PREM NARAYAN GARG Vs. INDIAN BANK

JUDGEMENT

(1.) The petitioner in this revisional application under Article 227 of the Constitution has impugned the judgment and order dated June 23, 2011 passed by the Chairman, Debts Recovery Appellate Tribunal at Calcutta (hereafter the appellate tribunal) dismissing Appeal No. 45 of 2008/689 filed by it, thereby confirming the judgment and order under appeal dated May 19, 2005 passed by the Presiding Officer, Debts Recovery Tribunal 1, Kolkata (hereafter the tribunal) in T.A./Appeal No. 1 of 2005. The tribunal had set aside an auction sale conducted in respect of the structure, i.e. a bungalow, on premises no. 2, Jubilee Road, Jamshedpur in the state of Jharkhand (hereafter the said bungalow).

(2.) The opposite party no. 1 (hereafter the bank) had initiated proceedings under Section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 against the opposite party no.2, M/s. SCIL (India) Ltd. (in liquidation) (hereafter SCIL), registered as O.A. No.186 of 1999. By an interim order of the tribunal, the properties of SCIL including the said bungalow were to be sold for realization of the dues of the bank. The tribunal appointed a Special Officer for such purpose. An order dated January 7, 2004 rejected valuation of the said bungalow made by the bank and the same was ordered to be valued afresh. The bank made a fresh valuation of the said bungalow. It was valued at Rs.21,43,125/-. The tribunal by its order dated January 14, 2004 directed the bank to issue sale notice by affixing it on a conspicuous part of the property as well as on the notice board of the tribunal for public notice, and fixed January 19, 2004 at 4 P.M. for conducting auction. At this stage, on January 19, 2004, the opposite party no.6 i.e. Tata Iron and Steel Co. (hereafter TISCO) filed an application praying, inter alia, that right, title and interest in respect of the said bungalow be determined first and the sale be postponed, alternatively for leave to participate in the proceedings for sale of the said bungalow without prejudice. On January 19, 2004 itself, the tribunal deferred the auction till January 20, 2004 at 4 P.M. A recovery inspector attached to the tribunal was appointed as Special Officer by an order dated January 20, 2004 to conduct sale of the properties of SCIL including the said bungalow. The submission of the bank that sale of the said bungalow ought to be postponed was not accepted on twin grounds, - (i) no ground was stated therefor and (ii) the intending purchasers were coming to participate in the sale for the last couple of days and notice of sale had been published in terms of its order. Insofar as the application filed by TISCO is concerned, the tribunal declined the prayer expressing the view that in terms of its earlier order dated January 14, 2004, the money that sale of the said bungalow would fetch shall be kept in a separate deposit and further, would be subject to final order as to the rights of the parties to the same. While disposing of the said application, permission was granted to TISCO to participate in the sale. Thereafter, on the same date, the sale was conducted wherein eight bidders participated but only two of them deposited earnest money. The petitioner emerged as the highest bidder with a bid of Rs.21,50,000/-. After perusal of the report of the Special Officer, the sale of the said bungalow was confirmed in his favour subject to deposit of balance purchase money on or before the 15th day from the date of sale thereof. The petitioner deposited more than 25% of the purchase money i.e. Rs.10,00,000/- immediately after declaration of result. On or about January 29, 2004, the bank filed an application praying for setting aside the sale in respect of the said bungalow and for fresh sale after paper publication and fixing of reserve price in accordance with law. The grounds for such prayer, inter alia, were that the observations made by the tribunal in course of hearing on January 19, 2004 to the effect that the successful purchaser would only be entitled to dismantle the said bungalow and the resultant debris were not recorded in its order passed on that date. Simultaneously, the petitioner also filed an application. He prayed for issuance of sale certificate and for delivery of possession of the said bungalow in his favour. By an order dated February 26, 2004, the tribunal disposed of the latter application by appointing a Special Officer with a direction that possession of the said bungalow be handed over to the petitioner. The application for modification filed by the bank, however, was adjourned till March 1, 2004. The order of February 26, 2004 of the tribunal was subjected to challenge in an appeal by the bank before the appellate tribunal. The appellate tribunal in its order dated January 18, 2005 observed that the tribunal had mis-conducted itself by disposing of the application filed by the petitioner and keeping the application of the bank pending. While setting aside the order under appeal, it directed the tribunal to consider the application filed by the bank and the petitioner afresh. The petitioner challenged the order of the appellate tribunal before this Court in its revisional jurisdiction. A learned single Judge of this Court by an order dated March 22, 2005 disposed of the application with the observation that the tribunal shall consider and dispose of the said applications within two months from date of communication thereof independently and without being influenced by any observation of the appellate tribunal. The parties were directed to maintain status quo in respect of the said bungalow till the disposal of the applications by the tribunal. The tribunal heard the applications afresh and the sale was set aside by an order dated May 19, 2005; consequently, the application of the petitioner for confirmation of sale stood dismissed and the Registrar of the tribunal was directed to refund the purchase money deposited by the petitioner in respect of sale of the said bungalow to him within 15 days. The petitioner preferred an appeal before the appellate tribunal challenging the order dated May 19, 2005. By judgment dated November 27, 2009, the appellate tribunal expressed the view that auction sale of the said bungalow and confirmation thereof in favour of the petitioner could not be sustained and, accordingly, dismissed the appeal. A further revisional application followed before this Court at the instance of the petitioner. The revisional application was allowed by an order dated July 1, 2010. The judgment and order of the appellate tribunal was set aside for the reasons mentioned therein and the appellate tribunal was directed to rehear the matter. It was pursuant to this direction of this Court that the appellate tribunal reheard the parties and delivered the impugned judgment and order.

(3.) It appears on perusal of the impugned judgment and order that the appellate tribunal concurred with the tribunal and dismissed the appeal on, inter alia, the following grounds: