Allahabad Bank vs Rajesh Pal

Sanjay Misra, J.—Connect with Writ Petition No. 2584 of 2014 (Kamal Kumar Bhatu v. The Debts Recovery Appellate Tribunal and 3 others). Both the writ petitions have been connected since they relate to the same proceedings, the same property, between the same parties and directed against the same judgment hence are being decided together by a common order passed in this writ petition.

Heard Sri P.N. Tripathi learned Counsel for the Allahabad Bank in both the petitions Sri D.P. Tripathi holding brief of Sri K.K. Tripathi learned Counsel for the auction purchaser K.K. Bhatu in both the writ petitions Sri Kaushal Kant learned Counsel for the borrower Rajesh Pal in both the writ petitions and learned Standing Counsel.

These writ petitions are directed against an order dated 18.12.2013 passed by the Debts Recovery Appellate Tribunal, Allahabad in Appeal No. 421 of 2013 (Rajesh Pal v. Allahabad Bank and others) whereby the Appellate Tribunal has set aside the order dated 26.9.2013 passed by the Debt Recovery Tribunal in SA No. 116 of 2011 and has remanded the matter to the Tribunal for fresh decision and also directed that the Bank shall restore possession of the premises in question to the appellant (borrower).

Sri P.N. Tripathi learned Counsel for the respondent Allahabad Bank has submitted that the remand order of the Appellate Tribunal is illegal for the reason that the benefit of section 14 of the Limitation Act 1963 could not have been granted to the borrower by the Appellate Tribunal for the reason that it was neither pleaded by him before the Appellate Tribunal nor any such application u/s 14 of the Limitation Act was made by him. He also submits that the directions issued by the Appellate Tribunal to the Bank to restore possession to the borrower is illegal for the reason that in proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act) the auction of the property was held on 25.8.2008 and sale certificate was issued to the auction purchaser on 4.10.2008 where after possession was handed over to him however the proceedings before the Debt Recovery Tribunal in SA No. 116 of 2011 were started on 2.5.2011 wherein the orders passed u/s 14 of the Act were assailed. He submits that the Debt Recovery Tribunal has not set aside the proceedings or orders passed u/s 14 of the Act but has rejected the application of the borrower on the ground of limitation. According to him when the measures u/s 14 of the Act including the auction have not been set aside by the Debt Recovery Tribunal and also by the Appellate Tribunal then possession could not be restored to the borrower and such a direction issued in the appellate order to the Bank is illegal and as such the impugned appellate order requires to be set aside.

Learned Counsel for the borrower Sri Kaushal Kant has submitted that the remand order is in accordance with law for the reason that the Debt Recovery Tribunal had illegally rejected the application of the borrower on the ground of limitation whereas it was quite apparent that the borrower was bona fide pursuing his remedy before the Civil Court and it was only after the Civil Court dismissed his civil suit on 18.11.2010 that the borrower after having filed a writ petition which was dismissed on 11.4.2011 filed the petition before the Debt Recovery Tribunal on 2.5.2011. According to Sri Kaushal Kant the benefit of section 14 of the Limitation Act has been rightly given to the borrower appellant since it was established from record that the borrower was pursuing a remedy bona fide and therefore was entitled to such benefit.

Sri Kaushal Kant further states that even if such pleadings were not made by the borrower appellant and an application tinder section 14 of the Limitation Act was not made by him however the entire pleadings regarding filing of the suit in the Civil Court its dismissal and filing of the writ petition in the High Court by the borrower and its dismissal are subject-matter of pleadings in the affidavit filed by the Bank. He therefore states that the Appellate Tribunal was justified in giving the benefit of section 14 of the Limitation Act for the reason that complete pleadings regarding those circumstances were available on its record and hence to say that the benefit was wrongly given to the appellant borrower would be incorrect.

Sri D.P. Tripathi holding brief of Sri K.K. Tripathi learned Counsel for the auction purchaser has supported the submission of learned Counsel for the Allahabad Bank and states that the order of the Appellate Tribunal whereby the Bank has to restore possession to the borrower (appellant) is illegal for the reason that neither the auction held in the year 2008 nor the sale certificate issued on 4.10.2008 has been set aside Even the measures taken u/s 14 of the SARFAESI Act have not been set aside and the auction purchaser has already been put in possession. He states that the direction to the Bank to restore the possession could be only by taking it away from the auction purchaser and handing it over to the borrower appellant would be illegal.

Having considered the submission of learned Counsel for the parties and perused the record insofar as the submission regarding the benefit of section 14 of the Limitation Act is concerned the Tribunal has granted such benefit on the pleadings of the parties available before it. When the circumstance in the affidavit filed by the Bank clearly indicate that the borrower appellant was pursuing a wrong remedy under a bona fide belief before the Civil Court and then in the High Court the benefit could have been given particularly in view of the fact that his writ petition was dismissed by the High Court on 11.4.2011 relegating him to the alternative remedy of filing an appeal u/s 17 of the Act and the application was filed before the Debt Recovery Tribunal with due diligence on 2.5.2011 i.e. within one month.

To say that in the absence of an application u/s 14 of the Limitation Act the Appellate Tribunal ought not to have granted the benefit to the appellant would be not in the interest of justice for the reason that the Debt Recovery Tribunal had not decided the matter on merits but had rejected the application of the borrower appellant only on the ground of delay although such delay was due to his prosecuting his suit before the Civil Court bona fide. The grant of benefit u/s 14 of the Limitation Act by the Appellate Tribunal has done substantial justice between the parties since the appellant borrower has not been heard on merits and has been non-suited on technical grounds of delay. Moreover, in the writ petition of the petitioner the High Court had relegated him to the remedy u/s 17 of the Act. As such the submission that the benefit of section 14 of the Limitation Act has been illegally granted cannot be accepted. To that extent the order of the Appellate Tribunal does not suffer from any error in law hence requires no interference by this Court under Article 226 of the Constitution of India.

Insofar as the second submission is concerned that the Appellate Tribunal ought not to have issued a direction to the Bank to restore possession to the appellant is concerned clearly the record indicates that the application filed before the Debt Recovery Tribunal on 2.5.2011 had assailed the proceedings initiated u/s 14 of the Act and the sale certificate dated 4.10.2008. The Debt Recovery Tribunal has not set aside the sale certificate dated 4.10.2008 nor it has set aside any proceedings or measures taken u/s 14 of the Act.

As such when the auction sale and sale certificate have not been set aside by the Debt Recovery Tribunal the possession handed over to the auction purchaser cannot be held to be illegal at this stage. By the impugned order the Appellate Tribunal has also not interfered in the sale certificate or any of the measures undertaken u/s 14 of the Act. As such the sale certificate and the possession handed over to the auction purchaser was at that time in accordance with law and has still not been set aside. The act of handing over the possession to the auction purchaser has also not been set aside or stayed nor any restraint has been imposed on it either by the Debt Recovery Tribunal or by the Appellate Tribunal.

Consequently, the Appellate Tribunal has erred in directing that the Bank shall restore possession of the property in question which could only be by taking possession from the auction purchaser and handing it over to the appellant. To that extent the impugned appellate order is not in accordance with law and therefore the direction to the Bank to restore possession to the appellant by taking it away from the auction purchaser cannot be upheld. Such direction is accordingly set aside.

Since the matter has been remanded by the Appellate Tribunal to the Debt Recovery Tribunal it requires to be decided now in accordance with law.

Both the writ petitions are accordingly disposed of. No order is passed as to costs.