Gujarat High Court
Narendra Jayantilal Trivedi vs Kotak Mahindra Bank on 7 October, 2021
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 2763 of 2017
With
CIVIL APPLICATION (FOR ORDERS) NO. 1 of 2021
In R/SPECIAL CIVIL APPLICATION NO. 2763 of 2017
With
CIVIL APPLICATION (FOR FIXING DATE OF HEARING) NO. 2 of 2021
In R/SPECIAL CIVIL APPLICATION NO. 2763 of 2017
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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NARENDRA JAYANTILAL TRIVEDI
Versus
KOTAK MAHINDRA BANK & 1 other(s)
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Appearance:
RITESH D PATADIA(6460) for the Petitioner(s) No. 1
MR PERCY KAVINA, SENIOR ADVOCATE WITH MS NALINI S
LODHA(2128) for the Respondent(s) No. 1
RULE SERVED(64) for the Respondent(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
Date : 07/10/2021
ORAL JUDGMENT
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C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021
1. By this petition under Article 227 of the Constitution of India, the petitioner has prayed for the following reliefs:
"A) YOUR LORDSHIP may admit and allow this Special Civil Application.
B) Your Lordships may be pleased to issue writ of mandamus and be pleased to direct the respondent bank not to proceed under the SARFEASI ACT further till they comply with the order passed by the Recovery officer dated 15-7-2016 in R.P No 360 at Annexure-K to this petition.
C) Your Lordships may be pleased to issue a Writ of certiorari or any other appropriate writ, order or direction quashing and setting- aside the order dated 04-02-2017 passed by the Hon,ble Chief Metropolitan Magistrate, Ahmedabad as annexed hereinabove as Annexure-A to this petition;
D) Your Lordships may be pleased to issue a writ of certiorari or any other appropriate writ, order or direction quashing and setting- aside the order dated 21-1-2017 passed by the Hon'ble Debt Recovery Tribunal, Ahmedabad as annexed hereinabove as Annexure-B to this petition.
E) Be pleased to declare that the order passed dated 21-1-2017 by the Hon'ble Debt Recovery Tribunal is defective being erroneous, without findings, without reasons and non considering the points of arguments and averments averred in the Interim Application annexed hereinabove Page 2 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 as Annexure-O to this petition and the arguments canvassed.
F) Your Lordships may be pleased to issue writ of mandamus and be pleased to hold and declare that the said proceedings of the respondent bank under the SARFEASI ACT are time barred.
G) Your Lordships may be pleased to issue or writ of mandamus and be pleased to hold and declare pending admission ,hearing and final disposal of this petition be pleased to stay the effect, operation and implementation of impugned order dated 16-
12-2016 passed by Hon'ble Chief Metropolitan Magistrate, Ahmedabad.
H) pending admission, hearing and final disposal of this petition be pleased to direct the respondents to maintain status quo qua residential property bearing No 212-2013, Azad Society, Ambawadi, Ahmedabad bearing total 378 Sq.Mtrs.of plot which is in physical possession of the petitioner.
I) Ex-parte Ad-interim relief in terms of para 9 (H).
J) Costs of this petition are awarded.
K) Any other relief, order or direction which may be just, fit, proper and equitable in the facts and circumstances of the petition."
2. Brief facts of the case are as under:
Page 3 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 2.1 The petitioner is the borrower to the loan granted by State Bank of India in the year 1983 to principal firm i.e. Arometics Intermediates and chemicals proprietorship firm of the petitioner. The petitioner and the principal firm had allegedly mortgaged various properties in favour of State Bank of India for loan of Rs. 29,50,000/- in the Year 1983.
2.2 To recover the dues, the State Bank of India had filed Special Civil Suit vide No. 937 of 1986 in the year 1986 against the principal firm and borrowers.
2.3 However, during the pendency of the said suit, receiver was appointed by the Civil Court for sale of Plant & machinery, tools, sheds. The receiver had taken over the possession of the properties in question of the principal firm and sold the same.
2.4 Thereafter, the civil suit was transferred as T.A No 95 of 1995 in the Debt Recovery Tribunal (for short "DRT") as per provisions of the Recovery Of Debts Due To Banks And Financial Institutions Act, 1993 (now the Recovery Of Debts And Page 4 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 Bankruptcy Act, 1993) (for short " RDB Act").
2.5 It is the case of the petitioner that in the year 1994, the receiver had sold the shed premises belonging to the said company i.e. shed no 74/1, phase 1,GIDC, Vatva, Ahmedabad, however, no recovery to that extent has been considered by the State Bank of India towards the outstanding dues and though the petitioner demanded details of recovery from the receiver who sold the movable properties in question, the receiver refused to provide the same stating that receiver was not bound to provide the same.
2.6 During the pendency of the proceedings before the DRT, Receiver appointed by DRT duly sold the factory i.e. 74/2, Industrial estate, GIDC, Vatva, Ahmedabad for Rs.16 lacs.
2.7 It is the case of the petitioner that without giving any set-off from the recovery of the dues from sale of movables and immovable properties i.e. machinery, tools and shed and factory situated at 74/2, industrial estate, GIDC, Vatva being mortgaged property and without any credit Page 5 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 or set-off the DRT passed the final order dated 3-3-2000 intimating the bank to give all the credits with regard to the sale of movables and immovable properties which were sold by the receiver.
2.8 Subsequently, State Bank of India assigned the account of the petitioner to the respondent bank i.e. Kotak Mahindra bank herein in the year 2006 for recovery of outstanding dues. It is the case of the petitioner that no clear information with regard to the documents of alleged mortgaged property have been stated in the assignment deed.
2.9 Kotak Mahindra bank being assignee was replaced in the execution proceedings being R.P. No 360 in place of State bank of India.
2.10 Subsequently, respondent bank in the year 2011 had initiated measures under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act ,2002 (for Short "SARFAESI Act") and issued notice under section 13 (2) dated 30-6-2011 for recovery of Rs.27,35,85,200.62.Page 6 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022
C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 2.11 Petitioner filed Securitization Application No. 94 of 2011 against the same and the DRT granted interim protection. However the matter was rejected in the year 2015. Subsequent to said order review was also filed and the same was duly rejected.
2.12 Subsequently, the respondent bank initiated measures under 13(4) of the SARFAESI Act dated 16-7-2015 and further filed application under section 14 before the Chief metropolitan magistrate vide CMA no 256 of 2015.
