Gujarat High Court
State Bank Of India (Sbi) vs Union Of India & 6 on 21 July, 2015
Author: R.M.Chhaya
Bench: R.M.Chhaya
C/SCA/9833/2013 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 9833 of 2013
With
SPECIAL CIVIL APPLICATION NO. 8969 of 2014
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE R.M.CHHAYA
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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 ? ================================================================ STATE BANK OF INDIA (SBI)....Petitioner(s) Versus UNION OF INDIA & 6....Respondent(s) ================================================================ Appearance in Special Civil Application No. 9833 of 2013 :-
MR SN SHELAT, SENIOR ADVOCATE with MR BIJU A NAIR, ADVOCATE with MR PRANAV G DESAI, ADVOCATE for the Petitioner MR KSHITIJ M AMIN, CENTRAL GOVERNMENT COUNSEL for the Respondent No.1 RULE SERVED for the Respondent No. 2 MR AS VAKIL, ADVOCATE for the Respondent Nos. 3 and 4 DELETED for Respondent Nos. 5 to 7 Appearance in Special Civil Application No. 8969 of 2014 :-
MR AS VAKIL, ADVOCATE for the Petitioners Page 1 of 61 C/SCA/9833/2013 JUDGMENT MR SN SHELAT, SENIOR ADVOCATE with MR BIJU A NAIR, ADVOCATE with MR PRANAV G DESAI, ADVOCATE for the Respondent Nos.1 and 2 DELETED for Respondent Nos. 3 to 5 RULE SERVED BY DS for the Respondent No.6 ================================================================ CORAM: HONOURABLE MR.JUSTICE R.M.CHHAYA Date : 21/07/2015 COMMON CAV JUDGMENT
1. Both the petitions are interconnected and raise same questions of law and facts and hence, both the petitions were heard together and are disposed of by this common CAV judgment.
2. Special Civil Application No.9833 of 2013 is filed by State Bank of India, wherein the petitioner - Bank has prayed for the following reliefs: "(i) your Lordships may be pleased to issue a writ of mandamus or writ of certiorari or any appropriate writ, order or direction against the respondent No.2 Tribunal and be pleased to quash and set aside the impugned order dated 5.4.2013 (Annexure C) issued by respondent No.2 Tribunal rejecting the Ext R/7 preliminary objection filed by the petitioner and fixing the matter for further hearing, holding that the said Page 2 of 61 C/SCA/9833/2013 JUDGMENT order dated 5.4.2013 is illegal and violative of the provisions of SARFAESI Act, 2002
(ii) your Lordships may be pleased to issue a writ of mandamus or writ of certiorari or any appropriate writ, order or direction against the respondent No.2 Tribunal and be pleased to quash and set aside the proceedings initiated by the respondent No.2 in Miscellaneous Application No.62/2012, holding that the said proceedings are illegal and violative of the provisions of SARFAESI Act, 2002
(iii) During the pendency and final disposal of present petition your Lordships may be pleased to stay the further proceedings in Miscellaneous Application No.62/2012 before the respondent No.2 Tribunal."
3. It is evident from the prayers itself that what is challenged by the petitioner - Bank is the order dated 5.4.2013 passed by the Debt Recovery Tribunal in Misc. Application No.62 of 2012, whereby the interim application filed by the petitioner - Bank in Misc. Application No.62 of 2012 raising preliminary objections came to be rejected being Exh.R/07. The record indicates that this Court (Coram: K.M. Thaker, J.) admitted the matter and passed the Page 3 of 61 C/SCA/9833/2013 JUDGMENT following order on 20.11.2013.
"1. Heard Mr.Desai, learned advocate for the petitioner and Mr.Vakil, learned advocate for respondent Nos.3 and 4 as well as Mr.Vakharia, learned advocate for respondent No.1. Other respondents have yet not entered appearance and today at the time of hearing, other respondents are not present.
2. This petition raises issue about the learned Tribunal's jurisdiction under Section 19 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
3. It is also submitted that the said issue is raised before this Court for the first time and deserves to be considered. Reliance is placed on the decision in the case of Manjudevi R. Somani vs. Union of India [AIR 2013 Gujarat 242] and on the decision dated 13.9.2013 in the case of Standard Chartered Bank vs. Dharminder Bhohi in Civil Appeal No.8486 of 2013.
4. Having regard to the aforesaid aspects, below mentioned order is passed.
5. RULE. Mr.Vakil, learned advocate for respondent Nos.3 and 4 as well as Mr.Vakharia, learned advocate for respondent No.1 have waived served of Rule.
6. So far as the issue about interim relief is concerned, Mr.Desai, learned advocate for the petitioner made it clear that the petitioner does not Page 4 of 61 C/SCA/9833/2013 JUDGMENT press for interim relief and subject to the contentions in the petition, the petitioners is ready and willing to proceed with the matter pending before the learned Tribunal.
7. Under the circumstances, interim relief is not granted.
8. Mr.Desai, learned advocate for the petitioner also submitted that the Tribunal had granted time to file reply on merits of the application pending before the learned Tribunal, however, such reply is not filed and that, therefore, two weeks' time is granted, then the petitioner bank will file reply and will proceed with the hearing of the application.
9. Under the circumstances, time until 5.12.2013 is granted to file reply before the learned Tribunal. After the pleadings are over, learned Tribunal may complete the matter as expeditiously as possible."
4. The record further indicates that after the order dated 20.11.2013 passed by this Court in Special Civil Application No.9833 of 2013, Misc. Application No.62 of 2012 was heard by the Debt Recovery Tribunal and by an order dated 9.6.2014, the Debt Recovery Tribunal allowed Misc. Application No.62 of 2012 and was pleased to award compensation of Rs.75,708/ along with interest at the rate of 12% from the Page 5 of 61 C/SCA/9833/2013 JUDGMENT date of filing of the application till decision and with further interest at the rate of 6% per annum from the date of the decision till the date of the realization. Being aggrieved by the said order dated 9.6.2014 passed by the Debt Recovery Tribunal, the applicants therein have preferred Special Civil Application No.8969 of 2014 praying for the following reliefs: "(A) to quash and set aside the judgment and order dated 09.06.2014 passed by the Debt Recovery Tribunal II, Ahmedabad below petitioners' Miscellaneous Application No.62 of 2012 to the extent the same does not award compensation and cost as prayed for in the petitioners' Miscellaneous Application No.62 of 2012 and be further pleased to award the compensation and cost as prayed for therein;
(B) to direct, pending the hearing and final disposal of the present Special Civil Application, the respondent Bank to deposit with this Hon'ble Court, the compensation of Rs.75,708/ with interest, as awarded under the impugned judgment and order dated 09.06.2014 passed by the Debt Recovery Tribunal II, Ahmedabad below petitioners' Miscellaneous Application No.62 of 2012 and further permit the petitioners to withdraw the same;"
5. This Court vide order dated 12.11.2014 (Coram: Page 6 of 61
C/SCA/9833/2013 JUDGMENT K.M. Thaker, J.) was pleased to pass the following order: "1. It is informed that Mr. Desai, learned advocate for the petitioner has filed sicknote.
