Gujarat High Court
Shree Ram Trading Company vs Bank Of Baroda on 27 September, 2019
Author: Biren Vaishnav
Bench: Biren Vaishnav
C/SCA/15838/2019 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 15838 of 2019
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE BIREN VAISHNAV
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1 Whether Reporters of Local Papers may be allowed to
see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law
as to the interpretation of the Constitution of India or any
order made thereunder ?
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SHREE RAM TRADING COMPANY
Versus
BANK OF BARODA
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Appearance:
MR SHALIN MEHTA, SENIOR COUNSEL WITH MR A R PATEL & MS AB
CHATURVEDI, ADVOCATES for the Petitioner(s) No. 1,2,3,4
for the Respondent(s) No. 2
MR PERCY KAVINA, SENIOR COUNSEL WITH MS NALINI LODHA for the
Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE BIREN VAISHNAV
Date : 27/09/2019
CAV JUDGMENT
1. By way of this petition under Article 226 of the Constitution of India, the petitioner has made the following Page 1 of 25 Downloaded on : Sat Sep 28 23:49:39 IST 2019 C/SCA/15838/2019 CAV JUDGMENT prayers:
"9 (A) To quash and set aside the order dated 12.09.2019 passed by the Debt Recovery Tribunal- 1, at Ahmedabad in Securitisation Application No. 134 of 2019 to the extent that it does not grant interim injunctions to the Petitioners;
(B) To direct the Respondent Bank to permit the Petitioners to repay the sanctioned OTS amount contained in the communication dated 29.03.2019 by giving a fresh and reasonable schedule of payment;
(C) To stay pending hearing and final disposal of the present Special Civil Application any further action of confirmation of sale or issuance of sale certificate or any action in furtherance of the scheduled auction dated 12.09.2019 of the properties of the Petitioners forming subject matter of auction notice dated 04.08.2019;
..."
2. The facts in brief are as under:
2.1 The petitioner No.1 is a partnership firm of petitioner No.2 and 4 and the petitioner No.3 is a guarantor / mortgagor.
Securitization Application No. 74 of 2017 was filed before the Debt Recovery Tribunal by the petitioners for the following reliefs:
"VI Reliefs:
a) to declare that the notice dated 30th June 2015 and possession notice dated 8th November 2016 are illegal, contrary to the provisions of law and accordingly quash and set aside the same.
b) To declare that the action taken by the respondent
- Bank under Section 13 is illegal and consequently be quashed and set aside.Page 2 of 25 Downloaded on : Sat Sep 28 23:49:39 IST 2019 C/SCA/15838/2019 CAV JUDGMENT
C) To restrain permanently the respondent Bank its servants, employees, agents or any other person acting for and on behalf of respondent Bank, from publishing photographs of the applicants.
d) ...
e) ccc"
2.2 By an order dated 19.02.2019, S.A No. 74 of 2017 was disposed of by the Tribunal.
2.3 According to the petitioner, in terms of the order dated 19.02.2019, the petitioner gave a One Time Settlement ("OTS") on 25.02.2019. The OTS Proposal offered a medium for raising 17 crores by the petitioner by sale of mortgaged assets.
2.4 It is the case of the petitioner that by a letter dated 26.03.2019, follow-ups were made with a request to expedite the sanction/ approval of OTS. It appears that the bank by a communication dated 29.03.2019, according to the petitioner accepted the OTS proposal and laid down certain payment terms. One of the terms was that the petitioners deposit 4,62,00,000/- on or before 30.03.2019. By a letter dated 30.03.2019, the petitioners stated that the sanction was given nearly more than one month after submission of the proposal Page 3 of 25 Downloaded on : Sat Sep 28 23:49:39 IST 2019 C/SCA/15838/2019 CAV JUDGMENT and as informed the petitioner would require 15-20 days for payment of Rs.473 lakhs. It appears that the respondent bank vide letter dated 05.04.2019, informed the petitioner that since the petitioner had failed to honour the sanction, the proposal is treated as closed. It appears that several proposals were made which were not accepted by the bank and the bank informed the petitioner, by a letter dated 25.06.2019 that it would proceed to recover physical possession.
