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SUPREME COURT OF INDIA
M.R. Shah, B.V. Nagarathna, JJ.
Kotak Mahindra Bank Limited – Appellant
Versus
Narendra Jayantilal Trivedi & Anr. – Respondents
Civil Appeal No. 4026 of 2022 (@ SLP(C) No. 2228 of 2022) With Civil Appeal No. 4027 of 2022 (@ SLP(C) No. 4724 of 2022)
Decided On : 13-05-2022
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 – Section 13(4) – Recovery of debt – Symbolic possession of mortgaged property – Number of proceedings were initiated by respondent No. 1 by which he has delayed proceedings initiated by bank under SARFAESI Act, and has stalled recovery proceedings – Once having enjoyed fruits of interim orders for approximately four years and in between initiating a number of other proceedings (even during pendency of writ petition) and thereafter, having invited order in writ petition on merits and when Single Judge dismissed writ petition with cost, Division Bench ought not to have passed an order nullifying strong observations made by Single Judge while dismissing writ petition – Division Bench also did not consider order of Single Judge on merits but has granted relief even while permitting withdrawal of appeal – Such conduct on part of litigant to once enjoy fruits of litigation for number of years, invite order on merits, which is against him and in appeal initially after obtaining ex-parte ad-interim relief and thereafter, having realised that same would not be sustained, withdrawing appeal and requesting that observations made by Single Judge while dismissing writ petition may not be considered, cannot be accepted and such conduct reprehensible – Impugned order passed by Division Bench of High Court quashed and set aside. (Paras 4.7, 4.8 and 6)
Facts of the case:
Feeling aggrieved and dissatisfied with impugned order dated 25.01.2022 passed by Division Bench of High Court of Gujarat at Ahmedabad and subsequent order dated 04.03.2022, in Letters Patent Appeal No. 75/2022, the original respondent – Bank has preferred the present appeals. Division Bench of the High Court by the impugned ex-parte ad-interim order dated 25.01.2022 granted an ex-parte order of stay in favour of respondent No. 1 of dispossession of the property till the next date of hearing and also stayed the payment of cost of Rs. 1,00,000/- imposed by Single Judge.
Findings of Court:
Allowing such a practice would tantamount to not only taking a chance before the court but would be indeed speculative and an abuse of the process of the court. Proceedings before the Court are not for taking the chance by the litigants.
Result : Civil Appeals allowed with costs.
Based on the provided legal document, here are the key points:
JUDGMENT :
M. R. Shah, J.
Leave granted.
1. Feeling aggrieved and dissatisfied with impugned order dated 25.01.2022 passed by the Division Bench of the High Court of Gujarat at Ahmedabad and subsequent order dated 04.03.2022, in Letters Patent Appeal No. 75/2022, the original respondent – Bank has preferred the present appeals.
2. The facts leading to the present appeals are as under:
2.1 A loan facility of Rs. 29,50,000/- was earlier extended by State Bank of India and later assigned to the appellant – Bank to a proprietorship firm of respondent No. 1 herein i.e., M/s Aromatics Intermediates and Chemicals. As a security for the said loan facility, property belonging to respondent No. 1 was mortgaged in favour of State Bank of India. In view of default by respondent No. 1 in making payments of the outstanding amounts, the bank filed a civil suit in the year 1986 for recovery of its dues and enforcement of securities. Upon enactment of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as the Act, 1993), the suit was transferred to the Debts Recovery Tribunal (DRT), which was numbered as Transfer Application No. 95/1995. The DRT vide order dated 03.03.2000 decreed the said application and directed respondent No. 1 and the guarantors to pay jointly and severally a sum of Rs. 44,01,159.47/ with cost.
2.2 Thereafter, the debts under the credit facility were assigned in favour of the appellant – bank. Pursuant to the assignment of dues, bank issued a demand notice upon the judgment debtor – respondent No. 1 and others under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) for a sum of Rs. 27,35,85,200.62/- as on 20.06.2011, together with further interest and expenses and costs. Before any further measures under section 13(4) of the SARFAESI Act could be taken by the appellant – bank, respondent No. 1 filed an application under section 17 of the SARFAESI Act before the DRT being Securitisation Application No. 94/2011. Vide order dated 06.01.2015, the Recovery Officer rejected the objections raised by respondent No. 1 and guarantors. The DRT dismissed the Securitisation Application No. 94/2011.
2.3 According to the appellant, the appellant took symbolic possession of the mortgaged property under section 13(4) of the SARFAESI Act on 16.07.2015. Respondent No. 1 and guarantors again raised objections in the recovery proceedings which were rejected by the Recovery Officer vide order dated 06.01.2015. By an order dated 15.07.2016, the Recovery Officer allowed the said application and reviewed/modified his earlier order dated 06.01.2015. The said order was challenged by the appellant before the DRT by way of Appeal No. 6/2016 and was pending.
2.4 Thereafter, the appellant also filed an application under section 14 of the SARFAESI Act before the learned Chief Metropolitan Magistrate (CMM) being Application No. 256/2015, which came to be allowed vide order dated 16.08.2016 and allowed the bank to take physical possession of the secured assets. Aggrieved by the actions/measures under the SARFAESI Act, taken by the bank, the borrowers/guarantors again approached the DRT by way of Securitisation Application No. 171/2016. Thereafter, the appellant filed a special criminal application before the High Court challenging the order passed by the learned CMM to the extent of not appointing a subordinate officer for execution of the order. The High Court disposed of the said special criminal application vide order dated 02.12.2016. Pursuant to the order passed by the High Court dated 02.12.2016, learned CMM authorized the Registrar of that Court to take possession of the secured property in question. Respondent No. 1 thereafter filed an interlocutory application before the DRT in Securitisation Application No. 171/2016, which came to be rejected. Respondent No. 1 also filed a Criminal Misc. Application No. 643/2017 before the l
Proceedings before Court are not for taking chance by litigants. Litigants must show due respect towards Court proceedings.
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The sale certificate under the SARFAESI Act is sufficient for title transfer, negating the need for further registration, and the High Court should not intervene in SARFAESI proceedings when alternat....
While expressing the aforesaid view, we are conscious that the powers conferred upon the High Court under Article 226 of the Constitution to issue to any person or authority, including in appropriate....
Courts should respect statutory routes for recovery before entertaining writ petitions in commercial matters, emphasizing the efficacy of specialized tribunals under SARFAESI.
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