Case Law Details
JM Financial Asset Reconstruction Co Ltd. And Ors. Vs State of Maharashtra (Bombay High Court)
The Bombay High Court considered a writ petition that was urgently circulated following a notice issued by the Recovery Officer, Debts Recovery Tribunal-II (DRT), Mumbai, for settling a sale proclamation in relation to certain properties. The petitioners submitted that the central issue in the writ petition was already covered in their favour by the Full Bench decision of the Bombay High Court in Jalgaon Janta Sahakari Bank Ltd. & Anr. vs. Joint Commissioner of Sales Tax Nodal 9, Mumbai, & Anr.
According to the petitioners, in view of the law laid down in the Full Bench judgment, no encumbrance relating to the dues claimed by respondent Nos. 2 and 3 could be recorded against the subject properties. The Court also noted that, on the previous date of hearing, the matter had been adjourned to enable respondent Nos. 2 and 3 to place material on record indicating whether the steps contemplated under the Maharashtra Land Revenue Code had actually been undertaken in relation to the dues claimed by them.
The petitioners further contended that the latest action initiated by the Recovery Officer of the DRT would prejudice them, as the sale proclamation concerning the scheduled properties would reflect an encumbrance in respect of the dues claimed by respondent Nos. 2 and 3.
In light of these developments, the petitioners tendered a draft amendment seeking to incorporate additional pleadings and prayer clauses, including a prayer for interim relief. The Bombay High Court held that the proposed amendment deserved to be allowed in the interest of justice, particularly in view of the central issue involved in the writ petition. Accordingly, the draft amendment was taken on record, and the petitioners were granted leave to carry out the amendment within one week.
Pending adjudication of the principal issue regarding the recording of encumbrances over the subject properties, the High Court directed the Recovery Officer of the DRT to maintain status quo in the recovery proceedings concerning the two scheduled properties covered by the notice for settling the sale proclamation dated 14 May 2026. The interim direction was ordered to remain in force until the next date of listing.
The matter was directed to be listed for further consideration on 24 July 2026, with the Court keeping the central issue open for adjudication. The order grants interim protection and does not finally determine the dispute. Bombay HC.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. This petition has been urgently circulated on behalf of the petitioner in the light of a recent development in the form of a notice for settling the sale proclamation issued by the Recovery Officer, Debts Recovery Tribunal-II, Mumbai (DRT).
2. It is submitted that the central issue raised in the present writ petition, according to the petitioners, is covered in its favour as per the full bench judgment of this Court in the case of “Jalgaon Janta Sahakari Bank Ltd. & Anr. vs. Joint Commissioner of Sales Tax Nodal 9, Mumbai, & Anr.”1.
3. It is submitted that hearing of this writ petition was adjourned on the last occasion to enable respondent Nos. 2 and 3 to place before this Court material indicating whether the steps contemplated under the Maharashtra Land Revenue Code were actually undertaken in the context of the dues claimed by respondent Nos. 2 and 3.
4. It is the case of the petitioners that in the light of the law laid down by this Court in the aforesaid full bench judgment, no encumbrance pertaining to the dues of respondent Nos. 2 and 3 can be recorded as against the subject properties.
5. It is submitted that the latest exercise being undertaken by the Recovery Officer of the DRT would cause prejudice to the petitioners as regards the properties, included in the schedule, as encumbrance regarding dues of respondent Nos. 2 and 3 would be shown in the sale proclamation pertaining to the said properties.
6. In that light, a draft amendment is tendered on behalf of the petitioners seeking to add certain paragraphs in the writ petition and also to add prayer clauses seeking interim relief in the light of the latest development.
7. We are of the opinion that the proposed amendment deserves to be granted in the interest of justice and in the light of the central issue being debated in this writ petition.
8. The draft amendment is taken on record. The petitioners are granted leave to carry out the amendment in terms of the draft amendment within one week from today.
9. We are of the opinion that till the central issue raised in this petition, recorded hereinabove is decided, it would be in the interest of justice that the Recovery Officer of the DRT is directed to maintain status quo in respect of the recovery proceedings pertaining to the two properties mentioned in the schedule of properties pertaining to the notice for settling the sale proclamation dated 14/05/2026, till the next date of listing.
10. List the petition for further consideration on 24th July 2026, ‘High on Board’.
Note:
1 (2022) SCC online Bom 1767
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