2. The petitions are admitted vide order dated 20.11.2013 (passed in Special Civil Application No.9833 of 2023) and order dated 16.10.2014 (passed in Special Civil Application No.8969 of 2014).
3. Therefore, the petition shall be listed in the cause list for final hearing instead of listing the petition in admission board.
4. In view of sicknote by learned advocate for the petitioner, hearing is adjourned. S.O. to 19.11.2014."
6. Accordingly, both the writ petitions were listed for final hearing and are heard together, as aforesaid.
7. For the sake of brevity, the petitioners of Special Civil Application No.8969 of 2014 are hereinafter referred to as "the petitioners"
and the respondentBank - petitioner of Special Civil Application No.9833 of 2013 is hereinafter referred to as "the Bank". Page 7 of 61
C/SCA/9833/2013 JUDGMENT
8. The common facts emerge from the record of both the petitions and more particularly, the facts stated in Special Civil Application No.8969 of 2014 are made basis of this judgment, which are enumerated as under:
8.1 Petitioner No.1 is a developer of immovable property known as Prithvi Emperor situated at New Prabhadevi Road, Prabhadevi, Mumbai. The record indicates that petitioner No.1 entered into a registered agreement to sell dated 4.9.2003 with Mr. Rasik Savla and Mrs. Shanti Rasik Savla in respect of Flat No.402 (hereinafter referred to as "flat in question"). As stated in the petition, the said agreement to sell, interalia, provided that the purchasers shall not let, sublet, transfer, assign or part with the purchaser's interest in the flat in question without obtaining prior written consent of the developer. The said agreement also, interalia, provided that the possession of the flat in Page 8 of 61 C/SCA/9833/2013 JUDGMENT question shall not be given unless and until all payments as per the agreement to sell are in fact made. It is the case of the petitioners that the purchasers executed a forged letter of possession as if it is signed by one of the partner of the developer purporting to have handed over physical possession of Flat No.402 to the purchasers. It is further the case of the petitioners that in fact the purchasers did not make regular payment of the sale consideration. It further appears from the record that the Bank sanctioned credit facilities of Rs.45 crores to the Company, named, Bright Global Paper Private Limited, wherein the purchasers of the flat in question stood as guarantors. It is alleged that by creating forged 'no objection certificate' purported to have been signed in the name of Jiten Gala as partner of the developer firm, the flat in question came to be mortgaged and the memorandum of entry came to be executed by the Bank and the said Company on 31.7.2007. The Page 9 of 61 C/SCA/9833/2013 JUDGMENT record indicates that thereafter, the developer and the purchasers executed a registered deed of cancellation dated 17.10.2007 canceling the registered agreement to sell dated 4.9.2003 in respect of the flat in question by mutual consent as the payment was not made as per the agreement to sell dated 4.9.2003. It is the case of the petitioners that in the said deed of cancellation of agreement to sell, there was no mention of the possession letter as well as no objection certificate. It is the case of the petitioners that at that juncture, the purchasers, for the first time, stated that the original agreement to sell dated 4.9.2003 is given to the Bank for taking business loan. It is the case of the petitioners that by a further deed of rectification dated 22.10.2007, petitioner No.1 - developer firm gave rights of Flat No.402 - flat in question in favour of petitioner No.2. The record indicates that thereafter, petitioner No.2 executed leave and licence agreement dated 5.11.2007 with the Page 10 of 61 C/SCA/9833/2013 JUDGMENT Standard Chartered Bank in respect of the flat in question for a period of 36 months ending on 4.11.2010 for the purpose of residence of the employee of the Standard Chartered Bank. It is the case of the petitioners that accordingly, Standard Chartered Bank deposited Rs.80 lacs with petitioner No.2 by way of a refundable security deposit and as determined, Standard Chartered Bank was to pay licence fee of Rs.30,000/ to petitioner No.2. It is the say of the petitioners that the flat in question came to be occupied by one Mr. Pankaj Bose. 8.2 The record indicates that as Bright Global Paper Private Limited and 2 purchasers defaulted in repaying the dues of the Bank, the Bank filed Original Application being Original Application No.32 of 2009 under the provisions of RDDB Act and the said Original Application is still pending. It appears from the record that pending the said Original Application, on 30.10.2009, the Bank made an attempt to take physical possession of the flat in question in Page 11 of 61 C/SCA/9833/2013 JUDGMENT purported exercise of powers under Section 13(4) of the Securitization Act on the basis of the fact that the same was mortgaged by Bright Global Paper Private Limited. It is the case of the petitioners that the petitioners informed the Bank that there is no mortgage and that the petitioners were owners of the flat in question.
8.3 The record indicates that thereafter, the Bank filed an application under Section 14 of the Securitization Act before the learned Chief Metropolitan Magistrate, Mumbai on 15.12.2009, wherein the petitioners were not impleaded as party. The record indicates that by an order dated 2.7.2010, the learned Chief Metropolitan Magistrate passed an order directing the Assistant Registrar to take possession of the flat in question and report compliance within one month. The record indicates that on 28.10.2010, the developer made an application to the learned Chief Metropolitan Magistrate to stay the order dated 2.7.2010. However, Page 12 of 61 C/SCA/9833/2013 JUDGMENT ultimately, on 28.10.2010, the Bank took physical possession of the flat in question and accordingly, a Panchnama came to be drawn and the Panchnama indicates that the flat in question was in physical possession of one Mr. Pankaj Bose, employee of Standard Chartered Bank and even the belongings of Mr. Pankaj Bose also got sealed alongwith the flat in question.