3. Being aggrieved by the notice dated 14.06.2019, issued by the Executive Magistrate & City Mamlatdar, Asarva, Ahmedabad under the provisions of the Securitization Act, the petitioner filed Securitization Application No. 134 of 2019 on 03.07.2019. Initially, interim relief was prayed in terms of prayer 7(A) to restrain the Magistrate from taking possession. On 06.07.2019, the Tribunal after hearing the counsels for the petitioner and the bank, relying on the order dated 19.02.2019 passed in S.A No. 74 of 2017, refused to grant interim relief.
3.1 Pending this Securitization Application, the bank served possession notices on 19.07.2019 and 22.07.2019. On 05.08.2019 the authorized officer of the bank served a notice Page 4 of 25 Downloaded on : Sat Sep 28 23:49:39 IST 2019 C/SCA/15838/2019 CAV JUDGMENT of sale of immovable properties, enclosing a copy of the published sale notice for sale of immovable properties dated 4.8.2019. The secured assets were put to auction. The petitioners therefore moved an amendment application for amending S.A No. 134 of 2019 which was granted and prayers were added to quash and set aside the possession notices dated 19.07.2019 and 22.07.2019, sale notice dated 05.08.2019 published together with auction notice dated 04.8.2019 and the scheduled auction to be held on 12.09.2019. Interim prayer was also amended praying for restraining the bank from taking action in pursuance of the aforesaid notices.
3.2 On 09.09.2019 a pursis was filed by the petitioner claiming that they were in a possession to sell properties which would fetch higher prices by nearly two crores and therefore a request was made that the properties be released from auction. Based on this pursis, the Tribunal passed the impugned order dated 12.09.2019 holding as under:
"11. Further, applicants have come with plea that they are trying for compromise with the bank and bank issued letter dt.29.3.2019 to applicants and asked the applicants to pay Rs.4.62 crores by 31.3.2019. Prima- facie the action of the bank was wrong and arbitrary, while accepting the compromise proposal for OTS amount. The purpose of OTS is to facilitate the borrower to pay the dues of the bank not to complete paper Page 5 of 25 Downloaded on : Sat Sep 28 23:49:39 IST 2019 C/SCA/15838/2019 CAV JUDGMENT formalities regarding acceptance of OTS proposal. The subsequent representations made by the applicants remained unheard even before initiating argument of counsel for the applicants by way of pursish offered to pay amount within 90 days and offered amount more than Rs.2.00 crores then the reserve price fixed by the bank. The offer seems to be lucrative, but it is the prerogative of the bank to accept or reject the proposal and bank has rejected the said proposal in its own discretion.
12. Under these given circumstances, despite arbitrary attitude on the part of the bank to give merely 48 hours to pay Rs.4.62 crores, I find no merits to extend any discretionary powers to grant any interim injunction to the applicants as scope of section 17 of the SARFAESI Act, 2002 is limited and there is no material irregularity as far as steps under Section 13(4) of the SARFAESI Act, 2002 are are concerned which may invite any interference of this Tribunal at this tage.
13. If applicants are aggrieved by the action of the bank on OTS and refusal to entertain subsequent representation they can approach appropriate forum so that in other cases bank may consider this aspect and to give reasonable time to the borrowers to pay initial amount while accepting his OTS proposal but certainly on such ground the auction process initiated by the bank under the Securitization Act, 2002 cannot be put at hault."
4. Mr. Shalin Mehta, learned Senior Counsel has appeared for the petitioners assisted by Mr. A.R. Patel and Ms. A.B. Chaturvedi, learned advocates for the petitioners. He has submitted as under:
4.1 Drawing my attention to the order dated 19.02.2019 passed in S.A No. 74 of 2017, Mr.Mehta would contend that it was agreed by and between the bank and the petitioner that the issues will be resolved within a month. It was in this Page 6 of 25 Downloaded on : Sat Sep 28 23:49:39 IST 2019 C/SCA/15838/2019 CAV JUDGMENT context that an OTS proposal was made on 25.02.2019 offering to make payment by sale of properties mortgaged with the bank in a phased manner. The letter set out how the amount was to be raised.
4.2 Mr.Shalin Mehta would contend by drawing my attention to the letter dated 29.03.2019 issued by the bank contending that though the proposal was made as early as on 25.02.2019, nearly after a month the bank by the communication dated 29.03.2019 which was received at 05:50 p.m on 29.03.2019 effectively gave the petitioners less than 24 hours to deposit Rs.4.62 crores on or before 30.03.2019.
