JUDGMENT : Chander Bhusan Barowalia, J. The plaintiff/applicant has maintained a suit for recovery of Rs.2,03,45,000/- (Rupees two crore three lac forty five thousand) against the defendants/non-applicants. As per the applicant, pursuant to advertisements, dated 18.07.2014 and 19.08.2014 issued by non-applicants, the applicant successfully participated in e-auction. The applicant deposited a sum of Rs.1,18,45,000/- (Rupees one crore eighteen thousand and forty five thousand) and Rs.35,00,000/- (Rupess thirty five lac). Consequent to the payments made by the applicant, sale certificate, dated 05.09.2014, was issued in her favour. It is further contended that the property being put to auction was free from all encumbrances, as claimed in the advertisements. However, when she tried to get the property entered in her name, it was unearthed that this Court in Civil Suit No. 85 of 2008 has passed interim orders restraining the property to be sold, encumbered, transferred in any manner. As per the applicant, the non-applicants were well aware that the property cannot be sold, encumbered, but they went with issuing the advertisements. Due to the fraudulent acts of the non-applicants, the applicant suffered pecuniary loss of Rs.1,53,45,000/- (Rupees one crore fifty three lac forty five thousand) and besides this she has also suffered damages to the tune of Rs.50,00,000/- (Rupees fifty lac). The applicant served legal notices upon the non-applicants, but they turned deaf ear to the same, hence the present suit seeking a decree of Rs.2,03,45,000/- (Rupees two crore three lac forty five thousand) alongwith interest @ 18% per annum. 2. Non-applicants filed separate written statements refuting the allegations made in the plaint. However, at this stage no exhaustive discussion of written statements is required, as this Court is only deciding application filed by the applicant under Order 11, Rules 1 and 2 CPC seeking permission of this Court to submit interrogatories with further direction to the non-applicants to answer the said interrogatories. In a nut shell, suit is pending adjudication and as per the applicant, the non-applicants received huge amount of money and the applicant is seeking recovery of that money alongwith interest and damages. The applicant by way of moving the present application seeking permission of this Court to take on record the following interrogatories: “1. Whether defendants issued advertisements dated 18.07.2014 and 19.08.2014, copies of which are available on records? 2. Whether plaintiff in sequel to advertisement dated 19.08.2014 participated in E-auction? 3.
The applicant by way of moving the present application seeking permission of this Court to take on record the following interrogatories: “1. Whether defendants issued advertisements dated 18.07.2014 and 19.08.2014, copies of which are available on records? 2. Whether plaintiff in sequel to advertisement dated 19.08.2014 participated in E-auction? 3. Whether plaintiff is declared successful bidder? 4. Whether plaintiff deposited amounts of a sum of Rs. 1,18,45,000/- and Rs. 35,00,000/-? 5. Whether defendants issued sale certificate in favour of plaintiff, copy of which is already on records? 6. Whether in advertisement dated 19.08.2014, defendants have proclaimed and advertised that property, subject matter of sale which sale later on was confirmed, is free from all encumbrances? 7. Whether at the relevant time, there was interim orders having been passed by this Hon’ble Court in CS No. 85/08, were already in vogue? 8. Whether property as is sold to the plaintiff by defendants can be mutated in the revenue records in the name of plaintiff in view of interim orders passed by this Hon’ble Court, referred to supra? 9. Whether in view of interim orders passed by this Hon’ble Court, referred to supra, subject matter of sale between plaintiff and defendants could have been sold by defendant? 10. Whether plaintiff visited the office of defendants on more than half a dozen occasions with the request to get the property entered in the name of plaintiff in the revenue records? 11. Whether defendants filed application under order 1 rule 10 CPC to be added as party in CS No. 85/08? 12. Whether in OMP filed under order 1 rule 10 CPC by defendants, factum of interim orders dated 24.09.2008 being in the notice of defendants stand specifically stated? 13. Whether said OMP as filed is dated 3.7.2014 i.e. prior to the date of advertisements dated 18.7.2014 and 19.8.2014? 14. Whether bank being aware with respect to interim orders at the time of preparing and filing OMP, referred to supra in CS No. 85/08, was justified in proclaiming vide advertisements dated 18.7.2014 and 19.8.2014 that the same property is free from all encumbrances? 15. Whether in view of interim orders passed in OMP in CS NO. 85/08 by this Hon’ble Court, bank, in law, committed contempt of the directions of this Hon’ble Court in putting the property for E-auction vide advertisement dated 18.07.2014 and 19.7.2014?” 3. The non-applicant separately filed replies to the application.
