P RADHAKRISHNAN vs UNION BANK OF INDIA on 16 May 2023

**O R D E R**

1. 1. This is an Appeal filed by the Appellant in challenging the order passed the Ld. Recovery Officer in IA No.306/2012 in R.P.No.52/2006 under section 30 of the RDDB & FI Act, 1993.

2. 2. The brief averments made by the Appellant in the Appeal are as follows:

3. 3. It is the submission of the Appellant that in pursuance of the Recovery certificate issued in DRC No.47/2006, the recovery proceedings were initiated in R.P.No.52/2006 for the amount due under the DRC issued by this Hon'ble Tribunal. Accordingly, the Recovery proceedings were initiated by the Recovery Officer to bring the item No.1 of Schedule B

property and the said property was mortgaged to M/s.State Bank of Bikaner and Jaipur (now merged with State Bank of India) who held the 1^st charge over the schedule mentioned property and the said property was expressly ordered to be excluded from the same in the final order dated 13.11.2006 while that being so, the Appellant filed an IA No.736/2009 before the Ld. Recovery Officer under Rule 11 of the second schedule to the Income Tax read with 26 & 29 of the RDB Act 1993 to raise the order of attachment dated 12.10.2007 passed in respect of the schedule mentioned property and consequently, sought to exclude the schedule property from the recovery proceedings. However, the Recovery Officer by order dated 05.01.2010 dismissed the said application against which the Appellant also preferred an Appeal in Appeal No.02/2010 before this Hon'ble Tribunal. The Hon'ble Tribunal by its order dated 08.06.2011 dismissed the said Appeal and directed the Respondent Bank to move an Application for amending the Recovery Certificate. Aggrieved by the said order in Appeal No.02/2010, the Appellant has filed an Appeal before the Hon'ble DRAT under section 20 of the RDB Act in Appeal No.118/2011 which is pending for disposal.

4. Subsequently, the Ld. Recovery officer issued a proclamation of sale dated 24.02.2012 to bring the property for sale on 11.04.2012 and hence, the IA No.306/2012 filed before the Ld. Recovery Officer challenging the sale of proclamation which was dismissed by the Ld. Recovery Officer by its order dated 12.10.2012 which is challenged in the present Appeal before this Hon'ble Tribunal.

5. Whereas, the Respondent Bank having filed the counter and stated that the property was mortgaged in favour of the Respondent bank. However, it is known to the Respondent Bank that the property is also mortgaged to the State Bank of Bikaner & Jaipur (now merged with State Bank of India) and has a claim of prior mortgage in favour of State Bank of Bikaner & Jaipur and hence, the State Bank of Bikaner & Jaipur had first charge over the mortgaged property and this Tribunal pleased to hold that the State Bank of Bikaner & Jaipur had first charge over the property while passing the final order dated 13.11.2006 in the OA filed by the Respondent Bank.

6. It is further stated by the Respondent Bank that the Recovery Certificate was issued based on the final order passed by this Tribunal in favour of the Respondent Bank in TA No.1427 of 2002 and having issued DRC No.47 of 2006 and equally a Recovery Certificate was also issued in favour of State Bank of Bikaner & Jaipur in respect of the mortgage of the property being the first charge holder in terms of the final order in TA No.1431 of 2002 dated 13.11.2006 in DRC No.30 of 2007 passed in favour of the State Bank of Bikaner & Jaipur.

7. It is further stated by the Respondent Bank that the property was brought for auction towards the recovery of dues by the State Bank of Bikaner & Jaipur through the Recovery Officer and the property was sold and having realized the entire dues of the State Bank of Bikaner & Jaipur, the Respondent Bank requested the Recovery Officer to attach portion of the property to discharge the debt of Rs.77.00 lakhs due to the Respondent Bank and thereby the Ld. Recovery Officer carved a portion of the property delineated with boundaries and attached the said property in order to realize the debt of the Respondent Bank. Subsequently, the Appellant filed an IA No.736/2009 challenging the sale which was dismissed by the Ld. Recovery Officer by its order dated 05.01.2010 and the said order was challenged before this Tribunal and filed Appeal No.02/2010, which was also dismissed by this Tribunal by its order dated 08.06.2011, wherein the Appellant preferred an Appeal before the Hon'ble DRAT which is still pending. However, there is no stay of proceeding is granted by the Hon'ble DRAT, Chennai in the case. Therefore, the Ld. Recovery Officer once again issued a proclamation of sale dated 24.02.2012 which was once again challenged by the Appellant in IA No.306/2012 before the Ld. Recovery Officer and the same was dismissed by the Ld. Recovery Officer.

