Bombay High Court
Brajesh Kasliwal Son Of Shri Suresh ... vs Union Of India And Ors on 29 September, 2020
Equivalent citations: AIRONLINE 2020 BOM 2386
Author: Ujjal Bhuyan
Bench: Ujjal Bhuyan, Abhay Ahuja
Order in WPST-92191-20.doc.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION (STAMP) NO.92191 OF 2020
Mr. Brajesh Kasliwal ..Petitioner
Versus
Union Bank of India & Ors. ..Respondents
Mr. P. S. Patwalia, Senior Advocate i/by Mr. Amit Ahuja, Advocate for the
Petitioner.
Mr. O. P. Gaggar a/w Mr. Aditya Gaggar, Advocates for Respondent No.1.
Mr. Rohit Gupta a/w Mr. Vinod Kothari i/by Apex Law Partners, Advocate
for Respondent No.2.
Mr. Dushyant A. Dave, Senior Advocate a/w Mr. Vinay Deshpande i/by
M/s. V. Deshpande & Co., Advocates for Respondent No.3.
Mr. Vikram Chaudhari, Senior Advocate a/w Mr. Harshit Sethi i/by Neha
Ahuja, Advocates for Respondent No.4.
Mrs. Ashwini A. Purav, AGP for Respondent - State.
CORAM : UJJAL BHUYAN &
ABHAY AHUJA, JJ.
DATE OF HEARING : 27.08.2020
DATE OF PRONOUNCEMENT : 29.09.2020
ORDER (Per Ujjal Bhuyan, J.)
Heard Mr. P. S. Patwalia, learned senior counsel along with Mr. Amit Ahuja, learned counsel for the Petitioner; Mr. O. P. Gaggar, learned counsel for Respondent No.1; Mr. Rohit Gupta, learned counsel for Respondent No.2; Mr. Dushyant Dave, learned senior counsel alongwith Mr. Vinay Deshpande, learned counsel for Respondent No.3; and Mr. Vikram Chaudhari, learned senior counsel along with Mr. Harshit Sethi, learned counsel for Respondent No.4.
BGP. 1 of 18 Order in WPST-92191-20.doc. 2] By filing this Petition under Article 226 of the Constitution of
India, Petitioner has prayed for the following reliefs :-
I) To set aside and quash the auction held on 11.11.2019 conducted by Respondent No.1, Union Bank of India, in respect of the property belonging to Respondent No.4 admeasuring 2.18 acres situated at No.7, Manoramaganj, A. B. Road, Indore, bearing Khasra Nos.168 and 169 (New Nos.306 & 307 of village Palasia Thana, Indore);
II) For a direction to Respondent No.1, Union Bank of India, not to undertake any further steps following the auction held on 11.11.2019;
III) To direct Respondent No.1, Union Bank of India, to accept the offer of the Petitioner to purchase the said property admeasuring 2.18 acres situated at No.7, Manoramaganj, A. B. Road, Indore, bearing Khasra Nos.168 and 169 (New Nos.306 & 307 of village Palasia Thana, Indore);
IV) To direct Respondent No.5, Central Bureau of Investigation, Economic Offences Wing, Mumbai to register a case and investigate offences of cheating, criminal breach of trust, criminal conspiracy etc. as well as related offences under the Prevention of Corruption Act, 1988 against the officials of Respondent No.1 Union Bank of India, Respondent No.2 and Respondent No.3 for unholy nexus, collusion, connivance and conspiracy to defraud the state exchequer by conducting the auction on 11.11.2019 for a paltry amount of Rs.65.52 crores.
BGP. 2 of 18 Order in WPST-92191-20.doc. 3] The above prayers have been made on the basis of the following factual narration. 4] According to the Petitioner, he belongs to a reputed family of
Indore known for providing healthcare facilities. The new hospital set up by the family Vishesh Hospital has been given the award for the best design in healthcare in the year 2019. It provides world class healthcare facilities in central India.
5] Respondent No.4 is the owner of the property admeasuring 2.18 acres situated at No.7, Manoramaganj, A. B. Road, Indore, bearing Khasra Nos.168 and 169 (New Nos.306 & 307 of village Palasia Thana, Indore) (briefly referred to hereinafter as "the property in question"). It is stated that though Respondent No.4 was the owner of the property in question, Respondent No.2 was in possession of the said property on the strength of a lease deed.
