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2005 DIGILAW 1323 (MAD)

Banu Construction Co. Pvt. Ltd. & Another v. Andhra Bank & Others

2005-08-10

M.KARPAGAVINAYAGAM, S.SARDAR ZACKRIA HUSSAIN

body2005
Judgment :- (Contempt Petition filed under Sections 10 and 12 of the Contempt of Courts Act to punish the respondents as stated therein.) M. Karpagavinayagam, J. Mr. B. Venkateswara Rao, the Managing Director of M/s.Banu Construction Company Private Limited, on his behalf and on behalf of the Company, has filed this contempt petition seeking to punish the respondents 1 to 6 for having committed contempt of the orders of this Court dated 3.2.2003 in W.P.M.P.No.4241 of 2003 in W.P.No.3386 of 2003. 2. The short facts leading to the filing of the contempt petition are as follows: “(a) Andhra Bank, Balanagar Branch, Hyderabad, the first respondent herein and another filed an application before the Debts Recovery Tribunal, Hyderabad, in O.A.No.460 of 1999 for recovery of money from M/s.Banu Construction Company Private Limited, the first petitioner herein. Though the examination of the witnesses on the side of the applicant, viz., Bank was over, the petitioners, the respondents 1 and 2 before the D.R.T., have not chosen to adduce any evidence. Therefore, ex parte decree was passed on 31.10.2000 by the Debts Recovery Tribunal, Hyderabad. Pursuant to the same, the certificate was issued for recovery of the amounts and recovery proceedings were initiated against the petitioners herein for a sum of Rs.44,06,36,954.79. Four of the properties were sold by the Recovery Officer, D.R.T., Hyderabad. (b) In the meantime, the petitioners filed an application to condone the delay in filing the petition to set aside the ex parte decree before the D.R.T., Hyderabad. The same was dismissed by the order dated 6.9.2002. Against the said order, the petitioners filed writ petition in W.P.No.17152 of 2002 on the file of the High Court of Andhra Pradesh for a Writ of Certiorari. (c) The High Court by the order dated 9.9.2002 directed the petitioners to approach the Debts Recovery Appellate Tribunal to assail the order passed by the Debts Recovery Tribunal. Accordingly, against the order dated 6.9.2002, the petitioners filed an appeal in M.A.No.203 of 2002 before the Debts Recovery Appellate Tribunal. The appeal also was dismissed on 31.1.2003 by the Appellate Tribunal. Challenging the said order, the petitioners have chosen to approach the High Court of Madras seeking for the issuance of a Writ of Certiorari for quashing the order passed in M.A.No.203 of 2002 on the file of the Debt Recovery Appellate Tribunal. The appeal also was dismissed on 31.1.2003 by the Appellate Tribunal. Challenging the said order, the petitioners have chosen to approach the High Court of Madras seeking for the issuance of a Writ of Certiorari for quashing the order passed in M.A.No.203 of 2002 on the file of the Debt Recovery Appellate Tribunal. (d) The First Bench of this Court entertained this writ petition and ordered notice and pending W.P.No.3386 of 2003, passed an interim order in W.P.M.P.No.4241 of 2003 on 3.2.2003 staying the further proceedings including dispossession. (e) It is alleged now that subsequent to the order dated 3.2.2003, on the instruction of the respondents 4 to 6 herein, the auction purchasers of the properties, one K.C.Venkateshwarlu, the Managing Director of EVK Properties Private Limited, the third respondent herein, came with hooligans on 2.6.2003 and started demolition of the compound wall of the property in question. Hence, the contempt petition against the respondents 1 to 6 reporting about the violation of the disobedience of the interim order passed on 3.2.2003." 3. The contents of the contempt petition as projected by the petitioners, the judgment-debtors are as follows: “On the application for recovery of money from the petitioners filed by the Andhra Bank, the first respondent herein before the D.R.T., Hyderabad, an ex parte decree was passed on 31.10.2000. On the strength of the ex parte decree, the recovery certificate was issued by the D.R.T. through the Recovery Officer, the second respondent herein. In the meantime, the petitioners filed a petition to condone the delay of 602 days in filing the petition to set aside the ex parte decree and the same was dismissed. Against the same, an appeal was filed before the D.R.A.T. It was also dismissed on 31.1.2003. To quash the said order, the writ petition was filed. In the meantime, the valuable properties situated in a prime locality in Hyderabad were sold in an auction for a throw away price. The respondents 4 to 6 were the successful purchasers. Since they were taking steps to dispossess the petitioners from the properties, they filed a writ petition and obtained the stay of the proceedings including dispossession in W.P.M.P.No.4241 of 2003 on 3.2.2003. The respondents 4 to 6 were the successful purchasers. Since they were taking steps to dispossess the petitioners from