15. Whether in view of interim orders passed in OMP in CS NO. 85/08 by this Hon’ble Court, bank, in law, committed contempt of the directions of this Hon’ble Court in putting the property for E-auction vide advertisement dated 18.07.2014 and 19.7.2014?” 3. The non-applicant separately filed replies to the application. Non-applicant No. 1 (Punjab National Bank) averred that the property in question was mortgaged with the bank and possession of the property was also taken under the provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as “SARFESI Act”). Non-applicant No. 1 had not been served with any notice from any Court or Tribunal qua restraint order against it or against non-applicant No. 2 (Canara Bank) from selling the property under the SARFESI Act. Non-applicants No. 1 and 2 provided credit facilities to Balaji Manganese Private Limited and M/s Balaji Sponge Iron Private Limited and in lieu of the same, property in question was mortgaged with them. Both, the borrower and guarantor, defaulted and only thereafter non-applicants exercised power under the SARFESI Act and applicant non-applicant No. 1 took possession of the property in question on 08.07.2008. Likewise, non-applicant No. 2 took possession of the property on 25.07.2008. Non-applicant No. 1 has further averred that it has filed a recovery suit for an amount of Rs.30,31,66,506/- (Rupees thirty crore thirty one lac sixty six thousand five hundred six) in the Debt Recovery Tribunal, Chandigarh, against M/S Balaji Manganese. Himachal Pradesh State Electricity Board issued letter dated 14.03.2014, which was replied by non-applicant No. 1, vide communication dated 25.04.2014. Subsequently, on 03.07.2014, non-applicant No. 1 filed an application under Order 1, Rule 10 CPC before the Hon’ble High Court in the same civil suit, titled HPSEV vs. M/s Balaji Manganese for impleading as party. On 24.12.2014, a supplementary affidavit was filed in Civil Suit No. 85 of 2008, whereby auction notice and sale certificates were placed on record. As per non-applicant No. 1, since the property was already sold there was no necessity to be arrayed as party before the Hon’ble Court in the said civil suit, so the application, filed for impleadment, was withdrawn and the Hon’ble Court recorded order dated 09.01.2015 to this effect. The non-applicants (Banks) issued e-auction notice in Indian Express newspaper, dated 18.07.2014, whereby the property was put to auction on 22.08.2014.
