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Judgment
R. S. Kulhari, Chairperson
The present appeal has been preferred under section 18 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short "the SARFAESI Act") against the order dated 19.02.2016 passed by the Tribunal below, whereby the S.A. filed by the appellant was dismissed on the ground of concealment of facts.
The appellant availed housing loan facility from the respondent-Bank. He committed default in repayment, hence the Bank issued demand notice dated 22.06.2007 followed by the possession notice dated 23.01.2012. The Bank also obtained the order dated 28.09.2012 from Chief Metropolitan Magistrate, Kanpur under section 14 of the SARFAESI Act. The appellant filed Writ Petition No.
56084/2012 before the Hon'ble Allahabad High Court, which was dismissed on 19.10.2012 with liberty to file an application under section 17 of the SARFAESI Act. The appellant, instead of filing the S.A. filed Writ Petition No. 57389/2012 before the Hon'ble D.B., which was dismissed on 07.11.2012.
Thereafter, the appellant filed the present S.A. on 22.11.2012 challenging the possession notice and C.M.M. Kanpur's order. In the meantime, the Bank had auctioned the property on 14.08.2012, which was also challenged by way of amendment. The Bank in its reply before the DRT while defending its action took an objection about the concealment of the fact of writ petitions filed by the appellant. The Tribunal below without going into the merits of the case, including the limitation aspect dismissed the S.A. on the ground of concealment of fact of filing of the writ petitions. Being aggrieved by the said order, the appellant has filed the present appeal.
The notices were sent to the respondents. Since the auction purchaser sold the property to the third party, hence the impleadment application was also allowed incorporating subsequent purchaser as the respondent no. 4. The respondent-Bank was represented on some dates, however none of the other respondents have ever appeared nor reply has been filed by any of the respondents nor anybody has been appearing for so many occasions. Therefore, the arguments of the learned counsel for the appellant were heard.
Learned counsel for the appellant submitted that the appellant has categorically mentioned in the limitation clause of the S.A. about the dismissal of the writ petitions and had also filed copy of the order of the Hon'ble High Court along with the said S.A. However, this fact could not be mentioned in the pleading of the S.A., which cannot be attributed to the appellant, because the pleadings are prepared on the advice of the counsel. Further non-mentioning of this fact was not material for decision of the S.A. nor it was any intentional act of the appellant, which may disentitle the S.A.-applicant to be heard on merit. By declining the S.A. only on the ground of concealment of fact has caused grave injustice to the appellant. There is substantial irregularity in the proceedings, therefore, the appeal be allowed and the Tribunal below be directed to hear the matter on merits. In support of the contention, learned counsel has relied upon the judgment passed by the Hon'ble Supreme Court in Arunima Baruah Vs. Union of India and others, (2007) 6 Supreme Court Cases 120.
Having heard the learned counsel for the appellant and on perusal of the record, it is apparent that the S.A. was dismissed only on the ground of concealment of the fact and no finding has been recorded with regard to the limitation and merits of the case. Indisputably, the appellant challenged the possession notice before the Hon'ble High Court by way of writ petition, which was dismissed on 19.10.2012 with a liberty to file the S.A. Another writ petition challenging the order of the Hon'ble High Court, was also dismissed on 07.11.2012 and thereafter the present S.A. was filed before the DRT. In limitation clause of the S.A., the appellant has mentioned that the S.A. was "within time from the order dated 19.10.2012 passed by the Hon'ble High Court". The copy of the dismissal of the writ petition was also annexed with the S.A. as recorded by the Tribunal below in its impugned judgment. Thus, it cannot be said that there was any deliberate or intentional concealment of the fact of filing the writ petition with a view to take any undue advantage or to misrepresent the Tribunal. The Hon'ble Supreme Court in Arunima Baruah Vs. Union of India (Supra) has held "that for refusal of exercising the discretion, the suppression must be of material fact. The term material fact depends on the facts and circumstances of the case and such fact be relevant material for grant or denial of relief." In that case also, the fact of filing the civil suit and withdrawal thereof was not mentioned in the writ petition, but it was not found to be suppression of material fact.
In the instant case, firstly the appellant has not intentionally or deliberately suppressed the mentioning of filing of writ petition. Therefore, it cannot be inferred that the concealment was made with a view to take any undue advantage, particularly when it has been mentioned in limitation clause and enclosed copy of the judgment of the Hon'ble High Court, whereby liberty was granted to him.
Secondly, the alleged concealment cannot be treated as suppression of material fact, because no effective order was passed in the writ petitions in relation to the proceedings of the bank, which may have any bearing on the decision of the case to be decided by the DRT. Thus, the principle laid down by the Hon'ble Supreme Court in the above case, is squarely applicable on the facts of the case at hand.
The Tribunal below has not considered these aspects in right perspective, therefore, the order impugned is liable to be set aside.
Accordingly, the appeal is allowed and the order dated 19.02.2016 is set aside. The matter is remanded back to the Tribunal below to decide it afresh including the issue of limitation in accordance with law after affording opportunity of hearing to all the concerned parties.
The parties shall appear before the Tribunal on 01.11.2021.
A copy of this judgment be sent to the parties as well as the DRT concerned and be also uploaded on the e-DRT portal.