the properties, they filed a writ petition and obtained the stay of the proceedings including dispossession in W.P.M.P.No.4241 of 2003 on 3.2.2003. Despite knowledge of this order, on being instructed by the respondents 4 to 6, the auction purchasers, the third respondent came to the property on 2.6.2003 at about 10.30 a.m. and started demolition of the compound wall. Watchman tried to prevent the forcible demolition, but in vain. Then, the petitioners made a complaint to the Commissioner of Police, Hyderabad, who in turn directed the Inspector of Panjagutta Police Station to take necessary action. So, an F.I.R. was registered on 11.6.2003 against the respondents 3 to 6. When the second respondent, the Recovery Officer was approached for reconstruction of the demolition part of the wall, he did not respond to them and he has been evasive in his reply. As such, he has been sailing with the other respondents, who have taken law into their own hands. Thus, the respondents 3 to 6 have wilfully disobeyed the order of this Court by dispossessing the petitioners by demolition of the portion of the compound wall." 4. The first respondent Andhra Bank has filed counter-affidavit denying the various facts as mentioned in the affidavit filed by the petitioner in the contempt petition. According to the first respondent, no allegations were made against it and nothing can be complained against the first respondent Andhra Bank since the handing over possession of the property is matter between the Recovery Tribunal and the purchaser. As such, the first respondent is unnecessary party and consequently, the petition has to be dismissed. 5. The other respondents, the auction purchasers, viz., respondents 4 and 6 have filed a counter-affidavit giving full details about the facts. The gist of their contentions is as follows: “Admittedly, the Recovery Officer, the third respondent K.C.Venkateshwarlu who is alleged to have helped the respondents 4 to 6, viz., the auction purchasers and the respondents 4 to 6 were not parties in the writ petition. The properties in question were brought to auction in pursuance of the order passed by the D.R.T. Bagyanagar Metals Private Limited, the sixth respondent herein, is one of the auction purchasers. He deposited the entire sale consideration of Rs.1,75,00,000/-. The properties in question were brought to auction in pursuance of the order passed by the D.R.T. Bagyanagar Metals Private Limited, the sixth respondent herein, is one of the auction purchasers. He deposited the entire sale consideration of Rs.1,75,00,000/-. Guptha, the fourth respondent, another auction purchaser also deposited the entire sale consideration of Rs.1,80,00,000/-. Similarly, the other auction purchaser also paid the sale consideration by depositing the amount in time. As such, all the respondents, viz., respondents 4 to 6 are auction purchasers for valuable consideration. The properties were not sold for a throw away price as alleged by the petitioners. The sale certificates have been issued in favour of the auction purchasers on 31.1.2003 itself. Accordingly, they were put in lawful possession on the same day. The sale certificates have also been duly registered on 31.1.2003. The perusal of the sale certificates would indicate that on 31.1.2003 itself, the properties have vested in auction purchasers with possession and as such, the auction purchasers have become the absolute owners of the properties from 31.1.2003 onwards. Admittedly, the petitioners on the date of sale certificates dated 31.1.2003 were not the owners of the properties. In fact, the guarantors of the loan filed a writ petition in W.P.No.18982 of 2002 on the file of the High Court of Andhra Pradesh and the First Bench of the said Court passed a conditional order on 13.9.2002 directing the petitioners to pay a sum of Rs.50 lakhs within eight weeks. Admittedly, the conditional order has not been complied with. As such, the sale had been confirmed. Consequently, the sale certificates were issued in favour of the respondents 4 to 6. As a matter of fact, the certificates of sale of immovable properties dated 31.1.2003 were executed by the Debt Recovery Officer, the second respondent herein, in their favour. The property that has been sold is that of the guarantors. Ultimately, the guarantors have not paid the amount as per the orders of the High Court of Andhra Pradesh. If at all, the sale can be questioned, the guarantors alone have got a right to question the same. Admittedly, the same has not been done. The petitioners herein who are the judgment-debtors cannot seek for any relief regarding those properties when the sale has become final. If at all, the sale can be questioned, the guarantors alone have got a right to question the same. Admittedly, the same has not been done. The petitioners herein who are the judgment-debtors cannot seek for any relief regarding those properties when the sale has become final. The sale certificates issued by the Tribunal