Shankar Jha (Manager), Bank of Maharashtra v. Nand Kishor Gupta S/o Shri Nathu Lal Gupta
2022-05-04
MANINDRA MOHAN SHRIVASTAVA, VINOD KUMAR BHARWANI
body2022
DigiLaw.ai
JUDGMENT : MANINDRA MOHAN SHRIVASTAVA, J. 1. Heard on application filed by applicant-Rameshwar Prasad Sharma in D.B. Special Appeal (Civil) No. 13/2019, seeking leave of the Court to file appeal. 2. For the reasons mentioned in the application, the application is allowed and leave is granted to the applicant-Rameshwar Prasad Sharma to file appeal. 3. There is delay of 250 days in filing of D.B. Special Appeal (Civil) No. 13/2019. 4. In view of the fact that D.B. Civil Special Appeal (Civil) No. 22/2018 has been filed against order dated 08.08.2018, which is also under challenge in Appeal No. 13/2019, we deem it appropriate to condone the delay. 5. Accordingly, delay in filing of Appeal No. 13/2019 is condoned and application filed under Section 5 of the Limitation Act in Appeal No. 13/2019 is allowed. 6. By this common judgment, both the appeals are being disposed off as they arise out of the same order dated 08.08.2018 passed by the learned Single Judge in S.B. Civil Writ Petition No. 1003/2018. 7. Respondents-writ petitioners Nand Kishore Gupta and Mrs. Usha Khandelwal had borrowed loan from appellant-Bank of Maharashtra. They were served with notice under Sections 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 SARFAESI Act’) against which they preferred an application before the Debt Recovery Tribunal, Jaipur (hereinafter referred to as ‘the DRT’) wherein notices were issued and the next date fixed was 02.02.2018. While regular sitting and hearing of the DRT was not taking place, the Bank issued advertisement for auction of the property on 30.01.2018, which was prior to the next date of hearing before the DRT. In such circumstances, the respondents-writ petitioners Nand Kishore Gupta and Mrs. Usha Khandelwal filed S.B. Civil Writ Petition No. 2033/2018 seeking protective umbrella and praying for quashing of demand notice issued under Section 13(2) of the SARFAESI Act as also possession notice issued under Section 13(4) of the SARFAESI Act. Sale notice was also challenged and prayer was made for quashing the same. Other ancillary reliefs were also sought in the writ petition. The writ petition was finally disposed off vide order dated 25.01.2018 with certain directions. 8.
Sale notice was also challenged and prayer was made for quashing the same. Other ancillary reliefs were also sought in the writ petition. The writ petition was finally disposed off vide order dated 25.01.2018 with certain directions. 8. However, despite there being an order of protection, the sale was confirmed and delivery of possession had also taken place, which led to filing of contempt petition (S.B. Civil Contempt Petition No. 1003/2018) against the appellants-bank officials (in D.B. Civil Special Appeal (Civil) No. 22/2018). After notice, reply was filed and the allegation of willful disobedience of the order of the Court was denied mainly on the plea and defence that order dated 25.01.2018 passed in writ petition related to a notice for auction of writ petitioners’ property under the SARFAESI Act on 30.01.2018, which was, however, abandoned and thereafter, a fresh notice was issued for holding auction on 28.02.2018, which was brought to its logical conclusion. It was also pleaded that order of the Court passed on 25.01.2018 protected the writ petitioners till hearing of the stay application. The case was taken up by the DRT on subsequent dates of hearing, but no interim order was passed in favour of the writ petitioners. Therefore, the officials proceeded with the auction, which was scheduled on 28.02.2018, which eventually led to confirmation of auction sale on 26.04.2018. 9. However, learned Single Judge, while hearing contempt petition, was not satisfied with the explanation offered by the contemnors and it was held that order dated 25.01.2018 was willfully disobeyed and the contemnors, fully aware of the nature and scope of order dated 25.01.2018, flouted the same. Learned Single Judge accordingly held the contemnors guilty of contempt of the Court. Learned Single Judge also held that as the confirmation of sale on 26.04.2018 and issuance of sale certificate were in violation of order dated 25.01.2018, therefore, all such acts and proceedings were void. Direction was also issued to take back possession of the property of the writ petitioners by resort to all legal processes as may be available. On the aspect of punishment, learned Single Judge observed that that issue can be adjudged subsequently taking into consideration the submissions of counsel for the parties that the dispute between the writ petitioners and Bank of Maharashtra is capable of being amicably resolved and an attempt to do so is underway.
On the aspect of punishment, learned Single Judge observed that that issue can be adjudged subsequently taking into consideration the submissions of counsel for the parties that the dispute between the writ petitioners and Bank of Maharashtra is capable of being amicably resolved and an attempt to do so is underway. Against that order passed by the learned Single Judge in contempt proceedings, D.B. Civil Special Appeal (Writ) No. 22/2018 has been preferred by the contemnors/officials of the Bank of Maharashtra. Later on, the auction purchaser, Rameshwar Prasad Sharma has also filed an appeal being D.B. Civil Special Appeal (Civil) No. 13/2019, as apart from declaration of contempt of Court order against the bank officials, learned Single Judge also directed taking back possession of the immovable property of the writ petitioners which was put to auction and in respect of which, sale was confirmed and sale certificate issued in favour of the auction purchaser Rameshwar Prasad Sharma holding that such proceedings being in the teeth of order dated 25.01.2018, were void ab initio. 10. Assailing the legality and validity of the order passed by the learned Single Judge holding the appellants in D.B. Civil Special Appeal (Civil) No. 22/2018 guilty of contempt of the Court, learned counsel for the appellants-bank officials argued that firstly there was no disobedience of the order passed by the Court. In the alternative, it has also been contended that even if it is held that action of confirmation of sale and issuance of sale certificate in favour of the auction purchaser violated order dated 25.01.2018, in any case, there is no material pleading or evidence to prove that it was a case of willful disobedience by the appellants-contemnors. On behalf of appellant Arinendu Shekhar, it has been submitted that he was not impleaded as a party in the contempt petition, nor any notice of contempt was issued to him. There is no allegation whatsoever made against him in the contempt petition that he committed willful disobedience of the order of the Court. An affidavit was field by him in the contempt petition only to state that proceedings were drawn bona-fide. He joined the other contemnors as appellant in Appeal No. 22/2018 because the order passed by the learned Single Judge is of wide sweep.
