Pankaj B Mangroliya vs Andhra Bank on 22 March, 2022

[Cites 13, Cited by 0]

Gujarat High Court

Pankaj B Mangroliya vs Andhra Bank on 22 March, 2022

1. By way of the present petition under Articles 14 , 21 , 226 and 227 of the Constitution of India, the petitioner, who had purchased the Page 1 of 18 Downloaded on : Mon Mar 28 20:13:42 IST 2022 C/SCA/15119/2020 JUDGMENT DATED: 22/03/2022 property in question way back in the year 2012 and not getting the title of the property, has prayed as under:

"12 A. Your Lordships may be pleased to admit this Special Civil Application;

B. Your Lordships may be pleased to issue a writ of Certiorari or any other writ order or direction in the nature of certiorari quashing and setting aside the order dated 28/08/2019 passed by learned Chairperson, DRAT, Mumbai in Appeal No.37 of 2016 and Your Lordships may further be pleased to restore the order dated 14/09/2015 passed by the learned DRT-II, Ahmedabad in MA No.56 of 2014 in the facts and the circumstances of the case and in the interest of justice;

C. Pending admission, hearing and final disposal of this petition Your Lordships may be pleased to direct the respondent Bank to deposit a sum of Rs.38,38,000/- with interest at 12% from the date of the application i.e. 12/08/2014 in this Hon'ble Court on receipt of the notice from this Hon'ble Court to meet with the ends of justice;

D. Any other and further relief that may be thought fit may kindly be granted."

2. Pursuant to the Notice issued by this Court, respondents have appeared through respective advocates and have filed affidavits-in- reply.

3. We have heard Mr.P.J.Kanabar, learned advocate for the petitioner; learned advocate Mr.C.Z.Sankla with Mr.Virendra Gohil, learned advocate appearing for respondent No.1 - Andhra Bank and Mr.Pavan Godiawala, learned advocate for respondent No.2- Gujarat Industrial Development Corporation (hereinafter referred to as "GIDC").

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4. Short facts, emerging from the record of the case, are as under:

That one M/s.Hetal Textiles Pvt. Ltd. availed a loan of Rs.53,90,741/- from the Andhra Bank in the year 1985. Against the said loan amount, certain immovable property were mortgaged with the bank and equitable mortgage was created. The said M/s.Hetal Textiles Pvt. Ltd. has constructed an Industrial Shed on Plot No.417/1, which was leased by Panoli GIDC to said M/s.Hetal Textiles Pvt. Ltd. for 99 years. Since the said M/s.Hetal Textiles Pvt. Ltd. could not repay the loan, Andhra Bank filed a Special Civil Suit No.679 of 1992 and prayed for decree, which reads as under:

"19. The plaintiff Bank therefore prays:

(a) A decree be passed in favour of the plaintiff Bank to recover Rs.53,90,741=00 with 27% interest p.a. payable at quarterly rests from defendants Nos.1 to 8 from the date of the Suit, till realisation and for the recovery of the following amount from Defendant Nos.9 to 11 with 27% interest p.a. payable at quarterly rests from the date of the suit till payment.

                 From                       Amount Rs.
                 Defendant No.9             Rs.1,61,307=00
                 Defendant No.10            Rs.1,62,257=00
                 Defendant No.11            Rs.1,58,272=00
                 and

It be held that the following immovable properties have been Equitably Mortgaged by below-mentioned Defendants in favour of the Plaintiff Bank to secure the suit financial facilities granted to Defendants Nos.1 to 6 and it be ordered that the said properties be sold for the payment of the above-

mentioned Suit dues of the Plaintiff Bank recoverable from Defendant Nos.1 to 8 and in case their sale proceeds are found to be insufficient to pay the plaintiff's suit dues in full, liberty be granted to them to recover the balance amount from the other Assets of the Defendant Nos.1 to 6.

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C/SCA/15119/2020 JUDGMENT DATED: 22/03/2022 DESCRIPTION OF THE PROPERTIES.

(a) S.No.99, 100 and 101 of Village Ushakar, Taluka Mandvi, Dist. Surat admeasuring 1,28,287 Sq.Mtrs.

adjoining Kim-Mandvi Highway Agricultural Lands S.No.404/1 and 404/2 of Village Dumas, Tal. Chorasi, Dist. Surat.

