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2022 DIGILAW 1707 (GUJ)

Bhaskar Prabhudas Parekh v. Bank of India

2022-12-07

BHARGAV D.KARIA

body2022
JUDGMENT : Heard learned advocate Mr.Rajesh Parekh with learned advocate Mr.Viral V. Dave for the petitioner and learned Senior Advocate Mr. R.S. Sanjanwala with learned advocate Ms.Anushree M. Soni for the respondent. 1. Rule, returnable forthwith. Learned advocate Ms.Anushree M. Soni waives service of notice of rule on behalf of the respondent. 2. By this petition under Articles 226 and 227 of the Constitution of India, the petitioner has prayed for the following reliefs : “(A) Your Lordship may be pleased to admit and allow this Application; (B) Your Lordship may be pleased to set aside the order below Ex.1 dtd 24-9-19 passed by the Appellate Tribunal Mumbai on Appeal No. 7 of 2014 should be quashed and set aside and the orders of DRT1 Ahmedabad dtd 18-4-13 in SA 81/12 and order dtd 3- 11-15 in MA 66 of 2015 should be restored without any interruption till the refund of amount paid by the petitioner i.e Rs. 25,00,000/- (Rupees Twenty Five Lakh only) to the Respondent Bank with interest of 9% p.a. till full payment to the present applicant along with damages, mesne profit occurred thereupon. (C) Cost of the present application to be recovered from the respondent Bank. (D) Your Lordship may be pleased to pass such other and further relief as may be deemed just and proper be granted in the interest of justice.” 3. The brief facts of the case are as under : 3.1. The petitioner has issued a Cheque No.390306 dated 18.04.2012 for Rs.25 Lakh in favour of the Bank of India on behalf of one M/s. Seema Jwellers-the borrower who borrowed finance from the respondent-Bank of India towards the advance for purchase of the property of the borrower with an understanding that if the petitioner fails to deposit the amount of purchase consideration of Rs.200 Lakhs for the property, the said amount shall be refunded by the respondent-Bank and till that point of time, the amount shall be kept into No Lien Account. 3.2. The said cheque was cleared by the HDFC Bank as per the statement placed on record by the petitioner along with the affidavit-in-rejoinder which clearly shows that the Cheque of Rs.25 Lakh was cleared. 3.3. 3.2. The said cheque was cleared by the HDFC Bank as per the statement placed on record by the petitioner along with the affidavit-in-rejoinder which clearly shows that the Cheque of Rs.25 Lakh was cleared. 3.3. M/s. Seema Jwellers preferred Securitisation Application No.81 of 2012 (for short ‘S.A.No.81 of 2012’) before the Debt Recovery Tribunal-I, Ahmedabad (for short ‘the DRT’) under the provisions of the Securitisation and Reconstructions of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the SARFAESI Act’) challenging the action taken by the respondent-Bank under Section 13(4) of the SARFAESI Act. 3.4. It appears that during the pendency of the S.A.No.81 of 2012, the petitioner preferred an application Exh: T-27 for return of the amount of Rs.25 Lakh deposited by him. 3.5. The DRT by order dated 18.04.2013 dismissed the S.A.No.81 of 2012 filed by the borrower M/s. Seema Jwellers, however, with regard to the application at Exhibit T-27, the DRT directed the respondent-Bank to refund an amount of Rs.25 Lakhs deposited by the petitioner. 3.6. The DRT held in the said order as under : “(22) Now I will deal with the applications filed by the Bhaskar Parekh, I have gone through the said applications Exh.T/26 and T/27. The said applications were filed at a very belated stage when the arguments of the Securitization Application were almost over. However, in order to meet the ends of justice, I cannot ignore the said applications which were filed on 05.03.2013. Be it noted that respondent Bank has not filed any formal reply to the said applications. In para No. 3 of T/27, the third party, has mentioned that one of the conditions of the offer made by him to the Bank while he deposited Rs. 25.00 lacs showing interest to purchase the second property, i. e. residential one wherein he categorically stipulated that, if he fails to deposit the remaining amount of Rs. 220 lacs, then the Bank shall return the deposited amount of Rs. 25.00 lacs. Since the Respondent Bank has not filed any reply and refuted this contention I have to believe the contention made by the third party applicant. Therefore, I am of the opinion, that Bank should also take a practical decision and refund Rs. 25.00 lacs to the third party in response to application Exh. T/27. 25.00 lacs. Since the Respondent Bank has not filed any reply and refuted this contention I have to believe the contention made by the third party applicant. Therefore, I am of the opinion, that Bank should also take a practical decision and refund Rs. 25.00 lacs to the third party in response to application Exh. T/27. It is a fact that this third party is a neither borrower nor a guarantor. He has merely offered to purchase the residential property in question and there is no agreement in existence between the third party and the Bank to the effect that if the third party back out from his offer, the amount deposited shall be forfeited. In view of the foregoing, I pass the undernoted order. ORDER 1. Securitization Application No. 81 of 2012 is dismissed without cots. Respondent Bank is at liberty to proceed further under the SARFAESI Act including taking possession of the secured properties with the assistance of police in terms of the order obtained from the Ld. Chief Metropolitan Magistrate under Section 14 of the SARFAESI Act and sale, etc. 2. Respondent Bank is directed to issue a Sale Certificate to Ms. Priyanka Soni, qua the property being Shop No. 206, 1st Floor, Samir Complex, Opp. Municipal Market, CG Road, Ahmedabad at her cost and also return all the title deeds within 15 days from 18.04.2013. 