Writ Appeal No. 741 of 2023 · The High Court · 2023
Case Details
1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 8TH DAY OF JANUARY 2025 PRESENT THE HON'BLE MR. JUSTICE S. G. PANDIT AND THE HON'BLE MR JUSTICE RAMACHANDRA D.HUDDAR WRIT APPEAL NO.741 OF 2023 (GM-DRT) BETWEEN: M/S. M AND S MARKETING COMAPNY AND M/S. M AND S BOTTLING COMPANY OFFICE: PLOT NO.64 STREET NO.1, SAGAR SOCIETY ROAD NO.2, BANAJARA HILLS HYDERABAD -500033 REP. BY ITS PROPRIETOR AND PARTENER JAIPAL REDDY AGED 68 YEARS. (BY SRI V SRINIVASA RAGHAVAN, SR. COUNSEL FOR SRI A S VISHWAJITH, ADV.) ...APPELLANT AND: 1. STATE BANK OF INDIA A BODY CORPORATE CONSTITUTED UNDER THE PROVISIONS OF THE STATE BANK OF INDIA ACT 1955 AND THE SUCCESSOR TO STATE BANK OF TRAVANCORE UNDER THE ACQUISITION OF STATE OF BANK TRAVANCORE UNDE ORDER NO.G S R 160 E DATED 22-02-2017 PASSED BY 2 THE CENTRAL GOVT. UNDER SECTION 35 OF THE STATE BANK OF IDNAI ACT, 1955 (23 OF 1955) AND HAVING INTER ALIA STRESSED ASSETS MANAGEMENT BRANCH WITH ADDRESS AT 2ND FLOOR OFFICE COMPLEX, BUILDING LHO COMLEX, 65, ST.MARKS ROAD BENGALURU REP. BY ITS CHIEF MANAGER MR. RTAN KUAMR SINHA AGED ABOUT 57 YEARS S/O LATE M M PRASAD. 2. M/S. SAMRAT ASHOK EXPORTS LTD., 3. MR. PRAVEEN CHANDER CHUGH 4. MR. ASHOK CHUGH 5. MR. DAVINDER KUMAR (DIED) REP. BY SMT. SUSHEELA 6. MR. SHALEEN CHUGH 7. MRS. SARITHA CHUGH R2 TO R7 ARE DELETED VIDE ORDER DATED 21.03.2024 8. M/S. KHODAY INDIA LIMITED REGD. OFF: BREWERY HOUSE KANAKAPURA ROAD BENGALURU HAVING ADMINISTRATIVE OFFICE NO.612, XV CROSS SARAKKI I PHASE, 100 FEET ROAD 3 J P NAGAR, BENGALURU-560078 REP. BY ITS DIRECTOR. 9. THE RECOVERY OFFICER- I DEBTS RECOVERY TRIBUNAL-I, SECOND FLOOR JEEVAN MANGAL BUILDING NO.4, RESIDENCY ROAD BENGALURU-560025. …RESPONDENTS (BY SRI G KRISHNAMURTHY, SR. COUNSEL FOR SRI BHARATH M.R., AND SRI CHANDRAKANTH PATIL K., ADVS. FOR R1 SRI GURUMURTHY M., ADV. FOR R8 R9 SERVED & UNREPRESENTED V/O DATED 21.03.2024, R2 TO R7 ARE DELETED) THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO I) SET ASIDE IMPUGNED ORDER OF THIS COURT 23 MAY 2023 PASSED IN W.P.NO. 9639/2018; II) GRANT THE COSTS OF THESE PROCEEDINGS AND ETC. THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 09.12.2024 COMING ON THIS DAY, S.G.PANDIT J., PRONOUNCED THE FOLLOWING: CORAM: HON'BLE MR JUSTICE S.G.PANDIT and HON'BLE MR JUSTICE RAMACHANDRA D.HUDDAR 4 CAV JUDGMENT (PER: HON'BLE MR JUSTICE S.G.PANDIT) Appellant, respondent No.8 before the learned Single Judge is in appeal under Section 4 of the Karnataka High Court Act, 1961 questioning the learned Single Judge’s order dated 23.05.2023 in W.P.No.9639/2018, by which respondent No.1’s writ petition is allowed quashing the order dated 31.01.2017 in DRC.No.1709 in O.A.No.521/1999 (Annexure-T) with a direction to proceed with the recovery proceedings. 2. For the sake of convenience, the parties to the appeal would be referred to as they stood before the Writ Court. 3. The respondent No.8 – appellant herein claims that it is a mortgagee of property in question i.e., No.612, 15th Cross, J.P.Nagar Extension, Ward 5 No.57, Bengaluru through mortgage deed dated 25.07.2012 created by respondent No.7. The property in question was originally belonged to one Late Davinder Kumar (respondent No.4). He gifted the said property to his wife Smt.Susheela under registered gift deed dated 15.09.2000. The respondent No.7 purchased the property from Smt.Susheela under registered sale deed dated 19.04.2002. Subsequently, respondent No.7 created a mortgage by way of deposit of title deeds in favour of respondent No.8 for the credit facility availed by it on 25.07.2012. The respondent No.1 had availed certain financial assistance from petitioner – State Bank of India (for short, ‘SBI’) and as it defaulted in repayment of the loan, SBI initiated recovery proceedings by filing O.A.No.521/1999 before the Debt Recovery Tribunal at Bengaluru (for short, ‘DRT’), making respondent Nos.1 to 6 as party respondents before the DRT. The 6 petitioner/SBI had included schedule ‘B’ to ‘E’ properties and had sought restraint order from transferring, alienating or otherwise dealing with those properties. 4. Schedule ‘E’ to the DRT application was the property belonging to respondent No.4, late Davinder Kumar, who was represented by his wife
