Patna High Court - Orders
Mr. Rajeev Kumar Singh & Anr vs Chairman Cum Managing Director on 9 September, 2013
Author: Kishore Kumar Mandal
Bench: Kishore Kumar Mandal
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.975 of 2013
======================================================
1. Mr. Rajeev Kumar Singh S/O Surendra Prasad Singh R/O Flat No. 404,
Suryalok Apartment, Budha Colony, P.S. Budha Colony, Patna-800001
2. Smt. Arunima Kumari Singh W/O Rajeev Kumar Singh R/O Flat No.
404, Suryalok Apartment, Budha Colony, P.S. Budha Colony, Patna-
800001
3. Mr. Anupam Raj Kumar S/O Late Ram Bahadur Singh R/O Flat No. 404,
Suryalok Apartment, Budha Colony, P.S. Budha Colony, Patna-800001
.... .... Petitioner/s
Versus
1. Chairman Cum Managing Director Indian Bank, Corporate Office, P.B.
No. 5555, 254-60, Awai Shanmugam Salai, Royapattah, Chennai- 600014
2. Authorized Officer Indian Bank, Zonal Office, Govind Bhawan, 1st
Floor, New Dak Bunglow Road, Patna-800001
3. Presiding Officer, Debt Recovery Tribunal 34, Bank Road, Opp. New
Police Line, Lodhipur, Patna-800001
.... .... Respondent/s
======================================================
with
Civil Writ Jurisdiction Case No.3705 of 2013
======================================================
1. Mr. Rajeev Kumar Singh S/O Surendra Prasad Singh R/O Flat No. 404,
Suryalok Apartment, Budha Colony, P.S. Budha Colony, Patna - 800001
2. Smt. Arunima Kumari Singh W/O Rajeev Kumar Singh R/O Flat No.
404, Suryalok Apartment, Budha Colony, P.S. Budha Colony, Patna -
800001
.... .... Petitioner/s
Versus
1. Chairman Cum Managing Director, Indian Bank, Corporate Office, P.B.
No. 5555, 254-60, Awai Shanmugam Salai, Royapattah, Chennai - 600014
2. Authorized Officer, Indian Bank, Zonal Office, Govind Bhawan, 1st
Floor, New Dak Bunglow Road, Patna - 800001
3. Presiding Officer, Debt Recovery Tribunal, 34, Bank Road, Opp. New
Police Line, Lodipur, Patna - 800001
.... .... Respondent/s
======================================================
with
Civil Writ Jurisdiction Case No.1749 of 2013
======================================================
1. Mr. Rajeev Kumar Singh S/O Surendra Prasad Singh R/O Flat No. 404,
Suryalok Apartment, Budha Colony, P.S. Budha Colony, Patna-800001
2. Smt. Arunima Kumari Singh W/O Rajeev Kumar Singh R/O Flat No.
404, Suryalok Apartment, Budha Colony, P.S. Budha Colony, Patna-
800001
3. Mr. Anupam Raj Kumar S/O Late Ram Bahadur Singh R/O Flat No. 404,
Suryalok Apartment, Budha Colony, P.S.- Budha Colony, Patna-800001
Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 2
.... .... Petitioner/s
Versus
1. Chairman-Cum-Managing Director, Indian Bank Corporate Office, P.B.
No. 5555, 254-60, Awai Shanmugam Salai, Royapattah, Chennai- 600014
2. Asst. General Manager Indian Bank, Biscomaun Bhawan, West Gandhi
Maidan, Patna-800001
3. Presiding Officer, Debt Recovery Tribunal 34, Bank Road, Opp. New
Police Line, Lodhipur, Patna-800001
.... .... Respondent/s
======================================================
Appearance :
(In CWJC No.975 of 2013)
For the Petitioner/s : Mr. Arbind Kumar Jha
For the Respondent/s : Mr. Dr. Binay Kumar Singh
(In CWJC No.3705 of 2013)
For the Petitioner/s : Mr. Arbind Kumar Jha
For the Respondent/s : Mr. Dr. Binay Kumar Singh
(In CWJC No.1749 of 2013)
For the Petitioner/s : Mr. Arbind Kumar Jha
For the Respondent/s : Mr. Dr. Binay Kumar Singh
======================================================
CORAM: HONOURABLE MR. JUSTICE KISHORE KUMAR
MANDAL
ORAL ORDER
5 09-09-2013In these writ petitions the petitioners raise an issue with respect to the action/steps taken by the respondent- Indian Bank ( for short „Bank‟) for realization of the loan amount obtained by the petitioner no.1 for which the petitioner nos. 2 and 3 stood as guarantors and created equitable mortgage to secure the credit facility granted by the secured creditor i.e. the respondent- Bank. These applications have, therefore, been heard together with the consent of the parties. The order present shall govern them.
Reliefs :
Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 3
In CWJC No. 975 of 2013 the petitioners have prayed for issuance of appropriate writ(s)/order(s) for quashing the order dated 07.12.12 (Annexure-19) passed by the Debts Recovery Tribunal ( for short „Tribunal‟) whereby the order dated 29.2.12 passed in S.A. No. 35 of 2012 was recalled. The petitioners also pray for issuance of appropriate order/direction restraining the respondent Tribunal from proceeding further in the aforesaid matter and to give effect to the order dated 29.2.2012 (Annexure-
14) passed in SA 35 of 2012.
