Globe Panel Inds. India Pvt. Ltd vs Santosh Saw Mills And Ors

P.K. Bhasin, J

This is the second case coming up before this Tribunal where Allahabad Bank appears to have gifted its secured asset to a total stranger to the loan transaction with its borrowers, respondent Nos. 5 and 6 herein. In the earlier case this Bank was found on a prima facie view to have itself gifted its secured asset while in the present case it has indirectly permitted its secured asset to be given as a gift to a total stranger. Though in this case the Bank had not directly gifted its secured asset but indirectly did that only by not challenging the order of the DRT dated 13.7.2012 whereby the auction conducted by it by tendering process in exercise of its power under Section 13(4) of SARFAESI Act was set aside and the secured asset auctioned in favour of the appellant herein was directed to be transferred surprisingly not in favour of the successful auction purchaser but to someone (respondent Nos. 1 and 2 herein) who had approached the DRT with an application (being S.A. No. 17/2012) under Section 17(1) of SARFAESI Act simply on the allegations that they were in occupation of the mortgaged property in question for over 39 years and so could not be dispossessed by the Bank in order to recover the loan amount which it had disbursed to respondent Nos. 5 and 6 herein. Vide order dated 13.7.2012 the then learned Presiding Officer of the DRT at an interim stage accepted that plea of the security applicants before him and conferred upon them ownership rights of the property which already stood auctioned by tendering process and the appellant was the successful tenderer and thus it stood deprived of whatever right it had acquired by participating in the tendering process which process was not being sought to be got set aside by anyone, including the security applicants (respondent Nos. 5 and 6), out of which one was a proprietorship firm and the other one was its proprietor, before the DRT on the grounds of fraud etc. Since the learned Presiding Officer had conferred full ownership rights upon respondent Nos. 1 and 2 herein at an interim stage of the S.A. Without even taking the trouble of undertaking the mandatory exercise of finding out if the Bank had committed any illegality in invoking various provisions of SARFAESI Act for selling its secured asset and whether the two security applicants had been able to establish any right for challenging the steps initiated by the Bank to recover its money from its defaulting borrowers, respondent Nos. 3 and 4 herein. The Bank did not challenge the order dated 13.7.2012 passed by the learned Presiding Officer whereby the security applicants were blessed with ownership rights over the property in dispute even though all that they were requesting the DRT to protect their 39 years old possession. Finally, without anything more the same learned Presiding Officer disposed of the S.A. vide order dated 23.8.2013 in view of the fact that he had already on 13.7.2012 made the security applicants owners of the Bank's secured asset. The Bank did not challenge that final order also and thereby endorsed the decision of the Presiding Officer conferring ownership rights over its secured asset upon the two security applicants.

The two orders passed in the S.A. by the then learned Presiding Officer of DRT-I, Chandigarh which give the entire factual background leading to the filing of the present appeal may be noticed now. The order dated 13.7.2012 reads as under:

"The learned Counsel for the applicant stated that order dated 9.7.2012 has been complied.

I.A. No. 633/2012

The applicant in aforesaid IA is stranger to the case as he is not a party in present S.A. No. sufficient cause has been disclosed which would gave cause of action for intervening in present S.A. There is no application for impleadment also on record. Accordingly, IA stands dismissed in limine.

The applicants in present SA are said to be in physical possession of the property in question for last 40 years or so. Since the physical possession was disputed by the respondent Bank, this Tribunal appointed LC to ascertain factual position. As per report of LC the applicants are in physical possession of the property and leased out some portion to MRF Tyre Ltd. under a lease deed which has been annexed with the report. The learned Counsel for applicant argued that since the applicants have succeeded in establishing that property in question is under their physical possession since 1972, no proceedings under Section 13(4) of SARFAESI Act for sale could have been initiated by the responding Bank without serving notice on the applicant and sale notice dated 22.12.2011 (Annexure A/19) is misleading, hence liable to be quashed.

