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2004 DIGILAW 590 (PAT)

Industrial Corporation Pvt. Ltd. And Another v. State Of Bihar

2004-06-22

R.M.PRASAD

body2004
Judgment R.M.Prasad, J. 1. In this writ petition, prayer is to quash the entire impugned proceedings subsequent to the final order dated 3.10.1996 passed in Execution Case No. 3 of 1988/15 of 1996 (Annexure-3) in inherent want of jurisdiction and for quashing the impugned order and certificate dated 21.6.2000 and 26.6.2000 respectively (as contained in Annexures-4 and 4/A) which according to the petitioners is not in accordance with the principles of natural justice and prescribed procedure and in complete violation of the laws mandated as alleged. Subsequently, the petitioner filed interlocutory application seeking amendment for issuance of a writ of certiorari quashing the order dated 13.1.2004 passed in Appeal No. 26 of 2002 (Annexure-9) and orders dated 23.11.2001, 10.12.2001, 1.2.2002 and 5.4.2002 passed in R.P. No. 80 of 2000 against which appeal No. 26 of 2002 was preferred, and, further, for a writ of mandamus directing the respondent-authorities to consider the application of the petitioners dated 16.4.2003, as contained in Annexure-8, and to pass a reasonable order in accordance with law in general and R.B.I. guidelines in particular. A prayer in the said interlocutory application has been made also to add auction purchaser Mr. Amar Kumar Agrawal, 202-B, Block, Hari Om Apartment, Exhibition Road, Patna as party respondent No. 5. 2. In short, the relevant facts are that on 22.2.1977 as Title (Mortgage) Suit No. 42 of 1977 was instituted in the Court of Subordinate Judge, Siwan for a decree of Rs. 1,55,80,215.92 under Order XXXIV, Rule 4 of the Code of Civil Procedure. On 23.1.1982 the suit was decreed in terms of compromise against defendant No. 1 (the Company) and 15 (Viren Pandey, newly added defendant being compromiser) and was dismissed against rest 13 original defendants to the suit. The decretal amount was scaled down to Rs. 80 lacs apart from certain other terms enumerated in. the compromise petition. Thereafter, certain loan was sanctioned to the petitioner-company, but, not fully disbursed as alleged: The petitioner-company also deposited certain amount. I do not consider it necessary to go into the details about the above matter as it is not necessary for consideration of the real dispute involved in the present case. 3. the compromise petition. Thereafter, certain loan was sanctioned to the petitioner-company, but, not fully disbursed as alleged: The petitioner-company also deposited certain amount. I do not consider it necessary to go into the details about the above matter as it is not necessary for consideration of the real dispute involved in the present case. 3. It is alleged that on 29.2.1988 without any application for obtaining final decree as envisaged in Order XXXIV, Rule 4 of the Code of Civil Procedure, Execution case No. 3 of 1988 was instituted against the petitioner for executing preliminary decree for sale dated 23.1.1982 and notices under Order XXI, Rule 22 was ordered to be issued on 18.8.1989. On 24.8.1990 petitioners appeared before the Executing Court and on 12.1.1993 filed objection and counter claim. According to the petitioners, Execution Case No. 3 of 1988 was ordered to be dismissed for non- prosecution on 3.10.1996. A photostat copy of the said order extracted for the record of Debt Recovery Tribunal has been annexed as part of Annexure-3 at page 34 of the brief. On 24.1.1997 the Debt Recovery Tribunal was established at Patna having jurisdiction for whole State of Bihar and Orissa. It is alleged that the said execution case which was dismissed for non-prosecution on 3.10.1996 was later on penned through without any application for restoration or review as mandated by Order XX, Rule 3 of the Code of Civil Procedure and transferred to Debt Recovery Tribunal, Paina treating it to be pending on the date of establishment of D.R.T., Patna, which on transfer was numbered as Execution Case No. 23 of 1999. Petitioners appeared before the D.R.T,, Patna and later on 29.2.2000 the Registrar, D.R.T., Patna pointed out to the respondent-Central Bank of India that the judgment and decree are not on record, whereupon the preliminary decree dated 23.1.1982 was filed by the said respondent along with a petition praying to waive the filing of final decree. The matter was referred to the Bench of Presiding Officer, D.R.T., Patna for order under amended sec. 31(A)(2) of the Act, which was inserted by Act 1 of 2000 with effect from 17.1.2000. According to the petitioners, no application as such was made by the respondent-Central Bank of India. The matter was referred to the Bench of Presiding Officer, D.R.T., Patna for order under amended sec. 31(A)(2) of the Act, which was inserted by Act 1 of 2000 with effect from 17.1.2000. According to the petitioners, no application as such was made by the respondent-Central Bank of India. The Presiding Officer, D.R.T, Patna passed order on 21.6.2000 (Annexure-4) allowing the execution petition with interest pendente