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  • Chapter-V of the RDB Act sets out the procedures that the Recovery Officer should follow in conducting his proceedings in pursuance of the Recovery Certificate issued by the Presiding Officer of the Debts Recovery Tribunal. The Act further clothes the Recovery Officer of the Tribunal with the provisions of the Income Tax Act. The provisions of the Income Tax Act which the Recovery Officer is clothed with are :

    1. Chapter V of the RDB Act.

    2. 2nd Schedule of the Income Tax Act.

    3. 3rd Schedule of the Income Tax Act.

    4. The Income Tax (Certificate of Proceedings) Rules.

    Where the Auction-Sale is under the provisions of the SRFAESI Act and is being effected by the Authorised Officer of the lending insitutions, then separate procedures are followed. The sale could be by negotiated disposal, or through a trust mechanism. There need not necessarily be a public auction in the normal sense.

    Auction - sale by the State Financial Corporations could be held under the State Financial Corporation Act, which is a separate self contained Act. Here, the SFC could take over the assets and sell separately by negotiations with possible investors/enterprenuers.

    Auction-Sale by Official liquidators are held under the orders of the Company Court benches of the repective High courts. Here the bids are processed and placed before the bench of the Court for orders.

    Auctions by the Recovery Officers are conducted under provisions of Chapter-V, Sections 25 to 30 of the RDB Act.

    In addition to the above, the Recovery Officers are empowered under provisions of Schedule II of the Income Tax, the Schedule III of the Income Tax Act, and also the Income Tax (Certificate Proceedings) Rules.

    The Recovery Officer comes into picture once the Presiding Officer of the Tribunal has issued a Recovery Certificate in a case. The merits of the Certificate, or the amounts mentioned in the Certificate cannot be agitated before the Recovery Officer.

    The Recovery Officer does not have the right to alter any amount mentioned in the Certificate. His role is limited to addition of certain standard amounts to the Certificate, which are actual "costs" as stipulated in the applicable rules.

    The Recovery Officer does not have the powers to add or delete names of persons whose onus it is to satisfy the certificate. He can however enlarge the area of persons from whom he may attempt to satisfy the Certificate, subject to provisions of the Rules, ie: the new persons must be holding amounts on behalf of the Certificate debtor.

    Before making payments to the Certificate creditors, the Recovery Officer is obliged to hear other claimants to the amounts, especially the State dues and the labor dues. In so far as labor dues are concerned the Recovery Officer is required to satisfy them as per the Supreme Court guidelines.

    Unless a specific stay order has been received, the Recovery Officer is not obliged to stay recovery proceedings merely on the ground that an appeal has been filed, or a Miscellaneous Application is pending for being heard.

    The powers of the Recovery Officer for arrest and detention are as prescribed in the Act as well as the applicable rules.

    An appeal against the order of the Recovery officer lies to the Presiding Officer of the Tribunal under whose jurisdiction he functions. Such an appeal should be filed within thirty days of passing of the impugned order.

    For General Terms & Conditions of Auctions, click here.

    If you are a regular investor in 'stressed' and 'non-performing' assets, or, looking for any particular kind of property, please contact the Web Master for assistance.

    BankDRT also offers value added services in the field of due diligence for the sale-disposal of properties. For details, please click here.