2026 INSC 863 1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 182 OF 2016

SHEELA GEHLOT … APPELLANT

Versus

MOHINI HARDAYAL

SINGH & ORS. … RESPONDENTS

WITH

CIVIL APPEAL NO. 190 OF 2016

PUNJAB & SIND BANK … APPELLANT

Versus

MOHINI HARDAYAL

SINGH & ORS. … RESPONDENTS

AND

CIVIL APPEAL NO. 191 OF 2016

JAGMINDER SINGH … APPELLANT

Versus

PUNJAB & SIND BANK

& ORS. … RESPONDENTS

J U D G M E N T

ALOK ARADHE, J.

1. These appeals arise from the judgment dated 15.05.2009

passed by the High Court of Madhya Pradesh at Jabalpur

(High Court) in Writ Petition No. 2199 of 2008, whereby the

2

High Court set aside the judgment of the Debts Recovery

Appellate Tribunal, Allahabad (DRAT) dated 01.02.2008 and

remitted the matter to the Debts Recovery Tribunal, Jabalpur

(DRT) for a fresh inquiry. The appellant before us in C.A. No.

182 of 2016 is an Auction-Purchaser whereas appellant in

C.A. No. 190 of 2016 is Punjab & Sind Bank (the Bank). C.A.

No. 191 of 2016 has been filed by Jagminder Singh, son of

late Mr. Hardayal Singh (the judgment-debtor). In order to

appreciate the challenge laid by the appellants to the

impugned judgment, it is necessary to set out the relevant

facts, which are stated infra.

FACTS

2. M/s. Sterling Malt & Foods Pvt. Ltd. (the Company) was a

company incorporated with the judgment- debtor, the

husband of Smt. Mohini Hardayal Singh (respondent no.1)

and Mr. N.S.S. Rao as its Managing Directors having its

registered office at S-246, Panchsheel Park, New Delhi. The

Company manufactured malt at its factory located at 34,

Industrial Area Banmore, District Morena, Madhya Pradesh.

3. The Company availed credit facilities from the Bank through

its branches at Connaught Place, New Delhi and

3

Jayendraganj, Gwalior. A charge was created over the factory

land, building, plant and machinery, and the two Directors of

the Company, namely judgment-debtor and Mr. N.S.S. Rao

furnished personal guarantees. The house bearing No. S-246,

Panchsheel Park, New Delhi (the Delhi Property) was not

mortgaged for the loan taken by the Company.

4. The malt manufacturing unit ceased to function in 1983,

leading to irregularity in repayment of loans. The Bank

instituted a suit under Section 34 of the Code for enforcement

of the security of equitable mortgage, namely Civil Suit No.

2601 of 1986 before the High Court of Delhi which was

transferred to DRT, Delhi in 1996 and re-registered as O.A.

No. 225 of 1996. The Bank filed another suit namely Suit no.

1-B of 1987 for recovery of an amount of Rs.3,84,29,670/-

(Rupees Three Crore Eighty Four Lakh Twenty Nine Thousand

Six Hundred Seventy) with interest from the Company before

the District Court, Morena (Morena Court).

5. After filing of the suit by the Bank, the Company started

searching for investors to take over its assets and liabilities.

The respondent nos. 7 to 11, namely L.K. Trust and its

trustees, in order to bail out and revive the Company acquired

4

the majority of shareholding in the Company and proposed a

scheme for its revival. The said scheme was accepted by the

Bank. The Bank amended the plaint in Civil Suit no. 1-B of

1987 and arrayed respondent nos. 7 to 11 as defendants in

the suit re-registering the suit as Civil Suit No. 26-A of 1989.

The parties entered into a compromise on the basis of which

a compromise decree was passed on 15.10.1991 by the

Morena court. Under the compromise decree, the Trust and

its trustees were required to pay a sum of Rs. 1.80 crores

payable in half-yearly instalments over a period of seven years

commencing from December, 1991. Clause 2(e) of the

compromise recorded that the title deeds of the Delhi property

furnished as a collateral security by the judgment-debtor,

would stand released, however, it was expressly clarified that

the same would not affect his personal liability to pay the

decretal amount.

6. The judgment-debtor passed away on 17.11.1994. The Trust

and its trustees paid an aggregate amount of about

Rs.82,00,000/- (Rupees Eighty-Two Lakh) between

September 1992 and September 1998, and thereafter

defaulted, attributing the default to the Bank’s failure to hand

over the possession of the factory as contemplated by the

5

compromise. The Bank filed an execution petition before the

Morena court -in 1995 in which respondent no. 1 and her

children were arrayed as judgment-debtors. Between 1995 to

1997, several attempts were made by the Morena court to

serve notice of execution upon respondent no. 1 and her

children but notices could not be served.