(b) R.C.C. Bungalow No.7 in the State Bank of India Employees Co-Op. Housing Society, Athwa-lines, Surat.

(b) A Decree be passed in favour of the Plaintiff Bank to recover:

(1) From Defendant No.9 Rs.1,61,307=00 with 27% interest p.a. payable at quarterly rest and (2) From Defendant No.10 to recover Rs.1,62,257=00 with 27% interest payable at quarterly rests and (3) From Defendant No.11 to recover Rs.1,58,272=00 with 27% interest payable at quarterly rests, from the date of the suit till realization.

(c) The plaintiff Bank be awarded the full costs of this Suit "

5. During the pendency of the said suit, an Act namely Recovery of Debts Due to Banks & Financial Institutions Act,1993 (hereinafter referred to as "the Act") came to be enacted and accordingly the said suit was transferred to Debts Recovery Tribunal established under the aforesaid Act. The Presiding Officer of Debts Recovery Tribunal, Ahmedabad vide judgement and order dated 24/08/2007 decreed the suit and passed the following order:

"OPERATIVE ORDER (1) Transfer Application is partly allowed with cost. (2) Defendants 1, 2, 4 to 6 do jointly and severally pay Page 4 of 18 Downloaded on : Mon Mar 28 20:13:42 IST 2022 C/SCA/15119/2020 JUDGMENT DATED: 22/03/2022 applicant 53,90,741.00 with simple interest @ 06% thereon from 27.11.1992 until realization.

(3) Applicant shall be entitled to sell the secured properties, described in Para No.13 of the Transfer Application, for realizing the certified dues. Liability of defendants No.7 and 8.2 shall be restricted to the value of the mortgaged properties, referred to above. (4) Transfer Application stands abated against the defendants No.3, 8.1 and 8.3 with no order as to costs. (5) Transfer Application stands dismissed against defendants No.9 to 11 with no order as to cost. (6) Issue Recovery Certificate under section 19(22) of The Act."

6. As per the aforesaid Judgement, Recovery Certificate under section 19(22) of The Recovery of Debts Due to Banks and Financial Institutions Act, 1993, was issued by the Presiding Officer of Debts Recovery Tribunal, Ahmedabad on 27/08/2007. The gist of the Certificate, which describes the properties, reads as under:

IT IS HEREBY ORDERED AND CERTIFIED under provision of Section 19 of the Act against defendant Nos.1 to 11, herein above :-

1. Transfer Application is partly allowed with cost.

2. Defendants 1, 2, 4 to 6 do jointly and severally pay applicant Rs.53,90,741.00 with simple interest @ 06% thereon from 27.11.1992 until realization.

3. Applicant shall be entitled to sell the secured properties, described in Para No.13 of the Transfer Application, for realizing the certified dues. Liability of defendants No.7 and 8.2 shall be restricted to the value of the mortgaged properties, referred to above.

4. Transfer Application stands abated against the defendants No.3, 8.1 and 8.3 with no order as to costs.

5. Transfer Application stands dismissed against defendants No.9 to 11 with no order as to cost.

Description of Properties (Para No.13) Page 5 of 18 Downloaded on : Mon Mar 28 20:13:42 IST 2022 C/SCA/15119/2020 JUDGMENT DATED: 22/03/2022 Date Property of Description Def. Nos.

a) 29-11-85 Def.No.4 (1) S.No.99, 100 and 101

of Village Ushkar, Taluka:

                                                  Mandvi,     Dist.    Surat
                                                  admeasuring       1,28,287
                                                  sq.mtrs. adjoining Kim-
                                                  Mandvi Highway.
                                                  (2) Agricultural lands:
                                                  S.No.404/1 & 404/2 at
                                                  Village            Dumas,
                                                  Tal.Choraso, Dist.Surat.
               b)                  Def.No.7       R.C.C. Bungalow No.7 in
                                                  the State Bank of India
                                                  Employees          Co.-Op.
                                                  Housing            Society,
                                                  Athwalines, Surat.
               c)                  Def.No.8       Flat No.A/4, in Anupam
                                                  Flats Co-Op. Housing
                                                  Society,      Athwalines,
                                                  Surat.