In I.A. No. 608/12 by order dated 24.5.2012 the respondent Bank was allowed to open sealed bid for getting dated of validity of Bank draft for earnest money submitted by the sole bidder extended. After opening of the bid, bid amount of Rs. 2.40 crores was known to the applicants. Accordingly, offer was made that the applicants are willing to make payment equivalent to bid amount being preferred buyer having physical possession of the property for last 40 years or so and on this offer the applicant was allowed to deposit Rs. 2.40 crores with the Registrar of this Tribunal and accordingly the applicants deposited the said amount on 12.7.2012.

The applicants have succeeded in establishing that they are in physical possession of the property for last 40 years and the respondent Bank was aware of the said fact. The proceedings under Section 13(4) of SARFAESI Act for sale of the property in question could have been taken only after obtaining physical possession of the property and statement of the Authorised Officer in sale notice dated 22.12.2011 (Annexure A/19) that possession had already been taken is misleading. On equity, since the applicants have deposited equivalent amount of sole bid received by Bank in response to the sale notice dated 22.12.2011 which in any case is more than reserve price fixed by the Bank, no prejudice will be caused to the respondent Bank if the offer of the applicant to purchase the property for same price is accepted as this transaction would be more convenient. Accordingly, Registrar is directed to release the amount of Rs. 2.40 crores deposited by the applicants to the respondent Bank within 7 days and the respondent Bank shall confirm the sale in favour of the applicants and issue the sale certificate within three days of receipt of aforesaid amount of Rs. 2.40 crores. The respondent Bank shall return demand draft of earnest money deposited by the bidder immediately.

Be listed for 14.9.2012 for further proceedings.

"Order Dasti."

And the final order passed in the S.A. on 23.8.2013 is also being re-produced below :

"1. This application has been filed under Section 17(1) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short SARFAESI Act, 2002) challenging therein the possession notice dated 9.11.2011 pasted on the property in question and notice for sale dated 22.12.2011 published on 24.12.2011 in the newspaper 'The Tribune'.

On hearing the submissions made on behalf of both the parties and perusal of record, in my considered opinion the following issues are involved in the present SA:

(a) Whether the property in question is legally in possession of the applicants for the last 39 years as claimed by the applicants?

(b) Whether the respondent Bank has legally pasted the possession notice on the property in question under the SARFAESI Act and the Bank is legally entitled to alienate the property by way of lease, assignment or sale under the provisions of SARFAESI Act in view of the fact that the applicants are legally in possession of the property for 39 years and the applicants are neither borrower nor guarantors in the recovery matter of respondent No. 3?

(c) Whether the action taken by the respondent Bank under the SARFAESI Act is well within limitation?

