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2022 DIGILAW 609 (MAD)

P. Ramalingam v. S. Chandra

2022-03-08

D.BHARATHA CHAKRAVARTHY, MUNISHWAR NATH BHANDARI

body2022
JUDGMENT (Prayer: Writ Petition No.7342 of 2020 filed under Article 226 of the Constitution of India, praying for issuance of a Writ of Certiorarified Mandamus to quash the order passed in Crl.M.P.No.4190 of 2017 in Crl.M.P.No.1669 of 2016, dated 10.07.2018 and consequently direct the fifth and sixth respondents to hand over the possession of the property in Flat No.B-22, VIII Floor, measuring plinth area of 1618 Sq.Ft. at Brownstone Apartments, Mahalingapuram High Road, Chennai- 600 034 together with 1618/168092 and 160/168092 parts of undivided shares in 23 grounds 702 sq.ft. of the vacant land bearing new S.No.620/50 block No.36, which forms part of the large extent of 490 grounds in old patta No.266, bearing Survey Nos.610 and 653 to 668 in Mahalingapuram in Nungambakkam Village in Egmore-Nungambakkam Taluk, Madras District as per the Sale Certificate, dated 15.11.2008 to the petitioner herein. Writ Petition No.27135 of 2021 filed under Article 226 of the Constitution of India, praying for issuance of a Writ of Certiorarified Mandamus to call for records comprised in Order dated 14.06.2017 in Crl.M.P.No.1669 of 2016 passed by the Chief Metropolitan Magistrate, Allikulam, Chennai, quash the same as arbitrary, illegal, unconstitutional and consequently forbear first respondent from acting contrary to the terms of the compromise dated 24.12.2011 by seeking possession of the Flat No.B-22, 8th Floor, Brownstone Apartment, Mahalingapuram, Chennai-600 034.) Munishwar Nath Bhandari, J. W.P.No.7342 of 2020: 1. Challenge is made to the order dated 10.07.2018 passed by the learned Chief Metropolitan Magistrate, Chennai in Crl.M.P.No.4190 of 2017 in Crl.M.P.No.1669 of 2016. The said challenge is made precisely on the ground of competence of the Chief Metropolitan Magistrate in passing the order under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). It is for the reason that earlier, an order was passed under Section 14 of the Act, 2002, dated 14.06.2017 and now, the order passed is dated 10.07.2018. It is submitted that when once an order was passed under Section 14 of the Act, 2002, the learned Chief Metropolitan Magistrate becomes "functus-officio" and otherwise, he has no power to review or recall the order, as the statute does not provide for it. It is otherwise going against the order passed by the Supreme Court on settlement between the parties. The Chief Metropolitan Magistrate was acting on the application of the first respondent. 2. It is otherwise going against the order passed by the Supreme Court on settlement between the parties. The Chief Metropolitan Magistrate was acting on the application of the first respondent. 2. Coming to the facts of this case, it is stated that, after the litigation between the bo rower, the Bank and the auction purchaser, i.e. the writ petitioner in W.P.No.7342 of 2020, a settlement was arrived at and in terms of the settlement, a criminal appeal (in Crl.M.P.No.5469 of 2012) in Crl.A.No.1524 of 2011, before the Apex Court, was disposed of by judgment dated 07.05.2012. Referring to the memo of settlement entered into between the parties, it is submitted that as far as the right of the auction purchaser is concerned, it was kept confirmed and in view of the above, the Bank was directed to release the papers in favour of the borrower. By order of the Chief Metropolitan Magistrate under challenge, now, hindrance has been created to get the possession of the property by the auction purchaser, despite the deposit of the entire money and therefore, the Writ Petition had been filed not only challenging the order passed by the Chief Metropolitan Magistrate, but also seeking further direction for handing over the possession of the property to the auction purchaser. 3. The learned counsel appearing for the Bank submitted that pursuant to the order of the Supreme Court, on settlement between the parties, they have received the entire amount of sale proceeds from the auction purchaser, but could not give possession of the property on account of the order passed by the Chief Metropolitan Magistrate for the reason that the borrower is not allowing the possession to be given to the auction purchaser. Thus, the Bank supported the case of the petitioner. 