7. On 12.08.1998, the Bank made a prayer for attachment of the

Delhi Property. The said prayer was rejected for want of

territorial jurisdiction. The Debts Recovery Tribunal was

established in Jabalpur on 07.04.1998. In view of the

mandate contained in Section 31 of the Recovery of Debts Due

to Banks and Financial Institutions Act, 1993, now known as

Recovery of Debts and Bankruptcy Act, 1993 (the 1993 Act),

the execution case was transferred to the DRT.

8. On 20.09.2004, the Recovery Officer, DRT, ordered the

auction of the Delhi property. On 24.10.2004, respondent no.

1 filed an application seeking recall of the order dated

20.09.2004 on the following grounds; (i) no notice of the

execution case filed in the Morena court, and of the transfer

of the case to the DRT was issued to her; (ii) an amount of

Rs.82,85,817/- worth of instalments was paid to the Bank by

6

the Trust and its trustees, the default in the subsequent

instalments was attributed to the Bank not handing over the

possession of the factory unit at Banmore as contemplated by

the compromise; and (iii) the compromise deed was signed by

all the parties including the Bank.

9. Prior to the decision on the aforesaid application filed by

respondent no. 1, the factory premises at Banmore, together

with 14 acres of land, plant and machinery were auctioned on

13.07.2006 for Rs.40,51,111/ - (Forty Lakh Fifty One

Thousand One Hundred and Eleven) . The Recovery Officer,

DRT by an order dated 10.10.2006 rejected the application

preferred by respondent no.1, seeking recall of the order

dated 20.09.2004 on the grounds that :- (i) no lease deed was

executed by the Company as decided in the compromise and

hence the Bank rightfully did not hand over the possession;

(ii) the default in payment of two instalments occurred

entitling the Bank to execute the decree; and (iii) form no. 17

notice was duly served and no objections were raised with

respect to valuation. The Recovery Officer directed that the

Delhi property be put to an auction sale for a reserve price of

928.85 lakh.

7

10. On 19.10.2006, the respondent no. 1 preferred an appeal,

namely Appeal No. 31 of 2006 against the aforesaid order

dated 10.10.2006 before the DRT. Along with the appeal, an

application seeking stay of execution proceeding, was also

filed. The DRT by an interim order dated 13.11.2006, rejected

the application for stay. Subsequently, an auction notice

dated 16.11.2006, was issued for the sale of the Delhi

property. The respondent no.1, approached the High Court by

way of writ petition, namely W.P. No. 17150 of 2006 against

the order dated 13.11.2006, seeking to restrain the auction of

the Delhi property due to be held on 27.11.2006. The High

Court passed an interim order dated 22.11.2006, directing

the continuance of the auction proceeding but directed that

the same shall not be finalised without leave of the court.

11. An auction was held on 27.11.2006 in which the bid of

Auction-Purchaser in C.A. No. 182 of 2016 was accepted. The

High Court by an order dated 15.01.2007, disposed of the writ

petition and directed the parties to appear before the DRAT

as the same was functional and further directed continuance

of interim order dated 22.11.2006 till the stay application is

decided by the DRAT.

8

12. The DRAT in respondent no.1’s appeal, by an order dated

27.02.2007 rejected the interim application for stay and

posted the appeal for hearing on 03.04.2007. Resultantly, the

auction sale was confirmed in favour of the Auction -

Purchaser and a sale certificate was issued on 01.03.2007 by

the Recovery Officer.

13. The respondent no. 1 instead of preferring an application

under Rule 60 or 61 of the Second Schedule to the Income

Tax Act, 1961 (1961 Act), preferred a writ petition, namely

W.P. No. 3512 of 2007 in which a plea was raised without

establishing any factual foundation that the Delhi property

being the main residential property of respondent no.1, is

exempt from attachment in view of Section 60(1)(ccc) of the

Code. The learned Single Judge of the High Court by an order

dated 12.03.2007, dismissed the writ petition and inter alia

held that : -(i) the respondent no. 1 cannot claim exemption

under Section 60(1)(ccc) of the Code without any factual

foundation; and (ii) no application under Rule 60 or Rule 61

of the Second Schedule to the 1961 Act was filed.

14. The respondent no.1 preferred a writ appeal, namely W.A. No.

433 of 2007. The Division Bench passed an interim order on

9

15.03.2007 directing the parties to maintain status quo

with regard to possession of the Delhi property. The writ

appeal was disposed of on 22.03.2007 with the following

directions :- (i) the parties shall appear before DRAT on

03.04.2007, (ii) the interim order dated 15.03.2007 shall

remain in force till the decision of the appeal, (iii) the DRAT

shall deal with the issues raised by the contesting

respondents and shall determine the objections permitted

within the parameters of law, and (iv) the DRAT shall dispose

of the appeal by 20.04.2007.