Defendants Nos.1 to 6 have constructed Industrial Shed at Panoli G.I.D.C. Plot No.417/1, Road No.4, Panoli with the financial facility obtained from the plaintiff Bank. They are 99 years lessees of the said plot and Shed constructed thereon are the properties of def.No.1 and they are also required to be attached before judgement or in the alternative prohibitory orders are required to be passed against def.No.1 to 6 not to dispose off, alienate or transfer them: till this suit is finally decided.

Jointly and Severally The Recovery Officer shall realize the amount as per this Certificate in the manner and mode prescribe under Section 25 and 28 of the Recovery of Debts due to Bank and Financial Institutions Act,1993 from the above named Certificate Debtors."

As per the said Certificate, Recovery Officer issued a Public Notice and put to auction Plot No.417/1 of GIDC, Panoli, which is the subject matter of the present proceedings.

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7. The petitioner having offered a highest price at Rs.38,38,000/-, was declared a successful purchaser and accordingly Certificate of sale of immovable property was issued at the instance of Recovery Officer of Debts Recovery Tribunal-II, Ahmedabad. Thereafter, the said amount was paid to the Bank. The possession Receipt (Kabja Pavti) was issued by Deputy Manager of Andhra Bank, Surat on 23/03/2012. When the GIDC, Panoli received a Certificate of Sale of Immovable Property from Recovery Officer of Debts Recovery Tribunal- II, Ahmedabad, it wrote a letter dated 04/09/2012, informing him that the property i.e. plot no.417/1 of Panoli GIDC Estate was never sold to M/s.Hetal Textiles Pvt. Ltd. and only land was allotted on certain terms and conditions. The said M/s.Hetal Textiles Pvt. Ltd. had failed to pay GIDC dues, the recovery proceedings were initiated against said M/s.Hetal Textiles Pvt. Ltd. and accordingly, possession of said plot was taken back on 20/12/2003. Hence, the property, which was never hypothicated with the Bank nor was of the ownership of M/s.Hetal Textiles Pvt. Ltd., was sold without prior permission of GIDC, Panoli and therefore, "No Due Certificate" cannot be issued in favour of the purchaser i.e. the present petitioner. Copy of the said letter was also sent to the present petitioner.

Having come to know about the aforesaid facts, the present petitioner has filed a writ petition being Special Civil Application No. 2857 of 2013 before this Court requesting the GIDC to issue "No Due Certificate" in favour of the petitioner and to complete the transfer formality, since he had purchased the property in question way back in the year 2012. Said petition was dismissed by learned Single Judge on several grounds including the ground that the property, which was auctioned by Debts Recovery Tribunal was not property of M/s.Hetal Page 7 of 18 Downloaded on : Mon Mar 28 20:13:42 IST 2022 C/SCA/15119/2020 JUDGMENT DATED: 22/03/2022 Textiles Pvt. Ltd. and possession of the property was taken back by GIDC, Panoli way back in the year 2003. Since the property was sold behind the back of Panoli GIDC, such writ cannot be issued. The said decision was challenged by the petitioner by way of filing an appeal being Letters Patent Appeal No.643 of 2013, which came to be dismissed vide oral order dated 17/06/2013, however, permitting the present petitioner to take out appropriate proceedings for recovery of his amount paid by him for the property, which was purchased by him in auction proceedings in the year 2012.

Both the decisions were challenged by the petitioner before the Hon'ble Apex Court being Special Leave to Appeal (Civil) CC No.20553 of 2013, which came to be dismissed on 06/12/2013. Thereafter, the petitioner has filed an application under Section 19(25) of the RDDB & FI Act, being Misc. Application No.56 of 2014 requesting the Presiding Officer to issue appropriate order or direction protecting the right, title and interest of the petitioner and alternatively prayed to direct the respondent Bank to return an amount of Rs.38,38,000/- with interest at the rate of 18% per annum, which he has paid in the year 2012 and the Bank had refused to return the same. Presiding Officer of Debts Recovery Tribunal-II at Ahmedabad vide judgement and order dated 14/09/2015 allowed the application and directed the respondent - bank to pay the aforesaid amount along with interest at the rate of 12 % per annum from date of filing of the said application till realisation.

