Mrs.Brihatakuchambal v. The Presiding Officer & Ors.

to advance arguments in accordance with law.2.The learned Senior Counsel for the petitioner submits that thepetitioner has filed an application to condone the delay of 120 daysin filing an appeal before the first respondent/Tribunal as perSection 17 of the SARFAESI Act and sought relief to set aside theproceedings initiated under the said Act and that the office of thefirst respondent/ Tribunal, by mistake has numbered the appeal asS.A.No.263 of 2007, without considering the delay in filing theappeal and after noticing the mistake, immediately withdrew theassigned number and has given Diary No.1529 of 2007 and the secondand third respondents have taken notice of the application to condonethe delay in projecting the appeal and also in the stay applicationand the first respondent/Tribunal has passed an interim order on03.12.2007 granting status quo and as such, the property has beenbrought for sale in public auction and it is ascertained that theapplication for condonation of delay has been allowed by the firstrespondent/ Tribunal on 22.05.2009 and the appeal itself has beendisposed of on 29.05.2009 without providing opportunity to thepetitioner to put forward her case and in short, the firstrespondent/Tribunal has failed to issue any notice to the petitionerafter allowing the delay condonation application and also failed toprovide opportunity to the petitioner to file the documents foreffective adjudication of the controversies/disputes raised in theappeal and therefore, the order passed by the firstrespondent/Tribunal in S.A.No.133 of 2009 dated 29.05.2009 is to beset aside to prevent an aberration of justice and consequently, toallow the writ petition.3.Even though, a plea is taken on behalf of the petitioner tothe effect that there is no Presiding Officer in the Debts RecoveryAppellate Tribunal, Chennai, we are to point out that as perNotification dated 29.05.2009 in F.No.A-12026/3/2006-DRT Governmentof India, Ministry of Finance, Department of Financial Services, theHonourable Chairperson of the Debts Recovery Appellate Tribunal,Mumbai has been authorised to discharge the functions of theChairperson, Debts Recovery Appellate Tribunal, Chennai also withimmediate effect until further orders. 4.Continuing further, it is the stand of the petitioner thather counsel has obtained the certified copy of the order passed inS.A.No.133 of 2009 dated 29.05.2009 in June 2009 and has informedthat he has not been served with any order of condonation of delay infiling the appeal, and in effect there has been no further hearing inthe appeal and therefore, he has not sought the permission to crossexamine the witnesses and the production of records.5.The writ petitioner, before the first respondent inS.A.SR.No.1529 of 2007 (filed under Section 17 of the SARFAESI Act,2002) has prayed for passing of the following interim order: https://hcservices.ecourts.gov.in/hcservices/ "Pending final decision of this application, theapplicant seeks issue of the interim orders tostay the operation of the impugned notice dated13.4.2007 issued by the respondents under Section13(4) of the Securitisation and Reconstruction ofFinancial Assets and Enforcement of SecurityInterest Act, 2002."6.The first respondent/Tribunal, in S.A.SR.No.1529 of 2007 on03.12.2007, has inter alia passed the interim order which runs thus:".... Without going into the merits of thisapplication and considering the fact that theRespondent bank issued impugned notice forenforcement of rights under the provisions of theSARFAESI Act and in the peculiar facts andcircumstances of this case and also to protect theinterest of both the parties adequately, it isordered that status quo as on date is to bemaintained by both parties till 17.12.2007.This order be communicated to the AuthorizedOfficer of the Respondent Bank by the Registry ofthis tribunal immediately. Communicate the copy ofthis order to the parties, immediately.Call on 17.12.2007 for further hearing anddisposal."7.The submission of the learned Senior Counsel