8.4 It appears from the record that being aggrieved by the said action taken by the Bank under Section 14 of the Securitization Act, the petitioners preferred the Securitization Application as provided under Section 17 of the Securitization Act, which came to be registered as S.A. No.134 of 2010 before the Debt Recovery Tribunal. It is also a matter of record that licensee - Standard Chartered Bank approached the Bank with a request to hand over the movables lying inside the flat in question and Debt Recovery Tribunal, by an order dated 23.12.2010, was pleased to direct the Bank to Page 13 of 61 C/SCA/9833/2013 JUDGMENT hand over the movables lying inside the flat in question to Mr. Pankaj Bose. The record indicates that S.A. No.134 of 2010 was allowed by the Debt Recovery Tribunal vide judgment and order dated 24.8.2011 and the Debt Recovery Tribunal was pleased to hold that the measures taken by the Bank under Section 13(4) of the Securitization Act are illegal and not in accordance with the provisions of the Act as well as the Rules and directed the Bank to return back the possession of the flat in question. It appears that the Bank prayed for a stay of the said judgment which was stayed by the Debt Recovery Tribunal itself upto 5.10.2011. The record indicates that the Bank challenged the said judgment and order dated 24.8.2011 by way of an appeal as provided under Section 18 of the Securitization Act before the Debt Recovery Appellate Tribunal. The record further indicates that the stay granted was extended from time to time by the Debt Recovery Appellate Tribunal, Mumbai as well as Debt Page 14 of 61 C/SCA/9833/2013 JUDGMENT Recovery Appellate Tribunal, Kolkata and at that stage, the petitioners preferred a petition being Special Civil Application No.6360 of 2012, wherein this Court, vide order dated 9.5.2012, stayed the order passed by the Appellate Tribunal and observed in Paragraph 42 as under: "42. However, by way of ad interim relief the implementation and operation of the order dated 20.04.2012 is stayed until the next date of hearing i.e. on 16th June 2012. In the meanwhile it would be open to the petitioner and/or the respondent to file appropriate application before the learned Appellate Tribunal to hear the appeal expeditiously by preponing the hearing and if the load on the roster permits then on daytoday basis and to pass appropriate orders including order of interim relief on merits after hearing the parties. If and when such application is made the learned Appellate Tribunal shall entertain it and shall hear and decide the appeal or at least the stay application expeditiously on merits after hearing the parties. So that such process can be undertaken and the hearing can be preponed and expedited, the last extension order dated 20.04.2012 is stayed."
8.5 It further appears that this Court (Coram: K.S. Page 15 of 61 C/SCA/9833/2013 JUDGMENT Jhaveri, J.) by a further order dated 6.8.2012 after noting the earlier orders passed by this Court, observed thus: "2. In spite of the aforesaid order, the Tribunal had passed the order, which is contrary to the aforesaid order. Hence, the aforesaid order passed by this Court shall operate. However, in the meantime, the respondents are directed to hand over the possession of the property in question to the petitioner and the same shall be subject to the result of further proceedings.
3. At this stage, Mr. Bhatt, learned counsel for respondent Bank requested the Court to stay the direction regarding possession of the property in question. Looking to the facts of the case, the request made by the learned counsel for the respondent Bank is rejected on the ground that it would amount to contempt."
8.6 It appears from the record that the Debt Recovery Appellate Tribunal, Mumbai decided the appeal filed by the Bank vide judgment and order dated 30.8.2012 and the Appellate Tribunal was pleased to dismiss the said appeal. The record indicates that the Bank thereafter handed over the possession of the Page 16 of 61 C/SCA/9833/2013 JUDGMENT flat in question to the petitioners on 17.8.2012 after preparation of the Panchnama and possession receipt of the even date. 8.7 It appears that on physical verification of the flat in question, it was noticed by the petitioners that the flat was not maintained properly and ultimately, the petitioners preferred an application for compensation as provided under Section 19 of the Securitization Act and prayed for a sum of Rs.1,39,86,998/ with interest at the rate of 12% under 5 different heads. It appears that the Bank filed an application on 18.1.2013 raising preliminary objection stating that the Misc. Application under Section 19 of the Securitization Act was not maintainable before the Debt Recovery Tribunal at the instance of the petitioners and that the petitioners are required to claim compensation by way of approaching the Civil Court. The Debt Recovery Tribunal, by an order dated 5.4.2013, was pleased to dismiss the said application which is impugned in Special Civil Page 17 of 61 C/SCA/9833/2013 JUDGMENT Application No.9833 of 2013 - a petition filed by the Bank. It is a matter of record that the order dated 5.4.2013 came to be challenged by the Bank, wherein this Court (Coram: K.M. Thaker, J.) admitted the said matter on 20.11.2013. The Debt Recovery Tribunal vide impugned order dated 5.4.2013 was pleased to partly allow the application for compensation awarding cost of Rs.75,708/. Being aggrieved by the same, the petitioners have preferred Special Civil Application No.8969 of 2014. 8.8 It may further be noted that the Bank has not challenged the order dated 5.4.2013 of Rs.75,708/ as awarded by the Tribunal to the petitioners. At stated at the Bar, the Bank has sent a cheque of the amount awarded to the petitioners, but the same is not accepted by the petitioners.
9. Mr. S.N. Shelat, learned Senior Advocate appearing for the Bank has taken this Court through the factual matrix arising in the Page 18 of 61 C/SCA/9833/2013 JUDGMENT petitions, the impugned order as well as the orders passed by the Debt Recovery Tribunal in the application filed by the petitioners of Special Civil Application No.8969 of 2014 under Section 17(3) of the Securitization Act and the order passed by the Debt Recovery Appellate Tribunal confirming the order of the Debt Recovery Tribunal. The learned Senior Advocate for the Bank contended that as per the definition of word "borrower" as provided under Section 2(1)(f) of the Securitization Act, the petitioners cannot be included in the word "borrower". Reliance is placed upon the judgment of the Apex Court in the case of General Manager, Sri Siddeshwara Cooperative Bank Ltd. & Anr. Vs. Ikbal & Ors. reported in (2013) 10 SCC 83. It was further contended that Section 17 remedy is available as the said Section provides for such a remedy to any person including the borrower. It was further contended that the provision of Section 19 of the Securitization Act is couched in a manner Page 19 of 61 C/SCA/9833/2013 JUDGMENT which would not allow third person to claim payment of compensation and costs. Relying upon the judgment of the Apex Court in the case of Harshad Govardhan Sondagar Vs. International Assets Reconstruction Company Limited & Ors., reported in (2014) 6 SCC 1 as well as the judgment of the Apex Court in the case of Standard Chartered Bank Vs. Dharminder Bhohi & Ors., reported in 2013 (12) Scale 124. It was further contended that only the borrower can claim compensation and not a third party. It was further contended that the definition of Section 2(1)(f) defines the word "borrower" and the same has to be given a restrictive meaning. It was further contended that the words "subject to contrary" would mean that it can give wider meaning provided if the meaning of the word defined is made entirely useless or make it repugnant subject to interpretation of the same. It was further contended that if the language is plain, the meaning of a word cannot be expanded. It was, therefore, contended that Page 20 of 61 C/SCA/9833/2013 JUDGMENT this Court cannot expand the meaning. Mr. Shelat has relied upon the following judgments to buttress his arguments.
(i) P. Kasilingam & Ors. Vs. P.S.G. College of Technology & Ors. reported in AIR 1995 SC 1395.
(ii) Harshad Govardhan Sondagar (supra).
(iii)State of West Bengal & Ors. Vs. Associated Contractors, reported in (2015) 1 SCC 32.