lite and future at the contractual rate until full and final realisation of the claim and directed for drawing up certificate under sec. 19(22) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, hereinafter referred to as the Act in Form No. 31 of the Rules and Procedure made thereunder and to send it to the Recovery Officer for the its execution under Secs. 25 and 28 of the Act and also under the relevant laws applicable in this regard. Later the Presiding Officer vide its order dated 26.6.2000 (Annexure-4/A) signed the certificate in Form No. 31 for sending it to the Recovery Officer for its execution under Secs. 25 and 28 of the Act. It is stated that on 26.6.2000 Director General of Police, Bihar was directed to afford special protection to petitioner No. 2 by Hon ble Supreme Court. On receipt of certificate the Recovery Proceeding No. 80 of 2000 was initiated against the petitioners on 10.7.2000 and on 27.12.2000 the properties were ordered to be attached by the Recovery Officer. On 23.11.2001 the properties were auctioned on the bid amount of Rs. 91,51,000.00 against reserved price of Rs. 1,17,15,000.00 upon which the petitioners filed petition before the Recovery Officer, D.R.T, Patna not to confirm the sale of movable properties and to restrain the auction purchasers to lift the movable properties without confirmation of sale, which they were doing in collusion with the Central Bank of India as alleged. The Presiding Officer, D.R.T. in Appeal No. 26 of 2000 restrained the auction purchaser from lifting/removing/ destroying or causing any sort of loss to the auctioned properties existing on today on the site and directed that status quo will be maintained until further orders vide order dated 24.10.2002. Thereafter, the present writ petition was filed on 3.3.2003. 4. The Presiding Officer, D.R.T. in Appeal No. 26 of 2000 restrained the auction purchaser from lifting/removing/ destroying or causing any sort of loss to the auctioned properties existing on today on the site and directed that status quo will be maintained until further orders vide order dated 24.10.2002. Thereafter, the present writ petition was filed on 3.3.2003. 4. In the amendment petition, it is stated that during the pendency of the writ application, petitioners made an application on 16.4.2003 to the Tribunal through the Recovery Officer for disposal of their case as per Reserve Bank of India guidelines dated 29.1.2003 with a request for sending the application for consideration and necessary action, but, the request for settlement at N.P.A. A7C was not considered nor rejected. However, on 13.1.2004 the Presiding Officer rejected Appeal No. 26 of 2002 and directed the Recovery Officer to confirm the sale. In the mean while, Amar Kumar Agrawal, being the highest bidder deposited 25% of the bid amount on 18.12.2001 and was directed to deposit further amount for taking delivery of possession of movable properties and said Amar Kumar Agrawal was allowed to lift movable properties of lot No. 5 on as is where is basis without confirmation of sale of deposit of the entire bid amount. Hence, the aforementioned amendment petition has been filed. 5. Said Amar Kumar Agrawal has filed Interlocutory application under Chapter XXI (C) Rule 5 of Patna High Court Rules for addition of party as Intervenor-respondent No. 5. 6. Counter affidavit on behalf of Central Bank of India and its officials (respondent Nos. 2 to 4) and rejoinder to counter affidavit and supplementary affidavit on behalf of petitioners have also been filed, respondent Nos. 2 to 4 have filed further counter affidavit and respondent No. 5 has also filed counter affidavit. 7. 6. Counter affidavit on behalf of Central Bank of India and its officials (respondent Nos. 2 to 4) and rejoinder to counter affidavit and supplementary affidavit on behalf of petitioners have also been filed, respondent Nos. 2 to 4 have filed further counter affidavit and respondent No. 5 has also filed counter affidavit. 7. The facts in the said affidavits are not much in dispute except that in the first counter affidavit of respondent No. 2 to 4 with respect to dismissal of Execution case for non-prosecution On 3.10.1996 and the allegation that the said order was penned through, the ante-dated, completely ignoring the provision of Code XX, Rule 3 of the Code of Civil Procedure and, further, that handwriting of both the orders dated 3.10.1996 and signature of the Presiding Judge appears to be different have been denied by stating in paragraph 15(b) that the allegations leveled against the learned court-below are not dignified and should be deprecated because it has not been substantiated by any evidence. It is further stated that it is manifest from the order-sheet of Execution Case No. 3 of 1988 that after 3.10.1996 several dates were fixed and finally vide order dated 8.3.1999 the Execution Case No. 3 of the 1988 stood transferred to the Tribunal as per provisions of the Act. Besides this preliminary objection regarding maintainability of the writ petition in view of the provisions contained under Sec. 20 of the Act since the order under challenge was appealable, has been raised. 