2.13 During the said proceeding simultaneously recovery proceedings were also initiated by the respondent bank vide R.P No 360 before the recovery officer, under RDB Act with regard to the decree dated 3-3-2000 passed by the DRT.
2.14 The petitioner filed an application for gathering the information from State Bank of India and Kotak Mahindra Bank with regard to details of the amount recovered by the receiver by sale of movables and immovable factory belonging to the principal firm, however no reply was given. Later on it came to the knowledge of the Page 7 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 petitioner that receiver had sold the factory situated at GIDC for Rs.16 lakh and amount was duly received by State Bank of India from the records of GIDC.
2.15 As the demand of the execution petition was not in consonance with the amount recovered and all credits of movables were also not granted the recovery officer quashed all the proceedings with regard to the said demand notice vide order dated 15-7-2016 and directed the respondent bank to provide all the details.
2.16 The respondent bank preferred an appeal before DRT against the said order dated 15-7-2016, however no stay has been granted.
2.17 The Chief Metropolitan Magistrate passed order dated 16-8-2016 under section 14 of the SARFAESI Act which was challenged by the petitioner before DRT by filing S.A No.171 of 2016.
2.18 The respondent bank approached this Court by filing CRMA No. 6631 OF 2016 which was disposed with direction to pass order in accordance with law under section 14(1) Page 8 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021
(a) by appointing subordinate of the Chief Metropolitan Magistrate to take possession.
2.19 It appears that thereafter, the Chief Metropolitan Magistrate passed an order dated 16.12.2016 under section 14 of the SARFAESI Act. The petitioner thereafter preferred an application for modification of the order passed by the Magistrate being CMA No. 653 of 2017.
2.20 The petitioner thereafter received the notice from respondent No.2 who handed over the possession on 09.02.2017. The petitioner has therefore preferred this petition.
3. This Court passed the following order on 17.02.2017:
"Heard learned senior counsel Mr. Anshin Desai assisted by learned advocate Mr. Ritesh Patadia for the petitioner and learned advocate Ms. Nalini Lodha appearing on caveat for the respondent Bank.
2. The broad issue urged in this petition is with reference to order dated 15.07.2016 passed by the Recovery Officer in the proceedings under the Recovery of Debts due to Banks and Financial Institutions Act, 1993 initiated by the Bank in which inter alia the Recovery Page 9 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 Officer has passed the following order on 15.07.2016, "(1) The objections Exh.D/60 filed by CD No. 2 and 3 are allowed as per above objections.
2) CH Bank is directed to submit details of recoveries in the accounts of CDs including this account with clear bifurcation of entire amount recovered by them vis-
a-vis its appropriation duly
supported with statement of
accounts.
(3) CH Bank is also directed to take steps to ascertain and join/bring legal heirs of deceased CDs on record.
(4) CH Bank has to quantify the dues afresh after deducting entire recoveries and giving affect of the same on the dates of recoveries and take steps to get the fresh demand notice issued accordingly. Matter is adjourned to 25.08.2016."
3. Respondent No.1 who is assignee of original lender Bank has simultaneously initiated the proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 which has negotiated its second round, now to reach the stage of interim order dated 21.01.2017 passed by the Debts Recovery Tribunal in Appeal under Section 17 of the Act.
4. While the contention of learned advocate for the respondent Bank about the right of the Bank to prosecute the Page 10 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 parallel proceedings under both the Acts as well as the contention about availability of alternative remedy are not discarded, the immediate point needs to be focused is whether the Bank is under legal obligation to comply with the direction issued by the Recovery Officer in order dated 15.07.2016 quoted herein above about quantification of the dues afresh. It was though submitted that the said order is under challenge and it awaits final outcome, but no orders so far have been passed as the parties are completing the pleadings.
5. Notice returnable on 28th February, 2017.
6 In light of the controversy, the respondents shall file a reply in particular in the context of the above aspects indicated, and in response to the case in general."
4. It appears that as no stay was granted against the action to be taken by the respondent- Bank for taking of the possession of the property in question, the petitioners preferred Civil Application No. 1 of 2021 on 19.03.2021 placing the events which have taken place subsequently with following prayers:
"(A) YOUR LORDSHIPS may be pleased to hold and declare that the applicants herein are protected by the order of the Hon'ble High Court.
(B) During the pendency and final disposal Page 11 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 of the present application, YOUR LORDSHIPS may be pleased to direct the opponents to stay proceeding under the SARFAESI act.
(C)YOUR LORDSHIPS may be pleased to award the cost of the present application to the applicants;
(D) Such other and further reliefs as may be deemed just and proper in the facts and circumstances of the present case may kindly be granted;"
5. The respondent-Bank filed their reply to the Civil Application as well as the main Special Civil Application placing on record the details as to how the petitioner has been successful in not paying the amount as per the Decree passed by the Tribunal on 03.03.2000 in transfer applications of the special suits filed by the erstwhile bank i.e. State Bank of India in the year 1986.
6. The details with regard to the facts which are not disclosed by the petitioner in the petition as well as the Civil Application are stated in detail by the respondent-Bank in the reply with following averments:
"10. With reference to para-I, (except deleted portion with black sketch pen) I deny that the respondent bank has filed any false affidavit before the DRAT, Mumbai and obtained order for proceeding Page 12 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 against the applicant as alleged. I deny that by way of conduct of the respondent 1 bank or otherwise, the respondent 1 bank has sought to disobey the order passed by this Hon'ble Court as alleged. I deny that this Hon'ble Court had passed any stay order or that the same was extended vide order dated 31.07.2018 as alleged. I state that the civil application seeking clarification is not maintainable. I further state that prior to filing of the above CA seeking clarifications to the extent of validity of stay in the main matter and legality, validity, correctness and soundness of the order dated 04.02.2017 passed by the Ld. CMM on application filed by the petitioner in regard to clarification of order dated 16.12.2016 passed under Section-14 of the SARFAESI Act, the petitioner, before the Ld. DRT had stated that there was interim protection in SCA No.2763 of 2017 and the Ld. DRT by order dated 18.01.2020 (copy at Annexure-R/2 hereto) restrained the bank from taking possession of the property and observed as under:
"........I feel fair to say that matter is pending before Hon'ble High Court regarding interim protection and it will be for the parties to avail efficacious remedy and clarification if any in the pending matter before Hon'ble High Court... .."