(iv) State Bank of India Vs. Yogendra Kumar Srivastava & Ors., reported in AIR 1987 SC 1399.
(v) Tamil Nadu State Electricity Board Vs. Central Electricity Regulatory Commission, reported in AIR 2007 SC 1711.
(vi) Commissioner of Trade Tax, Uttar Pradesh Vs. Kajaria Ceramics Ltd., reported in AIR 2005 SC 2968.
(vii)Nagar Mahapalika (now Municipal Corpn.) Vs. Page 21 of 61 C/SCA/9833/2013 JUDGMENT State of U.P. & Ors., reported in AIR 2006 SC 2113.
(viii)Union of India & Ors. Vs. Ram Kumar Thakur, reported in AIR 2009 SC 520.
(ix) Brihan Mumbai Electric Supply Transport Undertaking & Anr. Vs. Laqshya Media P. Ltd. & Ors. reported in AIR 2010 SC 5.
(x) Nahar Industrial Enterprises Ltd. Vs. Hong Kong & Shanghai Banking Corporation, reported in JT 2009 (10) SC 199.
(xi) State of Jharkhand Vs. Govind Singh, reported in AIR 2005 SC 294.
(xii)General Manager, Sri Siddeshwara Cooperative Bank Ltd. (supra).
9.1 It was further contended that thus, the application filed by the petitioners before the Debt Recovery Tribunal under Section 19 of the Securitization Act is not maintainable at all. It was also contended that all the prayers Page 22 of 61 C/SCA/9833/2013 JUDGMENT prayed for in Special Civil Application No.9833 of 2013 needs consideration by this Court. It was contended that if the prayers are considered and granted by this Court, the proceedings would come to an end. It is further averred that in order to avoid piecemeal challenge, this course is adopted, in fairness to the other side and by order dated 20.11.2013 passed by this Court in Special Civil Application No.9833 of 2013, the Bank has reserved its right to raise contention of its jurisdiction. Therefore, it cannot be said that the petition has become academic. It was submitted that the Debt Recovery Tribunal, while disposing of the application filed by the petitioners under Section 19 of the Securitization Act, more particularly, in Paragraphs 62 and 65, has been pleased to hold that the Bank cannot be said to have taken possession not in accordance with law. It was further contended that the Tribunal is not justified in holding and giving liberal Page 23 of 61 C/SCA/9833/2013 JUDGMENT interpretation to the word "borrower". It was contended that the word "borrower" does not even include the lessor much less a third party like the present petitioners claiming through secured guarantors. It was further contended that there is no lease between the Bank and the petitioners, but the lease is between the Bank and its guarantor. It was further contended that if surety has fabricated third party rights, then, it is for the petitioners to sue such surety and not the Bank. It was contended that at the most, it can be termed as tortuous act between them.
10. Mr. A.S. Vakil, learned advocate for the petitioners submitted that the writ petition filed by the Bank has become academic by virtue of the final order passed by the Debt Recovery Tribunal. It was submitted that the said petition would be absolute futile writ. It was further submitted that in the order dated 20.11.2013 passed by this Court in Special Civil Application No.9833 of 2013, the Court Page 24 of 61 C/SCA/9833/2013 JUDGMENT has not granted any liberty. It was further contended that the context of the statement made by the learned Senior Advocate for the Bank and the direction given by this Court to the Tribunal, exhibits that the Bank was ready and willing to proceed further and in fact, the learned Senior Advocate for the Bank prayed for time to file reply, more so, as indicated in the statement recorded in Paragraph 8 of the said order and therefore, on the said date i.e. on 20.11.2013, the petition filed by the Bank had become infructuous. It was further contended that in fact, the Bank waived the relief and invited direction from this Court to complete the matter expeditiously before the Debt Recovery Tribunal. It was submitted that even on bare reading of the prayers prayed for in the petition filed by the Bank, both the prayers are final in nature and having expressly agreed to proceed with the hearing and the statement made by the learned Senior Advocate for the Bank in Paragraph 6 of the Page 25 of 61 C/SCA/9833/2013 JUDGMENT said order, would mean that the Bank was permitted to raise the issue of jurisdiction before the Tribunal. It was further contended that the statement made by the learned Senior Advocate for the Bank can be interpreted only in that manner and thus, it was contended that the petition filed by the Bank became infructuous. Mr. Vakil specifically drew attention of this Court to the fact that after passing of the order by this Court, the Bank filed its reply and took contentions which are raised in the petition before the Tribunal and the Tribunal has discussed the said issue elaborately, more particularly, with regard to maintainability and it has held in favour of the petitioners. It was contended that after the hearing was over before the Tribunal, the petitioners as well as the Bank gave a joint purshis and thereafter, the judgment was delivered by the Debt Recovery Tribunal. It was also contended that the judgment of the Debt Recovery Tribunal is accepted by the Bank and Page 26 of 61 C/SCA/9833/2013 JUDGMENT is not challenged and in fact is implemented by the Bank and therefore, the prayers prayed for in the petition filed by the Bank do not survive. It was further contended that the Bank could have prayed for a writ of prohibition. However, having proceeded further before the Tribunal and the proceedings having been carried to a logical end, the same cannot now be quashed and set aside. It was further contended that all of these events have happened with the express consent of the Bank. It was further contended that the final judgment as on date is accepted by the Bank, inasmuch as, there is no challenge thereto by the Bank either on finding of the maintainability or on the quantum awarded and under such circumstances, it is all the more necessary and important that this Court be pleased not to pronounce on maintainability in the petition filed by the Bank and such pronouncement, if any, can have vital bearing on the petition of the petitioners. It was Page 27 of 61 C/SCA/9833/2013 JUDGMENT further contended that when the final judgment is accepted by the Bank and if the Court comes to the conclusion that it has become infructuous and the writ would be futile, then, this Court may not decide on merits. It was further contended that unless this Court comes to the conclusion that the petition filed by the Bank has not become infructuous and that the writ would not be futile, then only, the Court can proceed on the merits of the matter. It was further contended that in the facts and circumstances of the case, it would neither be appropriate, nor permissible to hold on one hand that the petition has become infructuous and the issuance of writ is futile and on the other hand, decide the same on merits. It was suggested by Mr. Vakil that as it is often done under such circumstances, the questions are kept open and therefore, the petition filed by the Bank deserves to be dismissed as having become infructuous as the same would amount to futile exercise and there is no possible writ Page 28 of 61 C/SCA/9833/2013 JUDGMENT which can be issued at this stage.