An affidavit was field by him in the contempt petition only to state that proceedings were drawn bona-fide. He joined the other contemnors as appellant in Appeal No. 22/2018 because the order passed by the learned Single Judge is of wide sweep. It is the contention of learned counsel for the appellants-bank officials that the order passed by the Court on 25.01.2018 was in relation to a notice of auction, which was scheduled to be held on 30.01.2018, but that was abandoned. Later on, fresh auction proceedings were initiated under subsequent notice of sale dated 08.02.2018 and in those proceedings, sale was confirmed on 26.04.2018. Therefore, the order of the Court cannot be said to be flouted as the order was in relation to the first auction proceedings and not the second one. Contention of learned counsel for the appellants is that order dated 25.01.2018 protected the writ petitioners against confirmation of auction sale proceedings only till hearing of the stay application. The case was listed before the DRT on subsequent dates, but no stay was granted though hearing of stay application had taken place, however, the case was adjourned. Therefore, the protection under order dated 25.01.2018 passed in the writ petition came to an automatic end. This was the bona fide understanding of the order of the Court by the authorities of the Bank, which led them to proceed with the auction of the property in subsequent auction proceedings. In order to persuade this Court to accept the aforesaid submission, learned counsel for the appellants has referred to various orders passed by the DRT from time to time. Learned counsel for the appellants further argued that the respondents-writ petitioners were not entitled to protection as granted to them vide order dated 25.01.2018 because the respondents-writ petitioners were not repaying the debt despite repeated opportunities and the writ petition was filed on incorrect facts, in order to somehow make out a case that because of non-sitting of the DRT, writ petitioners had to approach the writ Court seeking protection till decision of stay application. Further argument is that though application for stay was taken up for hearing, but no interim order was passed in favour of the writ petitioners by the DRT. 11.
Further argument is that though application for stay was taken up for hearing, but no interim order was passed in favour of the writ petitioners by the DRT. 11. It has also been argued that the writ petitioners themselves were not fully satisfied with order dated 25.01.2018 passed in the writ petition, therefore, they preferred D.B. Civil Special Appeal (Writ) No. 444/2018, which was disposed off on 03.04.2018 with the observation that the appropriate remedy was to apply for review. Thereafter, the writ petitioners filed S.B. Civil Review Petition No. 114/2018 on 20.04.2018 wherein notices were issued and the case was pending. Therefore, it is contended that even at the instance of the writ petitioners, order dated 25.01.2018 was assailed and review was also sought. In this background, the action of the concerned bank officials in proceeding with the auction, confirmation of sale and issuance of sale certificate cannot be said to be an act of disobedience, so as to constitute contempt of the Court. 12. Learned counsel for the appellants in both the appeals have raised a common submission that while deciding the contempt petition, supplementary directions have been issued, which is not permissible in law in view of the dictum of the Hon’ble Supreme Court in the case of J.S. Parihar vs. Ganpat Duggar and Others, (1996) 6 SCC 291 . It is also argued that an error of law was committed in relying upon the judgment of the Hon’ble Supreme Court in the case of Jehal Tanti and Others vs. Nageshwar Singh (Dead) through LRs. (2013) 14 SCC 689 because in that case, the matter was ultimately remanded to the Court for fresh disposal. 13. An attempt has also been made to convince the Court that order dated 25.01.2018 passed in the writ petition was not justified in law and in view of several judicial pronouncements of the Hon’ble Supreme Court in catena of decisions, writ Court ought not to have intervened with the auction proceedings and for this purpose, judgment rendered by the Hon’ble Supreme Court in the case of Authorized Officer, State Bank of Travancore and Another vs. Mathew K.C. (2018) 3 SCC 85 has been relied upon.
It is also submitted that the observation of the learned Single Judge, while holding the appellants-bank officials guilty of contempt, for filing an application for withdrawal/recall of sale certificate before the Recovery Officer is also not justified in law because as per the provisions of the SARFAESI Act, the proceedings initiated under Section 13 of the SARFAESI Act read with the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Central Registry) Rules, 2011, by the authorised officer are separate and independent from the recovery proceedings, therefore, the proceedings of the authorised officer cannot be undone by the Recovery Officer. In support of their contention, learned counsel for the appellants relied upon the decisions of the Hon’ble Supreme Court in the cases of J.S. Parihar (supra); Sudhir Vasudeva, Chairman and M.D. ONGC and Others vs. M. George Ravishekaran and Others, AIR 2014 SC 950 , Thomson Press (India) Ltd. vs. Nanak Builders and Investors Pvt. Ltd. and Others, AIR 2013 SC 2389 , Babulal and Another vs. Municipal Corporation Ratlam and Others, (2005) 13 SCC 101 , Dinesh Kumar Gupta vs. United India Insurance Company Limited and Others, (2010) 12 SCC 770 and United Bank of India vs. Satyawati Tondon and Others, (2010) 8 SCC 110 . 14. Per contra, learned counsel appearing for the respondents-petitioners would argue that the writ petitioners were prepared to repay the loan and despite specific offer made, the bank officials, in connivance with land grabber, hastily proceeded to put the property to auction after issuing notice and drawing the proceedings under Sections 13(2) and 13(4) of the SARFAESI Act, which was challenged by the writ petitioners by moving application before the DRT. However, the DRT was not regularly sitting and hearing the applications and in the meantime, before petitioners’ application for stay could come up for hearing before the DRT, in order to frustrate their prayer for stay, the bank officials/contemnors issued sale notice and fixed 30.01.2018 as the date for auction. In these pressing circumstances and to save their immovable property from auction without hearing of the stay application by the DRT, the writ petitioners had to approach the writ Court.