15. The DRAT by an order dated 19.04.2007, dismissed the

appeal preferred by the respondent no. 1 inter alia on the

following grounds:- (i) the respondent no. 1 had knowledge

about the execution proceeding before the DRT ; (ii) the

objection that the Delhi property was never mortgaged with

the Bank was never raised by respondent no. 1 before the

Recovery Officer; (iii) the plea that the Delhi property is

exempted from attachment under Section 60(1)(ccc) of the

Code was not pleaded and proved before the Recovery Officer;

(iv) DRT has territorial jurisdiction to proceed for sale of Delhi

property; (v) no deposit as contemplated under Rule 61 of the

Second Schedule to the 1961 Act was made, and (vi) the

10

execution case was transferred and received by the DRT

before insertion of Section 31A of the 1993 Act.

16. The respondent no.1 challenged the order dated 19.04.2007,

in the writ petition, namely W.P. No. 5489 of 2007, which was

allowed to be withdrawn by recording the undertaking of the

counsel for the Auction-Purchaser that she shall not

dispossess respondent no. 1 for thirty days and directed the

DRT to decide the appeal on or before 31.05.2007.

PROCEEDING BEFORE THE DRT

17. The DRT by an order dated 29.05.2007, allowed the Appeal

No. 31 of 2006 preferred by respondent no. 1 on 19.10.2006

and set aside the orders dated 20.09.2004 and 10.10.2006

passed by the Recovery Officer, DRT. The DRT recorded the

following findings: (i) non-issuance of Recovery Certificate is

not illegality but is a mere irregularity; (ii) the respondent

no.1’s objection under Section 60(1)(ccc) of the Code is

maintainable and can be raised after before the Recovery

Officer, DRT by affording an opportunity to the parties; (iii)

no notice required under Rule 2 of the Second Schedule of the

1961 Act was issued to respondent no.1; and (iv) respondent

no. 1 was not required to comply with the provisions of Rule

11

60 or 61 of the Second Schedule to the 1961 Act as no notice

under Rule 2 was issued to her. The DR T permitted

respondent no. 1 and Bank to urge their respective

contentions before the Recovery Officer, DRT.

PROCEEDING BEFORE THE D RAT

18. The Auction-Purchaser and the Bank challenged the order

dated 29.05.2007 passed by the DRT in an appeal before the

DRAT. The said appeals were allowed by an order dated

01.02.2008 and the order dated 29.05.2007 passed by the

DRT was set aside on the following grounds :- (i) notice of

attachment under Form 16 was duly served upon respondent

no. 1; (ii) the notice envisaged under Rule 2 of Second

Schedule to 1961 Act is required to be issued in the name of

the defaulter, namely the judgment-debtor and his widow i.e.

respondent no.1, son and daughter had already been

impleaded; (iii) Section 31A of 1993 Act does not apply; (iv)

respondent no. 1 neither pleaded any exemption under

Section 60(1)(ccc) of the Code nor produced any evidence

regarding exclusive ownership and possession of the Delhi

property; and (v) DRT erred in not attaching the Delhi

property for want of territorial jurisdiction.

12

PROCEEDING BEFORE THE HIGH COURT LEADING TO

THE IMPUGNED JUDGMENT

19. The respondent no. 1 challenged the order dated 01.02.2008

in a writ petition, namely W.P. No. 2199 of 2008. By the

impugned judgment, the Division Bench of the High Court on

15.05.2009, held that omission of notice under Order XXI

Rule 22 of the Code and by parity of reasoning under Rule 2

of the Second Schedule to the 1961 Act is not a mere

irregularity but a defect which goes to the root of jurisdiction

of the execution proceeding in which the legal representatives

were substituted after judgment debtor’s death. It was further

held that admittedly no notice was issued to respondent no.

1 and her children either before Morena court or after transfer

of the proceeding to the DRT. The High Court, however, held

that the same cannot be held to be void on this ground alone

and that the confirmed sale, the rights of the bona fide

Auction- Purchaser who had invested a substantial sum and

the unresolved question of exemption under Section 60(1)(ccc)

of the Code requires a fact- finding inquiry. It was also held

that Section 31A of the 1993 Act did not apply retrospectively

to the pre-existing execution and respondent no. 1 is entitled

to an opportunity to lead evidence about her claim to

13

exemption under Section 60(1)(ccc) of the Code being a mixed

question of law and fact.

20. Accordingly, the High Court allowed the writ petition, set

aside the judgment of the DRAT dated 01.02.2008, and

remitted the matter to the DRT, with a direction that an

inquiry be held within three months, and a decision be

rendered within six weeks to ascertain whether respondent

No.1 had suffered substantial prejudice by reason of non-

service of notice and whether the Delhi property qualified for

exemption under Section 60(1)(ccc) of the Code. It directed

status quo as to possession of the Delhi property to be

maintained pending the fresh inquiry and left the parties to

bear their own costs of the writ petition.

21. Being aggrieved, the Auction-Purchaser namely, Ms. Sheela

Gehlot has preferred C.A. No.182 of 2016, the Bank has

preferred C.A. No.190 of 2016 and Mr. Jagminder Singh, son

of judgment-debtor has preferred C.A. No.191 of 2016.

