Calcutta High Court
Haji Hanif Hakam vs Debt Recovery Appellate Tribunal At ... on 16 February, 2018
Equivalent citations: AIR 2018 CALCUTTA 94, AIRONLINE 2018 CAL 5, (2018) 185 ALLINDCAS 615 (CAL), (2018) 185 ALLINDCAS 615, (2018) 3 CAL HN 248, (2019) 3 CURCC 94
W.P. No. 381 of 2017
IN THE HIGH COURT AT CALCUTTA
Constitutional Writ Jurisdiction
Original Side
Haji Hanif Hakam
Vs.
Debt Recovery Appellate Tribunal at Kolkata & Ors.
For the Petitioner : Mr. Rupak Ghosh, Advocate
Mrs. Sharmistha Das, Advocate
Mr. Naseeb Khan Joy, Advocate
Mr. Ayan Dutta, Advocate
Mr. M.A. Jabbar, Advocate
For the Allahabad : Mr. Joy Saha, Senior Advocate
Bank Mr. O.N. Rai, Advocate
For Respondent No. 14: Mr. Deepnath Roy Chowdhury, Advocate
Mrs. Vijaya Bhatia, Advocate
Mr. Ganesh Prasad Shaw, Advocate
For Respondent Nos. : Mr. Samarjit Roy Chowdhury, Advocate
15, 16, 17 and 22
Hearing concluded on : February 12, 2018
Judgment on : February 16, 2018
DEBANGSU BASAK, J.:-
The petitioner has assailed an Order dated April 28, 2017 passed
by the Chairman, Debts Recovery Appellate Tribunal in Appeal No. 66 of
2017.
Learned Advocate for the petitioner has submitted that, the
petitioner is the assignee of the residue of the unexpired period of the
leasehold interest in terms of a lease deed dated September 12, 1975 in
respect of premises No. 14, A.K.M. Siddique Lane (formerly Wellesley
Lane), Kolkata- 700016. The petitioner had filed a suit being C.S. No. 97
of 1992 before this Hon'ble Court, inter alia, for recovery of possession.
The third respondent is a party defendant in such suit. A Receiver was
appointed in such suit. By an Order dated April 1, 1992, Joint Receivers
were appointed by the Hon'ble High Court for taking actual physical
possession of the suit property. In terms of such Order dated April 1,
1992, the Joint Receivers had visited the suit premises and had taken
possession thereof on April 2, 1992. The Joint Receivers had put wooden
board in the premises indicating that, the Joint Receivers are in
constructive possession of the suit premises. He has referred to the
Order dated April 1, 1992 and the minutes of the meeting of the Joint
Receivers subsequent thereto, in support of his contentions that, the
Joint Receivers are in possession of the suit premises. He has submitted
that, the suit is still pending. The appointment of the Joint Receivers
have not been withdrawn or vacated. The suit premise is, therefore,
custodia legis. The third respondent is aware of such possession by the
Joint Receivers. Notwithstanding the suit property being custodia legis,
the third respondent by suppressing such fact and without obtaining the
leave of the Court appointing the Joint Receivers, had filed a proceeding
under Section 19 of the Recovery of Debts Due to Banks and Financial
Institutions Act, 1993. The petitioner upon coming to know of such
proceedings, had filed an application before the Recovery Officer. By the
time, the petitioner could apply before the Recovery Officer, the
proceedings under Section 19 of the Act of 1993 had culminated into a
certificate and execution proceeding for the purpose of recovery of
certificate amount had been initiated. In such recovery proceedings, the
suit property was put up for sale and sold by the Recovery Officer. The
sale by the Recovery Officer is bad on the ground of the breach of the
principles of custodia legis. The sale is illegal, null and void. He has
submitted that, the issue of custodia legis raised by the petitioner in the
application before the Recovery Officer was not dealt with. The Recovery
Officer had disposed of the application by an Order dated September 3,
2015. The order of the Recovery Officer was appealed against. Such
appeal was dismissed by the Presiding Officer by its Order dated October
8, 2015. The appeal carried against the order of the Presiding Officer
was dismissed by the impugned Order dated April 28, 2017 passed by
the Debts Recovery Appellate Tribunal. In none of the three stages of the
proceedings did any of the authority consider and decide upon the point
of custodia legis raised by the petitioner.