I further state that the respondent bank preferred Misc. Appeal No.9 of 2020 against the order dated 18.01.2020 before the Ld. Debts Recovery Appellate Tribunal (Ld. DRAT) and the Ld. DRAT passed an order dated Page 13 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 07.02.2020 granting liberty to the respondent bank to request the Ld. DRT to hear the S.A. finally as pleadings were complete and the Ld. DRT shall examine the request and feasibility of early disposal. The statement made by the respondent bank of pleading being complete before the Ld. DRAT was on the basis that though the petitioner herein had filed an amendment Application in the SA but had not moved the same for months on end. The petitioner, though was served, chose to remain absent before the Ld. DRAT. When the matter came for hearing before the Ld. DRT on 19.02.2020, the petitioner submitted that respondent bank had made false statement before the Ld. DRAT about the pleadings being complete. The Ld. DRT recorded the submission of the petitioner in the order dated 19.02.2020 as under:
"... at this stage, Mr. Ritesh Patadia, Ld. Counsel for applicant appeared and submitted that bank has obtained order from Hon'ble Appellate Tribunal and misstatement of facts and he intends to pursue his remedy before Hon'ble Appellate Tribunal in accordance with law.."
I have considered the rival contentions of both the parties it is for the parties to file appropriate application before Hon'ble Higher Forum in their own discretion but certainly I find no merits to delay and adjudication of this matter....."
However, the petitioner does not seem to have pursued his remedy before the Ld. DRAT as per the statement made at bar and the submissions made before the Ld. DRT and no counter/reply has been filed by the Page 14 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 petitioner before the Ld. DRAT to date, though the said Misc. Appeal is pending as on date. I further state that the respondent bank has also filed MA No. 26 of 2020 before the Ld. DRT seeking the following prayers:
"6.RELIEFS SOUGHT:
In view of the facts mentioned in para-5 above the Applicant prays for the following reliefs :
a) This Hon'ble Tribunal be pleased to take note of the contemptuous acts of the Respondent as well as making false statements in the proceedings before this Hon'ble Tribunal and after issuing show cause notice to the Respondent, be pleased to formulate its observations and make a reference to the Hon'ble High Court, Gujarat to initiate action against the said Respondent under Section 2(c)(ii) and 2(c)(iii) of the Contempt of Courts Act, 1971;
b) pending the final hearing and disposal of this Application this Hon'ble Tribunal be pleased to direct the Respondent to deposit his passport with the Registrar of this Tribunal;
c) The Hon'ble Tribunal be pleased to issue such other orders, directions, as this Hon'ble Tribunal may deem fit and proper to meet the ends of justice, in the facts and circumstances;
d) The Hon'ble Tribunal be pleased to award costs for this Application".
The said MA has been filed in view of the statement made by the petitioner before the Ld. DRT that this Hon'ble Court has granted Page 15 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 a stay and that the stay was in operation. The Ld. DRT was pleased to issue Notice returnable on 04.12.2020 in the said MA and the same has been duly served upon the petitioner but the petitioner failed to appear in the above MA before the Ld. DRT nor any reply has been filed by the petitioner to the said MA to date. Instead, the present CA has been filed claiming that the respondent bank had attempted to disobey the order passed by this Hon'ble Court in asmuch as the stay was extended vide order dated 31.07.2018. In this regard, the id. DRT, in its final order dated 19.04.2021 has held/observed as under:
" .... So, in my humble opinion, the contentions raised on behalf of the applicants to avail benefits of said proceedings are not available to the applicants".
11. With reference to para-2, I state that this Hon'ble Court orally directed the respondent bank not to take physical possession till next date while passing order dated 17.02.2017 and the emails dated 17.02.2017 and 18.02.2017 addressed by respondent bank to the respondent no.2 lends credence to the same. It is pertinent to note that the said limited oral direction was never recorded in any order and hence there is no question of any extension as can be seen from the orders passed subsequently, specifically the order dated 05.05.2017. In the above context and in view of the subsequent development, the CA filed by the petitioner seeking the clarification in this regard is not maintainable.
12. With reference to para-3, I do not admit the so-called facts which are contrary and inconsistent with the record of proceedings Page 16 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 before the Ld. DRT, Ld. DRAT as well as before this Hon'ble Court and what is observed/held in the final order dated 19.04.2021 passed by the Ld. DRT in the SA. It is not out of place to mention here that the Ld. DRT in para-30 of its order has observed as follows:
"30 the applicants have relied upon the pendency of one proceeding before the Hon'ble High Court of Gujarat but applicants have failed to place on record any stay in the present proceeding filed under Section-17 of the SARFAESI Act, 2002 by the applicants or process initiated by the respondent bank under Securitization Act. So, in my humble opinion, the contentions raised on behalf of the applicants to avail benefits of said proceedings are not available to the applicants".
To the best of the knowledge of the respondent bank, this observation by the Ld. DRT has not been challenged by the petitioner herein.
13. With reference to para-3A, 3B, 3C, 3D, 3E, 3F, 3G, 3H, 31, 3J, 3K and 3L (except deleted portion with black sketch pen), I state that the contentions raised therein have been dealt with by the respondent bank in its reply to the petition and the issues pertaining to the same have been covered / decided by the Ld. DRT in its final order dated 19.04.2021 and I rely upon the same and I deny whatever is contrary thereto and inconsistent therewith.
14. With reference to para-3M & 3N (except deleted portion with black sketch pen), I state that the Ld. PO in para-26 of the order dated 19.04.2021 has held that the defence/ pleadings of the bank with respect to the contentions of the applicant that the Page 17 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 bank has failed to disclose recovery made by the bank during the pendency of the recovery proceedings while relying upon the orders passed by the Ld. Recovery Officer in recovery proceedings to the bank to disclose such amount remained uncontroverted by the applicants in pleadings or at the time of arguments. The applicants have failed to counter the specific pleadings and averments made in para-5.1 to 5.3 of reply of the bank, but in a strange manner come with the plea that the bank has not disclosed the details of recoveries made during pendency of Civil Suit/ TA No. 95 of 1995. In the above context, the. contention that unless and until the order dated 15.07.2016 is complied with, no further steps can be taken for recovery of the dues claimed by the respondent bank, as alleged is misconceived and untenable.
15. With reference to para-3O and 3P, (except deleted portion with black sketch pen), I state that the petitioner has raised contentions with respect to the order dated 16.08.2016 but the said order was quashed and set aside by this Hon'ble Court vide order dated 02.12.2016 passed in Criminal Misc. Application No. 6631 of 2016 filed by the respondent bank and remitted the matter to Ld. CMM to pass fresh order under Section-14 of the SARFAESI Act,2002.
