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Judgment
P.K. Bhasin, J
The appellant Bank is aggrieved by the perfunctory order dated 4th March, 2015 passed by Shri Ashish Kalia, the then Presiding Officer of Debts Recovery Tribunal-III, Delhi ('DRT' in short) while disposing of Securitisation Application No. 445/2008 (SA) filed by the respondent No. 1 herein under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short 'SARFAESI Act') when his residential property in Indirapuram, Ghaziabad was in danger of being auctioned by the appellant Bank to recover its money which it had advanced as loan on different dates in the year 2006 to respondent 3 herein, a proprietorship Firm of respondent No. 2, and to secure which loan respondent No. 2 had mortgaged with the Bank his property in Indirapuram, Ghaziabad and which the respondent No. 1 herein was claiming to have purchased from respondent No. 2 in the year 2008. The impugned order is re-produced below:
"1. The present securitisation application has been filed by the third party applicant against the action of the respondent Bank initiated under the SARFAESI Act, 2002 qua the property bearing flat No. GK-IV/15, Gyankhand, Indirapuram, Ghaziabad (U.P.) (hereinafter the property in question).
The brief facts of the case are that the applicants are claiming as the bona fide purchaser through registered sale deed dated 17.4.2008 and since that enjoying the possession of the property in question.
The applicant has shown the prior original lease deed dated 18.2.2006, executed by Ghaziabad Development Authority in favour of Shri Sanjeev Singh (who is now respondent No. 2 in this appeal) from whom the present applicant has purchased the property in question for a sale consideration of Rs. 27,21,000/- out of which a sum of Rs. 21,55,000 was paid and balance sum of Rs. 6,66,000/- is to pay to the defendant No. 2 on supplying the original documents of the said flat to the applicant which as per the representations of the defendant No. 2 had been misplaced in his house.
It is further submitted that applicant became suspicious when the original documents were not supplied by the defendant No. 2 as per his assurances and promises to the applicant towards finalisation of the sale transaction. On enquiry it was found that no objection received by the defendant No. 2 from GDA was a forged and fabricated document.
Thereafter, the applicant came across the public notice published by the defendant No. 1 Bank (which is now the appellant herein) wherein it was stated that the defendant No. 2 and his firm (respondent No. 3 in this appeal) are liable to pay the said Bank a sum of Rs. 28,06,238/- and the property in question was mortgaged with the defendant No. 1 Bank.
On perusal of records it is observed that the learned Predecessor of this Tribunal has already passed the order on 7.6.2010 wherein the applicant was directed to deposit another sum of Rs. 15.00 lacs together with simple, reducing balance based interest @ 10% to be imposed upon the NPA amount. The order dated 7.6.2010 is reproduced below:
"If Shri Rajan Jha, the petitioner is directed to deposit with the Bank another sum of rupees fifteen lacs together with the simple, reducing balance based interest at the rate of 10% to be imposed upon the NPA amount as arrived at by the Bank in connection with the cash credit, the term loan sanctioned by the Bank on March 3, 2006, the Bank would not be looser at this juncture because the residential flat No. 15, in Gyan Khand IV (GK-IV/15), Indira Puram, Ghaziabad, U.P. which the Bank has at the paragraph No. 5.d Page 7 accepted and described as the flat to be used by the middle income group..........."
In view of the above, this Tribunal is not convinced to interfere in the order passed by learned Predecessor of this Tribunal and hence nothing survives in the present S.A. and the same is disposed of.
File be consigned to record.
Sd/-
(Ashish Kalia)
Presiding Officer
DRT-III, Delhi
Pronounced in open Court
Dated 4.3.2015"
From the said final order of the DRT as well as the record of the DRT in respect of S.A. No. 445/2008 what emerges is that on different dates in the year 2006 the appellant Bank had advanced cash credit and term loan facilities to respondent No. 3 firm of which respondent No. 2 was the sole proprietor, and thereafter these respondents failed to repay the loan money to the Bank and their amount was classified as Non Performing Asset. (NPA) in May, 2008 and then a notice dated 13th June, 2008 was given to the respondent No. 3 under Section 13(2) of SARFAESI demanding Rs. 28,06,238/- plus interest and upon its failure to clear the dues the Bank took recourse to its remedies under Sections 13(4) and 14 of the SARFAESI Act to recover its money by putting to sale the mortgaged property of the borrower. Then came to be filed S.A. No. 445/2008 by respondent No. 1 herein before the DRT-III, Delhi in which he claimed that he had purchased the mortgaged property from respondent No. 2 herein, which was a leasehold property of Ghaziabad Development Authority and leased to respondent No. 2 herein the year 2008 but at the time of selling the property to him the respondent No. 2 had not disclosed that it was mortgaged with the appellant Bank and regarding the original title deed/lease deed in his favour he had represented that it had been misplaced and will be given to him (respondent No. 1). It was also the case of the respondent No. 1 that the sale price of the property in question was fixed in the sale deed at Rs. 27,21,000/- but only a sum of Rs. 21,55,000/- was paid to respondent No. 2 since original lease deed was not available with him at the time and it was agreed that balance amount of Rs. 6,66,000/- was to be paid to vendor at the time handing over of original lease deed to the appellant, but the same was never delivered and not only that, the appellant had come to know that even the NOC purporting to have been issued by Ghaziabad Development Authority given by vendor was found to be forged. However, subsequently the respondent No. 1 came to know that he had been defrauded by respondent No. 2 Sanjeev Singh and the Bank was threatening to sell the property which Sanjeev Singh had sold to him without disclosing that the same was already mortgaged with the appellant Bank.
