TRIBUNAL, ERNAKULAM v. THE FEDERAL BANK LIMITED

BY ADVS. SRI.SABU S.KALLARAMOOLA SRI.S.SUNIL KUMAR (KADAKKAVUR) OTHER PRESENT: SRI. MOHAN JACOB GEORGE (SC) THIS OP (DEBT RECOVERY TRIBUNAL) HAVING COME UP FOR ADMISSION ON 21.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: OP (DRT) No.100/2018 -3- J U D G M E N T The petitioner has approached this court challenging Ext.P22 order of the Debts Recovery Appellate Tribunal (DRAT), Ext.P20 order of the Debts Recovery Tribunal (DRT) and Ext.P16 proceedings of the Receovery officer in IA No.2629/2013 in DRC 659 in OA 1168/1999.

2. The brief facts of the case are as follows:- The 3rd respondent had availed a loan from the 1st respondent Bank after mortgaging 20 cents of land with building and all improvements situated in Sy No.3118/3 of Ayiroor Village, Chirayinkil Taluk, Thiruvananthapuram District. The said mortgage was on 28.3.1996. On default being committed by the 3 rd respondent, the 1st respondent Bank filed O.A.No.1168/1999 before the Debts Recovery Tribunal, Ernakulam. The said O.A. was allowed on 21-09-2001 and a recovery certificate No.659 was issued by the Tribunal. The petitioner who claims that the 3rd respondent was indebted to him filed O.S. No.27/1999 before the Subordinate Judge's Court, Attingal, which was decreed ex parte on 31-08-

1999. Pending the suit, the petitioner had obtained an attachment (on 23-02- 1999) over the property which was mortgaged to the 1st respondent Bank. In proceedings for execution of the decree before the Subordinate Judge's Court, Attingal as E.P.No.26/2000, the property which had been mortgaged with the Bank [which was also attached in proceedings before that Court] was sold in auction and was purchased by the petitioner/decree holder. It is submitted OP (DRT) No.100/2018 -4- that the said sale which was held on 15-12-2001 was confirmed on 26-03- 2002 and the property was delivered to the petitioner on 28-09-2003.

3. In the meanwhile, pursuant to the Recovery Certificate issued by the Debts Recovery Tribunal, the same property was brought to sale and was purchased by the 2nd respondent. The petitioner filed I.A.No.194/2004 in DRC 650/FB/TVM in O.A.No.1168/1999 which was rejected by Ext.P11 order essentially holding that any interest of the petitioner in the property was subject to the mortgage and the proceedings were initiated by the Bank on the strength of the mortgage in its favour on 28.3.1996. When the property was notified for sale, the petitioner approached this Court by filing O.P. (DRT)No.2791/2013 which was dismissed in limine by Ext.P13 judgment. Thereafter, the property was sold to the 2nd respondent. The petitioner approached the Recovery Officer by filing I.A.No.2629/2013 to set aside the sale. That I.A. Was also dismissed by Ext.P16 order. The petitioner, therefore, filed an appeal before the Debts Recovery Tribunal which was transferred to the Debts Recovery Tribunal-II and numbered as Tr.. Appeal No.66/2016. The said appeal was dismissed by Ext.P20 judgment dated 28- 02-2017. The petitioner, thereupon, approached the Debts Recovery Appellate Tribunal by filing an appeal. The said appeal was dismissed by Ext.P22 order essentially on the ground that the petitioner had failed to pay requisite court fee and upholding the objection raised by the registry of the OP (DRT) No.100/2018 -5- Debt Recovery Appellate Tribunal regarding court fee. It is thus that the petitioner is before this Court in the above original petition.

4. The learned counsel appearing for the petitioner would vehemently contend that the rights of the petitioner have not been properly adjudicated by any forum. It is submitted that the 1st respondent Bank had no saleable interest in the property. It is submitted that the proceedings before the Recovery Officer were without notice to the petitioner and was therefore unsustainable in law. It is submitted that the order of the Debts Recovery Appellate Tribunal dismissing the appeal filed by the petitioner is also bad in law as the application for waiver of court fee filed by the petitioner had not been considered in a proper manner by the Tribunal.

5. Sri. Mohan Jacob George, the learned counsel appearing for the respondent bank would vehementally contend that the petitioner filed OS No.27/1999 before the Sub Court, Attingal only on 22-02-1999. It is submitted that though the property in question was attached by the civil court on 23-02-1999 and though the suit was decreed on 31-08-1999 the petitioner cannot be heard to contend that he had not received notice of the proceedings before the DRT. It is submitted with reference to Ext.P5 that even in the sale proclamation before the Sub Court in O.S No.27/1999 it was indicated that the property was subject to the first charge of the respondent bank. It is also submitted that the property was subject matter of valid mortgage and since OP (DRT) No.100/2018 -6- the petitioner had purchased the property only after the DRT had adjudicated the matter, the petitioner cannot be heard to contend that he should have been made a party to the proceedings before the Tribunal. It is submitted that the rights if any of the petitioner is always subject to the mortgage and this cannot be seriously disputed by the petitioner.

6. Having heard the learned counsel appearing for the petitioner and the learned counsel for the respondent bank I am of the view that the petitioner has not made out any case for interference. It is true that the petitioner had filed O.S No.27/1999 before the Sub Court, Attingal for realization of money from the 3rd respondent. He had also obtained an attachment over the property in question on 23-02-1999. However, it is to be noticed that the mortgage in this case was created as early as on 28-03-1996 and on default being committed an OA was filed by the bank under the Recovery of Debts due to the Banks and Financial Institutions Act and the said OA had been allowed on 21-09-2001.

