Karnataka High Court
M/S Laxmi Dall Mill vs Karnataka Staet Financial Corporation ... on 12 August, 2022
Author: Rajendra Badamikar
Bench: Rajendra Badamikar
1
IN THE HIGH COURT OF KARNATAKA
KALABURAGI BENCH
DATED THIS THE 12TH DAY OF AUGUST, 2022
BEFORE
THE HON'BLE MR.JUSTICE RAJENDRA BADAMIKAR
REVIEW PETITION NO.200037/2019
BETWEEN:
M/S. LAXMI DALL MILL
CHINCHOLI ROAD, OPP: NEW MARKET
SEDAM, THROUGH IT'S PARTNER MUNNALAL
S/O MOTILAL KARWA
AGED ABOUT 87 YEARS
OCC:BUSINESS, R/O. SEDAM
NOW RESIDING AT HYDERABAD
... PETITIONER
(BY SRI. ARUNKUMAR AMARGUNDAPPA AND
SRI.RAJA VENKATAPPA NAIK, ADVOCATES)
AND:
1. KARNATAKA STATE FINANCIAL CORPORATION
THROUGH IT'S MANAGING DIRECTOR
SHANKAR NILAYA, M.G. ROAD
BANGALORE-560 002
2. KARNATAKA STATE FINANCIAL CORPORATION
THROUGH IT'S BRANCH MANAGER
NO.2-917/1 KSCA & RD
BANK BUILDING OPP: HINDI PRACHAR SABHA
GOVT. HOSPITAL ROAD
GULBARGA-585 102
3. M/S JATHMAL LAXMINIVAS TAPADIA
SEDAM THROUGH ITS PARTNER
RAMANUJANDAS,
2
R/O NEAR LAXMI NARAYAN TEMPLE
SEDAM-585 222
... RESPONDENTS
(BY SRI. SHIVANAND PATIL, ADVOCATE FOR R1 AND R2,
SRI. AMRESH S ROJA, ADVOCATE FOR R3)
THIS REVIEW PETITION IS FILED UNDER SECTION 114 R/W
0rder 47 Rule1 OF THE CIVIL PROCEDURE CODE, PRAYING TO
REVIEW THE JUDGMENT DATED 16.07.2019 DISMISSING R.S.A
NO.7114 OF 2008 AND ALLOW THE REGULAR SECOND APPEAL.
THIS REVIEW PETITION HAVING BEEN HEARD AND
RESERVED FOR ORDER ON 19.07.2022, COMING ON FOR
'PRONOUNCEMENT OF ORDER THIS DAY THROUGH VIDEO
CONFERENCE, THE COURT MADE THE FOLLOWING:
ORDER
This review petition is filed under Section 114 read with Order 47 Rule 1 of Civil Procedure Code, 1908 ('CPC' for short) for reviewing the judgment dated 16.07.2019 passed by this Court in RSA No.7114/2008 and for allowing this Regular Second Appeal.
2. For the sake of convenience, the parties herein shall be referred with the ranks occupied by them before the trial Court.
3. The brief facts leading to this case are that, the plaintiff/review petitioner has taken the financial assistance 3 from the respondent-Karnataka State Financial Corporation ('Corporation' for short) to the tune of Rs.4,33,000/- in 1981. The factory site, machinery and building of the factory were mortgaged as per the Mortgage Deed. But, however, the Corporation did not release the full amount and it has only released part of the amount from time to time. Hence, the plaintiff contended that, he suffered loss in the business and could not pay the installments. It is alleged that, the Corporation issued demand notice for Rs.1,43,000/- and his request for release of the balance amount was not acceded. It is the further case that, on 01.08.1984, the Corporation has issued a notice to the plaintiff demanding a sum of Rs.4,68,365.38 with interest. On failure to comply with the said notice, under Section 29 of the KSFC Act, possession of the Factory was taken-over and sale was effected by publishing notice on 14.03.1984 in local newspaper of Gulbarga. It is further contended that the market value was not mentioned in the notice and the plaintiff had no notice of sale. It is also contended that the plaintiff had brought customers from Hyderabad and 4 Calcutta, who were prepared to offer Rs.7.00 Lakhs. But, the Corporation did not allow for inspection of the Mill and the Corporation ought to have taken all care that industrial concern is sold for maximum price, being a trustee. Hence, the suit is filed by the appellant/review petitioner.
4. The defendant/Corporation and the purchaser in auction contended that, the Corporation has sanctioned loan of Rs,.4,33,000/- for construction of Dal Factory and purchase of machinery etc., in the year 1980 and the Mortgage Deed was also executed in favour of the Corporation and it is further contended that the plaintiff got loan of Rs.3,76,750/- out of the sanction loan of Rs.4,33,000/- and due to non-availment of the remaining loan amount, the loan was later restricted to Rs.3,76,750/- only as per letter dated 01.06.1983 and that the plaintiff failed to pay the loan amount in spite of several reminders and committed breach of the terms and conditions of agreement. Hence, it is the contention of the defendant that, in order to protect the interest of the Corporation, 5 without there being any alternative remedy, the Corporation proceeded to take action under Section 29 of the KSFC Act and the unit was taken over by the defendant with a right to sell or lease for recovery of its dues. It is also contended that the Corporation did not find any person to take the unit nor any partner of the plaintiff's firm shown any interest and the market value was not more than Rs.3.50 Lakhs and defendant No.3 being the highest bidder, has taken the property and the same was sold after wide publicity, in favour of defendant No.3.