SUBMISSIONS

22. Dr. A.M. Singhvi, learned senior counsel for the appellant in

C.A. No.182 of 2016 submitted that benefit of Section

60(1)(ccc) of the Code is limited for the benefit of the

14

judgment-debtor himself and not for his legal heir. In support

of the aforesaid submission, reliance has been placed on a

decision of the High Court of Delhi

1

. It is contended that by

virtue of the Punjab Relief of Indebtedness Act, 1934 (1934

Act), which introduced Section 60(1)(ccc) into the Code, the

judgment-debtor alone could have invoked the aforesaid

provision, and also the language of the 1934 Act excludes the

debts given by scheduled banks. It is, therefore, urged Section

60(1)(ccc) of the Code has been misapplied and misused as it

excludes the debts by the scheduled banks, again relied upon

a judgment of the High Court of Delhi

2

. It is pointed out that

the case was transferred from Morena court after the

enactment of the 1993 Act and there was no occasion to issue

notice under Order XXI Rule 22 of the Code. It is argued that

insofar as alleged absence of notice under the Second

Schedule to the 1961 Act, is concerned, admittedly, the

judgment-debtor herself filed detail objections in an

application on 24.10.2004 seeking recall of the order passed

by the Recovery Officer, DRT on 20.09.2004 and, therefore,

the question of prejudice to the respondent no.1, does not

1

Yogesh Sharma v. Devi Dayal & Ors., 1977 SCC OnLine Del 39

2

Sujata Kapoor v. Union Bank of India & Ors. 2019 SCC OnLine Del 12184

15

arise as she had complete knowledge and exercised the

opportunity to vigorously object to the direction for auction by

filing detailed objections in which all factual and legal points

were urged. It is, therefore, contended that the impugned

judgment deserves to be set aside. It is argued that the appeal

filed by the son of judgment-debtor is devoid of any merit and

is liable to be dismissed.

23. Mr. D.N. Goburdhun, learned senior counsel for the Bank in

C.A. No.190 of 2016 submitted that an auction sale

conducted under the 1993 Act, cannot be assailed by the

judgment-debtor without filing an appropriate application

under Rule 60 or 61 of the Second Schedule to the 1961 Act.

It is further submitted that the High Court in exercise of the

powers of superintendence does not act as a court of appeal

or as a court of error. It is urged that a sale can be set aside

only if there is a material irregularity or fraud in the sale

which has resulted in substantial injury to an applicant. It is

argued that the appeal preferred by the legal representative of

the judgment-debtor is liable to be dismissed. In support of

16

the aforesaid submissions, reliance has been placed on

various decisions

3

.

24. Mr. Rajiv Shakdher, learned senior counsel for the appellant

in C.A. No.191 of 2016 submitted that High Court erred in

holding that equities were in favour of auction purchaser and

ought to have appreciated that no notice of execution

proceeding was served either on the widow or the legal

representative of the judgment-debtor. It is further submitted

that the Delhi property is the residential house of the legal

representative of the judgment-debtor and is exempt under

the provision of Section 60(1)(ccc) of the Code. It is further

contended that on account of non-compliance of Section 31A

of 1993 Act, the auction was required to be set aside. It is

urged that DRT had no jurisdiction to execute the decree in

respect of an immovable property not situate within its local

limits. It is urged that in the appeals preferred by the Auction-

Purchaser and the Bank, no interference is called for. In

support of the aforesaid submissions, reliance has been

3

Sadhana Lodh v. National insurance Co. Ltd. & Anr., (2003) 3 SCC 524; Shamshad Ahmad &

Ors. v. Tilak Raj Bajaj (Deceased) Through LRs. & Ors., (2008) 9 SCC 1; Canara Bank v. M/s.

Luthra Industries & Ors., (2017) SCC Online Del 8165; Sujata Kapoor v. Union Bank of India &

Ors., (2019) SCC OnLine Del 12184; Saheb Khan v. Mohd. Yousufuddin & Ors. (2006) 4 SCC 476

17

placed on the decisions of various High Courts and this

Court

4

.

25. Mr. Shekhar Naphde, learned senior counsel for respondent

no. 1 in C.A. 182 of 2016, has submitted that Order XXI Rule

22 is mandatory and admittedly no notice was issued by the

executing court to respondent no. 1 and her children and

therefore, the auction is void. It is submitted that Rule 2 of

the Second Schedule to the 1961 Act, is couched in

mandatory language which has not been followed in the

instant case. In support of the aforesaid submission, reliance

has been placed on a decision of this Court

5

.