The appellant Bank had contested the S.A. inter alia on the grounds that the S.A. was a collusive step of the applicant (respondent No. 1 herein) and the borrowers (respondent Nos. 2 and 3 herein) aimed at delaying the recovery of Bank's dues and that the alleged sale of the mortgaged property by the mortgagor Sanjeev Singh (respondent No. 2 herein) in favour of the Security Applicant (respondent No. 1 herein) in any case had no effect on the Bank's right over that property as a prior mortgagee.
During the pendency of the S.A. the DRT had passed the following interim order on 7.6.2010, which is referred to and relied upon by the learned Presiding Officer in the above quoted final order also:
"The petitioner has acquired the Bank's interest in the secured asset; the same petitioner has deposited with the Bank a sum of Rupees five lacs not as the borrower; but as the third party. The Bank's real borrowers have not made their appearance and have not disclosed anything reliable to the Bank so that its recovery can be cased. The facts and materials collected directly by this Tribunal sufficiently indicate the interplay between the allegation and the counter allegation to be raised by the Bank and the petitioner. The property which has been acquired by the petitioner has been the sale source of the recovery of the Bank. The present market value of the property is not so much attractive to the Bank if the property is approached from the prudent man's angle.
If Shri Rajan Jha, the petitioner is directed to deposit with the Bank another sum of Rupees fifteen lacs together with the simple, reducing balance based interest at the rate of 10% to be imposed upon the NPA amount as arrived at by the Bank in connection with the cash credit, the term loan sanctioned by the Bank on March 3, 2006, the Bank would not be looser at this juncture because the residential flat No. 15, in Gyan Khand IV (GK-IV/15), Indira Puram, Ghaziabad U.P. which the Bank has at the paragraph No. 5,d Page 7 accepted and described as the flat to be used by the middle income group. The property has also been in the outskirt of Delhi, the property has also been acquired by Shri Sanjeev Singh whom this Tribunal has personally met in exercise of the power given under Rule 18 of Order XVIII of the First Schedule to the Code of Civil Procedure, 1908 on Saturday, May 23, 2009 on which day it has been assured by Shri Singh of his appearance before this Tribunal. His proprietorship concern named M/s. A.S. Services and Solutions has been out of existence; Shri Sanjeev Singh has also been found that day working under another person; that day it has also met the close relatives of Shri Singh. The deposit by Shri Rajan Jha the above amount along with the above interest shall certainly ensure the Banks's immediate recovery without any thorough trial, but not to the maximum extent.
This Tribunal intends to have the Bank's view on the above factors that have emerged before itself for the reason of arriving at the above amount. Shri U.N. Singh's claim that Shri Singh, the learned Advocate appointed by this Tribunal as the special officer of itself, the Bank's officials, the petitioner have also visited the places of Shri Sanjay Singh to comply with the Tribunal's order, but without any success cannot be neglected in any manner.
Shri Anil Mittal, the present Assistant General Manager of the Bank, Shri Sanjay Dubey, the law Manager, Shri Rajan Jha, the petitioner shall appear on the next date for the purpose of reconciliation to be conducted in between the Bank and the petitioner himself.
With the above direction, let Tuesday, June 15, 2010 be fixed as the next day and date for hearing.
