Punjab National Bank vs Pure Petroleum Pvt. Ltd. And Ors.

Ranjit Singh, J

This is yet another instance where the Debts Recovery Tribunal-I at Chandigarh has passed an interim order upon change of Counsel by the respondent herein. This has been noticed as trend with the Tribunal below in far too many cases to leave any comfortable feeling. The presence of this Counsel Mr. Dewan Sharma has invariably resulted in favourable order to the party even when earlier such interim orders were not forthcoming. In cases where recovery of huge amounts are at stake, even a little push is enough to derail the entire recovery. Tribunals have to be very particular while dealing with the cases to avoid conveying any wrong impression. Be that as it may, perusal of the facts in this case would reveal that M/s. Pure Petroleum & Ors. filed SA to challenge the action initiated by the Bank under the SARFAESI Act. This SA, which was filed through Counsel Mr. Atul Sharma, came up for hearing on interim relief on 17th September, 2012. The Tribunal below did not see any merit in the application for granting ad interim relief. However, in order to expedite the recovery, the respondent was directed to deposit a sum of Rs. 5 lacs within one week and thus ordered status quo to be maintained by the parties.

The respondents then filed IA seeking direction to the Bank to consider the OTS proposal and for staying e-auction proceedings. The Tribunal found that the offer made by the respondent for Rs. 25 lacs was not acceptable when the buyer of the property in question had offered a sum of Rs. 45.10 lacs. The Tribunal noticed that the respondent would not suffer any prejudice if the property is sold for higher price as he himself was proposing sale of the property to M/s. Anil & Co. for Rs. 25 lacs. The relief claimed accordingly in this IA was declined on 11th April, 2013.

A few days thereafter another application (IA No. 448 of 2013) was filed for preponing the hearing which was to be held on 22nd July, 2013. The Tribunal below allowed this application and heard another IA No. 449 of 2013 on 29th April, 2013. This application was filed seeking declaration that the sale of the property would comprise in leasehold rights in industrial land and building. It was urged that sale of the property comprising in lease hold rights was sham and bogus and prayer was for setting aside quashing the sale as well as for stay of confirmation of sale in favour of the auction purchaser. The prayer was also for redemption of the mortgage facility. The sale was for a sum of Rs. 54 lacs in favour of the perspective buyer.

The Tribunal below issued notice on this application and listed for hearing on 1st May, 2013. Thereafter, this application was listed on 20th May, 2013 when Mr. Dewan Sharma appeared on behalf of the applicant (respondent herein) and filed his Power of Attorney. Changed Counsel also filed one IA for preponement of the hearing which was allowed. The respondent filed another application for amendment of the SA. Notice was issued and got accepted. The Bank was required to file reply within one week. In this manner, the Tribunal below issued direction for maintaining status quo by the parties even when it was stated that the auction purchaser has taken possession of the property in question though the Bank had not handed over the possession. The Bank has therefore made grievance against this order.

Notice in this appeal was issued. The respondents have filed reply. The Counsel for the respondent has rather agitatingly made submission while opposing the appeal. The SA is still pending.

Grievance of the Bank is that the Tribunal below has passed the order of status quo without giving proper opportunity to the Bank to file reply to the amended SA. Submission is that this order is passed by completely overlooking the fact that the amendment of SA had been sought on the same date and it was yet to be allowed. Prayer for status quo was contained in the amended SA which was yet to be allowed. Thus the prayer would amount to allowing the amendment without affording opportunity to the appellant.

The manner in which the Tribunal below has passed the impugned order in itself may tend to convey that the presence of the Counsel may be the reason for passing this order. One may be left guessing as to what was the hurry to pass interim order before even allowing the amendment of SA. The respondent, however, still would plead that the present appeal was liable to be dismissed on ground of suppressio veri or suggestio falsi. The Counsel would point out that physical possession was taken forcibly and illegally by the Bank in connivance with the auction purchaser. In order to cover this illegal act, the Bank has now set up this plea contrary to the facts that the auction purchaser was already a tenant in the premises. The Counsel would refer to the lease agreement which he has placed on record to show that the auction purchaser Shri Punit Batra had signed as one of the witnesses to the lease deed and is brother-in-law of the tenant. Reference is also made to the report of the Local Commissioner to show that the premises were already in use and occupation of the respondent before the sale by the appellant. All these issues are secondary in the light of the position that the prayer contained in the amended SA is allowed before allowing the amendment. The question as on date to be considered is whether the Tribunal below could justifiably order status quo in this background. It is not for this Tribunal to say that such an order could have been passed or not. The question here is not of decision as such, but decision-making process. If the decision-making process is found to be tainted then no justification may be enough to sustain such order. I need not even observe that this Tribunal has routinely come across different orders where the Tribunal below had been passing various orders favouring the party whenever this particular Counsel has appeared either by change as Counsel or as a Counsel at the time of filing the case. In any case the impugned order cannot otherwise be sustained in the background as noticed above. The same is set aside. The matter is remanded back to the Tribunal below to consider the prayer afresh and pass any appropriate order in accordance with law.

The appeal is accordingly allowed in the above terms.