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2018 DIGILAW 1249 (GUJ)

Amit Dinesh Patel v. State Bank of India

2018-12-10

A.C.RAO, MOHINDER PAL

body2018
JUDGMENT : A.C. RAO, J. 1. RULE. Learned counsel for the respondents waive service of notice of rule. At the request of the learned counsel for the respective parties, present petition is taken up for final hearing today and heard the learned counsel for the respective parties at length. 1.1 By way of this petition under Articles 226 and 227 of the Constitution of India, petitioners, who are defendants in Original Application No. 551 of 2018 filed by the respondents Banks herein for recovery of dues of loan amounting to Rs. 1600 Crores and who are promoters of Shirpur Power Private Limited, have preferred the present petition for a writ of Mandamus or any other appropriate writ, order and/or direction directing the learned Debt Recovery Tribunal-I, Ahmedabad to frame, consider and adjudicate the preliminary issues as more particularly stated in the Interlocutory Application No. 1159 of 2018 in Original Application No. 551 of 2018 before adjudicating Original Application No. 1159 of 2018 or any other issue and/or application in the Original Application No. 551 of 2018, pending before the DRT. By way of amendment, the petitioners have also prayed to direct the DRT to take up I.A. No. 1159 of 2018 at the outset, frame Preliminary Issue as therein requested and hear and decide the said I.A. No. 1159 of 2018, before proceeding further with the Original Application No. 551 of 2018. 2. Mr. Mihir Thakore, learned Senior Advocate has vehemently submitted that the petitioners have raised preliminary contention in their application and requested to frame Preliminary Issue about the Court Fees etc. contending inter-alia that they are not guarantors and the Personal Guarantee is not Tri-parte Agreement and therefore, the same is not enforceable. It is further submitted that the learned DRT cannot sit tight over the I.A. No. 1159 of 2018 filed in Original Application No. 551 of 2018, for framing Issue. It is further submitted that it is the duty of the learned DRT to either allow or reject the I.A. No. 1159 of 2018, however, learned DRT is not passing any order. It is further submitted that it is the duty of the learned DRT to either allow or reject the I.A. No. 1159 of 2018, however, learned DRT is not passing any order. It is submitted that if any order is passed by the learned DRT, the petitioners have right to challenge the said order before the appellate forum and if preliminary issue is not framed and the main Original Application No. 551 of 2018 is decided by the learned DRT, then the petitioners will have to deposit 25% to 50% of the decretal amount that may be passed by the learned DRT, before the appellate tribunal and therefore, the rights of the petitioners are seriously prejudiced. 3. Mr. Rashesh Sanjanwala, learned Senior Advocate has appeared on behalf of the respondents Banks herein - original Plaintiffs and vehemently resisted the present writ petition contending inter-alia that this writ petition is nothing but smart move by the petitioners to prolong the matter before the DRT. It is contended that Order 22 of the CPC would not be applicable to the DRT and DRT is required follow its own procedure. It is contended that after filing of the I.A. No. 1159 of 2018, the petitioners herein had filed I.A. No. 1427 of 2017 virtually seeking same prayers as prayed in I.A. No. 1159 of 2018. However, said I.A. No. 1427 of 2017 was not pressed by the petitioners herein before the DRT and same was disposed of by the learned DRT accordingly. However, the aforesaid material fact has been suppressed by the petitioners herein in the present petition and cursory reference is made in the petition that too at the fag end of the petition. 3.1 Mr. Rashesh Sanjanwala, learned Senior Advocate has appeared on behalf of the respondents Banks herein has further submitted that the petitioners himself have contended in the pleadings of the petition and admitted that DRT has indicated at various hearings that the DRT is not inclined to separately consider the matter of preliminary issue raised by the petitioners herein and the said issue will be considered Original Application. 3.2 Mr. Rashesh Sanjanwala, learned Senior Advocate appearing on behalf of the respondents Banks has further submitted that the respondents have executed Personal Guarantee for the loan taken by Shirpur Power Private Limited. 3.2 Mr. Rashesh Sanjanwala, learned Senior Advocate appearing on behalf of the respondents Banks has further submitted that the respondents have executed Personal Guarantee for the loan taken by Shirpur Power Private Limited. It is submitted that he respondents Banks have filed the Original Application No. 551 of 2018 for recovery of huge dues of loan amount of Rs. 1600 Crores, which is public money, and present proceeding is nothing but to delay the proceedings before the DRT. It is submitted that the contentions raised by the petitioners that the petitioners will have to deposit 25% to 50% amount of decretal amount of the decree that may be passed by the DRT before the appellate authority is no ground to entertain the present petition. It is submitted that under the circumstances, the present writ petition is not maintainable. It is further submitted that the present petition has been preferred with mala fide intention to prolong the proceedings and therefore the same is required to be dismissed. 4. Heard the learned counsel for the respective parties at length. Considering the material on record. 