Calcutta High Court (Appellete Side)
Purnima Mazumdar vs United Bank Of India & Anr on 26 August, 2015
Author: Tapabrata Chakraborty
Bench: Tapabrata Chakraborty
IN THE HIGH COURT AT CALCUTTA
Civil Revisional Jurisdiction
APPELLATE SIDE
Present:
The Hon'ble Justice Tapabrata Chakraborty
C.O. No.714 of 2014
Purnima Mazumdar
versus
United Bank of India & Anr.
For the Petitioner : Mr. Rajsekhar Mantha,
Ms. Gopa Chakraborty.
For the Opposite Party No.1
/Bank : Mr. Proloy Kar,
Ms. Debasree Dhamali.
For the Opposite Party No.2 : Mr. Suddhasatva Banerjee,
Mr. D. Pal,
Mr. D. C. Sarkar.
Judgment On : 26th August, 2015.
Tapabrata Chakraborty, J.
The subject matter of challenge in the instant application under Article 227 of the Constitution of India is the judgment dated 7th February, 2015 passed by the learned Chairperson of the Debts Recovery Appellate Tribunal at Kolkata (hereinafter referred to as the learned tribunal) in Appeal No.16 of 2012 and Appeal No.30 of 2012.
Mr. Mantha, learned senior counsel appearing for the petitioner submits that the petitioner herein along with her husband applied for a house building loan from the United Bank of India, Salt lake branch (hereinafter referred to as the said bank) and the said bank sanctioned an amount of Rs.22 lacs and upon availing the loan amount they purchased half portion of the premises no.8-A, Duff Lane, P.S. Burtolla, Calcutta - 700 006 (hereinafter referred to as the said property) and the registered deed of conveyance pertaining to the property purchased was kept in the custody of the bank as collateral lien. Out of the said loan amount, an amount of Rs.8 lacs was paid but thereafter no further payment could be made and accordingly a notice under Section 13(2) of the of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to the said Act) was issued and thereafter on 12th August, 2009 a possession notice was sent under Section 13(4) of the said Act. Challenging the notice under Section 13(4) of the said Act, the petitioner and her husband preferred an application under Section 17(1) of the said Act and the same was registered as SA No.14 of 2009 before the Kolkata Debts Recovery Tribunal-II (hereinafter referred to as DRT) and in the said application initially an interim order was passed on 22nd September, 2009 directing the said bank to maintain status quo in respect of the subject matter with a further direction upon the applicants therein to pay an amount of Rs.3 lacs to the said bank on or before the next date of hearing. The said amount could not be paid by the applicants and during pendency of the proceedings, the said bank published a second notice of sale fixing the date of sale on 7th July, 2010 but no such notice was served upon the applicants and thereafter the bank sold the property and the sale certificate was issued on 6th January, 2011.
Mr. Mantha further submits that the petitioner was thereafter forcibly dispossessed on 21st January, 2011 and such fact was brought on record by applications dated 28th January, 2011 and 6th April, 2011 but without considering the same the learned tribunal dismissed the application under Section 17 of the said Act by an order dated 21st December, 2011. In the said order, the learned tribunal was, however, pleased to observe that no demand was made regarding the actual rate of interest which was required to be paid from 1st April, 2008 and it was also not stated that any demand was made towards future interests, expenses and costs and in the backdrop of such infirmities the bank was directed to refund an amount of Rs.13,17,854/- to the applicants.
Aggrieved by the said order dated 21st December, 2011 an Appeal Case No.16 of 2012 was preferred by the applicants and an Appeal Case No.30 of 2012 was preferred by the said bank. Both the said appeals were considered and by the judgment impugned dated 7th February, 2014, the learned tribunal was pleased to allow the appeal of the bank and the applicants' appeal was dismissed.
The primary contention of Mr. Mantha is that the learned tribunal has proceeded in a mechanical manner and though the entire sale procedure was under challenge, the applicants' prayer was turned down on a purported ground of insufficient pleading.
Drawing the attention of this Court to paragraph 23 of the learned tribunal's judgment, Mr. Mantha submits that in spite of a categoric observation that the DRT, having found the valuation to be inappropriate, could have taken steps to set aside the entire proceedings instead of directing refund of an amount of Rs.13,17,854/-, the reluctance on the part of the learned tribunal to interfere was an instance of non-exercise of jurisdiction vested upon it.
