Stillbene Chemicals Limited, Secunderabad v. Federal Bank Limited, Hyd.
2001-07-31
S.B.SINHA, V.V.S.RAO
body2001
DigiLaw.ai
S. B. SINHA, CJ. ( 1 ) THIS writ petition is directed against an order dated 3-4-2001 passed by the Debt Recovery Tribunal in original Application No. 498 of 2000 whereby and whereunder an advocate-Commissioner appointed has been directed to seize and sell the machinery and equipment as per the inventory report prepared by him in a public auction. The 1st respondent herein filed an application before the learned Tribunal below in terms of Section 19 of the Recovery of Debts due to Banks and Financial Institutions act, 1993 (hereinafter referred to as the act ). An interlocutory application was filed with the said original application wherein the following prayer was made: the applicant pray the Hon ble Tribunal be pleased to appoint an advocate commissioner to prepare inventory of the list of machinery, book debts, stores and all other hypothecated assets and file the report before the Hon ble tribunal. The applicant also prays for an interim order restraining thereby the defendants from transferring, alienating or otherwise dealing with or disposing off their properties till the entire dues of the applicant are realised. ( 2 ) THE petitioner contends that it received that papers relating to the original application on 7-3-2001. The interlocutory application was listed on 2-4-2001; but the same being a public holiday it was allegedly called on 3-4-2001. It is stated that the Counsel appointed by the petitioner could not reach the Tribunal on time and in the mean time an order had already been passed. ( 3 ) THE learned Counsel appearing on behalf of the respondents, on the other hand, submitted that on or about 29-1-2001 the tribunal has appointed an advocate-Commissioner for the purpose of taking inventory of the hypothecated properties described in B-Schedule to the original application and also to report the status/ functioning of the petitioner-unit. A report has been filed but no objection thereto has been filed by the petitioner. On the basis of the said report, an oral prayer was made to the effect that as the industry of the petitioner was closed, the machineries, equipments and raw materials would be damaged and in that situation the learned tribunal has passed the impugned order. ( 4 ) THE learned Tribunal has adopted a procedure which cannot be appreciated. It is one thing to say that an advocate- commissioner is appointed to make an inventory.
( 4 ) THE learned Tribunal has adopted a procedure which cannot be appreciated. It is one thing to say that an advocate- commissioner is appointed to make an inventory. But only because he submits a status report without there being any further application and without giving opportunity of hearing to the petitioner a drastic order in the nature of seizure and sale of the machinery and equipment in a public auction as per the inventory report has been made. The Tribunal has the requisite jurisdiction to pass the interim order. But such interim order must be passed having regard to the fact and circumstances of each case. The discretionary power vested in the Tribunal cannot be exercised arbitrarily nor can be exercised in violation of the principles of natural justice. ( 5 ) THE petitioner herein is yet to file its written statement. It has not raised its defence. As such the defence which may be raised by it is not known to the tribunal. Ordinarily a Court shall not direct seizure of the property through an advocate-Commissioner. In Padam Sen v. State of u. P. , the Apex Court Inter alia held: the defendants had no rights to these account books. They could not lay any claim to them. They applied for the seizure of these books because they apprehended that the plaintiff might make such entries in those account books which could go against the case they were setting up in Court. The defendants request really amounted to the Court s collecting documentary evidence which the defendants considered to be in their favour at that point of time. It is no business of the Court to collect evidence for a party or even to protest the rival parry from the evil consequences of making forged entries in those account books. If the plaintiff does forge entries and uses forged entries as evidence to the case, the defendants would have ample opportunity to dispute those entries and to prove them forgeries. We. are therefore of opinion that the additional Munsif had no inherent power to pass the order appointing a commissioner to seize the plaintiffs account books. The order appointing a sri Raghubir Pershad as Commissioner for this purpose was therefore an order passed without jurisdiction and was therefore a null and void order.
We. are therefore of opinion that the additional Munsif had no inherent power to pass the order appointing a commissioner to seize the plaintiffs account books. The order appointing a sri Raghubir Pershad as Commissioner for this purpose was therefore an order passed without jurisdiction and was therefore a null and void order. ( 6 ) EVEN assuming that the Tribunal had the power to direct seizure and sale of machineries and equipment of the petitioner by way of public auction, such an action could have been taken only when an application in regard thereto is filed. The properties are not in custodia legis. Even no receiver has been appointed. During the pendency of the proceedings, normally a defendant may not be dispossessed of his properties except in execution of a decree. In any event, as even no application had been filed by the 1st respondent herein making any such prayer and no opportunity of hearing had been granted to the petitioner, the impugned order cannot be sustained. ( 7 ) FOR the foregoing reasons, this writ petition is allowed and the impugned order is set aside. There shall be no order as to costs.