4.1 It appears from the record that the petitioners herein are defendants before the O.A. No. 551 of 2018 filed by the respondents Banks for recovery of huge dues of loan amount of about Rs. 1600 Crores, which is public money. 4.2 It appears that the petitioners herein - defendants before the DRT had filed I.A. No. 1159 of 2018 in Original Application No. 551 of 2018 for framing Preliminary Issue on or about 19/9/2018 and thereafter filed I.A. No. 1427 of 2017 on or about 13/11/2018 contending that I.A. No. 1159 of 2018 is pending and the Tribunal may take up hearing of the said application before taking up hearing of the Original Application and/or any other applications moved in the main Original Application No. 551 of 2018. It is pertinent to note that the said I.A. No. 1427 of 2018 was not pressed by the petitioners herein before the DRT and it was disposed of by the DRT vide order dated 14/11/2018, without prejudice to rights of the petitioners herein in earlier I.A. No. 1159 of 2018 and right to file fresh application on same cause of action if needed. In the subsequent I.A. No. 1427 of 2018 which was not pressed by the petitioners before the DRT virtually same prayer as prayed in I.A. No. 1159 of 2018 was prayed for and thereafter the present petition has been filed virtually for the same relief as was prayed in the I.A. No. 1427 of 2018. 4.3 So far as the contention raised by Mr. Thakore, learned Senior Advocate appearing on behalf of the petitioners that the petitioners will have to deposit 25% to 50% of the debt amount at the time of filing the appeal, which will put them in a disadvantageous position, cannot be a ground for circumventing the statutory provisions. Some of the provisions of a statute may be harsh to some of the litigants, but, that cannot be a ground to circumvent the other provisions laid down in the said statute or to make the said provisions null and void. 4.4 The petitioners had withdrawn I.A. No. 1427 of 2018 before the DRT with the same prayer which was withdrawn conditionally with a liberty to move afresh application for the same relief. Therefore, even otherwise, the petitioners have alternative remedy before the learned DRT to prefer a fresh application before the DRT. However, instead of availing the said alternative remedy before the DRT as prayed for by themselves while withdrawing I.A. No. 1427 of 2018 and granted by the learned DRT, the petitioners without availing the said alternative remedy, have approached this Court virtually for the same prayers as was prayed in I.A. No. 1427 of 2018 and hence also the present petition is not maintainable. 4.5 The Hon'ble Supreme Court, in the case of United Bank of India versus Satyawati Tondon reported in (2010) 8 SCC 110 while dealing with the provisions of the Secularization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, and the question regarding invocation of extraordinary powers under Article 226 and 227 of the Constitution of India, has held that the High Court ordinarily will not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person. The Hon'ble Supreme Court has further held that this rule of not entertaining a writ petition under Article 226, in case where there is an alternative effective remedy available, applies with a greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. It has also been held that before availing the remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute. At this juncture, it is necessary to quote paragraph 43 of the said judgment, which reads as under: "43. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues etc. the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, the High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute." 4.6 The learned DRT has granted liberty while disposing of I.A. No. 1427 of 2018 to move a fresh application for the same cause of action and for the same relief. However, we are not happy with the order of conditional withdrawal of I.A. No. 1427 of 2018. The petitioners have withdrawn I.A. No. 1427 of 2018 and virtually for the same relief, the petitioners have preferred the present petition. No reasons for granting conditional withdrawal have been assigned in the order. We are aware that as per Section 22 of the Recovery of Debts and Bankruptcy Act, 1993, provisions of the Code of Civil Procedure are not applicable to DRT. No reasons for granting conditional withdrawal have been assigned in the order. We are aware that as per Section 22 of the Recovery of Debts and Bankruptcy Act, 1993, provisions of the Code of Civil Procedure are not applicable to DRT. But there are plethora of decisions of the Hon'ble Apex Court that while passing order by the judicial or quasi judicial authority, reasons are required to be assigned. The order passed by the learned DRT permitting conditional withdrawal of I.A. No. 1427 of 2018 is not a reasoned order. It is settled principle that at the time of granting conditional withdrawal, authority or the Court has to ascertain whether any technical fault in the proceedings which could not be cured by amendment or circumstances are beyond the control which prevent the petitioners to proceed with the matter. Thus, only after satisfying itself, the authority or the Court can permit conditional withdrawal on sufficient ground. It is repeatedly held by the Hon'ble Apex Court that if such due care is not taken by the authority or the Court, as the case may be, while granting conditional withdrawal, otherwise it would be resulted in abuse of process