6] On 15.04.2005, Respondent No.4 mortgaged the said property in question to Union Bank of India, Respondent No.1, in order to avail certain credit facilities for Zoom Developers Private Limited and Zoom Vallabh Steel Limited. However, the aforesaid two entities failed to repay the loans availed of under the credit facilities. It is stated that the actual area of the property in question is 1,15,425 sq.ft. out of which 1,09,754 sq.ft. was mortgaged to Respondent No.1.
7] On failure to repay the loan amounting to Rs.63 crores approximately, Respondent No.1 initiated recovery proceedings under the BGP. 3 of 18 Order in WPST-92191-20.doc.
Securitization And Reconstruction Of Financial Assets And Enforcement of Security Interest Act, 2002 (briefly "the SARFAESI Act" hereinafter). Respondent No.1 issued notices under Section 13(2) & (4) of the SARFAESI Act and in the year 2011 dispossessed the lessee from the property in question.
8] Aggrieved by his dispossession, Respondent No.2 i.e. the lessee filed application before the Debts Recovery Tribunal (DRT), Mumbai seeking directions for restoration of possession. On orders of the DRT as upheld by the Courts, possession of the lessee i.e. Respondent No.2 was restored.
9] However, it is stated that Respondent No.1 did not take steps to evict the lessee in accordance with Section 14 of the SARFAESI Act.
10] Since January 2017, Respondent No.1 issued e-auction notices for auction sale of the property in question wherein the reserve price was mentioned at Rs.149.50 crores and the outstanding dues was mentioned at Rs.49,98,56,561.43. For one reason or the other auction sale did not take place. However, according to the Petitioner, a trend was noticeable from the different e-auction notices that the reserve price of the property in question was decreasing. In this connection, Petitioner has furnished a statement in paragraph 5.8 of the Writ Petition mentioning the dates of auction notices and the corresponding reserve prices which would show the declining trend in the reserve price of the property in question. The statement is extracted hereunder :-
BGP. 4 of 18
Order in WPST-92191-20.doc.
Sr. No. Date of Auction Notice Reserve price in INR
1. 04.01.2017 149.50 Cr
2. 24.01.2017 149.50 Cr
3. 18.05.2018 137.00 Cr
4. 08.08.2018 123.30 Cr
5. 07.09.2018 110.97 Cr
6. 03.11.2018 99.87 Cr
7. 25.01.2019 89.88 Cr
8. 13.06.2019 80.89 Cr
9. 06.09.2019 72.80 Cr
10. 22.10.2019 65.52 Cr
11] It is stated that the property in question is suitable for a
hospital. Since the Petitioner's business interest mainly centered around hospitals and health-care, he was desirous of purchasing the property in question. For this purpose, he wrote a letter to Respondent No.1 as well as to Respondent No.4 on 06.07.2019 offering to purchase the property in question for an amount of Rs.122.36 crores which was much higher than the reserve price of Rs.80.89 crores at that point of time.
12] According to the Petitioner, there appears to be some kind of understanding between Respondent No.1 and the lessee i.e. Respondent No.2 who continued to illegally occupy the property in question even after expiry of the lease deed on 31.10.2019. In his letter dated 06.07.2019, Petitioner had clearly mentioned that he was willing to buy the property in question if Respondent No.1 gave vacant, peaceful and physical possession thereof with a clear and marketable title free from all encumbrances.
BGP. 5 of 18 Order in WPST-92191-20.doc. 13] Respondent No.4 filed Writ Petition No.7856 of 2019 before
this Court challenging the legality and validity of the e-auction notice dated 13.06.2019. This Court by order dated 26.07.2019 took the view that Respondent No.4 had an alternative remedy before the Debts Recovery Tribunal (DRT). While dismissing the Writ Petition with liberty to Respondent No.4 to avail the alternative remedy, this Court recorded the statement made by learned counsel for Respondent No.1 that no bids were received pursuant to the auction notice dated 13.06.2019 which was to be conducted on 04.07.2019.
14] It may be mentioned that Respondent No.4 preferred Securitization Application No.115 of 2019 before DRT, Mumbai challenging the action of Respondent No.1 in auctioning of the property in question. However, no orders were passed thereon.
