Shree Dewan Steel (India) Ltd. vs Central Bank of India

Permod Kohli, J.—Invoking review jurisdiction of this Court under Order 47, Rule 1 of the Code of Civil Procedure, the petitioners have challenged the order dated 11.9.2008 passed by this Court in Company Application No. 612 of 2008 in Company Application No. 631 of 2006. The order reads as under:

It is admitted case of the parties that four Kanals referred to in his application is not the property of the company in liquidation. Hence no direction can be issued by the Company court. Application rejected.

This order was challenged in Company Appeal No. 18 of 2008 before Hon''ble Division Bench of this Court. The Company Appeal came to be disposed of vide order dated 21.102008 with the following observation:

Learned counsel for the appellant has invited this Court''s attention to the order dated 11.9.2008 and vehemently contended that there is a mistake apparent on the face of the record namely, that the four kanal land referred to in the application filed by the appellant-petitioner was in fact owned by the company in liquidation.

If the assertion made by the learned Counsel for the appellant is correct it is obvious that the appellant has a remedy under the provisions of Order 47 Rule 1 of the Code of Civil Procedure. As such, we are of the view mat in case the appellant is assailing the correctness of the factual position taken into consideration in the order dated 11 .9.2008, it would be rather appropriate for the appellant to file a review petition.

The instant appeal is accordingly disposed of with liberty to the appellant to file an application under Order 47 Rule 1 of the Code of Civil Procedure.

Disposed of in the aforesaid terms.

It is under these circumstances, present petition has been filed. Notice of this petition was served. None of the parties have chosen to file any reply/objections.

4.I have heard learned Counsel for the parties at length. Order 47 of the CPC provides for review on the grounds indicated in Rule 1 thereof, which reads as under:

Application for review of judgment.- (1) Any person considering himself aggrieved

(a) by a decree or order from which an appeal is allowed, but from which no appeal has been preferred;

(b) by a decree or order from which no appeal is allowed; or

(c) by a decision on a reference from a Court of Small Causes, and who, from the discovery of new and important matter or evidence which, after the exercise of due diligence, was not within his knowledge or could not be produced by him at the time when the decree was passed or order made, or on account of some mistake or error apparent on the face of the record, or for any other sufficient reason, desires to obtain a review of the decree passed for order made against him, may apply for a review of judgment to the court which passed the decree or made the order.

The review of an order or decree is thus permissible on the grounds indicated in Rule 1 which inter alia includes:

(i) discovery of new and important matter or evidence;

(ii) on account of some mistake or error apparent on the face of the record;

(iii) for any other sufficient reasons;

In the present case, the review is sought on the ground of error apparent on the face of the record. From the perusal of the impugned order dated 11.9.2008, it is evident that the order was passed on the basis of the admission of the counsel for the review petitioner. In para 7 of the petition, it is mentioned that there is an error apparent on the face of the record with respect to admission part. It is not the case of the petitioner that no admission was made at the time of passing of the order rather it is stated that there is mistake in recording the admission. The petitioners have relied upon Jamabandi for the year 2003-04 and various other documents in the present review petition. Mr. Kanwaljit Singh, Senior Advocate appearing for the petitioners has vehemently argued that the 4 kanals of land belongs to the company-in-liquidation and has been encroached upon by Avtar Singh and sons. While giving the genesis of the problem, he has stated that 27 kanals 5 marlas land was purchased by the company-in-liquidation from the erstwhile owners, 9 kanals odd were purchased by Naresh Chatley, Proprietor Chatley Steels. Out of these 9 kanals, 4 Kanals of land was put to auction by civil Court in the year 1999 and one Bimal Kakaria purchased the same. He sold these 4 kanals to Sachin Jain who further sold to Avtar Singh and sons. According to Mr. Kanwaljit Singh while taking over the property purchased in the auction, 4 kanals of land belonging to the Company Shree Dewan Steel (India) Ltd. was taken over which is the front portion of the property. He has further referred to order dated 31.8.2006 passed in C.A. No. 50 of 2003. This order was passed on the application of the Official Liquidator. The Official Liquidator made an application u/s 446 of the Companies Act on the allegation that the property in possession of the Official Liquidator has been encroached upon by breaking open the lock. It was further alleged that respondent No. 1 in the said application with the help of respondent No. 2 trespassed into the premises of the company-in-liquidation which had already been sealed. The respondents, however, pleaded that 4 kanals of land owned by M/s. Chatley Steel, Mandi Gobindgarh was purchased in public auction on 12.11.1999 in execution of decree dated 20.7.1998 passed in Civil Suit No. 286 of 28.7.1997. This sale has been confirmed by the Executing Court and on the basis of sale certificate dated 23.2.2000, 4 Kanals of land was handed over to the auction-purchaser. During the proceedings of the said application, Central Bank of India, secured creditor of the company-in-liquidation, with whom the land of the company measuring 27 kanals 5 marlas had been mortgaged was summoned. The Central Bank of India placed on record the site plan of the mortgaged property and on the basis of the aforesaid evidence, this Court found that 4 kanals land purchased by the auction-purchaser was different than the property of the company-in-liquidation (land measuring 27 Kanals and 5 marlas) which was available at site as shown in the site plan produced by the Bank and accordingly, the application was dismissed vide order dated 31.8.2006. Reference is made to another order dated 1.3.2007 passed by this Court in C.A. No. 631 and 641 of 2006 and 127 of 2007. These applications were filed objecting the sale of the property of the company-in-liquidation. In this application, the dispute was raised regarding sale of 4 kanals of land by the Civil Court. This Court has noticed entries in the revenue record. Based upon these entries, it has been contended by Mr. Kanwaljit Singh that the property of the Naresh Chatley sold by the Civil Court is from different khasra numbers whereas the property of the company-in-liquidation which was initially M/s Kanav Steel Pvt. Ltd. and later became Shree Dewan Steel Ltd. is from different khasra numbers. Another issue raised was that the sale of specific portions of 4 kanals by Naresh Chatley on the basis of Civil Court decree is invalid without the leave of the company court as Naresh Chatley had purchased the 4 kanals from the joint holding and so is the case with the company-in-liquidation which also purchased 27 kanals and 5 marlas from the same owner. Navtej Singh. On consideration of the issue, this Court observed that sale of land by Navtej Singh, the erstwhile owner, to three different entities including the company-in-liquidation Naresh Chatley, shall be deemed to be a share of the suit land and the specific portion can be obtained in pursuant of partition of such joint land.

