Harish Dang And Ors vs Bank Of Baroda And Ors

These appeals arise of an Original Application(O.A.) no. 364/2014 filed by respondent no.1, Bank of Baroda, in both these appeals, under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act,1993('RDDBFI Act' in short) against the two appellants in Appeal No. 87/2020 out of whom appellant no.2 H.R.Steel Pvt. Ltd. is the principal borrower and appellant no.1 is the guarantor and the two appellants in Appeal No. 88/2020 for recovery of Rs.22,03,17,551.43 alongwith pendente lite and future interest at the rate of 13% p.a. The said recovery case had to be filed since the respondent bank's borrower, H.R.Steel Pvt. Ltd. had defaulted in repayment of the loan facilities in the form of Cash Credit and Term loan, sanctioned in its favour and duly availed also by it during the period 2003 and 2014 in full. The repayment of the loan money was secured by way of equitable mortgage of some properties besides hypothecation of movable goods lying in the godowns at different premises and also by the personal guarantees of the appellants in both these appeals and one corporate guarantee of M/s Jyoti Metal and Allied Industries Pvt Ltd.

The O.A. was being contested by the appellants- defendants and in fact the proceedings reached the stage of final arguments and written arguments also stood filed in the year 2018 when without waiting for the final verdict of the DRT in the O.A. the bank moved an application sometime in November, 2018 seeking attachment before judgment of ground floor of property no. M-15, N.D.S.E.-II, New Delhi which was stated to be owned by two brothers Harish Dang and Parveen Dang, who are one of the two appellants in both these appeals. That application, registered as I.A.No. 1824/2018, remained pending without any order having been passed for almost two years The application moved by the bank for an early hearing of that application was rejected by the learned Presiding Officer of DRT-III who was having additional charge of DRT-I also on the ground that early hearing was not possible since the learned Presiding Officer was looking after the work of two DRTs.

Thereafter, the O.A. was fixed for final arguments as well as hearing on miscellaneous applications including the bank's attachment before judgment application on 05.08.2020. The bank, however, moved another application requesting the DRT to prepone the matter even before 05.08.20120. The Presiding Officer, however, this time issued notice for 05.08.2020 when in routine DRTs were not taking up regular matters because of spread of corona virus in the city. Counsel for the defendants in the O.A. were sent an email by the registry on 05.08.2020 for appearance in the matter same day. Counsel for the appellants has claimed that with such a short notice and in the absence of necessary software for video conferencing with her when she received the email she made a request for a date to prepare herself for arguments but her request was turned down by the Presiding Officer and on 06.08.2020 the attachment application came to be allowed and the defendants were required to furnish security for a sum of Rs. 10 crores within ten days else the property no. M-15(Basement, ground floor and third floors) would stand attached. It appears that the said property was at one time a single Unit and the same was demolished by a builder with whom the appellants herein claim to have entered into a collaboration agreement and the builder then reconstructed the building and first and second floors were given to the builder. The order passed on 06.08.2020 by the DRT is now under challenge in both these appeals which are being disposed of by this common order as facts and legal points involved therein are common and both the appeals were heard analogously also.

I have heard Mr. Rajeev Mehra, learned senior advocate for the appellants Harish Dang and H.R.Steel Pvt. Ltd.(borrower), Mr.Lokesh Bhola, learned advocate for the two appellants in appeal no.88.2020. Mr. Arun Aggarwal,learned advocate argued for the bank.

Since lot of emphasis was laid by the learned senior counsel for the appellants Harish Dang and M/s H.R.Steel Pvt. Ltd. On the contents of the attachment application being totally bereft of necessary averments which are required to be pleaded in an application for attachment before judgment I deem it appropriate to re-produce the attachment application of two pages having three paragraphs only. It reads as under:-

"APPLICATION_ FOR ANO: ON BEHALF OF APPLICANT UNDERSECTION 19(25) OF ROB ACT, 1993 FOR ATTACHMENT OF PROPERTY OF DEFEND.ANTS• 2 &3 BEING M-15, GROUND, FLOOR, SOUTH EXTENSION-II, NEW DELHI - 110049:

RESPECTFULLY $HOWETH:

The present O.A. is pending for adjudication before this Hon'ble Tribunal at the stage of pronouncement of order and is now next listed on 17.01.2019.