4.3 Inviting my attention to the letter dated 30.03.2019, Mr.Shalin Mehta, would contend that even as early as on 26.03.2019, it was pointed out that the petitioners had awaited for a month, and once the OTS proposal was accepted, it was not open for the bank to shut the doors to this proposal by a communication dated 5.4.2019.
4.4 Such an action of the bank was arbitrary. Once the bank had accepted the proposal it ought to have accorded reasonable chance to the petitioners to satisfy the proposal.Page 7 of 25 Downloaded on : Sat Sep 28 23:49:39 IST 2019 C/SCA/15838/2019 CAV JUDGMENT
4.5 Inviting my attention to various cheques, photocopies of which had been annexed at page 43 onwards, Mr.Mehta would contend that they were cheques from prospective buyers of the properties to be auctioned and they would fetch more than the upset price in three months.
4.6 Mr.Mehta would invite my attention to the prayers made in the S.A. No. 134 of 2019 and contend that though the stay was refused on 06.07.2019, when a pursis was given on 09.09.2019 offering that the petitioners shall pay within a period of only 90 days, an aggregate amount of Rs.11,49,86,000/- which is nearly 2,00,00,000/- higher than the reserved price fixed by the bank, the Tribunal, committed an error in rejecting the offer by the impugned order dated 12.09.2019.
4.7 Mr.Mehta would submit that once the Tribunal in para 11 of the order categorically observed that prima facie, the action of the bank was wrong and arbitrary while accepting the compromise proposal for OTS amount and when the offer of the petitioner was lucrative, having so observed that it was arbitrary, the Tribunal ought not to have rejected the offer. In Page 8 of 25 Downloaded on : Sat Sep 28 23:49:39 IST 2019 C/SCA/15838/2019 CAV JUDGMENT fact, the fact that the bank gave less than 24 hours to pay an amount of Rs.4.62 crores once having accepted the OTS the Tribunal fell in error in holding that the bank had the discretion to reject the proposal.
4.8 Since a preliminary objection was raised by the respondent bank with regard to the maintainability of the petition in view of an alternative and efficacious remedy under Section 18 of the SARFAESI Act, Mr. Mehta, learned Senior Counsel, submitted that Section 18 required the borrower to deposit with the appellate tribunal 50% of the amount of debt due from him which was an onerous condition. Once the D.R.T itself had held the action to be arbitrary, it ought to have enforced the OTS, since the alternative remedy was not efficacious.
4.9 In support of this submission, Mr.Mehta, learned Senior Counsel, relied on a decision of the Supreme Court in the case of A.V.Venkateswaran, Collector of Customs, Bombay vs. Ramchand Sobhraj Wadhwani & Anr., reported in AIR 1961 SC 1506. Drawing my attention to paragraph 10 of the judgment, Mr.Mehta would contend that existence of an adequate alternative remedy was by no means a bar. Their Page 9 of 25 Downloaded on : Sat Sep 28 23:49:39 IST 2019 C/SCA/15838/2019 CAV JUDGMENT application would depend on the facts of each particular case and the High Court can exercise jurisdiction under Article 226 of the Constitution of India. He also relied on a decision of the Supreme Court in the case of Maharashtra Chess Association vs. Union of India & Ors, reported in (2019) SCC OnLine SC 932. He specifically drew my attention to para 22 of the judgment that the decision whether to entertain or not to entertain an action under its writ jurisdiction remains a decision to be taken by the High Court on an examination of facts and circumstances of the particular case. He would therefore submit that this was a fit case in which a remedy under Section 18 was not an alternative but not even an efficacious remedy once a lucrative amount for proposing to pay higher proceeds than the upset price was offered. He would therefore submit that once the Tribunal has categorically held that the action of the bank which was a public body to be arbitrary under Article 14, discretion ought to be exercised in favour of the petitioner and all subsequent sales and issuance of sales certificates be stayed.
