TaxTMI Login
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →Just a moment...
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether the sale of the secured assets was a private transaction outside the jurisdiction of the recovery forums, so as to render the orders of the Recovery Officer, DRT and DRAT without jurisdiction; (ii) whether the confirmed sale could later be set aside for default in complying with the terms and conditions of sale and the Consent Terms; (iii) whether the challenge was barred by limitation or otherwise defeated by the statutory scheme governing recovery and enforcement.
Issue (i): Whether the sale of the secured assets was a private transaction outside the jurisdiction of the recovery forums, so as to render the orders of the Recovery Officer, DRT and DRAT without jurisdiction.
Analysis: The sale was not a purely private arrangement. The Receiver and Recovery Officer conducted the process under orders already passed in recovery proceedings, invited multiple bidders, approved special terms of sale, considered revised offers, and confirmed the highest bid through orders of the recovery forum. The petitioner participated throughout, sought possession, and repeatedly sought time to comply with the very terms approved in those proceedings. The statutory scheme under the recovery law and the Second Schedule to the Income-tax Act vested jurisdiction in the Recovery Officer for questions relating to execution, discharge, satisfaction, confirmation, and setting aside of the sale. The remedies under the recovery law and the SARFAESI framework were held to be complementary, not mutually exclusive.
Conclusion: The sale was within the jurisdiction of the recovery forums, and the jurisdictional challenge failed.
Issue (ii): Whether the confirmed sale could later be set aside for default in complying with the terms and conditions of sale and the Consent Terms.
Analysis: The sale was conditional and remained subject to compliance with deferred payment obligations, creation of security, issue and registration of debentures, insurance of the assets, and other agreed terms. The petitioner did not fulfil those obligations despite repeated extensions and continued to default over a sustained period. The Consent Terms did not extinguish the recovery forum's authority; instead, they reinforced the binding nature of the sale conditions and the petitioner's undertakings. A confirmed sale does not become immune from being set aside where the purchaser remains in breach of the conditions on which the sale was sanctioned.
Conclusion: The sale was validly set aside for non-compliance with the sale conditions, and the petitioner's objection failed.
Issue (iii): Whether the challenge was barred by limitation or otherwise defeated by the statutory scheme governing recovery and enforcement.
Analysis: Article 127 of the Limitation Act, 1963 was held inapplicable because the setting aside of the sale arose from default in complying with the terms of a court-supervised recovery sale, not from the type of auction challenge contemplated by Order XXI Rules 89 to 91 of the Code of Civil Procedure, 1908. The statutory framework under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and the Second Schedule to the Income-tax Act, 1961 governed the matter. The petitioner's own conduct in repeatedly seeking extensions and recognising the forum's authority was inconsistent with its limitation and lack-of-jurisdiction objections.
Conclusion: The limitation plea and related statutory objections were rejected.
Final Conclusion: The writ petition was devoid of merit, the impugned order was upheld, and the petitioner was found to have defaulted in honouring the conditions of the court-supervised sale.
Ratio Decidendi: Where a sale of secured assets is conducted under the supervision of the recovery forum on conditional terms, the Recovery Officer retains jurisdiction until the recovery certificate is satisfied, and persistent non-compliance with the approved sale conditions justifies setting aside the sale notwithstanding confirmation or possession.
TaxTMI 
TaxTMI 
