 2004. Upon Miscellaneous Application No. 77 of 2009, an order was passed on 28 April 2010, followed by a Recovery Certificate for Rs. 38,75,219/- alongwith interest. Recovery Proceeding No.

of was thereafter commenced.

The impugned order records that the subject property was attached in 2019, an attachment warrant was issued on 17.01.2020 at Exhibit-82 and the service affidavit at Exhibit-83 recorded service by newspaper publication and pasting at the property. It further records a valuation report, a notice settling proclamation and a sale proclamation. All except the valuation report were duly served including pasting at the site.

The impugned order records that the public e- auction was conducted on 27.10.2023, the bid of respondent No. 4, Mr. Mohd Shahid Khan, for Rs. 72,50,000/- was accepted, the sale was confirmed on 8.12.2023, and a sale certificate was issued on 8.02.2024 and thereafter registered. These are findings drawn by the Recovery Officer.

The appellant’s case is that they acquired their respective residential units under registered agreements dated 20.11.2003, bearing Registration Nos. 4818/2003, 4816/2003, 4815/2003 and 4817/2003, that they have occupied those units for over two decades, and that they first learnt of the recovery action when the DRT Receiver issued a possession notice dated 16.04.2025 pursuant to an order dated 04.04.2025.

On 29.04.2025 the appellants filed the Intervener Application which was numbered as Exhibit-127 before the Recovery Officer. They thereafter filed the Amendment Application at Exhibit 133. The impugned order shows that both applications were heard together on 20.05.2025. The appellants were represented by learned advocates, the Certificate Holder Bank filed an affidavit in reply at Exhibit 135, and detailed arguments were heard.

The present appeal was instituted on 23.05.2025. By order dated 17.06.2025, I.A. No. 1311 of 2025 was allowed only to the extent of the formal impleadment of the auction purchaser, with all contentions kept open. By order dated 20.06.2025, I.A. No. 1413 of 2025 seeking stay was rejected. That order expressly recorded that the appellants had not produced the copy of the application, along with the documents, filed before the learned Recovery Officer.

On 28.08.2026, the appellants filed I.A. No. 2340 of 2026 seeking to introduce a 1993 agreement concerning Gala No. 5, a Talathi report dated 31.07.2024, a extract and municipal assessment material for the years 1992-93 to 2002- 03, together with fresh pleas. By order dated 08.09.2026, the said application was rejected because it sought to introduce prior events belatedly and the proposed amendment was not necessary for deciding this appeal against the Recovery Officer’s order. Those documents and proposed amendments do not, therefore, form part of the material on which the merits of this appeal can be decided.

Case of the Appellants:

The appellants are bona fide purchasers and long- standing occupants of residential houses on the subject property under registered agreements of 20.11.2003 and have supported their possession by tax receipts, electricity bills, identity documents, sanctioned plans and title-chain documents

That the subject property was not validly mortgaged to the Bank; that it is leasehold property associated with a trust; and that the borrower had no right, title or interest capable of attachment and sale. The Bank is alleged to have failed to conduct proper title due diligence.

That the appellants were neither impleaded nor heard before the attachment and sale, and acquired knowledge only upon the Receiver’s notice dated 16.04.2025. The dismissal of their objection is stated to offend natural justice and Article 300A of the Constitution.

That the Recovery Officer allegedly declined jurisdiction under Section 19(25) of the RDB Act 1993 and allegedly held that the sale order could not be revised, without examining the appellants’ status as bona fide purchasers or the asserted defects in mortgage and sale.

That the order dated 20.05.2025 be set aside; the appellants be permitted to intervene; the sale certificate be declared void ab initio and cancelled; the Bank be directed to produce its mortgage, lease, trust and sale documents; and the appellants be protected against dispossession.

Case of the Respondent Bank:

The said property was attached and the attachment was published and pasted in 2019, subsequent auction notices were also published and pasted at site, no objection was made, the sale was completed, confirmed and certified, and the recovery proceeding had reached the stage of delivery of possession to the auction purchaser.

That the appellants did not challenge the attachment, the auction or the confirmation of sale in time and approached only when possession was to be delivered. Their challenge is said to be an afterthought intended to obstruct execution which had attained finality.