In CWJC No. 3705 of 2013 the petitioner no.1 is borrower who had obtained loan from the respondent Bank for which the petitioner no. 2 created equitable mortgage for grant of credit facility by the secured creditor i.e. the respondent Bank. The writ petition has been filed seeking a direction upon the respondent Tribunal to give effect to orders dated 13.12.2012 (Annexure 17A) passed by the Tribunal in SA No. 35 of 2012 whereby the Tribunal observed that the order dated 29.2.2012 (Annexure 12) passed in SA No. 35 of 2012 required to be recalled permitting the parties to advance arguments afresh. The petitioners have also prayed for a direction restraining the respondent to proceed with the sale of the properties mortgaged with the respondent Bank in pursuance of the order dated Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 4 11.1.2013 (Annexure-18).
In CWJC No. 1749 of 2013 the petitioners have prayed for issuance of appropriate writ(s) for quashing the ex parte judgment dated 30-07-2012 passed by the Tribunal in O.A. No. 31 of 2012 for payment of the loan amount quantified therein. Such prayer has been made on the ground that the petitioners had paid the entire dues of the respondent Bank in the light of order passed in S.A. No. 35 of 2012. The petitioners have also prayed for declaring the entire proceeding of O.A. No. 31 of 2012 initiated under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 ( for short „DRT Act, 1993‟) without jurisdiction as held by this Court in CWJC No. 8746 of 2012 in the case of M/S Purnea Cold Storage vs. State Bank of India & Anr. The petitioners have also prayed for consequential relief(s).
For the sake of brevity relevant facts shall be drawn from CWJC No. 975 of 2013.
The petitioner no.1 applied for loan for his building construction business. The petitioner nos. 2 and 3 stood as guarantors and created equitable mortgaged to secure the loan/credit facility. The respondent Bank sanctioned the credit facility in the sum of Rs. 44 lacs against the properties mortgaged Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 5 by the guarantors. The borrower for diverse reasons defaulted in paying off the dues/loan and the account became non operational between the period 22.11.2009 to 12.2.2010. The petitioner applied for regularizing the loan/credit account which was considered and rejected by the respondent Bank. The borrowers account having become irregular was classified as non performing assets (NPA) whereafter the respondent Bank initiated proceedings for recovery of loan/dues inasmuch as a notice under Section 13(2) of the Securitization & Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 ( for short „SARFAESI Act‟) was issued for realization of a sum of Rs. 82,55,889/- . The petitioner filed his response to the said notice vide letter dated 27.12.2010 and requested the respondent Bank to regularize the account in terms of guidelines /circulars issued by the Reserve Bank of India. The guarantor in the meanwhile also submitted an application with the respondent Bank that he was ready to get the account regularized by paying the principal and the interest for the period subject to approval. The respondent Bank by a communication dated 29.12.2010 addressed to the borrower refused to regularize the account. The matter was thereafter ventilated before the Ministry of Finance, Govt. of India by the petitioners. Since the petitioners failed to pay off the Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 6 dues of the respondent Bank the authorized officers of the respondent Bank came out with possession notice on 23.2.2011 in accordance with the SARFAESI Act and the Rules framed thereunder in respect of the mortgaged land/property. As per pleadings, during the course of the aforesaid proceeding, there was an agreement reached by and between the parties to pay Rs. 1.25 lacs every month from April 2011 besides deposit of a sum of Rs. 10 lacs in the month of March, 2011. In the light of the said agreement, the respondent Bank issued a communication dated 26.3.2011 to the borrower whereby 06 months time was allowed to repay the total dues of the respondent Bank and close the account. On acknowledging the aforesaid terms by the borrower the respondent Bank agreed to cancel the auction sale of the mortgaged property/land which was fixed on 28.3.2011. The petitioner/borrower deposited Rs. 10 lacs in March and thereafter paid different amounts ranging between 25,000/- to Rs. 1.25000/- between the period 13.4.2011 to 2.12.2011. The petitioner/borrower, thus, claims to have paid a total sum of Rs. 54,09,541/- to the respondent Bank for regularization of the account. In the meanwhile, the respondent Bank again came out with a sale notice dated 31.1.2012 for realization of the dues in the sum of Rs. 82,55,889/-. Aggrieved by the aforesaid sale notice Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 7 dated 31.1.12 the petitioners filed an application under Section 17 of the SARFAESI Act challenging the course taken by the secured creditor as also the notice published by the authorized officers of the respondent Bank under Section 13(4) of the SARFAESI Act. The Tribunal by an order dated 29.2.12 (Annexure 14) passed the following order:-
" Parties have given reply, accordingly Annexure 7 how the NPA the account should be converted to standard account. Bank has not considered prayer of the SARFAESI applicant in this regard. The counsel for Indian bank submitted that loan sanctioned was made for only one year, as per SARFAESI applicant‟s request, 6 month time was allowed and but same amount have been deposited by SARFAESI applicant.
The outstanding dues is more than 56,34,541/- at present if the borrower pay 25 lacs before 2nd March 2012 and rest amount be paid within 4 month in equal instalment.