16. With reference to para-3P and 3Q (except deleted portion with black sketch pen), I state that the Ld. CMM, upon remand of the matter by this Hon'ble Court to the Ld. CMM for passing the order afresh under Section- 14 of the SARFAESI Act, passed the order dated 16.12.2016. I further state that the order dated 16.12.2016 was subject matter of challenge in SA 171 of 2016 filed before the Ld. DRT and the Ld. DRT has dismissed the said SA with costs by order dated Page 18 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 19.04.2021.
17. With reference to para-3R and 3S, I state that contents thereof pertain to the order passed by the Ld. DRT rejecting the interim relief which has been challenged by the petitioner by way of the above petition. Since the SA has been finally heard by the Ld. DRT and the Ld. DRT dismissed the SA with costs vide order dated 19.04.2021, the challenge to the order dated 21.01.2017 rejecting the prayer for interim relief does not survive and the respondent bank is entitled to proceed in accordance with law as held by the Ld. DRT in the said final order passed in the SA. At this juncture, it is pertinent to point out that the petitioner through his advocate has addressed a etter dated 19.06.2021 to the Ld. Court Commissioner relying upon what transpired before this Hon'ble Court on 08.06.2021 and has attempted to dissuade the Ld. Court Commissioner from enforcing the order of the Ld. Chief Metropolitan Magistrate. Though the letter mentions that a copy has been sent to the deponent herein the same has not been received and the respondent bank has taken a copy of the said letter from the Court Commissioner. The said statement wrongly attributed to the respondenthas been clarified by Mr. Percy Kavina, Senior Advocate before this Hon'ble Court during the last hearing on 25.06.2021 in the presence of the Ld. Advocate appearing for the petitioner, that the submissions made on 08.06.2021 were made in some other matter and that the Senior Advocate is not appearing for the respondent bank. It is, therefore submitted that the said letter has been issued with malafide intentions knowing fully well that the statement attributed to the respondent bank are incorrect.. Copy of the said Letter dated 19.06.2021(without Annexures) 1s Page 19 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 annexed hereto and marked as Annexure-R/3.
18. With reference to para-3T, I state that the entire paragraphs, has been deleted with black sketch pen except these words "various occasions, further Applicant state and submit that vide order dated" which does not convey any meaning for the purpose of giving any reply thereto.
19. With reference to para-3U, I deny that the Hon'ble Court orally directed the respondent bank to stay their hands pending the petition and further hearing as alleged. I state that the emails dated 17.02.2017 and 18.02.2017 of the officers of the respondent bank to the Ld. Court Commissioner sought to be relied upon by the petitioner, point to the contrary.
20. With reference to para-3V (except deleted portion with black sketch pen), I deny that the respondent bank has misled the Hon'ble Court by saying that there is no interim relief in favor of the applicant herein, as alleged. I state that the bank has stated the correct facts before this Hon'ble Court which are recorded in the order dated 13.04.2017 and I adhere to the same.
21. With reference to para-3 W (except deleted portion with black sketch pen), I deny the allegation/contention that the additional affidavit stating the true and correct facts of the case and to prove on record how a Stay is in operation, being misconceived and untenable I state that the petitioner in para-9 of the additional affidavit has stated as under:
"9) I therefore pray before the Hon'ble Court that the position prevailing on Page 20 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 17.02.2017 of oral direction being given to the respondent bank not to take any steps of possession of my residential house being -- "212/213 Azad Society, Ambawadi 380 015" be kindly continue by a specific order by the Hon'ble Court"
In this regard, the subsequent orders dated 05.05.2017, 07.12.2017 and 22.12.2017 passed in the above petition are relevant when nothing has been submitted on behalf of the petitioner before this Hon'ble Court in respect of the stay as claimed in the additional affidavit. The respondent bank craves leave to refer to the said orders passed by this Hon'ble Court in the above petition at the time of hearing.
22. With reference to para-3X, I deny that on the request of the respondent bank herein that since there is stay pending before the Hon'ble High Court has specifically observed that "no any adjournment will be granted at the instance of the present petitioner, as alleged. I state that the fact is that there was nothing on record to suggest that there has been an interim order of stay passed by this Hon'ble Court, the Hon'ble Court in a routine manner stated that interim relief, if any, granted earlier to continue till then while issuing Rule returnable on 10.08.2018. I further state that the oral direction to stay the hands till next date given while passing of order dated 17.02.2017 is clearly reflected in the emails dated 17.02.2017 and 18.02.2017 addressed by the officer of the bank to the Court Commissioner nothing further has been recorded in the orders passed from time to time.
23. With reference to para-3Y, I state that Page 21 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 the filing of appeal before Ld. DRAT against the order passed by the Ld. DRT, is statutory remedy available to the respondent bank under the provisions of SARFAESI Act and the same cannot be found fault with. In fact, it was for the petitioner to seek clarification from this Hon'ble Court because the petitioner asserted before Ld. DRT that there is stay in operation without producing any order to that effect before the Ld. DRT. It is pertinent to note that the petitioner has not taken any steps in this regard before Ld. DRAT except making statement before DRT in the pending SA that the petitioner shall approach DRAT in this regard. It is also pertinent to note that the petitioner along with others, the applicants of the SA gave concurrence to the final hearing of the SA by the Ld. DRT based on which the Ld. DRT passed the final order dealing with all contentions pertaining to securitization process and dismissing the same with costs.
24. With reference to para-3Z, 1 deny that any material evidence in regard to operative stay has been placed on record as alleged. I state that the statement made at bar on behalf of the petitioner that the petitioner will approach Ld. DRAT in this regard, as referred to herein before is relevant and the petitioner is bound by the same.
25. With reference to para-AA, I, state that the present CA does not survive in view of the disposal of the SA 171/2016 by final order dated 19.04.2021 by the Ld. DRT giving finding on all the issues pertaining to securitization process and dismissing the same with costs.
26. With reference to para-4, I deny the Page 22 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 contents thereof. I state that the CA seeking clarification is not maintainable for the reasons stated hereinbefore and the contention that the application is filed within the prescribed period of limitation under the provisions of The Contempt of Courts Act, 1971, is of no relevance, though it is not submitted as to how the limitation under the Contempt of Courts Act applies to these proceedings.
