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2012 DIGILAW 2097 (MAD)

N. Prakash v. Registrar, Debt Recovery Tribunal

2012-04-26

D.MURUGESAN, K.K.SASIDHARAN

body2012
Judgment :- This writ petition is one among the many writ petitions and civil revision petitions filed against the orders passed by the Debts Recovery Tribunal, Coimbatore in gross violation of the provisions of the Recovery of Debts Due to Banks and Financial Institutions, 1993, and Securitisation and Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. THE FACTS:- 2. The petitioner is stated to be a cultivating tenant in respect of property in S.No.7/2A, No.110, Kulathur Village, Pollachi Taluk, Coimbatore District. The said property was the subject matter in O.S.No.123 of 1999 on the file of Sub Court, Udumalpet. The Bank obtained an exparta preliminary decree in the said suit on 18 July 1994 for a sum of Rs.1,14,653.99 along with interest @ 6% p.a. The Bank thereafter filed an interlocutory application in I.A.No.358 of 2001 to pass a final decree. Accordingly, final decree was passed on 20 October 2003. Subsequent to the constitution of the Debts Recovery Tribunal, the Bank filed application in O.A.No.43 of 2005 before the Debts Recovery Tribunal, Coimbatore. Recovery Certificate was issued on 24 March 2008 pursuant to the order in O.A.No.43 of 2005. 3. The petitioner, in his capacity as cultivating tenant, filed an application in I.A.No.2113 of 2008 before the Recovery Officer stating that the property mentioned in Schedule I would be sufficient to satisfy the Decree, and requested to exclude the property in Schedule II from the schedule of property proposed to be auctioned. The said application was dismissed by the Recovery Officer on 13 March 2009. The petitioner challenged the said order before the Debts Recovery Tribunal in I.A.No.1/2009. The petitioner also filed an application in I.A.No.522 of 2009 in Appeal No.1/2009 to stay all further proceedings pending disposal of the appeal. The Debts Recovery Tribunal, Coimbatore, dismissed the application in I.A.No.522 of 2009 on 24 April 2009. 4. The order dated 24 April 2009 was challenged by the petitioner before the Debts Recovery Appellate Tribunal, Chennai, in M.A.No.278 of 2010. The Debts Recovery Appellate Tribunal granted interim stay on 22 May 2009. The Recovery Officer originally issued a Sale Certificate in favour of third respondent on 20 July 2009 and it was cancelled later. The third respondent was impleaded as a party to the appeal. The Debts Recovery Appellate Tribunal granted interim stay on 22 May 2009. The Recovery Officer originally issued a Sale Certificate in favour of third respondent on 20 July 2009 and it was cancelled later. The third respondent was impleaded as a party to the appeal. The Debts Recovery Appellate Tribunal was pleased to allow the appeal by order dated 13 June 2011 and directed the Presiding Officer, Debts Recovery Tribunal, Coimbatore, to take up the appeal itself for final hearing and dispose of the same as expeditiously as possible. 5. The Debts Recovery Tribunal, Coimbatore, took the appeal for hearing and directed the petitioner to pay a sum of Rs.5 lakhs on or before 31 March 2012 and the remaining amount within a period of sixty days thereafter for the purpose of settling the entire dues. The petitioner promptly paid a sum of Rs.5 lakhs on 28 March 2012, pursuant to the direction issued by the Debts Recovery Tribunal. While so, the third respondent, stated to be the auction purchaser filed an application in I.A.No.278 of 2012 in Appeal No.1 of 2009 to implead her as a party. The learned Presiding Officer, Debts Recovery Tribunal, Coimbatore, even without ordering notice to the petitioner, allowed the said application and took up the application filed by the third respondent to review the earlier order dated 13 March 2012. The petitioner was not given an opportunity to submit his version before impleading the third respondent as party to the proceeding. The petitioner wanted a copy of the order in I.A.No.278 of 2012, so as to enable him to challenge the same before the Appellate Authority. Though the petitioner filed application for issuance of certified copies of the proceedings in I.A.No.278 of 2012, and the order impleading the third respondent as a party, the Presiding Officer deliberately dragged the matter without furnishing copy. The proceedings have not been updated on the website. Similarly, it has not been entered in the “A” diary though proceedings that took place on 12 March 2012 and 14 March 2012 have been updated. This made the petitioner to believe that the Presiding Officer was acting in a biased manner. 6. The proceedings have not been updated on the website. Similarly, it has not been entered in the “A” diary though proceedings that took place on 12 March 2012 and 14 March 2012 have been updated. This made the petitioner to believe that the Presiding Officer was acting in a biased manner. 6. It is the primary grievance that the learned Presiding Officer has openly stated that he would dismiss the appeal filed by the petitioner and allow the review petition, on 20 April 2012, and this prompted him to file the present writ petition. 7. Since the petitioner leveled serious allegations against the Presiding Officer, we directed the Debts Recovery Tribunal, Coimbatore, to produce the entire records. Accordingly, the Registrar, Debts Recovery Tribunal, Coimbatore, produced the entire case records in A.No.1/2009. SUBMISSIONS:- 8. The learned counsel for the petitioner submitted that the Presiding Officer, Debts Recovery Tribunal, Coimbatore, has been acting in a very strange manner and appearance of a particular counsel before him would tilt the balance in his Court. According to the learned counsel, the members of the Bar has been making a hue and cry to transfer the Presiding Officer from Coimbatore on account of his association with a particular counsel of that Bar. The learned counsel contended that in case applications are filed by a particular Advocate, the Presiding Officer would pass orders as prayed for by her without even issuing notice to the other side. The conduct of the Presiding Officer and his biased action made so many litigants to file civil revision petitions and writ petitions before this Court. The poor litigants were compelled to spend considerable amount on litigation on account of the illegal orders passed by the Presiding Officer. 