The Supreme Court has held that the requirement to serve a legal notice on the judgment debtor's legal representatives under Order XXI Rule 22 CPC before execution of a decree does not apply to an auction sale conducted by the DRT under the Recovery of Debts and Bankruptcy Act, 1993.

A bench of Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe heard the case where the execution proceedings initiated by the Appellants in a civil court against the Respondent were subsequently transferred to the Debt Recovery Tribunal (DRT). The DRT had auctioned the Respondent's subject property to realise the debt owed by them to the Appellants. The auction sale was, however, resisted by the Respondents, arguing non-compliance with Order XXI Rule 22 of CPC. They claimed to have not been served with a notice before proceeding for auction of the property.

Allowing the appeal, the judgment authored by Justice Aradhe rejected the Respondent's argument about the non-compliance with Order XXI Rule 22 of CPC, noting that the moment the proceedings were transferred to the DRT, the CPC loses its applicability.

“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…Therefore, Order XXI Rule 22 of the Code has no impact on the validity of the auction sale.”, the Court observed.

Accordingly, the appeal was allowed, thereby upholding the auction sale by the DRT.

Also From Judgment: CPC | Residential Property Exemption u/s 60(1)(ccc) Is Personal To Judgment-Debtor; LR Can't Claim : Supreme Court

Cause Title: SHEELA GEHLOT Versus MOHINI HARDAYAL SINGH & ORS. (With connected matters)

Citation : 2026 LiveLaw (SC) 808

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