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Judgment
This order is being prepared while working from home for being signed and communicated to the parties because of the suspension of functioning of DRAT due to spread of Corona Virus (Covid-19) in the entire country. This procedure for the preparation of orders by quasi judicial tribunals and their communication to the concerned litigants in place of formal pronouncement in open Court has been recognised by the Hon'ble Supreme Court in one of its judgments reported as AIR 2008 SC 2594, "State Bank of India and Ors. Vs. S.N.Goyal"(para 19) wherein it was observed that:-
".............While some quasi judicial tribunals fix a day for pronouncement and pronounce their orders on the day fixed, many quasi judicial authorities do not pronounce their orders. Some publish or notify their orders. Some prepare and sign the orders and communicate the same to the party concerned... "
The applicant is the auction purchaser of a huge property on the Raj Niwas Marg in the city of Hyderabad which it purchased in an auction conducted by respondent no.1 herein in exercise of its powers under the provisions of SARFAESI Act. That auction was conducted by the respondent no.1 as a secured creditor in order to recover over forty cores of rupees from its borrower, respondent no.4 herein owned and managed by respondents 2 and 3 herein. The property in question purchased by the appellant had been mortgaged by respondents 2 to 4 in favour of the lending Financial Institution.
The borrower/guarantors had challenged the steps taken by the secured creditor under SARFAESI Act by filing a Securitisation Application(S.A.) under Section 17(1) of SARFAESI Act. However its secured asset in Hyderabad came to be auctioned during the pendency of the S.A. in favour of the appellant herein. The appellant was then impleaded in the S.A. and the security applicants raised a doubt about the genuineness of the auction sale. They expressed the suspicion that actually the appellant herein had been funded respondent FI to buy the property in question and there was an unholy nexus between the two and in fact the Financial Institution itself had purchased the same by putting the appellant in the forefront. The security applicants moved an application before the DRT for a direction to the appellant herein to disclose the source of the money with which it had purchased the property in question to produce its financial documents The learned DRT allowed that application and gave the directions to the appellant as had been sought for by the defaulting borrowers.
Apprehending that the learned Presiding Officer of the DRT was not being fair towards it in the matter because of the kind of direction given to be complied with by the appellant which direction according to the counsel for the applicant was totally 'perverse' and abuse of the authority vested in the Presiding Officer the present transfer application has been moved by the auction purchaser. The relevant averments made in this application in support of the prayer of transfer of the S.A. to another DRT are as under:-
"12. The approach of the Ld. PO in hearing the present SA is different to the approach adopted during hearing other matters.
The Borrower/SA Applicant is a highly influential person of Andhra Pradesh and the Ld. PO DRT-II also belongs to the said place. It is learned by the Applicant from Hyderabad that the Ld. PO is favouring the Borrower because of some common connection. The Applicant Auction Purchaser is not equally placed with the Borrower/SA Applicant before the DRT II Delhi.
"Not only must Justice be done; it must also be seen to be done", is the well accepted preposition of law which is duly recognised by the Apex Court in its various decisions. The Apex Court in its decision reported at (2008) 3 SCC 659 has discussed about the grounds for the transfer of the matters. Reasonable apprehension in the mind of the litigant that he might not get justice in the court in which the Suit is pending is the sufficient ground for the transfer of the matter. The Applicant auction Purchaser apprehended that the Applicant is not likely to have a 'fair trail' in the DRT-II, Delhi and because of this genuine apprehension, the Applicant auction Purchaser has approached this Hon'ble Appellate Tribunal for the transfer of the matter from DRT-II Delhi to any other DRT in Delhi.
That the perusal of the orders passed by the Ld. DRT in the matter, clearly shows that the Ld. PO is highly prejudice in the matter and the apprehension of the Applicant that Applicant will not get justice and fair trial is correct and has the basic. The order dated 10.05.2019 has been passed by the Ld. PO while observing that any finance by the FI to the Auction Purchaser will be a fraud played by the FI on the Borrowers. This Application has no legal bases because section 13(5A) of the SARFAESI Act, permits the FI to bid for the property itself, in case the property is not sold. If the FI want to purchase the property, it can purchase in its own name. Granting the finance to the Auction Purchaser is neither illegal nor a fraud in any manner.