15] During the pendency of the Securitization Application, Respondent No.1 again issued e-auction notice dated 22.10.2019 for auctioning of the property in question on 11.11.2019. However, it is alleged that despite expiry of the lease deed on 31.10.2019, Respondent No.2 continued to be in possession of the property in question.
16] It is stated that Respondent No.4 had filed an Interim Application before the DRT to restrain Respondent No.1 from taking further steps in terms of the auction scheduled on 11.11.2019. When the Interim Application was heard, Respondent No.1 made a statement that a bid was received in response to the auction notice dated 22.10.2019. By the BGP. 6 of 18 Order in WPST-92191-20.doc.
order dated 11.11.2019, the Interim Application of Respondent No.4 was rejected by DRT.
17] Petitioner has stated that the bid referred to by Respondent No.1 was made by Respondent No.3 for an amount of Rs.65.52 crores which was accepted by Respondent No.1.
18] Respondent No.4 preferred Writ Petition (St) No.29319 of 2019 before this Court for setting aside of the order dated 11.11.2019 passed by DRT. By order dated 25.11.2019, this Court took the view that Respondent No.4 should avail the statutory remedy of appeal before DRT as provided under 'Section 21' of the SARFAESI Act, further observing that the impugned order would not require Respondent No.4 to make pre- deposit while preferring appeal. With the above observation, the Writ Petition was dismissed.
19] Aggrieved by the observation made by this Court that Respondent No.4 was not required to make any pre-deposit while filing appeal before the DRT against the order dated 11.11.2019, Respondent No.1 preferred SLP (C) No.28608 of 2019 before the Supreme Court. By order dated 13.12.2019 notice was issued and in the meanwhile further proceedings before DRT was stayed.
20] Review Petition No.156 of 2019 was filed by Respondent No.4 to review order dated 11.11.2019 passed by this Court in Writ Petition (St) No.29319 of 2019 which in the meanwhile was registered as Writ Petition No.12357 of 2019. An Interim Application was also filed by BGP. 7 of 18 Order in WPST-92191-20.doc.
Respondent No.4. By order dated 16.12.2019 both the Review Petition and the Interim Application were disposed of by clarifying that appeal to DRT under the SARFAESI Act was under Section 18 and not under Section 21 as was mentioned in the previous order. However, the observation made in the previous order that Respondent No.4 would not be required to make pre-deposit while filing appeal was reiterated. It was held that question of pre-deposit did not arise as no liability was fixed.
21] It appears that Respondent No.1 filed SLP(C) No.1753 of 2020 before the Supreme Court challenging the order dated 16.12.2019 passed by this Court while dismissing the Review Petition of Respondent No.4.
22] In the course of hearing of SLP(C) No.1753 of 2020, Respondent No.4 made a statement before the Supreme Court on 27.01.2020 that it was ready with a buyer who was willing to pay Rs.120 crores for the property in question. Supreme Court directed that Respondent No.4 should make a positive statement on affidavit naming the so-called buyer who should be ready to deposit Rs.50 crores by 03.02.2020.
23] It is stated that Petitioner filed an affidavit before the Supreme Court in SLP(C) No.28608 of 2019 expressing willingness to purchase the property in question for Rs.122 crores approximately on condition that vacant possession thereof should be handed over to the Petitioner after eviction of the lessee.
BGP. 8 of 18 Order in WPST-92191-20.doc. 24] On registration, SLP(C) No.28608 of 2019 became Civil
Appeal No.1902 of 2020 and SLP(C) No.1753 of 2020 became Civil Appeal No.1903 of 2020.
25] Both the Civil Appeals were heard together and disposed of vide the common order dated 02.03.2020. Both the orders dated 25.11.2019 and 16.12.2019 passed by the High Court observing that pre- deposit was not required while filing appeal against order of the DRT dated 11.11.2019 were set aside. However, no opinion was expressed on merit. That apart, auction purchaser was granted time till 20.03.2020 to deposit the balance of the sale amount.