27. With reference to para-5, I state that the petitioner is not entitled to the leave to add, amend, alter, vary, rescind or modify any of the grounds / averments made in the CA, in the facts of the case.
28. With reference to para-6, I deny the contents thereof. I state that after dismissal of SA with costs upon considering all issues pertaining to securitization process with reasons therefor by the Ld. DRT and the Ld. DRT holding that the respondent may proceed in accordance with law, the statutory remedy available to the petitioner is to approach the Ld. DRAT, Mumbai by way of Appeal u/s. 18 of the SARFAESI Act."
7. Thereafter, it appears that during the pendency of the petition, the petitioner preferred Civil Application No.2 of 2021 as notice dated 22.07.2021 was issued by the Court Commissioner of Additional Chief Metropolitan Magistrate to take over the possession of the property in question. This Court, therefore, passed the following order on 23.07.2021:
Page 23 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 "[1] This Civil Application is filed for the purpose of following reliefs:
"(11) (A) YOUR LORDSHIPS may be pleased to direct the Registry to prepone the said matter from 28-7-2021 to any date prior to 24-7-2021.
(B) During the pendency and final disposal of the present application, YOUR LORDSHIPS may be pleased to direct the opponents to maintain status-quo qua the property and / or honor their statement made at bar.
(C) Such other and further reliefs as may be deemed just and proper in the facts and circumstances of the present case may kindly be granted;"
[2] During the course of submissions, Mr.Anshin Desai, learned senior counsel with Mr.Ritesh D.Patadia, on instructions, has stated that there was an understanding given not to take any coercive measure. However, despite the fact that twice the matter is adjourned by consent on 02.07.2021, a notice came to be issued whereby it is indicated that on 24.07.2021 at 10 o'clock, the authority will take possession of the residential premises belonging to the applicant.
[3] To substantiate this contention, Mr.Desai, learned senior advocate has drawn the attention of this Court to a specific averments made on oath by the applicant contained in paragraph 2, which reads as under:
"2. That the said petition was duly listed for hearing of CA 1 of 2021 in the said petition on 25-6-2021, wherein the Respondent No.1 bank claimed time to file reply and it was duly agreed Page 24 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 between the parties that bank shall not take coercive steps by taken possession of residential property till then and considering the oral commitment made at bar the matter was duly listed on 30-6- 2021. The copy of said order is enclosed herewith as ANNEXURE-A."
[4] It has been further submitted that if breathing time or protection is not granted, an irreversible situation will be created and therefore, has requested that till Monday or Tuesday the status quo order be observed since abruptly the notice has been issued despite knowing the fact that the matter is placed next date of hearing on 14.07.2021.
[5] To this submission, Ms.Nalini S.Lodha, learned advocate appearing on behalf of the respondent bank has stated that in fact there was no understanding given at all and the order dated 25.06.2021 is reflecting that it is the petitioner who sought time and therefore, there was no question of granting any assurance not to take any coercive measure. Ms.Lodha, learned advocate has further submitted that in fact there was no question of granting any assurance of not taking any coercive steps since on 25.06.2021 is was informed that this original petition is against the interim order passed by the Debt Recovery Tribunal and during the passage of time, SA No.177 of 2016 itself is disposed of on 19.04.2021 and as such the petition has become infructuous and thereby, has disputed that no assurance was given by her or by her client.
[6] Having heard learned advocate appearing for the respective parties and having gone the contents of application, on oath, the applicant has stated as indicated above and in addition thereto despite aforesaid stand Page 25 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 taken by the respondent Bank through learned advocate Ms.Lodha, a perusal of order dated 25.06.2021 is indicating that by consent, the matter was adjourned to 30.06.2021 and thereafter, on 30.06.2021, following order was passed in the presence of learned advocates representing to the parties: When the matter is taken up for hearing, learned advocate Mr. Ritesh D. Patadia for the applicant has submitted that reply from learned advocate Ms.Nalini S. Lodhi is received in the morning itself. Hence, time is sought. Accordingly, by consent, list the matter on 14.07.2021.
[7] It is in between prior to 14.07.2021, a notice came to be issued on 02.07.2021 indicating that on 24.07.2021, the possession is to be taken of residential premises. Hence, in such a situation, if the interim protection, as prayed for, is not granted, there is likelihood of creation of irreversible situation.
[8] As against this, Ms.Nalini S.Lodha, learned advocate appearing on behalf of the respondent bank has no objection if the main petition is prepond for its hearing. [9] In view of the aforesaid situation, prevailing on record, Notice returnable on 26.07.2021. In the meantime, the respondents are directed not to take any coercive measure in response to the notice dated 02.07.2021. It is made clear that this breathing protection is given in view of the fact that twice the matter is adjourned by consent and there is an assertion on oath as stated in paragraph 2 of the application and it is further made clear that this interim protection is given till next date of hearing only.
Direct service TODAY is permitted."
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8. Pursuant to the aforesaid order, the respondent bank has not taken any coercive measure to take the possession of the property in question.
9. Learned advocate Mr. Patadia appearing for the petitioner submitted that the only prayer which now survives in the petition is prayer 10(B) whereby the petitioner has prayed to direct the respondent bank not to proceed under the SARFAESAI Act till the order passed by the Recovery Officer dated 15.07.2016 in Recovery Proceedings No. 360 is complied with. It was submitted that the Recovery Officer of Debt Recovery Tribunal, Ahmedabad has passed the order on 15.07.2016 dealing with objections Exh. D/60 filed by CD No. 2 and 3 against the sale/demand notice and calculation of dues/interest. The respondent bank filed its reply at Exh. H/61 but after considering such reply, the Recovery Officer directed the respondent-bank to submit the details of the recoveries in the account of the borrowers including the amount with clear bifurcation of the entire account recovered vis- a-vis appropriation duly supported with appropriate accounts and thereafter to quantify the dues giving effect of the recovery made to issue the fresh demand notice.
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10. It was submitted by learned advocate Mr. Patadia that unless and until the respondent-bank implements the order dated 15.07.2016, the respondent-bank cannot initiate any recover proceeding of either under the RDB and SARFAESAI Act. It was submitted that the respondent-bank is therefore, required to be restrained from proceeding further of taking possession of the property in question and thereafter selling the same to recover the outstanding dues of the petitioner as there is no compliance of the order dated 15.07.2016 by the respondent-Bank.