The non-applicants (Banks) issued e-auction notice in Indian Express newspaper, dated 18.07.2014, whereby the property was put to auction on 22.08.2014. The applicant, being the highest bidder, was sold property and non-applicant No. 1, i.e., Punjab National Bank, received Rs.1,18,45,000/- (Rupees one crore eighteen lac forty five thousand) and non-applicant No. 2, i.e., Canara Bank received Rs.35,00,000/- (Rupees thirty five lac) and sale certificate, dated 05.09.2014, was issued by the Bank. Non-applicant No. 1 has further averred that nothing was withheld in the advertisement and there had no encumbrance on the property, except the charge of the Banks. In the e-auction notice it was mentioned that e-auction is being held on “as is where is basis” and “as is what is basis” and that “To the best of knowledge and information of the Authorized officer, there is no encumbrance on any property. However, intending bidders should make their own independent inquiries regarding the encumbrances; title of the properties put on e-auction and claims/rights/dues/effecting the property, prior to submitting their bid. The e-auction advertisement does not constitute and will not be deemed to constitute any commitment or any representation of the respective banks. The property is sold with all the existing and future encumbrances whether known or unknown to the bank. The Authorized officer/secured creditors shall not be responsible in any way for any third party claims/rights/dues. Non-applicant No. 1 averred that in e-auction process no misrepresentation had been made by it and rather it was incumbent upon the auction purchaser to bid only after fully satisfying about the property qua encumbrance, title etc. By medium of the present application the applicant cannot be allowed to have beforehand knowledge that how non-applicant No. 1 will be proving its case. The interrogatories are frivolous, scandalous, vexatious and unnecessary and the application is sheer abuse of the process of Court of law. Lastly, non-applicant No. 1 prayed that the application, being misconceived, baseless and legally untenable, may be dismissed. 4. Non-applicant No. 2 has also filed reply to the application, wherein it has been contended that the present suit cannot be decided on the basis of interrogatories, as complex questions of fact and law are involved, which require examination of the witnesses, thus the application is without merits and same may be dismissed. It is further averred that non-applicant No. 2 was not aware of Civil Suit No. 85 of 2008.
It is further averred that non-applicant No. 2 was not aware of Civil Suit No. 85 of 2008. Non-applicant No. 2, i.e., Canara Bank, was not party to the said suit, thus the interim order, passed in the said suit, has not been in any manner violated on its part and the auction in favour of the applicant is valid, as she was the successful bidder. 5. The learned counsel for the applicant has argued that the non-applicants did not answer interrogatories No. 6, 7, 9 and 14 and they be answered. He has argued that in case the non-applicants answer these interrogatories the same will result into admission of the plaint and ultimately decree the suit, thus the non-applicants should answer these interrogatories. Conversely, the learned Senior Counsel for non-applicant No. 1 has argued that interrogatories were duly answered and the claim of the applicant, as set up in the plaint, is a matter of evidence, as the applicant (plaintiff) is claiming money decree. He has further argued that that there is distinction between restraint order and encumbrance. He has argued that all the interrogatories were answered and the only purpose of the interrogatories is to gather information and nothing more, thus the applicant (plaintiff) cannot say that decree may be passed only on the basis of the interrogatories. 6. The learned counsel for the applicant (plaintiff), in rebuttal, has argued that in case all the interrogatories are answered in the right perspective, the suit will be decreed only on the basis of admission. 7. In order to appreciate the rival contentions of the parties, I have gone through the record carefully. 8. Non-applicant No. 1 has filed a comprehensive reply to the application and a bare perusal of the same shows that the precise stand of non-applicant No. 1 is that there was no encumbrance on the property, except the charge of the banks. As per non-applicant No. 1, the suit is merit-less and has been filed on bogus grounds. In auction notice it was specifically mentioned that e-auction is being held on “as is where is basis” and “as is what is basis”. The further stand of non-applicant No. 1 extracted in verbatim as under: “That to the best of knowledge and information of the Authorized Officer, there is no encumbrance on any property.
