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2015 DIGILAW 748 (CAL)

Indrajit Roy v. Bank of Baroda

2015-09-04

HARISH TANDON

body2015
JUDGMENT : Harish Tandon, J. 1. In an original proceeding an application was taken out for attachment before judgment with further prayer in the form of injunction restraining the petitioner from encumbering, transferring or dealing with the properties mentioned in the said application. 2. Admittedly a credit facility was extended to one Monirul Alam in the nature of house-loan for Rs.12,00,000/- and odd by the Bank. It is alleged that the said Monirul Alam neglected and failed to pay the outstanding dues even after the demand having raised upon him. It is further alleged in the said petition that the said Monirul Alam mortgaged a Flat, being G-1 on the 3rd Floor of the building having super built up area of 1302 sq. ft. lying and situated at Mouza Bagjola, Municipal Holding No. 06/73, M.M. Ghosh Road, Kolkata - 700 074 by depositing the title deed. 3. In paragraphs 3 & 4 of the application it is stated that since the said property would not fetch the amount due to the Bank because the present value whereof is much less than the same, the enquiry was conducted as to the personal properties of the defendants therein including the petitioner and it appears that the petitioner is the owner of an immovable property jointly with the wife, Jayati Roy, in respect of a piece and parcel of land measuring 2 cottahs 13 chittacks and 21 sq. ft., being Premises No. 50, G.B. Road under the South Dum Dum Municipality, where one storied house has been erected. 4. Paragraph 5 thereof relates to the service of summons and non-appearance of the parties before the Tribunal. In paragraph 6, the Bank proceeds to say that the defendants avoided the payment of the lawful dues and in there an apprehension that they may deal not only the secured property but also their personal properties to negate or frustrate the claim of the Bank by creating a third party interest. 5. Paragraph 7 simply contains the statements relating to prejudice and loss, which the Bank would suffer, in the event the defendants failed to furnish security and if the order of attachment is not passed. 6. Paragraphs 8 & 9 contain the standard statements required to be made for attachment before judgment. 5. Paragraph 7 simply contains the statements relating to prejudice and loss, which the Bank would suffer, in the event the defendants failed to furnish security and if the order of attachment is not passed. 6. Paragraphs 8 & 9 contain the standard statements required to be made for attachment before judgment. Paragraph 10 relates to the prayer for injunction against in dealing with those properties by the defendants and in paragraph 11 the Bank prayed for appointment of a Special Officer to make an inventory of the scheduled property. 7. On the backdrop of the aforesaid averments the following reliefs are claimed in the said application: (a) Direct the defendants to furnish security to the applicant for a sum of Rs.21,45,795/- before this Hon’ble Tribunal; (b) In default of furnishing security as aforesaid an order of attachment before judgment of properties mentioned in Schedule-‘Y’ and ‘Z’ hereinafter written be passed; (c) A show cause to the defendants and an order for sale of the scheduled mentioned properties; (d) A Special Officer be appointed over the properties morefully mentioned in Schedule - ‘Y’ and ‘Z’ with a direction to make inventory and submit a Report to this Hon’ble Tribunal; (e) An order of Injunction restraining the Defendants and each of them, their servants, agents and assigns from dealing with or disposing of and or otherwise encumbering or transferring the properties and or fixed assets and bank account without the leave of this Hon’ble Tribunal; (f) The Defendants be directed to disclose their further personal properties, assets on affidavit before this Hon’ble Tribunal; (g) Any other relief as this Hon’ble Tribunal may deem fit and proper in the facts of this case.” 8. In the impugned order the Debts Recovery Tribunal fails and omits to record the observations relating to the attachment before judgment except that the interest of the Bank needs to be protected, when the secured property does not have the enough market value for recovery of the lawful dues. 9. Curiously enough the Presiding Officer of the Debts Recovery Tribunal proceeded to pass an order of injunction restraining the defendants therein from dealing with, disposing of or encumbering the property mentioned therein till further order of the Tribunal and disposed of the main application itself. 9. Curiously enough the Presiding Officer of the Debts Recovery Tribunal proceeded to pass an order of injunction restraining the defendants therein from dealing with, disposing of or encumbering the property mentioned therein till further order of the Tribunal and disposed of the main application itself. Astonishingly the other direction made by the said Tribunal was the issuance of the show cause upon the defendants and reply to be filed by them as to why the reliefs claimed in the said application should not be granted to the Bank. 10. If the Debts Recovery Tribunal issued a show cause and invited the reply from the defendants therein, in there no justification in disposing of the main application, as the said order would become nugatory and mere farce. 