Mr. Mantha has strenuously argued that infirmities are writ large in the entire proceeding inasmuch as there was no service of the second notice of sale upon the applicants and no fresh valuation of the property was obtained and no payment was received by the bank within 15 days of knocking down of the sale and no sale confirmation was issued within 15 days of sale and that as such there was no valid sale in terms of Rules 8 and 9 of the Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as the said Rules, 2002). In the backdrop of the said facts, he submits that the sale effected, without complying with the statutory requirements, is a nullity. In support of such contention reliance has been placed upon the following judgments :
a) Mathew Varghese -vs- M. Amritha Kumar, reported in (2014) 5 SCC 610.
b) J. Rajiv Subramaniyan -vs- Pandiyas, reporte in (2014) 5 SCC 651.
c) Vasu P. Shetty -vs- Hotel Vandana Place and others, reported in (2014) 5 SCC 660.
Presuming that the opposite parties would be agitating an issue as regards defect of parties, he submits that non- impleadment of the auction purchaser in the original proceedings is not fatal and such issue can be left to the discretion of this Court and for proper adjudication the Court can direct impleadment even at the revisional stage. In support of such contention reliance has been placed upon the following judgments :
a) Mumbai International Airport Pvt. Ltd. -vs- Regency Convention Centre & Hotels Pvt. Ltd. & Ors., reported in (2010) 7 SCC 417.
b) KISAN UCHATTAR MADHYAMIK VIDYALAYA SAMITI, DEORIA -vs- IIIRD ADDL.DISTRICT JUDGE, DEORIA, reported in [1989] 0 AIR(All) 168.
c) Udit Narain Singh Malpaharia -vs- Additional Member Board of Revenue, Bihar and another, reported in AIR 1963 SC 786.
Mr. Mantha argues that the entire sale proceeding was challenged and appropriate prayers were made and in the event the pleadings would have been read as a whole, the learned tribunal could not have dismissed the appeal on a mere technical ground of insufficient pleading. In support of such contention, reliance has been placed upon the following judgments :
a) Narain Prasad Aggarwal (Dead) by Lrs. -vs- State of Madhya Pradesh, reported in (2007) 11 SCC 736.
b) Udhav Singh -vs- Madhav Rao Scindia, reported in AIR 1976 SC 744.
c) Arun Kumar Arora -vs- Union Of India, reported in AIR 2006 Punjab and Hariyana 211.
Mr. Mantha further submits that the doctrine of lispendens is applicable to the facts of this case and the alienation of the property will in no manner affect the right of the applicant. In support of such contention reliance has been placed upon the judgment delivered in the case of K.N. Aswathnarayana Setty (D) Tr. LRs. & Others -vs- State of Karnataka & Others, reported in AIR 2014 SC 279.
Mr. Banerjee, learned advocate appearing for the opposite party no.2 submits that though the loan was obtained by the petitioner herein and her husband and the application and the appeal before the DRT and the learned tribunal respectively were jointly preferred by the petitioner and her husband, the instant revisional application has been preferred by the petitioner only and that though the opposite party no.2 herein was not impleaded in the proceedings before the DRT and the learned tribunal, the petitioner herein has impleaded the auction purchaser in the instant revisional application. Such infirmities warrant dismissal of the application at the threshold.
He submits that no indulgence should be given to a person, who after obtaining an interim protection, did not take any steps during the period from 13th November, 2009 and 21st January, 2011 and in the midst thereof, a valuable right accrued in favour of the opposite party no.2 through conclusion of the entire sale procedure and execution of the deed of conveyance on 17th February, 2012 and such right cannot be interfered with at this belated stage, which would work out extreme injustice to the opposite party no.2.
He further submits that the appeal was rightly rejected on the ground of insufficient pleading inasmuch as there was no specific challenge against the sale procedure, the sale notice and the valuation and the findings of facts cannot be disturbed in exercise of revisional jurisdiction. In support of the arguments reliance has been placed upon the following judgments :
a) Prabodh Verma and others, etc. etc. -vs- State of U.P. and others, etc., reported in (1984) 4 SCC 251.
b) Udhav Singh -vs- Madhav Rao Scindia, reported in AIR 1976 SC 744.
c) Kanchana -vs- P. Manian, reported in (2010) 15 SCC
515.
He further submits that the judgments delivered in the case of Mathew Varghese (Supra), J. Rajiv Subramaniyan (Supra) and Vasu P. Shetty (Supra) are distinguishable on facts inasmuch as in the instant case the petitioner has not furnished any explanation to the delay and upon conclusion of the sale procedure and execution of the deed, a constitutional right to property has already accrued in favour of the opposite party no.1 and such right cannot be interfered with at this belated stage. Right to property under Article 300A would not only apply to the borrower but also to the bonafide purchaser. The applicants consciously did not add the auction purchaser as a party and all the petitions and applications even though construed and read as a whole never show in them anywhere an unequivocal challenge to the sale or the sale procedure and in the backdrop of the said facts the judgments relied upon by Mr. Mantha as regards pleadings and addition of party are not applicable.