for thepetitioner is to the effect that while filing an appeal under Section17 of the SARFAESI Act, a petition has been filed to condone thedelay and though written arguments have been submitted by the bank,the main case has been disposed of after condoning the delay by theTribunal without providing a reasonable opportunity of hearing to thepetitioner, as a result of which, considerable prejudice has beencaused. Therefore, to verify the same, we have directed the Registrar(Judicial) to get the entire records relating to S.A.No.133 of 2009on or before 31.08.2009 and directed the matter to be listed on31.08.2009.8.The Registrar (Judicial) of this Court in VRR.No.4594/2009/CCdated 27.08.2009 has addressed the FAX Message to the PresidingOfficer of the first respondent/Tribunal to transmit the records inS.A.No.133 of 2009 to this Court on or before Monday 31st day ofAugust 2009 at 10.30 a.m. without fail. The Presiding Officer of thefirst respondent/Tribunal by way of reply dated 28.08.2009 has sentthe F.No.133/2009-DRT-I, Chennai (between Mrs.Brihatkuchambal Vs.Vijaya Bank, Pondicherry Br.) in original along with documents,Memorandum of Appeal as per the index enclosed. However, on https://hcservices.ecourts.gov.in/hcservices/

31.08.2009, this Court has directed the first respondent/ Tribunal toproduce the Original Docket Order on 01.09.2009. On 01.09.2009 thisCourt has passed the following order:'It is not evident from the records submitted bythe official that after condoning the delay, onwhat date the case was numbered as S.A.No.133 of2009 and posted for final disposal to give anopportunity to both the counsel to address theirarguments. Hence, the officer concerned isdirected to submit his remarks along with theoriginal records before 03.09.2009 Post on03.09.2009.'On 03.09.2009, the matter has been directed to be listed on04.09.2009.9.The Presiding Officer of the first respondent/Tribunal hassubmitted a report dated 02.09.2009 to this Registry which isextracted below:"I do hereby convey my unqualified apology tothe Hon'ble High Court of Madras, for theinconvenience caused in this matter.I submit to state that only in the judgmentpassed in WP.No.3566/07 (in the case of UCO BankVs. M/s.Kanji Manji Kothari and Co and others),the Hon'ble Division Bench, Hon'ble Bombay HighCourt consisting of Justice Smt.Ranjana Desai andJustice Smt.Roshan Dalvi JJ, have held asfollows:- "The provision of Section 5 of theLimitation Act is applicable to the proceedingsunder Sec.17(1) of the NPA Act". Accordingly, itis brought to the knowledge of this tribunal, thattribunal has got power to condone the delay infiling SARFAESI appeal. After hearing the counselfor both sides, at the first instance, condonedelay petition has been allowed.Thereafter, based upon the writtensubmissions filed by both sides, final orderpassed on 29.5.2009. There is no settled law toentertain Sec.5 application by this tribunal andonly after passing of the above judgment of theHon'ble Division bench of the Hon'ble Bombay HighCourt, this tribunal passed appropriate orders incondone delay petition. Based on the writtensubmissions of both sides, the SARFAESI Appeal wasdisposed of, on merits and also in accordance with https://hcservices.ecourts.gov.in/hcservices/ law.Once again, I do hereby convey myunconditional apology for the inconvenience causedto the Hon'ble High Court in this regard. I assurethat I will be more careful in future and I pray Imay kindly be excused."10.A perusal of the relevant Notings in File No.133/2009 of thefirst respondent (relating to the present case) shows the following:"SASR No.1529/073.12.2007Passed over for interim order in the above appeal.Interim order in the Appeal is pronounced and recorded inseparate sheets.The following Concluding portion of interim order ispassed in the Appeal.Considering the circumstances of this case and also toprotect the interest of both the parties adequately, it isordered that status quo as on date is to be maintained byboth parties till 17.12.2007.Call on 17.12.2007 for further hearing and