ANALYSIS

26. We have considered the rival submissions and have perused

the record. The questions which arise for determination are

as follows: (i) whether the plea of non-compliance of Order XXI

4

Syam Mandal v. Satinath Banerjee, AIR 1917 Cal 728; Charan Kanwal Rice General Mills & Ors.

v. New Bank of India & Ors., [I (2000) BC 26 ORT]; O. Vasantha v. Karnataka Bank Ltd., Mangalore

& Ors. [II (1999) BC 54]; Punjab & Sind Bank v. M/s Avi Autos & Ors.; [I (2000) BC 112 ORT; DRT,

Mumbai; Gauri Lal v. Smt. Sujham Devi & Ors. AIR 1986 Himachal Pradesh 3; Rajagopala Aiyar

v. Ramanuja Chariyar & Anr., AIR 1924 Madras 431; Kanchamalai v. Shahaji Rajah Sahib & Ors.

AIR 1936 Madras 205; Leelachand Walchand Gujar v. Vishnu Ganesh Lakade, AIR 1945 Bombay

409; Ajab Lal v. Hari Charan, AIR 1945 Patna 1; Marotrao Shama v. Narayan Jasrup & Ors., AIR

1948 Nagpur 300; Rm. P. Ar. Ramanathan Chettiar v. Pl. Ar. Lakshmanan Chettiar, AIR 1951

Madras 325; Prabhash Chand Jain & Ors. v. Punjab & Sind Bank, [(2000) 1 BC 43 (DRAT)] ;

Devassia v. South Indian Bank Ltd. [(2001) 2 BC 524]; Calcutta Dock Labour Board v. Smt.

Sandhya Mitra and Ors., (1985) 2 SCC 1; Badri Chando v. Raja Inderjit Pratap; (1932) ILR 54 All

736; and Radhakisan Hakumji v. Balvant Ramji, (1883) ILR 7 Bom 530

5

Satyanarain Bajoria & Anr. v. Ramnarain Tiberwal & Anr., (1993) 4 SCC 414

18

Rule 22 of the Code has any impact on auction sale? (ii)

whether failure to serve notice under Rule 2 of Second

Schedule to 1961 Act to the respondent no.1 and her children

in respect of Delhi property has rendered the execution or sale

void? and (iii) whether the Delhi property was exempt from

attachment under Rule 10 of the Second Schedule read with

Section 60(1)(ccc) of the Code? We proceed to examine the

aforesaid questions in its turn.

27. At the outset, it would be apposite to notice the statutory

framework within which the aforesaid questions arise for

consideration. The 1993 Act is an Act enacted with an object

of expeditious adjudication and recovery of debts due to

banks and financial institutions and matters connected

therewith or incidental thereto. Chapter IV of the 1993 Act

deals with the procedure of Tribunals. Section 19 provides for

an application to the Tribunal whereas Section 22

enumerates the procedure and powers of the Tribunal and the

Appellate Tribunal. Section 22 which is relevant for the

purposes of controversy involved in the appeals reads as

under: -

“22. Procedure and powers of the Tribunal

and the Appellate Tribunal.—

19

(1) The Tribunal and the Appellate Tribunal

shall not be bound by the procedure laid down

by the Code of Civil Procedure, 1908 (5 of

1908), but shall be guided by the principles of

natural justice and, subject to the other

provisions of this Act and of 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) The Tribunal and the Appellate Tribunal

shall have, for the purposes of discharging

their functions under this Act, the same

powers as are vested in a civil court under the

Code of Civil Procedure, 1908 (5 of 1908),

while trying a suit, in respect of the following

matters, namely:—

(a) summoning and enforcing the attendance

of any person and examining him on oath;

(b) requiring the discovery and production of

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.

(3) Any proceeding before the Tribunal or the

Appellate Tribunal shall be deemed to be a

judicial proceeding within the meaning of

sections 193 and 228, and for the purposes of

section 196, of the Indian Penal Code (45 of

1860) and the Tribunal or the Appe llate

Tribunal shall be deemed to be a civil court for

all the purposes of section 195 and Chapter

XXVI of the Code of Criminal Procedure, 1973

(2 of 1974).

(4) For the purpose of proof of any entry in the

‘bankers books’, the provisions of the

20

Bankers’ Books Evidence Act, 1891 (18 of

1891) shall apply to all the proceedings before

the Tribunal or Appellate Tribunal.”

28. Thus, Section 22(1) of the 1993 Act stipulates that Tribunal

while deciding an application under Section 19 of the 1993

Act, shall not be bound by the procedure of the Code and shall

be guided by the principles of natural justice. Section 29 of

the 1993 Act makes certain provisions of the 1961 Act,

applicable to recovery of the amount of debt due under the

1993 Act. Section 29 is extracted below for the facility of

reference :-

“29. Application of certain provisions of

Income-tax Act.—The provisions of the

Second and Third Schedules to the Income-

tax Act, 1961 (43 of 1961) and the Income-

tax (Certificate Proceedings) Rules, 1962, as

in force from time to time shall, as far as

possible, apply with necessary

modifications as if the said provisions and

the rules referred to the amount of debt due

under this Act instead of to the Income-tax:

Provided that any reference under the said

provisions and the rules to the “assessee”

shall be construed as a reference to the

defendant under this Act.”

