Bombay High Court
Mrs. Shakuntala W/O Pururshottam ... vs State Bank Of India, Nagpur And 2 Others on 7 February, 2018
Author: B.P. Dharmadhikari
Bench: B.P. Dharmadhikari
1 WP.775.18
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH, NAGPUR.
WRIT PETITION NO. 775 OF 2018.
Mrs. Shakuntala w/o Purushottam Nabira,
aged about 64 years, carried out the
business under the name and style of
V.S. Oil Industries, during the material
time, R/o Main Road, Plot No. 15,
House No. 203, Avdhoot Wadi,
Tahsil - Saoner-441107, District
Nagpur. ..... PETITIONER.
....Versus....
1] State Bank of India, constituted
under the State Bank of India
Act, 1955 having one of its
concerned Office, known as
Stressed Assets Resolution Centre,
5, Sai Complex, 3rd Floor, Above
Industrial Finance Branch, Bharat
Nagar, Amravati Road, Nagpur-
440033 (Through its Assistant
General Manager),
2] Hon'ble Debt Recovery Tribunal,
constituted under the Recovery
of Debts and Bankruptcy Act, 1993,
through its Hon'ble Presiding
Officer and Recovery Officer,
having its office at CGO Complex,
Seminary Hills, Nagpur-440001,
3] Arvind s/o Vasantrao Naik, aged
about 50 years, Occ. Not known,
resident of New Ward No.1, Chhindwara
Road, Saoner, District Nagpur. ...... RESPONDENTS.
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2 WP.775.18
Mr. Jatinkumar, Advocate for the petitioners,
Mr. Pande, Advocate for respondent no.1,
Mr. C.S. Lahabar, Advocate for respondent no. 3.
CORAM : B.P. DHARMADHIKARI & MRS. SWAPNA S. JOSHI, JJ.
DATED : FEBRUARY 7, 2018.
ORAL JUDGMENT (PER B.P. DHARMADHIKARI, J.)
1] Heard Mr. Jatinkumar, learned Advocate for petitioner, Mr. Pande, learned Advocate for respondent no.1 and Mr. C.S. Lahabar, learned Advocate for respondent no.3 finally with consent by issuing Rule and making it returnable forthwith.
2] Advance copy of petition has been given by petitioner to respondent nos. 1 & 3.
3] Respondent no.1 secured creditor is not opposing the petition because of acceptance of OTS proposal of petitioner on 12.12.2011.
4] Petitioner has approached this Court against order passed by Debts Recovery Appellate Tribunal in Appeal No. 23/12. By said order, Chairperson, DRAT has maintained the order dated 24.1.2012 ::: Uploaded on - 13/02/2018 ::: Downloaded on - 14/02/2018 01:11:10 ::: 3 WP.775.18 passed in Appeal No. 6/11 by Debts Recovery Tribunal, Nagpur rejecting the application of petitioner to set aside the sale under Rule 60 of Second Schedule to Income Tax Act.
5] The facts are not much in dispute. The petitioner moved application before Recovery Officer (respondent no.2) in Recovery Petition No. 74/06 vide Exh. 20 and Recovery Officer rejected it on 4.7.2011. Thereafter on 6.7.2011 sale certificate has been issued to respondent no.3. This order dated 4.7.2011 was questioned within limitation in appeal before D.R.T. and that Appeal No. 6/11 was rejected on 24.1.2012.
6] The reason given by the DRT and endorsed by DRAT is failure on part of petitioner to deposit amount mentioned in proclamation of sale together with interest as per Rule 60. It is not in dispute that petitioner has deposited amount of Rs.41,900/- only towards penalty. The requirement of Rule 60 is also not in dispute. Submission of learned Counsel for petitioner is when there is no recovery and claim is mutually settled by the petitioner judgment- debtor and respondent no.1 secured creditor, amount mentioned in proclamation of sale loses its relevance. He submits that in terms of Rule 60 only right available to successful auction purchaser is to ::: Uploaded on - 13/02/2018 ::: Downloaded on - 14/02/2018 01:11:10 ::: 4 WP.775.18 receive amount of penalty and that interest has been taken care of in the matter. The learned Counsel submits that literal or mechanical adherence to language or words employed in Rule 60 is, therefore, unwarranted in the facts of the matter. He has relied upon the judgment of Hon'ble Apex Court in the case of U. Nilan .vs. Kannayyan (Dead) through L.Rs. reported at AIR 1999 SC 3750 - particularly paragraph 27 thereof and in the case of Ram Karan Gupta .vs. J.S. Exim Ltd. and others reported at AIR 2013 SC 24
- paragraph 15.
