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Debt Recovery Tribunal empowered to sell property of borrowers, guarantors

The Allahabad High Court has approved a ruling that gives complete authority to the Debt Recovery Tribunal (DRT) under the law to sell the property of borrowers or guarantors of a loan through recovery officers.
 
The High Court further ruled that the sale certificate granted by the recovery officer is fully covered under Article-18 of Schedule I-B of Stamp Act and the stamp duty is chargeable on the amount of sale certificate.
 
The issue before the court for consideration was that sale certificate issued to the petitioners by an officer of the Debt Recovery Tribunal was a body empowered under any law for time being in force to sell such property by public auction and also the payment of stamp duty on such sale certificate.
 
The borrower had failed to pay the money to the bank and therefore in pursuance of the recovery certificate, the recovery officer auctioned the property of the borrower in which highest bid of the petitioners was accepted by the recovery officer and a sale certificate was issued by the recovery officer of the DRT.
 
While passing the order on a writ petition filed by Avdhesh Tyagi & others, Justice Sabhajeet Yadav said that in view of the statements of law contained in various provisions of the Act, 1993, it is clear that since by virtue of Section-18, read with Section-31 of the Act, the jurisdiction of court and other authority is barred from exercising the jurisdiction and powers conferred on the tribunals constituted and established under the said Act from the appointed date and the tribunal alone is entitled to recover the debts due to the banks and financial institutions.
 
Therefore, there can be no scope for doubt to hold that the Debt Recovery Tribunal is an authority or body empowered under law for time being in force under the Act 1993 to sell the property of defendants before the tribunal, who are borrowers and/or guarantor of the loan through recovery officers as such recovery officers are authorized to sell property of such defendants by public auction for recovery of debts specified in the certificate issued by the tribunal and to grant sale certificate to the purchaser of the property, the court stated.
 
As such, in my considered opinion, such sale certificate granted by the recovery officer is fully covered by Article-18 of Schedule I-B of Stamp Act.
 
It is immaterial that the aforesaid sale certificate was not granted by the civil or Revenue court, Collector or Revenue Officer, the judge added.
 
Allowing the writ petition, the court said that the petitioners are liable to pay stamp duty on the basis on a sale certificate and they are not liable to pay stamp duty under Article-23 of Schedule I-B on the market value of the property determined/fixed by the collector under the Stamp Act.

 

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