Key Pee Rolling Mills And Others vs Bank Of Maharashtra And Another

Dr. Pratibha Upasani, J

This Misc. appeal is filed by the appellants/original defendants being aggrieved by the order dated 18th June, 2002 passed by the learned Presiding Officer of Debts Recovery Tribunal-II, Mumbai, in Appeal No. 16/2002. By the impugned order, the learned Presiding Officer dismissed the appeal which was filed before him by the present appellants against the order of the Recovery Officer dated 26th November, 2001 and observed that the sale of the flat attached by the Recovery Officer by his order dated 26th November, 2001 should not be done until the Recovery Officer's order dated 20th May, 2001 was carried to the logical end. To understand the controversy between the parties, few facts are required to be stated, which are as follows:

The appeal before the Presiding Officer had arisen during the Recovery Proceedings No. 589/2000 pending before the Recovery Officer. During the course of the Recovery Proceedings, the Recovery Officer passed order dated 22nd April, 2002 on the application for stay of further proceedings made by the defendants. In the said application, it was mentioned by the defendants that residential flat of defendant No. 3 Mr. Ramesh Desai, who was a guarantor, was attached pursuant to the decree passed by the High Court in the Year 1993 in Summary Suit No. 1279/1990 against the defendant Nos. 1 to 5. Subsequently matter was transferred to DRT. It was further stated that the parent company M/s. Tensile Steel Ltd. was declared "sick" under SICA and therefore decree against defendant No. 1 Company by name M/s. Key Dee Rolling Mills, which was a sister concern of M/s. Tensile Steel Ltd. became un-executable against the guarantors. It was therefore prayed that attachment order in respect of the residential flat of Mr. Ramesh Desai, the guarantor be raised and further execution proceedings be stayed. This application came to be rejected by the learned Recovery Officer, against which the appeal came to be filed under section 30 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter to be referred to as the "RDBI Act") before the learned Presiding Officer. Contention of the appellants was that the application came to be rejected by the Recovery Officer without giving any reasons. A ground was taken that appeal was also preferred by the defendant NO. 3 even against the order dated 26th November, 2001 passed by the Recovery Officer on the Bank's application for attachment of the flat. It appears that since the Recovery Officer did not get much of co-operation from the Bank, the Recovery Proceedings came to be disposed off by the Recovery Officer, which came to be restored on the application made by the Bank and the grievance of the defendants was that there was no notice given to the defendants before restoration of the said application. The Recovery Officer restored the Recovery Proceedings as the Bank complied with the directions given by the Recovery Officer on 20th May, 2001. Those directions were as follows.

"The amount paid by the defendants are to be set right/re-conciliate by the applicant Bank and the defendant before this Tribunal as mentioned in para NO. 3 hereinbefore.

The applicant Bank has to ascertain the very status of the each assets with inference to their attachment/stay if any, by the other authorities i.e. B.I.E.R. Court Receiver, High Court etc. as mentioned in paras 4 and 5 herein above.

Sale process may be started in respect of properties/assets mentioned in columns 4, 5 and 7 of attachment warrant issued as mentioned in para 4 hereinabove.

All these directions were complied by the Bank subsequently.

The learned Presiding Officer in his impugned order dated 18th June, 2002 observed that though from the caption of memo of appeal impression was given that the same was filed against the order of the Recovery Officer dated 24th April, 2002 refusing to lift attachment of the flat of the defendant No. 3, the appellant had stated in para 2 of the memo of appeal that the order of the Recovery Officer dated 26th November, 2001 attaching the flat itself was challenged. The Bank's advocate pointed out that the said order dated 26th November, 2001 could not be challenged after more than six months and the proceedings also revealed that the appellants on their own showing had come to know about the said order at least before 26th February, 2002, on which day the application for raising attachment was filed before the Recovery Officer. The learned Presiding Officer therefore observed that if the appellants were aggrieved by the said attachment they should have come in appeal within one month of knowledge of the order, which in any case could be imputed to them prior to 26th February, 2002. The learned Presiding Officer therefore held the said appeal was barred by limitation and could not be entertained.

As far as grievance of the appellants that the Recovery Officer did not give reasoning for the order, is concerned, the learned Presiding Officer observed that though it was always proper to give reasoning for any order, the Recovery Officer was not expected to pass lengthy order giving reasons. As far as grievance of the appellants that Bank's application, for restoration of the Recovery Proceedings was allowed by the Recovery Officer without giving notice to them, is concerned, the learned Presiding Officer observed that the said order was an administrative order which could be reopened without hearing other side since there was no question of accrual or vesting of any right in the respondent just by order of consignment of the Recovery Proceedings in the record room.

As far as the rejection of the stay application made by the defendants, is concerned, the learned Presiding Officer observed that, the order of attachment, was passed in respect of the flat belonging to the defendant NO. 3 Mr. Ramesh Desai, who alone could have filed the appeal and how it could be said that appellant Nos. 1 & 2 were aggrieved. Moreover, application made before the Recovery Officer was on the ground that the decree passed against the Company became un-executable because "connected company" M/s. Tensile Steel Ltd. had been declared sick under SICA and rehabilitation was pending. It was stated by the appellants that attachment levied was illegal. The learned Presiding Officer observed that it could not be said that just because connected Company was declared sick, the Recovery Proceedings against M/s. Key Dee Rolling Mills also stood stayed and therefore the Recovery Officer was right in rejecting the said application.

I have heard Mr. Nagori for the appellants and Mr. Satish Shetye for the respondent NO. 1 Bank. I have gone through the proceedings including the impugned order. Very same contentions, which were raised before the learned Presiding Officer, were raised before me. Having gone through the impugned order, I find myself in agreement with the reasoning given by the learned Presiding Officer in the impugned order. Application for raising attachment was itself misconceived. It is difficult to understand as to how, when a sister concern M/s. Tensile Steel Ltd. was declared sick under the SICA, Recovery Proceedings could be stayed against the present appellants M/s. Key Dee Rolling Mills & Others. Therefore, the said application was correctly rejected by the Recovery Officer and the learned Presiding Officer while deciding the appeal.

The learned Presiding Officer had expressed displeasure as to how the applicant Bank did not comply with the directions given by the Recovery Officer in its order dated 20th May, 2001. He therefore ordered that unless that order was complied with, sale of the flat, which was attached should not be done. On this, the applicant Bank's advocate submitted that all those directions contained in the order dated 20th May, 2001 passed by the Recovery Officer were complied with. Under these circumstances, I find no infirmity in the impugned order. This appeal is without any merit and deserves dismissal. Hence, following order is passed.

ORDER

Misc. Appeal No. 275/2002 is dismissed.

Appeal dismissed.