On August 14 2026 the Supreme Court finally ended a fight that has lasted for decades. This fight was about a house in Delhi that was sold during a debt-recovery auction. The case is known as Sheela Gehlot v. Mohini Hardayal Singh & Ors. The whole problem started back in 1983. At that time Sterling Malt & Foods Pvt. Ltd. Stopped its manufacturing unit. Failed to pay back money to Punjab & Sind Bank. Hardayal Singh and other directors had personally promised to pay this loan.
The Supreme Court looked at these appeals. The Supreme Court decided that once a case moves to the DRT under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 different rules apply. Specifically, the process follows Section 29 of that Act and the Second Schedule to the Income-tax Act, 1961. It does not follow the rule in Order XXI Rule 22 of the CPC which says a notice must be sent before an auction. Even though no notice was sent under the rule the Supreme Court said this did not truly hurt Mohini because she already knew what was happening with the case.
The Supreme Court also cleared up a question. They looked at whether Mohini and her children could protect the house by calling it a ” property” under Section 60(1)(ccc) of the CPC. The Supreme Court ruled that this protection is for the person who owes the debt. Once that person is gone his family members cannot use that rule to save the house.
In the end the Supreme Court allowed the appeals from Sheela Gehlot and the bank. They dismissed the appeal from Jagminder Singh. The Supreme Court also canceled a 2009 order from the Madhya Pradesh High Court that wanted an inquiry. No extra money was awarded for costs. This judgment settles two ideas for debt-recovery. First small mistakes in the CPC rules do not cancel a DRT auction once the 1993 Act is, in charge. Second the rule that protects a residential property ends when the person who owes the debt dies.