In support of the contention that, the proceedings initiated by the
bank before the Debts Recovery Tribunal under Section 19 of the Act of
1993 and all orders passed therein dealing with the suit property
including the order of sale in respect thereof are illegal, null and void,
learned Advocate for the petitioner has relied upon 1959 Volume 1 SCR
page 333 (Kanhaiyalal v. D.R. Banaji & Ors.). He has submitted that,
the impugned order should be set aside. The order of sale of the suit
property in the proceedings under Section 19 of the Act of 1993 be
declared null and void.
Learned Senior Advocate appearing for the third respondent has
questioned the maintainability of the writ petition. He has submitted
relying upon 2015 Volume 5 Supreme Court Cases page 423
(Radhey Shyam & Anr. v. Chhabinath & Ors.) and 2015 Volume 9
Supreme Court Cases page 1 (Jogendrasinhji Vijaysinghji v. State
of Gujarat & Ors.) that, a writ petition directed against an order passed
by a Tribunal is not maintainable under Article 226 of the Constitution
of India. At best, the petitioner has a remedy under Article 227 of the
Constitution of India.
On the merits of the case, learned Senior Advocate for the third
respondent has submitted that, the claim of the petitioner is barred by
the laws of limitation. The suit property was put up for sale by a
publication dated June 20, 2005. The sale was completed on November
8, 2005. The application for setting aside of the sale was made for the
first time in 2015 before the Recovery Officer. He has drawn the
attention of the Court to the application. He has submitted that, the
application made by the petitioner is bereft of any particulars as to the
day when the petitioner had allegedly drawn the knowledge of such sale.
Referring to the Orders dated April 1, 1992 and September 16, 1992
passed by the High Court in the suit, he has submitted that, the Joint
Receivers are not in actual physical possession of the immovable
property. Although, the initial order was for actual physical possession,
the same was later modified to mean that the Receivers will take
constructive possession. Therefore, it cannot be said that, the Receivers
are in actual physical possession of the suit property. He has relied
upon 1996 Volume 11 Supreme Court Cases page 376 (Anthony C.
Leo v. Nandlal Bal Krishnan & Ors.) and 2002 Volume 2 Calcutta
High Court Notes page 522 (Bengal Peerless Housing Development
Co. Ltd. v. Gopeswar Prasad Agarwal & Ors.) for the proposition that,
when the Receiver is not in an actual physical possession, then, the
dealings with regard to an immovable property cannot be struck down
on the ground of the breach of the principles of custodia legis. He has
submitted that, the writ petition should be dismissed.
In reply, learned Advocate for the petitioner has submitted that, the
issue of maintainability of a petition under Article 226 of the
Constitution of India directed against an order passed by a statutory
Tribunal exercising judicial functions was gone into in All India
Reporter 2009 Calcutta page 140 (Bhowanipore Gujrati Education
Society & Anr. v. Kolkata Municipal Corporation & Ors.). It has
been held that, a writ petition is maintainable. So far as physical
possession of the Receiver is concerned, learned Advocate for the
petitioner has referred to the minutes of the meeting of the Joint
Receivers and the subsequent conduct of the parties and has submitted
that, the Joint Receivers are in physical possession of the property
concerned.
The following issues have arisen for consideration in the present
writ petition:-
(i) Is a writ petition under Article 226 of the Constitution of India
maintainable against an order passed by a Debts Recovery
Appellate Tribunal?
(ii) Is the immovable property concerned under the actual
physical possession of the Joint Receivers appointed by the
High Court in C.S. No. 97 of 1992 as contended by the
petitioner?
(iii) To what relief or reliefs, if any, are the parties entitled to?
The petitioner claims that, the issue of custodia legis raised in a
proceeding before the Debts Recovery Tribunal has not been decided.
According to the petitioner, the High Court in C.S. No. 97 of 1992
appointed Joint Receivers to take actual physical possession of the suit
property. The Joint Receivers are in possession. Therefore, the property
is in custodia legis. The bank could not have put up the property for sale
without obtaining the leave of the Court. All orders passed in such
proceedings relating to the suit property including the order of the sale
are bad.