8. In second counter affidavit, in answer to the claim of the petitioners for settlement at N.P.A. A/C pursuant to the R.B.I. guidelines, it is stated that the case of the petitioners cannot be considered in case of loans and borrowings resulting in non- performing assets. It is stated that in the case of the petitioners a compromise decree was passed from which it will appear that against the claim Rs. one crore fifty five lacs the Bank agreed to compromise for Rs. 80 lacs, but, for one reason or the other the writ petitioners have been able to delay the payment under compromise and failed to pay a single instalment and harassed the respondents by keeping prolonged litigations at different levels. one crore fifty five lacs the Bank agreed to compromise for Rs. 80 lacs, but, for one reason or the other the writ petitioners have been able to delay the payment under compromise and failed to pay a single instalment and harassed the respondents by keeping prolonged litigations at different levels. It is further contended that in any view of the matter when there is a compromise decree and security interest is available with the Bank for realisation of the decretal amount the R.B.I. guidelines cannot applied. It is stated that there cannot be two compromise in the same matter. Besides this, it is contended that there was no illegality in declaring Amar Kumar Agrawal as highest bidder and allowing him to lift one lot of the materials out of five lots. 9. Learned counsel for the petitioners has contended that due process of law, command of law and prescribed procedures have not been followed, which resulted in failure of justice. He contended that apart from injustice to have been done to the petitioners in allowing the claim of the respondent-Bank behind his back without considering their lawful set-off and counter claims already on record and without considering the fact that because of violation of terms of compromise, petitioners-company could not rehabilitate itself since 1975 to augment its income to liquidate the debts. The decree of 1982 is being executed in the year 2000 without taking into consideration that the order dated 3.10.1996 which was passed after penning through the valid order of dismissal dated 3.10.1996 is no order in the eyes of law and is void ab initio and, thus, it cannot be said that the execution proceedings was pending before any Court immediately before the date of establishment of the Tribunal on 24.1.1997. 10. Learned counsel for the respondent-Bank contended that there is no substance in the said submission of the learned counsel for the petitioners, as there is no evidence on record to show any irregularity with regard to the fact that learned Subordinate Judge penned through the earlier order and recorded fresh order on the same day. 10. Learned counsel for the respondent-Bank contended that there is no substance in the said submission of the learned counsel for the petitioners, as there is no evidence on record to show any irregularity with regard to the fact that learned Subordinate Judge penned through the earlier order and recorded fresh order on the same day. Further, he contended that it is not a fit case where the writ Court should interfere on any technicalities in the facts and circumstances of the present case where despite compromise to which the petitioners are also party they have been delaying the payment for one reason or the other leading to passing of a decree meaningless and ineffective. 11. Mr. Agrawal, learned counsel appearing for Intervenor-respondent No. 5 has contended that his client has unnecessarily been made to suffer in the present case. He also contended that writ petition is not the proper remedy and, in fact, petitioners ought to have filed appeal provided under the Act itself. 12. In reply, learned counsel for the petitioners contended that the records would reveal that transfer of execution case to Tribunal itself was bad in law and the entire proceedings before the Tribunal and the Recovery Officer are vitiated for want of jurisdiction which goes to the root of the matter and in the facts and circumstances of the present case the petitioners have rightly availed their remedy before this Court under Art. 226 of the Constitution of India. Learned counsel for the petitioners contended that, in fact, all the orders passed by the Tribunal and the Recovery Officer in the facts and circumstances are nullity. 