Abdul Jabbar vs Recovery Officer on 14 July 2026

O R D E R

1. This Appeal was filed on 27.01.2018 seeking to set aside the order dated 29.11.2017 passed in IA No.1726/2017 in DRC 3947 in OA. No.47 of 2013.

2. The appellant is neither a borrower nor is a guarantor. He claims that he is the owner of the property covered by Sale Deed No.3519/2008 registered in the SRO, Edappally on 03.08.2008. The said property was purchased from Mr. Muhammed Iqbal and Mr.Muhammad Anaz for valid sale consideration. He came across the publication of sale notice dated 09.09.2013 issued by the 2nd respondent bank herein. Hence he filed SA No.54/2014 before the DRT, Ernakulam (now DRT-I Ernakulam). According to the appellant, the 2nd respondent bank herein filed a sworn affidavit stating that the bank had no intention to proceed against the property of the appellant mentioned in Annexure-A5 sale deed and that in view of the above submission, S.A was closed. Thereafter, the appellant came across the sale proclamation in DRC 3947 dated 13.06.2017 in OA No.47/2013 for sale of the property belonging to Mr. Muhammed Iqbal and Mr.Muhammad Anaz including the shop No.XXI/62 D purchased and owned by the appellant. He filed IA No.1726/2017 before the Recovery Officer of the DRT-1, Ernakulam. The Ld. Recovery Officer after having heard both sides’ counsels, dismissed the above petition on 29.11.2017 on the ground that the property owned by the appellant had already been excluded and that property was identifiable The appellant having aggrieved against the above order has preferred this appeal before this Tribunal.

3. The counsel appearing for the appellant submitted that the appellant purchased the property covered in the sale deed No.3519/2018 registered in the SRO Edappally on 03.08.2008 from Mr.Mohammed Anaz and Mr.Mohammed Iqbal and that the appellant came across the sale proclamation issued in DRC 3947 dated 13.06.2017 in O.A. No.47/2013 that the property purchased by the appellant has been included along with the property of respondents 4 and 5 and that issuance of proclamation of sale without excluding the property purchased by the appellant is illegal and that and issuance of recovery certificate took effect from 31.3.2014 and expired on 31.03.2017 and that therefore, by virtue of the judgment of the Hon’ble Supreme Court in Nahar Industries as well as in Sunrise Plaza cases, the entire DRC proceedings ought to have been closed as time barred on the date of passing the impugned order as per Rule 68 (B) of the Income Tax (Certificate Proceedings) Rules 1961 and also in the light of the judgment dated 06.12.2017 of the Division Bench of the Hon'ble High Court of Kerala delivered in W.A. No.60/2010 and that therefore appeal may be allowed setting aside the order passed in IA No.1726/2017.

4. The counsel for the 2nd respondent submitted that the appeal is not at all maintainable either in law or on facts and that this appeal has been filed with an attempt to interfere with the sale proceedings initiated by the Ld. Recovery Officer of this Tribunal, who has considered the issue of determination of part of the secured assets belonging to the appellant and that the same has been excluded from the proclamation of sale notice and that a clear finding has been rendered in the order dated 29.11.2017 passed in IA No.1726/2017 and that Rule 68 (B) of Income Tax (Certificate Proceedings) Rules 1961 has no application to apply the limitation aspect in respect of the recovery proceedings in DRC 3947 and that petition in IA No.1726/2017 and this appeal has been filed by the appellant in collusion with the credit debtors and that therefore, Appeal may be dismissed.

5. The appellant claims that he purchased the shop No.21/62 D admeasuring an extent of 200 sq.m. at north eastern end of the first floor of the building along with 1/6th portion undivided interest in 1.21 Ares from Mr.Muhammed Iqbal and Mr. Muhammed Anaz who are the respondents 4 and 5 herein for a valid sale consideration. The appellant has not produced any of the relevant document in order to prove his contention that the property which is alleged to have been purchased by him has been included in the sale proclamation.

6. Be that as it may, there is a clear observation in the order dated 29.11.2017 passed in IA No.1726/2017 that on inspection of the property by the learned Recovery Officer of this Tribunal sale proclamation was issued excluding the property of the appellant, since the property was easily identifiable and well demarcated. If the appellant had not been satisfied over the above observation of the Ld Recovery Officer in the order, he ought to have filed the relevant documents before this Tribunal to prove his contention that his property has been included in the sale proclamation. But, he has not produced any relevant documents to prove his above contention. Therefore, this Tribunal does not find any substance or merit in the contention of the appellant that the property mentioned in the sale proclamation is not identifiable without any demarcation and that his property has been included.