4. The contest is however made by the learned counsel for the borrower. It is submitted that the memo of settlement entered into between the parties, does not create a right in favour of the auction purchaser, rather, if the Annexure-II to the memo of settlement is looked into, the direction on the Bank was to withdraw the Original Application as well as the civil and criminal proceedings. It was with further direction to return all the original papers of title deeds, as available in the records and they are not to pursue any other proceedings under the Act, 2002, against any other security. It was with further direction to return all the original papers of title deeds, as available in the records and they are not to pursue any other proceedings under the Act, 2002, against any other security. In the light of the memo of settlement and the order passed by the Apex Court, no right was created in favour of the auction purchaser, rather the borrower was absolved from all liabilities and therefore, he has rightly retained the possession. The application for passing the order by the Chief Metropolitan Magistrate was required, as the Bank was trying to take possession and to save and protect the borrower, the Chief Metropolitan Magistrate has passed the order, having competence under Section 14 of the Act, 2002. This prayer is not to cause interference with the order, rather, to dismiss the Writ Petition. 5. We have considered the rival submissions and perused the records. 6. The case has a chequered history, as narrated in the preceding paragraphs to show that pursuant to the order passed by the Chief Metropolitan Magistrate under Section 14 of the Act, 2002, the auction took place where the auction purchaser was successful and thus, a sale certificate was issued. However, the litigation remained between the parties and ultimately, it went up to the Supreme Court in reference to the criminal case, thereby, the criminal appeal stated above, filed by Gajapathy Rajan, was closed by the Supreme Court by order dated 07.05.2012. Finding that during the pendency of the appeal, the parties have compromised the matter and copy of the joint memo dated 24.12.2011 has been filed along with the application, and thereby, the parties were asked about the objection to the statement and finding no objection, the order was passed by the Apex Court by endorsing the joint memo. 7. The joint memo is based on the memo of understanding and the relevant paragraphs therein are quoted hereunder: "Accordingly, the Bank/party of the first part has realized a total sum of Rs.679.50 lakhs through various recovery measures like sale of the mortgaged properties etc on A/c of M/s.Blue Jaggers Ltd. In this connection certain third parties have filed SA petitions before DRT which are pending, and these petitions will be dealt in accordance with Law and orders in due course will bind the parties concerned." .. .... .... .... .... "Bank/the party of the first part having exercised its recovery steps, as against all mortgaged immovable assets which are not fraught with disputes/litigations etc. reviewed the position at the request of the borrower and agreed with the recovery effected so far be treated as full and final settlement. On the party of Second part approaching for a final Compromise, the Bank/party of the First part agreed to treat the recovery so far effected as mentioned earlier as full and final settlement of its dues, and also to give a quietus to other inter-se disputes, agreed to file a Joint Memo in the Hon'ble Supreme Court in the above said two Criminal appeals, which forms part, and parcel of this MOU, and is appended hereto as Annexure I. It is understood between the parties that the Bank/Party of the first part to make all endeavors to request the Hon'ble Supreme Court of India to accept the Joint Memo, and dispose of the two Criminal appeals on the terms contained in the Joint Memo and the parties hereto will comply with their mutual obligations as contained in Annexure II hereto. To envisage, and materialize alternate proposal for the settlement of the disputes between themselves, irrespective of any further developments in future, and to avoid multiplicity of proceedings, the following understanding has been agreed between the parties hereto, and in order to record the same in writing, the parties hereto have entered into this Memorandum of Understanding" 8. A perusal of the paragraphs quoted above, shows that the recovery effected so far be treated as full and final settlement, and therefore, to file a joint memo, recovery was satisfied on account of the auction of the property, as borrower has not paid and satisfied the due amount. It was in view of the fact that the sale certificate was issued prior to the memo of understanding and therefore, with the agreement, the matter was concluded by the Apex Court. 9. The learned counsel for the borrower referred to Annexure-II to the memo of understanding to impress upon the Court that the Bank had agreed to withdraw the Original Application and all the criminal matters with the assurance to return all the papers. 9. The learned counsel for the borrower referred to Annexure-II to the memo of understanding to impress upon the Court that the Bank had agreed to withdraw the Original Application and all the criminal matters with the assurance to return all the papers. It is only on satisfaction of the amount, and therefore, the Bank was not having right to take the possession of the property, and therefore, the learned Chief Metropolitan Magistrate rightly passed the order. 