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Judgment
P.K. Bhasin, J
The appellant Bank (ICICI Bank) is aggrieved by the order dated 17th August, 2016 passed by the Debt Recovery Tribunal-I, Delhi ('DRT in short) in the Securitisation Application (S.A.) filed under Section 17 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ('SARFAESI Act' in short) titled as "M/s. Mahal Buildwell Pvt. Ltd. v. ICICI Bank Ltd." whereby the appellant Bank was directed to deseal the Lower Ground Floor/Basement of property No. A-154, Sector-8, Dwarka, New Delhi (hereinafter to be referred as the 'the property in dispute') which it claimed to have been mortgaged in its favour by one borrower to secure the repayment of the loan granted by it and which property was sealed on 12th August, 2016 by the Court Receiver after the Bank had initiated action under Sections 13 and 14 of the SARFAESI Act against the borrower and guarantors and mortgagor of the property in dispute. The relevant facts are that the respondent Company claiming itself to be the owner of the property in dispute having purchased the same in September, 2012 from its erstwhile owner, who now is alleged by the appellant Bank to be the defaulter-borrower, filed a petition under Section 17 of the SARFAESI Act on 11.08.2016 in the DRT-I against the appellant herein challenging its action initiated under the SARFAESI Act for taking over physical possession of the property in dispute. In the S.A. the respondent Company had claimed interim relief also against the taking over of physical possession of the property in dispute.
Notice of the S.A. and stay application was given by the DRT to the Bank for next day i.e. 12th August, 2016 and on that day the learned presiding officer of DRT after hearing both the sides passed the following order:-
"12.08.2016
Present: Mr. Vineet Malhotra alongwith Mr. Vishal Gohri, Counsel for applicant
Mr. Puneet K. Bhalla, Counsel for respondent Bank.
Learned Counsel for the applicant submits that applicant is the Director of M/s. Mahal Buildwell Pvt. Ltd. and is bona fide purchaser of lower ground floor/basement of the property bearing No. 154, Block-A, Sector-8, Dwarka, New Delhi having purchased the same by way of registered sale deed dated 24.09.2012. He further submits that the applicant is the absolute owner of the said property and has rented out the same to one M/s. Meander Software Pvt. Ltd. and is the only source of income for his livelihood.
He further submits that the respondent Bank has already taken the possession of ground floor of the property in question for the last three months and no further steps have been taken by the Bank. He further submits that the dues of the Bank are approximately Rs. 90. lacs and he is ready to buy the ground floor for Rs. 90 lacs. He further submits that he is ready to deposit 5% of the said amount within three days and the balance amount will be deposited as per directions of this Tribunal.
Learned Counsel for the respondent Bank vehemently opposes the above submissions of the Learned Counsel for the applicant and submits that the entire property is mortgaged with the Bank and the sale deed in favour of the applicant is subsequent to mortgage. He further relied upon the order dated 25.7.2018 passed by this Tribunal in the S.A. No. 151/2016 filed by the applicant. He further contends that merely by changing the name of the applicant will not change the facts of the case.
Having heard the learned Counsel for the parties and perused the record. Looking to the facts and circumstances of the case and considering the fact that applicant is ready to pay entire dues of the Bank, therefore, the applicant herein is directed to deposit 5% of the amount of 90 lacs within three days with the Registrar of this Tribunal by way of an FDR. The respondent Bank is also directed to file its valuation report of the ground floor of the property in question within a week. Till then no coercive steps be taken against the property in question.
List the case for compliance on 25.8.2016. Dasti."