On the basis of the aforesaid observations, it has been argued that the 4 kanals of land in dispute, in fact belongs to the company and is subject to partition.

Mr. Chetan Mittal, learned senior counsel appearing for the auction-purchaser has drawn my attention to the order dated 1.3.2007, referred to hereinabove, which became subject matter in Company Appeal No. 16 of 2007. Appeal was dismissed by a Division Bench of this Court on 05.12.2007 {[2008]141 CompCos 786. Even after dismissal of the aforesaid appeal, a review petition was filed which was dismissed on 31.7.2008 and an appeal preferred against that also resulted in dismissal vide order dated 17.7.2008. From the above, it has emerged that earlier attempts to dispute not only the sale of 4 kanals by the Chatley Steels but also its identity failed. This Court rejected the contention, though an observation was made that if it was a part of the joint holding, partition of the same can be secured.

This factual background has been noticed by me on the basis of the submission made by the parties. However, the fact remains that the Review Court has the limited jurisdiction. Petitioners have not invoked the review jurisdiction on the ground of discovery of new facts, though some revenue record has been produced and submissions made on that basis. However, these arguments cannot be looked into as no basis for production of these documents has been laid. It is not the case of the petitioner that these documents have now been discovered and despite due diligence, these documents could not be produced earlier. The only ground urged is the mistake or error apparent on the face of the record. Review on this ground is permissible if the error can be detected or found from the impugned judgment without looking to any other material. In the present case, petitioners have tried to rely upon various other documents not forming part of the record nor noticed in the impugned order, as the impugned order was based upon admission of learned Counsel which fact has not been disputed. The scope of review has been considered by the Hon''ble Apex Court in case of State of West Bengal and Ors. v. Kamal Sengupta and Anr. A.I.R 2008 SCW 4294 wherein following observation have been made:

...The term ''mistake or error apparent'' by its very connotation signifies an error which is evident per se from the record of the case and does not require detailed examination, scrutiny and elucidation either of the facts or the legal position. If an error is not self-evident and detection thereof requires long debate and process of reasoning, it cannot be treated as an error apparent on the face of the record for the purpose of Order 47, Rule 1 CPC or Section 22(3)(f) of the Act. To put it differently an order or decision or judgment cannot be corrected merely because it is erroneous in law or on the ground that a different view could have been taken by the Court/Tribunal on a point of fact or law. In any case, while exercising the power of review, the concerned Court/Tribunal cannot set in appeal over its judgment/decision....

The principles which can be culled out from the above noted judgments are:

(i) The power of the Tribunal to review its order/decision u/s 22 of the Act is akin/analogous to the power of a Civil Court u/s 114 read with Order 47, Rule 1 of C.P.C.

(ii) The Tribunal can review its decision on either of the grounds enumerated in Order 47, Rule 1 and do not otherwise.

(iii) The expression any other sufficient reason appearing in Order 47, Rule 1 has to be interpreted in the light of other specified grounds.

(iv) An error which is not self-evident and which can be discovered by a long process of reasoning, cannot be treated as an error apparent on the face of record justifying exercise of power u/s 22(3)(f).

(v) An erroneous order/decision cannot be corrected in the guise of exercise of power of review.

(vi) A decision/order cannot be reviewed u/s 22(3)(f) on the basis of subsequent decision/judgment of a coordinate or larger Bench of the Tribunal or of a superior court.

(vii) While considering an application for review, the Tribunal must confine its adjudication with reference to material which was available at the time of initial decision. The happening of some subsequent event or development cannot be taken note of for declaring the initial order/decision as vitiated by an error apparent.

(viii) Mere discovery of new or important matter or evidence is not sufficient ground for review. The party seeking review has also to show that such matter or evidence was not within its knowledge and even after the exercise of due diligence, the same could not be produced before the Court/Tribunal earlier.

In the totality of the circumstances, there is no merit in this application. Application dismissed accordingly.