Impact Enterprises vs Union Bank Of India

Ranjit Singh, J

These appeals have been shuttling between this Tribunal and the High Court. On 29.1.2016, though these appeals were dismissed on merit when the Counsel for the appellant again did not come present. The appellant challenged this order dated 29.1.2016 by filing a writ petition before the High Court and the case has again been sent back to this Tribunal by setting aside the order dated 29.1.2016. The Hon'ble High Court has ordered listing of appeals before this Tribunal on 9.3.2016 for arguments. Now, the appellants have moved applications in all these appeals for taking on record some additional documents, which prayer stands rejected vide separate order dated 10.3.2016. When these appeals came up for hearing, the Counsel for the appellant again did not come present. Instead of going ahead with the hearing of these appeals, this Tribunal thought it appropriate to adjourn the appeals to 10.3.2016 for hearing, by passing the following order:

"These appeals have been taken up for heating a number of times. Appeals came to be dismissed for non-prosecution on a few occasions due to non-appearance of the Counsel for the appellant. When the application for recall of the order dismissing the appeal was rejected, the appellant had approached the High Court of Delhi which then had ordered hearing of the appeals on merits and fixed the date for appearance before this Tribunal on 15th January, 2016. The Counsel for the appellant again did not appear on the said date whereas Counsel for the respondent had appeared to make a mention about the directions issued by the High Court. The respondent had then moved an application for hearing the appeal, which was listed on 29th January, 2016. Counsel for the appellant remained absent on the said date. The order on merit was passed as the High Court had directed not to grant an adjournment. These appeals dismissed on merits on 29th January, 2016.

The appellant has again filed a Writ Petition to challenge the order dated 29th January, 2016 before the Hon'ble High Court. While setting aside the order dated 29th January, 2016, the High Court has fixed the hearing of the appeals on 9th March, 2016 i.e. today. This date was fixed with the concurrence of the Counsel for both the parties who had earlier appeared before this Tribunal to make a mention of the appeals for fixing date as per direction of the High Court.

When the cases were called in the first round, the appellant appeared in person to request for pass over as his Counsel, Mr. Sanjeev Bhandari, was yet to reach.

These appeals are called second time, but still the appellant requests for passing over the cases as the Counsel has not yet arrived. The appellant prays for waiting for 10 to 15 minutes more. He is apprised that these are the last cases listed on the board today and the Tribunal cannot be asked to wait for Counsel to come according to his convenience. This prayer being unreasonable is not accepted. The appellant thereafter starts making submission. It is noticed that the appellant is not in a position to assist this Tribunal properly. The appellant submits that he has filed written arguments pursuant to the earlier order passed by the High Court. There is still no sign of the Counsel for the appellant, though the Tribunal has waited for the Counsel in this process of going through the case file and hearing the appellant. Left with no alternative, the cases are adjourned to tomorrow i.e. 10th March, 2016 lest another round of litigation is taken to the High Court, This shall be subject to payment of Rs. 5,000/- as costs. These appeals be listed at No. 1 in the cause list tomorrow."

On 10.3.2016, the Counsel for the appellant has made his submission. He has primarily raised one argument by pleading that the account was wrongly classified as NPA and this issue once raised ought to have been considered by the Tribunal below. The Counsel, otherwise, would concede that the property has been sold under the SARFAESI Act and amount realized. Excess amount has also been adjusted, as already noticed in the order passed by this Tribunal while dismissing the appeals.

In the lengthy written arguments submitted by the Counsel for the appellant, he has primarily referred to the background of the case and orders passed by various Tribunals from time to time in the three S.As. which the appellant had filed. This factual background of the case has been taken note of by this Tribunal in its order dated 29.1.2016. As is noticed, the only grievance raised in the present appeal and in the present S.A. before the Tribunal below was against the sale of the immovable property by e-auction on the ground that this was not a prescribed mode of auction under the Rules. This plea has been rejected by the Tribunal below and this aspect has also not been seriously pressed by the Counsel for the appellant on 10.3.2016 as can be made out from the oral submission made before me. On 10.3.2016, the main emphasize of the Counsel has been that the account was wrongly classified as NPA and the Tribunal has not considered this aspect. Counsel for the respondent is justified in responding that no such plea had been raised either in the S.A. or in the grounds of appeals. The main relief claimed in Appeal No. 462/2014 is as under:

"6. MAIN PRAYER/RELIEF(S):

In view of the above facts and circumstances of the present case it is most respectfully prayed that this Hon'ble Court may kindly be pleased to:

(a) Allow the present appeal;

(b) Set aside order dated 22.9.2014 passed in TSA No. 09 of 2014 and Allow the T.S.A. No. 09 of 2014 (S.A. No. 118 of 2014 DRT-I, Delhi) filed by the appellant and/or;

(c) Set aside order dated 22.9.2014 passed in TSA No. 09 of 2014 and remand back the T.S.A. No. 09 of 2014 (S.A. No. 118 of 2014 DRT-I, Delhi) filed by the appellant for hearing before learned DRT-II, Delhi;

(d) Pass an order(s) issue appropriate direction(s) quashing and setting aside the E-auction Public notice(s) dated 10.11.2013 AND also set aside and quash any action/measure thereto taken subsequent to the sale under Securitisation Act, 2002 in relation to Immovable Property Bearing No. A-313, Measuring 190 Sq. Yards, Pocket A, Shivalik, Malviya Nagar, New Delhi, Belonging To Shri Ramit Vohra.