In the application, it has been pleaded on behalf of the applicant that the applicant No. 1 is a sole proprietorship firm of applicant No. 2. Initially the applicant No. 1 was a partnership firm working since 1972 at the property in question i.e. W-9, Industrial Area, Yamunanagar which was on asset of the firm. The partnership firm was started on 3.1.1972 between Shri Sajjan Kumar Agarwal, Shri Ved Parkash Rekhan applicant No. 2 (herein), M/s. Shanti Devi Agarwal and Shri Kusum Devi Agarwala, all having 25% share each. The firm M/s. Shree Santosh Saw Mills was started for carrying on the business of manufacturing of and dealers on tea chest battens, packing cases, timbers, genera, merchants, order suppliers, commission agents etc. and got the sale tax number JAG/CST/1762 dated 8.1.1972 as per partnership deed dated 3.1.1972 (Annexure A-l). One Shri Sukhdev Parshad Aggarwal purchased plot W-9 in the name of his son respondent No. 2 vide sale deed dated 15.10.1972 and when the partnership business was started in January, 1972 it was started over this plot and this property was taken over by the firm with the consent of respondent No. 4. The Registration of the firm with Small Scale Industries Department, applying for Electricity connection, filing of I.T. Returns and also in other departments wherein the property was shown as property of the firm. On 16.6.1987 the other partners executed General Power of Attorney in favour of applicant No. 2 vide which the reference for above said plot was also mentioned and the applicant No. 2 was authorised to sell, mortgage, lease or otherwise dispose off the said plot. Later on, the respondent No. 4 relinquished his right in the property after taking due consideration from applicants and since 13.10.1987 all the partners retired with their own free will, by settling their accounts and consequently the firm became proprietorship firm of the applicant No. 2 and the property is in continuation possession of the applicants since 1972. It is further pleaded that the firm M/s. Shri Santosh Saw Mills applied through applicant No. 2 for registration of Small Scale Industries in 1972 as per (Annexure A-2). M/s. Shri Santosh Saw Mills was also having Certificate of Registration under Haryana General Sales Tax Act/Rules, 1973 for same address with effect from 8.1.1972. Copies of the certificates are annexed herewith as (Annexure A-3). The applicant No. 2 is in continuous possession of the property since 1972, some of the communications/letters received on the address of the firm during 1986 to 1988 are annexed herewith as (Annexure A-4). The applicant No. 2 also got PAN card in his individual name as well as in the name of firm. Copies of the both PAN are annexed herewith as (Annexure A-5). The applicant No. 2 also purchased some LIC policies in his name on the address of the firm. Copies of the LIC Policies showing address of the applicant No. 2 as W-9, Industrial Area, Yamunanagar are collectively annexed herewith as (Annexure A-6). The applicant No. 2 got calculation sheet for assessment year 1987-88 and 1988-89 from Wealth Tax Department at W-9, Industrial Area, Yamunanagar. Copies of the same are annexed herewith as (Annexure A-7). The applicant No. 1 is doing business in the said premises since 1972, so the firm was also assessed to Tax (Sales Tax and Income Tax). Copies of assessment Order of Sales Tax from the year 1986-87 to 2007 are collectively annexed herewith as (Annexure A-8), which proves beyond any doubt that the applicants are doing business and are in possession of the property in question since long. Copies of Assessment Order of Income Tax are also annexed herewith as (Annexure A-9). The I.T. returns of applicant No. 2 showing address as W-9, Industrial Area, Yamunanagar are also annexed herewith as (Annexure A-10) for kind perusal of this Hon'ble Tribunal. The applicant No. 2 is having account with SBOP Yamunanagar, the address shown in the account is at W-9, Industrial Area, Yamunanagar. A copy of ledger of the year 1986 showing the address of the applicant as at W-9, Industrial Area, Yamunanagar, is annexed herewith as Annexure A-II). It is pertinent to mention here that the property in question was earlier mortgaged with SBOP for the loan taken by the M/s. Shri Santosh Saw Mills and in the year 1987 the applicant No. 2 got the same released from SBOP. The applicant approached the SBOP and applied under RTI for the documents. The Bank gave copies of the documents on 23.12.2011. Copies of the documents with copy of title deed register bearing signature of applicant No. 2 received under RTI are annexed herewith as (Annexure A-12). The applicant is also paying the MC Tax on building. Copies of the receipt issued by the MC are annexed herewith as (Annexure A-13). The Electricity connection and BSNL telephone is also in the name of the applicants. Copy of the telephone bill and electricity bill is annexed herewith as (Annexure A-14 and Annexure A-15) respectively. The respondent No. 4 has been pressing hard the applicant to get the possession of the premises. The applicants showed their inability to vacate the premises. Respondent No. 4 threatened to eject the applicant forcibly. On 7.10.2009 respondent No. 4 through his Advocate filed a suit for mandatory injunction for directing the applicants to handover actual vacant possession of the property in the Court of Civil Judge Jagadhri. The suit is still pending before the Civil Court. The respondent No. 4 also filed suit for dissolution of firm in the Civil Court, which is also pending the Civil Court. The detailed facts stated in Para 5(A) to (L) establish beyond any shadow of doubt that the applicants are in possession of the property for the last more than 39 years, but the respondent No. 4 wants to take possession from the applicants forcibly. On 9.11.2011 the applicants were taken aback when the officers of the respondent No. 1, came to be spot and pasted the possession notice dated 9.11.2011. The applicant had been pleading with them that the applicants are in possession since 1972. As the respondent No. 4 could not get any relief from the Court so he with the active connivance of Bank officials tried to take the forcible possession of the property under the possession of applicants. A copy of said possession notice dated 9.11.2011 is annexed herewith as (Annexure A-16). On 11.11.2011 the applicants immediately approached the Bank by filing application under RTI and asked for some documents, but the Bank vide its letter dated 9.12.2011 refused to give the documents. A copy of application dated 11.11.2011 set by the applicant and letter dated 9.12.2011 sent by the Bank are annexed herewith as (Annexure A-17 and Annexure A-18) respectively. It is further pleaded that the respondent No. 1 has no right to dispossess the applicants from the premises, which is situated at W-9, Industrial Area, Yamunanagar, as explained above. The possession of the property with the applicants was since 1972, so the applicants cannot be thrown out in a summary way without having recourse to law, if any. Admittedly the applicants are not a debtor of the respondent Bank and no notice whatsoever can be issued to them. The respondent No. 1 cannot be allowed to take law into its own hands and dispossess the applicants forcibly from W-9, Industrial Area, Yamunanagar. It is further pleaded that now respondent No. 1 has put the property for auction and fixed the date of receiving the officer on 30.1.2012 and the date of opening of offers is 31.1.2012 at 11.00 a.m. at Ambala. The applicants Wills suffer irreparable loss and injury in case the respondent No. 1 executes its threatened action of selling the property and thereafter by dispossessing the applicants. A copy of Notice for sale dated 22.12.2011 published on 24.12.2011 in the Tribune is annexed herewith as (Annexure A-19). It is further pleaded that as per the knowledge of the applicants the loan was granted to the respondent Nos. 3 and 4 in the year 1989-90 and the account became NPA in 1992, however the applicants are in possession since 1972. As a matter of fact it appears that the loan was granted to respondent No. 4 thinking the applicant No. 1 firm is owned by him, as the name of the respondent is Santosh Kumar Agarwala and the name of the applicant No. 1 is also Shree Santosh Saw Mills, whereas the respondent No. 4 was never a partner of applicant at that point of time when the respondent Bank granted loan to respondent No. 3. It is also submitted here that this sale notice are no notice in the eyes of law, as the same has not been issued within limitation as provided in Section 36 of the Limitation Act and as per Article 62 of the Limitation Act, 1963 (36 of 1963) the limitation to enforce payment of money secured by a mortgage or otherwise charged upon immovable property is twelve years and the time from which period being to run is starts when the money sued for becomes due. In the present case the money was become due in the year 1992 when account become NPA. In view of submission made above this notice is beyond limitation as prescribed in law time being in force. The Article 62 of the Limitation Act, 1963 clarifies the enforcement of the payment of the money secured by the mortgaged or otherwise charged upon immovable property, which is not, been applied in the present case by the respondent No. 1. The applicants are entitled to keep the possession of the property on the basis of adverse possession and the respondent are not entitled to dispossess the applicants from the property in any manner without due course of law if available to them. It is further pleaded that in view of the above said submission, the respondent No. 1 has no right to proceed against the applicants on the basis of the notices served under Sections 13(2) and 13(4) of the said Act to the respondent Nos. 3 and 4 and applicants and the action taken/to be taken by respondent No. 1 against the applicants on the basis of the said notices is also illegal, null and void, not sustainable under law and as such is liable to be set aside/quashed, qua the lawful possession of the applicants.

