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2019 DIGILAW 717 (ALL)

Ram Lakhan v. Debts Recovery Appellate Tribunal Allahabad

2019-03-15

ABDUL MOIN

body2019
JUDGMENT : Abdul Moin, J. Heard learned counsel for the petitioner and Sri D.K. Pathak, learned counsel appearing for the respondent No.3/Bank. 2. Under challenge are the orders dated 29.11.2018 and 17.2.2012 passed by the Debts Recovery Tribunal, Lucknow (hereinafter referred to as DRT, Lucknow) and Debts Recovery Appellate Tribunal, Allahabad (hereinafter referred to as the DART, Allahabad) respectively. A further prayer is for a mandamus commanding the respondents No.3 and 4 not to interfere in the peaceful possession of the petitioner over the house in question. 3. The case set forth by the petitioner is that he was an auction purchaser being highest bidder of the property of the respondent No.4 which property was published for auction by the bank in terms of the sale notice in the year 2009. It is contended that the bid of the petitioner was accepted and the Bank issued the acceptance letter on 20.6.2009. The petitioner alleges to have deposited the total sale consideration and the Bank issued a sale certificate dated 16.7.2009 in favour of the petitioner and a sale deed was also executed in favour of the petitioner on 30.7.2009. It is further contended that after the execution of the sale deed and taking over the possession of the property in question, the petitioner is residing in the house in question with his family members and has spent a large sum of money for construction of the ground floor and first floor in the said house. 4. It is contended that the borrower i.e. respondent No.4 in the present petition, preferred Securitisation Application No.289 of 2009 before the DRT, Lucknow on 30.9.2009 against the Bank challenging the sale notice including the sale certificate and notice issued under Section 13(2) and 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the 2002 Act) without impleading the petitioner. It is also contended that the Bank appeared and filed its detailed objections and the learned DRT, Lucknow after hearing the respondent No.4 and the Bank vide judgment and order dated 17.2.2012 allowed the Securitisation Application and set-aside the sale certificate dated 20.6.2009 and sale deed dated 30.7.2009 executed in favour of the petitioner. It is also contended that the Bank appeared and filed its detailed objections and the learned DRT, Lucknow after hearing the respondent No.4 and the Bank vide judgment and order dated 17.2.2012 allowed the Securitisation Application and set-aside the sale certificate dated 20.6.2009 and sale deed dated 30.7.2009 executed in favour of the petitioner. It is the specific contention of the learned counsel for the petitioner that at no point of time the petitioner was impleaded as party before the DRT, Lucknow and consequently he had no notice of the said Securitisation Application and the proceedings before the DRT, Lucknow. 5. The Bank being aggrieved with the said judgment and order dated 17.2.2012, preferred an application for review which was dismissed on 28.9.2015. The Bank being aggrieved against the order dated 28.9.2015 proceeded to file an appeal before the Debts Recovery Appellate Tribunal, Allahabad against the respondent No.4 vide Appeal No.297 of 2015 again without impleading the petitioner as a party and at the same time impleaded the respondent No.4 as respondent. The said appeal was filed under the provisions of Section 18 of the 2002 Act. It is further contended that the DRAT, Allahabad vide judgment and order dated 29.11.2018 dismissed the appeal filed by the Bank and directed the Bank to return the sale price to the auction purchaser (petitioner) with simple interest @ 8% per annum from the date of deposit till payment after receiving back the possession of the property from the auction purchaser. 6. It is contended that the petitioner had no knowledge of any of the aforesaid orders either passed by the DRT, Lucknow or DRAT, Allahabad and it is only in February, 2019 when the officers of the Bank handed over the copy of the judgment and order dated 29.11.2018 passed by the DART, Allahabad and also informed about the judgment and order dated 17.2.2012 of the DRT, Lucknow that the petitioner became aware of the said proceedings and consequently has now approached this Court praying for setting aside the aforesaid judgment and orders copy of which are annexed as Annexure-1 and 2 to the petition. 7. Learned counsel for the petitioner submits that the DRT, Lucknow could not have proceeded in the matter without insisting for the impleadment of the auction purchaser i.e. the petitioner as a party. 7. Learned counsel for the petitioner submits that the DRT, Lucknow could not have proceeded in the matter without insisting for the impleadment of the auction purchaser i.e. the petitioner as a party. It is also contended that once the auction sale had taken place, the petitioner was the highest bidder, the sale certificate was issued in his name and the sale deed was also executed, consequently it was the duty of the Bank to have informed the DRT, Lucknow about the said fact and even in case no such information was given by the Bank concerned, the DRT, Lucknow ought to have heard the petitioner before passing any order against him and thus the judgment and order dated 17.2.2012 passed by the DRT, Lucknow merits to be set-aside on this ground alone. 8. Learned counsel for the petitioner also argues that despite being perfectly aware of the petitioner being an auction purchaser, when the Bank filed the appeal before DRAT, Allahabad, consequently it should have at least impleaded the petitioner as a party and thus before the DRAT, Allahabad also the petitioner was condemned unheard with the result the petitioner is now being dispossessed from the house in question in which he is residing from the year 2009 i.e. since last 10 years in the garb of the two orders passed by the DRT, Lucknow and DRAT, Allahabad and accordingly prays for setting aside the impugned orders which are causing immense prejudice to him. 9. Per contra, Shri D.K. Pathak, learned counsel for the respondent No.3 submits that the present petition would not be maintainable as the petitioner has got an alternative remedy of filing an appeal under the provisions of Section 18 of the 2002 Act and thus prays that the present petition may be dismissed on this ground alone. 