5. Mr. Percy Kavina, assisted by Ms.Nalini Lodha, appeared on behalf of the bank and made the following submissions:Page 10 of 25 Downloaded on : Sat Sep 28 23:49:39 IST 2019 C/SCA/15838/2019 CAV JUDGMENT
5.1 By adding a note of caution, he would submit that even if the alternative remedy was not efficacious, from the conduct of the petitioner he would successfully demonstrate that the Tribunal did not commit any error and in fact even no final relief could have been granted by the Tribunal by way of the fresh securitization application being S.A No. 134 of 2019. 5.2 He would submit that by the principles of "waiver" and "res-judicata" the application before the Tribunal was barred. Drawing my attention to the order of the Tribunal dated 19.02.2019 passed in S.A. No. 74 of 2017, Mr. Kavina would contend that it was specifically the case of the petitioner that he would resolve the issues and pay the outstanding dues within one month and if for any reason what so ever the applicant fails, they would surrender vacant peaceful possession of all secured assets. It was on this understanding that vide order dated 19.02.2019, the S.A was disposed of because the petitioner waived his right of 14 days' prior notice and the bank was permitted to take possession forthwith if the applicants failed to surrender possession after 30 days.
5.3 Mr.Kavina invited my attention to the letter of the bank Page 11 of 25 Downloaded on : Sat Sep 28 23:49:39 IST 2019 C/SCA/15838/2019 CAV JUDGMENT dated 29.03.2019 to contend that against the dues of Rs.20 crores and notional dues of 30.15 crores, the bank was sacrificing Rs.13 crores by accepting Rs.17 crores. Inviting my attention to the letter dated 30.03.2019, Mr.Kavina would contend that the petitioner resiled from the OTS and in context of the letter dated 26.03.2019 asked for a further period of 15 to 20 working days. A request was also made not to charge interest at the rate of 12% which was a counter proposal.
5.4 He would further submit that when a comparison is made with the communication of the bank dated 29.03.2019 with the order passed in S.A No. 74 of 2017 dated 19.2.2019, the bogey that the petitioner got just one day to pay Rs.4.62 crores was misconceived. On 19.2.2019 itself the petitioners had agreed that if for any reason what so ever they failed to resolve, the bank would take peaceful possession. 5.5 Even if the bank had given a time table to pay the amount of Rs.4.62 crores by 01.04.2019, and clear the entire debt as per the proposal dated 29.03.2019, by letter of 30.03.2019 there was novation of contract inasmuch as a counter proposal was made and therefore it was not Page 12 of 25 Downloaded on : Sat Sep 28 23:49:39 IST 2019 C/SCA/15838/2019 CAV JUDGMENT immediately that the bank canceled the proposal. It did so only on 05.04.2019 after giving the petitioner enough elbow room.
5.6 Inviting my attention to pages 27 and 31 of the petition, Mr. Kavina would contend that none of the landmark dates were followed. Nothing was paid, the communication dated 05.04.2019 canceling the proposal was also not under challenge.
5.7 Mr. Kavina would further contend that if the prayers in the petition are read, specially prayer 9(B), in view of the aforesaid submissions, this Court would certainly not issue a writ of mandamus to permit the petitioner to repay the sanctioned O.T.S amount contained in the communication dated 29.03.2019 by giving a fresh and reasonable tenure of payment.
5.8 Inviting my attention to the pursis dated 09.09.2019, Mr. Kavina would contend that even at that point of time the petitioners had asked for a period of 90 days which takes the schedule of payment to 11.12.2019. On the charge submitted by Mr.Mehta contending that they had a better Page 13 of 25 Downloaded on : Sat Sep 28 23:49:39 IST 2019 C/SCA/15838/2019 CAV JUDGMENT proposal for each property, Mr.Kavina would suggest that in each case there was a new proposal.
5.10 Mr.Kavina would further contend that there cannot be any fault found in the order of the Tribunal when the fact situation showed that rather than accept the proposal the petitioner was giving counter proposal and merely because the D.R.T termed it as "arbitrary", the same would not be so. Mr.Kavina would further submit that the proceedings were barred by res-judicata. He invited my attention to the prayers of interim relief, prayer 7(A1) and contended that when in the first Securitization Application being S.A 74 of 2017, there was an agreement and understanding, coupled with the fact that in the present proceedings of S.A 134 of 2019 when an order dated 06.07.2019 was passed categorically rejecting the interim application wherein the Tribunal had extensively reproduced the order dated 19.2.2019, and observing that there was no merit to restrain the bank from proceeding further and once that order was not challenged, it was not open for the petitioner to challenge the order dated 12.09.2019. Relying on the chart, Mr.Kavina would contend that the difference between the Auction Price and the Projected Price was not so wide enough so as to brand the Page 14 of 25 Downloaded on : Sat Sep 28 23:49:39 IST 2019 C/SCA/15838/2019 CAV JUDGMENT sale as being under valued and it is a recognized principle that once the properties are under distressed sale, they would not fetch the correct market value.
