Pegasus Asset Reconstruction Pvt. Ltd. vs Punjab Traders And Ors.

J.M. Malik, J

The case of the appellant/financial institution is that that the respondents/borrowers filed two Securitisation Applications before two different Courts. The first Securitisation Application was filed before Mr. A.K. Tripathi, Presiding Officer, DRT-II being S.A. No. 88/2010 titled as M/s. Shiv Associates and Another (Punjab Traders) v. M/s Pegasus Assets Reconstruction Private Ltd. The learned Trial Court declined to grant interim relief in favour of the respondents on 6.1.2011. The respondents had moved the said application through Mr. Neeraj Kumar Singh, Advocate.

Mr. Neeraj Kumar Singh, Counsel filed another Securitisation Application before DRT-III presided over by Mr. D.C. Thakur on the same day on 6.1.2011 titled as M/s. Punjab Traders and Another (Shiv Associates) v. M/s. Pegasus Assets Reconstruction Private Ltd. Before DRT-III relief was claimed in respect of one property i.e. B-142, Okhla Phase-I, New Delhi but the learned Trial Court presided over by DRT-III went on to grant relief in respect of two properties i.e. one property situated at Okhla and another property situated at Kotla Mubarakpur. The borrowers/respondents had not made any request in respect of the property situated at Kotla Mubarakpur.

During the pendency of this appeal, the parties entered into a compromise. Counsel for the appellant Mr. Shahzad Khan who was accompanied by Mr. B.R. Chatterjee, Assistant Vice-President of the appellant financial institution made a statement before the Court that the matter otherwise stood settled as the appellant/ financial institution had received the entire amount to the full satisfaction of its claim against the respondents.

The learned Counsel for the appellant Mr. Shahzad Khan vehemently argued that the borrowers have created a very awkward position by filing the similar application before the second Trial Court. He argued that the learned Presiding Officer as well as the Counsel Mr. Neeraj Kumar Singh have committed contempt of Court and, therefore, some action must be taken against them.

I have heard Mr. Neeraj Kumar Singh, Advocate. He submitted that the fault does not lie at his doors because in the application filed before the learned DRT-III he had mentioned all these facts clearly and unambiguously. He has also submitted the copy of the application. Its relevant para is reproduced as hereunder:

Moreover, as the respondent company has set in motion the provisions of Securitisation Act on the basis of having the mandate from the other secured creditor namely Kotak Mahindra Bank Ltd. in whose favour the group of Banks comprising SBT, SBBJ and BOI are said to have assigned their security interest by virtue of a Deed of Assignment. Since final order has been pronounced in the matter relating to State Bank of Travancore by the Hon'ble Tribunal, the Hon'ble Tribunal has the necessary jurisdiction to try the present appeal. Notwithstanding the same, an appeal by M/s. Shiv Associates impugning the order dated 14.12.2010 passed by the learned Court of ACMM is pending adjudication where the appellant has been impleaded as one of the parties.

Mr. D.C. Thakur, the then Presiding Officer has since retired. Some inquiry is pending against him before the Hon'ble High Court. As Mr. Shahzad Khan, learned Counsel for the appellant did not make any complaint against him regarding his integrity, therefore, no action against him is called for. If necessary, a copy of this order be produced before the Hon'ble High Court where the inquiry is pending against Mr. D.C. Thakur in case SICOM Ltd. v. Triveni Infrastructure Development Company Ltd. and Ors., W.P.(C) No. 1740/2011, which is fixed for 22.7.2011. It is crystal clear that the Presiding Officer had no regards for the legal/judicial ethics. When the case was pending and decided by another Judge, the other Presiding Officer should not have entertained the application on the same cause of action. It is surprising to note that Mr. D.C. Thakur went beyond the pale of judicial ethics and granted the relief in that case where the other Presiding Officer had refused to grant the same. I hereby direct all the DRTs working under this Appellate Tribunal to follow the procedure detailed below.

First of all the case must go to the Registrar of the Court. The Registrar of the Court will decide the question of Court fee, maintainability and questions involving limitation. The Registrar must give number to the SA. In this particular case no number was given by the Court of Mr. D.C. Thakur. It appears that the Securitisation Application was put up before the learned DRT directly without intervention of the Registrar. This is a method, which has no sanction of law. This is creation of Mr. D.C. Thakur himself. The Registrars are further directed to get an affidavit from the litigants to the effect that no other applications have been filed in any other Courts. The Registrar would act in accordance with law and raise the objections which may either be removed by the litigant or may be finally decided by the learned Trial Court as required under both the Acts and Rules. If there is an emergency and the litigant is compelled to place the application before the Presiding Officer directly, the Presiding Officer will record reasons for entertaining the application directly. In case Registrar is not available, the Presiding Officer would appoint another officer in his place for the time being.

Rule 5 of the Debts Recovery Tribunal (Procedure) Rules, 1993 is reproduced as hereunder:

Presentation and scrutiny of applications--

(1) The Registrar, or, as the case may be, the officer authorised by him, shall endorse on every application the date on which it is presented or deemed to have been presented under rule 4 and shall sign endorsement.

(2) If, on scrutiny, the application is found to be in order, it shall be duly registered and given a serial number.

(3) If the application, on scrutiny, is found to be defective and the defect noticed is formal in nature, the Registrar may allow the party to rectify the same in his presence and if the said defect is not formal in nature, the Registrar may allow the applicant such time to rectify the defect as he may deem fit.

(4) If the concerned applicant fails to rectify the defect within the time allowed in Sub-rule (3), the Registrar may be order and for reasons to be recorded in writing, decline to register the application.

(5) An appeal against the order of Registrar under Sub-rule (4) shall be made within 15 days of the making of such order to the Presiding Officer concerned in chamber whose decision thereon shall be final.

All the DRTs are directed to comply with this rule strictly.

Now I turn to the case of Mr. Neeraj Kumar Singh. He himself argued that the case by DRT-II was decided in the early hour and according to him DRT-III heard him at about 6.30 p.m. Although, Mr. Neeraj Kumar Singh did not suppress the facts, yet, it must be borne in mind that he was not only working as an Advocate of his client but also working as an officer of the Court. Being an officer of the Court he should not have moved the second application, even if he didn't know what was the outcome of first application. He should have waited for the same and should not have moved the second application. The action on his part is against legal ethics. It does not behave on the part of an Advocate to approach the different Courts for same cause of action if he is not getting or is not likely to get the relief from the first Court. He also did not give the full details of the first application in the second application moved before DRT-III. I hereby warn Mr. Neeraj Kumar Singh, Advocate to be careful in future. Since the main fault lies with Mr. D.C. Thakur, therefore, I propose no further action against him.

The appeal stands disposed of.

Copies of this order be furnished to the parties as per law. Copies of this order be also sent to all DRTs, Mr. D.C. Thakur and Mr. Neeraj Kumar Singh, Advocate forthwith.