Ranjit Mukherjee vs State Bank Of India & Ors

The petitioner is aggrieved by an order dated November 21, 2016 passed by the Debt Recovery Appellate Tribunal (in short DRAT) rejecting an appeal filed by the bank against an order passed by the Debt Recovery Tribunal (in short DRT) under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act of 2002 (in short SARFAESI Act, 2002).

Learned Advocate appearing on behalf of the petitioner purchased an immovable property from the bank under the Act of 2002. The petitioner was put into possession of such immovable property.            The petitioner thereafter renovated the property at his costs and expenses. The petitioner transferred such property to his wife by a registered deed of gift.

Apparently, the borrower initiated proceeding under Section 17 of the Act of 2002. The petitioner, although a party respondent in such proceeding, was not given notice of such proceeding. DRT allowed the application under Section 17 of the Act of 2002 and directed the bank to put the borrower into possession. The bank preferred an appeal therefrom in a proceeding before DRAT. Again the petitioner was a party respondent. Again notice of DRAT proceeding was not served upon the petitioner. The petitioner subsequently learnt about the order of DRAT from the bank officers. The entire proceedings, both at the original and at the appellate stage, stand vitiated by breach of principles of natural justice, as the petitioner was not issued any notice of such proceeding. Therefore, the decision of DRT as well as DRAT should be quashed.

Learned Advocate appearing on behalf of the bank submits that, the bank was the appellant before DRAT. The bank attempted to serve the petitioner. The petitioner avoided such service. Upon the petitioner doing so, such fact was brought to the notice of DRAT. DRAT by an order dated November 21, 2016 noting that, the petitioner was avoiding service permitted the bank to effect service by substituted means through publication into two newspapers. The bank did so. Despite such publications, the petitioner did not appear in the DRAT proceeding. Therefore, he submits that, there is no infirmity in the order of DRAT requiring any intervention.

Learned Advocate appearing on behalf of the petitioner submits that, DRAT ought to have followed the procedure laid down in the Civil Procedure Code, 1908. DRAT ought to have ensured that the bank first affixed the notice of the proceeding at the last known address and thereafter undertake the process of publication. The provision of Order V of the CPC, 1908 not being followed, the process for substituted service is invalid.

The records made available to the Court establish that, the petitioner was the purchaser of an immovable property from the bank. The petitioner was put into possession subsequent to his purchase. The petitioner thereafter executed a deed of gift and transferred the property to his wife.

The borrower being aggrieved by the measures taken by the bank initiated proceeding under Section 17 of the Act of 2002 before the DRT. DRT allowed the same. Being aggrieved, the bank preferred an appeal therefrom. In the appeal, the bank attempted to serve the petitioner. Such attempt not fructifying the bank applied for substituted service and obtained the order dated November 21, 2016.

The order dated November 21, 2016 passed by the DRAT is as follows:‐

"Affidavit of service has been filed today wherein in paragraph 3 it is stated that notices have been sent by registered post with A/D and by speed post with A/D. Both the postal packets have come back with the remarks 'refused' and 'addressee has left the address' respectively. In paragraph 5 it is stated that the deponent went at the said address on 3rd October, 2016 in order to cause service of the postal packets containing a copy of the said order. Respondent No. 8 does not reside either in 10, Bhagajatin Road, P.O. & P.S. Siliguri, District Darjeeling or in 21, Bimal Sinha Sarani, Hakimpara, P.O. & P.S. Siliguri, District, though the said two houses belonged to Respondent No. 8. IN paragraph 6 it is stated that he also visited and found his family members inside. While he requested his wife, she refused the postal packet and also declined to write refusal on the said postal packets.

In the above circumstances, I direct the Appellant to serve the said Respondent by publication in two newspapers one in English and another in Vernacular language having wide circulation. Steps to serve by publication may be taken within a week."

Set out.

The bank complied with the order dated November 21, 2016. It published advertisements in the two newspapers. To my mind, the service on the petitioner stands completed so far as the DRAT proceedings are concerned. Neither DRT nor DRAT are bound by the provisions of the CPC, 1908.      They are, however, to follow the principles of the CPC, 1908. In the present case, DRAT finding that service on the petitioner could not be effected by normal mode, allowed service to be effected by substituted mode.     There is no infirmity in the order dated November 21, 2016. The petitioner being served with the notice of the appeal proceedings, it cannot be said that, the proceedings before the DRAT was without any notice and that, the petitioner was not afforded an opportunity of hearing before the DRAT.

The petitioner having chosen not to appear in the DRAT proceeding, the petitioner would not have any valid ground with regard to denial of hearing by DRAT.      So far as the original proceedings are concerned, the records made available at this stage do not establish that, the petitioner was served with such proceeding. The Court is informed that, the bank is in possession of the property concerned.

This order will not prevent the petitioner from approaching DRT or any other forum to ventilate the selfsame grievances before it, in accordance with law.

Learned Advocate appearing on behalf of the petitioner submits that, the bank should refund the purchase price.

Learned Advocate appearing on behalf of the bank makes over the pay order for the entire purchase price to the learned Advocate for the petitioner in Court.

Learned Advocate appearing on behalf of the petitioner submits that, the petitioner is entitled to interest.

The petitioner is at liberty to claim interest before the appropriate forum, in accordance with law.

Therefore, the bank having complied with the directions of the orders of the DRAT, no further interference is called for.

W.P. 2779 (W) of 2019 is disposed of without any order as to costs.

Urgent photostat certified copies of this order, if applied for, be made available to the parties upon compliance of the formalities.