The petitioner has challenged the order of the Debts Recovery
Appellate Tribunal dated April 28, 2017 in the writ petition under Article
226 of the Constitution of India. The Debts Recovery Appellate Tribunal
while passing the impugned order had exercised jurisdiction under the
provisions of the Recovery of Debts Due to Banks and Financial
Institutions Act, 1993. Section 18 of the Act of 1993 is relevant in the
present context. Section 18 is as follows:-
"18. Bar of Jurisdiction.-- On and from the appointed
day, no court or other authority shall have, or be entitled to
exercise, any jurisdiction, powers or authority (except the
Supreme Court, and a High Court exercising jurisdiction under
articles 226 and 227 of the Constitution) in relation to the
matters specified in section 17:
Provided that any proceedings in relation to the recovery of
debts due to any multi-State co-operative bank pending before
the date of commencement of the Enforcement of Security
Interest and Recovery of Debts Laws (Amendment) Act, 2012
under the Multi-State Co-operative Societies Act, 2002 (39 of
2002) shall be continued and nothing contained in this section
shall, after such commencement, apply to such proceedings."
Section 18 of the Act of 1993 recognizes that, a person can
approach the High Court under Articles 226 and 227 of the Constitution
of India against the orders passed by the authority exercising
jurisdiction under the Act of 1993.
Radhey Shyam & Anr. (supra) has noticed the distinctions
between Articles 226 and 227 of the Constitution of India. It has held
that, jurisdiction under Article 226 is distinct from that under Article
227. The amendment introduced to the provisions of Section 115 of the
Code of Civil Procedure, 1908 in no way curtails the revisional powers
and the power of superintendence of a High Court under Article 227 of
the Constitution of India. It has held that, the judicial orders passed by
Civil Courts are not amenable to writ jurisdiction under Article 226 of
the Constitution of India. Jogendrasinhji Vijaysinghji (supra) has
noticed the distinctions between Articles 226 and 227 of the
Constitution of India. It has held that, an Intra-Court appeal would lie
against an order passed by a Court under Article 226 of the Constitution
of India.
The issue as to whether a writ petition under Article 226 of the
Constitution of India is maintainable against an order passed by the
statutory Tribunal exercising judicial functions or not was considered by
the Full Bench on this Hon'ble Court in Bhowanipore Gujrati
Education Society & Anr. (supra). It has noticed Section 18 of the Act
of 1993. It has held as follows:-
"40. We are, therefore, unable to accept that since the
petition under Article 227 is maintainable against the decision
of a Tribunal exercising judicial functions; it would necessarily
exclude the exercise of power by the High Court under Article
226 of the Constitution of India."
..........................................................................................
"47. Even, otherwise, the observations of the Division Bench are clearly contrary to the provision contained in The Recovery of Debts Due to Banks and Financial Institutions Act, 1993. Section 18 of the aforesaid Act itself provides that the jurisdiction of the High Court under Article 226/227 of the Constitution of India shall not be affected by the establishment of the Debts Recovery Tribunal. That being so, the observations of the Division Bench are contrary to the express provision contained in Section 18 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993."
In view of the pronouncement of Bhowanipore Gujrati Education Society & Anr. (supra) the first issue is answered by holding that, a writ petition under Article 226 of the Constitution of India is maintainable against an order passed by the Debts Recovery Appellate Tribunal.
Admittedly, there is a civil suit pending before this Hon'ble Court being C.S. No. 97 of 1992. The petitioner is the plaintiff while the bank is one of the defendants. There are two orders passed in such suit which are extremely relevant in the factual matrix of the present case. By an Order dated April 1, 1992, Joint Receivers were appointed to take actual physical possession of the suit property. The relevant portion of such order is as follows:-
"This Court is of the view that Joint Receivers be appointed with Mr. Arabinda Sen and Mr. Ekramul Bari are appointed Jt. Receivers who will go and take actual physical possession of the premises No. 14, A.K.M. Siddique Lane, Calcutta. In the event, if the Joint Receivers find that the premises are being occupied by any unauthorised occupants, the Joint Receivers will make a note of the particulars of those persons. If some portion of the premises is found to be vacant, the Joint Receivers are given liberty to put their own padlock.
The matter is adjourned for one week.
The Joint Receivers are to file a report in the meantime......................................................"