26] Thereafter the auction purchaser i.e. Respondent No.3 filed application for extension of time to deposit the remaining auction amount. By order dated 20.03.2020, time was extended till 30.04.2020 making it clear that no further extension would be granted. However, on application Supreme Court vide the order dated 12.05.2020 extended the time to deposit the remaining amount for two months after lifting of the lockdown keeping in mind the disability caused due to the lockdown. By the said order, the applicant i.e. auction purchaser was directed to pay interest at the lending rate for the period starting from 20.03.2020 till the date of deposit.
27] Petitioner has stated that all throughout he had a strong apprehension that there was some kind of unholy nexus, collusion and conspiracy between Respondent No.2, concerned officials of Respondent No.1 and Respondent No.3 to grab the property in question. This was BGP. 9 of 18 Order in WPST-92191-20.doc.
evident because Petitioner's offer of Rs.122 crores was simply not considered, whereas Respondent No.1 settled for auction sale of the property in question with Respondent No.3 for a comparatively paltry amount of Rs.65.52 crores. However, it is the discovery of a Memorandum of Understanding (MOU) dated 05.01.2018 entered into between Respondent No.3 on the one hand and Respondent No.2 on the other hand which has now fortified the apprehension of the Petitioner about foul play in the auction in respect of the property in question. Referring to the MOU, it is stated that Respondent No.2 described himself as the joint owner of leasehold rights in the property in question. As per the MOU, Respondent No.3 was to give an amount of Rs.41 crores to Respondent No.2 to purchase his right, title and interest over the property in question and pursuant thereto cheques of Rs.11 crores were handed over to Respondent No.2. Respondent No.2 assured Respondent No.3 that he had contacts in Respondent No.1 and would be in position to enter into a tripartite agreement between Respondent No.1, Respondent No.2 and Respondent No.3 to finalize a deal in respect of the property in question. It was mentioned that the two parties to the MOU would not disclose the same till realization of the cheque amounts and till final MOU was signed.
28] Being alarmed by the aforesaid development, Petitioner filed a complaint dated 17.07.2020 before the Joint Director, Central Bureau of Investigation (CBI), Economic Offences Wing, Mumbai for registration of a case against the concerned officials of Respondent No.1, Respondent No.2 and Respondent No.3. But no action has been taken.
BGP. 10 of 18 Order in WPST-92191-20.doc. 29] Thereafter Petitioner approached the Supreme Court by filing
a Petition under Article 32 of the Constitution of India to set aside the auction sale held on 11.11.2019 and for a direction to CBI to conduct investigation into the alleged criminal conspiracy which has resulted in defrauding the state exchequer. The Petition was registered as Writ Petition (C) No.753 of 2020. By order dated 04.08.2020 the Writ Petition was however dismissed on withdrawal.
30] It is thereafter that the present Writ Petition has been filed seeking the reliefs as indicated above.
31] Learned senior counsel for the Petitioner has painstakingly taken us through the various documents on record and thereafter submits that there is clear collusion between officials of Respondent No.1, Respondent No.2 and Respondent No.3 because of which the reserve price of the property in question was continuously downgraded with each auction notice. When Petitioner saw the property, he knew it was very valuable and came up with the offer of Rs.122 crores on condition that Respondent No.1 should hand over the vacant possession of the property in question to him free from all encumbrances. However, Respondent No.1 did not take any steps to get Respondent No.2 evicted from the property in question despite the fact that the lease period had expired on 31.10.2019 and Respondent No.2 had no right to be in possession of the property in question. As against the offer of Rs.122 crores of the Petitioner, Respondent No.1 accepted the offer of Respondent No.3 for a much lesser amount of Rs.65.52 crores. Endeavour of Respondent No.1 ought to have BGP. 11 of 18 Order in WPST-92191-20.doc.
been to obtain as much price as possible for the property in question; but instead of doing that it has settled for a much smaller amount. This is inexplicable, he submits. He therefore urges the Court to admit the Writ Petition and examine the larger issues involved as espoused by the Petitioner.
32] While learned counsel for Respondent Nos.1 and 2 strongly oppose the Writ Petition, learned counsel for Respondent No.4 submits that auction process undertaken by Respondent No.1 needs to be looked into. He supports the stand of the Petitioner.