8. The Respondent Bank further stated that the contention raised before the Ld. Recovery Officer by the Appellant that the Respondent Bank cannot bring the property for sale, since the State Bank of Bikaner & Jaipur has first charge over the property and the recourse open to the Respondent Bank is only to proceed against the hypotheca of the Appellant held by the Respondent Bank. However, the Ld. Recovery Officer negated the contention of the Appellant and dismissed the IA No.306/2012 by its order dated 12.10.2012 and given a finding that the amount due and payable to State Bank of Bikaner & Jaipur is fully and finally discharged. Further, the property is also attached by the Recovery officer so as to recover the dues of the Respondent Bank.

9. The Respondent Bank further stated that there are no hypothecated articles as alleged by the Appellant with the Respondent Bank and the details of the hypotheca which has been furnished by the Appellant relates back to the year 1994. Furthermore, it is the discretion of the creditor to oppose against any asset of the debtor. The Appellant has no locus standi to question the details or initiation of Recovery Proceedings as the Appellant already played a fraud on the Respondent Bank without disclosing the prior mortgage in favour of the State Bank of Bikaner & Jaipur and had created a mortgage in favour of the Respondent Bank.

10. The Respondent Bank further stated that the Ld. Recovery Officer acted upon the Recovery Certificate issued by this Hon'ble Tribunal and there is no necessity for issuance of a fresh demand notice once again as the property is already attached by the Ld. Recovery Officer. The allegation that the Ld. Recovery Officer has committed illegality by carving out 35.03 cents without leaving access to the remaining property is denied and has no basis. And equally there is no excessive execution as alleged by the Applicant. The Appellant being a seasoned litigant is trying to procrastinate the proceeding and delaying the recovery process and therefore, the Appeal is liable to be dismissed with costs.

11. This Tribunal having considered the pleadings, averments and arguments advanced by the Ld. Counsels for the parties, is the considered view that the core issue raised in this Appeal against the attachment of property of 35.03 cents by the Ld. Recovery Officer so as to initiate Recovery towards the dues of the Respondent Bank.

12. It is also relevant to note that the Appellant has also filed an Appeal in Appeal No.03 of 2009, in which also the same issue was raised such as the extent of 24.95 cents was carved out of a total extent of a 2.00 acres of land and therefore, the sale held by the Ld. Recovery Officer is liable to be set aside and this Tribunal having considered the said Appeal and having dismissed the Appeal No.03/2009 by a detailed order, a similar issue and prayer is once again raised in the present Appeal too wherein, the Respondent bank is the second charge holder of the mortgaged property, which was also mortgaged with the State Bank of Bikaner & Jaipur (now merged with State Bank of India) and the dues of the State Bank of Bikaner & Jaipur, having fully recovered by the bank through the Recovery process initiated by the Recovery Officer of this Tribunal and there is no due is in existence in respect of State Bank of Bikaner & Jaipur (now merged with State Bank of India) at present. And therefore, the initiation of the proceedings against the schedule mentioned property for the recovery of the dues of the bank is permissible, though the final order passed in TA No.1427 of 2002 mentioned at para No. 7 (b) that " ..... except item No.1 of schedule B property over which D-5 is having the first charge, and to adjust the sale proceeds towards the amount due under Debts Recovery Certificate". The dues of the 5^th Defendant (State Bank of Bikaner & Jaipur – now merged with State Bank of India) having duly settled it's dues and furthermore, the excess sale proceeds of Rs.23,13,215.68 ps having paid by the Recovery Officer towards the dues of the Respondent Bank, the initiation of the sale proceedings against the item No.1 of schedule "B" property has no legal impediment towards the recovery of the Respondent Bank.

13. The Recovery Officer having dismissed the Application in IA No.306/2012 and the Appellant was also given sufficient opportunities by postponing the sale by the Recovery Officer to clear the dues. Whereas, the Appellant failed to discharge the dues and the Appellant is also not complied with the Rule 60/61 of the second schedule of the Income Tax Act, 1961

while making a claim before the Recovery Officer. Therefore, this Tribunal finds no merits in the Appeal filed by the Appellant, which is only required to be dismissed by this Tribunal.

14. The IAs if any, pending, is also stands disposed of and closed and the order passed in Appeal No.03/2009 shall also form part of this order for a better appreciation of facts and circumstances involved in this case.

15. In the result, this Appeal No.09/2012 stands dismissed with no order to costs.

A copy of the order be communicated to all the parties concerned by the Registry of this Tribunal.

(Dictated to my PA directly on the Computer, corrected and pronounced by me in the Open Tribunal on this the 16^th Day of May, 2023).

**[M.P. BALASUBRAMANIAN]** **PRESIDING OFFICER**