13. This Court vide order dated 3.2.2004 considered that perusal of records of Execution Case No. 3 of 1988 which was lying before the Tribunal was essential and, accordingly, directed the Registrar General to requisition the said records from the Tribunal. On 5.2.2004 the records were placed before this Court and on perusal thereof this Court, prima facie, found that there is something fishy in recording of the orders from 5.10.1994 up to the date of transfer of execution case to the Tribunal vide order dated 8.3.1999. In the facts and circumstances it was considered expedient to direct the Registrar General of this Court to examine the records and submit his report. In the facts and circumstances it was considered expedient to direct the Registrar General of this Court to examine the records and submit his report. Thereafter the Registrar General submitted his report at flag X. On perusal whereof this Court vide order dated 9.2.2004 on the request of the Registrar General adjourned the matter to enable him to get it verified by getting necessary records from the Civil Court and submit his further report. Thereafter the Registrar General submitted his further report on 4.3.2004 at flag B. The parties were heard on 9.3.2004 and the order was reserved. However, later the Registrar General got photostat copy of the Court diary of the Subordinate Judge to ascertain the correctness of the order dated 3.10.1996 passed by him. In view of the receipt of relevant photostat copy of the Court diary, this Court vide order dated 13.4.20.04 directed the Registrar General to examine the same and submit his further report, whereupon the matter was directed to be listed again under the same heading. On 12.5.2004 the Registrar General submitted his further report, which was shown to the learned counsel for the parties on 17.5.2004 and upon seeing the report learned counsel for the parties submitted that they do not intend to make any further submission. Accordingly, this Court decided to proceed with the disposal of the matter pursuant to the order reserved earlier. 14. The Registrar General in his report dated 12.5.2004 stated that he vide letter No. 44/RG/2004, dated 9.3.2004 requested the District and Sessions Judge, Siwan to make available the copies of Court Diary of Execution Case No. 3/88, accordingly, the copy of the Court Diary of Sub-Judge, I Siwan from 29.2.1988 to 2.2.1996 and copy of Court Diary of Sub-Judge III, Siwan from 8.3.1996 to 8.3.1999 in respect of Execution Case No. 3/88 were obtained. If is further stated that, however, since there were discrepancies while comparing the copies of the Court Diary in respect of entry of Execution Case No. 3/88 further report was called for from the District Judge, Siwan and from perusal of the report dated 10.5.2004 it appears that there were two Execution Cases pending with the same number i.e. 3/88/21/90 and 3/88/15/96. The District Judge reported that Execution Case No. 3/88/15/96 had earlier been sent to the Debts Recovery Tribunal, Patna. The District Judge reported that Execution Case No. 3/88/15/96 had earlier been sent to the Debts Recovery Tribunal, Patna. He has further stated that in the earlier report of the District Judge dated 27.2.2004 it was mentioned that only on 16.4.1998 the relevant Execution Case has been mentioned. According to the Registrar General, since there were two cases with same number the copy of the Court diary in respect of one case i.e. Execution Case No. 3/88/21/90 has no bearing so far as this case is concerned. In this connection, with reference to the report dated 11.5.2004 of the District Judge, he has stated that confusion has arisen because of the fact that two cases of same number were pending and whereas one of the case has been sent to the Debts Recovery Tribunal, Patna, another Execution Case No. 3/88/21/90 is still pending before Sub-Judge V. It has been reported that the District Judge found that the Bench Clerk and Office Clerk of the relevant period nave shown laxity in making proper entries in the Court diary in respect of two different cases which resulted in confusion. From the report of the Registrar General it appears that the District Judge has further reported that so far as this case is concerned except two dates no other date has been made available by the Court in Court diary. The said report of the District Judge is also placed on record, perusal whereof shows that the present Subordinate Judge III inquired into the matter and had taken out the relevant dates from the order sheet of the records of the present execution case after it has been transferred to his Court so as to compare with the Court diary and its appears that except 28.1.1997 and 16.4.1998 none of other dates are available in the Court diary. 15. From the record of the present execution case it appears that the decree-holder since 26.11.1995 continuously absented on several dates i.e. 15.11.1995, 24.1.996, 2.2.1996, 15.3.1996, 19.4.1996, 12.6.1996, 27.7.1996/30.7.1996, 4.9.1996 and on 3.10.1996. On 3.10.1996 when despite notice to the counsel for the decree-holder no pairvi was done on behalf of anybody and none respondent despite call, the Subordinate Judge dismissed the execution case for want of pairvi (default). On 3.10.1996 when despite notice to the counsel for the decree-holder no pairvi was done on behalf of anybody and none respondent despite call, the Subordinate Judge dismissed the execution case for want of pairvi (default). However, after the said order was signed by the Subordinate Judge, he penned through it and later another order of the same date is recorded directing the office to show the said order to the learned counsel for the parties and directing them to appear on 3.12.1996 for apprising the Court about the present