through the Recovery Officer would indicate that on 31.1.2003, the auction purchasers were put in possession of the properties and subsequently, the guarantors have complied with the conditional order by depositing Rs.50 lakhs and thereby allowed the sale certificates which have been issued in favour of the respondents, to be confirmed. In fact, there was a disturbance to the possession of the auction purchasers on 1.2.2003. Therefore, the auction purchasers lodged a police complaint. The Recovery Officer, D.R.T. also has written a letter to Station House Officer on 3.2.2003 stating that the possession has been handed over to the auction purchasers on 31.1.2003. In pursuance of the letter given by the Recovery Officer, protection was given by the police. In the meantime, without mentioning about the sale certificates and the fact of auction purchasers having been put in possession, by way of suppression, the petitioners obtained an interim order on 3.2.2003. Further, even in the complaint given by the petitioners dated 2.6.2003, the investigation was conducted by the police on the complaint being forwarded by the Commissioner of Hyderabad and during the course of enquiry, the Recovery Officer, D.R.T. himself has written a letter on 30.6.2003 clearly mentioning that the sale certificates have been issued in favour of the auction purchasers and they have already been put in possession on 31.1.2003 itself. Therefore, the contempt petition is not sustainable either in law or on facts and this is purely an abuse of process of law and therefore, it has to be dismissed with suitable costs." 6. We have heard the counsel for the parties and gone through the papers. 7. At the outset, it shall be stated that the petitioners have fully abused the process of court by filing contempt petition not only against the auction purchasers, but also against the Recovery Officer who is an officer attached to the Tribunal. We have heard the counsel for the parties and gone through the papers. 7. At the outset, it shall be stated that the petitioners have fully abused the process of court by filing contempt petition not only against the auction purchasers, but also against the Recovery Officer who is an officer attached to the Tribunal. Further, a very serious allegation has been made as if the second respondent, viz., the Debt Recovery Officer has set the other respondents to take law into their own hands with a view to frustrate the efforts of the petitioners to get the grievances redressed through Court of Law is quite unfortunate. This Court would strongly deprecate the attitude of the petitioners in making this uncharitable and irresponsible allegation against the Debt Recovery Officer. Under Rule 82 to Schedule II of the Income-tax Act, 1961, the Recovery Officer shall be deemed to be acting judicially within the meaning of the Judicial Officers' Protection Act , 1850. Under Rule 19 of Schedule II to the Income tax Act, 1961, any officer authorised to attach or sell any property may apply to the officer in-charge of the nearest police station or such assistance as may be necessary in the discharge of his duties and the authority to whom such an application is made shall depute sufficient number of police officers for furnishing such assistance. 8. The counter-affidavits which have been filed by the respondents would clearly indicate that the Recovery Officer, the second respondent herein on the strength of the order of the Tribunal conducted auction and after deposit of the entire sale consideration, issued sale certificates on 31.1.2003 and put the auction purchasers in possession of the properties on the same day. This was also intimated by the Recovery Officer through the letter dated 3.2.2003 to the Station House Officer, Panchagutta, Andhra Pradesh requesting him to safeguard the continuity of their possession. These facts are borne out from the records. But, without showing this, the petitioners have chosen to file a writ petition and obtained the order of stay of dispossession of the properties before this Court in W.P.M.P.No.4241 of 2003, even though the petitioners knew very well that they were not the owners of the properties on that date, even without impleading the respondents 4 to 6 who are the owners of the properties from 31.1.2003 by virtue of the sale certificates. 9. 9. The very unfortunate situation is that the properties in question belonged to the guarantors and those guarantors have filed a writ petition before the High Court of Andhra Pradesh and obtained an interim order against the confirmation of sale on 13.9.2002 on condition that they have to pay Rs.50 lakhs within eight weeks. Admittedly, this conditional order has not been complied with and consequently, the sale was confirmed. Thus, it is clear that through the guarantors, there was an attempt to stall the proceedings for confirmation of sale by filing the writ petition before the Andhra Pradesh High Court and without complying with the conditional order, they have chosen to come to this High Court to file the writ petition under the pretext that the writ petition is against the Appellate Tribunal which is situated in Chennai. 