Supreme Court of India· 14 August 2026

Under the Recovery of Debts and Bankruptcy Act, 1993, does Order XXI Rule 22 of the Code apply to an auction sale after execution is transferred to the DRT?

Sheela Gehlot v. Mohini Hardayal Singh & Ors

2026 INSC 863 · CIVIL APPEAL NO. 182 OF 2016
Coram: Alok Aradhe; Pamidighantam Sri Narasimha

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Answer

No — once execution is transferred to the DRT under Section 31 of the 1993 Act, the procedure prescribed by Section 29 of the 1993 Act read with the Second Schedule to the Income Tax Act, 1961 applies in supersession of the Code's procedure, and Order XXI Rule 22 has no impact on the validity of the auction sale.

Headnote

Recovery of Debts and Bankruptcy Act, 1993 — Section 31 — Section 29 — Code of Civil Procedure, 1908 — Order XXI Rule 22 — Section 60(1)(ccc) — Income Tax Act, 1961 — Second Schedule — Auction sale — Exemption — Attachment — Recovery of Debts and Bankruptcy Act, 1993 — Section 31, Section 29 — Execution procedure after transfer to DRT — Held: Once execution is transferred to the DRT under the 1993 Act, its own procedure applies in supersession of the Code. Order XXI Rule 22 of the Code therefore has no impact on the validity of the auction sale. (¶37) Income Tax Act, 1961 — Second Schedule, Rule 2 and Rule 61 — Non-service of notice, substantial injury — Held further: Absence of notice under Rule 2 of the Second Schedule does not void a sale where the defaulter had actual knowledge of the proceeding. A sale is set aside under Rule 61 only on proof of substantial injury from non-service or irregularity. (¶39, 40) Code of Civil Procedure, 1908 — Section 60(1)(ccc) — Exemption personal to judgment-debtor — Held further: The exemption of a main residential house from attachment under Section 60(1)(ccc) of the Code is personal to the judgment-debtor, not his legal representatives. The mixed question of law and fact cannot be raised for the first time in a writ petition. (¶43, 45) Recovery of Debts and Bankruptcy Act, 1993 — Auction sale — Remand set aside, appeals disposed — Held further: The High Court's remand for a fresh inquiry on these questions was therefore erroneous. The impugned judgment is set aside; the Auction-Purchaser's and the Bank's appeals are allowed, and the legal representative's appeal is dismissed, with no order as to costs. (¶47, 48)

In the Court's own words

Paragraph 37It bears emphasis that Delhi property was neither attached nor brought to sale in execution of the decree as a proceeding before the Morena court. It was attached and sold in exercise of powers under the 1993 Act which is a special enactment for expeditious recovery of debts due to banks and financial institutions. The transfer of execution proceeding from Morena court to the DRT, effected under Section 31 of the 1993 Act, did not merely change the forum of execution, it clothed the Recovery Officer, with the power to recover the amount in accordance with the procedure prescribed under Section 29 of the 1993 Act read with Second Schedule to the 1961 Act, in supersession of procedure under the Code before the Morena Court. The procedure governing the execution before the Recovery Officer only required the notice under Rule 2 of Second Schedule to 1961 Act. Therefore, Order XXI Rule 22 of the Code has no impact on the validity of the auction sale. Accordingly, the first question is answered.

Acts & Sections

Section 31, Recovery of Debts and Bankruptcy Act, 1993Section 29, Recovery of Debts and Bankruptcy Act, 1993Section 22, Recovery of Debts and Bankruptcy Act, 1993Order XXI Rule 22, Code of Civil Procedure, 1908Section 60(1)(ccc), Code of Civil Procedure, 1908Rule 2 of the Second Schedule to the Income Tax Act, 1961Rule 10 of the Second Schedule to the Income Tax Act, 1961Rule 61 of the Second Schedule to the Income Tax Act, 1961Section 35, Punjab Relief of Indebtedness Act, 1934

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Also decided in this judgment

Under the Income Tax Act, 1961, does the absence of notice under Rule 2 of the Second Schedule void a sale where the defaulter already had knowledge of the execution proceeding?Is the exemption from attachment of a residential house under Section 60(1)(ccc) of the Code of Civil Procedure available to the legal representatives of a deceased judgment-debtor?Can a mixed question of law and fact be raised for the first time in a writ petition if no factual foundation was laid before the original authority?

Plain-language answer prepared by the LexStreak Editorial Desk — verify against the judgment. Source: Supreme Court of India. Corrections