If it is not paid, the entire compromise failed, it is made clear that if borrower arrange a intending purchaser who will deposit the amount before the bank, after full payment of bank dues. The intending purchaser will get registration of above property. SARFAESI applicant will bear only minimum SARFAESI cost and Advocate fees 15000 and cost of paper publication on supply of proper receipts.
Accordingly, the S.A stands disposed off. A copy of this order be given to the parties."
The petitioners having failed to comply with the said order approached the Tribunal and filed MA No. 256 of 2012 Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 8 seeking modification of the order dated 29.2.12 by extending the time for payment of the dues of the respondent Bank which was disposed of by order dated 10-7-12 (Annexure-15). The said order reads thus:-
" On mention, the matter has been taken up. Ld. Counsel for both sides are present.
Heard the parties. In order dated 29.2.2012 passed in SA 35 of 2012, it has been ordered that the outstanding dues is more than Rs. 56,34,541/- at present and the applicant was to pay Rs. 25 lacs before 2 nd March, 2012 and rest amount within 4 months i.e. upto 2nd July 2012 in equal instalment and in compliance, the applicant has already deposited Rs. 25 lacs [ as disclosed at para 10 of MA], but the applicant could not deposit the rest amount. Today, the applicant has come with a draft of Rs. 32 lacs and requested to direct the respondent bank to accept the same. Ld. Counsel for respondent bank has vehemently opposed.
Looking to the facts and circumstances of the case, the applicant is directed to deposit the draft before the bank by tomorrow along with this order and also he shall deposit minimum SARFAESI cost and Advocate fee of Rs. 15,000/- with the bank on production of calculation by the bank. It is made clear that both the above noted amount shall be deposited by the applicant by tomorrow. After depositing the said amount, the applicant is entitled to obtain their security documents from the bank and accordingly, the bank shall supply the same within 7 days thereafter.
Accordingly, this MA stands disposed off.
A copy of this order be given to the parties."Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 9
It is the case of the petitioners that having paid the outstanding dues of the respondent Bank, the petitioners approached the Tribunal for release of the security documents. The same was vehemently objected by the respondent Bank. Having found that the respondent Bank was not agreeable to the order dated 29.2.12, the Tribunal by order dated 6.8.12 (Annexure-16) directed the respondent Bank to refund the entire amount paid by the borrower forthwith. The Misc. Application (MA No. 324 of 2012) was, accordingly, disposed of. The Tribunal, in the said order, observed as under:-
" Heard the ld. Counsels for both sides. Looking to the circumstances of the case, the respondent bank is directed to return all the amounts deposited with intervention of the Court, to the applicant by tomorrow. Accordingly, this MA stands disposed off. A copy of this order be served upon both the parties."
The respondent Bank refunded the entire amount paid by the borrower by a bank draft dated 1.9.12 for a sum of Rs. 58,70,692/-. In the meantime, the respondent Bank approached the Tribunal invoking its jurisdiction under the DRT Act, 1993 and filed OA No. 31 of 2012 on 22.12.2011 for recovery of its debt from the defendants (the borrower) to the tune of Rs. 77,61,607/- (up to 20-12-2011) along with satellite relief(s). The respondent Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 10 Bank also filed a writ petition vide CWJC No. 15753 of 2012 seeking diverse relief(s) including quashing of order dated 29.2.2012 passed by the Tribunal in SA No. 35 of 2012 and subsequent orders dated 10-07-2012 passed in M.A. No. 256 of 2012, order dated 26.7.12 passed in MA No. 304 of 2012, order dated 6.8.12 passed in MA No. 324 of 2012 and order dated 7.8.12 passed in MA No. 334 of 2012. The respondent Bank also prayed for a direction commanding the respondent borrower to make payment of the outstanding dues in terms of judgment and certificate dated 30-07-2012 passed by the Tribunal in OA No. 31 of 2012. Be it noted that the Tribunal in the proceeding initiated by the respondent Bank under DRT Act,1993 vide OA N. 31 of 2012 after taking steps for service of notice on the defendant (borrower) disposed of the said OA No. 31 of 2012 by its judgment dated 30-7-12 (Annexure 16 to CWJC No. 1749 of 2013 ) whereby the Tribunal allowed the said OA No. 31 of 2012 ex parte certifying therein that the respondent Bank (the applicant) was entitled to receive from the defendant the loan and interest amounting to Rs. 77,61,607/- up to 20/12/2011 along with pendente lite and future interest till realization of entire sum due and recoverable. The writ petition filed by the respondent Bank came up for consideration on 13.9.12 (Annexure 14) when Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 11 the same was dismissed as withdrawn on the submission of the respondent Bank that writ petition had become infructuous. It is further the petitioners case that MA No. 440 of 2012 was filed by the petitioners before the Tribunal in SA No. 35 of 2012 for compliance of order dated 29.2.12. The Tribunal vide order dated 5.10.12 (Annexure-15) directed presence of the Chief General Manager of the respondent Bank on 11.10.12 and to explain why the order dated 29.2.12 had not been complied with. The said application came up for consideration on 7.12.12 when, after hearing both sides, the MA 440 of 2012 was disposed of whereby the order dated 29.2.12 passed in SA No. 35 of 2012 was recalled. Both the parties were permitted to argue the case afresh.. The said SA No 35 of 2012 was considered on 13.12.12. The Tribunal by order dated 13.12.12 ( Annexure 17-A to CWJC No. 3705 of 2013) having noticed the salient features of the case again held that the order dated 29.2.12 was required to be recalled for hearing the matter afresh. The said order reads thus:-
"Both sides are present.