5.11 Mr.Kavina would contend that the petitioner is not entitled to relief qua prayer made in para 9(B) of the petition once the contract was already terminated and due to the counter proposals by letters dated 26.03.2019 and 30.03.2019, the stand of the bank of canceling the proposal without challenge to the order dated 05.04.2019 was not maintainable.
5.12 Reliance was placed on section 13(8) of the SARFAESI Act, to contend that the only way to prevent an auction was under that provision. Mr.Kavina, relied on a decision of the High Court of Patna in the case of Bihar Gramin Bank vs. Debt Recovery Tribunal in Civil Writ Jurisdiction Case No. 2135 of 2017 in support of his submission that merely because the Tribunal uses the adjective "arbitrary" that itself would not make the Tribunal's order vulnerable.
5.13 In rejoinder to the submission of Mr.Kavina, Mr.Mehta would contend that the S.A. No. 134 of 2019 was not barred Page 15 of 25 Downloaded on : Sat Sep 28 23:49:39 IST 2019 C/SCA/15838/2019 CAV JUDGMENT by waiver or res-judicata as the prayers therein were completely different and as per section 17 of the Act, several stages of measures could be challenged.
5.14 Mr. Mehta further submitted that the emphasis on the order dated 19.2.2019 by Mr. Kavina was misconceived. The issues were still unresolved and therefore there was no waiver. He submitted that the bank is a public utility undertaking amenable to Article 14 of the Constitution of India and an arbitrary action of the bank would make the petitioner eligible to seek a writ of mandamus. The petitioner had asked for only 15-20 days and not months for payment and refusal of accomodation was "commercial arrogance". 5.15 Mr. Mehta would invite my attention to Section 13(10) of the SARFAESI Act, to contend that though here the petitioners were willing to pay more than the upset price they were exposed to the vagaries of this Section.
6. Having considered the submissions of the learned advocates for the respective parties what appears is that the petitioners are aggrieved by the order dated 12.09.2019 passed by the Debt Recovery Tribunal-I, Ahmedabad, by Page 16 of 25 Downloaded on : Sat Sep 28 23:49:39 IST 2019 C/SCA/15838/2019 CAV JUDGMENT which, the interim application of the petitioner for restraining the bank from taking physical possession in furtherance of the notice dated 14.06.2019 and taking action in pursuance of the possession notice dated 19.07.2019 and the same notice dated 05.08.2019 was rejected.
6.1 The thrust of the arguments of Mr.Shalin Mehta learned Senior Advocate for the petitioner is two fold;
(a) That once the Tribunal categorically observed that the action of the bank was prima-facie wrong and arbitrary, it ought to have given the relief as prayed for. Once the action of the bank which is an instrumentality of the State under Article 12 of the Constitution of India, having been held arbitrary, the Court ought to interfere in exercise of powers under Article 226 of the Constitution of India.
(b) Mr.Mehta termed the action of the bank in closing the option of 'One Time Settlement' by its communication dated 05.04.2019 as 'Commercial Arrogance'. In his submission, when an offer of 'One Time Settlement' was made on 25.02.2019, the bank after more than a month on 29.03.2019 once having accepted the settlement gave virtually no room and asked the petitioners to deposit an amount of Rs.4.62 crores within less than 24 hours.
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7. Let us test this argument from the chronology that unfolded before the impugned order.
(I) SA No.74 of 2017 was filed by the petitioner claiming a relief that the notice dated 30.06.2015 and possession notice dated 08.11.2016 be set aside. A further declaration was sought to declare the action of the bank under Section 13 as illegal.
