Sheela Gehlot vs Mohini Hardayal Singh

Headnote Court Copy Facts Arguments Court observation Judicial Analysis Case Map Category Hierarchy Table of Content

2026 Supreme(SC) 939

SUPREME COURT OF INDIA
Pamidighantam Sri Narasimha, Alok Aradhe, JJ.
Sheela Gehlot – Appellant
Versus
Mohini Hardayal Singh & Ors. – Respondents
Civil Appeal No. 182 of 2016
With
Punjab & Sind Bank – Appellant
Versus
Mohini Hardayal Singh & Ors. – Respondents
Civil Appeal No. 190 of 2016
And
Jagminder Singh – Appellant
Versus
Punjab & Sind Bank & Ors. – Respondents
Civil Appeal No. 191 of 2016
Decided On : 14-08-2026

Important Points

IMPORTANT POINTS
(1) Auction sale of mortgaged asset – Tribunal while deciding application under Section 19 of 1993 Act, shall not be bound by procedure of CPC and shall be guided by Principles of Natural Justice.
(2) Writ Petition – A mixed question of law and fact cannot be raised for first time in a writ petition.

Subject

Civil Law - Execution of Decree / Debt Recovery

Act Referred

CIVIL PROCEDURE CODE: O.21 R.22, O.21 R.66
INCOME TAX RULES: R.60, R.61
INDIAN PENAL CODE: S.196
PUNJAB RELIEF OF INDEBTEDNESS ACT: S.35
RECOVERY OF DEBTS AND BANKRUPTCY ACT: S.19, S.22(1), S.29
RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT: S.31

Headnote

(A) Civil Procedure Code, 1908 – Order XXI Rule 22 – Insolvency and Bankruptcy Code, 2016 – Section 60(1)(ccc) – Recovery of Debts and Bankruptcy Act, 1993 – Sections 19 and 22 – Income Tax Act, 1961 – Rule 2 of Second Schedule – Auction sale of mortgaged asset – Tribunal while deciding application under Section 19 of 1993 Act, shall not be bound by procedure of CPC and shall be guided by Principles of Natural Justice – Executing Court is under obligation to issue notice to person against whom decree is sought to be executed – Procedure governing execution before Recovery Officer only required notice under Rule 2 of Second Schedule to 1961 Act – Order XXI Rule 22 of CPC has no impact on validity of auction sale – Absence of notice under Rule 2 of Second Schedule to 1961 Act, does not render either execution or sale void – Impugned judgment passed by High Court quashed and set aside. (Paras 28, 31, 37, 40 and 47)

(B) Constitution of India – Article 226 – Writ Petition – A pure question of law can be raised at any stage of proceeding – But a question of fact that requires investigation and inquiry for which no factual foundation has been laid, cannot be allowed to be agitated in a writ petition – A mixed question of law and fact cannot be raised for first time in a writ petition. (Para 45)

Facts of the case:

Questions which arise for determination are as follows: (i) whether plea of non-compliance of Order XXI Rule 22 of the Code has any impact on auction sale? (ii) whether failure to serve notice under Rule 2 of Second Schedule to 1961 Act to the respondent no.1 and her children in respect of Delhi property has rendered the execution or sale void? and (iii) whether the Delhi property was exempt from attachment under Rule 10 of the Second Schedule read with Section 60(1)(ccc) of the Code? We proceed to examine the aforesaid questions in its turn.

Findings of Court:

High Court erred in entertaining and in remitting the matter to Recovery Officer, DRT to decide same after giving an opportunity to parties to lead evidence.

Result : Civil Appeals partly allowed.

Legal Category Hierarchy

Advocates appeared:
For the Appellant(s) : Mr. Nikilesh Ramachandran, AOR Mr. P. K. Agrawal, Adv. Mr. Arun K. Sinha, AOR Mr. Rakesh Singh, Adv. Mr. D.N. Goburdhun, Sr. Adv. Mr. Rohan Kochhar, Adv. Mr. Saurabh Agrawal, AOR Ms. Gouri Goburdhun, Adv. Ms. Komal Mundhra, Adv. Mr. Ashutosh Rana, Adv. Ms. Laxita Upadhyay, Adv.
For the Respondent(s): Mr. Sanjay Kapur, AOR Mr. Nikilesh Ramachandran, AOR M/S. Karanjawala & Co., AOR Mr. Arjun Harkauli, AOR Mr. Pk Agrawal, Adv. Mr. A. Venayagam Balan, AOR Mr. Akshay Chitkara, Adv. M/s Sanjoli Gupta, Adv. Ms. Sanjoli Gupta, Adv. Mr. Darpan Jain, Adv. Mrs. Santhanalakshmi, Adv. Mr. Rishab Tomar, Adv. Mr. Puneet Thakur, Adv. Mr. Karuchola Koteswara Rao, Adv. Ms. Tina Garg, AOR Mr. D.N. Goburdhun, Sr. Adv. Mr. Rohan Kochhar, Adv. Mr. Saurabh Agrawal, AOR Ms. Gouri Goburdhun, Adv. Ms. Komal Mundhra, Adv. Mr. Ashutosh Rana, Adv. Ms. Laxita Upadhyay, Adv. Mr. Senthil Jagadeesan, Sr. Adv. Mr. Santosh Krishnan, AOR Mr. Ashwin Joseph, Adv. Mr. Vedant Singh, AOR Ms. Aarthi Rajan, AOR Mr. S. Santanam Swaminadhan, Adv. Ms. Abhilasha Shrawat, Adv. Mr. Kartik Malhotra, Adv. Ms. Manasigauri Agrawal, Adv. Mr. Naveen Nagarjuna, AOR