Mr. Banerjee further submits that the judgment on the issue of lis-pendens, delivered in the case of K.N. Aswathnarayana Setty (Supra) as relied upon by Mr. Mantha is distinguishable inasmuch as the transfer took place before the initiation of the proceedings and the property was not directly and specifically in issue in the proceedings.
Placing reliance upon the averments made in the affidavit- in-opposition filed by the opposite party no.1, Mr. Kar, learned advocate appearing for the said bank submits that the entire episode and the factual details were known to the petitioner herein and the progress of the proceeding was also within the knowledge of the petitioner but still she maintained deceptive silence for the entire period on and from 13th November, 2009 to 21st January, 2011.
Mr. Kar further submits that there has been no violation of the provisions of Rule 8(6) of the said Rules of 2012 inasmuch as the bank issued 30 days sale notice dated 20th May, 2010 to the applicants by courier after publication of such notice in the local newspapers. The petitioner and her husband were never unaware of the steps taken by the bank and the entire sequence needs to be taken into consideration which would reveal that enough opportunity was granted to the petitioner to put forward her objection. In support of such contention reliance has been placed upon the decision of the Hon'ble Division Bench of Gujrat High Court delivered in the case of Kanha International - Through Proprietor & Ors. -vs- Union of India & Ors., reported in AIR 2011Guj 108. The applicants before the DRT did neither dispute the valuation of the property nor the reserve price mentioned in the possession cum sale notice. The valuation has also not been challenged by the applicants in their subsequent applications.
I have heard the learned advocates appearing for the respective parties and I have considered the materials on record.
In the applications before DRT, there was no specific challenge to the claim of the bank pertaining to interest, expenses and charges. The bank has a right to claim interest at the contractual rate even after issuance of notice under Section 13 of the said Act, during pendency of the proceedings before DRT and till realisation and without disputing such authority of the bank, the DRT directed refund of such interest, expenses and charges on the rigmarole of observations to the effect that such directions have been issued "considering the peculiar facts and circumstances of the case and inability that has been explained by the applicants in repaying the dues" and that as such the learned tribunal rightly negated such direction of the DRT. The learned tribunal rightly observed that no plausible explanation was forthcoming from the borrowers in support of the findings given by the DRT in disallowing pre-litigation interest as well as pendente lite coupled with the future interest and cost.
The paramount objective of the Rules 8 and 9 of the said Rules of 2002 is to provide sufficient time and opportunity to the borrowers to take efforts to safeguard their right of ownership and the facts would reveal that on and from the date of issuance of the notice under Section 13(2), repeated opportunities were granted to the borrowers to safeguard their right of ownership and to discharge their liability. Even after availing an interim order from the DRT, the applicants did not make any endeavour to avail appropriate protection upon payment of the amount as directed. Furthermore, the applicants simply maintained a deceptive silence on and from 13th November, 2009 till 21st January, 2011 and in the midst thereof a valuable right over the property in question accrued in favour of the auction purchaser. The DRT itself in its order dated 21st December, 2011 categorically arrived at a finding to that effect that there was no endeavour on the part of the applicants to discharge the liability in spite of repeated reminders.
The entire process of reasoning rejecting the petitioner's appeal, in my view is sufficient and is in accordance with law. The argument of the petitioners to the effect that in the midst of pendency of the application under Section 17 of the said Act, the bank was precluded from resorting to section 14 of the said act has been rightly discounted by the learned tribunal in view of the decision of the Hon'ble Apex Court in the case of Standard Chartered Bank -vs- V. Nobel Kumar & others.
From the sequence of facts, it is explicit that the applicants did not take any steps whatsoever during the period on and from 13th November, 2009 to 21st January, 2011. Even after the applicants came to know about the sale of the property they chose not to challenge the same in their petitions dated 28th January, 2011 and 6th April, 2011. The applicants also did not take any steps to implead the opposite party no.2 herein in the original proceedings. No explanation was given by the DRT towards denial of pre-litigation interest, further interest and cost and that as such there had been no error on the part of the learned tribunal in dismissing the appeal of the petitioner and her husband being the appellants therein.
It is well settled that while exercising discretionary jurisdiction under Article 227 of the Constitution this Court takes into account certain factors and one of such considerations is delay and laches on the part of the petitioner in approaching the Writ Court. The Court should be loathe to encourage stale litigation. In the instant case, there has been an inordinate and unexplained delay on the part of the petitioner and a valuable right accrued in favour of the third party being the opposite party no.2 herein.
For the reasons discussed above, no interference is called for and the revisional application is dismissed.
In the facts of the present case, there will be no order as to costs.
Urgent Photostat certified copy of this judgment, if applied for, be given to the parties, as expeditiously as possible, upon compliance with the necessary formalities in this regard.
(Tapabrata Chakraborty, J.)