Symbolic possession in auctioned tenanted property bars direct eviction without statutory enquiry and due process.

Where auctioned property remains in the lawful occupation of a tenant, Rule 40 of the Income Tax (Certificate Proceedings) Rules, 1962, as applied through section 29 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, contemplates symbolical delivery and not direct eviction. The recovery machinery under Rules 39 to 47, read with execution principles under Order XXI CPC, requires the occupant to be dealt with through the prescribed enquiry and due process before any dispossession. An auction purchaser of tenanted property acquires only the defaulter's right, title and interest, and must seek eviction in accordance with law rather than by a direct order to hand over vacant possession.

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Issues: Whether the Recovery Officer could direct tenants in occupation of auctioned property to hand over actual vacant possession under Rule 40 of the Income Tax (Certificate Proceedings) Rules, 1962 read with section 29 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, and whether the auction purchaser was entitled only to symbolical possession.

Analysis: Section 29 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 makes the Second and Third Schedules to the Income Tax Act, 1961 and the Income Tax (Certificate Proceedings) Rules, 1962 applicable with necessary modifications. Rule 40, which applies where the property sold is in the occupation of a tenant or other person entitled to occupy it, contemplates delivery by proclamation and affixation and not eviction of the occupant. The scheme of Rules 39 to 47, when read with the corresponding execution principles under Order XXI of the Code of Civil Procedure, 1908, shows that a tenant in lawful occupation is not to be thrown out by a direct order of forcible eviction. The Recovery Officer also failed to follow the enquiry procedure contemplated by Rules 41 to 45 before passing the order. A purchaser of tenanted property gets only the defaulter's right, title and interest and is entitled to symbolical possession, while eviction of the tenant must be pursued in accordance with law.

Conclusion: The Recovery Officer had no authority to direct the tenants to deliver actual possession, and the impugned order was unsustainable.

Ratio Decidendi: Where auctioned property is in the lawful occupation of a tenant, the recovery machinery under Rule 40 provides only symbolical delivery to the purchaser and does not authorise eviction without the statutory enquiry and due process prescribed by the relevant rules.

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