That the transfer of the matter to any other DRT will not cause any inconvenience either to the Borrower or to the FI.
That the above facts of the case establishes beyond doubt the apprehension of the Applicant Auction Purchaser is genuine. Some of the instances; vide the order dated 01.12.2018 the Applicant was impleaded as the Respondent in the SA, however, no notice of the same was served on Auction Purchaser; for the 1st time the notice was served in the IA no.472 of 2019 for 19.03.2019 when the partner of the Applicant firm personally appeared from Hyderabad and sought time for engaging the Advocate and to file the Reply, no time was granted and the matter was posted for 20.03.2019, even the appearance and request for supply of matter was adjourned for the next working day i.e. 25.03.2019; the order dated 10.05.2019 is passed against the Applicant for the supply of the Income Tax Return, Wealth Tax Return for the last three years. Supply of source of funds, copies of the Bank Statements used in the purchase of the property has been passed despite the fact that Under the Act and the Rules there is no such scope for such directions.
That the directions on 10.05.2019 against the Applicant auction Purchaser has been passed on the mere allegation of the Borrower that the Respondent FI has granted the finance to the Auction Purchaser for the purchase of the property. Granting the finance by the FI to the auction purchaser is not illegal and not even the ground for setting aside the sale. In the orders, the submissions of the Auction Purchaser that the personal information cannot be asked for as the right to privacy is a fundamental right duly protected under the Constitution of India is not even dealt with. The Ld. PO has passed the direction dated 10.05.2019 despite the order dated 05.11.2018 of this Hon'ble Appellate Tribunal of setting aside the order dated 18.08.2018 of DRT-II of staying the further proceedings in the sale.
That on 22.05.2019, the Ld. DRT has fixed the matter for final hearing on 03.06.2019 though, the evidence of the parties are not yet filed."
From a bare reading of the contents of this transfer petition particularly the averments highlighted by me it is clear that the applicant is aggrieved by a judicial order passed by the learned Presiding Officer directing it to produce its financial position documents to justify that it had the means to buy property worth over forty crores. The correctness of this direction can be challenged in appeal by the applicant which the present applicant does not appear to have done, but certainly it cannot get the case withdrawn from the board of DRT-II and transferred to another DRT. That way the remedy of appeal which is available to the auction purchaser will get by-passed and transfer of case in such like situation will set an unhealthy trend suitable for litigants who believe in forum shopping. The reason, which is contemptuous in nature, is that the learned Presiding Officer of DRT and the security applicants both belong to same State and have some 'common connection' due to which the present Presiding Officer wants to favour the security applicants by cancelling the auction in favour of the applicant herein. This also is no ground to accept the prayer for transfer of the S.A. respondents 2 to 4 from DRT-II to another DRT. Yje allegations against the learned Presiding Officer are wreckless and without any basis.
This application is bereft of any sound averment justifying the apprehension of the applicant that it may not get justice from the present Presiding Officer of DRT-II, Delhi. It can be said that by filing this kind of an application levelling baseless allegations regarding 'some connection' between the learned Presiding Officer of DRT and the security applicants the applicant-auction purchaser has abused the process of law and the same deserves to be condemned and this transfer application deserves to be rejected with exemplary costs, though no amount of costs can compensate the loss of reputation of the Presiding Officer which gets caused when baseless allegations are levelled against him that he is favouring one party before him.
This application is accordingly rejected with costs of Rs. One Lac which should be deposited with Prime Minister's Relief Fund(PM CARES) for the benefit of corona virus victims. The costs should be deposited within fifteen days from the date of communication of this order and proof will be submitted in the Registry immediately when it becomes functional and open for lawyers/litigants again. In case proof of deposit of costs is not submitted the Registry shall place matter before the Bench within a week of the re-opening of the Registry for passing of further appropriate orders to ensure compliance of the said direction regarding costs.