10.1 Mr. Vakil, learned advocate for the petitioners submitted that Section 2 of the Securitization Act contains the words "unless the context otherwise require" and therefore, the word or the term as defined under the Securitization Act will have to be understood determining on phraseology used in the definition Section and the same will have to be understood in the manner in which it is used. It was submitted that Sections 13, 17, 18 and 19 of the Securitization Act are to be interpreted keeping in mind the said liberty. It was further contended on behalf of the petitioners that Section 17(1) of the Securitization Act permits any person to approach the Debt Recovery Tribunal and seek the benefit. As such, the applicant cannot ensue only to the benefit of the borrower. It was further contended that the words "concerned borrower"
occurring in Section 19 of the Securitization Act has to be given some meaning for practical Page 29 of 61 C/SCA/9833/2013 JUDGMENT purposes used in Section 19 of the Securitization Act and the same would be none else, but the applicant under Section 17(1) of the Securitization Act. It would be too far fetched interpretation that every time the applicant of Section 17(1) of the Securitization Act succeeds, respite is only to a borrower. It was further contended that in the present case, the petitioners filed an application under Section 17(3) of the Securitization Act which was allowed and appeal, filed before the Debt Recovery Appellate Tribunal, came to be dismissed. The Bank did not challenge the said judgment and handed over the possession to the petitioners. It was further contended that the provisions of the Securitization Act do not remotely suggest such a distinction or discrimination that the benefit of Section 19 of the Securitization Act would accrue only to a borrower as understood under Section 2(f) of the Securitization Act. If that were so, the words "concerned borrower" Page 30 of 61
C/SCA/9833/2013 JUDGMENT used in Section 19 of the Securitization Act would be nugatory and at the same time, the opening words "unless context otherwise require" would also become nugatory and would lose its significance. It was further contended that if the interpretation put forward by the Bank is accepted, then, the words "any person"
occurring in Section 17(1) of the Securitization Act would be excluded from Section 19 of the Securitization Act and that does not seem to be the intention of the legislature which is more so evident from the use of words "concerned borrower" in Section 19 of the Securitization Act.
10.2 It was further contended that the Bank indisputably and without any resistance gave possession not to the borrower but to the petitioners. It was further contended that the Bank has never contended that the possession should go to the borrower and even such a ground was not taken in the appeal filed by the Bank under Section 18 of the Securitization Act Page 31 of 61 C/SCA/9833/2013 JUDGMENT before Debt Recovery Appellate Tribunal. As such the record of the case indicates that the possession was handed over unconditionally to the petitioners. It was further contended that the opening words in Section 2(1)(f) which defines the word "borrower" assume significance and the said definition is completely exhaustive in nature. It was further contended that in absence of opening words, interpretation would have been narrower and not elastic as provided under Sections 2(1)(c), 13(4), 17(1), 17(3) and 19 of the Securitization Act. It was further contended that if the facts of the case are examined, the Bank took action under Section 13(4) of the Securitization Act and the petitioners filed an application under Section 17(1) of the Securitization Act. It was further contended that the locus to file the application is not disputed ever. It was further contended that it was never the case of the Bank on the basis of the case pleaded in an application under Page 32 of 61 C/SCA/9833/2013 JUDGMENT Section 17 of the Securitization Act, that the petitioners are required to approach the Civil Court and not the Debt Recovery Tribunal. It was further contended that the words "borrower" and "secured assets" both will not be and cannot be interpreted as per the definition and the same has to be understood in context with which they are used. Section 17(3) of the Securitization Act provides that the Debt Recovery Tribunal may restore the possession to the borrower would mean the applicant and only the applicant of application under Section 17 of the Securitization Act. It was further contended that in the present case, Bright Global Paper Private Limited was the principal borrower and Mr. Rasik Savla and Mrs. Shanti Rasik Savla were guarantors/ sureties and in such a case, if what is said by the Bank is to be accepted, possession would go to the borrower - Bright Global Paper Private Limited. It was further contended that, that is not the intention of the Securitization Act and Page 33 of 61 C/SCA/9833/2013 JUDGMENT borrower would mean necessarily the applicant of application under Section 17(1) of the Securitization Act. Relying upon the findings of Debt Recovery Tribunal as well as Debt Recovery Appellate Tribunal in the application filed by the petitioners as well as the appeal filed by the Bank, it was contended that the concerned borrower means such borrowers and when the Debt Recovery Tribunal directed to give possession to the petitioners, the same would mean the applicant of application under Section 17 of the Securitization Act and it would mean that the applicant of such an application who is entitled to restoration of possession. It was thus contended that the application filed by the petitioners under Section 19 of the Securitization Act is maintainable and it cannot be said that the petitioners have locus under Section 17 of the Securitization Act and no locus under Section 19 of the Securitization Act. It was further contended that every person for whom the forum Page 34 of 61 C/SCA/9833/2013 JUDGMENT under Section 17 of the Securitization Act is Debt Recovery Tribunal, the forum under Section 19 of the Securitization Act would remain the same for all purposes and a person cannot be said that for Section 17, it is the Debt Recovery Tribunal and for Section 19, it is a Civil Court. It was thus contended that as the Bank has not challenged the order passed by the Debt Recovery Tribunal under Section 19 of the Securitization Act, the writ filed by the petitioners has become infructuous and the petitioners would be entitled to move an application under Section 19 of the Securitization Act and that the Debt Recovery Tribunal has jurisdiction to adjudicate upon the said application.