10. Replying to the said submission, learned counsel for the petitioner submits that the initial order passed by the DRT, Lucknow dated 17.2.2012 stands impliedly affirmed with the dismissal of the appeal filed by the bank. 10. Replying to the said submission, learned counsel for the petitioner submits that the initial order passed by the DRT, Lucknow dated 17.2.2012 stands impliedly affirmed with the dismissal of the appeal filed by the bank. It is also contended that the limitation prescribed under the provisions of Section 18 of the 2002 Act for filing of an appeal is 30 days and there is no power to condone the delay in filing the appeal and as in the instant case more than 7 years have lapsed since the order of the DRT dated 17.2.2012 thus there is every likelihood that the appeal would not be entertained by the DRAT. 11. Heard learned counsel for the contesting parties and perused the record. 12. From a perusal of the aforesaid facts which have been indicated above, it clearly comes out that the petitioner was never impleaded as party before the DRT, Lucknow. Thus the judgment and order of the DRT, Lucknow dated 17.2.2012, a copy of which is Annexure-2 to the petition, was passed against the petitioner without hearing him. 13. The question to be considered by this Court is whether against the order dated 17.2.2012 passed by the DRT, Lucknow as impliedly affirmed in the Bank's appeal vide order dated 29.11.2018, the petitioner has any remedy or being remedy less, can approach this Court seeking exercise of power under Article 226 of the Constitution of India. In order to answer this question, the Court may consider the provisions of Section 18 of the 2002 Act, which for the sake of convenience are reproduced below:- "18. Appeal to Appellate Tribunal.--(1) Any person aggrieved, by any order made by the Debts Recovery Tribunal1 [under section 17, may prefer an appeal along with such fee, as may be prescribed]to the 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 per cent. 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 per cent. 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 per cent. 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" 14. From a perusal of Section 18 of the 2002 Act it clearly comes out that Section 18 of the 2002 Act provides that any person who is aggrieved by an order made by the DRT under Section 17 of the 2002 Act may prefer an appeal to the appellate tribunal within a specified time. Admittedly, the petitioner is aggrieved by the judgment of the DRT, Lucknow by which the sale certificate dated 20.6.2009 in his favour and the sale deed dated 30.7.2009 of the house in question have been set aside. As such, he can very well file an appeal under Section 18 of the 2002 Act before the DRAT, Allahabad and accordingly once the petitioner has the alternative remedy of filing of an appeal, consequently, the present petition would not be maintainable and thus there is no occasion for the petitioner to approach this Court directly challenging the order of DRT, Lucknow. 15. In this regard, the Court may refer to the judgment of the Hon'ble Supreme Court in the case of United Bank of India vs. Satyawati Tandon, (2010) 8 SCC 110 wherein the Hon'ble Supreme Court has held as under:- "43. 15. In this regard, the Court may refer to the judgment of the Hon'ble Supreme Court in the case of United Bank of India vs. Satyawati Tandon, (2010) 8 SCC 110 wherein the Hon'ble Supreme Court has held 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 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, 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. 44. While expressing the aforesaid view, we are conscious that the powers conferred upon the High Court under Article 226 of the Constitution to issue to any person or authority, including in appropriate cases, any Government, directions, orders or writs including the five prerogative writs for the enforcement of any of the rights conferred by Part III or for any other purpose are very wide and there is no express limitation on exercise of that power but, at the same time, we cannot be oblivious of the rules of self-imposed restraint evolved by this Court, which every High Court is bound to keep in view while exercising power under Article 226 of the Constitution. 45. It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective alternative remedy by filing application, appeal, revision, etc. and the particular legislation contains a detailed mechanism for redressal of his grievance. ........ 52. In City and Industrial Development Corporation v. Dosu Aardeshir Bhiwandiwala and Ors., (2009) 1 SCC 168 : MANU/SC/8250/2008 the Court highlighted the parameters which are required to be kept in view by the High Court while exercising jurisdiction under Article 226 of the Constitution. Paragraphs 29 and 30 of that judgment which contain the views of this Court read as under: 29. In our opinion, the High Court while exercising its extraordinary jurisdiction under Article 226 of the Constitution is duty-bound to take all the relevant facts and circumstances into consideration and decide for itself even in the absence of proper affidavits from the State and its instrumentalities as to whether any case at all is made out requiring its interference on the basis of the material made available on record. There is nothing like issuing an ex parte writ of mandamus, order or direction in a public law remedy. Further, while considering the validity of impugned action or inaction the Court will not consider itself restricted to the pleadings of the State but would be free to satisfy itself whether any case as such is made out by a person invoking its extraordinary jurisdiction under Article 226 of the Constitution. 