disposal.signedPOSR1529 2007 DT:17.12.07Counsel for the parties present. At the request of boththe sides adjourned to 19.12.07SR 1529 2007 DT:19.12.07Counsel for the parties present. Liberty granted to fileWS on or before 9.1.08. For final order by 21.1.08.SR 1529/0721/1/08Busy with Review Meeting. Hence reposted to 28/1/08.signedPOSR1529 2007 dt:28.1.08It is reported that the proposal is accepted by the resban. It is also reported that res bank has granted timeupto 12.4.08 for making payments. Copy of letter alsoissued by the res bank dt:14.1.08 also filed. Hence callthis matter on 15.4.08 for reporting settlement. https://hcservices.ecourts.gov.in/hcservices/ SR1529 2007 DT:15.408For reporting settlement by 30.4.08SR – 1529/07DATE: 30/4/08PO on tour/LeaveThe case is reposted to 19/06/08REGISTRAR/ARSR1529 2007 dt:19.6.08It is reported that in connected matter a CRP 429/04 filedbefore Hon'ble High Court and is coming up for hearing on21.7.08. Hence all this matter on 21.7.08SR1529 2007 Dt:21.7.08It is reported that the matter is pending before Hon'bleHigh Court. Hence adjourned to 18.8.08.OA/TA No.: SR.1529/09 DATE:18/8/08PO on tour/Leave Urgent Admn work of High Court.The case is reposted to 18/09/08REGISTRAR/ARSA62and SR1529 of 2007 dt:18.9.08Counsel for the parties present. It is reported that onthe same subject matter, appeal is filed before Hon'bleHigh Court in Company petition. Hence adjourned to28.10.08.OA/TA No.: SR/1529/07DATE: 28/10/08PO on tour/LeaveThe case is reposted to 24/11/08REGISTRAR/ARSR1529 2007 dt:24.11.08It is reported that the matter is pending before Hon'bleHC in CP. Hence adjourned to 30.12.08.SR 1529/200730.12.2008It is reported by the counsel for the respondent bank thatthere is no settlement. It is also reported thatArunachala Sugar Mills is only a party in the WP inHon'ble High Court. Counsel for respondent bank reportedthat no matter is pending before Hon'ble Madras High Courtregarding this case. Counter already filed by therespondent bank. For written submissions of both sides andalso for disposal matter is adjourned to 21.1.2009. No https://hcservices.ecourts.gov.in/hcservices/ further adjournment.SR1529 2007 dt:21.1.09At request adjourned to 13.2.09 for hearingOA/TA No.: SR-1529/07 DATE:13/2/09PO on tour/LeaveThe case is reposted to 24/03/2009REGISTRAR/ARSR1529/2007dt:24.3.09Counsel for respondent bank present. Norepresentation is made for appellant. For hearing anddisposal finally and last chance on 31.3.2009. It is madeclear that if no representation is made on that day, theSA will be dismissed for default.SR15292007dt:31.3.09Written submissions filed by the petitioner. For writtensubmissions of respondent bank by 1.4.2009.SR1529/2007 dt:1.4.09Written submissions filed by the petitioner. Forwritten submissions of respondent bank by 1.4.2009.SR1529/2007dt:1.4.09Written submissions filed by the bank. Writtensubmissions of appellant already filed. Heard. For finalorders on 5.5.2009.SA.Sr.No.1529 of 2007 05.05.2009PO busy with Honourable Supreme Court Case SA No.50of 2007, Honourable High Court Case OA.536 of 1998 &Honourable DRAT cases SA No.136 of 2007, hence reposted to26.05.2009.POSA No.133 of 2009 26.05.2009[Sr.No.1529 of 2007]Concerned stenos are on leave, hence reposted to29.05.2009." https://hcservices.ecourts.gov.in/hcservices/

11.Moreover, the undated order in SA Sr No.1529 of 2007 in SIANo.170 of 2007 as seen from the file points out that the firstrespondent/Tribunal, on perusal of material records, has come to theconclusion that 'the writ petitioner/appellant has made out a case tocondone the delay in the best interest of justice, equity, fair playand balance of convenience and condoned the delay and ordered theappeal to be numbered.' That apart, the first respondent/Tribunal, inS.A.No.133 of 2009 in the file Notings on 29.05.2009, has observedthe following:"The case is fixed today for passing orders.Detailed order recorded vide fly sheets. Thisappeal is dismissed with no order as to cost dueto circumstances of the case.Further, it is necessary to give breathingtime