Notice was issued to the respondent by this Tribunal and in response to notice of application, respondent Nos. 1 and 2/secured creditor Bank appeared through his Counsel and filed reply to SA on 30.1.2012. Respondent Nos. 3 and 4 appeared through Counsel but ever filed any reply. In the reply filed by the respondent Bank, it is pleaded that the present application is not maintainable in eyes of law as the same is not under the jurisdiction of this Tribunal as the cause of action was arisen within the jurisdiction of Kolkata and also the loan granted to respondent Nos. 3 and 4 was also within the jurisdiction of Kolkata and moreover the respondent Nos. 3 and 4 who is the borrower of the respondent Bank also reside and carrying on the business activities within the jurisdiction of Kolkata. It is further pleaded that the present application is barred under the Limitation Act as admittedly the respondent Bank has taken the possession of the said property on 11.11.2011 and the same was published in the leading news paper out of which one was in vernacular language on 13.11.2011, whereas the present SA was filed by the applicant on 25.1.2012 after the expiry of the above said limitation and as such they said application is barred under Limitation Act. (Annexure R-1 and R2). It is also contended that present application is not maintainable in the eyes of law as the applicants never shows any relationship with the respondent Nos. 3 and 4, applicant never placed on record any lease deed showing his lessee rights, nor any title deed showing his own's right the applicant only tried to shows his ownership on the basis of those documents which are not hard to obtain and moreover the applicant never shows any latest records showing the possession of the said property. All the records placed before this Tribunal belongs to the documents of 1980's and no latest document showing the ownership/possession of the applicant was placed on record by the applicant himself. It is also contended that applicant himself contradicts its statement in the present application in Para 5(B) the pleadings mentioned that "Shri Sukhdev Parshad Aggarwal purchased plot No. W-9 in the name of his son respondent No. 4 vide sale deed dated 15.10.1971 and when the partnership business was started in January, 1972 and this property was taken over as property of the firm and firm (now proprietorship) is still doing business on the said plot since 1972 with the consent of respondent No. 4. It is further pleaded that Shri Sukhdev Parshad Aggarwal has no concern with the present case and even if its so then Shri Sukhdev Parshad Aggarwal has not been impleaded as a party to the present application. Moreover applicant states that "this property was taken over as property of the firm and firm (now proprietorship)" but there is no document stated the taken over as property of firm as the respondent No. 4 is the sole and absolute owner of the said property and respondent No. 4 in his individual capacity mortgaged the said property with the respondent Bank (Annexure R-3). The averment of the applicant averred that they are still doing the business on the said very property but as per the information available presently the respondent No. 4 has given the said property on rent to MRF Tyres. Further the applicant is claiming that they are doing the business with the respondent Bank has nothing on the record stated that respondent No. 4 has any relation with the applicants and moreover the applicants has nothing to place on record stated that the respondent No. 4 has given any consent to the applicants to run their business. It is further pleaded that statement of the applicants are further contradictory as they stated that on 16.6.1987 the other partners executed General Power of Attorney in favour of applicant No. 2 vide which the reference for above said plot was also mentioned and the applicant No. 2 is authorised to sell, mortgage lease of otherwise dispose off the said plot, the same GPA can be produced at the time of hearing of present SA. Later the respondent No. 4 relinquished his right in the property after taking due consideration. In view of above statements of the applicants it is submitted that on 16.6.1987 other partners i.e. Shri Sajjan Kumar Agarwala, Ms. Shanti Devi Agarwala and Shri Kusum Devi Agarwala executed General Power of Attorney in favour of applicant No. 2 giving the authority to sell, mortgage the said property, now the question arises under what capacity the other partners gave the authority to applicant to sell or mortgage the property where they the owner of the property in question. If the respondent No. 4 admittedly be the owner of the property since 1971 as admitted by the applicant himself then how on 16.6.1987 the other partners gave the authority to applicant No. 2 to sell or mortgage the property. Further it is stated by the applicant that respondent No. 4 relinquished his right in the property after taking due consideration from applicants, but the applicant has nothing to place on records showing the relinquishment of the rights of respondent No. 4. It is alleged that the applicant is only trying to create hurdles by putting forward illogical propositions which has not logical principle are neither viable nor permitted by guidelines issued by Reserve Bank of India or governed by the principles of Banking Regulation Act.