In this case, earlier order dated 29.2.2012 was recalled vide order dated 7.12.2012 passed in MA 440/2012 as because as per the several directions given by the Tribunal, the S. applicant deposited the amount as settled vide order dated 29.2.2012, but the same was deposited by the applicant after due date and after depositing the amount, the bank did not Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 12 release the original documents. Thereafter, the bank insisted for more amount than the settled as the valuation of the mortgaged property is more than the settled amount.
By filing the misc. application, the applicant took extension of time to pay the amount and thereafter he has also filed another MA to return back the amount from the bank and at the request of the applicant [borrower] the amount deposited by him was returned to him. The applicant has filed several MAs i.e. MA 256/2012, 304/2012,324/2012, 362/2012 by which he has prayed for extension of time etc. & for other prayers.
Hence, the order dated 29.2.2012 was required to be recalled and arguments in SA requires afresh. Hence, this SA is listed for today.
And, ld. Counsel for bank has filed reply and wants time to file a petition to recall the order dated 29.2.2012 passed in SA 35 of 2012. Time is allowed and he may file the same. Let the case be put up on 7.1.2013. A copy of this order be given to the parties."
The petitioners instead of making submissions on the merit of the application ( SA No. 35 of 2012) filed an application on 9.1.13 praying therein that hearing of SA No. 35 of 2012 be kept in abeyance till disposal of the writ petition. Be it again noted here that the writ petition filed by the respondent Bank ( CWJC No. 15753 of 2012) had already been disposed of on 13.9.12. The respondent Tribunal fixed 11-1-2013 for consideration of SA No. 35 of 2012. By order dated 11.1.2013 Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 13 (Annexure 18 to CWJC No. 3705 of 2013) the Tribunal directed the respondent Bank to clarify on certain aspects/issue(s) raised by the applicant. It was, however, clarified therein that in the meanwhile the respondent Bank may proceed in accordance with law. The respondent Bank came out with another sale notice dated 2.2.13 ( Annexure 19 of CWJC No. 3705 of 2013) for realization of the dues in the sum of Rs. 93,95,594.99/-. The petitioners have filed the present batch of writ petitions for the relief(s) as noticed hereinabove.
Heard Sri Arbind Kumar Jha, learned counsel for the petitioners in all the three writ petitions and Mr. Anshay Bahadur Mathur for the respondent Bank. Parties have exchanged pleadings.
Learned counsel for the petitioner(s) appearing in support of CWJC No. 975 of 2013 and CWJC No. 1749 of 2013 submitted that the calculation of interest on the dues made by the respondent Bank is incorrect. Once the appeal under Section 17(2) of the SARFAESI Act was filed it rests with the jurisdiction of the Tribunal to consider the interest payable by the borrower. It has next been contended that while quantifying the outstanding dues payable by the borrower to the respondent Bank the relevant circular/guidelines issued by the Reserve Bank of India Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 14 have not been adhered to in the light of the ratio laid down by the Hon‟ble Apex Court in the case of Mardia Chemicals Ltd. & Ors. vs. Union of India & Ors. since reported in (2004)4 SCC
311. Mr. Jha also raised certain issues with respect to the jurisdiction of the Tribunal in adjudicating the appeal preferred by the aggrieved borrower. It has also been submitted that the Tribunal was vested with ample jurisdiction to reduce/waive interest. It has next been submitted that the Tribunal possesses adequate power/jurisdiction to execute its own order. The next contention on which much stress has been laid by the petitioner(s) is that the Tribunal being a creature of the statute is not vested with power of review under the SARFAESI Act. If there is no power of review with the Tribunal, then the order passed by the Tribunal recalling the order dated 29.2.12 is wholly without jurisdiction. He has relied in this regard in the case of Kalabharati Advertising vs. Hemant Vimalnath NariChania & Ors since reported in (2010) 9 SCC 437. It has been submitted that similar issue in the context of Consumer Protection Act, 1986 fell for consideration before the Apex Court in Rajeev Hitendra Pathak & Ors. vs. Achyut Kashinath Karekar & Anr. since reported in (2011)9 SCC 541 when the Apex Court held that Tribunals are creatures of the Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 15 statute. The District Forums and the State Commission(s) have not been given any power to set aside the ex parte orders and the power of review having not been expressly conferred by the Statute cannot be exercised. The order dated 7.12.12 passed in MA No. 440 of 2012 has also been challenged on the ground that once the appeal was disposed of on 29.2.12 there was no occasion for the Tribunal to pass the said order dated 7.12.12 inasmuch as no appeal under Section 18 of the SARFAESI Act would lie against the said order dated 7.12.12 and as such the petitioners have invoked the writ jurisdiction of this Court. It has next been argued that that the order dated 29.2.12 passed in SA No. 35 of 2012 merits no interference when no such relief was granted to the respondent Bank in the writ petition. Mr. Jha further contended that even if it is assumed that order dated 29.2.12 is not an order passed in accordance with the provisions of the SARFAESI Act and/or passed in a wholly irregular manner the same was required to be challenged for setting it aside. In fact, the respondent Bank had challenged the said order dated 29.2.12 in CWJC No. 15753 of 2012 which was dismissed as withdrawn as having become infructuous. Mr. Jha making submissions in support of CWJC No. 1749 of 2013 submitted that the said order was passed without serving notice thereof to the Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 16 petitioner(s). The judgment dated 30-7-12 itself declares it to be ex parte. It has next been submitted that while passing the aforesaid judgment dated 30-7-12 the respondent Tribunal did not take into account that major part/portion of the dues had already been paid to the respondent Bank, and as such, interest thereon cannot be directed to be paid to the respondent Bank. He, however, fairly submits that there is/are adequate provision(s) under the Act for setting aside the ex parte judgment, and as such, the petitioners shall invoke the relevant provisions of the DRT Act,1993 for setting aside the ex-parte judgment and/or assail the same before the appellate authority in accordance with law.