to Appellant to approach Honourable SuperiorForum, if she desire to do so, taking intoconsideration all the peculiar circumstances ofthe case. Hence, stay of taking furtherproceedings in pursuance of the impugned actionsmentioned in the appeal under SARFAESI Act by theRespondent bank, is granted for a period of twoweeks only from today.Let copy of the order be communicated to theparties concerned or to their Advocate immediatelyby the Registry."12.It is pertinent to point out that the preamble portion of theorder passed by the first respondent/Tribunal in S.A.No.133 of 2009(Sr.No.1529 of 2007) dated 29.05.2009 which runs as follows:"This appeal is filed under Section 17 ofSecuritisation and Reconstruction of FinancialAssets and Enforcement of Security Interest Act2002, to call for the records culminating in theissue of the impugned notice dated 13.04.2007under Section 13(4) of SARFAESI Act and set asidethe same and to direct the Respondents to handover possession of the secured assets which weretaken possession of by the Respondents on12.09.2007."13.The pith and substance of the argument of the learned SeniorCounsel for the petitioner is that the first respondent/Tribunal hasnot followed the principles of natural justice, equity and fair playsince a reasonable opportunity of hearing to the petitioner was notafforded to him and this has caused material and substantialprejudice to her resulting in miscarriage of justice, requiring https://hcservices.ecourts.gov.in/hcservices/ interference by this Court.14.We deem it appropriate to extract the relevant portion ofSection 22(1) of the Recovery of Debts Due to Banks and FinancialInstitutions Act, 1993 dealing with the procedure and powers of theTribunal and the Appellate Tribunal which runs thus:"22.Procedure and powers of the Tribunal and theAppellate Tribunal.-(1)The Tribunal and the Appellate Tribunal shallnot be bound by the procedure laid down by theCode of Civil Procedure, 1908 (5 of 1908), butshall be guided by the principle of naturaljustice and, subject to the other provisions ofthis Act and of any rules, the Tribunal and theAppellate Tribunal shall have powers to regulatetheir own procedure including the places at whichthey shall have their sittings."15.Again Section 17(1) of the Securitisation and Reconstructionof Financial Assets and Enforcement of Security Interest Act, 2002speaks of right to prefer an appeal to any person (includingborrower), aggrieved by any of the measures referred to in sub-section (4) of Section 13 taken by the secured creditor or hisauthorised officer under this Chapter, [may make an application alongwith such fee, as may be prescribed,] to the Debts Recovery Tribunalhaving jurisdiction in the matter within forty-five days from thedate on which such measures had been taken:[Provided that different fees may be prescribed for making theapplication by the borrower and the person other than the borrower.]etc.16.Importantly, Section 17(7) of the SARFAESI Act reads asfollows:"17(7) Save as otherwise provided in this Act, theDebts Recovery Tribunal shall, as far as may be,dispose of the application in accordance with theprovisions of the Recovery of Debts Due to Banksand Financial Institutions Act, 1993 (51 of 1993)and the rules made thereunder."17.Moreover, Rule 11 of the Security Interest (Enforcement)Rules, 2002, under the caption Procedure for recovery of shortfall ofsecured debt, sub-clause(2) enjoins that 'the provisions of the DebtsRecovery Tribunal (Procedure) Rules, 1993 made under Recovery ofDebts Due to Banks and Financial Institutions Act, 1993 (51 of 1993),shall mutatis mutandis apply to any application filed by under sub-rule (1).' https://hcservices.ecourts.gov.in/hcservices/

