Ramdev Ginning Factory v. Chief Manager, Authorised Officer, ICICI Bank Ltd.
2016-06-30
RAJENDRA MENON, VIVEK RUSIA
body2016
DigiLaw.ai
ORDER Rusia, J. -- 1. Facts of the case are not disputed, hence they are stated in short. Petitioner took a commercial loan from the respondents No.1 and 2 on 19.7.2005 sum of Rs.2,21,20,000/-. In default of non-payment of the said loan, his account was declared NPA by the bank on 31.3.2008 and that time liability was Rs.2,23,97,835/-. Since the property of the petitioner was mortgaged with the bank, therefore, the bank has taken possession of the said property on 24.8.2009 under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the SARFAESI Act’). Thereafter, petitioner tried to negotiate with the bank by way of offering Rs.1,60,00,000/- vide letter dated 10.9.2009 and Rs.1,90,00,000/- vide letter dated 7.10.2009. When the dispute could not be settled, then petitioner approached this Court by way of writ petition in which by way of interim order dated 12.8.2010 auction was stayed by this Court but later on the writ petition was dismissed on 12.7.2010 on the ground of availability of alternative remedy of appeal before the Debt Recovery Tribunal, Jabalpur (for short ‘the DRT’). 2. Petitioner filed an application under section 17 of the SARFAESI Act on 25.10.2010. An objection was raised by the bank that it was barred by limitation. During the pendency of the said application, the bank sold the mortgaged property by way of private treaty to respondent No.3 i.e. Ravi Joshi. When this fact came to the knowledge of the petitioner, he immediately moved an application for amendment on 8.11.2011 in the said application and which gave him a fresh cause of action. However, the application No.183/2010 was dismissed by the DRT on the ground of limitation. Being aggrieved by the order dated 11.4.2012, petitioner preferred an appeal before the Debt Recovery Appellate Tribunal at Allahabad (for short ‘the DRAT”) by way of Appeal No.121/12. Vide order dated 13.12.2012 the appeal filed by the petitioner was allowed on the ground that the bank has wrongly sold the property to Ravi Joshi for a sum of Rs.1.75 crores and the Application No.183/10 was not barred by any limitation in view of the fresh cause of action. The DRAT has further granted liberty to the petitioner to make an offer of Rs.2,70,00,000/- in the interest of the bank as well as of the borrower.
The DRAT has further granted liberty to the petitioner to make an offer of Rs.2,70,00,000/- in the interest of the bank as well as of the borrower. It was observed in para 16 of the order by the DRAT that the appellant is entitled to get the property redeemed as per section 91 of the Transfer of Property Act. The DRAT granted time to the petitioner to deposit the remaining amount of Rs.1,70,00,000/- with the bank within a period of 30 days from the date of passing of the order. 3. Respondents No.1 and 2 Bank filed a Writ Petition No.603/2013 against the order of DRAT dated 13.12.2012 in which Ravi Joshi was impleaded as respondent No.4. In the said writ petition one M/s. Goldy Contractors and Developers (P) Ltd. filed an application for intervention on the ground that the necessary amount of Rs.1,00,00,000/- was not deposited by the borrower, but in fact, it was deposited by him on 30.4.2012 and he is the real purchaser of the property in question for Rs.2.70 crores. It is further submitted that he is willing to purchase the property and on his behalf an offer was made by the respondent No.1, therefore, demand draft of Rs.1 crore was paid by the present intervenor to respondent No.1. He is ready to deposit the remaining amount of Rs.1.70 crores in terms of the order passed by the DRAT. The said application was directed to be considered at the time of final hearing. Vide order dated 31.7.2013 the writ petition was dismissed and the order of DRAT dated 13.12.2012 was upheld. In para 30 of the order, the Division Bench of this Court has observed that the dispute is between the intervener and the respondent No.1 i.e. the present petitioner, therefore, same cannot be decided in this writ petition. The intervener is having other remedy, therefore, we are not inclined to resolve the controversy between the respondent No.1 and the intervener. Para 30 of the aforesaid order is reproduced below : “30. In respect of the dispute between intervenor and the respondent No.1, the same cannot be decided in this writ proceedings. The intervener is having other remedy and therefore, we are not inclined to resolve the controversy between the respondent No.1 and intervenor.