In these pressing circumstances and to save their immovable property from auction without hearing of the stay application by the DRT, the writ petitioners had to approach the writ Court. It is further contended that taking into consideration the aforesaid peculiar circumstances, writ Court passed an order on 25.01.2018, protecting the writ petitioners by issuing directions so that their application for stay is not rendered infructuous and they may not be deprived of their property till the application for stay is heard and decided. Learned counsel would submit that the writ Court vide its order dated 25.01.2018 did not completely stay the auction proceedings, but the protection was to the effect that the bank may proceed with the auction on 30.01.2018, but the sale would not be confirmed till the next date of hearing with clear direction to the DRT to hear the stay application and in case, hearing on the stay application does not take place, then the order passed by the Court to remain in force till hearing of the stay application. The order clearly intended to protect the writ petitioners till decision of stay application and the appellants’ submission that the stay would continue only till hearing even though no orders were passed, is completely absurd and was never intended by the Court. Learned counsel would submit that the bank officials are not illiterate or rustic persons. It was very clear from the order of the Court that the Court intended that till application for stay is heard and decided, the protection will continue. The DRT did not decide the application for stay, though the case was listed, but orders on stay application were not passed. Thereafter, auction notice was issued fixing a new date of auction, even though application for stay was not heard and decided one way or the other, the bank officials-contemnors proceeded to confirm the sale as also issuing sale certificate and delivering possession to auction purchaser, thereby completely frustrating order dated 25.01.2018 passed by the learned Single Judge. 15. Learned counsel would next submit that observation for taking back possession of the immovable property of the writ petitioners is only a consequential order and not a supplemental order as such.
15. Learned counsel would next submit that observation for taking back possession of the immovable property of the writ petitioners is only a consequential order and not a supplemental order as such. It is contended that in view of the judgment of the Hon’ble Supreme Court in the case of Jehal Tanti and Others (supra), the confirmation of sale, issuance of sale certificate and handing over of possession of the immovable property to the auction purchaser are void-ab-initio. Therefore, consequential steps were required to be taken by the bank officials, which has been observed by the learned Single Judge while holding the contemnors guilty of contempt of the Court. 16. Further submission of learned counsel for the respondent is that after having flouted the order of the Court, the contemnors cannot be heard saying that order dated 25.01.2018 passed by the learned Single Judge in the writ petition was not justified in law. Order dated 25.01.2018 was never challenged by the contemnors or even the auction purchaser by filing any appeal or review, much less there being any stay on operation of order dated 25.01.2018. Therefore, the order remained operative and effective which restrained the contemnors from confirming the sale or issuing sale certificate, much less handing over possession of immovable property of the writ petitioners in favour of auction purchaser. All that was permissible under order dated 25.01.2018 was to hold the auction, but not confirm the sale till the application for stay is heard and decided by the DRT. The contemnors, therefore, after having held auction, ought to have kept the proceedings pending and awaited the orders passed by the DRT on the stay application filed by the writ petitioners and in case, stay application is rejected, they could have proceeded to confirm the sale and all other subsequent proceedings. But the contemnors were hand in glove with the bidder in the auction and, therefore, they hurriedly proceeded to confirm the sale and handed over the possession of immovable property, even though, application for stay remained pending in the DRT without being decided one way or the other and, therefore, it is a clear case of willful disobedience as has been held by the learned Single Judge in the contempt proceedings. 17.
17. We have given our anxious considerations to submissions made by learned counsel for the parties and perused the records, various orders and the authorities relied upon by both the sides. 18. The contents of the writ petition filed by the respondents-writ petitioners (S.B. Civil Writ Petition No. 2033/2018) would reveal that the writ petitioners had borrowed loan from the bank and while they were claiming settlement by making an offer of repayment of loan, concerned authority initiated proceedings under Sections 13(2) and 13(4) under the SARFAESI Act. The pleadings in the writ petition further show that the aggrieved by the action of the bank, writ petitioners had availed the remedy by filing an application before the DRT along with an application for stay on further proceedings as the writ petitioners were apprehending that their immovable property may be put to auction and sold. It is also revealed that the DRT, Jaipur was not holding its regular sitting and for one reason or the other, the stay application filed by the writ petitioners was not heard, decided and in the meantime, the bank scheduled the auction on 30.01.2018. In this backdrop, the writ petitioners approached the writ court seeking protection. While various sale notices and proceedings drawn under Sections 13(2) and 13(4) of under the SARFAESI Act were challenged in the writ petition and relief was sought, protective umbrella was also sought against auction, which was scheduled on 30.01.2018, while the application for stay remained pending undecided before the DRT. In the aforesaid background, learned Single Judge disposed off the writ petition with the following directions: “1. The respondent bank may proceed with the auction on 30.1.2018 but sale would not be confirmed till the next date before the DRT i.e. 2.2.2018. 2. The DRT would hear the stay application on the next date of hearing as otherwise petitioners have shown their willingness to repay entire due amount and said to have paid substantial amount. 3. In case hearing on the stay application does not take place on 2.2.2018 then the order passed by this court would remain in force till hearing of the stay application thus the DRT is given direction to hear the stay application at the earliest. 4. The petitioners would pay a sum of Rs. 7 lakh to the bank within one month from today. 5.
4. The petitioners would pay a sum of Rs. 7 lakh to the bank within one month from today. 5. In case respondent-bank remains aggrieved by the order passed by this court, it may move an application for modification/clarification of the order.” 19. Taking into consideration that the bank was proceeding to realise the debt by taking recourse to proceedings of auction and at the same time, application for stay before the DRT remained pending undecided, in order to strike balance between interest of both the parties, writ Court, though did not stay the auction proceedings scheduled to be held on 30.01.2018, but protected interest of the writ petitioners by ordering that sale would not be confirmed till the next date before the DRT, which was 02.02.2018. Further direction was given to DRT to hear and decide the stay application on the next date taking into consideration that the writ petitioners had shown their willingness to repay the entire due loan and said to have paid substantial amount. In particular, writ Court made it clear that in case, hearing on the stay application does not take place on 02.02.2018, then the order passed by the Court would remain in force till hearing of the stay application and direction was given to DRT to hear the stay application at the earliest. All these directions were subject to writ petitioners’ paying a sum of Rs. 7,00,000/- (Rupees Seven Lacs) to the bank within one month from the date of order, i.e. 25.01.2018. Moreover, the writ Court, taking into consideration that the writ petition was being disposed off without issuing notice to the bank, also gave liberty to the bank to move application for modification/clarification of the order. 20. Direction issued by the learned Single Judge in Para No. 3 of its order dated 25.01.2018 was clear that the protective umbrella would remain in force till hearing of the stay application coupled with direction to the DRT to hear the stay application at the earliest. There is no equivocally in the order. The spirit behind this order was to protect the writ petitioners against confirmation of sale and creation of third party interest till the hearing of their stay application. This observation of protection to continue till hearing of stay application has only one meaning that the protection would continue till decision of the stay application.