5. The trial Court after considering the claim of the plaintiff and appreciating evidence has observed that the Corporation has acted in fair manner while disposing the mortgaged property to defendant No.3 and has also given sufficient publicity and it is further observed that defendant No.3 is the bona fide purchaser and hence, dismissed the suit of the plaintiff/the review petitioner herein.
6. The First Appellate Court also did not agree with the contention of the appellant/review petitioner that it 6 suffered loss because, the respondent/Corporation has failed to release the balance of loan amount and there was no wide publicity given before auction sale and it further negated the contention of the plaintiff/review petitioner that there was any collusion and hence dismissed the appeal.
7. Being aggrieved by the concurrent findings of both the Courts below, the Regular Second Appeal was filed before this Court. In the Regular Second Appeal, this Court has framed the following Substantial Question of Law for consideration:
"Whether in the facts and circumstances of the case, the Courts below were justified in dismissing the suit of the plaintiff ignoring the evidence adduced by the plaintiff relating to valuation, notification, acceptance and communication?"
8. Thereafter, this Court vide order dated 16.07.2019 has answered the said substantial question of law in the affirmative and held that both the Courts have properly appreciated the oral and documentary evidence 7 and no case is made-out for interference, and accordingly dismissed the appeal. Being aggrieved by this judgment, now this review petition is filed.
9. Heard the arguments advanced by the learned counsels for the Review Petitioner and the Respondents. Perused the records.
10. The main contention of the learned counsel for the plaintiff/Review Petitioner is that, the appeal was disposed of without reference to the citations, as if it is a simple money suit. He would also contend that this Court failed to appreciate the fact that, regarding service of notice before auctioning the property and whether issuance of notice is proper or not, and intimation of delivery of possession was issued prior to execution of the sale deed. He would also contend that no tenders were floated and no auction was conducted and though the plaintiff has brought certain purchasers, the same was not considered and the consideration amount was also not paid on the date of auction sale etc. 8
11. Indirectly the learned counsel for the plaintiff/review petitioner is harping on the fact that, this Court has not properly appreciated the judgments of the Courts below and not considered the pleas urged and wrong burden has been casted. Hence, he would contend that, this is a fit case to review the judgment and decree passed by this Court in the Regular Second Appeal.
12. Per contra, the learned counsel for respondent/Corporation would contend that under Order 47, review is permissible only if there is an error apparent on the face of the records. He would also contend that there is no necessity of issuance of the second notice and since there were no bidders, the respondent/Corporation has taken steps in accordance with law. He would also contend that the third party rights were created in 1987 itself and now by filing this review, the appellants are virtually seeking for re-hearing of the regular second appeal on merits, which is not contemplated under Law. He would also contend that, since there are concurrent findings of 9 both the courts below, the factual aspects cannot be considered and no evidence is placed to show that there is any error apparent on the face of the records. He would further invite the attention of the Court to Para No.9 of the plaint, wherein the plaintiff/review petitioner admits about receipt of notice and hence he would seek for rejection of the review petition.
13. Having heard the arguments and after perusing the records placed before me, now the following point would arise for my consideration:
"Whether the review petitioner/plaintiff has made-out any grounds for reviewing the judgment and decree passed by this Court in RSA No.7114/2008?"
14. It is an undisputed fact that the Defendant/Corporation has failed to sanction loan of Rs.4,33,000/- with interest and however, the loan was later on restricted to the extent of Rs.3,76,750/- vide letter 10 dated 01.06.1983. Admittedly, the said amount was utilized by the plaintiff/review petitioner.
15. The contention of the plaintiff/review petitioner that, he has invested more than seven Lakhs in the industry. But, both the Courts below have consistently observed that, no such evidence is placed on record. Further, both the Courts have also observed that plaintiff failed to establish that due to non-release of the balance loan amount, the plaintiff/review petitioner has suffered any loss. It is also important to note here that the balance amount to be released was from time to time. When the firm was able to invest more than that of Rs.7.00 Lakhs for erection of machinery, the contention of the plaintiff/review petitioner that, due to non-release of meager balance amount the plaintiff did suffer loss, cannot be accepted and this Court appreciating these facts has rightly rejected the said contention.
16. Admittedly, the entire unit was mortgaged, which included land and the construction made and the 11 machineries erected thereon. It is not the case of the plaintiff/review petitioner that he has agitated regarding the market value before the KSFC. Apart from that, from Ex.D7, it is evident that the plaintiff had not withdrawn the balance loan amount sanctioned and thereby the respondent/Corporation has restricted the loan amount as per Ex.D8. Further, after granting sufficient opportunities, the respondent/Corporation has proceeded to sell the property and hence, now it cannot lie in the mouth of the plaintiff/review petitioner that, there was collusion. Further, the plaintiff/review petitioner has not produced any valuation report and he has also not made any efforts to see that auction be postponed and he could have addressed a letter to the respondent/Corporation disclosing the names of the interested purchasers and seeking for inspection of the site. But, no such correspondence was made by the plaintiff/review petitioner and now plaintiff is making lame grounds in this regard.