(II) On 19.02.2019 the submission of the applicant was recorded that the applicants would resolve their issues with the respondent bank regarding payment of outstanding dues in the loan accounts within one month and if for any reasons whatsoever, applicants failed to resolve their issues, they would surrender vacant peaceful possession of all secured assets. It was further submitted that the bank will be able to take possession forthwith if applicants failed to surrender possession after expiry of 30 days. Pursuant to the submission, the Securitization Application was disposed of with an observation that the counsel therein had expressed that on the safer side he intends to file undertakings with the bank accordingly.
(III)It is in this context that the petitioner made the proposal of 'One Time Settlement' by letter dated 25.02.2019. Page 18 of 25 Downloaded on : Sat Sep 28 23:49:39 IST 2019 C/SCA/15838/2019 CAV JUDGMENT The brief perusal of the 'One Time Settlement' would suggest that the petitioner proposed to settle the account on making payment by way of sale of properties mortgaged with bank in a phased manner and the proposed 'One Time Settlement' amount was Rs.17 crores. The petitioner gave a chart of offer and market price of the properties. On 26.03.2019, the petitioner wrote to the bank requesting the bank to expedite sanction. The letter dated 26.03.2019 stated that the matter be expedited as it will take 15 to 20 working days to complete the first phase of the 'One Time Settlement'. A letter was written on 30.03.2019 reiterating the same plus what was added was a request not to charge interest at the rate of 12% from 01.04.2019. The bank on 29.03.2019 accepted the 'One Time Settlement' in a phased manner. Merely because one of the terms required the petitioner to pay Rs.4.62 crores by 30.03.2019, would that by itself brand the action of the bank being arbitrary is the question. Going back to reliefs prayed for in SA No. 74 of 2017, it was a specific prayer of the petitioner to resist the action of the bank from the measures under Section 13. On 19.02.2019, purportedly with a view to resolve the issues outstanding Page 19 of 25 Downloaded on : Sat Sep 28 23:49:39 IST 2019 C/SCA/15838/2019 CAV JUDGMENT dues were agreed to be paid within one month. The arguments of the contesting parties of arbitrariness and commercial arrogance versus waiver/resjudicata have to be appreciated on this count.
(IV) Reading of the order dated 19.02.2019 makes it unequivocally clear that on that date itself the petitioner had shown its resolve to pay the outstanding dues and if for any reasons whatsoever the applicant failed to do so, it would surrender vacant, peaceful possession of all secured assets. It is highly improbable and inappropriate for the petitioner to cry foul of having been given less than 24 hours to pay the first tranche of Rs.4.62 crores by 30th of March, 2019. Once there was complete readiness to start the wheels of settlement by paying outstanding dues, it cannot be said that the petitioner was caught by surprise and his intention to enter into an OTS was short-circuited by bank acceptance on its terms. Between 19.02.2019 and 30.03.2019 if the petitioner could not have arranged to pay even 1/4th of the 'One Time Settlement' amount, it cannot be said that the letter of 29.03.2019 by the bank accepting the terms of settlement so set out can be in any manner said to be arbitrary.
Page 20 of 25 Downloaded on : Sat Sep 28 23:49:39 IST 2019 C/SCA/15838/2019 CAV JUDGMENT (V) In context of the order of the D.R.T dated 19.02.2019, when the petitioner specifically agreed for payment of outstanding dues within one month, obviously the time frame of showing readiness and willingness to settle the accounts would run from that date. The contention of the learned counsel for the petitioner that once the bank accepted the proposal for OTS on 29.03.2019, would bind the bank to follow it up is also misconceived. From the proposal dated 25.2.2019 when read conjointly with letters dated 26.03.2019 and 30.03.2019 what emerges is that the intention to pay the first installment was only fifteen to twenty days after 30.03.2019. Moreover, even by the letter dated 30.03.2019, what comes out is that a counter proposal not to charge interest at the rate of 12% was made from 01.04.2019. It was in this context that the letter dated 05.04.2019 which holds that the OTS stands frustrated and that the bank shall proceed for recovery of entire dues needs to be appreciated. Even though the letter of the bank dated 29.03.2019 gave a day to pay the first installment, a time table was set out for other installments, and had the petitioner willingness to pay or honour its statement of its intention to settle the dues, so expressly made before the Tribunal Page 21 of 25 Downloaded on : Sat Sep 28 23:49:39 IST 2019 C/SCA/15838/2019 CAV JUDGMENT on 19.02.2019, on 05.04.2019 even approximately two months after such declaration of intention to settle no amounts were deposited.