Immediately after this order was pronounced the respondent Company moved a contempt application (being I.A. No. 1092/2016) against the appellant Bank. It was alleged in that application that after hearing arguments on stay application on 12.8.2016 the matter was kept for pronouncement of order in the post lunch session and finally the Bank was directed not to take any coercive steps against the property in question. However, in order to overreach the tribunal and with a view to obstruct the cause of justice the Bank had at 3 p.m. sealed the property in dispute and that action of the Bank amounted to interference in-judicial proceedings. Prayer made was for restoration of possession to the applicant. Notice of that application was given to the Bank. The Bank appeared before the DRT and opposed the contempt application and on 17.8.2016 the learned presiding officer of DRT passed the following order:-
"Dt. 17.8.2016
Present:
I.A. No. 1092/2016
Heard on this I.A. Applicant has filed the present LA. praying therein to direct the respondent Bank to forthwith de-seal the premises of the applicant i.e; A-154, Lower Ground Floor/Basement, Sector-8, Dwarka, New Delhi and/or permit the applicant to break open the seal of the aforesaid premises and initiate appropriate contempt proceedings against the respondent Bank and its officers.
Record reveals that notice on this SA was issued by this Tribunal on 11.08.2016 and matter was fixed for hearing on the issue of interim relief on 12.08.2016. Both the parties were heard on 12.08.2016 and Bank officer was also present at the time of hearing before this Tribunal and in the presence of both the parties matter was kept for passing order on interim relief at 4.00 P.M. on same date. However, despite having knowledge that this Tribunal has seized the matter for passing orders on interim relief, learned Court Receiver took possession of property in question at 11.30 A.M. on 12.8.2016. This Tribunal is of the view that respondent Bank did not take due care and had not informed the learned Receiver to stop the proceedings till the order comes from this Tribunal. The action of the Bank is highly regrettable and shows that they have no respect for the orders of this Tribunal. It also shows that officers of the Bank have not acted in accordance with law and they should have informed to the learned Court Receiver. It cannot be believed that Court Receiver has taken the possession without the knowledge and help of the authorized officer of the respondent Bank. In these circumstances, I hereby direct the authorized officer of the Bank to de-seal the property today itself at 3.00 P.M. It is further directed that Ld. Receiver is not required for the purpose of de-sealing the property. At the time of de-sealing the property, the authorised officer of respondent Bank is also directed to make the inventory of articles lying therein and compare the same with the inventory prepared by the Court Receiver.
Authorised officer of the respondent Bank is also directed to remain present before this Tribunal on next date fixed.
This order is pronounced in the presence of both the parties, therefore, same shall be implemented, as directed hereinabove.
With these directions, IA stands disposed of accordingly.
Now case be listed on 06.09.2016 and the date already fixed i.e; 25.08.2016 is hereby cancelled.
Dasti
Sd/-
P.O., DRT-I"
Feeling aggrieved by this direction given to it by the DRT the appellant Bank filed the present appeal same day challenging the impugned direction primarily on the ground that since there was no stay granted by the DRT when the stay application was being heard there was no contempt of any order committed by the Bank in going ahead with taking over of the possession of the property in dispute through Court Receiver. This Tribunal by an ex-parte order passed on 17th August, 2016 itself had stayed the operation of the impugned order of the DRT while issuing notice of the appeal to the respondent Company. After the respondent had entered appearance both sides were afforded opportunity to make their submissions in the matter which they did.
Mr. Puneet Bhalla, learned Counsel for the appellant Bank sought to challenge the impugned direction for desealing of the property in dispute and handing over its possession to respondent Company on the ground that there was no restrain order in existence when the possession was taken over by the Receiver. It was also highlighted that earlier on 25th July, 2016 the same very Presiding Officer of DRT-I had rejected the same interim relief against taking over of the possession of the property in dispute in another petition under Section 17 of SARFAESI Act which was filed by one of the Directors of respondent Company in his individual name and when that order was challenged before this appellate Tribunal the appellant therein finding the defect in the proceedings initiated by one Director and not the respondent Company herein, which was claiming to be the owner of the property in dispute, withdrew the appeal on 11.08.2016 but this tribunal had given the liberty that the respondent Company could initiate fresh proceedings in its own name. Then the fresh S.A. came to be filed and this time the DRT gave interim relief despite the fact that earlier same relief had been denied a few days back and that rejection of the relief was not on the ground that one Director could not have maintained the petition in his individual name but on merits observing that the alleged sale of the property in dispute was after the creation of the mortgage in favour of the Bank.