29. Section 29 of the 1993 Act mandates the Recovery Officer to

proceed in accordance with the procedure envisaged under

the Second Schedule to the 1961 Act subject to such

21

modification as may be notified for recovery of debts due

under the Act.

30. Before proceeding further, it is apposite to take note of Order

XXI Rule 22 of the Code which reads as under:

“22. Notice to show cause against execution

in certain cases. –

(1) Where an application for execution is made, -

(a) more than two years after the date of the

decree, or

(b) against the legal representative of a party to

the decree or where an application is made

for execution of a decree filed under the

provisions of section 44A or

(c) against the assignee or receiver in

insolvency, where the party to the decree has

been adjudged to be an insolvent,

the Court executing the decree shall issue a

notice to the person against whom execution

is applied for requiring him to show cause,

on a date to be fixed, why the decree should

not be executed against him:

Provided that no such notice shall be

necessary in consequence of more than two

years having elapsed between the date of the

decree and the application for execution if

the application is made within two years

from the date of the last order against the

party against whom execution is applied for,

made on any previous application for

execution, or in consequence of the

application being made against the legal

representative of the judgment-debtor if

upon a previous application for execution

against the same person the Court has

ordered execution to issue against him.

22

(2) Nothing in the foregoing sub-rule shall be

deemed to preclude the Court from issuing

any process in execution of a decree without

issuing the notice thereby prescribed, if for

reasons to be recorded, it considers that the

issue of such notice would cause

unreasonable delay or would defeat the ends

of justice.”

31. No doubt, that requirement contained in Order XXI Rule 22

is mandatory and the use of word “shall” in Order XXI Rule

22 of the Code admits of no ambiguity and the executing court

is under an obligation to issue notice to the person against

whom a decree is sought to be executed in the circumstances

enumerated therein

6

.

32. In the instant case, the decree was passed on 15.10.1991. The

Execution Petition was filed on 12.09.1995 before the Morena

Court in which respondent no.1 and her children were

impleaded which is evident from Annexure R-1 to the counter

filed in C.A. No. 190 of 2016 by the son of judgment-debtor

and respondent no. 1, himself, namely Jagminder Singh. The

record of execution proceeding annexed with the additional

documents by respondent no.1 herself discloses that as many

as on seven dates, namely 19.09.1995, 17.01.1996,

6

Bharat Kantilal Dalal (Dead) through LR v. Chetan Surendra Dalal & Ors., 2025 SCC OnLine SC

2502; Rahul S. Shah v. Jinendra Kumar Gandhi & Ors.; (2021) 6 SCC 418; Barkat Ali & Anr. v.

Badrinarain (Dead) by LRs., (2008) 4 SCC 615 and Satyanarain Bajoria & Anr. (supra)

23

10.05.1996, 26.08.1996, 3 0.10.1996, 30.11.1996 and

24.01.1997, notices under Order XXI Rule 66 of the Code

were issued to respondent no.1 and her children but the same

could not be served.

33. Thereafter, the Morena Court on 07.04.1997, directed

issuance of notice under Order XXI Rule 22 of the Code to the

respondent no.1 and her children. Again on 25. 06.1997,

12.08.1997, 23.10.1997 and 16.12.1997, the Morena Court

directed issuance of notice under Order XXI Rule 66 of the

Code, however, the same could not be served. The execution

proceeding stood transferred to DRT on 15.12.1998. On

10.07.2003, the respondent no. 1 filed a Miscellaneous

Application, namely M.A. No. 65 of 2003 in O.A. No. 225 of

1996 before the DRT, Delhi seeking a direction to the Bank to

release the title deeds in respect of the Delhi property. In

paragraphs 9, 11 and 15 of the said application, the

respondent no.1 mentioned about the pendency of the

execution proceeding. Thus, respondent no. 1 at least on

10.07.2003 was aware about the execution proceeding.

34. At this stage, it is pertinent to take note of the addition made

to Order XXI Rule 22 for the State of Punjab by which a

24

proviso was inserted to sub-rule 2 of Order XXI Rule 22 of the

Code by High Court Notification No. 125-GAZ-XI-Y-14 dated

07.04.1932. For the facility of reference Order XXI Rule 22(2)

with proviso as applicable to the State of Punjab is extracted

below:-

“22(2)-Nothing in the foregoing sub-rule

shall be deemed to preclude the Court from

issuing any process in execution of a

decree without issuing the notice thereby

prescribed, if for reasons to be recorded, it

considers that the issue of such notice

would cause unreasonable delay or would

defeat the ends of justice.

“Failure to record such reasons shall be

considered an irregularity not

amounting to a defect in jurisdiction.”

The aforesaid proviso is applicable to Delhi as well.