33] However, Mr. Dushyant Dave, learned senior counsel for Respondent No.3 submits that the Writ Petition is nothing but an abuse of the process of the Court. He has referred to the order of the Supreme Court dated 04.08.2020 and submits that after dismissal of the Writ Petition by the Supreme Court on withdrawal but without any liberty, it is not open to the Petitioner to file a second Writ Petition before this Court on the same set of facts and seeking the same reliefs. On this ground alone, the Writ Petition should be dismissed. He has referred to various orders passed by the Supreme Court and submits that Respondent No.4 had failed to produce any buyer willing to pay Rs.120 crores for the property in question and ready to deposit Rs.50 crores by 03.02.2020 in terms of order dated 27.01.2020. Subsequent orders passed by the Supreme Court extending time to the auction purchaser to deposit the balance sale amount would clearly indicate that Supreme Court did not interfere with the auction process at all; rather it had allowed the auction process to be taken BGP. 12 of 18 Order in WPST-92191-20.doc.
to its logical conclusion. He therefore seeks dismissal of the Writ Petition.
34] In his reply submissions, Mr. Patwalia contends that the order dated 04.08.2020 cannot be construed in a manner so as to debar the Petitioner from approaching this Court for relief under Article 226 of the Constitution of India.
35] Submissions made by learned counsel for the parties have been duly considered.
36] It is not in dispute that on the same set of facts and seeking the same set of reliefs, Petitioner had approached the Supreme Court by filing a Writ Petition under Article 32 of the Constitution of India which was registered as Writ Petition (C) No.753 of 2020 (Brajesh Kasliwal Vs. Union of India). On 04.08.2020 the Writ Petition was dismissed as withdrawn. Order dated 04.08.2020 is extracted hereunder :-
"After some arguments we were not inclined to exercise our jurisdiction under Article 32 of the Constitution of India, and thus, learned senior counsel for the petitioner seeks to withdraw the petition.
The Writ Petition is accordingly dismissed as withdrawn."
37] From the above, it is evident that after arguing the matter for some time, Supreme Court was not inclined to entertain the Writ Petition. At that stage, learned senior counsel for the Petitioner sought leave to withdraw the Writ Petition. Accordingly, the Writ Petition was dismissed BGP. 13 of 18 Order in WPST-92191-20.doc.
as withdrawn. Further we find that while dismissing the Writ Petition no leave was granted by the Supreme Court to the Petitioner to file subsequent Writ Petition either before the Supreme Court or before the High Court. Now, on the same set of facts and seeking the same set of reliefs, the present Writ Petition has been filed by the Petitioner before this Court under Article 226 of the Constitution of India.
38] Is it permissible ?
39] In Sarguja Transport Service Vs. State Transport Appellate
Tribunal, Gwalior, AIR 1987 SC 88, Supreme Court was examining an order passed by the High Court dismissing the Writ Petition on the ground that no second Writ Petition would lie against the same order. It was mentioned that the earlier Writ Petition was withdrawn but without permission to file a fresh Petition. Petitioner moved the Supreme Court to grant special leave against the order of the High Court. It was in that context that Supreme Court examined the provisions of Rule 1 of Order XXIII of the Code of Civil Procedure, 1908 and posed the question for consideration as to whether it would or would not advance the cause of justice if the principle underlying Rule 1 of Order XXIII of the Code of Civil Procedure is adopted in respect of Writ Petitions filed under Articles 226/227 of the Constitution. Be it stated that Rule 1 of Order XXIII deals with withdrawal of suit or abandonment of part of claim. Rule 1(4) makes it clear that where the plaintiff withdraws his suit or part of the claim without liberty to institute a fresh suit, he shall be precluded from instituting any fresh suit in respect of such subject-matter or such part of BGP. 14 of 18 Order in WPST-92191-20.doc.
the claim.