That the impugned order is a threshold order under the proviso to Rule 11(1) of the Second Schedule of the Income Tax Act 1961, and this appeal cannot be enlarged into an original trial of title, mortgage or validity of sale by relying on material which was not before the Recovery Officer.

That the documents later proposed through I.A. No. 2340 of 2026 were all old or based upon old entries, no due diligence was shown, and declaratory relief concerning comparative title could not be introduced in the present appeal filed under Section 30 of the RDB Act 1993.

Heard the parties, considered their arguments and perused the available records.

The appeal against the order dated 20.05.2025 was filed within time and is maintainable. The question is not one of the Tribunal lacking appellate jurisdiction. The question is whether the appellants have demonstrated, from the record properly placed before this Tribunal, any error in the Recovery Officer’s decision not to investigate Exhibit-127 read with Exhibit-133 because the claim had been designedly or unnecessarily delayed.

Section 25(a) of the RDB Act, 1993 authorises recovery by attachment and sale of the movable or immovable property of the defendant. Section 29 makes the Second and Third Schedules to the Income-tax Act and the Income-tax (Certificate Proceedings) Rules 1962 applicable, as far as possible and with necessary modifications, to recovery under the RDB Act 1993.

Rule 11(1) of the Second Schedule to the Income- tax Act 1961 requires the Recovery Officer to investigate a claim or objection that property is not liable to attachment or sale. Its proviso is equally express: no investigation shall be made where the Recovery Officer considers that the claim or objection was designedly or unnecessarily delayed. Under Rule 11(3), the burden is upon the claimant to adduce evidence showing the requisite interest in or possession of the property at the statutory point of time. Rules 11(4) and 11(5) direct the consequence according to possession and the capacity in which possession is held.

Enquiry under Rule 11 is directed to who is in possession and in what capacity. Title may arise incidentally to that inquiry, but the summary procedure is not intended for the determination of intricate questions of ultimate title. Further, a third party may raise an objection under Rule 11 that an appeal against the Recovery Officer’s order lies under Section 30 and that Rule 11(6) preserves the remedy of a civil suit to establish the right claimed in the property, subject to law.

Section 30(1) of the RDB Act 1993, permits a person aggrieved by an order of the Recovery Officer to appeal within thirty days from issuance of a copy, and Section 30(2) empowers the Tribunal, after hearing and such inquiry as it deems fit, to confirm, modify or set aside that order. It is to record that the prescribed thirty-day period for an appeal under Section 30 cannot be extended by resort to Section 5 of the Limitation

Act 1963. The present appeal against the order dated 20.05.2025 was filed promptly. The relevance of that principle here is that earlier, distinct recovery measures cannot be challenged through a later appeal against another order.

Now with respect to the impugned order, the Recovery Officer’s use of the expression ‘barred by limitation’ requires clarification. Rule 11(1) does not prescribe a fixed limitation period for a third- party claim. Its proviso instead creates a threshold based on conduct: whether the claim was designedly or unnecessarily delayed. The impugned order expressly reproduced and invoked that proviso, considered the chronology of attachment, notice, auction, confirmation and certificate, and found a delay of about fifteen months after confirmation. The operative dismissal is, therefore, capable of being tested and sustained under the statutory proviso, without treating Rule 11 as if it contained a separate fixed period of limitation.

The most fundamental obstacle to the appeal is that the very Intervener Application at Exhibit-127 and the Amendment Application at Exhibit-133, whose rejection is challenged, are not placed on record. The Bank’s reply at Exhibit-135 before the Recovery Officer is also absent. The formal index to the original appeal did not include Exhibits 127 and 133. The recompiled index identifies the appeal memo, affidavits, the appellants’ documents, the order dated 28.04.2010, the Recovery Certificate, possession material, the impugned order and title deeds; it likewise does not index the two foundational applications.

The memorandum’s internal ‘List of Enclosures’ states that copies of the Intervener Application dated 29.04.2025 and the amendment application are enclosed. That recital does not prove filing and cannot substitute the missing documents. The ambiguity is resolved by the order dated 20.06.2025 in I.A. No. 1413 of 2025 recording that the appellants had not produced the application and documents filed before the Recovery Officer. No subsequent order admits those missing applications into the appeal record. No corrective action by the Appellants is seen from the record.