11. The attention of this Court is drawn to the provision of Section 19 (12) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 to show that the Tribunal is empowered to make an interim order either in the form of injunction or stay or attachment against the defendants to debar them from transferring, alienating or otherwise dealing with or disposing of any property and assets belonging to them without the prior permission of the Tribunal. 12. Mr. Saha, learned advocate appearing for the petitioner, submits that the petitioner is neither a borrower nor a mortgage of the property mentioned in the said application to secure the credit facility granted to the defendant no. 1 and, therefore, the Tribunal ought not to have proceeded to pass an order of injunction in respect of those properties. He audaciously submits that the property mentioned in the said application is mortgaged with the Bank of Baroda under a separate contract entered into between the Bank and his client and, therefore, has no nexus or bearing with the contract entered into between the Bank and defendant no. 1. He thus submits that the Tribunal ought not to have proceeded to in junct his client to deal with or dispose of the property mentioned therein, which is not kept as collateral security or mortgaged with the Bank in a contract with the defendant no. 1. 13. Mr. 1. He thus submits that the Tribunal ought not to have proceeded to in junct his client to deal with or dispose of the property mentioned therein, which is not kept as collateral security or mortgaged with the Bank in a contract with the defendant no. 1. 13. Mr. Srinivas, learned counsel appearing for the Bank, produces the original application filed before the Debts Recovery Tribunal, which contains General Form of Guarantee, wherein the petitioner is arraigned as guarantor undertaking to the due payment and discharge on demand of all amounts due and payable to the borrower. According to him, the Bank can proceed either against a borrower or a guarantor or both, as both the borrower and guarantor are jointly and severally liable for the lawful dues of the Bank. From the said General Form of Guarantee it appears that the petitioner stood as guarantor for due payment and discharge of the dues of the Bank and in there no impediment in proceeding against both the borrower and guarantor. 14. The point which hinges in this re-visional application is whether the personal propertys of a guarantor, which is not mortgaged with the Bank for securing the loan, can be included in the subject matter of the disputes before the Debts Recovery Tribunal and the said Tribunal can pass an appropriate order in exercise of power conferred under Section 19 (12) of the said Act. 15. Had it been a case that third party’s properties are sought to be attached, the position would have been different. Since the petitioner himself stood as a guarantor, it is necessary for the Tribunal to record the cogent findings before proceeding to pass an order of injunction or an attachment before the judgment, in there no justification in the findings that since the Bank’s money is to be secured or protected, the order of injunction or an attachment is an automatic consequence. The entire order impugned in this re-visional application is bereft of any findings or reasons for passing an order of injunction in favour of the Bank. Furthermore the Tribunal has not recorded any observations on the attachment before judgment and even after issuing the show cause proceeded to dispose of the said interlocutory application. The entire order impugned in this re-visional application is bereft of any findings or reasons for passing an order of injunction in favour of the Bank. Furthermore the Tribunal has not recorded any observations on the attachment before judgment and even after issuing the show cause proceeded to dispose of the said interlocutory application. The entire approach of the Presiding Officer of the Tribunal is contrary to provisions laid down under Order 38 of the Code of Civil Procedure as well as Section 19 (12) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. 16. An order without the reasons is no order in the eye of law. The injunction is not only preventive, but an equitable relief as well. For an equitable jurisdiction, the Tribunal must bear in mind the interest of both the parties, as it is not a one way traffic. Merely because the Bank’s interest is to be protected cannot be a ground for either passing an order of injunction or passing an order of attachment of the property before judgment. 17. This Court, therefore, finds that the entire approach of the Presiding Officer the Debts Recovery Tribunal is contrary to the substantive and procedural law and cannot be sustained. 18. The order impugned is thus set aside. 19. The application filed by the Bank shall be heard by the Tribunal afresh after permitting the petitioner to file counter affidavit to the same, which shall be filed within 10 days from date. The Bank is at liberty to pray for an ad interim order of injunction before the Tribunal, who shall consider the same in presence of both the parties and by recording reasons. 20. The Tribunal is further directed to dispose of I.A. No. 966 of 2015 within two weeks from the date of expiration of the period for exchange of affidavits by passing a reasoned order in accordance with law. 21. None of the observations recorded herein above shall have persuasive effect upon the Tribunal in disposing of the said I.A. No. 966 of 2015 and the Tribunal shall not be influenced by any observations made herein above. 22. With the above observations, the revisional application is disposed of. 23. There will be no order as to costs.