Qur'an

Imaam going into ruku after reciting a sajdah aayat

Q: A few days ago, our imam recited Surah Alaq in the second rakah of Isha salaah. When he recited the aayah of sajdah, he did not perform the sajda-e-tilawat but went into ruku' and completed the salaah as normal. 

My question is: was he right in omitting to do sajda-e-tilawat which my understanding is to be wajib. After the salaah he explained that what he did was permissible.