Respondent - Andhra Bank challenged the said decision by way of filing an appeal under section 20 of the Act before the Debts Recovery Appellate Tribunal at Mumbai being Appeal No.37 of 2016. Appellate Tribunal vide order dated 28/08/2019 accepted the appeal filed at the instance of the appellant and quashed and set aside the order passed by Debts Recovery Tribunal-II, Ahmedabad asking the present petitioner Page 8 of 18 Downloaded on : Mon Mar 28 20:13:42 IST 2022 C/SCA/15119/2020 JUDGMENT DATED: 22/03/2022 to take appropriate legal remedy against the person or the institution, which had taken over possession but cannot invoke section 19(25) of the Act. Hence, this petition.

8. Mr.P.J.Kanabar, learned advocate appearing for the petitioner has vehemently submitted that respondent-bank had disbursed the loan amount to M/s.Hetal Textiles Pvt. Ltd. and others, against the property mortgaged with the Bank, which have been referred in the plaint. Since the loan amount was not repaid, the suit was filed and in the said Suit, Bank itself has described the properties of those respondents, which have availed the loan, which was mortgaged with the bank, whereas it has been specifically stated in the plaint itself and in the agreement that apart from the immovable property of the defendant, properties of GIDC and original defendants have leasehold rights and even in the prayers, property in question is not part of lease for execution of the lease deed. Taking us through the prayer, he would submit that subsequent to transfer of the aforesaid suit to Debts Recovery Tribunal established under the Act, final judgement came to be delivered on 24/08/2007, which was prepared as an application and original defendants were jointly and severally liable to pay an amount of Rs.53,90,741/- with simple interest at the rate of 6% from 27/11/1992 until realization and it was also declared that original plaintiff shall be entitled to sell the secured properties, described in Para No.13 of the Transfer Application, for realizing the certified dues. He would submit that it is an undisputed fact that plot in question was not a secured property. He would further submit that even in the Certificate issued by the Recovery Officer, it has been stated that property described in the Certificate and Shed constructed thereupon, are required to be attached and cannot be sold. He would submit that though property in question was not a secured property, Page 9 of 18 Downloaded on : Mon Mar 28 20:13:42 IST 2022 C/SCA/15119/2020 JUDGMENT DATED: 22/03/2022 Recovery Officer put in auction the said plot. By taking us through the advertisement, he would submit that the petitioner having offered the highest price in the public auction, was declared a successful purchaser of the immovable property and accordingly, an amount of Rs.38,38,000/- was paid to the bank and accordingly Sale Certificate was issued. He would submit that the petitioner was shocked when he was not given "No Due Certificate" though he has purchased the property in open market and pursuant to the Notice issued by the Presiding Officer appointed by Debts Recovery Tribunal and therefore, he had filed a writ petition being Special Civil Application No.2857 of 2013. By taking us through the order dated 02/04/2013 passed by learned Single Judge in the writ petition, he would submit that it has been categorically observed by learned Single Judge that by preparing a panchnama, the possession was taken over by GIDC in the year 2003 from M/s.Hetal Textiles Pvt. Ltd.. However, neither the bank nor the Recovery Officer cared to verify the documents with regard to ownership of plot in question and put to auction the same.

