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Third party dragged in a DRT Case, what to do?
18-Jan-2026 (In Recovery Law)
Dear advocates, we bought a house from a builder in 2025, who bought the land from person X in 2024 , X bought this land in 2022 from Y. A DRT case had ruled against Y in 2019 and RC had started. We saw a notice outside our house today , where the bank had asked the DRT to attach our house to pay Y’s debt. The land in question was never mortgaged to the bank.
What should we do , what’s the worst that can happen.
Hi there, at first you must immediately file a reply with DRT stating your facts and contest the case.
Further, you must file a MA with PO to get your name removed from the case and allow detachment of your house.
However, before proceeding you need proper verification and proof of your documents and chain of buyers & sellers of the land.
It's advisable to contact me and more details to assist you better.
Helpful?
Adv. Ishan Parashar
Adv. Ishan Parashar
Delhi | 200+ Answers
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Since the DRT order and recovery certificate are against Y, the bank can proceed only against the secured assets or properties belonging to Y at the relevant time. If the land was never mortgaged to the bank and was validly sold by Y in 2022 before any attachment, subsequent bona fide purchasers for value (including X, the builder, and you) acquire protected title. The bank cannot automatically attach your house merely because it once belonged to Y. You should immediately file objections before the Recovery Officer/DRT, place on record the complete chain of title documents, sale deeds, and proof of consideration, and assert your status as a bona fide purchaser without notice. Also check whether any attachment order existed prior to Y’s sale. The worst-case scenario is prolonged litigation, but attachment and sale of your house is unlikely if prior transfer and absence of mortgage are established.
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Adv. Madhvi Chopra
Adv. Madhvi Chopra
Delhi | 50+ Answers
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You should immediately file an objection under Rule 11 of the Second Schedule of the Income Tax Act before the Recovery Officer of the DRT, stating that the property in question was never mortgaged to the bank and that you are a bona fide purchaser for valuable consideration without notice of any charge or encumbrance. Along with the objection, annex copies of all registered sale deeds showing the ownership chain (Y → X → Builder → You), the encumbrance certificate, and proof of your possession. Simultaneously, you should file a civil suit for declaration and permanent injunction before the District Court seeking a declaration that the bank has no charge or lien over your property and to restrain the bank from attaching or taking possession of it. A written representation should also be made to both the bank’s authorized officer and the Recovery Officer, DRT, requesting them to keep the attachment proceedings in abeyance pending inquiry. These steps are crucial because the bank’s recovery rights extend only to mortgaged or secured assets, and as a bona fide third-party purchaser, you have a strong legal ground to protect your property from wrongful attachment.
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Adv. Nikhil Karwal
Adv. Nikhil Karwal
Delhi | 25+ Answers
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As per the Transfer of property act any fraudulent transfer shall not impair the rights of transfer in good faith and for consideration. In your case you may seek a specific relief through court by way of a declaratory decree that you do not have collided with the debtor and you are a transferee in good faith.
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Adv. Avinash Gaur
Adv. Avinash Gaur
Delhi | 5+ Answers
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Please file an application in the DRT challenging the attachment. Collate your documents to show your bona fide purchase and to showcase that there was no encumbrance when the property was purchased.
You need to press for Stay of proceedings and move rather fast.
Helpful?
Adv. Kunal Sinha
Adv. Kunal Sinha
Delhi | 200+ Answers
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