In replication it is pleaded that disputed property is situated in Jagadhri and the respondent Bank is also established at Jagadhri, accordingly this Tribunal has jurisdiction to entertain, try and adjudicate the above-mentioned SA. It is stated that it is a settled law that any action of the secured creditor taken under Section 13(4) of the SARFAESI Act can be challenged under Section 17(1) of the SARFAESI Act and the sale notice dated 22.12.2011 published on 24.12.2011 has been challenged by filing the present SA on 25.1.2012, within 45 days of the date of notice, hence the application is well within limitation. It is further submitted that the applicants have placed on record numerous document to establish that they are in possession of the property in question for the last 39 years or so. It is further submitted that there are numerous documents on record to establish that the property in question is possessed by the applicants M/s. Santosh Saw Mills and its proprietor Shri Ved Parkash Rekhan for the last 30 years or so. It is denied for want of knowledge that respondent No. 4 had deposited the title deeds of the mortgaged the property in question with respondent Bank for creating equitable mortgage. In the reply, the respondent Bank has not disclosed the date of creation of mortgage of the property in question. It is denied that respondent No. 4 has given the said property on rent to MRF Tyers. It is worth-mentioning that this Tribunal has appointed to Local Commissioner, who has filed his report which reveals that the MRF Tyers are the tenants of the applicants and respondent No. 4 has no concern with them. It is further submitted that the respondent Bank has issued the impugned notice of sale without taking over the physical possession of the property in question under Section 13(4) of the SARFAESI Act, hence it is a gross violation of the provisions of SARFAESI Act and rules thereof, therefore, the Authorised Officer is liable for an action under Section 29 of the SARFAESI Act for which the applicants reserve their right to approach the Illaqua Magistrate for filing a complaint under Section 30 of the Act, if so advised at the appropriated time. It is further submitted that the applicants have never interrupted or interfered in the proceedings of the recovery from respondent Nos. 3 and 4, but the applicants have challenged the illegal and arbitrary action of the Bank against the property in question which is in possession of the applicants for the last 39 years. Otherwise also, under the SARFAESI Act, without taking the possession, of the properties under Section 13(4)(a), no right has arisen to sell the property as the respondent Bank has not taken the possession of the property under Section 13(4)(a) of the Act and has directly jumped to sell the property by publishing a notice for sale dated 22.12.2011.