7. The learned counsel for the respondent bank is also right in contending that the fact that the civil court had put the property to sale to recover the amount in terms of the decree in OS No.27/1999 and the fact that the petitioner had purchased the property on 15-12-2001 need not detain this court as it is very clear that the sale was clearly subject to the superior charge in favour of the bank. Moreover, in Ext.13 judgment this court held as OP (DRT) No.100/2018 -7- follows:- “The Original Petition filed by the decree holder in O.S.No.27/1999 on the file of the Court of the Subordinate Judge of Attingal is liable to be dismissed for more reasons than one. They are: The petitioner was permitted to bring the property of the second (i) respondent (who was the judgment debtor) to sale only subject to the mortgage in favour of the first respondent as evident by Ext.P5 order. (ii) The claim petition put in by the petitioner in I.A.No.194/2004 in DRC.650/FB/TVM in O.A.No.1168/1999 on the file of the Debts Recover Court was dismissed by Ext.P7 order which has long ago become final. (iii) The inter-se rights between the petitioner and the first respondent Bank arising out of Ext.P8 notification for sale can better be adjudicated under Section 17 of the SARFAESI Act before the Debts Recovery Tribunal. The Original Petition fails and is rejected in limine.” In that view of the matter I find no infirmity in the impugned order and though the order of the Appellate Tribunal is essentially not on the merits of the matter, I find no reason made out to interfere in the impugned orders in exercise of the jurisdiction vested in this court under Article 227 of the Constitution of India. Original petition fails and it is accordingly dismissed. AMG Sd/- GOPINATH P. JUDGE OP (DRT) No.100/2018 -8- APPENDIX OF OP (DRT) 100/2018 PETITIONER EXHIBITS EXT.P1 EXT.P2 EXT.P3 EXT.P4 EXT.P5 EXT.P6 EXT.P7 EXT.P8 EXT.P9 EXT.P10 EXT.P11 EXT.P12 EXT.P13 EXT.P14 COPY OF JUDGMENT DATED 31.08.1999 IN O.S.27/1999 ON THE FILE OF SUB COURT,ATTINGAL COPY OF THE PETITION EA.229/2001 IN O.S.27/1999 ON THE FILE OF SUB COURT,ATTINGAL COPY OF THE OBJECTION FILED IN O.S.27/1999 ON THE FILE OF SUB COURT,ATTINGAL COPY OF THE ORDER DATED 12-10-2001 IN E.A.229/2001 IN O.S.27/1999 OF SUB COURT,ATTINGAL. COPY OF SALE PROCLAMATION FILED BEFORE THE SUB COURT,ATINGAL IN O.S.27/1999 (WITH ENGLISH TRANSLATION) COPY OF THE ORDER DATED 26.03.2002 IN E.P.26/2000 IN O.S.27/1999 OF SUB COURT,ATTINGAL COPY OF DELIVERY KYCHIT AND REPORT IN E.P.26/2000 IN 0.S.27/1999 OF SUB COURT,ATTINGAL(WITH ENGLISH TRANSLATION) COPY OF SALE CERTIFICATE ISSUED BY SUB COURT,ATTINGAL IN E.P.26/2000 IN O.S.27/1999 (WITH ENGLISH TRANSLATION) COPY OF BASIC TAX RECEIPT NO.1112387 DATED 23.7.2003 ISSUED BY AYIROOR VILLAGE OFFICE (WITH ENGLISH TRANSLATION) COPY OF ENCUMBRANCE CERTIFICATE ISSUED BY SRO VARKALA (WITH ENGLISH TRANSLATION) COPY OF THE ORDER DATED 28.12.2004 IN I.A.194/2004 IN DRC 650/FB/TVM BY RECOVERY OFFICER,DRT,ERNAKULAM COPY OF SALE PROCLAMATION PUBLISHED IN NEW INDIAN EXPRESS DAILY DATED 21.7.2013 COPY OF THE JUDGMENT DATED 16.08.2013 IN OP(DRT)2791/2013 OF HIGH COURT OF KERALA. COPY OF PETITION IN I.A.2629/2013 IN DRC 659/FB/TVM IN O.A.NO.1168/1999 OF RECOVERY OFFICER,DRT,ERNAKULAM OP (DRT) No.100/2018 -9- EXT.P15 EXT.P16 EXT.P17 EXT.P18 EXT.P19 EXT.P20 EXT.P21 EXT.P22 COPY OF OBJECTION FILED IN I.A.NO.2629/2013 IN DRC 659/FB/TVM IN O.A.1168/1999 OF RECOVERY OFFICER,DRT,ERNAKULAM COPY OF ORDER DATED 25.09.2013 IN I.A.2629/2013 IN DRC 659 IN O.A.1168/1999 OF RECOVERY OFFICER,DRT,ERNAKULAM COPY OF APPEAL NO.15/2013 OF DEBTS RECOVERY TRIBUNAL,ERNAKULAM COPY OF OBJECTION IN APPEAL NO.15/2013 OF DEBTS RECOVERY TRIBUNAL,ERNAKULAM COPY OF REPLY STATEMENT IN APPEAL NO.15/2013 OF DEBTS RECOVERY TRIBUNAL COPY OF ORDER DATED 28.02.2017 TR.APPEAL NO.66/2016 (APPEAL NO.15/2013)OF DEBTS RECOVERY TRIBUNAL,ERNAKULAM. COPY OF THE APPEAL-AIR 330/2017 OF DEBTS RECOVERY APPELLATE TRIBUNAL,CHENNAI. COPY OF THE ORDER DATED 26.04.2018 IN AIR 330/2017 OF DEBTS RECOVERY APPELLATE TRIBUNAL,CHENNAI.