status for final disposal of the execution case. From the order sheet it appears that the said order was shown only to one counsel and not to both the counsels. On 3.12.1996 again both the parties were absent and the matter was adjourned for 28.1.1997. On 28.1.1997 from the signature in the order-sheet it appear that the Presiding Officer changed, but none appeared and since thereafter the matter was adjourned till 19.2.1998 in absence of decree-holder. On 4.3.1998 a petition was filed on behalf of decree-holder for transfer of the case to Debt Recovery Tribunal. On the next date i.e. 16.4.1998 the decree-holder filed Hazari before the Incharge Court, who adjourned the matter for 4.6.1998. Thereafter again the decree-holder absented on three dates i.e. 4.6.1998, 24.9.1998 and 4.12.1998 and lastly vide order dated 8.3.1999 learned Subordinate Judge recorded that as per valuation of the execution proceeding the proceeding is triable by Debt Recovery Tribunal and so directed for sending the records of the execution proceeding to the Tribunal immediately. 16. The entire order sheet does not show that any petition was filed for recall of the first order dated 3.10.1996 or for restoration of the execution case. I failed to appreciate as to how the learned Subordinate Judge penned through the said order and recorded another order of the same date for which no pairvi was made on behalf of either parties nor any petition was filed. This creates strong suspicion about manipulation in the records obviously at the instance of the decree-holder, who was the beneficiary in getting the matter transferred to the Debts Recovery Tribunal on its creation. This is also evident from the fact that even the later order dated 3.10.1996 was not shown to the judgment-debtors as is evident from the order sheet. This creates strong suspicion about manipulation in the records obviously at the instance of the decree-holder, who was the beneficiary in getting the matter transferred to the Debts Recovery Tribunal on its creation. This is also evident from the fact that even the later order dated 3.10.1996 was not shown to the judgment-debtors as is evident from the order sheet. It appears that after dismissal of the execution case vide first order dated 3.10.1996 the decree-holder mala fide managed to get the said order penned through and recording of the another order of the same date later behind the back of the petitioners without even there being any formal petition either for recall of the first order dated 3.10.1996 or for restoration of the execution case, so that the execution case is transferred to the Tribunal u/s. 31 of the Act. sec. 31 of the Act deals with transfer of pending cases and provides that every suit or other proceeding pending before any Court immediately before the date of establishment of a Tribunal under the Act, being a suit or proceeding the cause of action where on it is based is such that it would have been, if it had arisen after such establishment, within the jurisdiction of such Tribunal, shall stand transferred on that date to such Tribunal except the appeal pending before any Court. 17. Thus, apparently the transfer of the case to the Debt Recovery Tribunal on 8.3.1999 was bad as on the date of the establishment of the Tribunal on 24.1.1997 the execution case had already been dismissed. As such, this Court finds substance in the submission of the learned counsel for the petitioners that the impugned orders passed by the Debt Recovery Tribunal and the Recovery Officer are bad in law and not sustainable. 18. The impugned proceedings and the orders are, thus, quashed. Learned Tribunal is directed to formally return the records of the execution case to the District Judge, Siwan forthwith. District Judge, Siwan is directed to transfer the case to the appropriate Court forthwith ,on receipt of the records. 18. The impugned proceedings and the orders are, thus, quashed. Learned Tribunal is directed to formally return the records of the execution case to the District Judge, Siwan forthwith. District Judge, Siwan is directed to transfer the case to the appropriate Court forthwith ,on receipt of the records. Considering the peculiar facts and circumstances of this case, this Court directs the Executing Court to proceed with the execution case in terms of the compromise between the parties (contained in Annexure-1) except with respect to lot No. 5 sold in auction to respondent No. 5 for which the amount realised from respondent No. 5 shall be adjusted against the decretal amount payable by the petitioners and excess amount, if any, deposited by respondent No. 5 shall be refunded to respondent No. 5 with interest at the rate realised from the petitioners in terms of the compromise. It is, however, made clear that if the petitioners commit any default to comply with the terms of the compromise the Executing Court shall proceed in the matter to realise the decretal amount in accordance with law. Let the records received from the Tribunal be returned to the Tribunal forthwith along with a copy of this order. The writ application is, accordingly, disposed of.