18.The term 'Natural Justice' stands for justice according toconscience. It is true that natural justice is not defined anywhere.It is used at time in the sense of 'Eternal Law, Natural Law andNatural Equity', the Latin equivalent is Jus Naturale and LexNaturale. In Vionet V. Barett (1885) 55 LJ. QB 39 at page 45 it isobserved that 'natural justice is the natural sense of what is rightand wrong.' The two principles of natural justice are: (1)No personshould sit in judgment in his own cause, or in any way in which he isinterested nemo debet esse judex in propria causa. Since a Judge islikely to have a bias wherever he has an interest in the case, thisis also called the Doctrine of Bias; (2) No one accused of any chargeof likely to suffer any civil consequences, should be adjudged unlesshe has notice of the proceedings and he has been provided with anopportunity of put forwarding his case viz., Audi Alteram Partem. Itis apt to quote the great philosopher Seneca's quotation (around 4 BC – A D 56) which is as follows: 'Whoever should adjudge anything,the other party not having been heard.. Even though he should decidefairly, it would scarcely be fair.' The concept of natural justice isnothing but principles of natural law which have not yet taken theshape of positive law ruling the people, and are followed, inunwritten or uncodified or unenacted form and is of generalapplication. However, it has assumed the form of concrete law in duecourse. 19.At this juncture, we feel it apt to quote a judgment of theHonourable Apex Court in UMA NATH PANDEY AND OTHERS [2009 (2) CTC185], the Honourable Apex Court has held as follows:"The adherence to principles of natural justice asrecognized by all civilized States is of supremeimportance when a quasi-judicial body embarks ondetermining disputes between the parties, or anyadministrative action involving civil consequencesis in issue. These principles are well settled.The first and foremost principle is what iscommonly known as audi alteram partem rule. Itsays that no one should be condemned unheard.Notice is the first limb of this principle. Itmust be precise and unambiguous. It shouldappraise the party determinatively the case he hasto meet. Time given for the purpose should beadequate so as to enable him to make hisrepresentation. In the absence of a notice of thekind and such reasonable opportunity, the orderpassed becomes wholly vitiated. Thus, it is butessential that a party should be put on notice ofthe case before any adverse order is passedagainst him. This is one of the most importantprinciples of natural justice. It is *after allan approved rule of fair play...." https://hcservices.ecourts.gov.in/hcservices/ (emphasis supplied)20.Suffice it to point out that the width and amplitude of thepowers of Tribunal are to be gathered from the ingredients of Section22(1) of the Recovery of Debts Due to Banks and FinancialInstitutions Act, 1993, in addition to Rule 18 which enables theTribunal to pass orders to secure the ends of justice. The Tribunal'spowers under Section 22(2) of Recovery of Debts Due to Banks andFinancial Institutions Act, 1993 are (except as mentioned in sub-clause (2)) wider than the powers of a civil Court and onlylimitation is that it should observe the principles of naturaljustice. Moreover, a Tribunal can regulate its own procedure and solong as the procedure adopted by it is not in violations of theprovisions of the Act or Rules and is not opposed to the principlesof natural justice and is not arbitrary or unreasonable, the samewill not be interfered with.21.It is true that as against the orders passed by the firstrespondent/Tribunal in S.A.No.133 of 2009 dated 29.05.2009, appealcan be preferred to the Appellate Tribunal as per Section 18 ofSARFAESI Act and generally, this fast track procedure cannot beallowed to be derailed by taking recourse to the proceedings underArticle 226 and 227 of the Constitution of India or by way of filinga suit. However, by means of supervisory jurisdiction under Article227 of the Constitution of India, this Court is empowered to find outwhether the first respondent/Tribunal has proceeded within itsparameters of law.22.Though this Court on 01.09.2009 has passed the order to theeffect that 'it is not evident from the records submitted by theofficial that after condoning the delay, on what date the case wasnumbered as S.A.No.133/2009 and posted for final