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2020 Supreme(Kar) 590
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ABHAY S. OKA, M. NAGAPRASANNA, JJ.
Arshad Ispat Partnership Firm – Appellant
Versus
Union Of India – Respondent
Writ Appeal No.395 of 2020 (GM -RES)
Decided on : 10-07-2020
Advocate Appeared:
For the Appellant :SRI X.M.JOSEPH, ADVOCATE
For the Respondent:SRI M.N.KUMAR, SRI VIJAY KUMAR A PATIL, SRI V.B.RAVISHANKAR, ADVOCATE
Headnote:
Securitization and Reconstruction of Financial Assets And Enforcement of Security Interest Act, 2002 - Section 13(2) - Enforcement of Security Interest and Recovery of Debts Laws Act, 2012 - Section 6(c) - Constitution of India, 1950 - Article 226 - Possession of property - Immovable properties - Appellants having defaulted in payments Bank issued a notice on January invoking section 13(2) of Securitization and Reconstruction of Financial Assets And Enforcement of Security Interest Act, 2002 calling upon appellants to pay a sum which was outstanding loan amount and interest accrued at relevant point of time - Appellants failed to comply with terms of notice issued by Bank pursuant to which a symbolic possession of property of appellants was taken on July and a possession notice was issued under Section 13(4) of Act - Aforestated property was put out for sale by an e-auction under a sale notice fixing date of auction - 6th respondent herein participated in e-auction and was declared to be successful bidder - It is at that point of time appellants challenged sale proceedings conducted by Bank before Debt Recovery Tribunal in appeal - Tribunal granted an interim order subject to condition that petitioners to deposit a sum on or before February – Held, It is in interest of public at large that a finality should attach to decisions pronounced by Courts of competent jurisdiction and is also in public interest that none should be vexed twice over same kind of litigation - Parties should not be permitted to bring fresh litigations because of new views that they may entertain every time - If this were permitted litigations would have no end except when legal ingenuity is exhausted - If facts obtaining in case on hand are considered qua principles of public policy it would be clear that appellants having not chosen to raise a challenge to Amendment Act of 2012 after its dismissal cannot now urge that Amendment Act of 2012 is contrary to SARFAESI Act resulting in prejudice to appellants - Appellants filing another writ petition substantially for same relief substantially on same allegation cannot be permitted as previous decision of this Court which has became final cannot be reopened in present case as earlier order passed will govern rights and obligations of parties - Every ground that was urged was always available to appellants when they filed earlier writ petitions - Amendment Act of 2012 is notified ad a clear nexus with nature and character of writ petitions filed earlier - Appellants having failed to raise a challenge to Amendment Act of 2012 in earlier proceeding would be debarred from agitating same in subsequent writ petition - Permitting repeated filing of writ petitions on same cause of action and is an abuse of process and opposed to principles of public policy - It is germane to notice that appellants have not paid any amount even as on date against a claim of a public sector nationalized bank which was more than and would submit that they have not paid amount due to frustration of business losses - This bogey of frustration is uttered like a swan song by every borrower who has defaulted in payment - Demand notice was issued and much water has been flown beneath bridge till this date - Rights of parties are altered and sale certificate is issued in favor of 6th respondent - If court at this juncture consider issue on merits of claim of borrower who has throughout been litigating without making any payment to Bank it would be putting a premium on his limitative persistence - In terms of law declared by Apex Court if facts obtaining in case on hand are noticed court would have no hesitation to hold that appellants have no equity in their favor which may justify court interference in exercise of equitable discretionary and extraordinary jurisdiction under Article 226 of Constitution of India - Actions of appellants cannot but be turned as blameworthy in not making good any payment prior to issuance of sale certificate in favor of auction purchaser and intermittently stonewalling efforts of Bank to redeem its secured credit - This discretionary jurisdiction will have to be declined to be exercised in order to bring a finality to crafty evasions new subtleties and ingenuities invented by appellants to evade law - In court considered view order of learned Single Judge does not warrant any interference on sheer conduct of appellants - Writ appeal is dismissed
JUDGMENT :
Aggrieved by the order dated 29th May 2020 passed by the learned Single Judge in W.P.No.51184/2017, whereby the learned Single Judge dismissed the writ petition, the writ petitioners have filed the instant writ appeal.
2. Shorn of unnecessary details, the facts material for the adjudication of this appeal, may be stated thus:
The appellants are a partnership firm engaged in the business of manufacture and trade of Sponge Iron from Iron Ore. The appellants sought and were sanctioned financial assistance from the 4th respondent-Corporation Bank (hereinafter referred to as ‘Bank’ for short), who on 14th October 2009 sanctioned the term loan of Rs.12.00 crores and thereafter, sanctioned an additional sum of Rs.3.00 crores on hypothecation and mortgage of immovable properties which was of deposit of title deeds, this appeal concerns mortgage of a residential apartment built on a land measuring 3990 sq. ft. situated at No.39, Ward No.11, Assessment No.39, Opposite Municipal School Ground, College Road Area, Hospet, Bellary District.
3. The appellants having defaulted in payments, the Bank issued a notice on 6th January 2012 invoking section 13(2) of the Securitization and Reconstruction of Financial Assets And Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘SARFAESI Act’ for short) calling upon the appellants to pay a sum of Rs.14,85,16,675/-which was the outstanding loan amount and interest accrued at the relevant point of time. The appellants failed to comply with the terms of the notice issued by the Bank pursuant to which a symbolic possession of the property of the appellants was taken on 4th July 2012 and a possession notice was issued under Section 13(4) of the Act.
4. The aforestated property was put out for sale by an e-auction under a sale notice dated 29th December 2016 fixing the date of auction on 30th January 2016. The 6th respondent herein participated in the e-auction and was declared to be the successful bidder. It is at that point of time, the appellants challenged the sale proceedings conducted by the Bank before the Debt Recovery Tribunal at Bangalore (hereinafter referred to as ‘the Tribunal’ for short) in appeal I.R. No.652/2016. The Tribunal granted an interim order subject to the condition that the petitioners to deposit a sum of Rs.25.00 lakhs on or before 25th February 2016. The petitioners pursuant to the interim order deposited only Rs.10.00 lakhs as partial compliance of the order of the Tribunal. The appellants later filed an application before the Tribunal seeking extension of time to comply with the conditional interim order of deposit of Rs.25.00 lakhs.
5. The Tribunal directed that the appellants should deposit a sum of Rs.1.00 crore on or before 30th March 2016. The appellants failed to deposit the amount so directed. On such failure, the Tribunal vacated the interim order and dismissed the appeal. Thus, the challenge to the auction sale before the Tribunal failed. After the dismissal of the appeal the bank confirmed the sale in favour of the 6th respondent on 24th August 2016. The appellants filed the W.P. Nos.9687-9689 of 2017 seeking a prayer, inter alia, to set aside the auction sale made in favour of the 6th respondent herein on 24th August 2016.
6. The Bank later moved the District Magistrate with an application under Section 14 of the SARFAESI Act seeking assistance to take physical possession of the property in question. By an order dated 16.10.2017, the District Magistrate directed the Tahsildar to take possession of the immovable property and handover the same to the Bank.
7. The appellants filed another writ petition challenging the order dated 16.10.2017 passed by the District Magistrate and also sought a declaration that Section 6(c) of the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Act, 2012 (hereinafter referred to as ‘Amendment Act of 2012’ for short) as arbitrary, running contrary to Section 13(2) read with Section 2(1)(o) of