He would submit that the petitioner is a bonafide purchaser and had paid the entire amount, however, he did not get the fruits of the same and was not declared the owner of the property since the auction was totally illegal one. He would submit that the property of GIDC Panoli has been sold in open market as if the same belongs to original debtor i.e M/s.Hetal Textiles Pvt. Ltd.. He would submit that the petitioner has tried to get his dues back. However, as per the observations made by the Division Bench of this Court in Letters Patent Appeal No.643 of 2013, he approached the Debts Recovery Tribunal by filing an application under section 19(25) of the Act. Debts Recovery Tribunal after considering the fact that ownership is of the GIDC and possession has been taken by GIDC way back in the year 2003, an application was allowed in part and the Bank Page 10 of 18 Downloaded on : Mon Mar 28 20:13:42 IST 2022 C/SCA/15119/2020 JUDGMENT DATED: 22/03/2022 was directed to refund the amount with interest. He would further submit that the Appellate Tribunal has committed an error by holding that the petitioner has to avail remedy under Rule 62 of Second Schedule of the Income Tax Act, 1963 and Income Tax Act, 1961, as provided in sub- section (5) of Section 28 of the Recovery of Debts Due to Banks & Financial Institutions Act,1993. He would submit that even Appellate Tribunal has committed an error in holding that the Tribunal ought not to have exercised its power under Section 19(25) of the Act since, the same would be applicable only to those parties, who have agreement with regard to some dues and not third party. He would submit that on the contrary, section 19(25) empowers the Tribunal to make such orders and give such directions as may be necessary or expedient to give effect to its orders or to prevent abuse of its process or to secure the ends of justice and therefore, Tribunal has rightly exercised his powers and entertained the application having found that the petitioner being a bonafide purchaser of the property and having not received the fruits of payment made by him way back in the year 2012, has rightly passed appropriate order.

In support of his above submissions, he has relied upon the decision of Hon'ble Division Bench of this Court rendered in the case of Lalitkumar Jivabhai Thakkar & Anr. V/s. State Bank of India & Others reported in 2009(2) GLR 1667. By taking us through prepositions laid down by the aforesaid decision, he would submit that even the third party application is entertained under the said Act. He has also relied upon the decision of Division Bench of Madras High Court delivered in Writ Petition No.39199 of 2016 in the case of S.Shanmuganathan V/s. Indian Overseas Bank. He would submit that application under section 19(25) can be entertained at the instance of third party. He has also relied upon the decision rendered by Bombay Page 11 of 18 Downloaded on : Mon Mar 28 20:13:42 IST 2022 C/SCA/15119/2020 JUDGMENT DATED: 22/03/2022 High Court in the case of Anil Nandkishor Tibrewala & Anr. V/s. Jammu and Kashmir Bank Ltd. reported in 2007(3) Bom Cr. 941. By making above submissions and relying upon aforesaid decisions, he would submit that this petition may be allowed.

9. On the other hand, Mr.C.Z.Sankla, Ld.Advocate with Mr.Virendra Gohil, learned advocate appearing for respondent No.1 has vehemently opposed this petition. He would submit that Debts Recovery Tribunal has rightly accepted the appeal filed by the Bank on the ground that the present petitioner is supposed to take out appropriate proceedings under Rule 62 of the Income Tax Act,1963 and Income Tax Act, 1961, as provided in sub-section (5) of Section 28 of the Debts Recovery Act. He would submit that a purchaser of a property can apply to the Officer to set aside the sale on the ground that defaulter has no interest in the property sold and therefore, in the present case, the petitioner should have approached the Recovery Officer established under the Debts Recovery Act, which has not been undertaken by the petitioner and therefore, the appellate authority has rightly entertained the application filed under Section 19(25) of the Act and quashed and set aside the order passed by Debts Recovery Tribunal-II, Ahmedabad. He would submit that Recovery Officer has issued a Public Notice for execution of the decree dated 21/12/2011 in a daily newspaper wherein it is specifically stated that the decree shall be executed by selling plot no.417/1 located at GIDC of Panoli. By taking us through the advertisement, he would submit that it was specifically mentioned in the advertisement that GIDC have owed 5 Lacs against the property. However, GIDC has not raised any objection about the auction of the property, which was proposed to be auctioned for executing the decree of huge amount.

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C/SCA/15119/2020 JUDGMENT DATED: 22/03/2022 He would further submit that if GIDC would have brought to the notice of the Bank that possession has already been taken back by the GIDC itself in the year 2003 and raised objection about the auction, the property could not have been sold. Bank is at not fault when subsequent action in the property and handing over possession, cannot be treated as illegal and cannot be quashed and set aside indirectly by asking the bank to refund the amount, which was paid by the present petitioner.