Mr. Mathur, learned counsel for the respondents, per contra, submitted that the petitioner(s) are invoking extraordinary and discretionary writ jurisdiction of this Court. The petitioner are, therefore, obliged to demonstrate that the order dated 29.2.12 passed by the Tribunal in SA No. 35 of 2012 was an order passed in accordance with law. If the answer is in negative then this Court would not invoke its power of judicial review to interfere with the order passed by the Tribunal recalling the order dated 29.2.12 and thereby providing the parties opportunity to make submissions on the merit of the appeal afresh which is not going Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 17 to prejudice the petitioners in any manner. If quashing of the subsequent order restoring SA No. 35 of 2012 for fresh consideration revives an order which is wholly without jurisdiction then even if the petitioners are able to make out a case this Court shall be justified in declining invocation of its writ jurisdiction to set aside the impugned order(s). Mr. Mathur further submitted that the account of the petitioners became irregular and was classified by the respondent Bank as NPA. A notice under Section 13(2) of the SARFAESI Act was given to the petitioners for an outstanding loan amount of Rs. 82,55,889/- (Annexure 5 to CWJC No. 3705 of 2013). It was followed by a possession notice issued on 23.2.2011 under Section 13(4) of the SARFAESI Act ( Annexure -9 of CWJC No. 3705 of 2013). The borrower ( petitioner no.1) approached the respondent Bank on 6.3.2011 and offered to make payment of Rs. 10 lacs within ten days and requested for upgrading/regularizing the account again for a further period of 6 to 12 months. The borrower agreed to pay a minimum 1.25 lac every month. The respondent Bank by communication dated 26.3.2011 (Annexure B to the Counter affidavit) granted six months time to the petitioners to repay the total dues and close the account. Till the account was closed the petitioners were directed to pay Rs. 1.25 lacs every month Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 18 towards interest. The petitioner acknowledged receipt of the said letter . Having found that the petitioners had defaulted in paying off the entire dues within the aforesaid time a public auction sale notice dated 30-1-12 was published by the Bank for recovery of the dues amounting to Rs. 82,55,889/- ( Annexure 11 of CWJC No. 3705 of 2013). The petitioner/borrower aggrieved thereby filed SA No. 35 of 2012 praying therein that the said notice be declared as illegal/void and the respondent Bank be directed to explain reasons for not adhering to the request of the borrower for regularizing the account and not converting the substandard account of the borrower /petitioner no.1 to standard account as per RBI circular/guidelines. The Tribunal without affording any opportunity to the Bank suo motu decided the amount of outstanding dues as more than Rs. 56,34,541/- and directed the borrower to bear only SARFAESI cost and advocate fees of Rs. 15,000/- and also cost of paper publication little realizing that in the sale notice dated 30-1-12 the total dues recoverable was Rs. 82,56,889/-. The Tribunal while passing the order dated 29.2.12 did not record the objection raised by the Bank with regard to waiving of the interest inasmuch as no reasons have also been recorded therefor. The borrower/applicant thereafter filed MA No. 256 of 2012 in the said proceeding seeking extension of time Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 19 for payment of the said amount as they had failed to comply with the order dated 29.2.12. The Bank vehemently opposed the settlement of outstanding dues without the consent of the Bank and sought adjudication of the case on merit. Recording the said objection the Tribunal by order dated 10-7-12 extended the time for payment of the dues quantified in order dated 29-2-12 and directed the Bank to release the security documents of the mortgaged property. The borrower/applicant again filed MA No. 304 of 2012 for release of the security documents of the mortgaged property which was again objected by the respondent Bank stating therein that the Tribunal had not adjudicated on the claim of the parties inasmuch as no contractual rate of interest was directed to be paid. On such objection the Tribunal by order dated 26.7.12 ( Annexure H of the counter affidavit in CWJC No. 3705 of 2013) directed the applicant/borrower to pay a lump sum amount of Rs. 50,000/- towards interest to the respondent Bank whereafter the respondent Bank was directed to release the documents. The respondent Bank filed OA No. 31 of 2012 under the DRT Act,1993 for realization of the dues for which notice under Section 13(4) of the Act was published under the SARFAESI Act. After taking steps for service of notice of the said application on the defendant/borrower the Tribunal by Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 20 judgment and certificate dated 30-7-12 accepted and allowed the prayer made in the original application filed by the respondent Bank and determined the outstanding dues in the sum of Rs. 77,61,607/- which was directed to be paid with satellite relief(s). The borrower showing his ignorance to the said judgment dated 30-7-12 passed in OA No. 31 of 2012 approached the Tribunal in SA No. 35 of 2012 by filing MA No. 324 of 2012 for release of security documents. The same was contested by the respondent Bank stating therein that the Tribunal under the DRT Act,1993 has already passed a judgment on 30-7-12 for recovery of the sum of Rs. 77,61,607/- with pendente lite and future interest from the borrower/applicant. Having heard the parties the respondent Tribunal by order dated 6.8.12 observed that if the Bank is not satisfied with the deposits/payments already made by the petitioners then the entire amount deposited by the petitioners shall be returned by the Bank forthwith to the applicant. The said order was passed in the light of the stand taken in this regard by the applicants/petitioners also. The respondent Bank accepted the aforesaid order and took steps for refund of the amount paid by the petitioners. Since