Before going into merit of the case it will be appropriate that events happened during the pendency of this case may be brought on record. This Tribunal vide order dated 13.7.2012 dismissed LA No. 633/2012 filed on behalf of applicant/third party for impleadment in limine. It was also observed in the said order that the applicants in present SA said to be in physical possession of the property in question for last 40 years or so. The physical possession was disputed by the respondent Bank. LC appointed by this Tribunal vide order dated 30.1.2012 wherein it was confirmed that applicants are in physical possession of the property but leased out some portion to M/s. MRF Tyre Ltd. under a lease deed. The learned Counsel for applicant argued that since the property in question is under their physical possession since 1972, no proceedings under Section 13 (4) of SARFAESI Act for sale could have been initiated by the respondent Bank without serving notice on the applicant and sale notice dated 22.12.2011 (Annexure A/19) is misleading and liable to be quashed.

It is on record that 1/A No. 608/12, the respondent Bank was allowed to open sole sealed bid vide order dated 24.5.2012. After opening of the sole bid, applicant offered equivalent amount as being offered by the bidder for Rs. 2.40 crores which was allowed to be deposited with the Registrar of this Tribunal. This Tribunal vide order dated 13.7.2012 observed that the applicants have succeeded in establishing that they are in physical possession of the property for last 40 years and the respondent Bank was aware of the said fact and the proceedings under Section 13(4) of the SARFAESI Act for sale of the property in question could have been taken only after obtaining physical possession of the property and statement in Sale Notice dated 22.12.2011 (Annexure A-19) of having possession with the respondent Bank is misleading. It was also observed that since the applicants have deposited equivalent amount of sole bid received in response to the sale notice dated 22.12.2011, no prejudice would be caused to the respondent Bank if the offer of the applicant to purchase the property for same price is accepted and Registrar was directed to release the amount of Rs. 2.40 crores deposited by the applicants to the respondent Bank within 7 days and the respondent Bank was directed to confirm the sale in favour of the applicants and to issue the sale certificate within three days of receipt of aforesaid amount of Rs. 2.40 crores. The respondent Bank was also directed to return demand draft of earnest money deposited by the sole bidder immediately. In compliance of aforesaid order, the respondent Bank has taken all steps except registration of sale certificate which was stayed in appeal filed before Hon'ble DRAT wherein by order dated 14.9.2012, Hon'ble DRAT directed that registration of the sale certificate would be subject to outcome of the appeal.

Keeping in view aforesaid position, nothing survives in this case. Accordingly SA stands disposed of subject to outcome of the appeal pending before Hon'ble DRAT.

Free copy of this order be given to the parties as per rules."