Table of Content
1. background facts of debt recovery and auction sale (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21)
2. submissions on notice, jurisdiction, and exemption (Para 22 , 23 , 24 , 25)
3. statutory framework for recovery proceedings (Para 26 , 27 , 28 , 29 , 30 , 31)
4. order xxi rule 22 not mandatory under 1993 act (Para 32 , 33 , 34 , 35 , 36 , 37)
5. non-service of notice does not void sale without substantial injury (Para 38 , 39 , 40)
6. section 60(1)(ccc) exemption personal to judgment-debtor (Para 41 , 42 , 43 , 44 , 45 , 46)
7. appeals allowed, impugned judgment set aside (Para 47 , 48)

JUDGMENT

ALOK ARADHE, J.

1. These appeals arise from the judgment dated 15.05.2009 passed by the High Court of Madhya Pradesh at Jabalpur (High Court) in Writ Petition No. 2199 of 2008, whereby the High Court set aside the judgment of the Debts Recovery Appellate Tribunal, Allahabad (DRAT) dated 01.02.2008 and remitted the matter to the Debts Recovery Tribunal, Jabalpur (DRT) for a fresh inquiry. The appellant before us in C.A. No. 182 of 2016 is an Auction-Purchaser whereas appellant in C.A. No. 190 of 2016 is Punjab & Sind Bank (the Bank). C.A. No. 191 of 2016 has been filed by Jagminder Singh, son of late Mr. Hardayal Singh (the judgment-debtor). In order to appreciate the challenge laid by the appellants to the impugned judgment, it is necessary to set out the relevant facts, which are stated infra.

FACTS

2. M/s. Sterling Malt & Foods Pvt. Ltd. (the Company) was a company incorporated with the judgment- debtor, the husband of Smt. Mohini Hardayal Singh (respondent no.1) and Mr. N.S.S. Rao as its Managing Directors having its registered office at S-246, Panchsheel Park, New Delhi. The Company manufactured malt at its factory located at 34, Industrial Area Banmore, District Morena, Madhya Pradesh.

3. The Company availed credit facilities from the Bank through its branches at Connaught Place, New Delhi and Jayendraganj, Gwalior. A charge was created over the factory land, building, plant and machinery, and the two Directors of the Company, namely judgment-debtor and Mr. N.S.S. Rao furnished personal guarantees. The house bearing No. S-246, Panchsheel Park, New Delhi (the Delhi Property) was not mortgaged for the loan taken by the Company.

4. The malt manufacturing unit ceased to function in 1983, leading to irregularity in repayment of loans. The Bank instituted a suit under Section 34 of the Code for enforcement of the security of equitable mortgage, namely Civil Suit No. 2601 of 1986 before the High Court of Delhi which was transferred to DRT, Delhi in 1996 and re-registered as O.A. No. 225 of 1996. The Bank filed another suit namely Suit no. 1-B of 1987 for recovery of an amount of Rs.3,84,29,670/-(Rupees Three Crore Eighty Four Lakh Twenty Nine Thousand Six Hundred Seventy) with interest from the Company before the District Court, Morena (Morena Court).

5. After filing of the suit by the Bank, the Company started searching for investors to take over its assets and liabilities. The respondent nos. 7 to 11, namely L.K. Trust and its trustees, in order to bail out and revive the Company acquired the majority of shareholding in the Company and proposed a scheme for its revival. The said scheme was accepted by the Bank. The Bank amended the plaint in Civil Suit no. 1-B of 1987 and arrayed respondent nos. 7 to 11 as defendants in the suit re-registering the suit as Civil Suit No. 26-A of 1989. The parties entered into a compromise on the basis of which a compromise decree was passed on 15.10.1991 by the Morena court. Under the compromise decree, the Trust and its trustees were required to pay a sum of Rs. 1.80 crores payable in half-yearly instalments over a period of seven years commencing from December, 1991. Clause 2(e) of the compromise recorded that the title deeds of the Delhi property furnished as a collateral security by the judgment-debtor, would stand released, however, it wa