Mr. Vineet Malhotra, learned Counsel for the respondent Company on the other hand sought to justify the impugned direction of the DRT on the ground that the Bank had attempted to overreach the process of Court by sealing the property when the DRT had already reserved the order on the stay application and submitted that the Bank should have itself stopped further action for taking over of the possession and should have shown full respect to the DRT by awaiting its order which was to be pronounced same afternoon. Having not done that the DRT was well within its powers to restore status quo ante after having found a good case of stay in favour of the respondent Company in its order passed in the afternoon of 12th August, 2016.
During the hearing of this appeal on 24th August, 2016 the Counsel for the respondent Company had shown me copy of the proceedings of the Receiver conducted at the site while taking over possession of the property in dispute. Those proceedings showed that when possession was being taken over only the Bank officials were present and none else, even from the side of mortgagor, was present and property was found lying open and after taking over the possession and sealing it the keys were handed over to the authorised officer of the Bank. My attention was drawn to the Receiver's proceedings to show that the Bank's claim in this appeal that possession had been taken over at 11.15 a.m. was not correct since the Receiver himself had stated in his report that he had reached the site at 12.15 p.m. and his proceedings had continued till 1 p.m.
I have given my thoughtful consideration to the entire aspect of the matter and the submissions made from both sides by their learned Counsel.
It is true, as was the submission of Mr. Puneet Bhalla, learned Counsel for the appellant Bank, that normally contempt action gets attracted when violation of some injunction order of any Court takes place which in the present case was not there at the time when the Receiver took physical possession of the property in dispute on 12th August, 2016. However, if during the pendency of some judicial or even quasi judicial proceedings filed by some aggrieved party for the protection of his property status of that property is changed by the other side, like the appellant Bank did in the present case by taking over physical possession of the property in dispute through Receiver appointed by the CMM at its instance and sealing the same while arguments on the stay application were being heard by the DRT, with the intention to make the proceedings before the Court or quasi judicial Authority in-fructuous, the Court or even the quasi judicial Authority will not wash off its hands and be a silent spectator. In that situation, the powers are vested in the Court as well as in the quasi judicial Authority to come to the conclusion whether the proceedings had been made in-fructuous by the one of the litigants before it. If it comes to the conclusion that status of the property involved in the proceedings was changed by the contesting opponent in order to render the ongoing proceedings in-fructuous in that situation the action of that party would be an attempt to overreach the law and the judicial process and at the instance of the successful party the clock can be set back and status quo ante can be ordered and that was the relief claimed by the respondent Company in the present case after the DRT had found a case in its favour for the grant of some interim relief.
At this point I would like to make a reference to two judgments of two High Courts which fully back the above view of mine. Calcutta High Court in one of its judgments reported AIR 1956 Cal 428, "Nandan Pictures Ltd. v. Art Pictures Ltd. and Ors." had observed as under:-
"4.........I consider it sufficient to point out that it is only in very rare cases that a mandatory injunction is granted on an interlocutory application and instances where such an injunction is granted by means of an 'ad interim' order pending the decision of the application itself are almost unknown. I do not wish to say, because it is not necessary for the purposes of this case to say so, that in no circumstances will the Court have any jurisdiction to issue an ad interim injunction of a mandatory character pending the disposal of an application for an injunction. Injunctions are a form of equitable relief and they have to be adjusted in aid of equity and justice to the facts of each particular case............It would appear that if a mandatory injunction is granted at all on an interlocutory application, it is granted only to restore the status quo and not granted to establish a new state of things, differing from the state which existed at the date when the suit was instituted. The one case in which a mandatory injunction is issued on an interlocutory application is where, with notice of the institution of the plaintiffs suit and the prayer made in it for an injunction to restrain the doing of a certain act, the defendant does that act and thereby alters the factual basis upon which the plaintiff claimed his relief An injunction issues in such a case in order that the defendant cannot take advantage of his own act and defeat the suit by saying that the old cause of action no longer survived and a new cause of action for a new type of suit had arisen. When such is found to be the position, the Court-grants a mandatory injunction even on an interlocutory application, directing the defendant to undo what he has done with notice of the plaintiffs suit and the claim therein and thereby compels him to restore the position which existed at the date of the suit.........".
