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SUPREME COURT OF INDIA
V. GOPALA GOWDA, C. NAGAPPAN, JJ.
INDIAN BANK – APPELLANT
VS.
MANILAL GOVINDJI KHONA – RESPONDENT
[Civil Appeal No.1416 of 2015 arising out of SLP (C) No. 12513 of 2013]
Decided On : 03-02-2015
(2002) 4 SCC 475; (1999) 7 SCC 539; (2000) 6 SCC 655 – Relied upon
(2001) 7 SCC 71; (2014) 6 SCC 397 – Distinguished
(b) Recovery of Debts due to Banks and Financial Institutions Act, 1993 – Section 24, r/w Section 5, Limitation Act, 1963 – Provisions of Limitation Act are applicable to DRT – DRT ought to examine section 5 of Limitation Act while deciding question of condonation – High Court rightly condoning the delay. (Para 16)
(2000) 2 BOMLR 567; (2007) 2 SCC 230 – Referred
(c) Recovery of Debts due to Banks and Financial Institutions Act, 1993 – Section 31 – Order of High Court directing Court Receiver to auction sale property in question after establishment of DRT – Void ab initio – High Court rightly setting aside the same and remitting the matter to DRT II – DRT II is required to examine this aspect. (Para 18)
Facts of the case:
A Civil Suit was filed by the appellant-Bank before the High Court against the respondent on 07.09.1987 for recovery of Rs.69,50,213.59 with interest @ 18.5% p.a. with quarterly rests and enforcement of the mortgage. The High Court passed a consent decree in the Civil Suit for the suit amount together with concessional rate of interest at 12% p.a. which was to be paid by the respondent to the Bank on or before 31.05.1997. On 31.05.1997, the respondent tendered the amount in terms of the decree dated 09.12.1996, which was refused by the appellant. The respondent moved Chamber Summons for recording the payment of decreetal amount tendered on 31.05.1997. On 01.08.1997, the respondent applied for ad interim relief in terms of the above Chamber Summons. However, the High Court declined to grant ad interim relief but adjourned the said Chamber Summons for recording evidence. Appeal by the respondent was dismissed and the S.L.P filed by the respondent was also dismissed.
The High Court directed the Court Receiver to sell the mortgaged property of the respondent and permitted the appellant-Bank to participate in the auction. The appellant-Bank purchased the mortgaged property for Rs.2,00,00,000/-.
After the period of 7 years of the issuance of the recovery certificate in favour of the appellant-Bank, the respondent moved a Misc. application before the Recovery Officer to set aside the sale of the mortgaged property which was dismissed by DRT-II, Mumbai. The respondent moved an application for rectification of recovery certificate dated 29.11.2004 along with an application for condonation of delay in filing the Misc. application for rectification of recovery certificate and an application seeking interim orders in respect of the property which was sold in the public auction.
The DRT dismissed the interim application. The DRT-II further rejected the condonation of delay application.
The respondent filed an appeal before the DRAT and the same was dismissed.
The respondent further challenged the order of DRAT before the High Court praying to quash the same.
The High Court has allowed the writ petition by setting aside the orders of the DRT and the DRAT and condoned the delay.
Finding of the Court:
There is no infirmity in the impugned order.
Result: Appeal dismissed with cost.
JUDGMENT
V.GOPALA GOWDA, J.
Leave granted.
2. The appellant in this appeal has challenged the judgment and order dated 29.08.2012 of the High Court of Judicature at Bombay, passed in Writ Petition No. 3652 of 2012, whereby the High Court allowed the writ petition and Misc. Application No. 7 of 2012 for condonation of delay in filing Misc. Application (L) No. 34 of 2012 filed by the respondent before the Debt Recovery Tribunal(for short "DRT") and quashing the orders dated 10.04.2012 and 22.02.2012 passed by the Debt Recovery Appellate Tribunal(for short "DRAT"), Mumbai, in Misc. Appeal No.35 of 2012 and the DRT respectively.
3. The brief facts of the case are stated hereunder in a nutshell :-
A Civil Suit No. 2636 of 1987 was filed by the appellant-Bank before the High Court of Judicature at Bombay against the respondent on 07.09.1987 for recovery of Rs.69,50,213.59 with interest @ 18.5% p.a. with quarterly rests and enforcement of the mortgage. The High Court vide its order dated 09.12.1996 passed a consent decree in the Civil Suit for the suit amount together with concessional rate of interest at 12% p.a. which was to be paid by the respondent to the Bank on or before 31.05.1997. On 31.05.1997, the respondent tendered the amount in terms of the decree dated 09.12.1996, which was refused by the appellant. The respondent moved Chamber Summons No.1066 of 1997, inter alia, for recording the payment of decreetal amount tendered on 31.05.1997. On 01.08.1997, the respondent applied for ad interim relief in terms of the above Chamber Summons. However, by the order dated 01.08.1997, the High Court was pleased to decline to grant ad interim relief but adjourned the said Chamber Summons for recording evidence to establish the fact that the respondent had tendered the payment of the decreetal amount on or before 31.05.1997. Being aggrieved by the same, the respondent preferred Appeal No.960 of 1997 before the Division Bench of the High Court. By an order dated 05.12.1997, the said appeal was dismissed and the S.L.P filed by the respondent was also dismissed by this Court on 23.03.1998.
4. Thereafter, the High Court directed the Court Receiver by its order dated 03.12.1999, to sell the mortgaged property of the respondent and permitted the appellant-Bank to participate in the auction, and the Court Receiver issued notices for auctioning the mortgaged property. The auction was held on 06.05.2000 at which the appellant-Bank purchased the mortgaged property for Rs.2,00,00,000/-, the sale of which was approved by the High Court vide its order dated 21.07.2000. The Court Receiver issued the Sale Certificate on 18.4.2002 and the same was registered in the name of the appellant-Bank. Thereafter, a series of applications and proceedings were initiated by the respondent before the DRT, DRAT and different High Courts and Civil Courts seeking various reliefs against the appellant-Bank.
After the period of 7 years of the issuance of the recovery certificate in favour of the appellant-Bank, the respondent moved a Misc. application before the Recovery Officer to set aside the sale of the mortgaged property which was dismissed on 2.12.2011 by DRT-II, Mumbai. The respondent moved an application for rectification of recovery certificate dated 29.11.2004 along with an application for condonation of delay in filing the Misc. application for rectification of recovery certificate dated 29.11.2004 and an application seeking interim orders in respect of the property which was sold in the public auction by the Court Receiver. The DRT dismissed the interim application by its order dated 30.01.2012. The DRT-II further rejected the condonation of delay application filed by the respondent by its order dated 22.02.2012. The respondent aggrieved by the above said order filed an appeal before the DRAT and the same was dismissed vide order dated 10.04.2012. The respondent further chose to challenge the order of DRAT before the High Court in W.P.No.3652 of 2012 urging various
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