Back
DEBT RECOVERY APPELLATE TRIBUNAL, ALLAHABAD
R.K. Gupta, Chairperson, J.
Achala Gupta and Anr. —Appellants
versus
Bank of Baroda —Respondent
Appeal No. R-170 of 2013
Decided on 8.10.2013
For the Appellants:Mr. Kushal Kant and Mr.Piyush Kumar Tiwari, Advocates
For the Respondent:Mr. Rajesh Maindiretta, Advocate
Headnote:Recovery of Debts Due to Banks and Financial Institutions Act, 1993 — Sections 20, 30 — Transfer of Property Act, 1882 — Section 52 — Indian Partnership Act, 1932 — Section 14, 15 and 40 — Property of the firm — Property belonging to the partnership firm on deed of dissolution is passed on to another partner — Bank loan — Bank filed recovery proceedings — Application filed by Bank was allowed by the Debt Recovery Tribunal and Recovery Certificate was issued — According to appellant No.1 she was the owner of the property in question and appellant No.2 was the guarantor — Proceeding for attachment were issued by the Recovery officer but the Recovery officer by his order dated 15.6.2012 on the objection filed by appellant No.1 directed to maintain statues quo with the result that the property could not be put to auction — Recovery officer passed the final order by which the objection raised on behalf of appellant No.1 was allowed and the property was released — Property in question initially belonged to appellant No.2 — A partnership deed was entered into between both the appellants on 5.4.2001 — Firm was dissolved on 18.5.2002 and appellant No.2 surrendered all his claims and entitlement in favour of appellant No.1 — Property in question was not mortgaged but the property was attached by the Recovery officer on basis of From No.17 filed by the Bank before the Recovery Officer — Whether the Tribunal was justified in applying doctrine of lis pendens and holding that construction of the partnership firm was only made to frustrate the recovery of the Bank — (No.)
Held: Considering the fact that the appellant No. 1 has validly acquired the property and that there is no question of applying Section 52 of the Transfer of Property Act in which principle of lis pendens is enunciated because the property was not at all mortgaged but the individual property of the mortgagor i.e. the appellant No.2 was made stock of the partnership firm, it is not the case that the property which was mortgaged, to frustrate the mortgage the partnership firm was constituted between the appel1 ants but on the application submitted for attachment by the Bank the property of the appellant No.1 was treated to be the property of the appellant No.2 who was a guarantor but has not mortgaged the said property. Both the partners entered into partnership agreement to carry out the business subsequently, on dissolution of the partnership, the appellant No.2 relinquished all his rights and interest in favour of the appellant No. 1 to all the assets and stock of the firm therefore, the appellant No. 1 became the absolute owner. Thus, the Tribunal unnecessarily, held that the construction of the partnership firm was only made to frustrate the recovery of the Bank which cannot be accepted because the property was not mortgaged by the mortgagor i.e. the appellant No.2 and further the constitution of the partnership firm and dissolution was much prior to attachment order passed by the Recovery Officer. (Para 20)
Result: Appeal Allowed.
R.K. Gupta, Chairperson, J.—The present Appeal has been preferred by the appellants under Section 20 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 challenging the order passed by the Tribunal on 12th July, 2013 while exercising the powers vested with it under Section 30 of the said Act, 1993.
2. The relevant facts for adjudication of the present case are that according to the appellant No. I she is the owner-of the property in question: The appellant No. 2 was the guarantor and the loan transaction was made in favour of the Certificate Debtor firm namely United Soya Products Ltd. The Bank filed a Civil Suit for recovery of its dues and ultimately the said Civil Suit could not be decided by the Civil Court and after promulgation of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, the said Civil Suit was transferred to Debts Recovery Tribunal which was registered as T.A. No. 1172/1998 and the same was allowed by the Debts Recovery Tribunal by its order dated 16th August, 2000 and the Recovery Certificate was issued. The appellant No. 2 was also jointly and severally held liable to the due alongwith principal borrower.
3. After when the said certificate was issued then the land bearing Khasra Nos. 367-374-386/4/1/1, 373/1, 375 and 377 admeasuring 12.31 acres, situated at P.H No. 42, Village Bawariya Kalan, Tehsil Huzur, District Bhopal, M.P. was attached by the Recovery Officer. The proceedings for attachment were initiated by the Recovery Officer on the basis of the information in Form 17 submitted by the Bank. The property was to be put to auction by the Recovery Officer but the Recovery Officer by his order dated 15th June, 2012 on the objection filed by the appellant No. I directed to maintain status quo with the result that the property could not be put to auction.
4. According to the appellant No.1 she was the owner of the property and according to the Bank the said property belongs to appellant No.2 and therefore, the order for attachment was passed. The Recovery Officer passed the final order on 9th August, 2012 by which the objection raised on behalf of the appellant No.1 was allowed and the property was released but so far as the remaining property was concerned, there was no order to release but the property of which the description has been given hereinabove belonging to the appellant No.1 was released.
5. Against the order passed by the Recovery Officer, the Bank preferred an appeal under Section 30 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 to the Presiding Officer of Debts Recovery Tribunal and the Debt Recovery Tribunal vide the order impugned dated 12th July, 2013 allowed the Appeal preferred by the Bank and set aside the order dated 9th August, 2012 passed by the Recovery Officer by which the objection so raised by the appellant No. 1 was accepted.
6. In the present case, the Recovery Officer found that the property belongs to the appellant No. 1 and the Recovery Officer further observed that the property of which the description has already been given hereinabove does not belong to the appellant No.2 The learned Counsel appearing for the appellant submitted that in the present case, the order passed by the Tribunal does not deal with the correct position of law and it was further submitted that the Tribunal has not in fact decided the clinching issue in relation to the property and unnecessarily has referred to Section 52 of the Transfer of Property Act in which the principal of lis pendens in enunciated. It is submitted that the said lis pendens is not applicable in the present facts and circumstances of the case. The learned Counsel appearing for the appellant further submitted that in the present case the clinching issue had been whether the property which was initially belonging to the appellant No.2 the details of which has been given in earlier paragraph and whether has legally been passed on to the appellant No.1.
7. T