11. It was further submitted by learned advocate Mr. Patadia that the petitioner was and is always ready and willing to pay the market value of the property in question to the respondent-Bank but the respondent-Bank is not ready and willing to accept such amount and is insisting upon taking over the possession without giving any opportunity to the petitioner to pay the amount of the value of the property in question.
12. On the other hand, learned Senior Advocate Mr. Pahwa with learned advocate Ms. Lodha for the respondent bank submitted that the petitioner has filed this petition only with a view to delay the recovery proceedings of the respondent-Bank who Page 28 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 has got rights assigned from the erstwhile State Bank of India who had provided financial assistance to the petitioner.
13. It was further pointed out that as the petitioner failed to pay the outstanding dues of the State Bank of India, civil suits were filed in the year 1986 which were transferred to the DRT in the year 1995 and the DRT passed the decree in the Civil Suits against the petitioner in the year 2000 and for more than 21 years the respondent-Bank is not able to execute or implement the decree in any manner including the steps taken under the provisions of the SARFAESAI Act.
14. Learned Senior Advocate Mr. Pahwa further submitted that the petitioner has time and again challenged the proceedings taken up by the respondent under the SARFAESAI Act and every time, after having failed, did not take the proceedings to the higher forum for adjudication and as such the decree passed by the Tribunal in the year 2000 has achieved finality.
15. Learned senior advocate Mr. Pahwa invited attention of the Court to the summary of the application filed at Exh A/66 filed by the State Bank of India in OA No. 937/1986 arising out of Page 29 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 T.A. no.95 to point out that the State Bank of India submitted the details on 29.12.1999 during the pendency of the suit before the DRT that total amount of the suit is 44,01,159.47 and thereafter, legal expenses incurred by the Bank was of Rs. 99,459.71 and therefore total dues to be recovered from M/s. Aromatics Intermediates and Chemicals and others of which the petitioner is one of the proprietor would be Rs. 45,00,619.18. In the summary, the State Bank of India also stated that recovery affected of Rs. 9,33,031.20 and total outstanding dues recoverable was shown as Rs. 35,67,587.98 so far as OA No. 937 of 1986 [TA No.95 of 1995]. It was therefore submitted that when the State Bank of India has already filed a summary of dues to be recovered before the DRT during the pendency of the proceedings of the Civil Suit prior to passing of the decree there was a full disclosure by the State Bank of India of the outstanding dues after giving effect of the amount recovered by the State Bank of India with regard to sale of the movable properties.
16. It was therefore submitted that the order dated 15.07.2016 passed by the Recovery Officer in Recovery Proceedings No. 360 cannot be considered as impediment for any purpose to recover the outstanding dues by the respondent-
Page 30 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 bank under the provisions of the SARFAESAI Act.
17. Learned Senior Advocate Mr. Pahwa placed reliance upon the decision of the Supreme Court in case of Transcore vs. Union of India and anr reported in (2008) 1 SCC 125 to submit that respondent bank can initiate the proceedings under the SARFAESAI Act independent of the proceedings under the RDB Act and as such, the proceedings initiated by the respondent-bank under the SARFAESAI Act cannot be halted or kept in abeyance till the proceedings under the RDB Act are completed or complied with.
18. It was therefore submitted that when the respondent bank has already challenged the order dated 15.07.2016 by way of an appeal before the Presiding Officer of the DRT in the year 2016, the respondent bank should not be restrained to take action under the SARFAESAI Act to proceed further irrespective of the order passed by the recovery officer cannot be .
19. Learned Senior Advocate Mr. Pahwa also submitted that the DRT while disposing of the second securitization application filed by the petitioner, has dealt with all the objections raised by the petitioner in this petition and by order dated 19.04.2021 the Tribunal has Page 31 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 considered the objections raised by the petitioner before the Recovery Officer as well as which are referred to by the advocate of the petitioner in the present proceedings.
20. Learned Senior Advocate Mr. Pahwa relied upon the observations made by the DRT in Para no. 27 to 33 in the order dated 19.04.2021 passed in Securitization Application No. 171/2016.
21. It was therefore submitted that the petitioner is not entitled to the reliefs claimed in the present petition and the same is required to be dismissed.
22. Having heard learned advocates for the respective parties and having considered the material on record it appears that the petitioner has filed this petition only with a view to stall the recovery proceedings initiated by the respondent-bank under the provisions of the SARFAESAI Act. This aspect is dealt with by the Tribunal in the order dated 19.04.2021 in detail while dismissing the Securitization Application No. 171 of 2016 preferred by the Aromatics Intermediates and Chemicals through petitioner and other guarantors with a cost of Rs.25,000/-.
23. In such circumstances, it would be worthwhile Page 32 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 to refer to the following observations made in the order dated 19.04.2021 passed by the Tribunal which is a fact finding authority er:
"26. It is case of the Applicant that bank has failed to disclose recoveries made by 'the bank during the pendency of Recovery Proceedings and Applicants further relied on the orders passed by Ld. Recovery Officer in Recovery Proceedings to give directions to the bank to disclose such amount.
At the outset, this Tribunal is of the opinion that any order passed by Ld. Recovery Officer under The Recovery of Debts and Bankruptcy Act, 1993 cannot be touched or merits of such order cannot be adjudicated under the proceedings under Section 17 of the SARFAESI Act, 2002 by this Tribunal. This Tribunal is to ascertain the validity of Demand Notice independently as per the provisions of Securitisation Act. It is the candid case of the Applicants at the time of arguments that bank has failed to disclose the details of such recovery, whereas the bank has referred to such facts in Para No. 5.1 to 5.3 of its reply, which reads as under:
TA 95/1995 (Civil Suit No.937/1986) 5.1 During the pendency of the above proceedings, the hypothecated movables and one of the mortgaged properties being Factory land and building situate at 74/2, admeasuring 3512 sq. mtrs. together with A1 type Shed no.4 (Phase-I) constructed thereon, GIDC Industrial Estate,Vatva, Ahmedabad, was sold by the court receiver. It is pertinent to note Page 33 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 that the said property belonged to (i) Aromatic Intermediate and Chemicals sole proprietor Narendra Jayantilal Trivedi,
(ii) Gujarat Polymers, sole proprietor Narendra jayantilal Trivedi HUF, and
(iii) Amco Dyestuff Industries, 4 partnership firm comprising of Narendra J. Trivedi, Vasant ]. Trivedi and Hemant J. Trivedi and the same was mortgaged to State Bank of India, Laghu Udhyog Branch, Ahmedabad (SBI) to secure the credit facilities granted to Aromatic Intermediates and Chemicals and its sister concerns. It is pertinent to note that various civil suits were filed by SBI for recovery of the dues in various loan accounts.
