Gujarat High Court
Asset Reconstruction Company (India) ... vs The Ashok Nagar Group Cooperative ... on 16 December, 2021
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
C/SCA/18785/2021 ORDER DATED: 16/12/2021
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 18785 of 2021
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ASSET RECONSTRUCTION COMPANY (INDIA) LIMITED
Versus
THE ASHOK NAGAR GROUP COOPERATIVE COTTON SILK GINNING
AND PRESSING SOCIETY LIMITED & 1 other(s)
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Appearance:
MR SHUSHIL NIMBKAV FOR MR CHAITANYA S JOSHI(5927) for the
Petitioner(s) No. 1
for the Respondent(s) No. 1,2
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
Date : 16/12/2021
ORAL ORDER
Heard learned advocate Mr.shushil Nimbkav for learned advocate Mr.Chaitanya S. Joshi for the petitioner.
1. By this petition, under Article 227 of the Constitution of India, the petitioner has prayed for the following reliefs :
"A. Issue a Writ of Certiorari or such other writ, direction or order in the nature of Writ of Certiorari and quash the impugned Order dated 2nd December 2021 passed by the Learned Debts Recovery Tribunal-I, Ahmedabad in Securitization Application No.74 of 2021; & B. Pending the hearing and final disposal of this Writ Petition, the execution and operation of the order dated 2nd December 2021 passed by the Learned Debts Recovery Tribunal-I, Ahmedabad in Securitization Application No.74 of 2021 may kindly be stayed; & C. Pass such other and further reliefs as the nature and circumstances of the case may require."Page 1 of 6 Downloaded on : Wed Jan 12 10:51:57 IST 2022
C/SCA/18785/2021 ORDER DATED: 16/12/2021 2.1. The brief facts of the case are that the petitioner is a Company incorporated under the Companies Act, 1956 and a Company within the meaning of Companies Act, 2013 registered as an Asset Reconstruction Company pursuant to Section 3 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'the SARFAESI Act').
2.2. The respondent No.1 availed various financial facilities from the original lender Bank, DCB bank limited and subsequently, on account of the defaults committed by the respondent No.1/borrower, the loan account of the respondent No.1 No.1/borrower was ultimately classified as a "Non-Performing Asset" on 30th March, 2015 in the books of account of the original lender and in accordance with the Reserve Bank of India's directives and guidelines in this regard and was assigned to the petitioner by the original lender in terms of Section 5 of the SARFAESI Act, 2002 vide assignment agreement dated 2nd June, 2016.
2.3. It is the case of the petitioner that the petitioner initiated proceedings under the provisions of the SARFAESI Act, 2002 and the respondent No.1/borrower filed a Securitisation Application No.74 of 2021 before the Debt Recovery Tribunal-I Ahmedabad with a prayer to Page 2 of 6 Downloaded on : Wed Jan 12 10:51:57 IST 2022 C/SCA/18785/2021 ORDER DATED: 16/12/2021 quash and set aside the action taken under the provisions of the SARFAESI Act in the year 2016 and all consequential actions which the petitioner had initiated against the borrower. The Debt Recover Tribunal passed an order on 24.11.2021 as under :
"Ld. Counsel Mr. Amit Kotak for the Applicants is present.
Ld. Counsel Mr. Chaitanya Joshi for the Respondent ARCIL is present.
Today this matter has come up for hearing on the purshis filed by Ld. Counsel for the Applicants.
Ld. Counsel for the Applicants stated that the Respondent ARCIL is going to take possession of the property in question tomorrow. He further submitted that at this stage. without going into merits of the case, the Applicants are ready and Avilling to deposit Rs.7.5 lacs within one week along with OTS proposal. He further submitted that Applicant No.1 is a cooperative society of small farmers. As such, in the interest of justice, appropriate directions may be given.
Per contra, Ld. Counsel for the Respondent ARCIL submitted that in the present case, demand notice was issued in the year 2016 and till date. the Applicants have not deposited any amount. As such, Respondent ARCIL may be permitted to take possession of the property belonging to Applicant No.1.
Heard Ld. Counsel for both the parties.