By taking us through the last portion of the Certificate issued by the Presiding Officer of Debts Recovery Tribunal, he would submit that the Tribunal has observed that the order by which the property in question was ordered to be attached and therefore, such attached property was rightly put to an auction and therefore, this petition may be dismissed.

10. On the other hand, Mr.Pavan Godiawala, learned advocate appearing for the GIDC has taken us through the affidavit-in-reply filed by the GIDC and he would submit that it is an undisputed fact that plot in question belongs to GIDC, which was leased to original loanee i.e M/s.Hetal Textiles Pvt. Ltd.. M/s.Hetal Textiles Pvt. Ltd. was holding leasehold rights only for a period of 99 years. It has also come on record that when the original loanee availed the loan only Shed constructed on the land was mortgaged along with other immovable properties of the original loanee and therefore, the bank had no right, title or interest over the property in question, which is owned by GIDC to put the same in auction. The possession of the property was taken over in the year 2003 by preparing panchnama, which has been produced on record. He would further submit that when the property in question was not mortgaged at all, there is no question of selling the property and interpreting the order Page 13 of 18 Downloaded on : Mon Mar 28 20:13:42 IST 2022 C/SCA/15119/2020 JUDGMENT DATED: 22/03/2022 in the way the bank likes and therefore, he would submit that appropriate order may be passed.

11. We have heard learned advocates appearing for the respective parties. It appears from the record that M/s.Hetal Textiles Pvt. Ltd. had availed the loan from Andhra Bank to the tune of Rs.53,90,741/- by executing various agreements. Since the original loanee did not repay the loan, the bank was constrained to file a suit being Special Civil Suit No.679 of 1992 in the Court of Joint Civil Judge (Senior Division) at Surat. The plaint has been reproduced on record. Prayers made by the Bank in the suit, has already been reproduced hereinabove.

12. Even the property described in the plaint and the suit are the same, which does not include the property in question. i.e Plot No.417/1, upon which, Shed was constructed. The said suit was transferred to Debts Recovery Tribunal under the provisions of the Act and ultimately, said suit, which was treated as an application was decreed. Thus, it is clear from the case put forward by the bank in the year 1992 itself that property in question was never mortgaged with the Bank by the original loanee. A Certificate dated 27/08/2007, produced on record, describes the property for attachment. However, from the close reading of description with regard to the plot in question, it has been categorically stated that plot was a leasehold property and shed constructed thereon, are properties of original defendant No.1 i.e. M/s.Hetal Textiles Pvt. Ltd. and were also required to be attached and it is further observed that it shall not dispose of, alienate or transfer the properties referred to in the Certificate including the Shed constructed on immovable property on the plot in question.

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13. If we see operative part of the judgement delivered by Debts Recovery Tribunal in suit proceedings, it has been categorically stated that it is entitled to sell the secured property only and description in Para- 13 in the Transfer Application, the plot, which has been purchased by the present appellant was not a secured property. It is amply clear from the record of the case that there is no dispute that original loanee had ever become owner of the property in question, which has been sold in the auction.

14. As far as maintainability of the application under section 19(25) of the Act is concerned, the same reads as under:

"19(25) The Tribunal may make such orders and give such directions as may be necessary or expedient to give effect to its orders or to prevent abuse of its process or to secure the ends of justice."

15. Since the petitioner did not get fruits of his action i.e. paying the full price of the property purchased in auction and having come to know that the property, which was not belong to original loanee, has been sold, an application was preferred under the said provisions and therefore, in our opinion, he is an affected party, which can file such application. We are in complete agreement with the decision of Division Bench of this Court rendered in the case of Lalitkumar Jivabhai Thakkar & Anr. (Supra). After considering the facts in the case, Hon'ble Division Bench of this Court in Para-7 has observed as under :

"7. We are primarily concerned with the question whether an application by a third party can be entertained by the D. R. T. under sub-sec. (25) of Sec. 19 of the R.D.B. Act, if the Tribunal is convinced that the orders passed by it Page 15 of 18 Downloaded on : Mon Mar 28 20:13:42 IST 2022 C/SCA/15119/2020 JUDGMENT DATED: 22/03/2022 would amount to an abuse of its process. Sub-section (25) of Sec. 19 of the R.D.B. Act reads as follows :