Legal Reasoning
Smt.Susheela. Though the said property was not mortgaged to the Bank, the said property was included since it belonged to Davinder Kumar, who was one of the Director of the first respondent- company. In the said OA, on 18.06.1999 an ad- interim injunction was granted against the respondents therein, restraining them from transferring, alienating or otherwise dealing with or disposing of the same, pending disposal of the OA. 7 5. As the defendant Nos.3 to 6 therein were un-served, paper publication for service of notice was taken on them on 08.11.1999. As stated above, on 15.09.2000, late Davinder Kumar, who was defendant No.4 in OA executed gifted deed in favour of his wife in respect of the property in question. Subsequently, on 25.11.2001, Davinder Kumar died and his wife Smt.Susheela, was brought on record as respondent. The recovery certificate was issued by the DRT on 28.03.2002. Thereafter, Smt.Susheela, LR of the Davinder Kumar under registered sale deed dated 19.04.2002 sold the property in favour of M/s.Khoday India Limited, respondent No.7 herein. When demand notices were issued by the Recovery Officer of the DRT based on the Recovery Certificate, the seventh respondent appeared and filed their objections/obstructions to the proceedings in respect of ‘E’ schedule property on the ground that they were 8 the bonafide purchasers and that there was no impediment for them to purchase the ‘E’ schedule property. 6. The seventh respondent also filed separate petition on 21.06.2005 in DCP proceedings before the Recovery Officer seeking deletion of ‘E’ schedule property under the sale proclamation dated 03.09.2001. The said petition also came to be dismissed by order dated 19.08.2005. By separate order dated 24.08.2005, obstruction petition was also rejected. Thereafter, once again, Sale Proclamation was ordered on 02.09.2005 and the objection filed by seventh respondent was again dismissed. Fresh Sale Proclamation was issued again on 07.08.2012. Again, the seventh respondent filed its objection under Rule 11(1) of II schedule, read with Section 25 and 29 of The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short, ‘RDBFY Act’) to set 9 aside the Proclamation. The objections of M/s.Khoday India Limited was again dismissed by an order dated 18.08.2014. Again, sale Proclamation was issued on 03.11.2014 and in the meanwhile, seventh respondent had filed appeal before the Debts Recovery Appellate Tribunal (for short, ‘DRAT’) against an order dated 18.08.2014, where its objection petition was rejected. As the DRAT directed statutory deposit, the 7th respondent filed writ petition before this Court challenging the order passed by the DRAT and said writ petition came to be dismissed on 09.06.2015. SLP filed also was dismissed by order dated 31.07.2015. 7. On 06.10.2015, the appellant herein/respondent No.8 before the learned Single Judge, filed an impleading application before the Recovery Officer, DRT, Bengaluru to implead themselves as party respondents claiming that they 10 are the mortgagees under respondent No.7. The said impleading application was allowed by the Recovery Officer by order dated 31.01.2017, with an observation that non-service of order of injunction dated 18.06.1999 on defendant No.4 i.e., late Davinder Kumar, the order of injunction has become redundant and it cannot be enforced. Against the said order dated 31.01.2017, the petitioner filed appeal before the DRT-II on 17.03.2017. Subsequently, by filing a memo, the petitioner/Bank withdrew the appeal filed before the DRT With liberty to pursue its legal remedies as per law before the appropriate Court of law. 8. Thereafter, the petitioner/Bank filed W.P.No.9639/2018 with a prayer to quash the order dated 31.01.2017 passed by the Recovery Officer in DRC.No.1709 in OA.No.521/1999 impleading respondent No.8 as party respondent, with a prayer 11 to direct the Recovery Officer to proceed with the recovery proceedings in DRC.No.1709, in OA.No.521/1999 in respect of the property in question. Learned Single Judge under impugned