The spirit behind this order was to protect the writ petitioners against confirmation of sale and creation of third party interest till the hearing of their stay application. This observation of protection to continue till hearing of stay application has only one meaning that the protection would continue till decision of the stay application. To say, as has been argued by learned counsel for the appellants- contemnors, that the interim protection was available only till the date of hearing of stay application and not till decision of the stay application, is not only deliberate misreading of the order of the Court, but also reflects the mens rea on the part of the bank officials to somehow circumvent the orders and proceedings of this Court. 21. The orders passed by the DRT on various dates have been placed for perusal of this Court. After 25.01.2018, the case was listed and adjourned, but no order was passed on the stay application one way or the other, either allowing or rejecting the same. On 09.02.2018, recording presence of the parties and that reply was filed by the appellants-bank, copy of which was supplied to the applicants-writ petitioners, case was directed to be listed on 03.04.2018. On that day, no hearing on stay application had taken place. DRT fixed the next date of hearing on 03.04.2018 and on that day, it was recorded that the Presiding Officer is not holding Camp Court at DRT, Jaipur, therefore, next date of hearing was fixed on 04.07.2018. However, an application for early hearing was filed by the bank, on which order was passed by the Registrar, DRT on 13.04.2018 for listing the case on 16.04.2018. 22. On 16.04.2018, an application was filed by the applicants-writ petitioners, copy of which was supplied to the counsel for the respondents-bank and counsel for the bank sought time for filing reply to that application. Order also records that an objection regarding non-supply of copy of I.A. No. 239/2018 was also raised by the applicants-writ petitioners and the bank was directed to deliver copy of that application to the applicants-writ petitioners and request was made to place the matter before the Presiding Officer and the case was, therefore, directed to be listed before the DRT on 20.04.2018. These proceedings on 16.04.2018 were also drawn by the Registrar of the DRT as the Presiding Officer was not holding sitting on that day.
These proceedings on 16.04.2018 were also drawn by the Registrar of the DRT as the Presiding Officer was not holding sitting on that day. Thereafter, on 20.04.2018, the case was listed before the Presiding Officer of the DRT. On that day, the DRT passed an order for filing rejoinder before the Registry on 24.05.2018. There is nothing in the order to show that any hearing on the stay application had taken place, much less decision thereon. 23. Thus, without there being any hearing on the stay application, much less any order passed by the DRT on the stay application filed by the respondents-writ petitioners, the bank-officials proceeded to confirm the sale under auction dated 28.02.2018, on 26.04.2018 and also issued sale certificate accompanied with delivery of possession of immovable property of the writ petitioners. It would, thus, be clear that no hearing on stay application, much less effective hearing, had taken place on the prayer for stay made by the writ petitioners and the case was adjourned for filing rejoinder on 20.04.2018 and immediately, thereafter, the sale was confirmed and sale certificate was issued and possession handed over. It was clearly an act of overreaching the order of the Court. As has been observed hereinabove, the spirit of the order of the Court was that till stay application is heard and decided, interim protection would continue, obviously, because the Court was of the view that at least till hearing and decision of stay application, the sale should not be confirmed, otherwise the very prayer for stay would be rendered infructuous. It was a matter relating to sale of immovable property of the writ petitioners. The protection was granted vide order dated 25.01.2018 by the writ Court taking into consideration the willingness shown by the writ petitioners to settle all the dues. Apparently, bank officials were in a hurry, for the reasons best known to them. They were parties to proceedings before the DRT on various dates of hearing and it was within their personal knowledge that no hearing on stay application had taken place, much less any order passed. 24. Order dated 25.01.2018 was clearly intended to protect the writ petitioners till hearing on their stay application. The order could not be construed narrowly, meaning thereby that some kind of proceedings takes place without any order passed as that would be completely absurd.
24. Order dated 25.01.2018 was clearly intended to protect the writ petitioners till hearing on their stay application. The order could not be construed narrowly, meaning thereby that some kind of proceedings takes place without any order passed as that would be completely absurd. In any case, as has been referred hereinabove, even no hearing on stay application had taken place and on various dates, pleadings were exchanged, directions were issued for supply of applications, filing of rejoinder etc. Up till date of confirmation of sale on 26.04.2018, none of the orders, as reflected from various order sheets of the DRT, would show that any argument whatsoever towards hearing of stay application was made by the parties. Even hearing had not taken place. Therefore, the contention of the appellants that as the hearing had taken place, therefore, the protection granted vide order dated 25.01.2018 came to an automatic end, has no legs to stand and if we may say so, is deliberate misreading of the order and completely frivolous. If the pleadings of the appellants-contemnors are read in juxtaposition with order dated 13.04.218 of the Registrar, DRT, it would be clear that hearing of the case was pre-poned on the prayer made by the bank. When the case was again listed on 16.04.2018, no hearing had taken place but only direction for exchange of pleadings was issued. It was not even hearing before the DRT but the case was listed before the Registrar, DRT for fixing the case for hearing. When the matter came up before the DRT on 20.04.2018, the case was listed for filing of rejoinder before the Registrar on 24.05.2018. There is no whisper in the order that any hearing had taken place, much less any order passed on the stay application. 25. The appellants have also taken stand that when the order granting protection to the writ petitioners was passed by the writ Court on 25.01.2018, it was only in relation to auction which was scheduled on 30.01.2018, but that auction having not materialised, new schedule of auction was fixed by issuing fresh notice fixing date of auction, auction was held, sale was confirmed and sale certificate was also issued. Therefore, it is argued that it was not within the ambit of order dated 25.01.2018. This argument deserves to be rejected at the threshold.