9. According to the learned counsel for the petitioner, the Presiding Officer would go to any extent to please his Advocate friend, who is the counsel for the third respondent in the present matter and as such, the petitioner would not get justice from the Debts Recovery Tribunal, Coimbatore, and as such, he made a request to transfer the matter to any other Tribunal. 10. The learned counsel for the petitioner informed us that a quo-warranto petition has already been filed against the Presiding Officer and the same is coming up for consideration before the First Bench of this Court. 11. 10. The learned counsel for the petitioner informed us that a quo-warranto petition has already been filed against the Presiding Officer and the same is coming up for consideration before the First Bench of this Court. 11. The standing counsel for the Indian overseas Bank, the second respondent in the present writ petition, also submitted that a particular lawyer influences the decision of the Presiding Officer and a verification of the records of Debts Recovery Tribunal, Coimbatore, would prove this fact. 12. The learned standing Counsel by placing reliance on certain orders passed by the Debts Recovery Tribunal, Coimbatore, contended that it is high time that the said officer is transferred from Coimbatore, as otherwise, litigants would be put to untold hardship. The Presiding Officer has been passing orders at his whims and fancies without any regard to the settled legal position. 13. The learned senior counsel for the third respondent was not in a position to deny the allegations made by the learned counsel for the petitioner and the second respondent against the Presiding Officer, Debts Recovery Tribunal, Coimbatore. According to the learned senior counsel, being the auction purchaser, third respondent wanted early disposal of the matter and she has no objection for transferring the matter to any other Debts Recovery Tribunal. The learned Senior counsel further submitted that instead of transferring the matter to Debts Recovery Tribunal, Madurai, it would be helpful to the parties in case the matter is transferred to the Debts Recovery Tribunal, Chennai. 14. We have also perused the records summoned from the Debts Recovery Tribunal, Coimbatore. DISCUSSION:- 15. The appeal in question was preferred by the petitioner and it was numbered as Appeal No.1/2009. The third respondent was not a party to the proceeding. The third respondent in her capacity as auction purchaser filed an application in I.A.No.278/2012 to implead her as a party to the proceeding. The application was filed by Ms. Sankaran Latha, Advocate, Coimbatore, on 27 March 2012. The application was taken on file and allowed by the Debts Recovery Tribunal, Coimbatore even without ordering notice to the writ petitioner or Bank. The application in I.A.No.278/2012 does not contain any indication that before filing the said application, copy has been served on the petitioner. The application was filed by Ms. Sankaran Latha, Advocate, Coimbatore, on 27 March 2012. The application was taken on file and allowed by the Debts Recovery Tribunal, Coimbatore even without ordering notice to the writ petitioner or Bank. The application in I.A.No.278/2012 does not contain any indication that before filing the said application, copy has been served on the petitioner. We are not in a position to understand as to how in a pending matter, an application could be moved by a third party without giving notice to the other side whether it be the petitioner or the respondent. Though the petitioner was not given notice in the impleading petition in I.A.No.278/2012, he was given notice in I.A.No.285/2012 filed to review the order in I.A.No.522 of 2009. The Presiding Officer ought to have issued notice to the petitioner before passing orders in the interlocutory application to implead the third respondent as a party to the appeal. There is no dispute that it is the discretion of the Court to implead a party to a pending matter, in case, for an effective adjudication of the matter, presence of such party is absolutely necessary. Even in such a case, before deciding the issue, the petitioner who was instrument in filing the application should have given due audience. The presiding officer appears to have ignored basic principles of justice. 16. This Bench has been dealing with Debts Recovery Tribunal cases for the last one year. We have come across several such illegal orders passed by the Presiding Officer, Debts Recovery Tribunal, Coimbatore. Writ petitions and Civil Revision Petitions have been preferred not only by the borrowers but also by the Banks and other financial institutions. In some cases, the Bank settled the matter with the principal borrower or guarantor. The Presiding Officer was not in favour of such settlement. This made the Presiding Officer to pass orders directing Chairman and Managing Director of the Bank to submit a report, detailing the circumstances under which the local officials settled the matter with the principal debtor. In some of the matters involving Indian Overseas Bank, the Presiding Officer permitted the borrower to auction and sell machineries and to pay the amount even without notice to the Bank. This made the Bank to file writ petitions before this Court and we have already stayed such orders. In some of the matters involving Indian Overseas Bank, the Presiding Officer permitted the borrower to auction and sell machineries and to pay the amount even without notice to the Bank. This made the Bank to file writ petitions before this Court and we have already stayed such orders. Bank would be in a position to engage a counsel at Chennai and file writ petitions and civil revision petitions. It is only the poor borrowers who have to pay the amount, ultimately along with the litigation expenses incurred by the Bank. In case the borrowers and the guarantors are affected, necessarily, they have to engage a counsel here at Madras and file appropriate applications to challenge such orders. This also would cause considerable expenses to the poor litigants. 