Disputed title in recovery proceedings may be decided by the tribunal, with recovery stayed until ownership is determined.

Where recovery proceedings involve a disputed title to attached property, the Debts Recovery Tribunal may determine ownership as an incidental part of its recovery powers, while the Recovery Officer has no separate jurisdiction to decide that dispute. The commentary also notes that, where the title question goes to the basis of attachment, recovery may be kept in suspense pending adjudication of ownership, after hearing the affected parties and the official liquidator, with principles akin to resistance to execution under Order 21 Rules 97 to 100 CPC guiding the process.

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Issues: (i) Whether the Debts Recovery Tribunal could decide the question of title to the properties sought to be attached in recovery proceedings. (ii) Whether the recovery proceedings should remain suspended until that question was decided.

Issue (i): Whether the Debts Recovery Tribunal could decide the question of title to the properties sought to be attached in recovery proceedings.

Analysis: The recovery scheme under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 vests the Tribunal with authority not only to adjudicate the debt but also to control consequential recovery steps. The Tribunal's power to order security or attachment under Section 19(13A) of the Act makes the determination of title to property an incidental and necessary aspect of effective execution. The Recovery Officer, however, has no independent jurisdiction to adjudicate such title disputes. The Court distinguished the earlier Supreme Court rulings on exclusive jurisdiction and notice to the official liquidator, holding that those decisions did not finally answer the specific issue of title dispute concerning a guarantor's property in the present context.

Conclusion: The Debts Recovery Tribunal was competent to decide whether the disputed properties belonged to the applicant/respondent No. 2.

Issue (ii): Whether the recovery proceedings should remain suspended until that question was decided.

Analysis: Since the title dispute went to the very basis of the attachment sought in execution, and because an erroneous determination could unfairly affect either the company in liquidation or the applicant, the Court directed that the Tribunal should first resolve the ownership question. The direction was to be made after hearing the parties and the official liquidator, applying the principles governing resistance to execution under Order 21, Rules 97 to 100 of the Code of Civil Procedure, 1908. Pending that determination, a temporary stay of recovery was considered necessary to preserve the parties' positions.

Conclusion: The recovery proceedings against the applicant/respondent No. 2 were ordered to remain suspended, with an initial unconditional stay for four weeks and continuation of the stay upon timely application to the Tribunal.

Final Conclusion: The application succeeded in securing Tribunal adjudication of the ownership dispute and interim protection against recovery until that adjudication was made.

Ratio Decidendi: Where recovery proceedings involve a disputed question of title to property, the Tribunal exercising recovery jurisdiction may determine that dispute as an incidental part of its execution powers, and interim recovery may be suspended until such determination is made.

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