From the aforesaid two orders passed and particularly the portions highlighted by me as well as the oral submissions made by the learned Counsel for the parties the factual position which emerges is that Allahabad Bank had advanced some loan to respondent Nos. 5 and 6 herein but they defaulted in re-payment of the loan amount which led to the declaration of their account as NPA and issuance of statutory demand notice under Section 13(2) of SARFAESI Act. Since the borrowers did not make the payment of the demanded amount within the statutory period of 60 days the Bank issued possession notice under Section 13(4) of SARFAESI Act and it claimed to have taken possession also of the mortgaged property though the DRT got it verified from a Local Commissioner that physical possession had not been taken over by the Bank. The respondent Nos. 1 and 2 therein were claiming to be in possession for over 39 years of the mortgaged property in question and since there was a threat of their dispossession therefrom and the same being sold in auction by the appellant Bank to recover its outstanding dues from respondent Nos. 5 and 6 they filed an S.A. before the Tribunal below (DRT) and sought an interim relief also. The DRT permitted the Bank to go ahead with the tendering process but was not permitted to open the tenders to be received. It is common case of the parties that the appellant herein was the only one to submit its bid. It had also submitted EMD alongwith its bid in a sealed envelope. Since the DRT had ordered the sealed tender envelopes not to be opened by the Bank and in the meantime the validity period of the Bank Draft which the tenderer might have given with the tender was expiring the Bank moved an application (being I.A. No. 608/2012) on 24.5.2012 before the DRT for permitting it to open the sealed envelope so that the Bank Draft could be given to the tenderer for getting the same revalidated. The learned DRT required the Bank to bring the sealed envelope to the Tribunal. At that stage the appellant, the sole tenderer approached the DRT with an application (being I.A. No. 633/2012) in the pending S.A. of respondent Nos. 5 and 6 herein, with a prayer that it should also be given hearing before any orders are passed regarding the tender submitted by it. When the sealed envelope was produced by the Bank before the DRT and was opened it became known to the entire world that the appellant herein had submitted its bid for Rs. 2.40 crores. At that stage the security applicants offered in their reply to the said application of the appellant herein, while opposing the right of the appellant herein of being heard in the matter, to purchase the mortgaged property for the amount at which the appellant had offered to purchase. The DRT vide its order dated 13.7.2012, which has already been re-produced, rejected the prayer of the appellant, sole tenderer, of an opportunity of being heard after impleading it in the S.A. directed the auctioned property to be sold in favour of the security applicants and for return of the money deposited by the appellant back to it by the Bank. The security applicants were ordered to issued the sale certificate instead of the appellant which had participated in the tendering process. This kind of direction issued by the DRT has shocked the judicial conscience of this Tribunal. I do not find any merit in the submission made on behalf of the security applicants that the appellant had no locus standi to intervene in their S.A. and seek any kind of relief. The sale of the mortgaged property was conducted by the secured creditor without the intervention and involvement of DRT and when the appellant submitted its bid it was for the Bank only to deal with that bid and either to accept the same or reject it, albeit in accordance with law. The DRT was not justified in ordering the production of the sealed tender before it particularly after it itself had earlier permitted the Bank to go ahead with auction of the secured asset. In any case, the DRT having decided to do that the appellant herein became entitled to intervene in the S.A. proceedings and particularly when the security applicants after coming to know its bid amount had offered to purchase the property in question at the same price as quoted by the appellant (and not at a higher price) in their reply to appellant's application for intervention it got the right to oppose any kind of opposition to its bid. The learned Presiding Officer was not right in not even listening to the appellant herein, the sole bidder. In the facts and circumstances, the appellant had no other Forum to approach for opposing any move by anyone to have its bid rejected. In the whole process it was the DRT which had taken upon itself the task of deciding the fate of the bid submitted by the appellant despite the fact that none had come forward to raise any doubts about the genuineness of the bidding process adopted by the Bank. Thus, the decision of the DRT in rejecting the prayer of the appellant to address it in opposition to the prayer of the security applicants to reject the bid of the appellant and accept their offer as preferred persons and then the decision to grant ownership rights upon the security applicants cannot be sustained under any circumstances. If such type of orders passed by quasi-judicial Tribunal were to be sustained in appeal even if the Bank has not challenged the same then there will be no stopping the DRTs in passing any kind of orders while deciding S.As. where the scope of inquiry is extremely limited. In fact, the impugned direction passed by the DRT is so perverse that even if it had been accepted by this Tribunal that the same could not be set aside at the instance of the appellant auction purchaser the same would have still been set aside in exercised of the supervisory jurisdiction which the Chairperson of DRAT exercise over DRTs and which supervisory jurisdiction includes judicial supervision also to ensure that the DRTs do not cross the limits within which they are supposed to function and which limit in the present the learned DRT can be said to have exceeded far beyond the permissible limits.