(e) Pass an order/appropriate directions to the respondent Bank to reschedule/restructure in view of Bank's letter dated 22.8.2012 by letter No. ADV/238/212 (ANNEXURE A-17);

(f) Pass an order/appropriate directions restraining the Bank from taking any further measures under Securitization Act, 2002;

(g) Costs of the appeal be also awarded to the Appellant;

(h) Any other order or orders as this Hon'ble Court may deems fit and proper be also passed in favour of the Appellants and against the respondents."

The other appeals are filed against the orders passed on various I.As.

Thus, the appellant has only prayed for setting aside the order dated 22.9.2014 passed in TSA No. 09 of 2014 and to allow the TSA. Prayer also is that to set aside the order dated 22.9.2014 passed in TSA to remand the said TSA back to the Tribunal below for hearing. Further prayer is for issuing direction quashing and setting aside the e-auction public notice dated 10.11.2013 and to set aside and quash any action/measure thereto taken subsequent to the sale under the SARFAESI Act in relation to immovable property bearing No. A-313, measuring 190 sq. yds., Pocket A, Shivalik, Malviya Nagar, New Delhi.

The Counsel for the appellant was asked to indicate the pleading in the S.A. to show if any challenge was made in the said S.A. on the ground now pressed in the present appeals. The Counsel for the appellant could not succeed in showing any part of the pleading in the said S.A. where this issue was pressed. Indeed, this issue has been raised in the S.A. No. 317/2011 field by the appellant earlier. While passing the order dated 29.1.2016, this Tribunal had taken note of this S.A. No. 317/2011 filed by the appellant. The S.A. No. 317/2011 and another S.A. No. 69/2013 filed by the appellant were disposed of directing the Bank to proceed against the mortgaged property. The appellant had then impugned the order passed in the said S.As. by filing appeal. This Tribunal declined to interfere against the action taken by the respondent-Bank. Even when the present S.A. was filed, the Tribunal had observed that auction would be subject to the final outcome of the S.A., giving liberty to the appellant to participate in the auction or to bring any better buyer. In fact, feeling aggrieved against that part of the order whereby the sale was made subject to the final outcome of the S.A., the Bank had filed a miscellaneous appeal before this Tribunal.

The property was sold on 10.3.2014 for a sum of Rs. 7.22 crore. On 26.3.2014, sale certificate was issued and certificate was registered on 1.4.2014. The possession of the property was also delivered to the successful auction purchaser. The sale proceeds were appropriated towards the dues on 29.3.2014. Once the appellant could not maintain its challenge raised in the S.A. on the ground that the account was wrongly classified as NPA, and, thereafter, the property has been sold, the appellant cannot be permitted to re-agitate the issue again. The appellant had also challenged the order passed in earlier appeals before the High Court by filing Writ Petition No. 6385/2013. The Division Bench of the High Court had directed the appellant to deposit a sum of Rs. 50 lac as interim measure with the Respondent Bank on or before 4.11.2013 on which date the case was listed before this Tribunal. The High Court had stayed the auction of the property till the said date on the condition that in case the appellant failed to deposit the amount prior to 4.11.2013, the S.A. No. 69/2013 would stand dismissed automatically. The appellant could not deposit this amount and, accordingly, the S.A. stood dismissed in terms of the order passed by the High Court. This Tribunal had accordingly disposed of the miscellaneous appeal pending before it, which came up for hearing on 4.11.2013. Thus, the challenge raised by the appellant on the ground that the account was wrongly classified as NPA attained finality when this S.A. and the appeal were dismissed. In this background, the appellant cannot now be permitted to re-agitate the same issue in the present appeals.

If this plea is now considered at this stage in the present appeals, it would apparently act in violation of the order passed by the High Court to hear the appeal on deposit of Rs. 50 lac by virtue of which the earlier S.A. containing this ground of challenge was dismissed. The principle of res judicata may come into play.

The present S.A. was filed only to challenge the e-auction which challenge has been considered and rightly negated by the Tribunal below. The ground on which the e-auction is challenged has rightly been dealt with by the Tribunal below, as can be seen from the impugned order. The Tribunal below has rightly observed that the order passed by it with some riders was interfered with by this Tribunal in the appeal filed by the Bank. The Tribunal below had permitted the Bank to proceed with the auction and even the conditions which were imposed by the Tribunal below were removed by this Tribunal. Pursuant thereto, the property has been sold by way of auction. The ground of challenge to the auction is only to the manner of holding the auction by way e-auction which challenge, in my view, is totally misplaced and misconceived. The ground of challenge pressed now that the account was wrongly classified as NPA cannot be permitted or considered in the factual and legal background as noticed above. There is, thus, no merit in the appeals. The same are dismissed.