(VI) Obviously the conduct of the petitioner would indicate that it had waived its right to settle the dispute once, though repeatedly asked to pay some installments it failed to do so.
8. In context of the aforesaid, I am of the opinion that the contention of the petitioner that the bank had acted arbitrarily and exhibited "commercial arrogance" cannot stand. The petitioner therefore does not deserve indulgence of being granted a writ as prayed for in para 9(B) to be given a fresh and a reasonable schedule for payment.
9. Perusal of the application being S.A No. 134 of 2019 would indicate that initially when filed in July 2019 action of taking over physical possession was challenged. What was challenged was the notice issued by the Executive Magistrate & City Mamlatdar for taking over physical possession of the property. At that stage, the matter was argued for interim relief and order was passed by the Tribunal on 06.07.2019 refusing grant of interim relief. The order, when read would indicate that the Tribunal has in considering the issue Page 22 of 25 Downloaded on : Sat Sep 28 23:49:39 IST 2019 C/SCA/15838/2019 CAV JUDGMENT whether the petitioner is entitled to grant of any interim relief, extensively reproduced the order dated 19.02.2019. The Tribunal has specifically held & observed as under:
"I have gone through the orders so passed. Order is self speaking and there is no scope to interfere into the action of the bank at this stage once the applicants waived their rights unconditionally and it was the duty of the applicants to resolve their issues regarding repayment of loan / outstanding with the bank and as such I find no merits to restrain bank from proceeding further under the Securitization Act. It is not a case where the applicants are claiming redemption of secured assets and I find no necessary (Sic) to go into the merits of release of individual property against some price. The bank in its own discretion, is free to entertain such request as the same is beyond the scope of SARFAESI Act. Once applicants themselves waived right to have fourteen days prior notice. The proposal for amount offered by the applicants about realizable value or market value have no bearing on the right of the applicant bank to proceed under Securitization Act. Once there is no actually tender of amount by the applicants to liquidate their dues as reserved price is nothing to do with the amount which would have been realized by putting properties on auction because reserved price is the amount to attract prospective bidders and during breathing process, financial institutions can get bidder price then deserved price. "
9.1 The Tribunal further therefore clearly opined that it found no merit to grant any interim relief.
10. It is undisputed that the aforesaid findings of the Tribunal have become final. Mere amendment to this application by adding prayer 7(A1) on 04.09.2019 challenging consequential notices and then giving a pursis on 09.09.2019 Page 23 of 25 Downloaded on : Sat Sep 28 23:49:39 IST 2019 C/SCA/15838/2019 CAV JUDGMENT would not absolve the petitioners and once having failed to challenge the order of 06.07.2019 they are estopped on the principles of res-judicata to come forward and challenge further consequential action by bringing an amendment and holding a pursis asking for further time of ninety days to deposit an amount of Rs.11 crores.
11. What is therefore evident from the chronology above is that after offering a one time settlement, making a counter proposal, challenging the action of issuing section 14 notice, having failed in that, amending the application under the guise of a pursis and asking for further time to pay an amount of Rs.11 crores from offering to sell properties which were under sale pursuant to the provisions of section 13 of the SARFAESI Act by asking for more time to pay such amount and without challenge to the communication dated 05.04.2019 would indicate that the ploy of the petitioner was to somehow postpone the natural consequence which was challenged in securitization application no. 134 of 2019 and for which they had once failed to secure interim relief on 06.07.2019 and such order remained unchallenged. It is in this context that the petitioner is not entitled to prayer in terms of para 9(A) also.
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12. Before parting it will be worthwhile to note that arguments have been made by the respective parties that the petitioner could have availed of an alternative remedy under Section 18 of the SARFAESI Act. However, it was agreed by both the learned counsels for the respective parties that they would rather proceed to have the issue adjudicated on merits. It is on this count that I have not discussed the law and relegated the petitioner to avail an alternative remedy.
13. For the reasons stated hereinabove, the petition is dismissed with no orders as to costs.
(BIREN VAISHNAV, J) DIVYA Page 25 of 25 Downloaded on : Sat Sep 28 23:49:39 IST 2019