10. The records would reveal that the matter was contested by the petitioners before the Tribunal at Hyderabad and subsequently, no evidence for defence was adduced and consequently, the decree was passed as against the judgment-debtors, the petitioners herein. The petitioners have chosen to file a petition to set aside that decree claiming that it is an ex parte decree and since there is a delay, they have also filed an application to condone the delay of 602 days. Having failed in that, the petitioners chose to file a writ petition before the High Court of Andhra Pradesh, which in turn, directed the petitioners to go to the Appellate Tribunal and to file an appeal as the appeal against the order passed by the Tribunal at Hyderabad would only lie before the Appellate Tribunal. The petitioners having failed in the Appellate Tribunal as well, could have approached the Andhra Pradesh High Court. However, they chose Madras High Court to file a writ petition only on the ground that the Appellate Tribunal is situated in Madras. 11. Whether the aspect that writ petition would lie as against the order of the Appellate Tribunal which confirmed the order of the Tribunal, Hyderabad, need not be considered in this application. However, they chose Madras High Court to file a writ petition only on the ground that the Appellate Tribunal is situated in Madras. 11. Whether the aspect that writ petition would lie as against the order of the Appellate Tribunal which confirmed the order of the Tribunal, Hyderabad, need not be considered in this application. But, the fact remains that even though the properties were put in possession with the auction purchasers by issuance of sale certificates by the Recovery Officer, the second respondent to the other respondents, the petitioners have chosen to obtain an interim order from the First Bench of this Court staying the proceedings including the dispossession by suppression of the relevant facts by stating that as if the petitioners are continuing to be in possession. So, it is clear that the order passed by the First Bench on 3.2.2003 was only on the basis of the incorrect particulars given by the petitioners. Had the First Bench known about the sale certificates issued in favour of the auction purchasers, the respondents 4 to 6, and they were put in possession by the Recovery Officer who is a Tribunal Officer, the First Bench, in our view, would not have granted stay of the proceedings including the dispossession. 12. As per the proceedings of the Recovery Officer, the second respondent, the possession of the properties is with the auction purchasers from 31.1.2003 onwards on the basis of the sale certificates issued and the sale deeds have been registered and the police protection was being given on the request of the second respondent by virtue of his powers conferred upon him, it cannot be said that the order passed by the First Bench on 3.2.2003 staying the proceedings including dispossession has been violated. On the other hand, it is to be stated that the stay of dispossession cannot be said to be in force in view of the possession given to the auction purchasers by the Recovery Officer on 31.1.2003 itself. 13. On the other hand, it is to be stated that the stay of dispossession cannot be said to be in force in view of the possession given to the auction purchasers by the Recovery Officer on 31.1.2003 itself. 13. The serious allegation levelled against the Recovery Officer who is deemed to be the judicial officer attached to the Tribunal and the false particulars given in the affidavit filed by the petitioners in the contempt petition would make it clear that the petitioners have abused the process of court and on the basis of the incorrect particulars, this Court was constrained to issue notice to the respondents, with the result, they had to appear before this Court by engaging counsel. Hence, while dismissing the application as abused the process of court, it is appropriate to impose heavy costs. Accordingly, the petitioners are directed to pay Rs.10,000/- as costs to each of the respondents 1 to 6 within one month from today. 14. With the above observation, the contempt petition is dismissed. 15. During the pendency of the contempt petition, an application in Sub Application No.276 of 2003 has been filed to permit the petitioners to put up the portion of the compound wall demolished by the respondent pending disposal of the contempt petition and the first Bench by the order dated 23.7.2003 directed that the petitioners shall be entitled to construct the demolished compound wall, subject to the condition that the same is liable to be ordered to be demolished in the event of the contempt petition being dismissed. Since the contempt petition is dismissed, the wall constructed is liable to be demolished.