10.3 Mr. Vakil further submitted that the cause of action under Section 19 of the Securitization Act would arise only when the proceedings under Section 17 of the Securitization Act attains finality. It was further contended that the proceeding under Section 19 of the Page 35 of 61 C/SCA/9833/2013 JUDGMENT Securitization Act is an independent proceeding and after finality of the proceeding under Section 17 of the Securitization Act, the right to claim compensation arise. It was further contended that once it has been held under Section 17(3) of the Securitization Act that the measures were not in accordance with the Rules and possession was ordered to be restored and actually restored and the appeal against the same having been dismissed and both the judgments are in force today and in fact acted upon while deciding the application under Section 19 of the Securitization Act, the Debt Recovery Tribunal cannot and could not have gone into the correctness of the said judgments. It was further contended that while dealing with the application under Section 19 of the Securitization Act filed by the petitioners, the Tribunal has traveled beyond its jurisdiction. It was further contended that while considering the application under Section 19 of the Securitization Act, the Tribunal Page 36 of 61 C/SCA/9833/2013 JUDGMENT cannot be permitted to rehear the application under Section 17 of the Securitization Act. It was further contended that the findings given by the Debt Recovery Tribunal exhibits the mindset of the Debt Recovery Tribunal and as such the Debt Recovery Tribunal has attempted to reopen the entire case. It was further contended that the Debt Recovery Tribunal has also considered the contentions not falling for consideration under Section 19 of the Securitization Act. It was further contended that in fact only two issues are framed and when the final judgment under Section 17 of the Securitization Act was confirmed in appeal, the Debt Recovery Tribunal should have decided only the quantum. It was further contended that the manner in which the Debt Recovery Tribunal has dealt with the issue of measures taken under Section 13(4) of the Securitization Act, it has almost set at naught first part of Section 19 of the Securitization Act and it was contended that in view of the findings given by the Debt Page 37 of 61 C/SCA/9833/2013 JUDGMENT Recovery Tribunal in the application under Section 17 of the Securitization Act and Debt Recovery Appellate Tribunal in appeal under Section 18 of the Securitization Act as well as this Court, such findings cannot stay together. It was further contended that the conclusion arrived at by the Tribunal in the impugned judgment that there was good faith on the part of the Bank is erroneous and even if such a plea is there, the same is dishonest having accepted the judgment. It was further submitted that there is no discussion in every point in the impugned judgment and the Debt Recovery Tribunal has exercised review powers. It was further contended that no heads as prayed for by the petitioners have been considered. Still however and even though the Debt Recovery Tribunal was aware of the heads, the Debt Recovery Tribunal has not dealt with it even though it could have referred to the same. It was further contended that having framed the issue, the Debt Recovery Tribunal ought to have Page 38 of 61 C/SCA/9833/2013 JUDGMENT dealt with certain heads which have not been done. It was further contended that the entire thrust of the judgment is that the actions taken by the Bank under Section 13(4) of the Securitization Act are taken in good faith and hence, they are measured in accordance with the provisions of the Securitization Act. It was further contended that in the proceedings under Section 17 of the Securitization Act or in the appeal under Section 18 of the Securitization Act, no such defence was raised and if no such defence is raised, such defence cannot be raised in Section 19 proceedings. It was further contended that if such contentions are not raised, the same cannot be raised for the first time in Section 19 proceedings as the same are really continuation of proceedings under Sections 17 and 18 of the Securitization Act. It was further contended that provisions of Sections 17(3), 19 and 32 of the Securitization Act will have to be read harmoniously. It was further contended that the Page 39 of 61 C/SCA/9833/2013 JUDGMENT action cannot be not in accordance with the provisions of the Act and the Rules for the purpose of Section 17(3) of the Securitization Act and yet it is in accordance with law for the purpose of Section 32 of the Securitization Act. Mr. Vakil referring to the definition of word "good faith" occurring in Section 2(1)(f) of General Clauses Act, contended that the conduct of the Bank does not demonstrate that the Bank was acting in good faith.
10.4 It was further contended that the facts reveal that the Bank was conscious of the fact that there is no mortgage and that there is no record that after the same, what steps were taken by the Bank. It was further contended that if the defence is not available as it was not raised earlier and the issue not having been framed, the Bank cannot be allowed to raise such a dispute in an application under Section 19 of the Securitization Act and the Tribunal cannot set at naught the judgment which is in favour of the petitioners and which Page 40 of 61 C/SCA/9833/2013 JUDGMENT has been confirmed by the appellate authority and therefore, it was contended that such action cannot be termed as having been taken in good faith.
10.5 Mr. Vakil also took this Court through the earlier judgment passed by the Debt Recovery Tribunal upon an application filed by the petitioners under Section 17(3) of the Securitization Act as well as the judgment of the Debt Recovery Appellate Tribunal which is in favour of the petitioners, which has been acted upon by the Bank. It was reiterated by Mr. Vakil that the Bank has in fact accepted and acted upon the said judgment and has not only handed over the possession, but has not challenged the same. It was thus submitted that even the impugned judgment under Section 19 of the Securitization Act passed by the Debt Recovery Tribunal is not challenged and the Bank has accepted the same. It was lastly submitted that the impugned judgment of awarding only amount of Rs.75,708/ to the Page 41 of 61 C/SCA/9833/2013 JUDGMENT petitioners deserves to be quashed and as such, the application filed by the petitioners under Section 19 of the Securitization Act deserves to be allowed by this Court in exercise of its extraordinary jurisdiction under Article 226 of the Constitution of India by allowing the petition filed by the petitioners and by dismissing the petition filed by the Bank as having become infructuous, as contended by the petitioners.
10.6 Mr. Vakil has relied upon the following judgments to buttress his arguments.
(i) Suresh Vs. Vasant & Ors. reported in AIR 1972 SC 1680.
(ii) State of Haryana & Ors. Vs. M/s. Krishna Rice Mills, reported in AIR 1982 SC 1106.
(iii) Arun D. Desai Vs. High Court of Bombay, reported in 1984(1) Suppl. SCC 372.
(iv) M/s. Doongarsee and Sons & Ors. Vs. State of Gujarat & Ors. reported in AIR 1971 Gujarat Page 42 of 61 C/SCA/9833/2013 JUDGMENT
46.
(v) Suresh Chandra & Ors. Vs. State of U.P. & Anr., reported in AIR 1977 Allahabad 515(1).
(vi) The Vanguard Fire and General Insurance Co.
Ltd., Madras Vs. M/s. Fraser and Ross & Anr., reported in AIR 1960 SC 971.
(vii) N.K. Jain & Ors. Vs. C.K. Shah & Ors., reported in AIR 1991 SC 1289.
(viii) K.V. Muthu Vs. Angamuthu Ammal, reported in AIR 1997 SC 628.
(ix) Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai & Ors., reported in AIR 1999 SC 22.
(x) Special Officer and Competent Authority, Urban Land Ceilings, Hyderabad & Anr. Vs. P.S. Rao, reported in AIR 2000 SC 843.
(xi) M/s. Philips Medical Systems (Cleveland) Inc. Vs. M/s. Indian MRI Diagnostic and Page 43 of 61 C/SCA/9833/2013 JUDGMENT Research Ltd., reported in AIR 2009 SC 1052.
(xii) National Insurance Co. Ltd. & Anr. Vs. Kirpal Singh, reported in AIR 2014 SC 1440.
(xiii) Municipality of Bhiwandi and Nizampur Vs. M/s. Kailash Sizing Works, reported in AIR 1975 SC 529.
(xiv) Chaman Lal Vs. The State of Punjab, reported in AIR 1970 SC 1372.
(xv) Asstt. Commr., AntiEvasion Commercial Taxes Vs. Amtek India Ltd., reported in (2007) 11 SCC 407.
(xvi) General Officer Commanding, Rashtriya Rifles Vs. Central Bureau of Investigation & Anr., reported in (2012) 6 SCC 228.
(xvii) Brijendra Singh Vs. State of U.P. & Ors., reported in (1981) 1 SCC 597.
