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2009 Supreme(AP) 296

IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD
ANIL R. DAVE, C.J and VILAS V. AFZULPURKAR., J.
Bhanu Constructions Company Limited - Appellant
Vs.
Recovery Officer, Debts Recovery Tribunal, Hyderabad and others - Respondent
Writ Petition Nos.27695 of 2007 and 9158 of 2008
Decided on 22.4.2009.

Advocates appeared:
Mr. S. Ravi, Counsel for the Petitioner in W.P. No. 27695 of 2007 and Respondent NO.2 in W.P. No. 9158 of 2008.
Mr. A. Rajasekhar Reddy, Assistant Solicitor General, assisted by Mr. M. Ratna Reddy, Standing Counsel for Central Government for Respondent NO.1.
Mr. B. Adinarayana Rao, Counsel for Respondent Nos.2 and 3 in W.P. No. 27695 of 2007 and Respondent Nos. 3 and 4 in W.P. No. 9158 of 2008.
Mr. D. Prakash Reddy, Senior Advocate, assisted by Mr. B. Venkatadri and Mrs. V. Dyumani, Counsel for Respondent Nos.4 to 7 in W.P. No. 27695 of 2007 and Petitioner in W.P. No. 9158 of 2008.
Mr. Ch. Srinivas, Counsel for Respondent NO.8 in W.P. 27695 of 2007.

Headnote:RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT, 1993, Sections 19 (22), 19 (23) and 19 (25) and Section 22:- Where the Debt Recovery Appellate Tribunal had only transferred the recovery proceedings to Debt Recovery Tribunal, Vishakhapatnam, but not stayed the recovery certificate issued by the Recovery Officer, the recovery certificate issued by the Debt Recovery Officer and the sale in pursuance thereof can not be challenged in view of the fact that there was Debt Recovery Tribunal, Vishakhapatnam on the date of recovery certificate and the object of the Act is for speedy recovery of the loans granted by the banks.

       b) RECOVERY OF DEBTS DUE TO BANK AND FINANCIAL INSTITUTIONS ACT, 1993, Section 22 - Civil Procedure Code, 1908, Section 39:- The proceedings of auction in pursuance of a recovery certificate issued by the Recovery Officer can not be found fault with and challenged on the ground that some of the properties in question were situated in Krishna District and hence the Recovery Officer should have transferred the proceedings to Debt Recovery Tribunal, Vishakhapatnam so far as the principles of natural justice is given to the petitioner borrowers, because the provisions of civil procedure code is not applicable.

       c) RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT, 1993, Section 19 (22), (23) and (25) and 29 - Income tax Act, 1961, Second Schedule, Rules, 60 and 61 - Mere expression of willingness to deposit the amount mentioned in the Recovery Certificate is not sufficient to set aside the auction sale already concluded under the same since the under the Income Tax Act, any such amount shall be deposited within 30 days.

       d) RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT, 1993, Section 19 (22), (23) and (25) - Where all principles of natural justice had been complied with and many opportunities were given earlier to the petitioner borrower for settlement of the loan taken, the auction conducted under recovery certificate can not be faulted with for not setting a single reserve or bid price while it is fixed under different headings and also on the ground that the creditor bank had not accepted a one time settlement offered earlier by the petitioner.

       

ORDER

(Per Anil R. Dave, C.J.)

As common questions of law and fact have fallen for consideration in these two writ petitions, at the request of the learned advocates, both the petitions were heard together and are decided by this common order. Facts of both the cases, in a nutshell, are as under:

W.P.No.27695 of 2007

2. Writ Petition NO.27695 of 2007 has been filed by M/s. Bhanu Constructions Company Ltd. seeking a direction to set aside the auction conducted on 13.12.2007 and 14.12.2007 by the Recovery Officer, Debts Recovery Tribunal, Hyderabad (respondent NO.1 herein) for sale of the properties mortgaged by it in favour of respondent Nos.2 and 3. The petitioner has also sought for a direction to transfer the proceedings of R.P.No.420 of 2001 in OANo.460 of 1999 pending on the file of the Debts Recovery Tribunal, Hyderabad to the Debts Recovery Tribunal, Visakhapatnam.

3. The petitioner is engaged in the business of construction. It availed certain loan facilities from Andhra Bank, Kothi, Hyderabad and State Bank of India, Secunderabad, respondent Nos.2 and 3 herein respectively. For the purpose of securing repayment of the loans, the petitioner and its guarantors had mortgaged certain immovable properties like agricultural lands situated in Krishna and Guntur Districts and open lands with a building in Hyderabad. When the petitioner failed to repay the loan 3mount, respondent Nos.2 and 3 had filed J.A.No.460 of 1999 before the Debts =1ecovery Tribunal, Hyderabad, and in Insurance of the said proceedings, a recovery certificate was issued on 31.10.2000. Subsequent to the constitution of a Bench of the Debts Recovery Tribunal it Visakhapatnam, the petitioner had filed v1.P.No.28 of 2007 in R.P.No.420 of 2001 in O.A.No.460 of 1999 before the Debts Recovery Tribunal, Hyderabad, seeking• transfer of the recovery certificate to the Debts Recovery Tribunal, Visakhapatnam, on the ground that the Tribunal at Visakhapatnam had got jurisdiction to try the proceedings as certain mortgaged properties are situated in Krishna and Guntur Districts. M.P.No.28 of 2007 was rejected by an order dated 10.12.2007 and the said order became final, as validity of the same Nos not challenged by the petitioner. While Vl.P.No.28 of 2007 was pending for its consideration, respondent NO.1 herein issued in auction notice dated 10.10.2007 for sale of the mortgaged properties and the auction vas held on 13.12.2007 and 14.12.2007. In he meanwhile, the Chairperson, Debts recovery Appellate Tribunal, Chennai, by a letter dated 30.11.2007 conveyed his approval for transfer of recovery appeals in i.P.No.420 of 2001 in O.A.No.460 of 1999 to the file of the Debts Recovery Tribunal, visakhapatnam. The grievance of the petitioner is that in spite of the specific direction from the Debts Recovery Appellate tribunal, Chennai for transfer of the recovery appeals under letter dated 30.11.2007, respondent No.1 had passed an order dated 0.12.2007 in M.P.No.28 of 2007 holding 1at the recovery certificate need not be transferred to the Debts Recovery Tribunal, visakhapatnam. In the said order dated 0.12.2007, it was also held that since the petitioner was carrying on business at Hyderabad and was having its registered office in Hyderabad, respondent NO.1 was competent to execute the recovery certificate respect of all the mortgaged properties respective of the fact that some of them fell under the jurisdiction of another Tribunal. There after, on 14.12.2007, the petitioner had ed another petition being IAI R NO.1205 of 2007 under Section 19(23) and (25) of the recovery of Debts Due to Banks and financial Institutions Act, 1993 (for short, 1e RDB Act") seeking stay of all further proceedings including stay of the auction proceedings scheduled to be held on 14.12.2007 at Vijayawada. However, the said petition was returned on the ground that the proceedings in O.A.No.460 of 1999 had been transferred to Debts Recovery Tribunal, Visakhapatnam.

4. Subsequent to the filing of the w




























































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