30. The Court while exercising its jurisdiction under Article 226 is duty-bound to consider whether: (a) adjudication of writ petition involves any complex and disputed questions of facts and whether they can be satisfactorily resolved; (b) the petition reveals all material facts; (c) the petitioner has any alternative or effective remedy for the resolution of the dispute; (d) person invoking the jurisdiction is guilty of unexplained delay and laches; (e) ex facie barred by any laws of limitation; (f) grant of relief is against public policy or barred by any valid law; and host of other factors. The Court in appropriate cases in its discretion may direct the State or its instrumentalities as the case may be to file proper affidavits placing all the relevant facts truly and accurately for the consideration of the Court and particularly in cases where public revenue and public interest are involved. Such directions are always required to be complied with by the State. Such directions are always required to be complied with by the State. No relief could be granted in a public law remedy as a matter of course only on the ground that the State did not file its counter-affidavit opposing the writ petition. Further, empty and self-defeating affidavits or statements of Government spokesmen by themselves do not form basis to grant any relief to a person in a public law remedy to which he is not otherwise entitled to in law. 53. In Raj Kumar Shivhare v. Assistant Director, Directorate of Enforcement and Anr., (2010) 4 SCC 772 : MANU/SC/0249/2010 the Court was dealing with the issue whether the alternative statutory remedy available under the Foreign Exchange Management Act, 1999 can be bypassed and jurisdiction under Article 226 of the Constitution could be invoked. After examining the scheme of the Act, the Court observed: 31. When a statutory forum is created by law for redressal of grievance and that too in a fiscal statute, a writ petition should not be entertained ignoring the statutory dispensation. In this case the High Court is a statutory forum of appeal on a question of law. That should not be abdicated and given a go-by by a litigant for invoking the forum of judicial review of the High Court under writ jurisdiction. The High Court, with great respect, fell into a manifest error by not appreciating this aspect of the matter. It has however dismissed the writ petition on the ground of lack of territorial jurisdiction. 32. No reason could be assigned by the appellant's counsel to demonstrate why the appellate jurisdiction of the High Court under Section 35 of FEMA does not provide an efficacious remedy. In fact there could hardly be any reason since the High Court itself is the appellate forum. 54. In Modern Industries v. Steel Authority of India Limited, (2010) 5 SCC 44 : MANU/SC/0251/2010 the Court held that where the remedy was available under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 the High Court was not justified in entertaining a petition under Article 226 of the Constitution. 55. 54. In Modern Industries v. Steel Authority of India Limited, (2010) 5 SCC 44 : MANU/SC/0251/2010 the Court held that where the remedy was available under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 the High Court was not justified in entertaining a petition under Article 226 of the Constitution. 55. It is a matter of serious concern that despite repeated pronouncement of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and SARFAESI Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of banks and other financial institutions to recover their dues. We hope and trust that in future the High Courts will exercise their discretion in such matters with greater caution, care and circumspection. 16. The argument on the part of the petitioner that filing of an appeal now i.e. in the year 2019 against the order passed by DRT, Lucknow dated 17.2.2012 would not be maintainable and would be barred by limitation as Section 18 of the Act, 2002 under which the appeal is to be filed, gives a limitation period of thirty days from the date of the receipt of the order of the Debts Recovery Tribunal to file an appeal and no power of condonation of delay has been given to the Tribunal, is patently misconceived inasmuch as this aspect of the matter has been considered by the Hon'ble Supreme Court in the case of Baleshwar Dayal Jaiswal Vs. Bank of India and Ors, (2016) 1 SCC 444 wherein after framing the question as to whether the Appellate Tribunal under the Act, 2002 has the power to condone the delay in filing of an appeal under Section 18 (1) of the Act, 2002, the same was answered by the Hon'ble Supreme Court in the affirmative. For the sake of convenience the relevant observations of the Hon'ble Supreme Court in the case of Baleshwar Dayal Jaiswal (supra) is reproduced below:- "1..... The question in this batch of appeals is whether the Appellate Tribunal under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("the SARFAESI Act") has the power to condone delay in filing an appeal Under Section 18(1) of the said Act. ............. 15. The question in this batch of appeals is whether the Appellate Tribunal under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("the SARFAESI Act") has the power to condone delay in filing an appeal Under Section 18(1) of the said Act. ............. 15. As a result of the above discussion, the question is answered in the affirmative by holding that delay in filing an appeal Under Section 18(1) of the SARFAESI Act can be condoned by the Appellate Tribunal under proviso to Section 20(3) of the RDB Act read with Section 18(2) of the SARFAESI Act. The contrary view taken by the Madhya Pradesh High Court in Seth Banshidhar Media Rice Mills Pvt. Ltd. case is over-ruled." 17. Keeping in view the aforesaid discussions, it would be always open to the petitioner to file an appeal under Section 18 of the 2002 Act duly explaining the reasons for the delay in filing the appeal. 18. Accordingly, keeping in view the aforesaid discussion, no case for interference is made out. As such, the writ petition is dismissed with the aforesaid liberty.