It was submitted by Mr. Atul Sharma, learned Counsel for the appellant that the appellant had always been ready to take the property with the security applicants in possession since it had participated in the auction knowing fully well that the auction was to be on 'AS IS WHERE IS AND WHATEVER THERE IS BASIS' and now it was ready to go ahead with the purchase of the property in question with the security applicants in possession and steps will be taken to get possession from them only in accordance with law. On the other hand, Mr. Alok Jagga, learned Counsel for the security applicants had while half heartedly defending the impugned decision of the DRT taken on 13.7.2017 to confer upon security applicants title in respect of the property in question submitted that in case this Tribunal decides to set aside that order then the matter should be remanded back to the DRT for deciding the S.A. on its merits and not to accept its disposal as infructuous.

Thus, the security applicants who had come to the DRT to save their possession got in a platter the ownership of the property in question without there being any adjudication of any kind by the then learned Presiding Officer of the DRT. The direction given at the interim stage for issuance of sale certificate in favour of the security applicants was totally without jurisdiction and unjustified. That relief could not have been, in fact, given to the security applicants even after full trial since all that they had claimed in the S.A. was that they could not be dispossessed from the property in their occupation by the Bank to recover its alleged outstanding dues from its defaulting borrower/mortgagor. Just because in the opinion of the learned Presiding Officer no prejudice was going to be caused to the Bank if it was directed to issue sale certificate in favour of the security applicants after accepting the amount of Rs. 2.40 crores as had been offered by the appellant herein, which they were willing to pay to have the possessory title converted into full ownership rights, the DRT could not have dispensed with the requirement to holding an inquiry into the alleged grievances of the security applicants in their S.A. and straightaway conferred upon them the ownership rights. Any relief, if at all, they were to be granted could be granted only after returning a finding that the measures initiated by the Bank under SARFAESI Act were illegal and suffering from any infirmity. No such finding was returned by the learned Presiding Officer either at the time of passing the order dated 13.7.2012 or even at the time of disposing of the S.A. as virtually having already become infructuous because of ownership having already been conferred upon security applicants vide miscellaneous order dated 13.7.2012. The route chosen by the learned Presiding Officer for granting totally unmerited relief to the security applicants at the interim stage and then disposing of the S.A. subsequently as infructuous leaves much to be desired. Firstly there was no occasion for the DRT to have called upon the Bank to produce in Court the tender(s) received for any purpose particularly when neither the security applicants who were claiming some relief merely on the basis of their being in possession not the borrower/mortgagor had raised any doubts in respect of the tendering process adopted by the Authorised Officer of the secured creditor, appellant Bank herein.

For the aforesaid reasons the orders passed by the learned DRT on 13.7.2012 directing conferment of ownership rights in respect of the property in question upon the security applicants, respondents 1 and 2 herein, and issuance of sale certificate in their favour and the setting aside of the sale in favour of the appellant is liable to be set aside and is hereby set aside. The respondents 1 and 2, security applicants, will be entitled to get back their money from the Bank which they had paid towards the sale consideration of the property in dispute. The DRT now shall have to decide the S.A., which it had simply disposed of as having become infructuous, afresh and the same will now get revived. Since this Tribunal has not gone into the merits of the case of the two security applicants the DRT will be at liberty to take any decision, albeit, in accordance with law. As far as the fate of the auction in which the appellant had submitted its bid is concerned, it will be open to the Bank to take its own decision in accordance with law since earlier the DRT had taken away that right from it. The DRT will now take up the S.A. for being proceeded further on 19.5.2018 at 2 p.m. Record of DRT be sent back with a copy of this order.