In view of the fact that •M-15,• Ground Floor, South, :extension-II, New Delhi - 110049 was mentioned as• one of the address of the defendants. Investigating agency was engage for ascertaining the complete details, details qua title. Vide its• repots dated 17.08.2017 it has been revealed that as per the house tax details- available with SDMG the same are in the name of Mr. Harish Dang, defendant no. 3 . andMr. Praveen Dang, defendant no. 4. The copy of the detective agency report dated 17.08.2017 along with its• annexure being property tax receipt no. G85138258 dated• 17.062017 •is annexed herewith as Annexure A.PP--1.

It would. therefore be in the interest of justice that the mortgaged property, being M-15, Ground Floor, South Extension-Il, New Delhi - 110049 is attached forthwith. In case orders for attachment are not granted it would be cause irreparable loss and injury to the applicant bank which may not be compensated in any mariner whatsoever.

PRAYER-•

In view of the above premise it is therefore be prayed that this HonbleTribunal may be pleased to:

i) . Attach immovable property being M-15, Ground Floor, South Extension-II, New Delhi - 1100491; and

ii) pass such other orders which this Hori'bleTribunal may deem fit and proper in the facts and circumstance of the case in favour of the applicant bank."

A bare perusal of this application shows that the same is totally bereft of necessary averments as to why a direction for attachment before judgment was being sought for. It was even pleaded that the defendants were going to part with their house in N.D.S.E. in order to defeat the bank's fight for recovery of public money which are now stated to be to the tune of over forty crores. The absence of necessary averments in the attachment application in fact casts a suspicion as to whether in fact the bank wanted such an order or wanted to give an opportunity to the defaulters of its dues to run away after selling it off. Such an application with ingredients having been pleaded therein justified rejection of that application in limine.

As far as the impugned order passed by the learned Presiding Officer of the Tribunal below is concerned it is equally bereft of any good reason for passing of an order directing the defendants in the O.A. to furnish security for a sum of Rs. 10 crores or else to face attachment of their house in one of the posh colonies of New Delhi. The impugned order can be said to have been passed casually and just for the asking. Neither the bank nor the learned Presiding Officer of DRT considered the circumstance that the attachment application had remained pending for almost two years and no instance of defendants' having made any attempt to sell the property in question even after attachment application had been filed the very object behind moving such an application stood defeated and the same had become meaningless and not even of academic interest. The learned Presiding Officer had unnecessarily written a lengthy order containing no relevant discussion about the absence of necessary pleadings in the attachment application. Just because bank dues were being claimed to be forty crores odd the order for attachment before attachment for that reason alone could not have been passed by the DRT. Even Mr. Arun Aggarwal, learned counsel for the bank kept on arguing that huge amount of public money is involved and the impugned direction was rightly passed by the DRT. He had no explanation to offer as to why it was not even pleaded by the bank that the defendants were going to sell off the property in question to defeat the bank's efforts being made to recover its dues. He also did not offer any plausible justification for not insisting upon quick disposal of its attachment application.

The impugned thus order cannot be sustained and is accordingly set aside. However, considering the fact O.A. of the bank is for a huge amount and also considering the fact attachment application could be taken up by the learned Presiding Officer by giving a day's notice to defendants on 04.08.2020 and dispose of the application on 06.08.2020 which shows that the learned Presiding Officer was conscious of the fact that the case involves huge amount of public money and need expeditious hearing it is directed the O.A. itself should be disposed of within a period of two months from the date of communication of this order. The case was ripe for final hearing long back and so the same can be disposed of within the said period. During the course of hearing learned senior counsel Mr. Rajeev Mehra had submitted that the appellants will advance final arguments even through video conferencing and the DRT could be directed to decide the O.A. within a fixed period. Mr. Mehra had also very fairly submitted that the defendants have no intentions of parting with their sole residential house which was being sought to be attached before judgment. The defendants will remain bound by this statement of their senior advocate.