approval in this regard was required to be taken from the head office an application vide MA No. 334 of 2012 was filed seeking extension of few days time for refund of Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 21 the entire amount paid by the petitioners/applicants in the light of order dated 29.2.12 passed in SA No. 35 of 2012 and the subsequent orders. After hearing the parties the Tribunal by order dated 7.8.12 directed the Bank to refund the said amount within ten days. In view of the aforesaid, the respondent Bank vide MA No. 355 of 2012 approached the Tribunal for staying the operation of orders dated 29.2.12 and the subsequent orders dated 10-7-12, 26.7.12 and 6.8.12 until disposal of CWJC No. 15753 of 2012. The borrower/applicant filed MA No. 362 of 2012 for initiating a proceeding for contempt since the respondent Bank had not paid the entire amount of the petitioner/borrower as per order passed by the Tribunal. The Tribunal disposed of the said MA No. 362 of 2012 directing the respondent Bank to return/refund the entire amount paid by the borrower/petitioner(s) on or before 1.9.12. By a common order dated 3.9.12 ( Annexure M to the counter affidavit) the Tribunal disposed of MA No. 362 of 2012 and MA No. 355 of 2012 since the full amount of Rs. 58,70,692/- received by the Bank from the borrower due to intervention of the Tribunal was paid to and received by the borrower by a demand draft dated 1.9.12 payable at Patna. The Tribunal, in these factual background, by order dated 3.9.12 held that the orders passed in MAs as well as the order dated 29.2.12 Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 22 passed in SA No. 35 of 2012 are recalled. The respondent Bank had already filed a writ petition aggrieved by the order(s) passed by the Tribunal including the order dated 29.2.12 passed in SA No. 35 of 2012. In the meanwhile, the Tribunal passed the order dated 3.9.12 recalling all its order passed in MA(s) inasmuch as order dated 29.2.12 passed in SA was modified and the matter was directed to be placed for fresh consideration on merit. The writ petition was disposed of as having become infructuous by order dated 13.9.12. Having returned the full amount received by the respondent Bank due to intervention of the Court a fresh sale notice was published by the Bank for recovery of the dues amounting to Rs. 82,55,889/- only. The petitioners did not challenge the order dated 3.9.12 passed by the Tribunal in SA No. 35 of 2012 but again filed MA No. 440 of 2012 in SA No. 35 of 2012 seeking implementation of the order of the Tribunal dated 29.2.12 passed in SA No. 35 of 2012 and in case of non implementation of the said order to punish the concerned authorities of the respondent Bank for wilful/ deliberate violation of the said order. The sale notice dated 22.9.12 was also sought to be declared as nullity. The Tribunal without hearing the respondents Bank by order dated 5.10.12 called upon the Chief General Manager of the respondent Bank to present himself Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 23 before the Tribunal on 11.10.11. The respondent Bank in the meanwhile filed a reply affidavit to the said MA No. 440 of 2012 placing on record the diverse orders passed by the Tribunal including the order dated 3.9.12 whereby all previous orders passed in the said proceeding were recalled which had remained unchallenged by the petitioners/borrowers. Having considered the said fact and the previous order the Tribunal by order dated 7.12.12 recalled the order dated 29.2.12 and directed SA no. 35 of 2012 for fresh hearing. It has, thus, been submitted that from the conduct of the parties and the previous orders passed by the Tribunal it would appear that the order dated 29.2.12 had already been nullified by the Tribunal which was duly accepted by the petitioners. Combating the submissions made by the petitioners that the Tribunal has no such power of review vested in it under the SARFAESI Act it has been submitted that all the orders passed under Section 17 of the SARFAESI Act ( read with Rule 18 of the Debts Recovery Tribunal (Procedure) Rules 1993 read with Section 17(7) of the SARFAESI Act) is/are appealable before the appellate authority/Tribunal under Section 18 of the Act. Relying on ratio laid down by the Apex Court in the case of United Bank of India vs. Satyawati Tondon & Ors. AIR 2010 SC 3413 it has been submitted that this Court would not invoke its Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 24 discretionary writ jurisdiction ignoring the statutory remedy available to the aggrieved party against any order passed under Section 17 of the Act. He submits in the same vein that under section 22(3) of the DRT Act any proceeding before the Tribunal shall be deemed to be a judicial proceeding and as such any writ application under Article 226 without invoking Article 227 shall not be maintainable against the orders of the Tribunal in which financial transaction and public money is involved. Referring to Section 17(7) of the SARFAESI Act it has next been submitted that the Tribunal under the Act is required to dispose of the application in accordance with the provisions of the DRT Act 1993 and the Rules framed thereunder. Referring to the Rules framed under the DRT Act called the Debts Recovery Tribunal (Procedure) Rules, 1993 it has been submitted that the Tribunal is competent to pass orders as deemed necessary or expedient to give effect to its orders or to prevent abuse of its process or to secure the ends of justice. Rule 5A of the said Rules provides for review of an order made by the Tribunal on account of some mistake/error apparent on the face of the record. One of the reasons obviously would be to prevent abuse of its process or to secure the ends of justice. By the conduct of the petitioners it would appear that the order dated 29.2.12 passed in SA 35 of Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 25 2012 had already been modified/recalled and the petitioners acquiesced in it. Even otherwise the restoration of SA No. 35 of 2012 for hearing afresh is not liable to be interfered with since the same is not going to prejudice any party.