5.2 The said TA was decided by judgment and order dated 03.03.2000 which records inter alia as follows :
"Ld. Advocate for the applicant bank has placed on record the summary of the application. It is stated in the summary that during the pendency of the suit receiver was appointed to sell hypothecated machineries, tools and relative sheds in the industnal area and accordingly, the securities were realized and certain amount have been received."
The same has been recorded on the basis of the Summary of the Application Exh. A/ 66 (copy at Annexure-R/1 hereto) filed by SBI in the said TA on 29.12.1999 ie. after the sale of the hypothecated movables and the plot / shed. The SBI in the said application, stated that during the pendency of the suit before the Civil Court as well as the Tribunal, securities were realized and some amount has been received and had shown the recovery of Rs.9,33,031.20 ps. in the said Page 34 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 Application Exh.A/66, which is part of record of proceedings of TA before Ld. DRT.
Recovery Proceeding No.360 5.3 Upon disposal of the TA, execution proceedings being RP 360 before the Ld. Recovery Officer (Ld. RO) commenced and demand notice was issued on 16.04.2003 on the basis of interest certificate filed by SBI. In the said Interest Certificate, inadvertently, the recovery was mentioned as nil. The respondent bank, therefore filed revised Interest Certificate by way of an Affidavit dated 12.06.2012 (copy at Annexure-R/2 hereto) for issuance of fresh demand notices. The said Narendra ].Trivedi filed objections Exh. D/40 (copy at Annexure-R/3 hereto) against the revised Interest Certificate to which the respondent bank filed reply (copy at Annexure-R/4 hereto) and written submissions (copy at Annexure-R/5 hereto). The said objections were rejected by the Ld. RO by order dated 06.01.2015 (copy at Annexure-R/6 hereto) and demand notice issued on the basis of revised interest certificate was held to be good and in accordance with the procedure. However, surprisingly, the said Narendra J. Trivedi along with applicant no. 2 filed another round of objections in the RP with respect to the very demand notice and calculation of interest, though the same was held to be valid by the Ld. RO by order dated 06.01.2015 and no appeal was preferred there against. The Ld. RO by order dated 15.07.2016 allowed the objections which were earlier rejected by the Ld. RO. The respondent bank has challenged the order dated 15.07.2016 passed by the Ld. RO in RP 360 by way of Appeal No. 6/2016 Page 35 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 wherein the notice has been issued by this Hon'ble Tribunal, but the appellants though served, have yet to file their Affidavit-in-Reply thereto. The said Appeal 6/2016 is presently pending for hearing."
The said defence/ pleadings of the bank remained uncontroverted py the Applicants in pleadings or at the time of arguments. The Applicants have failed to counter the specific pleadings and averments made in para 5.1 to 5.3 of the reply of the bank, but in a strange manner come with plea that bank has not disclosed the details of recoveries made during pendency of Civil Suit/TA No.95 of 1995.
So, in the rejoinder, Applicants have failed to reply to the detailed facts summarised in the said paragraphs of the reply to the Securitisation Application. At this juncture, I would like to reproduce Annexure R/1 i.e. Summary of the Application filed by the SBI in the said T.A. on 29.12.1999, copy of which is produced by the Respondent Bank along with its reply at Exh.R/15-
"During the pendency of the suit before Civil Court, as well as this Tribunal, securities were realised and some amount has been received.
The final details of outstanding is as under:Page 36 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022
C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 Amount (Rs)
1. Total amount of suit 44,01,159.47 PLUS:- 99,459.71 LEGAL EXPENSES:
(Advertising exp. Misc. Cost Fees of Court Commissioner, watchmen salary, insurance, inspection 45,00,619.18 expenses, etc) Less: 9,33,031.20 Recovery effected Rs.
35,67,587.98 NOTE: OVER AND ABOVE PROFESSIONAL FEES AND COURT FEES AS PER SCHEDULE AND RULES ARE TO BE RECOVERABLE".
so the bank has duly informed the recovery of Rs.9,33,031.20Ps on 99.12.1999 to this Tribunal and this Tribunal passed following orders after considering such disclosure -
"In the results, the application is allowed declaring that:
(a)The Applicant Bank is entitled to recover from the Respondents No.1 to 4 and severally, a sum of Rs.44,01,159.47 ps with cost, current and future interest, at the rate of @16.5% per annum, with quarterly rests from the date of application, till realisation.
b) The Applicant Bank will give credit to the amount received in the matter out of the sale proceeds of the assets belonging to the Respondents no.1 to 4 during the pendency of the Page 37 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 suit.
c) In case, of default in making payment by the Defendants, the Applicant Bank is at liberty to sale the movable and immovable properties of the Defendants and to adjust the sale proceeds towards the amount due.
d) Issue Recovery Certificate and accordingly, parties be informed."
The objections of borrower firm against calculations had already been rejected by the Ld. Recovery Officer vide order dtd:06.01.2015. The Applicants have failed to counter such facts. Further, the bank duly disclosed recovery of Rs.9,33,031.20 Ps before issuance of Recovery Certificate to this Tribunal, so it cannot be said that bank, at any point of time, ever concealed recoveries effected during pendency of Civil Suit. Even there is reference of such recoveries in the reliefs granted by this Tribunal and if there is any dispute between bank and borrower about calculations in the Recovery Proceedings pendency under Act,1993 that cannot be adjudicated in any application filed under Section 17 of the SARFAESI Act, 2002.
27. Further in Annexure - "C" to the Demand Notice produced at page No. 35 of Securitisation Application by the Applicants themselves, bank has referred adjustment of recovery made by sale of some of the secured assets. Once bank has given such details of recovery in the Demand Notice itself, it would not be appropriate to say that bank has Page 38 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 concealed any recovery or has not given the details of recoveries made by the bank during the pendency of Recovery Proceedings before the Civil Court or before this Tribunal. So on that account, the Demand Notice is not defective at all and the observations passed by the Ld. Recovery Officer would not have any overriding effect on the Securitisation process initiated by the secured creditor after giving benefit of such details. So on that account, I find no merits in the contentions raised on behalf of Applicants.