Pursuant to and in terms of an Order dated April 1, 1992 the Joint Receivers held a meeting on April 2, 1992 at the suit premises. A Minutes of the meeting was prepared. The Minutes of the meeting signed by the Joint Receivers, inter alia, state that the Joint Receivers took physical possession of the suit preemies on April 2, 1992.
There is a subsequent Order dated September 16, 1992 passed in a contempt proceedings relating to the suit. By such order, the Joint Receivers were directed to put up a wooden board indicting that the Joint Receivers are in constructive possession of the suit premises. The relevant portion of the Order dated September 16, 1992 is as follows:-
"This Court, after hearing the submissions made on behalf of the petitioner and on behalf of the respondent, the alleged contemnor is of the view that no order need be passed save and except directing the Receivers to put a wooden board indicating that the Jt. Receivers are in constructive possession of the premises. ............................................."
For the period from April 1, 1992 to September 15, 1992, the suit property was in actual physical possession of the Joint Receivers. With effect from September 16, 1992, the actual physical possession of the Joint Receivers stood altered to constructive possession. The proceedings before the Debts Recovery Appellate Tribunal filed by the bank were subsequent to September 16, 1992. On the date of the filing of the proceedings, therefore, the Joint Receivers were not in actual physical possession of the suit property.
Kanhaiyalal (supra) has held that, proceedings taken in respect of a property which is in a possession and management of a Receiver appointed by a Court, without the leave of that Court, are illegal in the sense that, the party proceeding against the property, without the leave of the Court concerned, is liable to be committed for contempt of the Court. The proceedings so held, do not affect the interest in the hands of the Receiver who holds the property for the benefit of the party who, ultimately may be adjudged by the Court to be entitled to the same. It has noticed that, the Courts in India did not hold that, sale of a property in the hands of a Receiver is void ab initio. It has, however, noticed that the American Courts appear to have taken the view that such a sale is void ab initio. It has expressed the view that, the sale of a property in the hands of a Receiver is voidable and could be declared illegal in an appropriate proceeding or by a suit.
Anthony C. Leo (supra) has held that, where a Receiver is appointed over a property by a Court, such Court became custodia legis of such property. However, such de jure possession does not bring about vesting of the property in the Receiver or in the Court, free from encumbrances, even pendente lite. In spite of the appointment of a Receiver, the rights and obligations of the third parties in respect of the property in custodia legis remain unaffected. It has held that, if a person claims a paramount right over that of the Receiver in respect of the property, he has to approach the Court appointing the Receiver for leave to initiate proceedings to establish such right. Such a person is not entitled to disturb the possession of the Receiver, without the leave of the Court. However, such a leave is not applicable, if the Receiver is not in actual physical possession of the property.
The Division Bench in Bengal Peerless Housing Development Co. Ltd. (supra) has considered Kanhaiyalal (supra) as well as Anthony C. Leo (supra).
Court appointing a Receiver over a property to take actual physical possession thereof becomes custodia legis of such property. However, appointment of a Receiver does not mean that the property vests in the Receiver or the Court, even pendente lite. A person claiming any paramount right in respect of the property has to obtain the leave of the Court in custodia legis to establish such right. Such leave is required when the Court has appointed a Receiver to take physical possession of the property. A proceeding initiated without the leave of Court appointing the Receiver, when the Receiver is not in physical possession of the property, does not stand vitiated by absence of leave.
In the facts of the present case, the Joint Receivers not being in actual physical possession of the suit premises, on the date of institution of the proceedings, by the bank, before the Debts Recovery Tribunal, it cannot be said that, such proceedings stand vitiated due to the absence of leave of the Court appointing the Receiver. Consequently, the sale conducted by the Recovery Officer in the execution proceedings of the Certificate issued by the Presiding Officer, does not stand vitiated.
In view of the discussions above, the second issue is answered accordingly.
The Recovery Officer, the Presiding Officer and the Recovery Appellate Tribunal before whom the issue of custodia legis was raised did not decide the same. They ought to have decided the same. However, all of them proceeded not to grant any relief to the petitioner. The petitioner has failed on the issue of custodia legis in course of hearing of the writ petition. Therefore, remanding the matter would not subserve the ends of justice. So no relief can be granted to the petitioner. The third issue is answered accordingly.
W.P. No. 381 of 2017 is dismissed. No order as to costs.
[DEBANGSU BASAK, J.]