On a consideration of rival submissions made by the parties it appear the main grievance of the petitioners in CWJC No. 975 of 2013 and 3705 of 2013 is that the Tribunal having disposed of the matter on 29.2.12 had become functus officio. The said order could not have been reviewed and/or recalled by the Tribunal in absence of any jurisdiction in this behalf conferred on the Tribunal under the SARFAESI Act. The said appeal was filed by the petitioners aggrieved by the issuance of public auction sale notice dated 30-1-12 for recovery of dues amounting to Rs. 82,55,889/-. The petitioners prayed for regularizing the account in the light of circular/guidelines issued by the Reserve Bank of India. The Tribunal, having noticed the stand of the respondent Bank that the outstanding dues was more than 56,34,541/- held that a compromise was entered between the parties and the dues were to be paid in instalments within a specified period. What shall be the due amount payable by the borrower to the respondent Bank was, however, not adjudicated/quantified. It is to be noted here that the respondent Bank had taken steps under section 13(4) Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 26 of the SARFAESI Act for realization of a sum of Rs. 82,55,889/-. Once an appeal is filed by the borrower the Tribunal is required to examine the entire facts and circumstances and the evidence produced by the parties with regard to the sustainability of the action taken by the respondent Bank under section 13(4) of the SARFAESI Act. On perusal of the order dated 29.2.12 (Annexure-
14) this Court does not find that any such consideration of the matter was made by the Tribunal. On the contrary, without quantifying the actual amount payable by the applicant/borrower to the respondent Bank the Tribunal held that the outstanding dues being more than 56,34,541/- shall be paid in instalments as per compromise/agreement reached by the parties. It has been vehemently contended on behalf of the respondent Bank that no such compromise was reached by and between the parties inasmuch as no application to that effect was filed. It further appears that at the instance of the petitioners the Tribunal by order dated 10-7-12 (Annexure-15) passed in MA No. 256 of 2012 arising out of SA No. 35 of 2012 extended the time for depositing the amount as per order dated 29.2.12. In the said order it has been noticed that the outstanding dues of the respondent Bank was more than Rs. 56,34,541/-. Yet another Misc. application being MA 324 of 2012 was filed by the petitioners praying therein that Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 27 the order dated 29-2-2012 if not acceptable to the respondent Bank then the respondent Tribunal should direct the respondent Bank to refund the entire amount. By order dated 6.8.12 the Tribunal allowed the said prayer and directed the respondent Bank to return the entire amount deposited with the respondent Bank by the petitioners. It appears in the meanwhile the respondent Bank had already filed a writ petition in this Court challenging the order dated 29.2.12 passed by the Tribunal in SA 35 of 2012. In the meantime, the petitioners filed another Misc. application being M.A. 440 of 2012 for implementation of the order dated 29.2.12. It appears the writ petition in the meanwhile was disposed of as having become infructuous on 13.9.12. The said Misc. application was considered on 7.12.12 in presence of the parties when the Tribunal considering the fact that the order dated 29.2.12 was not acceptable to the respondent Bank on diverse counts and the fact that the petitioners having appreciated the objection raised by the respondent Bank also prayed for refund of the entire amount deposited with the respondent Bank which was already refunded by the Bank considered it expedient to recall the order dated 29.2.12 and thereby providing the parties a fresh opportunity to make submissions for disposal of SA 35 of 2012. From diverse orders placed before this Court passed Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 28 by the Tribunal in SA 35 of 2012 and the Misc. Applications filed therein by the petitioners it appears that the respondent Bank had not entered into any compromise accepting 56,34,541 as the due amount. The same was, however, treated to be the agreed amount although the Tribunal in doing so, recorded that the outstanding dues of the respondent Bank on the relevant day was more than 56,34,541/-. The petitioners, by their conduct, also accepted recall of the order dated 29.2.12. Whether an application to that effect was filed or not, in the facts and circumstances of the case, would delve into irrelevance if from the conduct of the parties it appears that they agreed to recall of the order dated 29.2.2012 and thereby to proceed with disposal of the appeal on merit after affording opportunity of hearing to both the parties. The said order of the Tribunal dated 7.12.12 (Annexure 19) is, therefore not going to prejudice the petitioners in any manner. The contention of the petitioners is that no such jurisdiction to review and/or recall the order passed by it is vested in the Tribunal.