Sd/-
(D.C. Thakur)
Presiding Officer
DRT-III, Delhi"
It would thus be seen that the learned Presiding Officer of DRT who had disposed of the S.A. finally had simply relied upon the order dated 7.6.2010, passed by his predecessor at an interim stage and which, it fact, was not even an order giving any interim relief against the sale of the mortgaged property. It was only a casual view of the then Presiding Officer that, that way the interest of the Bank could well be taken care of particularly when the borrower/mortgagor was not even appearing in the matter to contest the applicant's petition under Section 17(1) and without discussing the grounds of challenge taken by the Security Applicant (respondent No. 1 herein) and the defence of the defendant Bank (appellant herein) as well as the evidence adduced in the matter had set at naught the action of the appellant Bank initiated under the SARFAESI Act for the recovery of its dues to the tune of over thirty lacs.
In fact, the learned Counsel for the appellant Bank had informed this Tribunal at the time of first ex parte consideration of the appeal on 8.6.2015 that even the order dated 7.6.2010 was never complied with by the security applicant (respondent No. 1 herein) and part payment of Rs. 25 lacs only had been received by the Bank only on 20.3.2015.
There was no representation of the respondent No. 1 in this appeal at the time of final hearing on 4.11.2016 though his Counsel had earlier been appearing in the matter on some dates. Other two respondents, who are the borrower Firm and its proprietor Sanjeev Singh were served by way of publication but they did not enter appearance in the appeal.
The Presiding Officer of the DRT was supposed to examine the strength of the case of respondent No. 1 hereinafter noticing the defence of the Bank and the flaws in the Bank's steps taken, firstly to declare applicant's account as a Non Performing Asset (NPA) and then its decision to have recourse to Section 13(4) and Section 14 of the SARFAESI Act and only if some deficiency in those steps had been established by the Security Applicant any relief could be given to him. The Presiding Officer of the DRT adopted a short-cut route and gave final relief to the Security Applicant. The Presiding Officer should have at least considered the objections of the Bank that the S.A. was a collusive action of the Security Applicant and the borrower/mortgagor. The Presiding Officer also did not bother to examine the legal objection of the Bank, which obviously was based on Section 48 of the Transfer of Property Act, that even if the Security Applicant had purchased the property in question from the borrower that transaction could not have vitiated the action taken by the Bank under SARFAESI Act to recover its money by selling the property in question, which had been mortgaged in its favour by the borrower much prior to its alleged sale by the borrower in favour of the Security Applicant. The slipshod manner in which the Presiding Officer had disposed of the S.A. can under no circumstances be approved of by this Tribunal and leaves much to be desired. The way the S.A. was disposed of shows that the Presiding Officer was of the view that there was no role of the Bank to play in this legal battle and he was simply to give some relief to the Security Applicant because he was a victim of the fraud allegedly committed upon him by the Bank's borrower in selling to him the property which was already mortgaged with the Bank and police complaint had also been lodged against the borrower and since the police could not come to his rescue the DRT at least should come to his help.
The Hon'ble Supreme Court in Swaran Lata Ghosh v. H.K. Banerjee, 1969 (SLT Soft) 253 : (1969) 1 SCC 709, indicated that adjudication by a reasoned judgment of the dispute upon a finding on the facts in controversy and application of the law to the facts found, are essential attributes of a judicial trial. The relevant observations are as under:
"6. Trial of a civil dispute in Court is intended to achieve, according to law and the procedure of the Court, a judicial determination between the contesting parties of the matter in controversy. Opportunity to the parties interested in the dispute to present their respective cases on questions of law as well as fact, ascertainment of facts by means of evidence tendered by the parties, and adjudication by a reasoned judgment of the dispute upon a finding on the facts in controversy and application of the law to the facts found, are essential attributes of a judicial trial. In a judicial trial, the Judge not only must reach a conclusion which he regards as just, but, unless otherwise permitted, by the practice of the Court or by law, he must record the ultimate mental process leading from the dispute to its solution. A judicial determination of a disputed claim where substantial questions of law or fact arise is satisfactorily reached, only if it be supported by the most cogent reasons that suggest themselves to the Judge a mere order deciding the matter in dispute not supported by reasons is no judgment at all. Recording of reasons in support of a decision of a disputed claim serves more purposes than one. It is intended to ensure that the decision is not the result of whim or fancy, but of a judicial approach to the matter in contest, it is also intended to ensure adjudication of the matter according to law and the procedure established by law. A party to the dispute is ordinarily entitled to know the grounds on which the Court has decided against him, and more so, when the judgment is subject to appeal. The Appellate Court will then have adequate material on which it may determine whether the facts properly ascertained, the law has been correctly applied and the resultant decision is just."