"The Tribunal may make such orders and give such directions as may be necessary or expedient to give effect to its orders or to prevent abuse of its process or to secure the ends of justice. "

Every Court or Tribunal is obliged to see that its process shall not be abused or misused. Improper and tortious use of a legitimately issued process of a Tribunal to obtain a result that is either unlawful or beyond the process and scope would amount to its abuse. Expression 'ends of justice' means not only justice to the parties, but also to witnesses and others which may be inconvenienced. Tribunal is empowered to make such orders and give such directions as may be necessary or expedient to give effect to the orders lawfully passed. Tribunal is also empowered to make such orders and directions so as to secure ends of justice. Tribunal is also empowered to make such orders and issue such directions so that process of the Tribunal be not abused. Statute has not interdicted third parties to bring to the knowledge of the Tribunal that its process is being abused and there is also no stipulation in the Act that such powers can only be invoked at the instance of the parties to the proceedings. Question as to whether there has been an attempt to abuse the process of Tribunal depends upon facts and circumstances of each case which a third party can bring to the notice of the Tribunal. Tribunal if finds that mortgage has been created fraudulently and sham and bogus documents were produced before the Tribunal to get favorable orders to the prejudice of a third party, that fact can always be brought to the notice of the Tribunal. Tribunal has an obligation to see that its process be not abused. Tribunal would also be guarded against, abuse of its process, by a third party to defeat the object and purpose of the Act which is expeditious adjudication and for recovery of debt of the Banks and financial institutions."

Hence, this application was rightly entertained by Debts Recovery Tribunal filed at the instance of the present petitioner.

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16. So far as the submissions made by Mr. Sankla, Ld.Advocate about applicability of Section 62 of Second Schedule of the Income Tax Act is concerned, we are of the opinion that the same shall not be applicable in the present facts and circumstances of the case, in view of the fact that the petitioner is a bonafide purchaser and has purchased the property and has got nothing for the payment, which he had made in the year 2012. We are of the opinion that the person, who had purchased the immovable property, which was not owned by loanee and if under misconception and without examining the title of the property, if the Bank has put such property in auction, a person cannot be asked go for cancellation of sale on the ground referred therein. If the Bank has not examined the documents of a property, which is put in auction and when it is the case of the Bank itself in the suit proceeding that only Shed was mortgaged, he had no right, authority or power to put such property in public auction.

17. We are of the opinion that if GIDC had brought to the notice of factual aspect about taking possession in the year 2003, sale might not have taken place. The same would not come in the way of the petitioner, who had purchased the property put under auction at the instance of recovery officer in open market and have paid huge amount to the tune of Rs.38,38,000/-.

Third party cannot be compelled to go for examining the validity of the sale when it has come on record that the property, which was not mortgaged has been sold in open market.

18. It is also pertinent to note that when the petitioner has filed an application before the Tribunal, Bank had raised objection about refunding the amount and therefore, case proceeded further and Page 17 of 18 Downloaded on : Mon Mar 28 20:13:42 IST 2022 C/SCA/15119/2020 JUDGMENT DATED: 22/03/2022 ultimately the Tribunal has accepted the prayers and directed the Bank to pay an amount of Rs.38,38,000/- with interest at the rate of 12% thereon from the date of filing of the application under section 19(25) of the Act, till realisation.

On the contrary, bank has carried on further, by way of filing an appeal and therefore, we are of the opinion that the petition requires consideration not only the ground that he is entitled for the amount, as directed by the Tribunal but also, at the rate of interest granted by the Tribunal from the date of filing of the original application till realisation.

19. Respondent - Andhra Bank is hereby directed to pay the aforesaid amount with interest within a period of three months hereinafter, in absence of any further order from the higher forum. If the amount is not paid within a period of three months, the petitioner shall be entitled to get interest at the rate of 15% per annum till realization. This petition is allowed. Rule is made absolute accordingly.

sd/-

(A.J.DESAI, J) sd/-

(ANIRUDDHA P. MAYEE, J.) DIPTI PATEL Page 18 of 18 Downloaded on : Mon Mar 28 20:13:42 IST 2022

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