Therefore, it is argued that it was not within the ambit of order dated 25.01.2018. This argument deserves to be rejected at the threshold. The writ petitioners had approached the Court because the bank had initiated proceedings to auction their immovable property and their application for stay though pending, was not being heard. Merely because at the time when the order was passed on 25.01.2018, the auction was fixed on 30.01.2018, does not, by any stretch of imagination, mean that if on that day, auction could not take place for any reason and new date of auction was fixed, protective umbrella under order dated 25.01.2018 passed by the writ Court would not apply. Such a stand of the appellants-contemnors is without any logic and reasoning. If this contention is to be accepted, it would always be open for a party to flout the order of the Court by cancelling the auction on the date fixed, issuing fresh auction notice and to proceed with sale confirmation and delivery of possession. This contention also, therefore, has no force. 26. Much emphasis has been laid on the authority of the bank to proceed against a borrower and limited scope of judicial review in writ proceedings by referring to various judgments. At the first place, this defence does not hold water and is not tenable in law. When facing contempt proceedings, the contemnors cannot be heard saying that the order, which was disobeyed by them, ought not to have been passed by the Court of law. If the bank was aggrieved with order dated 25.01.2018 passed by the writ Court, it was not without any remedy, but it chose not to take any remedy against that order and found out the ways and means to circumvent the order. Since the day on which the sale was confirmed, sale certificate issued and possession of immovable property delivered to auction purchaser, order dated 25.01.2018 remained in force and effect, neither stayed, nor set aside by any higher Court, the act of the concerned officials was nothing but a calculated design to circumvent the order in the garb of it being a case of fresh date of auction fixed by the appellants-contemnors. This argument is also without any merit and has rightly been rejected by the learned Single Judge in contempt proceedings. 27.
This argument is also without any merit and has rightly been rejected by the learned Single Judge in contempt proceedings. 27. It is to be noted that order dated 25.01.2018 did not altogether stay the auction proceedings. The only restraint was against confirmation of sale because confirmation of sale would have followed delivery of possession of immovable property and if the application for stay before the DRT is not heard, it would frustrate the prayer for stay, create complications by involving third party interest, i.e. the auction purchaser. However, the concerned bank officials acted with undue haste and left no stone unturned to ensure that before hearing of the application for stay before the DRT, somehow immovable property of the writ petitioners is sold and proceedings are completed. 28. A grievance has been raised by the appellants that the writ petitioners did not make correct statement of facts before the writ Court by which order dated 25.01.2018 was passed. That does not give the concerned bank officials a licence to flout the order of the Court. If the concerned bank officials were of the view that the writ petitioners had not correctly stated the facts before the writ Court and obtained an order in their favour by misleading the writ Court, the only course open for them was either to seek review of the order or to challenge the order in the higher Court of law, but none of these legally permissible courses were taken recourse to. 29. Another argument has been raised that the order, of which disobedience is alleged, was challenged by way of appeal by none other than the writ petitioners, which was disposed off with liberty to file review and thereafter, review was also filed. Therefore, during pendency of the review, no contempt could be alleged. 30. This argument does not merit acceptance. Writ petitioners had sought many more reliefs than what was granted to them by the writ Court vide order dated 25.01.2018 and therefore, they took recourse to the remedy available to them under the law. Pendency of review petition at the instance of the writ petitioners, in the absence of there being any order staying the effect and operation of order dated 25.01.2018, could not be taken as a shield because order dated 25.01.2018 continued to remain in force despite pendency of the review petition.
Pendency of review petition at the instance of the writ petitioners, in the absence of there being any order staying the effect and operation of order dated 25.01.2018, could not be taken as a shield because order dated 25.01.2018 continued to remain in force despite pendency of the review petition. It is not a case where the bank had filed review petition seeking review of the order on any ground available to them under the law and without allowing reasonable time to seek clarification, contemnors were subjected to contempt proceedings. Order dated 25.01.2018 remained in full force and effect. Therefore, the concerned bank officials could not have proceeded to confirm the sale, issue sale certificate and hurriedly deliver possession of the property to the auction purchaser. 31. Both the contemnors as well as the auction purchaser have raised a common ground that the direction of the learned Single Judge, while passing the order of contempt, insofar as it seeks to hold that the auction sale, which was in disobedience of the order, was void ab initio, is not in conformity with the law. Learned Single Judge, while holding the contemnors in contempt petition guilty of willful disobedience, has recorded a finding that the confirmation of sale on 26.04.2018 as also issuance of sale certificate would be void, relying upon the judgment of the Hon’ble Supreme Court in the case of Jehal Tanti and Others (supra). On the other hand, specific reliance has been placed on the judgment of the Hon’ble Supreme Court in the case of Thomson Press (India) Ltd. (supra) that the sale would not become technically invalid though party guilty of contempt may be punished. In the case of Thomson Press (India) Ltd. (supra), an issue as to the effect of sale in breach of injunction was considered. It was held that the breach of any injunction issued by any competent court would not automatically render the transfer whether by way of an absolute sale or otherwise ineffective. The party committing the breach may doubtless incur the liability to be punished for the breach committed by it, but the sale by itself may remain valid as between the parties to the transaction subject only to any direction which the competent Court may issue in the case. The observations in this regard as contained in Para 52 of the said judgment are as below: “52.
The observations in this regard as contained in Para 52 of the said judgment are as below: “52. There is, therefore, little room for any doubt that the transfer of the suit property pendete lite is not void ab initio and that the purchaser of any such property takes the bargain subject to the rights of the plaintiff in the pending suit. Although the above decisions do not deal with a fact situation where the sale deed is executed in breach of an injunction issued by a competent Court, we do not see any reason why the breach of any such injunction should render the transfer whether by way of an absolute sale or otherwise ineffective. The party committing the breach may doubtless incur the liability to be punished for the breach committed by it but the sale by itself may remain valid as between the parties to the transaction subject only to any directions which the competent Court may issue in the suit against the vendor.” In the case of Jehal Tanti and Others (supra), the issue revolved mainly around the authority and jurisdiction of the Court to pass interim order/injunction order while the issue with regard to its jurisdiction is still pending consideration before that Court. It has been held that even if, subsequently it is found that the Court had no jurisdiction to deal with the subject matter before it, the interim order passed by it before such declaration is made, would not be treated to be ineffective during the period it was in operation, but will lose its effect only after issue of its jurisdiction is decided. The principles dealing with such a particular situation were propounded as below: “10. The nature and effect of an alienation made in violation of an order of injunction was considered in Tayabbhai M. Bagasarwalla vs. Hind Rubber Industries (P) Ltd. (1997) 3 SCC 443 and the following propositions were laid down: (SCC pp. 453-454 and 459-460, Paras 16 and 27-28) “16. According to this section, if an objection is raised to the jurisdiction of the court at the hearing of an application for grant of, or for vacating, interim relief, the court should determine that issue in the first instance as a preliminary issue before granting or setting aside the relief already granted.