In another judgment of the Hon'ble Supreme Court in State of Punjab v. Bhag Singh, I (2004) SLT 89 : (2004) 1 SCC 547, it was observed that:
"6.....Reasons are live links between the mind of the decision-taker to the controversy in question and the decision or conclusion arrived at. Reasons substitute subjectivity by objectivity. The emphasis on recording reasons is that if the decision reveals the inscrutable face of the sphinx, it can, by its silence, render it virtually impossible for the Courts to perform their appellate function or exercise the power of judicial review in adjudging the validity of the decision. Right to reasons is an indispensable part of a sound judicial system, reasons at least sufficient to indicate an application of mind to the matter before Court. Another rationale is that the affected party can know why the decision has gone against him. One of the salutary requirements of natural justice is spelling out reasons for the order made, in other words, a speaking-out. The inscrutable face of a sphinx is ordinarily incongruous with a judicial or quasi-judicial performance."
And It's not that the reasons are only to be given by ordinary Courts and not by quasi judicial Tribunals, as appears to be the impression under which the Presiding Officer looks like harbouring. The aspect has also been cleared by the Hon'ble Supreme Court in a later decision rendered on 15th April, 2010 in SLP (C) No. 16466 of 2009, Asstt. Commissioner v. M/s. Shukla & Brothers, reported in III (2010) SLT 565, and the following are the relevant paras from that judgment:
"7. As is evident from the facts narrated in the Revision Petition and the grounds raised besides raising the question if law, a factual controversy was also raised going to the very root of the case, that the rolling shutters and doors fixed by the respondent on the shops were not manufactured of tax paid material. Thus, question of law, mixed questions of law and facts were not examined by the High Court in some detail, but as already noticed, by one line order the Revision Petition was dismissed. During the course of hearing, we were informed that arguments were also addressed with reference to judgments of this Court which were also cited before the Board. However we find no mention thereof in the impugned order. It was also contended that similar questions do arise in number of other cases, thus it was expected of the High Court to deal with the contentions rather than pass a cryptic order.
The Supreme Court in the case of S.N. Mukherjee v. Union of India, (1990) 4 SCC 594, while referring to the practice adopted and insistence placed by the Courts in United States, emphasized the importance of recording of reasons for decisions by the administrative authorities and Tribunals...........
In exercise of the power of judicial review, the concept of reasoned orders/actions has been enforced equally by the foreign Courts as by the Courts in India. The administrative authority and Tribunals are obliged to give reasons, absence whereof could render the order liable to judicial chastise. Thus, it will not be far from absolute principle of law that the Courts should record reasons for its conclusions to enable the appellate or higher Courts to exercise their jurisdiction appropriately and in accordance with law. It is the reasoning alone, that can enable to higher or an Appellate Court to appreciate the controversy in issue in its correct perspective and to hold whether the reasoning recorded by the Court whose order is impugned, is sustainable in law and whether it has adopted the correct legal approach. To sub-serve the purpose of justice delivery system, therefore, it is essential that the Courts should record reasons for its conclusions, whether disposing of the case at admission stage or after regular hearing."
At the cost of repetition, we may notice, that this Court has consistently taken the view that recording of reasons is on essential feature of dispensation of justice. A litigant who approaches the Court with any grievance in accordance with law is entitled to know the reasons for grant or rejection of his prayer. Reasons are the soul of orders. Non-recording of reasons could lead to dual infirmities; firstly, it may cause prejudice to the affected party and secondly, more particularly, hamper the proper administration of justice. These principles are not only applicable to administrative or executive actions, but they apply with equal force and, in fact, with a greater degree of precision to judicial pronouncements. A judgment without reasons causes prejudice to the person against whom it is pronounced, as that litigant is unable to know the ground which weighed with the Court in rejecting his claim and also causes impediments in his taking adequate and appropriate grounds before the higher Court in the event of challenge to that judgment. Now, we may refer to certain judgments of this Court as well as of the High Courts which have taken this view.
13..........The distinction between passing of an order by on administrative or quasi-judicial authority has practically extinguished and both are required to pass reasoned orders. In the case of Siemens Engineering and Manufacturing Co. of India Ltd. v. Union of India & Anr., AIR 1976 SC 1785, the Supreme Court held as under:
"6.....If Courts of law are to be replaced by administrative authorities and Tribunals, as indeed, in some kinds of cases, with the proliferation of Administrative Law, they may have to be so replaced, it is essential that administrative authorities and Tribunals should accord fair and proper hearing to the persons sought to be affected by their orders and give sufficiently clear and explicit reasons in support of the orders made by them. Then alone administrative authorities and Tribunals exercising quasi-judicial function will be able to justify their existence and carry credibility with the people by inspiring confidence in the adjudicatory process. The rule requiring reasons to be given in support of an order is, like the principle of audi alteram partem, a basic principle of natural justice which must inform every quasi-judicial process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not satisfy the requirement of law...."