Section 17(7) of the SARFAESI Act provides that the Tribunal shall, as far as may be, dispose of the application in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and the Rules made thereunder. Rules have been framed under the DRT Act, 1993 called the Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 29 Debts Recovery Tribunal ( Procedure ) Rules. Rule 5A provides for review of the order made by the Tribunal on account of some mistake/ apparent on the face of the record. Rule 18 thereof adequately vests the Tribunal with the power to make such orders and give such directions as may be necessary or expedient to give effect to its orders or to prevent abuse of its process or to secure the ends of justice. The Tribunal, while dealing with the appeal preferred under the SARFAESI Act, therefore, can pass appropriate orders as deemed fit to secure ends of justice and/or to prevent abuse of its process. In the case at hand, on perusal of the diverse orders passed by the Tribunal in SA 35 of 2012 including the order dated 29.2.12 passed therein it appears the consideration which was required to be bestowed by the Tribunal for disposal of the appeal filed under Section 17 of the Act was not made inasmuch as the outstanding dues of the respondent Bank was not considered in the light of the facts appearing from the record and ascertained before disposing of the matter by order dated 29.2.12 which was subsequently again modified by the Tribunal at the instance of the petitioners. Considering the consistent vehement objection raised by the respondent Bank the petitioners themselves filed a Misc. Application seeking a direction upon the respondent Bank to refund the amount Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 30 deposited with the Bank in the light of the order dated 29.2.12 which was acceded to by the Tribunal. In other words, the petitioners also accepted the mistake committed by the Tribunal apparent on the face of the record and acceded to re-hearing of SA 35 of 2012 on merit. By subsequent order the Tribunal passed an order to that effect whereby the order dated 29.2.2012 was recalled and SA 35 of 2012 was restored for fresh disposal. Whether any application for the same was filed and/or any fee required therefor was paid by the respondent Bank, in my view, becomes irrelevant. These are matters pertaining to procedure only. This Court is, therefore, of the view that for non filing of an application and depositing any fee required therefor would not make the order impugned in the application patently illegal meriting interference on this count alone. I have already noticed the relevant provisions which enables the Tribunal to make appropriate orders to prevent abuse of its process and/or to secure ends of justice. The ends of justice shall be sub served if the parties are given liberty to argue the case on merit afresh which will obviously prejudice none. If that is the case then, this Court would not invoke its discretionary writ jurisdiction to interfere with the order passed by the Tribunal by which the order dated 29.2.12 was recalled only after ensuring refund of the entire Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 31 amount deposited by the petitioners by the respondent Bank in the light of order dated 29.2.12.
The petitioners have raised an issue with regard to the order dated 13.9.12 passed in CWJC No. 15753 of 2012. It is stated that by the said order this Court had confirmed the order dated 29.2.12 which was also under challenge. In my view, the said submissions of the petitioners is not well founded. By the time the writ petition came up for consideration, the Tribunal had already recalled its order. It further appears that the respondent Bank in the meanwhile had also invoked the jurisdiction of the Tribunal under the DRT Act, 1993 by filing O.A 31 of 2012 in which the Tribunal passed the judgment on 30-7-12 whereby the dues payable by the petitioners to the respondent Bank was quantified at Rs. 77,61,607/- as on the date of filing of the O.A. In that view of the matter the writ petitioner (respondent bank) sought permission to withdraw the writ petition as having become infructuous.
The matter can be viewed from different angle also. The order dated 29.2.12 passed by the Tribunal in SA 35 of 2012 does not conform to the requirements of law as contained in diverse provisions of Section 17 of the SARFAESI Act. Recording the objection of the respondent Bank that the Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 32 outstanding dues was more than 56 lacs and odd the Tribunal without quantifying the actual dues payable by the borrower to the respondent Bank directed payment of the dues in instalments as per compromise /agreement between the parties. No such compromise/agreement has been brought on record by the petitioner(s). If the subsequent order passed by the Tribunal is quashed then the said order dated 29.2.12 shall revive. This Court, in such circumstance, would refrain from exercising its extra ordinary and discretionary writ jurisdiction . Law in this regard is settled beyond cavil.
In the light of the discussions made hereinabove, this Court finds no merit in CWJC No. 975 of 2013 and 3705 of 2013. They are accordingly rejected.
Learned counsel for the petitioners appearing in support of CWJC No. 1749 of 2013 contended that the orders passed by the Tribunal in OA no.31 of 2012 was challenged mainly on two counts. Firstly, the Tribunal shall have no jurisdiction to entertain such application in the light of order passed by a learned Single Judge of this Court in CWJC No. 8746 of 2012 and secondly, the said order was ex-parte. Mr. Jha, learned counsel fairly submits that the first ground of attack does not survive in view of the order passed by a Division Bench of this Patna High Court CWJC No.975 of 2013 (5) dt.09-09-2013 33 Court in LPA No. 1743 of 2012 arising out of CWJC No.8746 of 2012. Referring to diverse provisions contained in the DRT Act and the Rules framed there under it has been contended that the petitioners shall invoke those jurisdiction for recall/review of the judgment dated 30-7-12. Learned counsel for the respondent Bank, on the other hand, submits that the said order is appelable. In the light of the aforesaid stand taken by the parties, CWJC no. 1749 of 2013 stands disposed of permitting the petitioners to seek remedy as is/are available to them in accordance with law.
There shall be no order as to cost(s).
(Kishore Kumar Mandal, J) Shyam/-