Decision
order, allowed the writ petition quashed the impugned order dated 31.01.2017 in DRC.No.1709 in OA.No.521/1999 with a direction to proceed with the recovery proceedings. Learned Single Judge while allowing the writ petition observed that a pendente lite purchaser would be bound by any order/decree that would be passed against his vendor especially when respondent No.8 claims as mortgagee of schedule property from respondent No.7. Questioning the order of learned Single Judge as well as observations made therein, appellant/respondent No.8 before the learned Single Judge is in appeal. 9. Heard learned senior counsel Sri.V.Srinivasa Raghavan for learned counsel 12 Sri.A.S.Vishwajith for the appellant, learned senior counsel Sri.G.Krishnamurthy for Sri.Bharath M.R., and Sri.Chandrakanth Patil K., learned counsel for respondent No.1 and learned counsel Sri. Gurumurthy M., for respondent No.8. Perused the entire writ appeal papers as well as written arguments and the case-laws on which learned senior counsels placed reliance. 10. Learned senior counsel Sri.V.Srinivasa Raghavan, would contend that the writ petition filed by the petitioner/SBI was not at all maintainable since the statutory appeal filed by SBI was withdrawn by filing a memo to pursue their remedies available under the law. Learned senior counsel invites attention of this Court to averments made in the writ petition at paragraph 29 and submits that the appeal filed before the DRT, challenging the impugned order dated 31.01.2017 in DRC.No.1709 in 13 O.A.No.521/1999 was withdrawn solely on the ground that the DRT has no power to condone the delay in filing the appeal. Learned senior counsel would submit that though liberty is granted to avail any other remedy, a time barred claim under the Statute could not have been entertained under Article 226 of the Constitution of India. In that regard, learned senior counsel places reliance on the decision of the Hon’ble Apex Court in the case of ASSISTANT COMMISSIONER (CT) LTU, KAKINADA AND OTHERS VS. GLAXO SMITH KLINE CONSUMER HEALTH CARE LIMITED1. 11. Further, to contend that Section 5 of the Limitation Act, 1963 (for short, ‘Limitation Act’) would not be applicable to appeals filed under Section 30 of the Recovery of Debts and Bankruptcy Act, 1993 (for 1 (2020) 19 SCC 681 14 short, ‘DRT Act’), learned senior counsel places reliance on the decision of the Hon’ble Apex Court in the case of INTERNATIONAL ASSET RECONSTRUCTION COMPANY OF INDIA LIMITED VS. OFFICIAL LIQUIDATOR OF ALDRICH PHARMACEUTICALS LIMITED AND OTHERS2. 12. Learned, senior counsel Sri.V.Srinivasan Raghavan next contended that in terms of Rule 68B of the Second Schedule to Income Tax Rules, no sale of immovable property is permissible after the expiry of three years from the date of attachment. In that regard, learned senior counsel takes us through Rule 68B as well as the decision of the Hon’ble Apex Court i.e., C.N.PARAMASIVAM AND ANOTHER V/S. SUNRISE PLAZA THROUGH PARTNER AND OTHERS3. Further, learned senior counsel would contend that it
Decision
ORDER (a) Writ appeal is allowed. (b) Impugned order dated 23.05.2023 in W.P.No.9639/2018 passed by the Learned Single Judge is set aside and the said writ petition stand dismissed with liberty to the petitioner/Bank to avail any other remedy available under law. SD/- (S. G. PANDIT) JUDGE SD/- (RAMACHANDRA D.HUDDAR) JUDGE NC. CT: BMS