39.1] It was observed by the Supreme Court that it is common knowledge that very often after a Writ Petition is heard for some time when the Petitioner or his counsel finds that the Court is not likely to pass an order admitting the Petition, request is made by the Petitioner or by his counsel to permit the Petitioner to withdraw the Writ Petition without seeking permission to institute a fresh Writ Petition. A Court which is unwilling to admit the Petition would not ordinarily grant liberty to file a fresh Petition while it may just agree to permit withdrawal of the Petition. It is plain that when once a Writ Petition filed in a High Court is withdrawn by the Petitioner himself, he is precluded from filing an appeal against the order passed in the Writ Petition because he cannot be considered as a party aggrieved by the order passed by the High Court. In that context Supreme Court expressed the view that the principle underlying Rule 1 of Order XXIII of the Code of Civil Procedure should be extended in the interest of administration of justice to cases of withdrawal of Writ Petition also, not on the ground of res judicata but on the ground of public policy. It would also discourage the litigant from indulging in bench-hunting tactics. In any event there is no justifiable reason in such a case to permit a Petitioner to invoke the extraordinary jurisdiction of the High Court under Article 226 of the Constitution of India once again. In that case it was held that while withdrawal of a Writ Petition filed in High Court without permission to file a fresh Writ Petition may not bar other remedies like a suit or a Petition under Article 32 of the Constitution since such withdrawal does not amount to res judicata, the remedy under Article BGP. 15 of 18 Order in WPST-92191-20.doc.
226 of the Constitution should be deemed to have been abandoned by the Petitioner in respect of the cause of action relied on in the Writ Petition when he withdraws it without such permission. It was however clarified that the said view would not be applicable to a Writ Petition involving personal liberty because such a case stands on a different footing altogether.
40] While Supreme Court had clarified in Sarguja Transport Service (supra) that dismissal of a Writ Petition filed under Article 226 of the Constitution of India without liberty to file fresh Petition would bar a second Writ Petition under Article 226 of the Constitution of India though it may not bar other remedies like a suit or a Petition under Article 32 of the Constitution of India, in our view the said principle based on public policy would be applicable in an inverse situation. In other words, when a Writ Petition filed under Article 32 of the Constitution of India is dismissed by the Supreme Court without liberty to move the High Court, it would be logical to construe that on the same set of facts and seeking the same set of reliefs, the Petitioner would be precluded from approaching the High Court under Article 226 of the Constitution of India.
41] On the above ground itself, we are not inclined to entertain the Writ Petition, that too at the instance of the Petitioner.
42] That apart, we would also like to add that the property in question originally belonged to Respondent No.4; he is not before us. Furthermore, Petitioner says that he is willing to offer much higher price for the property in question and in this connection had written letter to BGP. 16 of 18 Order in WPST-92191-20.doc.
Respondent No.1 as well as Respondent No.4 on 06.07.2019. Two auction notices were issued thereafter on 06.09.2019 and 22.10.2019. Petitioner has not made any statement that he responded to the said auction notices or could not respond to the said auction notices for any valid reason. Having not participated in the auction process and not being the previous owner of the property in question, we find it difficult to accept the contention of the Petitioner. Moreover, Petitioner's offer of higher bid is conditional:
Respondent No.1 should evict Respondent No.2 who is in possession of the property in question and thereafter hand over the vacant possession thereof to the Petitioner free from all encumbrances. It is for Respondent No.1 to take a decision whether to go for public auction without evicting the illegal possessor or to first clear the illegal possession and thereafter to hold auction sale. It is not for the Court to substitute its views for that of Respondent No.1. Price of a property in auction process that too entangled in disputes/litigation is dependent on various factors. In such circumstances, the Writ Court would not like to interfere in the commercial decisions of Respondent No.1. What may appear beneficial to Respondent No.1 from the view point of the Petitioner may not be considered as beneficial by Respondent No.1. That apart, we find from the various orders placed on record that Supreme Court had extended time to the auction purchaser to pay the sale amount, thereby indicating that the auction process should be taken to its logical conclusion.
43] In such circumstances, we are not inclined to invoke our writ jurisdiction under Article 226 of the Constitution of India.
BGP. 17 of 18
Order in WPST-92191-20.doc.
44] In so far filing of complaint by the Petitioner before
Respondent No.5 is concerned or Petitioner's grievance vis-a-vis the MOU dated 05.01.2018 is concerned, we express no opinion thereon.
45] Writ Petition is accordingly dismissed. However, there shall be no order as to costs.
46] This order will be digitally signed by the Personal Assistant of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order.
ABHAY AHUJA, J UJJAL BHUYAN, J
Digitally
signed by
Balaji Balaji G.
Panchal
G. Date:
Panchal 2020.09.29
13:58:17
+0530
BGP. 18 of 18