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2009(1) Bankmann 582 (Bom.)
BOMBAY HIGH COURT
V.C. Daga, J.
Harjit Singh Sohal and Anr. —Appellants
versus
Indian Bank —Respondent
Writ Petition No. 5627 of 2008
Decided on 18.12.2008
For the Appellants:Mr. N.G. Thakkar and Ms. Sophia Pinto, Advocates.
For the Respondent:Mr. S.S. Shetye, Ms. Mohana Nair i/b JMB Partners and Ms. Yamini Chandran, Advocates.
IMPORTANT POINT
Forfeited amount cannot go to the bank’s coffers and also cannot be adjusted against the bank’s recovery.
Headnote:(i) Recovery of Debt due to Banks and Financial Institutions Act, 1993—Section 21—Condition of pre-deposit—DRT decreed suit for recovery of money with further interest with direction to sell mortgage property—DRT did not admit appeal against DRT’s decree and direction —Pre-deposit was made despite extension of hours—Appeal dismissed.
(ii) Constitution of India—Article 226—Writ petition prays for extension of time, adjustment of Rs. 1,10,000 (forfeited) and restoration of appeal—Held: Dismissal of petitioners appeal has achieved finality—Application under Section 21 of the 1993 Act is withdrawn— Right to appeal is neither absolute nor ingredient of natural justice—Petition is devoid of any substance—Writ petition is dismissed. (Paras 5, 12, 25 and 26)
V.C. Daga, J.—Rule returnable forthwith. Heard finally by consent of parties. This petition is directed against the order dated 23rd August 2008 passed by the learned Presiding Officer of the Debts Recovery Appellate Tribunal, Mumbai (“the DRAT” for short).
2. The petitioners were parties of M/s Sohal Engineering Works (“the said firm” for short) having its office at Sohal Industrial Estate, LBS Marg, Bhandup, Mumbai 400078. The respondent is one of the nationalized Banks of the country having its branch office at Mumbai (“the Bank” for short).
3. The Bank advanced credit facilities to the extent of Rs. 56,00,000 by the said firm from time to time against the mortgage of their immovable property, being plot of land bearing Survey No. 200 (part) CTS No. 288/1 to 2 of Bhandup village, Mumbai Suburban district, together with the factory building and other structures/errections and godowns standing, thereon, (“the said mortgaged property” for short).
4. The said firm had also executed necessary loan documents to secure the finances made by the Bank from time to time. The said firm M/s Sohal Engineering Works committed number of defaults in payment of outstanding dues of the Bank. Consequently, amount due and recoverable from the said firm was recalled.
5. The said firm did not repay its outstanding dues in spite of demands. Consequently, the respondent-Bank in the year 1993 filed suit bearing No.2667 of 1993 in the High Court against the said firm for recovery of their dues with future interest. The said suit was transferred to the Debts Recovery Tribunal-II, Mumbai (“the DRT” for short) on the establishment of the said Tribunal, numbered as Original Application No.2449 of 1999. The suit was, thereafter, decreed on 20th June, 2003. The judgment and order directed inter alia; the petitioners to pay Rs.1,36,21,240.66 ps. together with further interest thereon with direction to sell the mortgage property, described hereinabove.
6. Being aggrieved by the aforesaid judgment and order dated 20.6.2003, the petitioners filed Appeal No.73 of 2004 (“the said Appeal” for short) before .DRAT along with Misc. Application No. 105 of 2004 for waiver of pre-deposit and prayed for stay of recovery proceedings. The DRAT vide its order dated 20.8.2007 directed the petitioner to deposit a sum of Rs. 8,90,000 within eight weeks, failing which the appeal was to stand dismissed.
7. The petitioners could not arrange for the aforesaid sum of Rs.80,00,000. Consequently, on 22.10.2007 the appeal automatically stood dismissed. The applications moved by the petitioners from time to time to seek extension of time did not result in compliance of the order of pre-deposit. The proceedings to execute decree obtained by the respondent-Bank were initiated before the Recovery Officer. The mortgaged property was put to auction on 23.5.2007, in which the highest bid was given by one M/s Kumar Housing and Land Development Ltd. for Rs.34,00,00,000. However, said highest bidder defaulted in making payment of the balance bid amount. Hence, the Recovery Officer of DRT-II cancelled the said auction sale and forfeited the earnest money deposit of Rs.1,10,00,000 paid by the said highest bidder.
8. Being aggrieved by the order of forfeiture M/s. Kumar Housing and Land Development Ltd. preferred the Misc. Appeal No.8 of 207 before the Presiding Officer of the DRT, Mumbai, who was pleased to confirm the order of the Recovery Officer against which an appeal was preferred before the DRAT, which was also dismissed by an order dated 28.4.2008. Now, the challenge to this order is pending before this Court in the writ petition filed by the said bidder.
9. The mortgaged property was again put to public auction on 16.6.2008, wherein one M/s Kakade Infra Projects Builders Pvt. Ltd. was declared as successful bidder, whose bid was a sum of Rs. 41,25,00,000. The auction sale confirmed on 30.7.2008, in their favour. The purchaser, has paid the stamp duty required to be paid for issuing