35. The Morena court for a long period of two years and three

months i.e. from 19.09.1995 to 16.12.1997 tried to serve

notices on respondent no.1 and her children and would have

been justified in proceeding with the execution of the decree

without notice to respondent no.1 and her children as

issuance of such notice would have caused unreasonable

delay. In view of Order XXI Rule 22(1) of the Code as

applicable to Delhi, even if, the execution proceeding had

continued before the Morena court, the non -issuance of

25

notice under Order XXI Rule 22(1) of the Code, would merely

have been an irregularity and not a defect in jurisdiction.

36. The respondent no. 1 and her children were impleaded in the

execution proceeding before the Morena court. The DRT was

established in Jabalpur on 07.04.1998. Thereupon, in view of

mandate contained in Section 31 of the 1993 Act, the

execution proceedings were transferred from Morena court to

DRT.

37. It bears emphasis that Delhi property was neither attached

nor brought to sale in execution of the decree as a proceeding

before the Morena court. It was attached and sold in exercise

of powers under the 1993 Act which is a special enactment

for expeditious recovery of debts due to banks and financial

institutions. The transfer of execution proceeding from

Morena court to the DRT, effected under Section 31 of the

1993 Act, did not merely change the forum of execution, it

clothed the Recovery Officer, with the power to recover the

amount in accordance with the procedure prescribed under

Section 29 of the 1993 Act read with Second Schedule to the

1961 Act, in supersession of procedure under the Code before

the Morena Court. The procedure governing the execution

26

before the Recovery Officer only required the notice under

Rule 2 of Second Schedule to 1961 Act. Therefore, Order XXI

Rule 22 of the Code has no impact on the validity of the

auction sale. Accordingly, the first question is answered.

38. Before proceeding to examine the second question, we may,

at this stage, take note of Rule 2 and Rule 61 of the Second

Schedule to the 1961 Act, which read as under:-

“2. Issue of notice.—When a certificate

has been received by the Tax Recovery

Officer from the [Assessing Officer] for the

recovery of arrears under this Schedule,

the Tax Recovery Officer shall cause to be

served upon the defaulter a notice

requiring the defaulter to pay the amount

specified in the certificate within fifteen

days from the date of service of the notice

and intimating that in default steps would

be taken to realise the amount under this

Schedule.

61. Application to set aside sale of

immovable property on ground of non -

service of notice or irregularity. —

Where immovable property has been sold

in execution of a certificate, 5 [such

Income-tax Officer as may be authorised

by the 6 [Principal Chief Commissioner or

Chief Commissioner] or 7 [Principal

Commissioner or Commissioner] in this

behalf], 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 of

the immovable property on the ground

that notice was not served on the

27

defaulter to pay the arrears as required by

this Schedule or on the ground of a

material irregularity in publishing or

conducting the sale:

Provided that—(a) no sale shall be set

aside on any such ground unless the Tax

Recovery Officer is satisfied that the

applicant has sustained substantial

injury by reason of the non-service or

irregularity; and

(b) an application made by a defaulter

under this rule shall be disallowed

unless the applicant deposits the

amount recoverable from him in the

execution of the certificate.”

39. The Rule 2 of the Second Schedule to the 1961 Act, requires

a notice of demand to be served upon a defaulter before

recovery is levied against him. Rule 2 of the Second Schedule

incorporates principles of natural justice to the procedure for

recovery. However, it is to be noted that the Second Schedule

also contains Rule 61 which supplies the consequences of and

the remedy precisely for such a default, namely an application

to set the sale aside on the ground of non-service of notice or

of irregularity. Such an application has to be made within a

period of 30 days from the sale and requires that sale shall be

set aside only if an applicant has sustained substantial injury

by reason of non-service or irregularity.

28

40. Admittedly, no notice under Rule 2 of the Second Schedule

was served either on respondent no. 1 or on her children.

However, it is pertinent to note, respondent no. 1 and her

children were already parties to the execution proceedings.

The respondent no. 1 had notice about the auction of Delhi

property as she had filed M.A. No. 65 of 2003 before DRT,

Delhi seeking release of original title deeds of the Delhi

property. In the said M.A. respondent no.1 had stated about

pendency of execution proceeding. The respondent no.1 had

also filed an application seeking recall of the order dated

20.09.2004 directing an auction. Therefore, the question of

substantial injury being caused to respondent no. 1 and her

children on account of non-service of notice under Rule 2 of

the Second Schedule to the 1961 Act, does not arise. It is also

pertinent to note that even after the sale, the legal

representative did not take recourse to the remedy provided

under Rule 61 of the Second Schedule of the 1961 Act.

Therefore, in the facts and circumstance of the case, absence

of notice under Rule 2 of the Second Schedule to the 1961

Act, does not render either the execution or the sale void.

Accordingly, the second question is answered in the negative.