7. The appellant has contended in the appeal that the proceedings initiated in DRC 3947 in O.A. No47/2013 is hit by Rule 68B of the Income Tax (Certificate Proceedings) Rules 1961. The appellant is not entitled to raise the above plea of limitation, since his contention is not sustainable in view of the judgment dated 16.12.2024 rendered by the Hon'ble High Court of Kerala in OP (DRT) No.446/2023 (Geevarghese P. John & others Vs. The Federal Bank Ltd & anr.). The Hon'ble High Court of Kerala after having referred to the judgment of the Hon’ble Supreme Court delivered in Paramsivam C.N. Vs. Sunrise Plaza and the judgments of the Hon'ble High Court of Kerala delivered in Ratheesh M.N. Vs. Debt Recovery Tribunal-2 Ernakulam, and M/s Bio Research Pharmaceuticals Vs. State Bank of Travancore and Kutaguptan Vs. Canara Bank has categorically held as follows:

“24. The decisions in Bio Research Pharmaceuticals (Supra) and Paramsivam (supra) only establish that the phrase “as far as possible” in Section 29 of the RDDB Act does not mean that the provisions of the Second Schedule to the income Tax Act need not be followed at all or can be deviated from at the whims and fancies of the Recovery Officer. In other words, both decisions only hold that where such provisions are in tune with the Scheme of the RDDB Act, they must be followed without departure.

24.1 - It is held that the period of limitation for recovery of the dues of the Banks/Financial Institutions under Section 19 of the RDDB Act will be the period of limitation prescribed in Article 136 of the Schedule to the Limitation Act 1963. 24.2 – The provisions of Rule 68B of the Second Schedule to the Income Tax Act 1961 is not applicable to proceedings for recovery of amounts determined as payable to a Bank/Financial Institution under the provisions of the RDDB Act.

24.3 – In light of the aforementioned discussions and reasoning, the petition filed by the Bank/Financial Institution is allowed, and the petitions filed by the borrows/guarantors are dismissed.”

8. In yet another judgment dated 08.04.2025 rendered by the Hon'ble High Court of Kerala in George Joseph and anr. Vs. State Bank of India [OP (DRT) No.183/2024] similar view has been taken. It will be pertinent to reproduce the extract of paragraph 4 of the judgment hereunder:

“The issue agitated in this OP (DRT) takes in the question whether Rule 68B, which provides a time limit for the sale of attached immovable property (the second schedule to the Income Tax Act) applies to proceedings for recovery of amount determined as payable to Banks/Financial Institutions under the RDDB Act. This Court held that the provisions of Rule 68B of the second schedule to the Income Tax are not applicable to the proceedings to a Bank/Financial Institution under the provisions of the RDDB Act, in the judgment in Geevarghese P. John Vs. The Federal Bank Limited [2024 KLT Online 2981].”

9. In the light of the dictum laid down in the afore cited judgments it is clearly established that the provisions of Rule 68B of the Second schedule to Rule 68 (B) of the Income Tax (Certificate Proceedings) Rules 1961 is not applicable to the proceedings initiated by the Recovery Officer of the DRT for recovery of the amounts from the credit debtors. In any event, the appellant who is said to be the purchaser of the property from the respondents 4 and 5 have no locus standi to challenge the proceedings initiated by the learned Recovery Officer of this Tribunal for sale of the property of the credit debtors, who are respondents 4 and 5 herein in order to realize the outstanding loan due by referring to Rule 68 (B) of the Income Tax (Certificate Proceedings) Rules 1961. Therefore, the submission of the counsel for the appellant that the entire DRC proceedings is liable to be closed as time barred is absolutely unsustainable and untenable.

10. The order dated 29.11.2017 passed by the learned Recovery Officer of this Tribunal in IA No.1726/2017 in DRC 3947 in O.A. No.47/2013 does not suffer from any infirmity or illegality. Therefore, the above order is not liable to be interfered with by this Tribunal.

Resultantly, Appeal No.6 of 2018 stands dismissed. No order as to cost.

Dictated to Steno, taken down, transcribed, typed by him, corrected and pronounced by me in the open court on this the 14th day of July, 2026.

(Su. WILLYAHM) PRESIDING OFFICER Mj/