of law. 4.7 The Hon'ble Apex Court in the following cases has laid down the following as abuse of process of law:- 4.7.1 In the case of Omprakash Verma and others vs. State of Andhra Pradesh and others, reported in (2010) 13 SCC 158 , the Hon'ble Supreme Court has observed and held as under:- "70. This Court has approved this well-settled principle that a judgment of the Supreme Court cannot be collaterally challenged on the ground that certain points had not been considered. This Court in Anil Kumar Neotia v. Union of India ([1988] 2 SCC 587) held that it is not open to contend that certain points had not been urged or argued before the Supreme Court and thereby seek to reopen the issue. The relevant portion of the judgment is as follows: "17. This Court further observed that to contend that the conclusion therein applied only to the parties before this Court was to destroy the efficacy and integrity of the judgment and to make the mandate of Article 141 illusory. 18. It is also no longer open to the petitioners to contend that certain points had not been urged and the effect of the judgment cannot be collaterally challenged." 76. 18. It is also no longer open to the petitioners to contend that certain points had not been urged and the effect of the judgment cannot be collaterally challenged." 76. In Forward Construction Co. v. Prabhat Mandal [(1986) 1 SCC 100] this Court held that an adjudication is conclusive and binding not only as to the actual matter determined but as to every other matter which the parties might and ought to have litigated and have had it decided. The following portion of the judgment is relevant which reads as under: (SCC p. 112, para 20). So far as the first reason is concerned, the High Court in our opinion was not right in holding that the earlier judgment would not operate as res judicata as one of the grounds taken in the present petition was conspicuous by its absence in the earlier petition. Explanation IV to Section 11 CPC provides that any matter which might and ought to have been made ground of defence or attack in such former suit shall be deemed to have been a matter directly and substantially in issue in such suit. An adjudication is conclusive and final not only as to the actual matter determined but as to every other matter which the parties might and ought to have litigated and have had it decided as incidental to or essentially connected with the subject-matter of the litigation and every matter coming within the legitimate purview of the original action both in respect of the matters of claim or defence. The principle underlying Explanation IV is that where the parties have had an opportunity of controverting a matter that should be taken to be the same thing as if the matter had been actually controverted and decided. It is true that where a matter has been constructively in issue it cannot be said to have been actually heard and decided. It could only be deemed to have been heard and decided." 4.7.2 The Hon'ble Apex Court in the case of Dalip Singh vs. State of Uttar Pradesh and others, reported in (2010) 2 Supreme Court Cases 114, in paragraphs 1 and 2 has observed and held as follows:- "1. For many centuries Indian society cherished two basic values of life i.e. satya (truth) and ahimsa (non-violence). Mahavir, Gautam Buddha and Mahatma Gandhi guided the people to ingrain these values in their daily life. For many centuries Indian society cherished two basic values of life i.e. satya (truth) and ahimsa (non-violence). Mahavir, Gautam Buddha and Mahatma Gandhi guided the people to ingrain these values in their daily life. Truth constituted an integral part of the justice-delivery system which was in vogue in the pre-Independence era and the people used to feel proud to tell truth in the courts irrespective of the consequences. However, post-Independence period has seen drastic changes in our value system. The materialism has overshadowed the old ethos and the quest for personal gain has become so intense that those involved in litigation do not hesitate to take shelter of falsehood, misrepresentation and suppression of facts in the court proceedings. 2. In the last 40 years, a new creed of litigants has cropped up. Those who belong to this creed do not have any respect for truth. They shamelessly resort to falsehood and unethical means for achieving their goals. In order to meet the challenge posed by this new creed of litigants, the courts have, from time to time, evolved new rules and it is now well established that a litigant, who attempts to pollute the stream of justice or who touches the pure fountain of justice with tainted hands, is not entitled to any relief, interim or final." 4.7.3 The Hon'ble Apex Court in the case of Ravinder Kaur vs. Ashok Kumar and another reported in (2003) 8 Supreme Court Cases 289 in paragraph 22 has observed and held as follows:- "22. All these facts apart, we notice that nowhere in the petition the respondent tenants claim to be in possession of any shop other than Shop No. 3 in regard to which they have suffered an eviction order. It is not their case that they are also in possession of some other property in regard to which there is no eviction order but the landlord is trying to take possession in these execution proceedings. We have specifically asked the learned counsel appearing for the respondents that apart from Shop No. 3 belonging to the appellant, are the respondents in possession of any part of the property bearing No. EK 172/2 situated at Chowk Panjeer, Jalandhar. We have specifically