Hari Kripa Towers (P) Ltd. vs Ministry Of Finance And Ors.

Ranjit Singh, J

The appellant had filed an application filed under Section 17 of the SARFAESI Act for issuing direction to the Ministry of Finance and Reserve Bank of India (impleaded as respondents 1 and 2 in the said application) to conduct inquiry into the affairs of respondent No. 3. This prayer has been declined by the Tribunal below. The appellant has filed this appeal against the order passed by the Tribunal

The Tribunal below has held that such an application with the prayer as contained therein, obviously, would not be maintainable. Counsel for the appellant also could not disclose any provision before the Tribunal below under which such a prayer made in the application filed under Section 17 of the SARFAESI Act could be so maintained.

In this application filed before the Tribunal below, the appellant had also prayed for stay of further action/measures/steps in respect of impugned auction sale held on 14.9.2011 with regard to the property bearing Plot Nos. 27, 28 and 29 with land measuring 15120.00 sq. mtrs. Located at Phase-II Extension. Hoisery Complex, Gautam Budh Nagar, Noida, U.P.

The case set up by the appellant before the Tribunal below was that the property was mortgaged with IFCI Ltd. Respondent No. 3 initiated proceedings for recovery and the Recovery Officer issued sale notice for selling the property in question by way of public auction. The appellant had given a bid for the said property in the auction held on 20.4.2005 and was declared successful bidder Subsequently, however, the amount paid by the appellant was directed to be refunded under the orders of this Tribunal, without prejudice to its right. The appellant, thereafter, filed a Writ Petition before the Delhi High Court, which was dismissed on the ground that one-time settlement proposal was pending consideration.

Now respondent No. 3 has again put the property to sale and it is urged that respondent No. 3 had earlier obtained the order by making wrong and illegal submissions and thus the appellant had deprived of the benefit arising out of public auction held in its favour. The appellant accordingly has pleaded that there is a need to hold an inquiry and investigation against respondent No. 3.

The Tribunal below has rightly noticed that the application under Section 17 of the SARFAESI Act can be filed by the person aggrieved by the measures referred in Sub-section (4) of Section 13 of the SARFAESI Act taken by the secured creditor. The Tribunal noticed that the Ministry of Finance and Reserve Bank of India, which were impleaded as respondents 1 and 2 were not secured creditor and so no relief could be claimed or granted against them. As per the Counsel for the appellant, the Ministry of Finance and Reserve Bank of India had been impleaded only to seek direction for conducting inquiry into the affairs of respondent No. 3. He, however, could not show any provision under the Act by which such direction could be issued by the Tribunal below. The prayer made by the appellant was accordingly rejected and so the appellant has filed the present appeal.

The Counsel for the appellant relied upon the provisions of Section 19(25) of the RDDBFI Act to urge that the Tribunal below would have inherent powers to pass any order to give effect to such direction as may be necessary and expedient to give effect to its orders or to prevent abuse of its process or to secure the ends of justice. As per the Counsel, this Tribunal would have inherent power to issue such direction for holding investigation and inquiry against respondent No. 3.

Counsel at that stage was required to explain as to when an investigation can be directed and whether this Tribunal would have any power to direct investigation against any person or for that matter whether such investigation if open to be conducted otherwise can be so conducted by either the Ministry of Finance or Reserve Bank of India. The Counsel was also required to submit in case any such direction can be issued to the Ministry of Finance or Reserve Bank of India. Counsel could not say anything in this regard and rather was seen dumb founded. At least I am clear in my mind that this Tribunal has to exercise its power and jurisdiction strictly in terms of the provisions contained in the SARFAESI Act and RDDBFI Act and there is no power or source available under these enactments on the basis of which any direction for holding investigation and inquiry can be issued by this Tribunal.

The investigation has to be by setting the criminal law into motion which certainly may not be within the competence of this Tribunal. The inquiry also can be either held under the Criminal Procedure Code or any other inquiry in nature of domestic inquiry. No directions to hold investigation can be issued and such directions would be a call beyond the jurisdiction of this Tribunal. This Tribunal also would have no source or power to direct inquiry in nature of domestic inquiry which may be directed against any person who may have committed any misconduct. This appeal is totally misconceived and misplaced and apparently have been filed without application of mind. The appeal is accordingly dismissed.