Civil court jurisdiction in third-party claim to attached property upheld; auction during interim suspension treated as non est.

The statutory scheme governing recovery proceedings preserves a third party's right to sue after rejection of a claim to attached property, so the civil court remained competent to entertain the partition suit and grant interim protection against recovery action. The challenge based on lack of jurisdiction therefore failed, and supervisory interference under Article 227 was not the proper course. A sale conducted while an interim suspension of the injunction was operating could not be sustained, because the record showed the auction was postponed, the earnest money was returned, and no fresh auction date was notified before the sale. The sale was treated as non est and incapable of being acted upon.

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Issues: (i) Whether the civil court had jurisdiction to entertain the suit filed by third-party claimants and to grant interim protection against recovery proceedings; (ii) whether the auction conducted during the operation of the interim suspension of the ad interim injunction could be sustained.

Issue (i): Whether the civil court had jurisdiction to entertain the suit filed by third-party claimants and to grant interim protection against recovery proceedings.

Analysis: The recovery mechanism under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 permits execution through the Recovery Officer, but section 29 applies the Second Schedule to the Income-tax Act, 1961, including Rule 11, to third-party objections. Rule 11(6) expressly preserves the right of the party aggrieved by rejection of a claim to institute a civil suit to establish title, and the Recovery Officer's order remains subject to the result of such suit. On that footing, the civil court was held competent to try the partition suit and to pass interim orders to protect the claimed property. The petitioner was also held to have alternative remedies before the civil court or by appeal, and supervisory jurisdiction under Article 227 was not the proper course.

Conclusion: The civil court had jurisdiction, and the challenge to the ad interim injunction on the ground of lack of jurisdiction failed.

Issue (ii): Whether the auction conducted during the operation of the interim suspension of the ad interim injunction could be sustained.

Analysis: The record showed that the auction was postponed, the EMD was returned, and thereafter the sale was conducted without notifying a fresh auction date while the interim suspension was in force. The court treated the resulting prejudice as one caused by the court's interim order and held that such prejudice had to be corrected at final disposal. On that basis, the sale held during the subsistence of the interim suspension was held to be incapable of being acted upon.

Conclusion: The auction and sale conducted during the interim suspension were held to be non est.

Final Conclusion: The revision petition did not succeed, the civil court's protective order was sustained, and the sale proceedings taken during the interim arrangement were treated as invalid.

Ratio Decidendi: Where the statutory scheme expressly preserves a third party's right to sue after rejection of a claim to attached property, the civil court retains jurisdiction, and any sale conducted in disregard of the operative interim order may be treated as void in law.

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