10. We find that the Chief Metropolitan Magistrate had no power to pass the order after the order was earlier passed exercising the jurisdiction under Section 14 of the Act of 2002. The Chief Metropolitan Magistrate is not clothed with the power of review or recall under the Act, 2002. He is not having inherent powers for it or, as otherwise it remains with the High Court or the Supreme Court. The power of review or recall can be exercised by the Administrative Officers or the authorities or the quasi-judicial and Judicial Officers only when such powers are given under the statute and not otherwise. It is in view of the judgment of the Apex Court in the case of Kalabharati Advertising Vs. Hemant Vimalnath Narichania and others, reported in 2010 (9) SCC 437 = MANU/SC/0674/2010, wherein, it was observed by the Apex Court as follows: "12. It is settled legal position that unless the statute/rules so permit, the review application is not maintainable in case of judicial/quasi-judicial orders. In absence of any provision in the Act granting an express power of review, it is manifest that a review could not be made and the order in review, if passed is ultra-vires, illegal and without jurisdiction. (vide Patel Chunibhai Dajibha Vs. Narayanrao Khanderao Jambekar and Anr. MANU/SC/0287/1964 : AIR 1965 SC 1457 and Harbhajan Singh Vs. Karam Singh and Ors. MANU/SC/0015/1965 : AIR 1966 SC 641 ). 13. In Patel Narshi Thakershi and Ors. Vs. Shri Pradyuman Singhji Arjunsinghji MANU/SC/0433/1970 : AIR 1970 SC 1273 ; Maj. Chandra Bhan Sinigh Vs. Latafat Ullah Khan and Ors. MANU/SC/0042/1978 : AIR 1978 SC 1814 ; Dr.Smt.Kuntesh Gupta Vs. Management of Hindu Kanya Mahavidhyalaya, Sitapur (U.P) and Ors. MANU/SC/0104/1987 : AIR 1987 SC 2186 ; State of Orissa and Ors. Vs. Commissioner of Land Records and Settlement, Cuttack and Ors. MANU/SC/0549/1998 : 1998 (7) SCC 162 and Sunita Jain Vs. Pawan Kumar Jain and Ors. MANU/SC/0042/1978 : AIR 1978 SC 1814 ; Dr.Smt.Kuntesh Gupta Vs. Management of Hindu Kanya Mahavidhyalaya, Sitapur (U.P) and Ors. MANU/SC/0104/1987 : AIR 1987 SC 2186 ; State of Orissa and Ors. Vs. Commissioner of Land Records and Settlement, Cuttack and Ors. MANU/SC/0549/1998 : 1998 (7) SCC 162 and Sunita Jain Vs. Pawan Kumar Jain and Ors. MANU/SC/7012/2008 : 2008 (2) SCC 705 , this Court held that the power to review is not an inherent power. It must be conferred by law either expressly/specifically or by necessary implication and in absence of any provision in the Act/Rules, review of an earlier order is impermissible as review is a creation of statute. Jurisdiction of review can be derived only from the statute and thus, any order of review in absence of any statutory provision for the same is nullity being without jurisdiction. 14. Therefore, in view of the above, the law on the point can be summarised to the effect that in absence of any statutory provision providing for review, entertaining an application for review or under the garb of clarification/modification/correction is not permissible." 11. In view of the above decision of the Supreme Court, firstly, the Chief Metropolitan Magistrate has no power to pass the order under Section 14 of the Act, 2002, as it was passed earlier, and thereby, he became "functus-officio" for all purposes therein and having no power to review or recall. Thus, the Chief Metropolitan Magistrate exceeded his jurisdiction and passed the impugned order. It is otherwise going against the order passed by the Supreme Court endorsing the settlement between the parties. It is based on the settlement that the auction purchaser has paid the entire due amount to the Bank, but has not given possession. It is precisely in view of the order passed by the Chief Metropolitan Magistrate at the instance of the borrower. We find that the action of the Chief Metropolitan Magistrate, so also the borrower to create hindrance in execution of the memo of understanding and the order of the Supreme Court, thus, needs to be dealt with by issuing appropriate direction. 12. Accordingly, the impugned order passed by the Chief Metropolitan Magistrate, dated 10.07.2018 is quashed. W.P.No.7342 of 2020 is allowed. 12. Accordingly, the impugned order passed by the Chief Metropolitan Magistrate, dated 10.07.2018 is quashed. W.P.No.7342 of 2020 is allowed. The Bank is directed to give possession of the property in question to the auction purchaser within 15 days and for that, the borrower is directed to give possession of the property to the Bank within the period aforesaid. Looking at the act of the borrower, creating hindrance despite an order of the Supreme Court in terms of the memo of understanding, costs of Rs.25,000/- (Rupees twenty five thousand only) be paid by the borrower to the petitioner for the litigation within a period of 15 days. In case of non-compliance of the order, the Registrar (Judicial) of this Court shall take steps to list this Writ Petition for appropriate orders. W.P.No.27135 of 2021: 13. In view of the allowing of W.P.No.7342 of 2020 as above, we dismiss W.P.No.27135 of 2021 with costs of Rs.25,000/- (Rupees twenty five thousand only) to be paid by the petitioner to the Tamil Nadu State Legal Services Authority, High Court Buildings, Chennai-600 104.