PAWAN KUMAR PODDAR v. BANK OF INDIA, RANCHI MAIN BRANCH, RANCHI
2016-03-15
APARESH KUMAR SINGH
body2016
DigiLaw.ai
ORDER : APARESH KUMAR SINGH, J. 1. Proceedings initiated by the respondent-Bank of India for recovery of outstanding dues of M/s Ellen Breweries and Distilleries Pvt. Ltd. and Others in O. A. Case No. 125 of 2002 vide decree dated 28.02.2006 led to Recovery Proceeding No. 09 of 2006 before the learned Recovery Officer, DRT, Ranchi. The description of properties auctioned are as follows:- M.S. Plot No. 1718, Holding No. 1396 (New) Ward No. 1 of the Ranchi Municipal Corporation Area, Court Road, Ranchi, Total area-3 Katha. Bounday : East- Portion of M.S. Plot No. 1718 belonging to Sh. A. K. Banerjee and Sh. J. Banerjee, West- Kutchery Road, South-Portion of M. S. Plot No. 1718, North M.S. Plot No. 1717. 2. Entire property described herein above on auction fetched total value of Rs. 66,75,000/-. Dues of the Bank was Rs. 34,10,219/-. It would not be out of place to mention here that auction was conducted on 28.03.2008 in the premises of DRT, Ranchi on "as is where is basis". Respondent no. 3, M/s Dilasha Commodities Pvt. Ltd. is the auction purchaser of the property described herein above. 3. In the background of all these facts, it is pertinent to mention that petitioner herein was a tenant of respondent no. 2, judgment debtor holding tenancy over 15 Katha of land of respondent no. 2 out of which 3 katha of land fall in the property auctioned as described herein above. As a tenant, he sought setting aside of the sale of immovable property in terms of Rule 60 of the Second Schedule of the Income Tax Act as adopted under Recovery of Debts Due to Banks and Financial Institutions Act, 1993 by making an offer of deposit. Petitioner, however, faced eviction suit in respect of tenanted premises and decree of eviction has been passed by learned Trial Court vide judgment and decree dated 10.03.2006 in Eviction Suit No. 06 of 1985 and upheld by the Appellate Court in Title Appeal No. 55 of 2006 vide judgment dated 20.12.2012. Petitioner has preferred Second Appeal bearing S. A. No. 20 of 2013 pending before this Court and has not yet been evicted of the tenant premises. Second Appeal has not yet been admitted. It is also brought to the notice of the Court that there are no stay over the eviction decree passed against the petitioner.
Petitioner has preferred Second Appeal bearing S. A. No. 20 of 2013 pending before this Court and has not yet been evicted of the tenant premises. Second Appeal has not yet been admitted. It is also brought to the notice of the Court that there are no stay over the eviction decree passed against the petitioner. Petitioner's request for setting aside of the sale of immovable property was negated not only by the Recovery Officer, but upheld by the DRT, Ranchi in Appeal No. 03 of 2009 dated 04.05.2011 and by the DRAT, Kolkata in Appeal No. 74 of 2011 dated 04.06.2012, Annexure-5 and 6 respectively. Therefore, petitioner is before this court challenging these impugned orders refusing to set aside the sale of immovable property sold in auction. Auction sale has also been confirmed in favour of the respondent no. 3 and certificate to that effect has also been issued. 4. Whether petitioner's interest would survive to prosecute the instant cause of action is dependent upon the outcome of the eviction matter and is an important factor to be taken into account when finally adjudicating the case. Other question involved is the status of tenant protected under the Rent Control Act in any such proceeding for realisation of Debts of Banks and other Financial Institutions under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 or SARFAESI Act, 2002. In the recent judgment rendered by the Apex Court in the case of Vishal N. Kalsaria v. Bank of India and Ors. in Criminal Appeal No. 52 of 2016 Reported in JBCJ 2016 (1) P.G. 434 (S.C.)dated 20.01.2016, the Hon'ble Supreme Court had been pleased to held as follows:- "38. It is a settled position of law that once tenancy is created, a tenant can be evicted only after following the due process of law, as prescribed under the provisions of the Rent Control Act. A tenant cannot be arbitrarily evicted by using the provisions of the SARFAESI Act as that would amount to stultifying the statutory rights of protection given to the tenant. A non obstante clause (Section 35 of the SARFAESI Act) cannot be used to bulldoze the statutory rights vested on the tenants under the Rent Control Act.