7] Mr. Pande, learned Advocate for respondent no.1/Bank, has not opposed the prayers. According to him, Bank has accepted One Time Settlement proposal.
8] Mr. C.S. Lahabar, learned Advocate for respondent no.3, has invited our attention to the fact that in present matter as sale certificate is issued, right is created in purchaser. He further submits that the acceptance of OTS shows that when total due amount from petitioner was Rs.2,22,66,421.27, the claim has been compromised only for Rs.18,50,000/-. He has relied upon proceedings of meeting dated 20.10.2011 for said purpose. In this situation, according to him, when there was already a sale certificate, the proclamation in relation ::: Uploaded on - 13/02/2018 ::: Downloaded on - 14/02/2018 01:11:10 ::: 5 WP.775.18 of which said sale certificate was issued, was always relevant and, therefore, authorities below have rightly rejected application under Rule 60.
9] The perusal of order dated 4.7.2011 passed by respondent no.2 reveals efforts made by respondent no.1 Bank to auction the property and to recover its dues. It appears that after some efforts Bank could find purchaser. The proclamation of sale dated 14.4.2011 mentions amount due on 31.10.2010 as Rs.1,01,05,833/- as on 31.10.2010 with future interest, costs and charges. The present petitioner had offered amount of Rs.18,50,000/- only. After considering facts, the Recovery Officer has rejected the application under Rule 60 moved by petitioner. The DRT and thereafter DRAT have accepted non-compliance with requirement of Rule 60. 10] The arguments show that on 4.7.2011 when respondent no.2 passed first order below Exh. 20 and rejected it, there was no one time settlement between petitioner and secured creditor. The documents on record to which our attention was invited by respondent no.3 show that the resolution of accepting compromise was passed in meeting no. 12-052 on 20.10.2011, i.e. more than three months after the issuance of sale certificate in favour of ::: Uploaded on - 13/02/2018 ::: Downloaded on - 14/02/2018 01:11:10 ::: 6 WP.775.18 respondent no.3. The details therein reveal the fact of waiver of interest and legal expenses of Rs.1,56,86,384.61. Amount of Rs.47,30,027.66 has been removed from AUCA. Thus, accepting compromise amount of Rs.18,50,000/-, total due amount of Rs.2,22,66,412.27 has been settled. The sale certificate and entry of respondent no.3 into picture has been lost sight of. 11] We cannot examine the correctness or validity of order dated 4.7.2011 in the light of events which have transpired on 20.10.2011. If the interest of respondent no.3 is to be displaced, the petitioner has to show compliance with Rule 60 above. 12] The judgment of Hon'ble Apex Court in U. Nilan .vs. Kannayyan (Dead) through L.Rs. reported at AIR 1999 SC 3750 (supra) paragraph 27 shows acceptance of view of Privy Council that sale of property in execution of a decree does not become absolute merely on passing of order confirming the sale under Order 21 Rule 92 and it is always subject to appeal against an order rejecting an application for setting aside the sale. The other judgment of Hon'ble Apex Court in Ram Karan Gupta .vs. J.S. Exim Ltd. And others reported at AIR 2013 SC 24 (supra) in paragraph 15 shows why such a rule like Order 21 Rule 89 has been enacted. Hon'ble ::: Uploaded on - 13/02/2018 ::: Downloaded on - 14/02/2018 01:11:11 ::: 7 WP.775.18 Apex Court has pointed out that object is to save judgment-debtor from threatened deprivation of his property, to satisfy the claim of decree-holder and to compensate auction purchaser. However, the said judgment does not show that a compromise entered into between decree-holder and judgment-debtor after confirmation of sale is relevant and can be looked into to find out compliance with scheme of Order 21 Rule 89. Here petitioner has not pointed out any error or mistake in auction process prior to 4.7.2011. 13] In this case, when after great efforts and long drawn litigation, the respondent no.1 Bank has found auction purchaser and there is a sale certificate issued in favour of that auction purchaser, we find that it would not be in the interest of justice to accept subsequent OTS entered into between petitioner and respondent no.1 Bank. Remedy under Rule 60 is for the judgment-debtor like petitioner and it does not empower or permit decree-holder (here respondent no.1) to better its recovery or to take steps to the prejudice of respondent no.3. Hence, yielding to any OTS after such confirmation cannot enable respondent no.1 to defeat the auction in favour of respondent no.3.
14] We, therefore, do not see any jurisdictional error or ::: Uploaded on - 13/02/2018 ::: Downloaded on - 14/02/2018 01:11:11 ::: 8 WP.775.18 perversity in concurrent orders passed by lower authorities. The petition is, therefore, dismissed. No order as to costs.
JUDGE. JUDGE.
J.
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