Perusal of the record reveals that important document of Mortgage Deed is not placed on record by either party till date. As such, in eabsence of the relevant documents, the matter cannot be heard on merits. However, considering the submissions of Ld. Counsel for the Applicants. I deem it proper to direct the Applicants to deposit Rs.7.5 lacs (Rupees Seven Lac Fifty Thousand only) within one week along with OTS proposal.
Meanwhile. Respondent ARCIL is directed to consider the OTS proposal of the Applicants in accordance with Rules.
Page 3 of 6 Downloaded on : Wed Jan 12 10:51:57 IST 2022C/SCA/18785/2021 ORDER DATED: 16/12/2021 Further. the Respondent ARCIL is directed to place on record Mortgage Deed and other relevant documents for just disposal of the present S.A. The Respondent ARCIL is also directed not to take any coercive action qua the property In question tilt the next date of hearing.
List the matter for hearing on 02/12/2021."
2.4. Thereafter, the Debt Recovery Tribunal on the next date of hearing i.e. on 2nd December, 2021 passed the following order :
"Mr. Amit Kotak, Ld. Counsel for the Applicants and Mr. Chaitanya Joshi, Ld. Counsel for the Respondent ARCIL appeared.
Today this matter has come up for hearing on condonation of delay.
Ld. Counsel for the applicants submitted that the Applicants have complied the directions of this Tribunal given vide order dated 24.11.2021 and Rs.7,50,000/has been deposited by the Applicants with the Respondent ARCIL. He further submitted that the Respondent ARCIL has not provided the statement of account and due to this the Applicants could not submit the OTS proposal. As such Respondent ARCIL may be directed to provide the statement of account so that the Applicants can submit the OTS proposal.
Per contra Ld. Counsel for the Respondent ARCIL submitted that the connected 0.A. No.586/2016 is pending before this Tribunal and the Applicants are the Defendants in the 0.A., in which the outstanding amount has mentioned. As such there iS no question to provide the statement of account. He further submitted that he will file the mortgage deed today itself with the Registry in compliance of the directions given by this Tribunal vide order dated 24.11.2021 with an advance copy to the Ld. Counsel for the Applicants.
In view of above, the Respondent ARCIL is directed to file mortgage deed before the Registry with an advance copy to the Applicants today itself.
Further, Registry is directed list the present matter alongwith 0.A. No.586/22016 on 23.12.2021 for hearing.Page 4 of 6 Downloaded on : Wed Jan 12 10:51:57 IST 2022
C/SCA/18785/2021 ORDER DATED: 16/12/2021 Meanwhile, interim relief, if any, shall continue till next date of hearing."
3. In view of the above facts, as the matter is pending before the Debt Recovery Tribunal and the petitioner has challenged the interim order and the matter is fixed for further hearing on 23.12.2021, it would not be necessary to interfere in the ongoing proceedings before the Debt Recovery Tribunal at this juncture.
4. Learned advocate Mr.Nimbkav for the petitioner submitted that the Debt Recovery Tribunal could not have combined both the proceedings one being under the SARFAESI Act and other being under the Recovery of Debts and Bankruptcy Act (for short 'the RDB Act') and in view of the order dated 02.12.2021, as the Debt Recovery Tribunal has ordered to hear both the proceedings together, it would take a long time for Debt Recovery Tribunal to dispose of the proceedings which would hamper the recovery process undertaken by the petitioner. It was also pointed out that as against the outstanding dues of more than Rs.5 Crores, the Debt Recovery Tribunal has granted stay against coercive actions to be taken by the petitioner on deposit of meager amount of Rs.7.5 Lakhs by the borrower, more particularly, when the Securitisation Application file by the borrower is admittedly beyond the period of limitation.
Page 5 of 6 Downloaded on : Wed Jan 12 10:51:57 IST 2022C/SCA/18785/2021 ORDER DATED: 16/12/2021
5. Be that as it may. The petitioner can raise all the contentions which are raised before this Court before the Tribunal by filing appropriate application and for that purpose no interference is required at this stage by exercising extra- ordinary jurisdiction under Article 227 of the Constitution of India as the impugned order being an interim order.
6. In view of the above facts, without entering into the merits of the matter, the petition is dismissed with cost of Rs.5,000/- to be deposited with the Legal Service Authority within a period of one week from today.
(BHARGAV D. KARIA, J) PALAK Page 6 of 6 Downloaded on : Wed Jan 12 10:51:57 IST 2022