This omission is substantive, not technical. Without Exhibit-127 and Exhibit-133, this Tribunal cannot ascertain the precise claim submitted to the Recovery Officer; the description and identity of the units claimed by each intervener, the documents actually tendered with the claim; the explanation, if any, offered for not objecting during attachment and sale, or the exact relief sought under Rule 11. An appeal is a challenge to the order below. The appellant must place the foundational pleading and material necessary to demonstrate error. The Tribunal cannot reconstruct them from later paraphrases in the memorandum of appeal.

The omission remained uncured notwithstanding the express recording made on 20.06.2025 and the time thereafter available to the appellants. Instead, in August 2026, they sought to introduce a different set of old documents and fresh declaratory pleas through I.A. No. 2340 of 2026. That application was rejected on 8.09.2026. The rejected material cannot be read indirectly while deciding the appeal; nor can it cure the non-production of the pleadings actually decided by the Recovery Officer.

The reliefs sought are also unsupported by the documents produced. Although cancellation of the auction sale certificate is a principal final prayer, the formal index and the paper book do not contain the sale proclamation, the auction proceedings, the order confirming sale dated 08.12.2023 or the sale certificate dated 08.02.2024 as documents produced by the appellants. What they produced concerning possession is the later order dated 04.04.2025 and the Receiver’s notice dated 16.04.2025. Those post-sale possession steps are not the auction record and cannot establish that the auction or certificate was illegal.

The appellants’ principal grounds further misread the impugned order. The memorandum repeatedly asserts that the Recovery Officer dismissed the applications for want of jurisdiction under Section 19(25) and held that the sale order could not be revised. The impugned order does not record either proposition as its finding. Those were among the rival submissions advanced. The decision actually rendered was that the claim had been designedly delayed and should not be investigated under the proviso to Rule 11(1). Grounds directed to findings never returned do not dislodge the ratio of the order under appeal.

The plea that the applications were dismissed without notice is equally inconsistent with the order sheet. The appellants appeared through advocates, the Bank filed its reply on maintainability at Exhibit-135, and the Recovery Officer heard detailed arguments from both sides. Whether the resulting conclusion was correct is open to appeal, but denial of an opportunity of hearing is not established by the record.

The delay finding has affirmative support in the Recovery Proceeding as summarised in the impugned order. Attachment was effected and publicised in 2019-2020. The notice settling proclamation and sale proclamation were served at the property and by publication. The auction was held in October 2023, the sale confirmed in December 2023 and the certificate issued in February 2024. The appellants claim continuous occupation since 2003, yet their first objection was filed only on 29.04.2025, when delivery of possession had become imminent.

The appeal gives only a general assertion that knowledge arose from the Receiver’s notice of 16.04.2025. It does not offer a cogent explanation for how persons asserting continuous residence at the very property remained unaware of repeated pasting and publication through the attachment and sale stages. More importantly, the absent Exhibit-127 and Exhibit-133 prevent verification of whether any such explanation was placed before the Recovery Officer at all. On the record presented, the Recovery Officer’s conclusion that the claim had been unnecessarily delayed is a possible and justified conclusion. Thus, no ground for appellate substitution is made out.

Further, this Tribunal cannot use a Section 30 appeal from a threshold order to grant the appellants a final declaration of better title, adjudicate the validity of the alleged lease or mortgage, order an open-ended inquiry into the Bank’s title documents, or cancel a sale certificate not produced and not directly challenged through the relevant recovery measures.

Therefore, the impugned order dated 20.05.2025 calls for no interference for three reason i.e. the appellants have not produced the very applications decided by the impugned order even after that omission was judicially recorded, the available chronology supports the Recovery Officer’s satisfaction that the objection was unnecessarily delayed within the proviso to Rule 11(1) of the Second Schedule to the Income Tax Act 1961 and the wider prayers concerning title, mortgage and cancellation of sale exceed the scope of this appeal. Accordingly, the following order

ORDER

Appeal No.15 of 2025 is dismissed and the order dated 20.05.2025 passed by the Recovery officer is affirmed.

Any interim protection subsisting in the appeal stands vacated. All pending interim applications, if any, stand disposed of.

No order as to costs.

Sd/-

(Harish Kumar Kaushik) Presiding Officer, DRT-2, Mumbai Radhika