453-454 and 459-460, Paras 16 and 27-28) “16. According to this section, if an objection is raised to the jurisdiction of the court at the hearing of an application for grant of, or for vacating, interim relief, the court should determine that issue in the first instance as a preliminary issue before granting or setting aside the relief already granted. An application raising objection to the jurisdiction to the court is directed to be heard with all expedition. Sub-Rule (2), however, says that the command in sub-rule (1) does not preclude the court from granting such interim relief as it may consider necessary pending the decision on the question of jurisdiction. In our opinion, the provision merely states the obvious. It makes explicit what is implicit in law. Just because an objection to the jurisdiction is raised, the court does not become helpless forthwith - nor does it become incompetent to grant the interim relief. It can. At the same time, it should also decide the objection to jurisdiction at the earliest possible moment. This is the general principle and this is what Section 9-A reiterates. Take this very case. The plaintiff asked for temporary injunction. An ad interim injunction was granted. Then the defendants came forward objecting to the grant of injunction and also raising an objection to the jurisdiction of the court. The court overruled the objection as to jurisdiction and made the interim injunction absolute. The defendants filed an appeal against the decision on the question of jurisdiction. While that appeal was pending, several other interim orders were passed both by the civil court as well as by the High Court. Ultimately, no doubt, the High Court has found that the civil court had no jurisdiction to entertain the suit but all this took about six years. Can it be said that orders passed by the civil court and the High Court during this period of six years were all non est and that it is open to the defendants to flout them merrily, without fear of any consequence. Admittedly, this could not be done until the High Court's decision on the question of jurisdiction.
Can it be said that orders passed by the civil court and the High Court during this period of six years were all non est and that it is open to the defendants to flout them merrily, without fear of any consequence. Admittedly, this could not be done until the High Court's decision on the question of jurisdiction. The question is whether the said decision of the High Court means that no person can be punished for flouting or disobeying the interim/interlocutory orders while they were in force, i.e. for violations and disobedience committed prior to the decision of the High Court on the question of jurisdiction. Holding that by virtue of the said decision of the High Court (on the question of jurisdiction), no one can be punished thereafter for disobedience or violation of the interim orders committed prior to the said decision of the High Court, would indeed be subversive of the rule of law and would seriously erode the dignity and the authority of the courts. We must repeat that this is not even a case where a suit was filed in the wrong court knowingly or only with a view to snatch an interim order. As pointed out hereinabove, the suit was filed in the civil court bona fide. We are of the opinion that in such a case the defendants cannot escape the consequences of their disobedience and violation of the interim injunction committed by them prior to the High Court's decision on the question of jurisdiction. *** *** *** 27. The learned counsel for Defendants 1 and 2 submitted that this is not a proceeding for contempt but a proceeding under Rule 2-A of Order 39 of the Civil Procedure Code. The learned counsel submitted that proceedings under Order 39 Rule 2-A are a part of the coercive process to secure obedience to its injunction and that once it is found that the Court has no jurisdiction, question of securing obedience to its orders any further does not arise. The learned counsel also submitted that enforcing the interim order after it is found that the Court had no jurisdiction to try the said suit would not only be unjust and illegal but would also reflect adversely upon the dignity and authority of the Court.
The learned counsel also submitted that enforcing the interim order after it is found that the Court had no jurisdiction to try the said suit would not only be unjust and illegal but would also reflect adversely upon the dignity and authority of the Court. It is also suggested that the plaintiff had instituted the present suit in the civil court knowing fully well that it had no jurisdiction to try it. It is not possible to agree with any of these submissions not only on principle but also in the light of the specific provision contained in Section 9-A of the Code of Civil Procedure (Maharashtra Amendment). In the light of the said provision, it would not be right to say that the civil court had no jurisdiction to pass interim orders or interim injunction, as the case may be, pending decision on the question of jurisdiction. The orders made were within the jurisdiction of the Court and once this is so, they have to be obeyed and implemented. It is not as if the defendants are being sought to be punished for violations committed after the decision of the High Court on the question of jurisdiction of the civil court. Here the defendants are sought to be punished for the disobedience and violation of the order of injunction committed before the decision of the High Court in Land Acquisition Officer v. Vishanji Virji Mepani AIR 1996 Bom. 366 . According to Section 9-A, the civil court and the High Court did have the power to pass interim orders until that decision. If they had that power they must also have the power to enforce them. In the light of the said provision, it cannot also be held that those orders could be enforced only till the said decision but not thereafter. The said decision does not render them (the interim orders passed meanwhile) either non est or without jurisdiction. Punishing the defendants for violation of the said orders committed before the said decision (Vishanji Virji Mepani) does not amount, in any event, to enforcing them after the said decision. Only the orders are being passed now. The violations are those committed before the said decision. 28.
Punishing the defendants for violation of the said orders committed before the said decision (Vishanji Virji Mepani) does not amount, in any event, to enforcing them after the said decision. Only the orders are being passed now. The violations are those committed before the said decision. 28. The correct principle, therefore, is the one recognised and reiterated in Section 9-A to wit, where an objection to jurisdiction of a civil court is raised to entertain a suit and to pass any interim orders therein, the Court should decide the question of jurisdiction in the first instance but that does not mean that pending the decision on the question of jurisdiction, the Court has no jurisdiction to pass interim orders as may be called for in the facts and circumstances of the case. A mere objection to jurisdiction does not instantly disable the court from passing any interim orders. It can yet pass appropriate orders. At the same time, it should also decide the question of jurisdiction at the earliest possible time. The interim orders so passed are orders within jurisdiction when passed and effective till the court decides that it has no jurisdiction to entertain the suit. These interim orders undoubtedly come to an end with the decision that this Court had no jurisdiction. It is open to the court to modify these orders while holding that it has no jurisdiction to try the suit. Indeed, in certain situations, it would be its duty to modify such orders or make appropriate directions. For example, take a case, where a party has been dispossessed from the suit property by appointing a receiver or otherwise; in such a case, the Court should, while holding that it has no jurisdiction to entertain the suit, put back the party in the position he was on the date of suit.