Para 30 of the aforesaid order is reproduced below : “30. In respect of the dispute between intervenor and the respondent No.1, the same cannot be decided in this writ proceedings. The intervener is having other remedy and therefore, we are not inclined to resolve the controversy between the respondent No.1 and intervenor. We also take a note that Shri S.M. Sanyal, learned counsel for the respondent No.1 during the course of arguments made an offer of Rs.3 crores and also submitted that he will deposit Rs.30,00,000 (Rs.Thirty lacs) more to the offer made before the appellate Tribunal.” 4. That in view of the liberty granted by this Court M/s. Goldy Contractors and Developers (P) Ltd. filed an Application No.331 of 2013 in Appeal No.121/12 before the DRAT, Allahabad. The DRAT in its detailed order has allowed the application filed by M/s. Goldy Contractor and the bank was directed to carry out the order dated 13.12.2012 by issuing a sale certificate in favour of M/s. Goldy Contractors. Para 27 of the aforesaid order is reproduced below: 27. For the reasons as aforesaid, the application filed by M/s. Goldy Contractor and Developers Pvt. Ltd. is allowed and the bank is directed to carry out the order passed by this Tribunal on 13.12.2012 by issuing the sale certificate in favour of M/s. Goldy Contractor and Developers Pvt. Ltd. And also the order passed today by taking necessary steps on receipt of the amount as directed in earlier part of this judgment. Accordingly, the application stands allowed. 5. Now the borrower i.e. Ramdev Ginning Factory has filed the present writ petition before this Court being aggrieved by the order passed by the DRAT dated 8.10.2013. The sole contention raised by Shri Sanyal, learned counsel for the petitioner is that the DRAT has wrongly exercised the powers and entertained the application filed by respondent No.4 in his appeal No.121/12. When the final order has been passed on 11.4.2012 the DRAT has become functus officio and could not have entertained the application filed by the respondent No.4. He has further submitted that it is not the proper remedy available to respondent No.4 as liberty was granted by the Division Bench of this Court vide order dated 31.7.2013, therefore, the impugned order is liable to be set aside for want of jurisdiction. 6.
He has further submitted that it is not the proper remedy available to respondent No.4 as liberty was granted by the Division Bench of this Court vide order dated 31.7.2013, therefore, the impugned order is liable to be set aside for want of jurisdiction. 6. Shri Abhinav Malhotra, learned counsel appearing for respondent No.3 argued in support of the petitioner and submitted that the Tribunal is a creation of Statute namely “the SARFAESI Act of 2002” wherein there is no provision to review or recall of its order. Under section 18 the appeal lies only against the order of DRT, therefore, the DRAT has wrongly assumed the power and passed the impugned order. He has further submitted that though he purchased the property by way of private treaty and filed the Writ Petition No.13185/13 before this Court challenged the order of DRAT but at present he is not interested in the purchase of property and only wants the amount of Rs.1.70 crores deposited with the bank be returned back to him with interest. 7. Shri A.K. Sethi, learned senior counsel for the respondent No.4 submits that respondent No.4 is the real purchaser and deposited the amount of Rs.1,00,00,000/- on behalf of the petitioner, therefore, Tribunal has rightly entertained his application which was the only remedy available to him to get the relief. 8. We have heard learned counsel for the parties at length and in our considered opinion the only question arises in this petition for adjudication is that “whether the DRAT has rightly entertained the Application No.331/13 filed by the respondent No.4”. The DRAT has been constituted under the Recovery of Debts due to Banks and Financial Institutions Act, 1993. The DRAT is the appellate forum where the appeal lies against the order passed by the DRT under section 17 of the SARFAESI Act of 2002. For ready reference section 18 is reproduced below : 18. Appeal to Appellate Tribunal.
The DRAT has been constituted under the Recovery of Debts due to Banks and Financial Institutions Act, 1993. The DRAT is the appellate forum where the appeal lies against the order passed by the DRT under section 17 of the SARFAESI Act of 2002. For ready reference section 18 is reproduced below : 18. Appeal to Appellate Tribunal. -- (1) Any person aggrieved, by any order made by the Debts Recovery Tribunal (under section 17, may prefer an appeal along with such fee, as may be prescribed) to an appellate Tribunal within thirty days from the date of receipt of the order of Debts Recovery Tribunal: (Provided that different fees may be prescribed for filing an appeal by the borrower or by the person other than the borrower): Provided further that no appeal shall be entertained unless the borrower has deposited with the appellate Tribunal fifty percent of the amount of debt due from him, as claimed by the secured creditors or determined by the Debts Recovery Tribunal, whichever is less : Provided also that the appellate Tribunal may, for the reasons to be recorded in writing, reduce the amount to not less than twenty-five percent of debt referred to in the second proviso). (2) Save as otherwise provided in this Act, the appellate Tribunal shall, as far as may be, dispose of the appeal in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) and rules made thereunder. 9. Except the power to be exercised as appellate authority in the entire Act, the DRAT has no further power of review and revision, therefore, the DRAT cannot assume the power which is not available and provided under the Act. In view of the aforesaid, learned counsel for the petitioner was right in saying that after passing the order under section 18 by the DRAT, the Tribunal has become functus officio and cannot go beyond its powers. Once the order of the Tribunal dated 11.4.2012 has been upheld by the High Court vide order dated 31.7.2013 in Writ Petition No.603/13 then the Tribunal cannot review its own order.
Once the order of the Tribunal dated 11.4.2012 has been upheld by the High Court vide order dated 31.7.2013 in Writ Petition No.603/13 then the Tribunal cannot review its own order. In para 30 of the judgment, the Division Bench has held that so far as the dispute between the intervener and the respondent No.1 is concerned same cannot be decided in the writ petition and the intervener is having other remedy to resolve the dispute between them. This Court has only granted liberty to the respondent No.4 to resolve the dispute with the petitioner and not with the bank, therefore, the respondent No.4 may have a remedy to approach the Court of Law against the petitioner but the intention of this Court was not that the intervener should approach the DRAT to seek recall of earlier order dated 13.12.2012, therefore, in our considered opinion the DRAT has travelled beyond its jurisdiction vested to it under the Statute of 2002 and passed the impugned order. 10. In view of the aforesaid, we have no option but to set aside the same. Accordingly the impugned order is set aside and the consequences shall follow.