Bombay High Court
Vinayak Arts And Ors vs Bank Of Maharashtra And Ors on 16 September, 2021
Author: G. S. Kulkarni
Bench: Dipankar Datta, G. S. Kulkarni
2-WP.3513.2020
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 3513 OF 2020
Vinayak Arts and Ors. } Petitioners
Versus
Bank of Maharashtra and Ors. } Respondents
WITH
INTERIM APPLICATION NO. 2271 OF 2021
WITH
WRIT PETITION NO. 3513 OF 2020
Mrs.Meenakshi Atul Deshpande } Applicant
In the matter of
Vinayak Arts and Ors. } Petitioners
Versus
Bank of Maharashtra and Ors. } Respondents
WITH
INTERIM APPLICATION NO. 1480 OF 2021
IN
WRIT PETITION NO. 3513 OF 2020
Vinayak Arts and Ors. } Applicant
Versus
Vinayak Arts and Ors. } Petitioners
Versus
Bank of Maharashtra and Ors. } Respondents
Mr.Shivaji A. Masal for the petitioners.
Mr.S.S.Panchpor for the applicant in IA/2271/2021.
Mr.O.A.Das for respondent nos. 1 and 2.
CORAM :- DIPANKAR DATTA, CJ &
G. S. KULKARNI, J.
DATE :- SEPTEMBER 16, 2021 Page 1 of 6 J.V.Salunke,PS 2-WP.3513.2020 PC :-
1. This writ petition dated 4th October 2019 is directed against the order dated 1st October 2019 passed by the Presiding Officer, Debts Recovery Tribunal, Pune (hereafter "the DRT", for short), refusing to grant ad-interim relief in connection with an application under section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereafter "the SARFAESI Act" for short) presented by the petitioners. The impugned order records that the secured creditor, on 11th July 2019, had given opportunity to the petitioners to make payment by way of one-time settlement (OTS) under "Mahariyayat" scheme but they chose not to avail of such opportunity. It was also recorded that the secured creditor had taken symbolic possession of the secured asset on 2 nd August 2018, whereupon the process for disposing of the secured asset by auction sale has been initiated.
2. In paragraph 10 of the writ petition, the petitioners have averred that the writ jurisdiction of this court was being invoked because the Debts Recovery Appellate Tribunal (DRAT) was then not available. However, in support of such pleading, the petitioners have not annexed to the writ petition any supporting documentary evidence. Such an omission assumes significance in view of the objection raised by the secured creditor as well as the auction purchaser (not impleaded as respondent despite direction made in this behalf by an order dated 22nd January 2020), which we propose to consider a little later.Page 2 of 6
J.V.Salunke,PS 2-WP.3513.2020
3. We further find that a coordinate Bench of this Court, on 19th July 2021, had granted an opportunity to the petitioners to tender a payment of Rs.2,36,00,000/- to show their bona fides within three weeks from date without prejudice to their rights and contentions in respect of the pending dispute. This sum constituted the dues of the secured creditor. Instead of tendering payment, as directed, the petitioners applied on 8th July 2021 [I.A. No.1480 of 2021] seeking extension of time to make the requisite payment by 8 (eight) weeks. Resting on pendency of this application, the petitioners did not make any payment and, in the process, allowed the period of 8 weeks to lapse.
4. Despite not availing the Mahariyayat scheme for having a one-time settlement of the dues, the petitioners, during the pendency of this writ petition, proposed one-time settlement of the dues in July 2021. This proposal was much after the secured asset had been sold to the auction purchaser in pursuance of a sale conducted on 18th September 2019 and, hence, was not accepted by the secured creditor.
5. On the backdrop of the aforesaid facts and circumstances, we are now tasked to decide whether the petitioners' approach to this Court invoking the jurisdiction under Article 226 of the Constitution of India is justified and also as to whether they are entitled to any relief.