11. Mr. S.N. Shelat, learned Senior Advocate for the Bank in his further arguments submitted Page 44 of 61 C/SCA/9833/2013 JUDGMENT that the judgments relied upon by the petitioners are not applicable to the present case and are not helpful. It was contended that only because the learned Senior Advocate for the Bank made a statement which does not mean that the Bank now cannot argue on merits. It was further contended by Mr. Shelat that the petition of the Bank survives and it is open for the Bank to agitate the question of maintainability under Section 19 of the Securitization Act filed by the petitioners. It was further contended that as the facts reveal, the Bank has entered into an agreement with the borrower and not with the petitioners. It was further contended that the Act gives wider powers to any person under Section 17 of the Securitization Act over and above the borrower. It was further contended that under Section 17 of the Securitization Act, the Tribunal was deciding only security interest and the application under Sections 17 and 19 of the Securitization Act both are independent. It was Page 45 of 61 C/SCA/9833/2013 JUDGMENT submitted that the judgments on interpretation relied upon by the petitioners lead to only one thread argument i.e. the context and collocation. It was further submitted that the said judgments lay down a proposition that if such meaning is not given, it becomes repugnant. It was further contended that the repugnancy of definition would arise when the definition does not agree with the subject or context. It was further contended that this would mean that not being in confirmation with the definition would not make it repugnant containing the word defined in its context. It was further contended that therefore what is required to be considered is whether the definition becomes unworkable or otiose, then only, this Court can go into it. It was further contended that if Sections 2(f) and 19 of the Securitization Act are read, it would mean that benefit of Section 19 of the Securitization Act is to be given only to the borrower. It was further contended that there can be a question Page 46 of 61 C/SCA/9833/2013 JUDGMENT before the Court that were the petitioners been treated unfairly? It was contended by Mr. Shelat that in facts of the case, the Bank has not treated the petitioners unfairly. The facts reveal that the borrower has treated them unfairly and for the case of fraudulent action of the borrower, law does not provide a remedy under the Securitization Act. It was further contended that this legislation is only for the security interest and therefore, Section 19 of the Securitization Act is very carefully worded and fraud upon secured asset is kept out of the purview of the Act and Section 19 does not provide for damages to person who has been defrauded by the borrowers. It was further contended that assertions made without any evidence would be irrelevant to consider the heads of the compensation. It was further contended that the petition of the Bank deserves to be allowed and the petition filed by the petitioners deserves to be dismissed.
12. Mr. Vakil in further submissions reiterated the Page 47 of 61 C/SCA/9833/2013 JUDGMENT contentions raised by him and submitted that the writ filed by the Bank has become infructuous and as such submissions made by the petitioners are not answered by the Bank. It was further contended that both the prayers have become infructuous and no other meaning can be given to both the prayers. It was reiterated that the words "concerned borrower"
occurring in Section 19 of the Securitization Act also include a person who has got benefit of success of application under Section 17 of the Securitization Act. It was further contended that it is not the intention of the legislature that only the borrower can file application under Section 17 of the Securitization Act and raise plea before the Civil Court and the person to whom the possession is ordered to be restored becomes entitled to compensation under Section 19 of the Securitization Act. Mr. Vakil further contended that the petitioners suffered because of the wrongful action taken by the Bank and it Page 48 of 61 C/SCA/9833/2013 JUDGMENT is for the Bank to compensate the petitioners and not the borrower. It was lastly contended that in facts of the present case, the possession was taken over from the petitioners and it has been restored to the petitioners and such an issue was not raised before the Apex Court in the case of Harshad Govardhan Sondagar (supra). It was reiterated that the petition filed by the Bank deserves to be dismissed as having become infructuous and the petition filed by the petitioners deserves to be allowed as prayed for.
13. No other or further submissions are made by the learned counsel appearing for the respective parties.
14. Before considering the submissions made by the learned counsel appearing for the respective parties, on bare perusal of the prayers prayed for by the Bank in its writ petition, it clearly appears that prayer (A) has become academic.
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15. By virtue of the order passed by this Court dated 20.11.2013, while admitting the matter, the interim order passed below Exhs.6 and 7 by the Debt Recovery Tribunal was not disturbed. Considering the submissions made by the learned counsel for the Bank before this Court, it clearly appears that the issue as regards maintainability of the application under Section 19 of the Securitization Act filed by the petitioners was permitted to be raised before the Debt Recovery Tribunal at the time of hearing/final hearing of the said application. It is no doubt true that this Court did not dispose of the matter finally, but from the conduct of the Bank, it clearly appears that the Bank did raise those questions before the Tribunal. The Bank also participated in the hearing before the Debt Recovery Tribunal and gave a joint purshis to decide the application pending before the Debt Recovery Tribunal under Section 19 of the Securitization Act. Even thereafter, the Bank deposited with Page 50 of 61 C/SCA/9833/2013 JUDGMENT the petitioners the amount of Rs.75,708/ along with interest, as awarded by the Tribunal. It is also an admitted position that the Bank has thereafter not challenged the said order before any higher forum including this Court. Thus, the conduct of the Bank clearly spells out that they have not only implemented the orders passed by the Tribunal under Section 19 of the Securitization Act, but in fact have acquiesced with it. Though the Bank has contended that it had not given up the challenge before this Court and therefore, the prayers prayed for in prayer (B) and in fact all the prayers prayed for in Paragraph 10 needs consideration by this Court and in order to avoid peacemeal challenge, this course is adopted in fairness to the other side, is contrary to the conduct of the Bank itself. It is not the case of the Bank that after the final order passed by the Tribunal, the same is now challenged by the Bank even in the pending petition and the fact remains that the Bank has not only actually Page 51 of 61 C/SCA/9833/2013 JUDGMENT participated in the hearing before the Tribunal and has further taken all contentions even regarding the maintainability before it, but has implemented the order passed by the Debt Recovery Tribunal dated 9.6.2014 and therefore, the Bank is not correct in asserting that the prayers prayed for in their petition being Special Civil Application No.9833 of 2013 still survive. It is an admitted position that the Bank did not challenge the order of handing over the possession passed by the Debt Recovery Tribunal which became final by virtue of dismissal of the appeal filed by the Bank. Similarly, the Bank has also not challenged the order passed by the Tribunal under Section 19. Under such circumstances, the contention raised by the respondentBank, that the petition filed by the Bank still survives, deserves to be negatived. The contentions raised by the Bank before this Court are raised in its petition predominantly challenging the interim order passed by the Debt Recovery Tribunal below Page 52 of 61 C/SCA/9833/2013 JUDGMENT Exhs.6 and 7. As noted hereinabove, the Bank participated in the proceedings before the Debt Recovery Tribunal on the statement made before this Court and has not only accepted the order passed by the Tribunal under Section 19, but has acted upon it. In such circumstances, only because the question of maintainability of the application under Section 19 by a person other than the borrower is raised for the first time would not give any additional right to the Bank to reagitate the same questions. The Bank has not challenged the order of Tribunal at all. After the order was passed by this Court, the Bank filed reply before the Tribunal, raised all contentions and by a joint purshis (Exh.22), even prayed before the Tribunal to dispose of the said application. Having acted in such a manner, the Bank cannot now revert back and say that the petition filed by the Bank still survives. The contention raised by the learned advocate for the petitioners that the petition filed by the Bank has become Page 53 of 61 C/SCA/9833/2013 JUDGMENT infructuous deserves to be accepted. On the contrary, the record indicates that the Bank was made aware by the petitioners that the flat in question was not of the ownership of the principal borrower and that the possession is with the petitioners at the stage of Section 14 application.