For example, take a case, where a party has been dispossessed from the suit property by appointing a receiver or otherwise; in such a case, the Court should, while holding that it has no jurisdiction to entertain the suit, put back the party in the position he was on the date of suit. But this power or obligation has nothing to do with the proposition that while in force, these orders have to be obeyed and their violation can be punished even after the question of jurisdiction is decided against the plaintiff provided the violation is committed before the decision of the Court on the question of jurisdiction.” (Emphasis supplied) That judgment did not deal with the effect and impact of interim order on the transactions made while the interim order was in force, though it has been held that it would amount to breach of interim order and a defence that the interim order passed by the Court which ultimately held that it has no jurisdiction, will not be treated as non-est only because subsequently issue of jurisdiction has been decided and it has been held that the Court, which passed the interim order/injunction order, did not have the jurisdiction to deal with the subject matter. The said judgment is not an authority for the proposition that any sale transaction made during the period the interim order was in force would be void or non-est. 32. On the other hand, the judgment of the Hon’ble Supreme Court in the case of Thomson Press (India) Ltd. (supra) clearly holds that the transaction of sale, in breach of injunction order, would not be automatically ineffective though the party committing the breach may incur liability to be punished for the breach committed by it. Therefore, in the considered opinion of this Court, the finding of the learned Single Judge that the confirmation of sale and issuance of sale certificate would be void ab initio is against the principles laid down by the Hon’ble Supreme Court in the case of Thomson Press (India) Ltd. (supra). At the same time, the remedy would be available to the aggrieved party to seek adjudication on this aspect by constituting separate proceedings before the appropriate forum as may be permissible to it under the law. 33.
At the same time, the remedy would be available to the aggrieved party to seek adjudication on this aspect by constituting separate proceedings before the appropriate forum as may be permissible to it under the law. 33. As far as the issue with regard to jurisdiction of the contempt Court to issue supplementary directions is concerned, we need not dwell upon this aspect because the directions, which are not supplemental but consequential, have been issued by the learned Single Judge on the finding that the confirmation of sale and issuance of sale certificate is void ab initio. Certainly, if it was to be held that it was within the jurisdiction of the Court deciding the contempt petition to declare the confirmation of sale and issuance of sale certificate void ab initio, the direction issued by the learned Single Judge in contempt proceedings that the respondents-contemnors are directed to take back possession of the contempt petitioners’ immovable property, would have been sustainable. It was not supplementary direction, but consequential direction, the principles laid down in the case of Sudhir Vasudeva, Chairman and M.D. ONGC and Others (supra) would have no application. In view of the findings as recorded above, it is not necessary for us to make further comments, as the direction of taking back possession is based on the finding that the confirmation of sale and issuance of sale certificate was void ab initio, which has not been upheld by us. 34. One of the arguments raised by the contemnors is that without there being specific finding with regard to the role played by each of the contemnors, learned Single Judge, while deciding the contempt petition, has held all the contemnors guilty of contempt. It is submitted that neither in the contempt petition, nor in other supplementary affidavits, the contempt petitioners specifically alleged role played by each of the contemnors. It has been argued that even according to order dated 25.01.2018, auction proceedings were not stayed and the direction was not to confirm the auction proceedings. In the contempt petition, no specific averments have been made as to how each of the contemnors was involved in the process of confirmation of sale and issuance of sale certificate. 35.
It has been argued that even according to order dated 25.01.2018, auction proceedings were not stayed and the direction was not to confirm the auction proceedings. In the contempt petition, no specific averments have been made as to how each of the contemnors was involved in the process of confirmation of sale and issuance of sale certificate. 35. In this regard, we find that at the time when the contempt petition (S.B. Civil Contempt Petition No. 1003/2018) was filed, the contempt petitioners alleged in the pleadings that despite order dated 25.01.2018, sale notice dated 16.04.2018 was served on the contempt petitioners on 20.04.2018. According to the contempt petitioners, at the time when contempt petition was filed, action of the contemnors in proceeding to hold auction under sale notice dated 16.04.2018 was contemptuous. During the pendency of the contempt petition, reply was filed by the respondents-contemnors and it was revealed that the auction was not only held but the sale was also confirmed. In Para 8(d) of the reply filed by the contemnors, it was disclosed that on 28.02.2018, fresh auction was carried, in which the property was auctioned to the highest bidder and sale certificate was issued on 26.04.2018. Along with the additional affidavit, sale certificate dated 26.04.2018 has been filed as Annexure P-7, which reveals that sale certificate has been issued by Arinendu Shekhar in the capacity of Chief Manager, Asset Recovery Cell and Authorised Officer, Bank of Maharashtra, Branch Rajapark, Jaipur, Rajasthan. Said Arinendu Shekhar was not a party in the contempt petition. The respondents-contemnors in the contempt petition, though had defended the action of confirmation of sale, neither from the contempt petition, nor from the reply, additional affidavits or other pleadings filed by the parties including the contempt petitioners, it would reveal as to what role was played by the respondents-contemnors in the matter of confirmation of sale and issuance of sale certificate followed by delivery of possession and finally acceptance of bid amount offered by the auction purchaser. Even after reply was filed by the respondents-contemnors in the contempt petition revealing the action of confirmation of sale and issuance of sale certificate, by way of rejoinder affidavit or otherwise, the contempt petitioners have not alleged that confirmation of sale and issuance of sale certificate was under the directions/dictates of the contemnors impleaded in the contempt petition.
Even after reply was filed by the respondents-contemnors in the contempt petition revealing the action of confirmation of sale and issuance of sale certificate, by way of rejoinder affidavit or otherwise, the contempt petitioners have not alleged that confirmation of sale and issuance of sale certificate was under the directions/dictates of the contemnors impleaded in the contempt petition. Who has confirmed the sale, has not been specifically pleaded in the contempt petition. While it is true that the appellants-bank officials have sought to defend the action of confirmation of sale and issuance of sale certificate, which has not been accepted by learned Single Judge and even, we are of the view that confirmation of sale and issuance of sale certificate was in the teeth of order dated 25.01.2018 passed in the writ petition filed by the contempt petitioners, in the absence of there being any specific pleading or material before us that the confirmation of sale and issuance of sale certificate was at the command/dictate/direction of the appellants (except Arinendu Shekhar), who have been held guilty of contempt, even though we are of the view that violation of the order of the Court had been committed and the confirmation of sale and issuance of sale certificate was in violation of the Court’s orders, the authority, who confirmed the sale and issued sale certificate, having not been impleaded as party contemnor and those, who are impleaded as party contemnors, not assigned any specific role in confirmation of sale and issuance of sale certificate, we find ourselves unable to hold that the respondents in the contempt petition are guilty of contempt of court. 36. It appears that the order passed by the learned Single Judge was taken as an order of wide sweep to include the officer, who had confirmed the sale and issued sale certificate namely Arinendu Shekhar, Chief Manager, though he was not party to the contempt petition. Arinendu Shekhar is also one of the appellants in the appeal (D.B. Civil Special Appeal (Civil) No. 22/2018) filed by other three officials namely Shri Shankar Jha, Shri Rahul and Shri Pragati Kumar, who were impleaded as respondents in the contempt petition filed by contempt petitioners Nand Kishore and Mrs. Usha Khandelwal. 37.
