Judicial Analysis Court Copy Headnote Facts Arguments Court observation

CALCUTTA HIGH COURT
Sabyasachi Bhattacharyya, J.
M/s Alogoma Steels Limited —Petitioner
versus
CIC Steels Pvt. Ltd. and Anr. —Respondents
R.V. W. No.84 of 2018 with C.A.N. No.4501 of 2018 with C.A.N. No.4502 of 2018 in C.O. No.993 of 2018
Decided on 6.2.2019

Counsel for the Parties:
For the Petitioner:Mr. Jayanta Mitra, Mr. Saptangshu Basu, Mr. Sarathi Dasgupta, Mr. Shehabuddin and Mr. Vikas Singh, Advocates
For the CIC Steels Pvt. Ltd.:Mr. Hirak Mitra, Mr. Suddhasatwa Banerjee, Ms. Suchismita Ghosh, Mr. Shounak Mitra and Mr. Rishov Dutt, Advocates
For the State Bank of India:Mr. Jay Saha and Mr. Kunaljit Bhattacharjee, Advocates
For the LOCO Industries:Mr. Dhruba Ghosh, Mr. Arindam Banerjee and Mr. Vivek Basu, Advocates

IMPORTANT POINT
Redemption of mortgage—Section 60-A of Transfer of Property Act, 1882only gives an additional option to mortgagor to redeem through a third party, subject to consequence that rights of mortgagor in property stand transferred to third party-assignee in exclusion of mortgagor.

Headnote:Recovery of Debts Due to Banks and Financial Institutions Act, 1993 – Section 19 – Transfer of Property Act, 1882 – Sections 60 and 60-A – Recovery of debt – Redemption of mortgage – Section 60-A only gives an additional option to mortgagor to redeem through a third party, subject to consequence that rights of mortgagor in property stand transferred to third party-assignee in exclusion of mortgagor – Effect of Section 60-A is only to relieve mortgagor of liability to repay loan by assigning mortgaged debt to third party – However, right to redeem a loan and title in property stands transferred to third party-assignee – In present case, no title in property was retained by mortgagor – Even mortgaged loan being assigned to respondent no. 1, right of redemption also went to respondent no. 1–assignee in substance – What remained with mortgagor-applicant was right to be free from liability to repay loan – Any legal right, if available in law either to applicants in review petition as well as recall application, were not affected by order under review – In the event there was any subsequent attempt to tender significantly higher bids than respondent no.1, there was no fetter on Tribunal, imposed by order under review, to consider the same – Term “in accordance with law” was sufficiently wide to encompass any subsequent changed circumstance – Tests for review, being existence of an error apparent on face of record, discovery of new matter or any other ground akin thereto, are entirely absent in present case – Questions raised by applicants in both review application and recall application pertain to alleged errors of law and/or fact and do not attract in any manner provisions of review – Applications dismissed. (Paras 40, 41, 45, 47 and 48)
Result: Applications dismissed.

JUDGMENT

Sabyasachi Bhattacharyya, J.—RVW 84 of 2018 and CAN 4502 of 2018 are taken up together for hearing, being directed against the same order - the former seeks review of an order dated June 15, 2018 passed in C.O. No. 993 of 2018 and the latter seeks recall of the same order.

2. The present review petition has been taken out by the opposite party no. 1 in C.O. No. 993 of 2018. The grounds of challenge to the order under review are primarily as follows:

3. That no third party (here the petitioner/present respondent no. 1, namely, CIC Steels Pvt. Ltd.) could be impleaded in a proceeding under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as “the DRT Act”).

4. Secondly, that since the present respondent no. 1 sought virtually to enforce an agreement allegedly entered into between the applicant and the respondent no. 1, the tribunal did not have jurisdiction to grant such relief and the petitioner/respondent no. 1 ought to have approached the appropriate forum, either for specific performance of contract or for damages.

5. Thirdly, the statutory right of redemption, which was available to the applicant, was taken away by the order under review.

6. Learned senior counsel appearing for the applicant places the provisions of Section 19 of the DRT Act in this context, which are set out below:

“Recovery of Debts Due to Banks and Financial Institutions Act, 1993:-

19. Application to the Tribunal.—(1) Where a bank or a financial institution has to recover any debt from any person, it may make an application to the Tribunal within the local limits of whose jurisdiction,—

(a) the branch or any other office of the bank or financial institution is maintaining an account in which debt claimed is outstanding, for the time being; or

(aa) the defendant, or each of the defendants where there are more than one, at the time of making the application, actually and voluntarily resides, or carries on business, or personally works for gain; or

(b) any of the defendants, where there are more than one, at the time of making the application, actually and voluntarily resides, or carries on business, or personally works for gain; or

Provided that the bank or financial institution may, with the permission of the Debts Recovery Tribunal, on an application made by it, withdraw the application, whether made before or after the Enforcement of Security Interest and Recovery of Debts Law (Amendment) Act, 2004 for the purpose of taking action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002), if no such action had been taken earlier under that Act:

Provided further that any application made under the first proviso for seeking permission from the Debts Recovery Tribunal to withdraw the application made under sub-section (1) shall be dealt with by it as expeditiously as possible and disposed of within thirty days from the date of such application:

Provided also that in case the Debts Recovery Tribunal refuses to grant permission for withdrawal of the application filed under this sub-section, it shall pass such orders after recording the reasons therefor.

(1-A) Every bank being, multi-State co-operative bank referred to in sub-clause (vi) of clause (d) of Section 2, may, as its option, opt to initiate proceedings under the Multi-State Co-operative Societies Act, 2002 (39 of 2002) to recover debts, whether due before or after the date of commencement of the Enforcement of the Security Interest and Recovery of Debts Laws (Amendment) Act, 2012 from any person instead of making an application under this Chapter.

(1-B) In case, a bank being, multi-State co-operative bank referred to in sub-clause (vi) of clause (d) of Section 2 has filed an application under this Chapter and subsequently opts to withdraw the application for the purpose of initiating proceeding under

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Judicial Analysis

SupremeToday

CALCUTTA HIGH COURT Sabyasachi Bhattacharyya, J.M/s Alogoma Steels Limited —PetitionerversusCIC Steels Pvt. Ltd. and Anr. —RespondentsR.V. W. No.84 of 2018 with C.A.N. No.4501 of 2018 with C.A.N. No.4502 of 2018 in C.O. No.993 of 2018 Decided on 6.2.2019

IMPORTANT POINTRedemption of mortgage—Section 60-A of Transfer of Property Act, 1882only gives an additional option to mortgagor to redeem through a third party, subject to consequence that rights of mortgagor in property stand transferred to third party-assignee in exclusion of mortgagor.

Cases Referred (3)

Judicial Analysis

CALCUTTA HIGH COURT
Sabyasachi Bhattacharyya, J.
M/s Alogoma Steels Limited —Petitioner
versus
CIC Steels Pvt. Ltd. and Anr. —Respondents
R.V. W. No.84 of 2018 with C.A.N. No.4501 of 2018 with C.A.N. No.4502 of 2018 in C.O. No.993 of 2018
Decided on 6.2.2019

IMPORTANT POINT
Redemption of mortgage—Section 60-A of Transfer of Property Act, 1882only gives an additional option to mortgagor to redeem through a third party, subject to consequence that rights of mortgagor in property stand transferred to third party-assignee in exclusion of mortgagor.