In auction notice it was specifically mentioned that e-auction is being held on “as is where is basis” and “as is what is basis”. The further stand of non-applicant No. 1 extracted in verbatim as under: “That to the best of knowledge and information of the Authorized Officer, there is no encumbrance on any property. However, intending bidders should make their own independent inquiries regarding the encumbrances; title of the properties put on auction and claims/rights/dues/effecting the property, prior to submitting their bid. The e-auction advertisement does not constitute and will not be deemed to constitute any commitment or any representation of the respective banks. The property is sold with all the existing and future encumbrances whether known or unknown to the bank. The Authorized Officer/secured creditors shall not be responsible in any way for any third party claims/rights/dues. Accordingly, it was amply clear that bank clearly stipulated in advertisement that there is no encumbrance to the best of its knowledge and information. Hence there is no misrepresentation on part of bank. Further, it was also made incumbent upon the auction purchaser to submit bid after duly satisfying about the property regarding encumbrance/title.” 9. On the other hand, non-applicant No. 2, by medium of his reply to the application, has contended that the controversy involved in the present matter cannot at all be adjudicated wholly on the basis of interrogatories, as the matter is complicated and witnesses are required to be examined. Non-applicant No. 2 has further contended that it was not aware about Civil Suit No. 85 of 2008, wherein interim order was passed by the Court, and it was not party to the said suit, thus no violation is attributable on it. Lastly, it has been contended that plaintiff (applicant), being successful bidder, was rightly granted auction. 10. Now, the only question which remains to be answered is whether all the interrogatories have been answered by the non-applicants (defendants) or not. Admittedly, all the interrogatories have not been answered one by one. Non-applicant No. 1, in reply to interrogatory No. 6 submitted that the bank was not impleaded in any litigation and there was no notice to the bank. In reply to interrogatory No. 7 it has been specifically contended that Authorized Officer/Secured Creditors shall not be responsible, in any way, for any third party claims, rights and dues.
Non-applicant No. 1, in reply to interrogatory No. 6 submitted that the bank was not impleaded in any litigation and there was no notice to the bank. In reply to interrogatory No. 7 it has been specifically contended that Authorized Officer/Secured Creditors shall not be responsible, in any way, for any third party claims, rights and dues. Further, the answer of interrogatories No. 9 and 14 seems to be that there was no encumbrance to the best knowledge of the non-applicants and it was for the applicant to ascertain the facts before making the bid. 11. Order 11, Rules 1 and 2 CPC reads as under: “Order XI Discovery and Inspection R. 1. Discovery by interrogatories.- In any suit the plaintiff or defendant by leave of the Court may deliver interrogatories in writing for the examination of the opposite parties or any one or more of such parties, and such interrogatories when delivered shall have a note at the foot thereof stating which of such interrogatories each of such persons is required to answer: Provided that no party shall deliver more than one set of interrogatories to the same party without an order for that purpose: Provided also that interrogatories which do not relate to any matters in question in the suit shall be deemed irrelevant; notwithstanding that they might be admissible on the oral cross-examination of a witness. R. 2. Particular interrogatories to be submitted.- On an application for leave to deliver interrogatories, the particular interrogatories proposed to be delivered shall be submitted to the Court. [and that court shall decide within seven days from the day of filing of the said application]. In deciding upon such application, the Court shall take into account any offer, which may be made by the party sought to be interrogated to deliver particulars, or to make admissions, or to produce documents relating to the matters in question, or any of them, land leave shall be given as to such only of the interrogatories submitted as the Court shall consider necessary either for disposing fairly of the suit or for saving costs.” 12. Now, as discussed hereinabove, the interrogatories have been answered by the non-applicants (opposite parties), thus this Court is required to adopt the recourse as provided under Order 10, Rule 1 CPC, which is extracted hereinbelow for ready reference: “Order X EXAMINATION OF PARTIES BY THE COURT [R. 1A.
Now, as discussed hereinabove, the interrogatories have been answered by the non-applicants (opposite parties), thus this Court is required to adopt the recourse as provided under Order 10, Rule 1 CPC, which is extracted hereinbelow for ready reference: “Order X EXAMINATION OF PARTIES BY THE COURT [R. 1A. Direction of the Court to opt for any one mode of alternative dispute resolution.- After recording the admissions and denials, the Court shall direct the parties to the suit to opt either mode of the settlement outside the court as specified in sub-section (1) of Section 89. On the option of the parties, the Court shall fix the date of appearance before such forum or authority as may be opted by the parties.]” 13. In view of settled legal position, as enumerated Under Order 11, Rules 1 and 2 CPC and Order 10, Rule 1A CPC, the application is disposed of. Now, let the parties be heard with regard to option for choosing the forum for redressal of their dispute either by mediation, conciliation or by other proceedings, as provided under Section 89 of CPC.