disposal to give anopportunity to both the counsel to address their argument. Hence theofficer concerned is directed to submit his remarks along with theoriginal records before 03.09.2009' and the same being communicatedby the Registry to the first respondent/Tribunal in its letterC.O.No.349/2009 dated 01.09.2009, the Presiding Officer of the firstrespondent/Tribunal, in his report dated 02.09.2009, has notwhispered on what date the case has been numbered as S.A.No.133 of2009 after a condonation of delay and posted for final disposal togive an opportunity to both the counsel to address their argumentsand the said report is conspicuously silent in this regard.23.It transpires from the file in S.A.No.133 of 2009 (Sr.No.1529of 2007) the order is mentioned as 'Dated this 26th Day of May, 2009'and later '26th' has been scored out and put as '29th' in blue ink.Likewise, after paragraph 12 of the said order in the sentence'Dictated to the Stenographers, transcribed by him and afternecessary corrections, signed and pronounced by me in the Open Courton this 26th Day of May, 2009' the date '26th' has been scored out and https://hcservices.ecourts.gov.in/hcservices/ below '29th' has been put in blue ink.24.Even in the preamble portion of the order passed inS.A.No.133 of 2009 dated 29.05.2009, there is no reference to thenames of the counsel who have appeared and addressed their argumentsin regard to the disposal of the appeal. Therefore, this is aconcrete case of the petitioner or his counsel has not been providedwith a reasonable opportunity of oral hearing or oral submissions ofthe counsel, notwithstanding the submissions of written argumentsfiled on respective sides, in S.A.No.133 of 2009 on the file of thefirst respondent/Tribunal and the first respondent/Tribunal has notprovided a reasonable opportunity of hearing to the petitioner andthereby has not adhered to the principles of natural justice, thoughit has to be guided by the principles of natural justice in followingthe same while adjudicating the controversies/disputes of the partiesin matters pending before it and on this simple ground alone, we areinclined to interfere with the order of the first respondent/Tribunalin S.A.No.133 of 2009 dated 29.05.2009 and allow the writ petition byexercising the supervisory jurisdiction vested under Article 227 ofthe Constitution of India, since we come to the inevitable conclusionthat the order of the first respondent/Tribunal dated 29.05.2009passed in S.A.No.133 of 2009 stands vitiated, in the eye of law andaccordingly set aside the same to prevent an aberration of justiceand to promote substantial cause of justice.25.For the foregoing reasons, we allow the Writ Petition withoutcosts. Consequently, the order passed by the first respondent/Tribunal in S.A.No.133 of 2009 dated 29.05.2009 is set aside. Thefirst respondent/Tribunal is directed to restore the S.A.No.133 of2009 to its file and to dispose of the same afresh within a period oftwo months from the date of receipt of a copy of this order inaccordance with law including the strict adherence of principles ofnatural justice after providing sufficient opportunities to bothparties to put forward their respective pleas. Consequently,connected miscellaneous petition is closed. Sd/- Asst.Registrar* Corrected order to issue.30.9.09Sd/-Asst.Registrar23.10.09/true copy/ Sub Asst.RegistrarSgl https://hcservices.ecourts.gov.in/hcservices/ To1.The Presiding Officer, Debt Recovery Tribunal, Spencers Building, Chennai-2.2.Vijaya Bank Ramaraj Complex Ist Floor,To be substituted the No.14/A Jawaharlal Nehru Road,order already despatched Pondicherry-605 001.on 15.10.20093.The Authorised Officer, Vijaya Bank, Ramaraj Complex Ist Floor, No.14/A Jawaharlal Nehru Road, Pondicherry-605 001.4. The Section Officer, Writ Section, High Court, Madras-104.5. The Section Officer, V.R.Section, High Court, Madras-104.+1 cc to Mr.R.Shankara Narayanan, Advocate, SR.No.47813+1 cc to M/s.Sampathkumar Associates, Advocate, SR.No.48521ORDER INW.P.NO.17180 of 2009TM {CO}TP/1.10.2009.PA(CO)EM/23.10.09