12
17. Both the Courts below have held that the respondent/Corporation has acted in a fair manner while disposing the mortgaged property to defendant No.3 for recovering the due amount. Further, both the Courts below have specifically observed that the plaintiff/review petitioner has failed to prove that there was no sufficient publicity given before selling the unit and there are material irregularities in conducting the sale. Apart from that, both the Courts below have observed that the plaintiff has failed to prove that the valuation of the property as on the date of the sale was more than 12 to 15 Lakhs. Hence, both the Courts below have refused to grant any reliefs to plaintiff and concurrently observed that the plaintiff has not approached the Court with clean hands. Further, all the issues were answered against the plaintiff.
18. That being the case, now this Court sitting in second appeal, has got a limited jurisdiction and as such, the factual aspects cannot be gone into and only the substantial question of law is required to be considered. 13 Even this Court has observed that, the plaintiff/review petitioner has not placed any material document relating to the valuation, notification etc.
19. Learned counsel for the review petitioner/plaintiff has placed reliance on a decision reported in (2005) 4 SCC 741 [Board of Control for Cricket in India and Another Vs. Netaji Cricket Club and Others] and invites the attention of the Court to the observations made in Paragraphs 89 & 90 of the said decision. It is observed in the said decision that, the application for review would be maintainable even if it is necessitated on account of mistake or any other sufficient reason. But, it is not a case of any mistake and no sufficient reasons are forthcoming. The grounds urged by the review petitioner now, were already considered by both the Courts below and were answered against the plaintiff/review petitioner. This Court has affirmed the said finding in view of lack of evidence. Hence, the said principles cannot come to the aid of the review petitioner in any way. 14
20. The learned counsel has further placed reliance on a decision of the Hon'ble Apex Court reported in 2017(5) ALD 4(SC) [Sanjay Vs. Anil and Others]. But, it was again in respect of improper valuation. But, both the Courts below have concurrently held that, there is no issue regarding improper valuation and auction sale and hence the said principles will not assist the review petitioner in any way.
21. The learned counsel would further invites the attention of the Court to the decision of the Hon'ble Apex Court reported in (2012) 10 SCC 290 [ Micro Hotel Private Limited Vs. Hotel Torrento Limited and Others], wherein at Head Note 'C', certain guidelines have been laid down in respect of sale of properties under Section 29 of the KSFC Act. But, again that is based on merits of the case. In the instant case, both the Courts below have concurrently held that there is no collusion and the respondent/Corporation has followed all the norms and hence, that issue cannot be agitated in review. 15
22. The learned counsel has further placed reliance on a decision of the Hon'ble Apex Court reported in (2004) 7 SCC 151 [Gajraj Jain Vs. State of Bihar and Others], wherein again similar view was taken and it is on merits of the case. But, since it is a review petition, merits of the case cannot be considered and if the review petitioner/appellant is so advised, can challenge the judgment and decree passed by this Court, before the appropriate Court. In review the entire appeal cannot be re- heard on merits, as all the grounds urged by the appellant/review petitioner were already considered by this Court and were accordingly answered. The citations relied upon by the learned counsel for the appellant/review petitioner will not come to his aid in any way.
23. The learned counsel for the respondent/Corporation would place reliance on a decision of the Hon'ble Apex Court in Civil Appeal No.7948/2004 decided on 21.03.2006 [Haridas Das Vs. Usha Rani Banik and Others] reported in AIR 2006 SC 1634, 16 wherein it is observed that the review is not maintainable on the ground that, the review petitioner had not highlighted all the aspects or he could have argued more forcefully. The Apex Court in the said decision has also considered the scope of Section 114 as well as Order 47 of CPC and the parameters prescribed thereunder and it is also held that, re-hearing of the dispute is not permissible in the review petition.
24. The learned counsel for the respondent/Corporation has also placed reliance on the decision reported in AIR 2013 SC 3301 [Kamalesh Verma Vs. Mayavati & Ors.], wherein the Hon'ble Apex Court has reiterated the said Rule that, when there is no material, then the parameters of review jurisdiction to go into the earlier order to review petition is not maintainable.
25. In the instant case, the appellant/review petitioner has again agitated similar facts, which are already argued before this Court in the second appeal and the same were answered by this Court as well as both the 17 Courts below. Now these points cannot be again urged in the review petition and the remedy for the appellant/review petitioner is to approach the Higher Court by way of appeal. Under these circumstances, the review petition is not at all maintainable. No evidence is placed to prove that, there is any error apparent on the face of the judgment and decree. Hence, the point under consideration is answered in the negative and accordingly, I proceed to pass the following:
ORDER The review petition is dismissed.
Sd/-
JUDGE KGR* CT:NR