........the Supreme Court in another very recent judgment delivered on 22nd February, 2008, in the case of State of Rajasthan v. Rajendra Prasad Jain, Criminal Appeal No. 360/2008 (Arising out of SLP (Crl.) No. 904/2007) stated that "reason is the heartbeat of every conclusion, and without the same it becomes lifeless."
Providing of reasons in orders is of essence in judicial proceedings. Every litigant who approaches the Court with a prayer is entitled to know the reasons for acceptance or rejection of such request. Either of the parties to the lis has a right of appeal and, therefore, it is essential for them to know the considered opinion of the Court to make the remedy of appeal meaningful. It is the reasoning which ultimately culminates into final decision which may be subject to examination of the appellate or other higher Courts. It is not only desirable but, in view of the consistent position of law, mandatory for the Court to pass orders while recording reasons in support thereof, however, brief they may be. Brevity in reasoning cannot be understood in legal parlance as absence of reasons. While no reasoning in support of judicial orders is impermissible, the brief reasoning would suffice to meet the ends of justice at least at the interlocutory stages and would render the remedy of appeal purposeful and meaningful. It is a settled canon of legal jurisprudence that the Courts are vested with discretionary powers but such powers are to be exercised judiciously, equitably and in consonance with the settled principles of law. Whether or not, such judicial discretion has been exercised in accordance with the accepted norms, can only be reflected by the reasons recorded in the order impugned before the higher Court. Often it is said that absence of reasoning may ipso facto indicate whimsical exercise of judicial discretion. Patricia Wald, Chief Justice of the D.C. Circuit Court of Appeals in the Article, Blackrobed Bureaucracy Or Collegiality Under Challenge, (42 MD.L. REV. 766, 782 (1983), observed as under:
"My own guiding principle is that virtually every appellate decision requires some statement of reasons. The discipline of writing even a few sentences or paragraphs explaining the basis for the judgment insures a level of thought and scrutiny by the Court that a bare signal of affirmance, dismissal, or reversal does not."
The Court cannot lose sight of the fact that a losing litigant has a cause to plead and a right to challenge the order if it is adverse to him. Opinion of the Court alone can explain the cause which led to passing of the final order. Whether an argument was rejected validly or otherwise, reasoning of the order alone can show. To evaluate the submissions is obligation of the Court and to know the reasons for rejection of its contention is a legitimate expectation on the part of the litigant. Another facet of providing reasoning is to give it a value of precedent which can help in reduction of frivolous litigation. Paul D. Carrington, Daniel J. Meador and Maurice Rosenbury, Justice on Appeal 10 (West 1976), observed as under:
"When reasons are announced and can be weighed, the public can have assurance that the correcting process is working. Announcing reasons can also provide public understanding of how the numerous decisions of the system are integrated. In a busy Court, the reasons are an essential demonstration that the Court died in fact fix its mind on the case at hand. An unreasoned decision has very little claim to acceptance by the defeated party, and is difficult or impossible to accept as an act reflecting systematic application of legal principles. Moreover, the necessity of stating reasons not infrequently changes the results by forcing the Judges to come to grips with nettlesome facts or issues which their normal instincts would otherwise cause them to avoid."
The reasoning in the opinion of the Court, thus, can effectively be analysed or scrutinized by the Appellate Court. The reasons indicated by the Court could be accepted by the Appellate Court without presuming what weighed with the Court while coming to the impugned decision. The cause of expeditious and effective disposal would be furthered by such an approach. A right of appeal could be created by a special statute or under the provisions of the Code governing the procedure. In either of them, absence of reasoning may have the effect of negating the purpose or right of appeal and, thus, may not achieve the ends of justice.
We are not venturing to comment upon the correctness or otherwise of the contentions of law raised before the High Court in the present petition, but it was certainly expected of the High Court to record some kind of reasons for rejecting the revision petition filed by the Department at the very threshold. A litigant has a legitimate expectation of knowing reasons for rejection of his claim/prayer. It is then alone, that a. party would be in a position to challenge the order on appropriate grounds. Besides, this would be for the benefit of the higher or the Appellate Court. As arguments bring things hidden and obscure to the light of reasons, reasoned judgment where the law and factual matrix of the case is discussed, provides lucidity and foundation for conclusions or exercise of judicial discretion by the Courts. Reason is the very life of law. When the reason of a law once ceases, the law itself generally ceases. Wharton's Law Lexicon). Such is the significance of reasoning in any rule of law. Giving reasons furthers the cause of justice as well as avoids uncertainty. As a matter of fact it helps in the observance of law of precedent. Absence of reasons on the contrary essentially introduces an element of uncertainty, dis-satisfaction and give entirely different dimensions to the questions of law raised before the higher/Appellate Courts. In our view, the Court should provide its own grounds and reasons for rejecting claim/prayer of a party whether at the very threshold i.e., at admission stage or after regular hearing, howsoever precise they may be.
