Simmi Kharbanda vs Punjab National Bank

Ranjit Singh, J

The present appeal is directed against the order dated 10.7.2013 passed by the Tribunal below, whereby the prayer of the appellant to extend the time for deposit of Rs. 5 lacs, as ordered on 18.1.2013, is declined. The plea by the appellant is that she being in possession of the property by virtue of sale deed dated 11.12.2008 cannot be asked to deposit any amount and that the said property was mortgaged subsequent to the date of sale of some of part of same property in her favour.

The appellant, in fact, had filed S.A. No. 24/2013 before the Tribunal below, claiming to be the owner in possession of the property being second floor of the property bearing No. 34/14, Patel Nagar, New Delhi, measuring 100 sq. yds. The appellant claims that she is the owner of the property having purchased the same for Rs. 13 lacs vide registered sale deed dated 11.12.2008 The S.A. was filed for restraining the Bank/Court Receiver from taking physical possession of the said property, in response to the S.A., the Bank had pleaded that the appellant is a conniving party with Mr. Hitesh Kumar who has played fraud with the Bank. As per the Bank, the property in question was already mortgaged with the Bank and the claim of the appellant that she had purchased the same for Rs. 13 lacs was much below even the Circle Rate of that area fixed by the Collector. Under the circumstances, the Tribunal thought it appropriate to direct the concerned officer of the Income Tax Department to conduct an inquiry to find out if the property in question was sold as per the Circle Rate concerned or not and to file his report before the Tribunal. Till the completion of inquiry, the Tribunal below directed the parties to maintain status quo in regard to the property in question. This was hedged with a condition that the appellant would deposit a sum of Rs. 5 lacs with the respondent Bank within a period of three weeks and this amount was to be kept in no-lien interest-bearing account for the longest period till the outcome of the S.A.

The appellant could not deposit this amount within the period of three weeks as directed by the Tribunal and nearly after expiry of six months, the appellant has approached the Tribunal for grant of extension of time to deposit the sum of Rs. 5 lacs. The appellant had expressed her willingness to deposit the amount as would reveal from the opening line of the impugned order, which reads:

"The learned Counsel for the applicant submits that the applicant is depositing Rs. 5 lacs as per order dated 18.1.2013."

Thus appellant had expressed her intention to deposit this amount in unequivocal terms and had only prayed extension of time of three weeks be allowed to her on 18.1.2013 to deposit this amount vide impugned order, the Tribunal declined the request of the appellant for extension of time and accordingly the appellant has filed the present appeal.

Though the appellant had always been willing to deposit this amount before the Tribunal below, as can be seen from the impugned order as well, but in the appeal she has pleaded that she is not having good financial capacity and is not in a position to deposit this amount of Rs. 5 lacs. In the appeal the appellant has also challenged the notice dated 25.6.2013, which is termed as illegal, unlawful ab initio. The prayer in the appeal is to set aside/quash the order passed by the Tribunal below on 10.7.2013, and to set aside the step taken by the Bank under Sections 13(4) and 14 of the SARFAESI Act. Thus, the appellant has invoked the appellate jurisdiction of this Tribunal to claim the relief which is pending adjudication in SA before the Tribunal below. While challenging the order which has only decided and dealt with her prayer for extension of time to deposit the amount, the appellant has now challenged even the notices under Section 13(4) and Section 14 thus enlarging the scope of the present appeal to such an extent that relief which are yet to be considered by the Tribunal below are agitated in this appeal. Can this be done? Emphatic 'No' would be an answer to this poser.

Besides, it may also be noted that the appellant till date has not challenged the order dated 18.1.2013, whereby she was directed to deposit Rs. 5 lacs. Perhaps to wriggle herself out of this position, the appellant seems to have evoked this novel but impermissible method to challenge the measure taken under Section 13(4) of the SARFAESI Act without first getting adjudication in this regard from the Tribunal below. It cannot even be made out and it is not known as to what are the grounds of challenge raised in the S.A. Despite such glaring issue directly staring in this case, the appellant seems to have succeeded to quite an extent in her designs by making this Tribunal to pass an order on 11.7.2013 restraining the Receiver from taking possession of the property.

This appeal was filed even without filing the certified copy of the impugned order. Application for exemption from filing the certified copy was filed and the case was heard. The appellant had also filed an application under Section 18 of the Act to seek exemption from making any pre-deposit for entertaining the appeal. The appellant was able to convince this Tribunal that she is neither a borrower nor a guarantor and hence was not required to make any deposit to comply with the requirement laid down by the second proviso to Section 18(1) of the SARFAESI Act. After overcoming this hurdle of pre-deposit, the Counsel for the appellant had made submission in the appeal by stating that the appellant had moved an application for restraining the Bank and the Receiver from taking physical possession but the said application has been dismissed by the Tribunal on 10.7.2013. The submission, as projected, in my view would not reflect the correct factual matrix. It cannot be made out if it was pointed out before this Tribunal that when the order dated 18.1.2013 was passed for maintaining status quo of the property during enquiry the appellant was also directed to deposit a sum of Rs. 5 lacs. The impugned order dated 10.7.2013 was passed on an application made before the Tribunal for extension of time to make deposit of that amount. This prayer was declined vide order dated 10.7.2013. This Tribunal was made to pass an order restraining the Receiver from taking physical possession of the second floor of the property The net result is that the appellant has even not complied with the direction to deposit the amount but still has got an order without raising any challenge to the order requiring her to deposit the amount.