Arinendu Shekhar is also one of the appellants in the appeal (D.B. Civil Special Appeal (Civil) No. 22/2018) filed by other three officials namely Shri Shankar Jha, Shri Rahul and Shri Pragati Kumar, who were impleaded as respondents in the contempt petition filed by contempt petitioners Nand Kishore and Mrs. Usha Khandelwal. 37. In Appeal No. 22/2018, Appellant No. 4, Arinendu Shekhar, who was concerned Chief Manager and confirmed the sale and issued sale certificate, having not been impleaded in contempt proceedings, had no opportunity to take defence that the order dated 25.01.2018 passed by the Court was not within his notice and knowledge. In the appeal, he has joined with other contemnors only to justify the action of confirmation of sale and issuance of sale certificate. There is neither any pleading, nor material to show that Arinendu Shekhar (Appellant No. 4 in D.B. Civil Special Appeal (Civil) No. 22/2018) was not only fully aware of the order dated 25.01.2018, but for all practical purposes also, he was in full knowledge of the same, even then, he proceeded to confirm the sale and issued sale certificate. 38. The contempt petition was filed against three persons namely Shri Shankar Jha, Shri Rahul and Shri Pragati Kumar. We further find that after reply was filed by aforesaid three contemnors, at a later stage of the contempt petition, an additional affidavit was filed on behalf of the contemnors, by Arinendu Shekhar (Appellant No. 4 in Appeal No. 22/2018). In the affidavit, Arinendu Shekhar claimed to be acquainted with the facts and circumstances of the case in his capacity as the Chief Manager and Authorised Officer of the Bank of Maharashtra. He has further stated in the affidavit that he has never flouted order of the Court knowingly or unknowingly and also prayed for unconditional apology. Para 4 of the affidavit shows that additional affidavit was filed in the contempt petition in compliance of direction dated 25.07.2018 of the Court requiring the bank to file a detailed affidavit detailing out the procedure adopted by the bank for auction of petitioners’ property. The contents of the affidavit are to the effect that the proceedings were continued on 28.02.2018 and sale certificate was issued on 26.04.2018 and then, registered in favour of auction purchaser in the Office of Sub Registrar, Diggi, District Tonk on 27.04.2018.
The contents of the affidavit are to the effect that the proceedings were continued on 28.02.2018 and sale certificate was issued on 26.04.2018 and then, registered in favour of auction purchaser in the Office of Sub Registrar, Diggi, District Tonk on 27.04.2018. In his affidavit, he has also stated that when the case was listed before the DRT on 20.04.2018, no interim relief was granted in favour of the petitioners. 39. Be that as it may, no person can be punished for contempt without being impleaded as party in contempt proceedings, without he being issued notice and granting opportunity to him to rebut the allegations of contempt. It appears that Arinendu Shekhar was the Chief Manager and Authorised Officer in the bank, who had conducted auction, confirmed sale and issued sale certificate, was required by the higher officers to file affidavit in the contempt petition to espouse the cause and defence of contemnors, who were already impleaded in the contempt petition as respondents, rather it being a case of Arinendu Shekhar himself being a party and noticed by the Court. We have already held hereinabove that the action of confirmation of sale, issuance of sale certificate and all proceedings thereafter were in the teeth of order dated 25.01.2018, which could not have been done. However, that would only lead to conclusion that there was disobedience of the order of the Court. In order to hold that there was willful disobedience, the individual and collective role of the contemnors impleaded in the case has to be examined. Unless definite conclusion is reached by the Court that the disobedience was willful in nature, a person cannot be held guilty of contempt of Court. 40. The contemnors, who were already impleaded in the contempt petition namely Shri Shankar Jha, Shri Rahul and Shri Pragati Kumar have stated in Para-12 of their reply that they have never flouted order dated 25.01.2018 in any manner whatsoever and it has also been averred that the petitioners have dragged higher officials of the bank, who have not been involved in any capacity whatsoever in the alleged transaction without any rhyme and reason.
Therefore, it was the burden of the petitioners to clearly plead and prove that insofar confirmation of sale, issuance of sale certificate followed by transfer of possession of the property is concerned, the three contemnors, who were impleaded in the contempt petition had a role to play. Insofar as Arinendu Shekhar is concerned, the records do reveal that it was he, who had confirmed the sale and issued sale certificate, which was in violation of order dated 25.01.2018 because the interim order was operative, as discussed in detail hereinabove, Arinendu Shekhar was not impleaded as party, nor any notice of contempt proceedings was issued to him. Therefore, he also cannot be held guilty of contempt of Court. There is nothing in the order passed by the learned Single Judge, which discusses the role played by Arinendu Shekhar and then come to the conclusion that even though he was not impleaded as party in the contempt petition, he appeared to be a person willfully disobeying the order of the Court. 41. In view of above considerations, the order passed by the learned Single Judge cannot be sustained in law and, therefore, the same is set aside. As the contempt petition is still pending because punishment order was not passed, we allow the contempt petitioners to move application for impleadment of Arinendu Shekhar as respondent (contemnor in the pending contempt petition. It goes without saying that so far as other contemnors, who were originally impleaded as respondents in the contempt petition, can no longer be proceeded against as this Court has held that they are not guilty of contempt of Court. As already observed hereinabove, it would be open for the contempt petitioners to institute separate proceedings to challenge the auction proceedings and seek recovery of property on such grounds as may be available to them under the law including the ground that the confirmation of auction sale and all subsequent proceedings were in violation of the Court order. 42. Both the appeals are accordingly allowed in the manner and to the extent as stated above.