We would reiterate the principle that when reasons are announced and can be weighed the public can have assurance that process of correction is in place and working. It is the requirement of law that correction process of judgments should not only appear to be implemented but also seem to have been properly implemented. Reasons for an order would ensure and enhance public confidence and would provide due satisfaction to the consumer of justice under our justice dispensation system. It may not be very correct in law to say, that there is a qualified duty imposed upon the Courts to record reasons. Our procedural law and the established practice, in fact, imposes unqualified obligation upon the Courts to record reasons. There is hardly any statutory provision under the Income Tax Act or under the Constitution itself requiring recording of reasons in the judgments but it is no more res integra and stands unequivocally settled by different judgments of this Court holding that, the Courts and Tribunals are required to pass reasoned judgments/orders..........."
Applying these observations of the Hon'ble Supreme Court to the mariner the Presiding Officer of the DRT has disposed of the S.A. the only conclusion which this Appellate Tribunal can arrive at is that the impugned order is totally unsustainable and, in fact, is perverse showing total non-application of mind to the facts as well as the applicable law.
Now, the question arises as to what should be the decision of this Tribunal once it has been concluded that the impugned order of the DRT cannot be sustained at all. One option which came to my mind is to remand the matter to the DRT for a fresh decision in accordance with law and the observations made hereinabove by this Tribunal. However, before any final decision could be taken in this regard I came across couple of judicial precedents including that of the Apex Court wherein it has held that remand by Appellate Tribunals should be avoided unless it is absolutely necessary and the Appellate Tribunal comes to the conclusion that on the basis of material already on record the Appellate Tribunal the appeal cannot be disposed of by the Appellate Tribunal itself and fresh trial is required.
In the judgment dated 11.3.1999 rendered in the case of Ashwin Kumar K. Patel v. Upendra J. Patel & Ors., II (1999) SLT 470, the following observations were made by the Hon'ble Supreme Court:
"The High Court said that this also makes the factual foundation of the trial Court's order erroneous'. For the above reasons, the High Court set aside the order of the trial Court and remitted the matter for fresh decision. It is against the above order that the plaintiff has preferred this appeal.
The point for consideration is whether the order of the High Court in remitting the matter to the trial Court was necessary? Question also is whether this Court should remand the case to the High Court in the event of this Court holding that the remand by the High Court was not called for? If not, whether the order of the trial Court is to be sustained?
In our view, the High Court should not ordinarily remand a case under Order 41 Rule 23, CPC to the lower Court merely because it considered that the reasoning of the lower Court in some respects was wrong. Such remand orders lead to unnecessary delays and cause prejudice to the parties to the case. When the material was available before the High Court, it should have itself decided the appeal one way or other. It could have considered the various aspects of the case mentioned in the order of the trial Court and considered whether the order of the trial Court ought to be confirmed or reversed or modified. It could have easily considered the documents and affidavits and decided about the prima facie case on the material available. It matters involving agreements of 1980 (and 1996) on the one hand and an agreement of 1991 on the other, as in this case, such remand orders would lead to further delay and uncertainty. We are, therefore, of the view that the remand by the High Court was not necessary.
We have also considered whether, on that account, we should send back the matter to the High Court for consideration of the appeal. We are of the view that, on the facts of this case, this Court can decide whether the temporary injunction granted by the trial Court should be confirmed or not. We are, therefore, not remitting the matter to the High Court because a further remands would lead to delay and perhaps one more special leave petition to this Court."
One decision of the Allahabad High Court in S.P. Builders v. Chairperson, Debts Recovery Appellate Tribunal & Ors., AIR 2007 All 77, on the aspect of remand by Appellate Tribunal, which incidentally in this case was Debts Recovery Appellate Tribunal, may also be noticed. Relevant paras from this judgment are reproduced below:
"9. The DRAT is a Appellate Tribunal constituted under Section 8 of the Act. Section 22 of the Act provides procedure and powers of the DRT and DRAT and a perusal thereof shows that Appellate Tribunal exercises all such powers as are exercisable by the Tribunal itself on the question of fact as well as law. Section 22 of the Act is reproduced as under:
Procedure and powers of the Tribunal and the Appellate Tribunal--(1) The Tribunal and the Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908) but shall be guided by the principles of natural justice and, subject to the other provisions of this Act and of any rules, the Tribunal and the Appellate Tribunal shall have powers to regulate their own procedure including the places at which they shall have their sitting.