It appears that the appellant succeeded in urging before this Tribunal that the condition for depositing Rs. 5 lacs is linked with the interim order of status quo. In fact, the parties were directed to maintain the status quo till the completion of inquiry by Income Tax Department. The direction to deposit the amount of Rs. 5 lacs does not seem to be linked with status quo order. Primarily the Tribunal had granted status quo during the course of inquiry by Income Tax. Condition to deposit Rs. 5 lacs was addition condition required to be complied with. Necessary consequences due to non deposit was to follow. When that happened the appellant approached the Tribunal to deposit the amount which is declined. Instead, of complying with the condition or seeking time to deposit the amount, the appellant has challenged the notice of possession or proceedings under Section 14 of the SARFAESI Act, which is yet to be adjudication by the Tribunal below. This appears to be rather a clever move to raise such challenge on these grounds and thus to bypass the Tribunal where such issue are required to be raised at the first instance and have been so raised.

Still, the appellant was afforded an opportunity to comply with the condition imposed in the impugned order by making a deposit of Rs. 5 lacs. The appellant sought time to comply the directions without raising any demure. Indeed, she had prayed for extension of time to make the deposit which prayer is declined by the order impugned The obvious reason to file appeal would be that the appellant intends to make the deposit. One cannot really appreciate the game plan of the appellant who, in fact, has used these means to make a challenge to notice, etc. by evading the passing of order by the Tribunal below and thus succeeded in circumventing the Tribunal below. It was, therefore, considered imperative to direct the appellant to first comply with the direction requiring him to deposit Rs. 5 lacs. Till date the appellant has not challenged the order dated 18.1.2013 where this condition was imposed. No objection was made by the appellant and the case was adjourned to enable her to deposit the amount. Today, the appellant seems to have made a somersault. The Counsel submits that the appellant has not deposited the sum of Rs. 5 lacs. The Counsel thereafter commenced his submissions on merits of the appeal. This conduct smacks of arrogance. The appellant apparently is aware that the interim order passed this Tribunal would protect her and so word was ready to invite final order in the appeal. By this way the appellant would be able to successfully by pass the Tribunal below. The status quo order was during the inquiry proceedings but not a word is said about this inquiry. The obvious attempt is to get an adjudication on merit that too without first getting decision on the S.A. which is pending decision. It is surprising to notice that the appellant has been able to achieve her goal by fully defying the orders of the Tribunal below.

I.A. No. 14/2013 was filed on receipt of notice dated 25.6.2013 issued for taking physical possession of the property. As per the appellant, she then came to learn that the status quo order passed in her favour was also subject to the condition of deposit of Rs. 5 lacs. Otherwise, the appellant had never chosen to bother about the deposit of this amount which was the condition imposed in the impugned order. When the application came up for hearing on 10.7.2013, as already noticed, the appellant expressed her willingness to deposit this amount and prayed for extension of time. No submission was made on the aspect of illegality of the notice of possession as was issued. The Tribunal declined to extend the period for making the deposit, against which the appellant has filed the present appeal. Once the condition imposed for depositing Rs. 5 lacs, whether linked with the status quo order or not, was not complied with, some consequence were bound to follow. The appellant also chose not to challenge the said order. In this manner, she cannot now be permitted to challenge the condition so imposed in the order dated 18.1.2013 in this circuitous manner. The appellant was still given chance and opportunity to comply with the direction which, in fact, she had not challenged. After taking time, the appellant has the arrogance to plead that she be heard on merit without making any deposit. Once the appellant has not complied with the condition imposed in the impugned order that too after taking time before this Tribunal to comply with the direction, the appellant may have lost her right to be heard on merits. The appellant has not only wasted the time of this Tribunal but has been able to enjoy the interim order even after failing to comply with the condition. If the challenge raised in the S.A. is permitted to be raised in the present appeal, it may render the S.A. and the challenge made therein redundant. In my considered opinion, the present appeal primarily being against an order declining the interim prayer, which was for extension of time, the appellant cannot be permitted to enlarge the scope of challenge to seek opportunity of hearing against the notice under Section 13(4) of the Act or the notice of possession or sale. Such challenge has to be first dealt with by the Tribunal below before the appellant is heard on these issues. The nature of the present application being limited where the plea was restricted only to seek time to make deposit, the appellant cannot be permitted to enlarge the scope of the present appeal in the manner she has sought to do. Otherwise, the appellant would be under obligation and duty to comply with the direction issued by the Tribunal below against which she did not raise any challenge. This in itself would be enough to decline the prayer of the appellant to hear her on the issue of possession and sale once the appellant has been arrogant enough to disobey the direction issued by the Tribunal below. The appellant even after defying the condition imposed has been able to enjoy the benefit of the restraint status quo order over a period of a-year-and-a-half. It is, therefore, high time to put the case on track. I am, therefore, not inclined to hear the challenge raised by the appellant in the present appeal and would dismiss the same. The Tribunal below would now deal with the S.A. on some early date and the Bank would also be at liberty to proceed with the measures which have been initiated by it under the provisions of the SARFAESI Act.