29

41. Now, we deal with the third question. It is pertinent to note

that clause (ccc) incorporated in sub-Section (1) of Section 60

of the Code, by means of Section 35 of the Punjab Relief of

Indebtedness Act, 1934 as amended by Punjab Amendment

Act No. XII of 1940 and Punjab Amendment Act No.VI of 1942,

application of which was extended to the erstwhile State of

Delhi by a subsequent notification dated 08.06.1956

published in the Gazette on 16.06.1956. Admittedly, Section

60(1)(ccc) of the Code applies to National Capital Territory of

Delhi. The relevant extract of Section 60(1)(ccc) of the Code is

reproduced below: -

“60. Property liable to attachment and sale

in execution decree-

(1) x x x

Provided that the following particulars shall

not be liable to such attachment or sale,

namely,

(ccc) one main residential house and other

buildings attached to it (with the material and

the sites thereof and the land immediately

appurtenant there to and necessary for their

enjoyment) belonging to a judgment-debtor

other than an agriculturist and occupied by

him:

Provided that the protection afforded by this

clause shall not extend to any property

specifically charged with the debt sought to be

recovered.”

30

42. Section 60(1)(ccc) of the Code in its application to Delhi

exempts attachment and sale of one main residential house

belonging to judgment-debtor other than an agriculturist and

occupied by him the protection is by its own text personal to

the judgment debtor as it is confined to a house belonging to

and occupied by the judgment debtor and this protection does

not extend to legal representatives of judgment debtor.

43. The Delhi High Court

7

interpreting Section 60(1)(ccc) of the

Code has held that a legal representative is a distinct juridical

concept from judgment debtor and liability devolving upon

legal representative is limited to the estate in his hands and

he cannot, merely by virtue of residing in a house which

belonged to the deceased judgment debtor, claim personal

exemption that Section 60(1)(ccc) of the Code affords to a

judgment-debtor alone. The same view has commended itself

to the Punjab & Haryana High Court in two decisions

8

. Thus,

the plea of exemption under Section 60(1)(ccc) of the Code is

personal to the judgment-debtor and is not available to be

raised by his legal representatives.

7

Yogesh Sharma & Ors. v. Devi Dayal & Ors., AIR 1977 Delhi 270

8

K.L. Bawa v. Basant Textiles, AIR 1982 P&H 275, Pargat Singh & Anr. v. Gurmail Kaur & Ors.;

2014 SCC OnLine P&H 23436

31

44. The view taken by the Delhi and Punjab & Haryana High

Courts about the interpretation of local amendment to Section

60(1) of the Code, namely Section 60(1)(ccc) of the Code which

is applicable to the State of Punjab, Haryana and Delhi has

held the field for thirty seven long years. We find no good

ground to differ with the view taken by the aforesaid High

Courts. Therefore, the plea of exemption under Rule 10 of the

Second Schedule read with Section 60(1)(ccc) of the Code is

not available to respondent no. 1 and her children.

45. For yet another reason, it is not necessary for us to examine

the issue of applicability of Section 60(1)(ccc) of the Code. It

is a well-settled legal proposition that a pure question of law

can be raised at any stage of the proceeding but a question of

fact that requires an investigation and inquiry for which no

factual foundation has been laid cannot be allowed to be

agitated in a writ petition. Thus, a mixed question of law and

fact cannot be raised for the first time in a writ petition

9

.

46. It is noteworthy that respondent no. 1 neither in her

application before the Recovery Officer on 24.10.2004, nor in

M.A. 65 of 2003 filed before the DRT, Delhi raised an objection

9

Greater Mohali Area Development Authority & Ors. v. Manju Jain & Ors.; (2010) 9 SCC 157,

(2010) 3 SCC (Civ) 639

32

with regard to plea of exemption under Section 60(1)(ccc) of

the Code. The respondent no. 1 also did not raise the plea in

her appeal against order dated 10.10.2006 (31 of 2006) and

in the writ petition filed against the order dated 13.11.2006

passed by the DRT. The respondent no. 1’s plea of exemption

under Section 60(1) (ccc) of the Code, came to light for the

first time in a writ petition filed against the order dated

27.02.2007 rejecting the application for stay wherein the High

Court while dismissing the writ petition observed that there

is no iota on record that the exemption was ever claimed by

her. In the proceeding before the DRT, leading to order dated

29.05.2007, the respondent no. 1 did not either plead or lead

any evidence with regard to applicability of exemption under

Section 60(1)(ccc) of the Code. Therefore, the High Court erred

in entertaining and in remitting the matter to the Recovery

Officer, DRT to decide the same after giving an opportunity to

the parties to lead evidence. Accordingly, the third question is

answered.

47. For the foregoing reasons, the impugned judgment dated

15.05.2009 passed by the High Court of Madhya Pradesh at

Jabalpur in Writ Petition No. 2199 of 2008 is quashed and set

aside.

33

48. In the result, C.A. No. 182 of 2016 and C.A. No. 190 of 2016

are allowed whereas C.A. No. 191 of 2016 is dismissed.

However, there shall be no order as to costs.

……………..……………………………….J.

[PAMIDIGHANTAM SRI NARASIMHA]

………………………………………………J.

[ALOK ARADHE]

NEW DELHI;

AUGUST 14, 2026.