3. Respondent Bank is further directed to return Rs. 25.00 lacs within 15 days from 18.04.2013 to Mr. Bhaskar Parekh, a third party against the valid acknowledgment of receipt.” 3.7.The respondent-Bank being aggrieved by the order of the Tribunal to refund the amount of Rs.25 Lakh to the petitioner preferred Appeal No.7 of 2014 before the Debt Recovery Appellate Tribunal at Mumbai (for short ‘DRAT’). 3.8. In the Appeal Memo filed by the respondent- Bank, it is nowhere stated that the respondent- Bank did not receive an amount of Rs.25 Lakh. On the contrary, in the paragraph No.(d) of the Appeal Memo the respondent-Bank stated as under : “The Appellant submits that the Respondents submitted a proposal dated 18.04.2012 to the effect that they have negotiated for sale of the said two mortgaged properties being shop No. 206 and Bungalow no. 21-B and submitted with their offer letter two cheques one issued by Ms. Priyanka Soni for Rs. 10 lacs towards part payment of the sale of shop no. 21-B and submitted with their offer letter two cheques one issued by Ms. Priyanka Soni for Rs. 10 lacs towards part payment of the sale of shop no. 206 and one by Mr. Bhasker Parikh for Rs. 25 lacs towards part payment of the sale of Bungalow no. 21-B and requested the Appellant to allow them to sell the said two mortgaged assets as per their offer. The said offer dated 18.04.2012 of the Respondents was considered by the Appellant and the Appellant vide its letter dated 26.05.2012 permitted the Respondents to sell the said two mortgaged assets on certain terms and conditions as under.” 3.9. In spite of the above averments made by the respondent-Bank, it was presented before the DRAT that the respondent-Bank did not receive an amount of Rs.25 Lakh. The DRAT therefore, in the order dated 24.09.2019 while allowing the Appeal of the respondent-Bank held as under : “4. I have perused the material papers and the impugned order dated 18/04/2013. Issue relating to payment of Rs.25.00 Lacs was referred in para no.22 of the impugned order. It is recorded in the order that the applicant third party contended that the balance amount is not deposited in time, the bank shall return the deposited amount of Rs.25.00 Lacs. As rightly pointed out by advocate for appellant when third party is claiming refund of that amount, it is for third party to show that the said amount is deposited with the bank and then only any direction can be given. It is submitted that even the cheque relied on by third party is returned to respondents and it is not known whether said cheque is encashed or not. In any way, we are not concerned with those aspects and simple issue that has to be examined is whether Tribunal below has any power to give such direction as per section 17 of the SARFAESI Act. 5. If the measures taken by the bank were found to be illegal and incorrect, then Tribunal below can only pass an order setting aside such measures and direct the bank to restore back possession, except that no other power is vested in the Tribunal below and if the third party is parted with any money, its remedy is otherwise and it cannot invoke the jurisdiction of the Tribunal below under Section 17 of the Act. 6. 6. Considering these aspects, I am of the view that the Tribunal below committed error in giving such direction, particularity when the main S.A. is. dismissed, such a direction is unwarranted.” 3.10. From the above order passed by the DRAT, it is clear that the respondent-Bank made misrepresentation before the DRAT and misled the DRAT and Appeal was allowed in favour of the respondent-Bank. 3.11. The petitioner also filed a Miscellaneous Application before the DRT in the year 2015 being Miscellaneous Application No.66 of 2015 which was also allowed by the DRT by judgment dated 03.11.2015 as under : “(5) This Tribunal vide its order dated 18.04.2013 has directed the respondent to return Rs. 25.00 lacs within 15 days from the date of the said order to the present Third party applicant. The respondent bank in its reply submitted that an appeal filed by the respondent bank involving the above noted direction of the Tribunal is pending before the Hon’ble DRAT, Mumbai. But the respondent did not file any relevant documents wuch as copy of the Appeal Memo, stay order, if any, passed by the Hon’ble DRAT, etc. The present Third party applicant should not be allowed to suffer as his hard earned money is involved. It is a fact that he is neither a borrower nor a guarantor. It is also a matter of record that he has paid a amount of Rs. 25.J0 lacs to purchase the above noted secured assets under the SARFAESI Act. Hon’ble Supreme Court of India in the matter of Balbir Singh reported in AIR 2004 SC 2141 held that unless there is a stay order obtained from a higher forum the mere fact of filing of an Appeal/Revision will not entitle the authority to not comply with the order of the Trial court, i.e. Tribunal in the present case. Therefore, the order of the Tribunal dated 18.04.2013 must be complied with.” 3.12. Though the aforesaid order was passed by the DRT, the same was not produced or disclosed before the DRAT in the year 2019 when the Appeal No.7 of 2014 was taken up for hearing by the DRAT. The respondent-Bank thus suppressed the order passed by the DRT in the year 2015 directing the respondent-Bank to pay the amount of Rs.25 Lakh within ten days with interest with a dire consequences to follow of initiating the contempt proceedings. 