(2) The Tribunal and the Appellate Tribunal shall have, for the purpose of discharging their functions under this Act, the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908), which trying a suit, in respect of the following matter, namely--
(a) Summoning and enforcing the attendance of any person and examining him on oath;
(b) Requiring the discovery and production of documents;
(c) Receiving evidence on affidavits;
(d) Issuing commissions for the examination of witnesses or documents;
(e) Reviewing its decisions;
(f) Dismissing an application for default or deciding it ex parte;
(g) Any other matter which may be prescribed.
(3) Any proceeding before the Tribunal or the Appellate Tribunal shall be deemed to be a judicial proceedings within the meaning of Sections 193 and 228, and for the purposes of Section 196 of the Indian Penal Code (45 of 1860) and the Tribunal or the Appellate Tribunal shall be deemed to be a Civil Court for all the purposes of Section 195 and Chapter XXVI of the Code of Criminal Procedure 1973 (2 of 1974).
Therefore, the Appellate Tribunal is not a body of limited jurisdiction. It exercise power co-extensive with the Tribunal itself. In these circumstances, if there was no want of any relevant material, if the Tribunal has not discussed some issues properly, it was open to the Appellate Tribunal' to consider itself all such issues and to decide the matter but, that, by itself, cannot be a reason to remand the matter to the Tribunal. This Court in Nehru Steel Rolling Mills, Muzaffarnagar v. Commissioner of Sales Tax, 1993 UPTC 407 (Hon'ble M. Katju, J. as His Lordship then was) while considering the correctness of an order passed by the Sales Tax Tribunal remanding the matter to Deputy Commissioner observed as under:
In my opinion a remand order should, not be readily made, and it should only be made when for very strong reasons the authority cannot itself dispose of the matter on merits. It seems that these remand orders were made by the authorities merely to get rid of the case so that the authority could avoid going into the matter deeply and deciding the issue once and for all. This kind of attitude is to be deprecated.
Again in Abid Hasan Watch Co., Varanasi v. Commissioner of Sales Tax, 1995 UPTC 1035, this Court observed in Paras 8, 9 and 10 as under:
(8) The procedural law regarding remand may be stated. It is this that appeal Court may remand a case if it has been decided on a preliminary point and said judgment of lower Court is set aside in appeal by the appeal Court. It may again send the case to lower Court with directions in case it is necessary in the interest of justice. Another contingency is where the Court from whose decree an appeal is preferred has disposed of the case otherwise than on a preliminary point and the decree is reversed in appeal and a retrial is considered necessary, the Appellate Court can remand the case to decide specific issue or issues. The Appellate Court may also frame issue or issues for determination after remand. In such a case additional evidence may also be directed to be taken. Otherwise the evidence already on record will again be read.
(9) If however, the evidence on record is sufficient to enable to Appellate Court to pronounce judgment, the Appellate Court may after resettling the issues, if necessary, finally determine the suit.
(10) I would now deal with a few situations where remand or a prayer for it should be frowned upon. It is in exceptional cases that remand may be ordered, like when there has been no real trial. Mere insufficiency of evidence is no ground for allowing a party to adduce further evidence on remand. If there is insufficiency of evidence for any party to prove his case, he will suffer. Remand with a view to enable a party to fill up lacuna in evidence is not permissible. In protracted litigation the remand should not be resorted to on the ground that final curtain should be drawn.
The question has also been considered by the Apex Court in a catena of cases and it will be useful to refer some recent judgments. In Ashwinkumar K. Patel v. Upendra J. Patel & Ors., the Apex Court held that even the High Court should not remand a case under Order 41 Rule 23, C.P.C. to lower Court merely if some reasoning of the lower Court is wrong, since it leads to unnecessary delay and cause prejudice to the parties. If the material is available, the High Court should decide the matter itself since it can consider all the aspects. The relevant observations as contained in Para 7 is reproduced as under:
"In our view, the High Court should not ordinarily remand a case under Order 41 Rule 23, C.P.C. to the lower Court merely because it considered that the reasoning of the lower Court in some respects was wrong. Such remand orders lead to unnecessary delays and cause prejudice to the parties to the case. When the material was available before the High Court, it should have itself decided the appeal one way or other. It could have considered the various aspects of the case mentioned in the order of the trial Court and considered whether the order of the trial Court ought to be confirmed or reversed or modified." Recently, in Pushpa Devi & Anr. v. Binod Kumar Gupta & Anr., AIR 2004 SC 1239 it was held if the entire material is available and the parties have raised off issues before the Appellate Court, it should not remand the matter but decide on its own."