28. It is contended on behalf of the Applicants that the bank has not complied with Rule 8(1) & 8(2) of The Security Interest (Enforcement) Rules, 2002. Bank has taken steps under Section 13(4) of the SARFAESI Act, 2002 on 16.07.2015, whereas the Applicants have filed this Securitisation Application on 24.09.2016 and there is no explanation to explain the delay in filing of this Securitisation Application and even applicants failed to file any application for condonation of delay. Once Applicants failed to explain the delay and Applicant no.1 being owner of the property, filed earlier litigation and was aware about the action of the bank and opted not to challenge the process within time and has failed to make the payment, cannot be allowed to harp upon technicalities only.
29. Although there is continuity of process, but each step has its own independent existence, importance and significance and bank/secured creditor is not bound to take all steps. The Page 39 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 secured creditor may abandon process in between in its own discretion. An aggrieved person, if opts to challenge a particular step, he can get complete relief up to that stage and once said person failed to challenge an initial step and opts to file Securitisation Application to challenge subsequent step, it is obligatory on the part of the person to explain, why he could/did not challenge earlier step and seek condonation of delay to challenge initial step also. In the absence of any such explanation, the said person has no right to challenge earlier step, as a matter of right and Tribunal would be within its jurisdiction to ignore the objections qua earlier steps, rather challenge to earlier steps at belated stage, would also Prejudice the rights of secured creditor. So the applicants would have challenged the steps of the bank at relevant time. As per the judgment of Hon'ble Supreme Court of India in the matter of M/s Hindon Forge Put. Ltd., & Anr & Ors. v/s. The State of Uttar Pradesh through Dist Magistrate Ghazibad & Anr, the Apex Court has recogruzed the right of the borrower to approach the Tribunal under Section 17 of the SARPAESI Act, 2002, even without losing possession and borrower had every right to avail efficacious remeyly under the said Act at relevant time.
Even otherwise, once Applicant no.3 received notice under Section 8(1) of The Security Interest (Enforcement) Rules, 2002 and this fact is not been denied by the Applicants, the Applicants have no right to question the validity of Rule 8(1) & 8(2) of The Security Interest (Enforcement) Rules, 2002. Further, from the date of orders passed Page 40 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 under Section 14 of the SARFAESI Act, 2002, the Securitisation Application is within time, but at the time of final arguments, Applicants have failed to point out any irregularity or illegality in the orders passed under Section 14 of the SARFAESI Act, 2002.
30. The Applicants have relied upon the pendency of one proceeding before the Hon'ble High Court of Gujarat, but Applicants have failed to place on record any stay in the present proceedings filed under Section 17 of the SARFAESI Act, 2002 by the Applicants or process initiated by the Respondent Bank under Securitisation Act. Soin my humble opinion, the contentions raised on behalf of the Applicants to avail benefit of said proceedings are not available to the Applicants.
31. It is worthwhile to mention here that the bank filed the Recovery Proceedings in the year 1986 and now we are in the year 2021. The bank made part recoveries through process of law by sale of hypothecated assets and one property situated in Vatva. The amount recovered is merger amount, as compared to total recoverable dues. On the date of issuance of Demand Notice, bank claimed Rs.27,35,85,200.62 Ps, whereas amount recovered was approximately Rs.9,33,031.20 Ps.
The Applicants made every effort to hinder the process of covery of public money. The bank has mentioned details of three assets as securities in the Demand Notice, but has proceeded against one property only. To my opinion, if bank has given details of all the securities, Page 41 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 although some of the securities had been sold earlier by the bank through process of Court and has given the credit of so recovered amount in the account of borrower in its ultimate demand made under the Demand Notice, the reference of already sold securities would not render Demand Notice defective. So on that account also, I find no merits in the Securitisation Application.
32. It is high time to curb such type of litigants, who for their benefit, give or furnish part information and conceal part information to the detriment of secured creditor and with a view to mislead the Courts. The Applicants who had filed earlier SARFAESI Act, 2002, were required to disclose all such facts regarding death of Smt.Kokilaben N. Trivedi and all other facts regarding sale of two secured assets at first available opportunity that is in the objections filed against the Demand Notice and in the earlier filed Securitisation Application, but the Applicants concealed factum of death of Smt.Kokilaben N. Trivedi for about 15 years. Non-disclosure of vital and material information and concealment of such information and case as set-up regarding recoveries made by the bank during pendency of Civil Suit by the Applicants, at the time of arguments reveals that the Applicants have not come to this Tribunal with clean hands. The initial pleadings as well as subsequent conduct during pendency of proceedings of the litigant must be fair enough to enable the justice delivery system/Courts to adjudicate matters in a judicious manner. The approach of Applicants reveals that the Applicants deliberately acted in a manner to Page 42 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 jeopardise fair adjudication of matter. Once the Applicants have not come to this Tribunal with clean hands, they are not entitled to any reliefs on merits. We can rely on the judgment of Hon'ble Supreme court in the case of V. Chandrasekaran v. Administrative Officer reported in 2012(4) R.C.R.(Civil) 588, which is fully applicable to present case. The Applicants for their such conduct are liable to pay cost.
33. Keeping in view, all such facts and circumstances, Securitisation Application is dismissed with cost of Rs.25,000/-, apart from the right of the bank to recover all expenses incurred to defend the litigation filed by the Applicants to question validity of Securitisation Process. Cost is to be deposited with National Defence Fund in the Account No. 11084239799 State Bank of India at New Delhi Main Branch (00691) and file a purshis in compliance of orders of this Tribunal within 7 days. The Respondent Bank may proceed further in accordance with law."
24. From the narration of the facts made by the DRT it is clear that the petitioner has only one goal and agenda as not to pay any single rupee after the decree passed by the DRT in the year 2000. The petitioner has remained successful for almost 21 years for not paying any amount of the outstanding dues as per the decree passed by the DRT which has achieved finality. In such circumstances, without adverting to the further facts and taking into consideration the finding of the DRT which is not under challenge and which Page 43 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022 C/SCA/2763/2017 JUDGMENT DATED: 07/10/2021 has achieved finality, the petition is dismissed with cost of Rs. 1 lakh. The amount of cost to be deposited with the Gujarat State Legal Services Authority within a period of four weeks from the date of receipt of this order.
25. Civil Applications are also dismissed in view of dismissal of Special Civil Application.
(BHARGAV D. KARIA, J) JYOTI V. JANI Page 44 of 44 Downloaded on : Sun Jan 16 22:19:36 IST 2022