4. The respondent-Bank thus suppressed the order passed by the DRT in the year 2015 directing the respondent-Bank to pay the amount of Rs.25 Lakh within ten days with interest with a dire consequences to follow of initiating the contempt proceedings. 4. It appears that the entire action of the respondent-Bank is only with a view to see that the order passed by the DRT is not complied. 5. In view of the above facts, the petition is allowed. The respondent-Bank is directed to refund Rs.25 Lakh as per order passed by the DRT in the year 2013 as well as 2015. 6. As the respondent-Bank has mislead the DRAT by not disclosing the correct facts, cost of Rs.5 Lakh is also imposed upon the respondent-Bank applying the decision of the Hon’ble Supreme Court in case of Dnyandeo Sabaji Naik and Others vs. Pradhya Prakash Khadekar and Others reported in (2017) 5 SCC 496 which reads as under: “13. This Court must view with disfavour any attempt by a litigant to abuse the process. The sanctity of the judicial process will be seriously eroded if such attempts are not dealt with firmly. A litigant who takes liberties with the truth or with the procedures of the Court should be left in no doubt about the consequences to follow. Others should not venture along the same path in the hope or on a misplaced expectation of judicial leniency. Exemplary costs are inevitable, and even necessary, in order to ensure that in litigation, as in the law which is practised in our country, there is no premium on the truth. 14. Courts across the legal system - this Court not being an exception – are choked with litigation. Frivolous and groundless filings constitute a serious menace to the administration of justice. They consume time and clog the infrastructure. Productive resources which should be deployed in the handling of genuine causes are dissipated in attending to cases filed only to benefit from delay, by prolonging dead issues and pursuing worthless causes. No litigant can have a vested interest in delay. Unfortunately, as the present case exemplifies, the process of dispensing justice is misused by the unscrupulous to the detriment of the legitimate. The present case is an illustration of how a simple issue has occupied the time of the courts and of how successive applications have been filed to prolong the inevitable. Unfortunately, as the present case exemplifies, the process of dispensing justice is misused by the unscrupulous to the detriment of the legitimate. The present case is an illustration of how a simple issue has occupied the time of the courts and of how successive applications have been filed to prolong the inevitable. The person in whose favour the balance of justice lies has in the process been left in the lurch by repeated attempts to revive a stale issue. This tendency can be curbed only if courts across the system adopt an institutional approach which penalizes such behavior. Liberal access to justice does not mean access to chaos and indiscipline. A strong message must be conveyed that courts of justice will not be allowed to be disrupted by litigative strategies designed to profit from the delays of the law. Unless remedial action is taken by all courts here and now our society will breed a legal culture based on evasion instead of abidance. It is the duty of every court to firmly deal with such situations. The imposition of exemplary costs is a necessary instrument which has to be deployed to weed out, as well as to prevent the filing of frivolous cases. It is only then that the courts can set apart time to resolve genuine causes and answer the concerns of those who are in need of justice. Imposition of real time costs is also necessary to ensure that access to courts is available to citizens with genuine grievances. Otherwise, the doors would be shut to legitimate causes simply by the weight of undeserving cases which flood the system. Such a situation cannot be allowed to come to pass. Hence it is not merely a matter of discretion but a duty and obligation cast upon all courts to ensure that the legal system is not exploited by those who use the forms of the law to defeat or delay justice. We commend all courts to deal with frivolous filings in the same manner. 15. Hence it is not merely a matter of discretion but a duty and obligation cast upon all courts to ensure that the legal system is not exploited by those who use the forms of the law to defeat or delay justice. We commend all courts to deal with frivolous filings in the same manner. 15. We accordingly dismiss the Special Leave Petitions but while doing so, direct that: (i) the petitioners shall vacate the premises on or before 7 March 2017; (ii) In case the petitioners fail to vacate the premises by the date indicated in (i) above, they shall expose themselves to civil and criminal consequences under the law; (iii) the petitioners shall pay all arrears for use of the premises computed at the rate fixed in the order of this Court dated 28 August 2015 within four weeks; and (iv) the petitioners shall pay costs quantified at Rs 5 lakhs (Rupees five lakhs) to the respondents within two months.” 7. The cost of Rs.5 Lakh shall be paid to the petitioner in addition to the amount of Rs.25 Lakh with interest as directed by the DRT within a period of four weeks from the date of receipt of this order. Rule is made absolute to the aforesaid extent. 8. At this stage, learned Senior Advocate Mr.Sanjanwala has prayed for the stay of this order. The same is refused as time of four weeks is granted to comply with this order.