A tenant cannot be arbitrarily evicted by using the provisions of the SARFAESI Act as that would amount to stultifying the statutory rights of protection given to the tenant. A non obstante clause (Section 35 of the SARFAESI Act) cannot be used to bulldoze the statutory rights vested on the tenants under the Rent Control Act. The expression any other law for the time being in force as appearing in Section 35 of the SARFAESI Act cannot mean to extend to each and every law enacted by the Central and State legislatures. It can only extend to the laws operating in the same field. Interpreting the non obstante clause of the SARFAESI Act, a three Judge Bench of this Court in the case of Central Bank of India v. State of Kerala and Ors. has held as under: "18. The DRT Act and Securitisation Act were enacted by Parliament in the backdrop of recommendations made by the Expert Committees appointed by the Central Government for examining the causes for enormous delay in the recovery of dues of banks and financial institutions which were adversely affecting fiscal reforms. The committees headed by Shri T. Tiwari and Shri M. Narasimham suggested that the existing legal regime should be changed and special adjudicatory machinery be created for ensuring speedy recovery of the dues of banks and financial institutions. Narasimham and Andhyarujina Committees also suggested enactment of new legislation for securitisation and empowering the banks etc. to take possession of the securities and sell them without intervention of the Court. XXX XXX XXX 110. The DRT Act facilitated establishment of two-tier system of Tribunals. The Tribunals established at the first level have been vested with the jurisdiction, powers and authority to summarily adjudicate the claims of banks and financial institutions in the matter of recovery of their dues without being bogged down by the technicalities of the Code of civil Procedure. The Securitisation Act drastically changed the scenario inasmuch as it enabled banks, financial institutions and other secured creditors to recover their dues without intervention of the Courts or Tribunals. The Securitisation Act also made provision for registration and regulation of securitisation/reconstruction companies, securitisation of financial assets of banks and financial institutions and other related provisions. 111.
The Securitisation Act drastically changed the scenario inasmuch as it enabled banks, financial institutions and other secured creditors to recover their dues without intervention of the Courts or Tribunals. The Securitisation Act also made provision for registration and regulation of securitisation/reconstruction companies, securitisation of financial assets of banks and financial institutions and other related provisions. 111. However, what is most significant to be noted is that there is no provision in either of these enactments by which first charge has been created in favour of banks, financial institutions or secured creditors qua the property of the borrower. 112. Under Section 13(1) of the Securitisation Act, limited primacy has been given to the right of a secured creditor to enforce security interest vis-à-vis Section 69 or Section 69A of the Transfer of Property Act. In terms of that sub-Section, a secured creditor can enforce security interest without intervention of the Court or Tribunal and if the borrower has created any mortgage of the secured asset, the mortgagee or any person acting on his behalf cannot sell the mortgaged property or appoint a receiver of the income of the mortgaged property or any part thereof in a manner which may defeat the right of the secured creditor to enforce security interest. This provision was enacted in the backdrop of Chapter VIII of Narasimham Committee's 2nd Report in which specific reference was made to the provisions relating to mortgages under the Transfer of Property Act. 113. In an apparent bid to overcome the likely difficulty faced by the secured creditor which may include a bank or a financial institution, Parliament incorporated the non obstante clause in Section 13 and gave primacy to the right of secured creditor vis-a-vis other mortgagees who could exercise rights under Sections 69 or 69A of the Transfer of Property Act. However, this primacy has not been extended to other provisions like Section 38C of the Bombay Act and Section 26B of the Kerala Act by which first charge has been created in favour of the State over the property of the dealer or any person liable to pay the dues of sales tax, etc. ........ 116.
However, this primacy has not been extended to other provisions like Section 38C of the Bombay Act and Section 26B of the Kerala Act by which first charge has been created in favour of the State over the property of the dealer or any person liable to pay the dues of sales tax, etc. ........ 116. The non obstante clauses contained in Section 34(1) of the DRT Act and Section 35 of the Securitisation Act give overriding effect to the provisions of those Acts only if there is anything inconsistent contained in any other law or instrument having effect by virtue of any other law. In other words, if there is no provision in the other enactments which are inconsistent with the DRT Act or Securitisation Act, the provisions contained in those Acts cannot override other legislations. (emphasis laid by this Court)" 5. The auction purchaser does not intend to dispossess the petitioner till he is evicted as per due process of law. As a matter of fact noticed herein above, petitioner claims setting aside of auction to establish his ownership of only 3 Kathas of the auction sold property out of total 15 kathas of the tenanted plot. The auction proceedings were held on "as is where is basis" meaning thereby, the auction purchaser would get right, ownership and title over the property on as is where is basis and subject to his tenancy. 6. In such circumstances, adjudication of the plea raised by the petitioner herein can wait till the outcome of the eviction matter finally. This however in no way would limit right of the auction purchaser or the original owner of the property, which would only be subject to his tenancy right. It is informed that landlord has also moved the Recovery Officer, Ranchi seeking payment of balance amount left after meeting the decreetal amount of respondent-Bank. Let it be made clear that there are no restraint on any of these authorities/forums in proceedings in these respective matters pending before them. 7. For the aforesaid reasons, let the matter be posted after 16 weeks for its consideration.