(Emphasis is mine)
Similar view was expressed by Gujarat High Court in "Bhupatla Govindji v. Bhanumati Dayalal", AIR 1984 Guj 10. The relevant observations of the High Court are re-produced below:-
".........The net effect of this acceptance of the conclusion is that the plaintiff and her predecessor, husband were in possession of this godown right from the year, 1955. She was in possession even during the pendency till the ad interim injunction stood unfortunately vacated, because of the dismissal of the suit at the hands of the learned trial, Judge, which took place on 30th June, 1982. The letters Exhs. 18 and 19 show that being overjoyed with his success in the trial Court, the defendant put his-locks and staples (iron stripes) across the door, so as to prevent the plaintiff from entering the godown, and is well-nigh possible that he might have introduced into the godown some Articles of his own also. The question is whether this advantage taken by the defendant during the short period of nine days, when the injunction did not operate can be said to be amounting to taking an undue advantage of the inter regnum or vacuum created by the procedural delays that are inevitable in the modern system administration of justice. In the facts and circumstances of the case and in the light 'of the findings recorded by the learned Judge which I am bound to accept, it is to be held that this defendant-appellant tried' to change the situation before the appellate Court could do anything in the Matter. An appeal is a continuation, of the suit and if any one-takes advantage of the Court's procedures and changes the situation to the material disadvantage of the other side, in the meantime and if ultimately, the action which facilitated the commission of the act on the part of the persons held un-authorised, the Court should put the party in the position in which it would have been, before that vacuum or interregnum created by the procedural delays. Mr. S.M. Shah very vehemently submitted that in a situation like this, because of some developments, may be due to the legal technicalities, the proper and the only course left open to the plaintiff, was to seek suitable amendment of the plaint and to seek a relief of possession but this sort of mandatory injunction coupled with delivery if possession could not be granted by the Court of its own, without there being any formal prayer. The argument. No doubt, is to be considered with concern, but whenever it appear to a Court of that a party is shrewd enough to over reach the legal process the Court should rut its too down and see that this shrewdness does not stand rewarded. In other words, if necessary, the clock would be made to move back in order to restore the legal position which would have continued, had that party not taken benefit of that intervening period."
(Emphasis supplied)
Thus, in view of the above decisions of two High Courts I need not go into the question whether the action of the appellant Bank amounts to contempt of Court or not or at what time actually possession was taken over by the Receiver on 12th August, 2016. Suffice it would be to say that in the facts and circumstances of the case no fault can be found with the direction given by the learned Presiding Officer of the DRT to the appellant Bank for restoring status quo ante. As far as the grievance voiced by the learned Counsel for the appellant Bank that there was no justification whatsoever for the same learned Presiding Officer, who had only a couple of days before the passing of the order dated 12th August, 2016 had on the same facts declined to grant any relief in the matter, in granting interim relief against the Bank without any change in circumstances or legal position is concerned. I am of the view that this grievance can be urged at the hearing of the appeal, which I was told by the Counsel for the Bank, already stands filed against the order dated 12th August, 2016 vide which interim relief has been granted to the respondent Company and if raised the same shall, it is needless to say, be considered in accordance with law and totally uninfluenced by the fate of the present appeal of the Bank.
This appeal is accordingly dismissed. Had the Bank shown little restraint till the pronouncement of the order on the interim application of the respondent Company on 12th August, 2016 the passing of the impugned direction by the DRT would have been avoided as also the filing of this appeal but the Bank did show hot haste in taking over the possession of the property in dispute. Therefore, the appellant Bank is burdened with costs of Rs. 25,000/- half of which should be deposited with the DRAT Bar Association and half with DRT Bar Association within a week. Despite the fact that this appeal stands rejected, it is made clear that the dismissal of this appeal will also not entitle the respondent Company to create any third party interest in the property in dispute or to put anyone else in any capacity, except itself, in possession of the same till the disposal of its S.A.