In this case the Security Applicant before the DRT as well as the appellant Bank had adduced evidence by way of affidavits in support of their respective pleas in the S.A. but the same have not even been referred to by the Presiding Office of DRT. Therefore, this Appellate Tribunal does not consider it appropriate to remand the matter to the DRT only to deliver a fresh judgment. That can very conveniently be done by this Tribunal itself also since the entire controversy between the appellant Bank and respondent No. 1 centres around the effect of alleged sale of the mortgaged property in favour of respondent No. 1 by the Bank's borrower, respondent No. 2 Sanjeev Singh and that controversy is totally legal in nature and did not even require any evidence from either side and the S.A. could have been and even now can be disposed of merely on the basis of admitted pleadings of the parties.
Another reason for not directing remand of the matter to the DRT is that the DRT had disposed of the S.A. after unconscionable delay and the record of the DRT shows that many years were consumed in the disposal of the S.A. without any justification and umpteen number of adjournments were being granted for the asking firstly by the earlier Presiding Officer Shri D.C. Thakur and then by Shri Ashish Kalia who took over the proceedings in the year 2011 and thereafter had been simply been adjourning the case from time-to-time without there being any good grounds at all. The Presiding Officer of the DRT have been showing scant respect to the legislative mandate of disposal of such like matters within a maximum period of four months. Of course the Bank itself has also been contributory in this enormous delay in the disposal of the S.A. inasmuch as it never felt aggrieved by the matter not being taken up for effective proceedings before the DRT and that is evident from the fact that it never thought of approaching this Tribunal for any direction to the DRT for early and expeditious disposal of the case, as was the remedy available to it under Section 17(6) of SARFAESI Act. The delay with which the S.A. has been disposed of has frustrated the very object which the Parliament sought to achieve, namely, speedy recovery of Banks' money by straightaway resorting to sale of mortgaged/secured assets without the intervention of Courts/DRTs.
As noticed already, the Counsel for the respondent No. 1 (Security applicant before DRT) had not even appeared to argue before this Tribunal when the appeal was listed and taken up for final hearing. So, only the Counsel for the appellant Bank addressed arguments.
Accordingly, I now proceed to examine the case myself on merits instead of remanding it back to the DRT.
The undisputed position is that respondent No. 1 had filed S.A. on the main ground that he had been sold the mortgaged property by its owner Sanjeev Singh, respondent No. 2 herein and Bank's borrower, in 2008 without disclosing to him that he had already created equitable mortgage of that property in favour of the appellant Bank to secure repayment of huge amount of loan taken by his proprietorship Firm, respondent No. 3 herein, and in that way he had been defrauded by Sanjeev Singh and for which fraud played upon him he had reported the matter to the police also. It was his case in the S.A. that despite that fraud he could not be deprived of the property purchased by him from Sanjeev Singh by the Bank as he was a bona fide purchaser. On the basis of these facts pleaded in the S.A. itself by respondent No. 1 himself he could not have succeeded before the DRT. So, the question whether his S.A. was collusive action, as was the case of the appellant Bank, need not be gone into since this case under Section 17(1) was hit by Section 48 of the Transfer of Property Act in view a Division Bench judgment of Hon'ble High Court in Ishwar Doss Malhotra v. Dhanwant Singh and Ors., AIR 1985 Delhi 83 & 26 (1984) DLT 377 in which it was held that in case a property is mortgaged before its sale by the mortgagor in favour of a third party then that subsequent purchaser cannot be called a bona fide purchaser and that sale of the mortgaged property by the mortgagor after creation of mortgage in favour of the Bank cannot affect the Bank's/mortgagee's rights created prior in time. This judgment has been followed in a subsequent judgment also by a Single judge Bench of Hon'ble Delhi High Court rendered on 19th November, 2013 in CS(OS) 188 of 2011, Ritu Gupta & Anr. v. Usha Dhand & Ors., I (2014) BC 167 : 205 (2013) DLT 218. Thus, based on this legal position the S.A. deserved to be rejected straightaway by the DRT but unfortunately it took seven years to decide the matter and that too in a most perfunctory manner. The one paragraph decision based on the earlier order dated 7.6.2010 could have been written in the year 2011 itself when the new Presiding Officer took over instead of keeping the matter alive for almost four years thereafter. For the foregoing reasons, this appeal is allowed and the impugned order dated 4.3.2015 passed by DRT-III, Delhi in S.A. No. 445/2008 is set aside and, consequently the S.A. No. 445/2008 now stands rejected. Cost of Rs. 25,000/- is also imposed on respondent No. 1.