6. Mr.Das, learned advocate for the secured creditor and Mr.Panchpor, learned advocate for the auction purchaser have submitted that as on date the writ petition was instituted Page 3 of 6 J.V.Salunke,PS 2-WP.3513.2020 before this Court, the DRAT was available and functional in Mumbai, and without impugning the order of the DRT before the DRAT, this Court was approached directly. Mr.Das has specifically submitted that the incumbent Chairperson of the DRAT, after holding office for a substantial number of years, has demitted office only yesterday. Be that as it may, since the assertion of the petitioner that the DRAT was not available on 4th October 2019, when this writ petition was instituted, is disputed by the secured creditor and the auction purchaser, we need to examine whether there is any documentary evidence in support of the pleading in paragraph 10 of the writ petition. There is no such documentary evidence and accordingly, in view of the decision of the Supreme Court reported in AIR 1988 SC 2181 [Bharat Singh and Ors. vs. State of Haryana and Ors.] we find no reason to give credence to the pleading that an appellate remedy was not available to the petitioners. The writ petition itself ought not to have been entertained in view of the efficacious alternative remedy made available by section 18 of the SARFAESI Act.
7. However, we need not rest our conclusion that the writ petition does not merit interference only on the above technical ground.
8. Measures had been taken by the secured creditor under section 13(4) of the SARFAESI Act upon classification of the account of the petitioners as "non-performing asset". It has not been remotely suggested that such measures were taken in contravention of the provisions of section 13 of the SARFAESI Act resulting in substantial prejudice to the Page 4 of 6 J.V.Salunke,PS 2-WP.3513.2020 petitioners. Having regard to the decisions of the Supreme Court reported in (i) (2020) 10 SCC 659 [L & T Housing Finance Limited vs. Trishul Developers and Anr.]; (ii) (2020) 4 SCC 440 [K. Virupaksha and Anr. vs. State of Karnataka and Anr.]; (iii)(2019) 2 SCC 198 [Hindon Forge Private Limited and Anr. Vs. State of Uttar Pradesh through District Magistrate, Ghaziabad and Anr.; (iv) (2018) 3 SCC 85 [Authorized Officer, State Bank of Travancore Vs. Mathew K.C.] and (v) (2010) 8 SCC 110 [United Bank of India vs. Satyawati Tondon and Ors.], where caution has been sounded in no uncertain terms that the High Courts must be extremely slow to entertain writ petitions against either measures taken by the secured creditor under section 13(4) of the SARFAESI Act or against orders passed by the DRT under section 17 thereof unless sufferance of substantial prejudice is demonstrated, we hold the writ petition to be not entertainable.
9. Even otherwise, it is clear from the documents on record that the petitioners had been granted sufficient opportunity to liquidate the dues of the secured creditor. Despite opportunity extended under the Mahariyayat scheme, they chose not to respond. It is also on record that even this Court, showing indulgence, granted time of 3 (three) weeks to the petitioners to tender payment of Rs.2,36,00,000/- to show their bona fides. Such order was not challenged. Instead of availing of such opportunity, an application for extension of time has been made and the time prayed for tendering the payment has also expired in the meanwhile without the petitioners making any honest attempt to comply with such order within Page 5 of 6 J.V.Salunke,PS 2-WP.3513.2020 8 (eight) weeks from 8th July 2021. They simply rested on their oars and a prayer is made now that time to tender the payment be extended by 8 (eight) weeks from today. The petitioners, we are constrained to observe, have not shown any inclination to liquidate the dues; in fact, their conduct has been to buy time. The auction purchaser, having purchased the secured asset with its resources, is entitled to have the sale certificate issued in its favour, which has been stalled by reason of the interim order dated 11th October 2019 passed by this Court. We are pained to observe that the petitioners were not entitled to such order in view of their recalcitrant conduct in unnecessarily prolonging the proceedings and by not liquidating the dues of the secured creditor.
10. For the reasons aforesaid, the writ petition is held to be devoid of any merit. It accordingly stands dismissed. There shall be no order as to costs.
11. The interim application for extension of time [I.A. No.1480/2021] has been rendered infructuous by efflux of time and, accordingly, stands dismissed as such.
12. The interim application of the auction purchaser (I.A. No.2271 of 2021) for vacating the interim order succeeds. The interim order passed on this writ petition dated 11 th October 2019 stands vacated forthwith. Steps may be taken hereafter by the secured creditor in accordance with law.
SALUNKE JV Digitally signed by SALUNKE J V Date: 2021.09.17 (G. S. KULKARNI, J.) (CHIEF JUSTICE) 19:27:35 +0530 Page 6 of 6 J.V.Salunke,PS