16. As far as the petition filed by the petitioners is concerned, as such the petition is filed for enhancement of the compensation which is otherwise awarded by the impugned order. On examination of the application which was filed before the Tribunal, it clearly spells out that the petitioners have claimed total compensation of Rs.1,39,86,998/ under 5 different heads. The impugned order of the Tribunal does not indicate that the Tribunal has considered the same on the basis of the averments made in the application and the evidence on record. It is an admitted position that in the earlier round of the petition, the petitioners had approached the Tribunal for getting back the possession Page 54 of 61 C/SCA/9833/2013 JUDGMENT which was taken by the Bank as per the order passed by the learned Magistrate under Section 14 of the Securitization Act. The petitioners had approached the Debt Recovery Tribunal under Section 17 of the Securitization Act and by an order dated 24.8.2011, held that the action of the Bank of taking over possession of the premises in question was dehors the provisions of the Securitization Act and was pleased to further direct the Bank to give back the possession to the petitioners. It is also an admitted position that the conclusion arrived at by the Debt Recovery Tribunal in the said application was challenged by the Bank by way of further appeal before Debt Recovery Appellate Tribunal, Mumbai by way of filing Appeal No.168 of 2011 as provided under Section 18 of the Securitization Act. The said appeal was also dismissed. The order passed by the Debt Recovery Tribunal has attained its finality. The Bank has not challenged the said order before this Court and has implemented the Page 55 of 61 C/SCA/9833/2013 JUDGMENT said order by giving back possession of the premises in question. Therefore, it was not open for the Debt Recovery Tribunal while dealing with the application under Section 19 of the Securitization Act filed by the petitioners and hold that taking over of possession of the premises in question by the Bank was in good faith. With respect, the Debt Recovery Tribunal was not called upon to decide the said issue as the said issue has already become final. The Debt Recovery Tribunal, in no uncertain terms, has held in the order dated 24.8.2011 that the possession of the premises in question was not in accordance with law, which has attained finality and the Tribunal had therefore no jurisdiction in a subsequent application filed under Section 19 of the Securitization Act by the petitioners to reopen the same. In opinion of this Court, therefore, the findings to that effect are without jurisdiction.
17. It is found that while deciding the Page 56 of 61 C/SCA/9833/2013 JUDGMENT maintainability of the application, the Tribunal has made such observations. It is found that the Tribunal has not considered even the aspect of maintainability as contended by both the sides before it and has in fact reopened the issue which was decided by the Tribunal itself as confirmed by the Appellate Tribunal while it decided the earlier application filed by the petitioners under Section 17(1) of the Act. The record clearly reveals that the Bank was made aware by the petitioners that the petitioners' tenant is in possession of the secured asset i.e. flat in question. Still however, the Bank proceeded further with the proceedings under Section 14 and took possession. Considering the fact that the findings given by the Tribunal and the Appellate Tribunal have been accepted by the Bank in relation to the fact that the Bank did not act in accordance with the provisions of the Act while deciding the application under Section 17 filed by the petitioners, it was not Page 57 of 61 C/SCA/9833/2013 JUDGMENT open for the Tribunal to revisit the said issue again. The Tribunal could have decided the question of maintainability of the application and could have come to the finding that the said application filed by the petitioners under Section 19 is either maintainable or not maintainable. However, while doing so, the Tribunal has travelled beyond its jurisdiction. In facts and circumstances of this case, therefore, and in light of the conclusion arrived at by this Court, as observed hereinbelow, the question of maintainability is kept open.
18. Even considering the judgments cited by both the sides, as far as the prayers prayed for by the Bank are concerned, the same have become infructuous and the petition filed by the Bank has become academic. The Bank cannot be permitted to reagitate the said issue only because the petition was pending for its final disposal. On the contrary, in the facts and circumstances of the case, certain contentions Page 58 of 61 C/SCA/9833/2013 JUDGMENT are raised, for the first time, before this Court in these petitions under Article 226 of the Constitution of India. Taking into totality of the facts therefore, the only remedy which is left for this Court is to remand the proceedings of the application under Section 19 filed by the petitioners by quashing and setting aside the impugned order dated 9.6.2014 passed by the Debt Recovery TribunalII, Ahmedabad in Misc. Application No.62 of 2012, back to the Debt Recovery Tribunal.
19. As far as the quantum of compensation and cost as prayed for by the petitioners is concerned, it is found that the Tribunal has, on lumpsum basis, come to the conclusion that the petitioners are entitled to compensation and cost of Rs.75,708/. It is found from the impugned order that the Tribunal has not dealt with the heads which are on record of the application and has not appreciated the evidence on record. However, this Court, in exercise of jurisdiction under Article 226 of Page 59 of 61 C/SCA/9833/2013 JUDGMENT the Constitution of India, cannot embark upon reappreciation of evidence itself and in facts and circumstances of the case, in opinion of this Court, the only option left with the Court is to quash and set aside the impugned order and remand the proceedings of Misc. Application No.62 of 2012 for its de novo hearing and reconsideration of the application on merits. Even while appreciating the judgments cited by the learned advocate for the petitioners as well as the Bank as this Court has come to the conclusion that the matter requires de novo hearing by the Tribunal on all counts, the same does not require any further elaboration by this Court. It is further clarified that in light of this discussion, the judgments cited by both the sides are not dealt with individually.
20. Consequently, Special Civil Application No.9833 of 2013 filed by the Bank is hereby dismissed as having become infructuous. Special Civil Application No.8969 of 2014 filed by the Page 60 of 61 C/SCA/9833/2013 JUDGMENT petitioners is partly allowed. The order dated 9.6.2014 passed by the Debt Recovery Tribunal II, Ahmedabad in Misc. Application No.62 of 2012 is hereby quashed and set aside and the proceedings of Misc. Application No.62 of 2012 are restored to the file of Debt Recovery TribunalII, Ahmedabad. The Debt Recovery TribunalII, Ahmedabad shall hear the parties again and decide the issue afresh, as expeditiously as possible, preferably within a period of three months from the date of receipt of this judgment. Order accordingly. There shall be no order as to costs.
(R.M.CHHAYA, J.) mrp Page 61 of 61