asked the learned counsel appearing for the respondents that apart from Shop No. 3 belonging to the appellant, are the respondents in possession of any part of the property bearing No. EK 172/2 situated at Chowk Panjeer, Jalandhar. The learned counsel was not able to give any satisfactory reply to our question which would only mean that the respondents are not in possession of any other property other than Shop No. 3 leased out to them in the abovementioned property belonging to the appellant. That is also why they prayed for restoration of possession. Therefore, raising a dispute in regard to the description or identity of the suit schedule property or a dispute in regard to the boundary of the suit schedule property is only a bogey to delay the eviction by the abuse of the process of court. Courts of law should be careful enough to see through such diabolical plans of the judgment-debtors to deny the decree-holders the fruits of the decree obtained by them. These type of errors on the part of the judicial forums only encourage frivolous and cantankerous litigations causing law's delay and bringing bad name to the judicial system." 4.8 Of course, for the term 'abuse of the process of the Court' the Code of Civil Procedure has not given any definition. A party to a litigation is said to be guilty of abuse of process of the Court, in any of the following cases:- (1) Gaining an unfair advantage by the use of a rule of procedure. (2) Contempt of the authority of the Court by a party or stranger. (3) Fraud or collusion in Court proceedings as between parties. (4) Retention of a benefit wrongly received. (5) Resorting to and encouraging multiplicity of proceedings. (6) Circumventing of the law by indirect means. (7) Presence of witness during examination of previous witness. (8) Institution vexatious, obstructive or dilatory actions. (9) Introduction of Scandalous or objectionable matter in proceedings. (10) Executing a decree manifestly at variance with its purpose and intent. (11) Institution of a suit by a puppet plaintiff; (12) Institution of a suit in the name of the firm by one partner against the majority opinion of other partners etc. (8) Institution vexatious, obstructive or dilatory actions. (9) Introduction of Scandalous or objectionable matter in proceedings. (10) Executing a decree manifestly at variance with its purpose and intent. (11) Institution of a suit by a puppet plaintiff; (12) Institution of a suit in the name of the firm by one partner against the majority opinion of other partners etc. 4.9 On the basis of the decisions of the Hon'ble Apex Court in the cases of Udyami Evam Khadi Gramodyog Welfare Sanstha v. State of Uttar Pradesh, (2008) 1 SCC 560 , State of Madhya Pradesh v. Narmada Bachao Andolan and another, (2011) 7 SCC 639 , Prestige Lights Ltd. v. State Bank of India, (2007) 8 SCC 449 , K.D. Sharma v. Steel Authority of India Limited, (2008) 12 SCC 481, In Dalip Singh v. State of Uttar Pradesh and others, (2010) 2 SCC 114 , Manohar Lal (Dead) By Lrs. v. Ugrasen, (2010) 11 SCC 557 , following principles may be culled out:- (1). A writ remedy is an equitable one. While exercising extraordinary power a Writ Court certainly bear in mind the conduct of the party who invokes the jurisdiction of the Court. (2). Litigant before the Writ Court must come with clean hands, clean heart, clean mind and clean objective. He should disclose all facts without suppressing anything. Litigant cannot be allowed to play "hide and seek" or to "pick and choose" the facts he likes to disclose and to suppress (keep back)/conceal other facts. (3). Suppression or concealment of material facts is not an advocacy. It is a jugglery, manipulation, manoeuvring or misrepresentation which has no place in equitable and prerogative jurisdiction. (4). If litigant does not disclose all the material facts fairly and truly or states them in a distorted manner and misleads the Court, the Court has inherent R.P. No. 161/2015 (Central Ware House & Ano. v. Union of India & Anr.) power to refuse to proceed further with the examination of the case on merits. If Court does not reject the petition on that ground, the Court would be failing in its duty. (5). Such a litigant requires to be dealt with for Contempt of Court for abusing the process of the Court. (6). There is a compelling need to take a serious view in such matters to ensure purity and grace in the administration of justice. (7). (5). Such a litigant requires to be dealt with for Contempt of Court for abusing the process of the Court. (6). There is a compelling need to take a serious view in such matters to ensure purity and grace in the administration of justice. (7). The litigation in the Court of law is not a game of chess. The Court is bound to see the conduct of party who is invoking such jurisdiction. 5. Considering the overall facts of the case, arguments of the learned counsel for the respective parties and material on record, we are of the opinion that the present petition is nothing but abuse of process of law to prolong the proceedings pending before the DRT and same is hereby deprecated. The petitioners have withdrawn the I.A. No. 1427 of 2018 before the DRT conditionally with a liberty to move afresh application before the DRT and same relief is sought for in the present petition. The petitioners are blowing hot and clot at the same time before the DRT and this Court, which cannot be permitted. There is no substance in the present petition and the deserves to be dismissed and is accordingly dismissed. Rule is discharged. No costs.