Recovery sale procedure permits confidential valuation and reserve price fixation, but sale must not exceed what is needed to realise dues.

Section 29 of the recovery law incorporates the Second and Third Schedules to the Income-tax Act with necessary modifications, so the debtor receives notice of the sale proclamation but not a prior hearing on valuation or reserve price fixation unless the incorporated rules expressly confer that right. On that basis, regulation 60, allowing confidential valuation by an approved valuer and reserve price fixation on that valuation, was treated as consistent with the statutory scheme. The sale must still be confined to what is necessary to realise the dues, and the extent of the property to be sold required further valuation-based examination.

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Issues: Whether regulation 60 of the Debt Recovery Tribunal, Maharashtra and Goa, Regulations of Practice, 2003 was inconsistent with section 29 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 read with rules 52 and 53 of the Second Schedule to the Income-tax Act, 1961; and whether the property attached for recovery could be sold only to the extent necessary to satisfy the decree debt.

Analysis: Section 29 makes the Second and Third Schedules to the Income-tax Act, 1961 and the Income-tax (Certificate Proceedings) Rules, 1962 applicable, with necessary modifications, to recovery proceedings under the Act. Rules 52 and 53 require notice to the defaulter for the proclamation of sale, but they do not require a hearing before valuation is made or reserve price is fixed, nor do they require acceptance of any alternative valuation furnished by the debtor. Regulation 60, which provides for confidential valuation by an approved valuer and fixation of reserve price on that basis, was held to be consistent with the statutory scheme. At the same time, the sale should not extend beyond what is necessary to realize the dues, and the question whether only a part of the property could be sold, and whether the access road shown in the valuation report would unnecessarily affect the value of the other plot, required further examination by the valuation officer.

Conclusion: The challenge to regulation 60 failed. The request to confine the sale to the extent necessary remained under consideration for further examination.

Final Conclusion: The statutory sale procedure under the recovery law was upheld, while the extent and configuration of the property to be sold required further valuation-based scrutiny.

Ratio Decidendi: Where the recovery statute incorporates the income-tax sale procedure only with necessary modifications, the debtor is entitled to notice of the sale proclamation but not to a prior hearing on valuation or reserve price fixation unless the incorporated rules expressly provide such a right.

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