17. There is no doubt that the Debts Recovery Tribunal, Coimbatore, is entitled to pass discretionary orders, in accordance with law. The problem is on account of passing orders violating the mandatory provisions of law. The petitioner in the present writ petition and the petitioners in other writ petitions as well as the Standing Counsel for different banks jointly made allegations against the Presiding Officer stating that he has been supporting a particular counsel and whenever the said counsel is engaged, the officer would pass favourable orders to please that counsel, flouting the legal provisions. 18. M/s Canara Bank, Kongu Nagar, Tiruppur, filed a writ petition before this Court in W.P.No.9775 of 2012 challenging the order passed by the very same Presiding Officer restraining the Bank from proceeding under the SARFAESI Act. The said order was challenged by the borrower in W.P.No.2103/2012 complaining that the original application was allowed even without permitting the borrower to file his statement. During the course of hearing of those two writ petitions, the learned counsel for the petitioner as well as the Bank made similar allegations against the Presiding Officer. While disposing of those writ petitions, we have expressed our strong displeasure in passing such orders in a hasty manner. The relevant paragraph or the order reads thus:- 10. There is nothing on record to show that the borrowers have filed their counter in O.A.No.72 of 2011. In fact, the first hearing itself was only on 14 September, 2011. We are not in a position to understand the logic in passing such hasty orders by the Debts Recovery Tribunal, Coimbatore. The relevant paragraph or the order reads thus:- 10. There is nothing on record to show that the borrowers have filed their counter in O.A.No.72 of 2011. In fact, the first hearing itself was only on 14 September, 2011. We are not in a position to understand the logic in passing such hasty orders by the Debts Recovery Tribunal, Coimbatore. In fact, we have been witnessing many such orders passed by the Presiding Officer, Coimbatore in a hasty manner and in violation of the mandatory previsions of the statute. The members of the legal fraternity time and again complained across the Bar that the Presiding Officer, Debts Recovery Tribunal, Coimbatore is in the habit of keeping the records with him till the appeal time is over and never issues the certified copy of the order before the statutory period for filing appeal. We do not want to comment anything n this, at this point of time, without giving an opportunity to the Presiding Officer to offer his remarks. 11. The impugned order clearly shows that the Debts Recovery Tribunal, Coimbatore violated all the canons of justice in his attempt to dispose of matters. We are not in a position to appreciate the course of conduct adopted by the Debts Recovery Tribunal to dispose of the original application without giving an opportunity to the parties either to file their statement or to make submissions. 19. Factual matrix of the present case clearly indicates that the Presiding Officer allowed the impleading application filed by the third respondent without even issuing notice to the petitioner. The factum of impleading coupled with the appearance of a particular counsel made the petitioner to entertain a reasonable doubt that he would not get justice from the Presiding Officer. We are not here to examine the said issue in extensor more on account of the fact that we have not called for a report from the Presiding Officer with regard have not called for a report from the Presiding Officer with regard to such allegations. In any case, the parties have now expressed their consent to transfer the matter to Debts Recovery Tribunal, Chennai. 20. In any case, the parties have now expressed their consent to transfer the matter to Debts Recovery Tribunal, Chennai. 20. We are, therefore, of the view that interest of justice would be sub-served in case the appeal preferred by the petitioner in Appeal No.1/2009 is transferred from the file of Debts Recovery Tribunal, Coimbatore, to the Debts Recovery Tribunal, Coimbatore, to the Debts Recovery Tribunal II, Chennai. 21. The Registry is directed to transfer the records received from the Debts Recovery Tribunal, Coimbatore, directly to the Debts Recovery Tribunal II, Chennai, along with a copy of this order so as to enable the Tribunal to take up the matter and dispose of the same in accordance with law. 22. We have already extracted the submissions made before us by the counsel on either side in the present writ petition and the members of the Bar. In fact, the Bar was unanimous while making submission that the Presiding Officer, Debts Recovery Tribunal, Coimbatore, has been showing undue favour to a particular counsel and that appearance of that counsel would tilt the balance in favour of the party who has engaged the said counsel. Litigants should have a feeling that their cases are heard by the Presiding Officer without bias. Judiciary would lose its name in case parties entertain a reasonable doubt, about the integrity of the Presiding Officer. We have been seeing many such orders passed by the Presiding Officer, Debts Recovery Tribunal, Coimbatore, taking contradictory stand and passing orders in violation of the settled legal principles. Therefore, we are of the view that the matter requires consideration by the concerned authorities. 23. The Secretary, Ministry of Finance, New Delhi, and Ministry of Law and Justice, are directed to conduct an enquiry and take appropriate action the matter. 24. The writ petition is disposed of with the above direction. Consequently, connected miscellaneous petition are closed.