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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SONIA GOKANI, SANDEEP N. BHATT, JJ.
ADARSH KHANDSARI UDHYOG – Petitioner
Versus
DEBT RECOVERY TRIBUNAL-II, AHMEDABAD – Respondent
Special Civil Application No. 25671 of 2022
Decided On : 05-01-2023
Recovery of Debts and Bankruptcy Act, 1993 – Section 19(25) - Companies Act, 1956 - Securitization And Reconstruction Of Financial Assets And Enforcement Of Security Interest Act, 2002 - Section 13(2), 14, 17, 18 - Debt Recovery Tribunal (Procedural Rules) 1993 - Rule 18 - Gujarat Public Trust Act, 2011 - Constitution of India, 1950 - Articles 226 and 227 - Debts Recovery Tribunal (Procedure) Rules, 1993 - Rule 5(4) - Mortgaged immovable properties - Repayment of loan - Take physical possession of properties - Grievance on part of petitioner is that after application was reserved for judgment and pronouncment Bank had produced certain documents vide a pursis and without affording any opportunity of hearing to applicant – Held, Remedy of petitioner in such a case to prefer an appeal against order of Registrar under Sub-Rule (4) within 15 days of passing of order to Presiding Officer concerned, as Registry under Rule 5 has right to decline to register application if, concerned applicant failed to rectify defect within time allowed in sub-rule (3) that is what has been done in instant case - When approaching this Court for equitable relief, it was expected by petitioner to disclose all these aspects more particularly, when matter was taken up for hearing outcome before Registry of Tribunal was already available on internet - It is having already chosen remedy was also not highlighted and hence, even without holding against petitioner in this regard, Court find that there is an efficacious remedy available for petitioner to approach - It had already chosen to so do it and yet without exhausting same, it prefer to come before this Court - It was not difficult for petitioner to approach court concerned for recall - Insistence on part of Registry to go for review instead of recall if was objectionable to petitioner, it already has a remedy as mentioned - Petition disposed of.
ORDER :
1. The petitioner is before this Court seeking to quash the final order dated 22.11.2022 passed in Securitization Application No. 114 of 2013. The main grievance on the part of the petitioner is that after the said application was reserved for judgment and pronouncment on 01.11.2022, the Bank had produced certain documents on 18.11.2022 vide a pursis and without affording any opportunity of hearing to the applicant. The order came to be passed by the Debt Recovery Tribunal-II, Ahmedabad in the said application. This has aggrieved the applicant-petitioner and is before this Court seeking following reliefs:
(A) That the Hon’ble Tribunal be pleased to issue appropriate writ, order or direction quashing and setting aside order dated 22.11.2022 passed dismissing Securitisation Application No. 114 of 2013 (At Annexure A) by Respondent No. 1 and direct Respondent No. 1 to rehear the Securitisation Application No. 114 of 2013.
(B) That pending the hearing and final disposal of this application, the Hon’ble Tribunal be pleased to stay the implementation and execution of final order dated 22.11.2022 (Annexure A) passed in Securitisation Application No. 114 of 2013.
(C) For ad-interim reliefs in terms of Para (B).
(D) For such other and further reliefs as the Hon’ble Tribunal may deem fit and proper in the facts and circumstances of the case.”
2. Brief facts leading to the present petition are as follow:
2.3 The respondent Bank sanctioned Cash Credit Limit of Rs. 3 Crore to Adarsh Ginning Pvt. Ltd. and applicant No. 1 had mortgaged certain immovable properties with the Bank as security and applicant No. 2 had provided personal guarantee for the limits sanctioned. On account of the default committed by the borrower in the repayment of loan, the respondent-Bank issued the demand notice on 30.07.2013 under Section 13(2) of the Securitization And Reconstruction Of Financial Assets And Enforcement Of Security Interest Act, 2002 (‘the SARFAESI Act’ hereinafter) demanding the sum of Rs. 2,99,17,365/-.
2.4 The Bank also filed an application under Section 14 of the SARFAESI Act to take physical possession of the properties in question. The District Magistrate, Gir Somnath passed an order on 28.09.2015 for taking physical possession of the properties and the Bank took possession of the mortgaged properties and issued the possession notice on 01.10.2013.
2.5 The sale by way of auction vide auction sale notice dated 09.09.2016 took place and it was held on 15.10.2016. The respondent Bank issued the certificate of sale on 17.11.2016 in favour of the respondent auction purchasers and aggrieved by these measures, the petitioner preferred the Securitization Application No. 114 of 2013.
2.6 Both the sides had completed the pleadings and thereafter the matter was reserved for judgment scheduled on 01.11.2022. It appears that on that day the matter could not be finally decided and pronounced. Thereafter, it continued to be at the stage of pronouncement. It is not in dispute that the arguments had been concluded and both the sides were permitted to tender written submissions till 05.11.2022. The matter was listed for pronouncement on 11.11.2022 thereafter and it had been further deferred for judgment on 18.11.2022 due to paucity of time.
2.7 On 18.11.2022, when the matter was listed for pronouncement of judgment, the learned advocate for the respondent Bank served a copy of pursis on
Point of Law - It is not for a litigant to decide what fact is material for adjudicating a case and what is not material. It is the obligation of a litigant to disclose all the facts of a case and le....
While expressing the aforesaid view, we are conscious that the powers conferred upon the High Court under Article 226 of the Constitution to issue to any person or authority, including in appropriate....
The main legal point established in the judgment is that when an alternative remedy is available to challenge an order under the SARFAESI Act, the instant writ petition is not maintainable.
The Tribunal must consider merits and apply due diligence in SARFAESI Act proceedings, treating them like civil suits, to ensure fair adjudication.
The main legal point established in the judgment is the importance of approaching the court with clean hands and the consequences of suppression of material facts.
The court established that the right of redemption under the SARFAESI Act is extinguished upon the issuance of a sale certificate, and timely challenge to bank actions is essential.
The court held that the petitioners, as successful bidders in the e-auction, were entitled to have the sale deed executed in their favor as individuals, despite participating in the auction as a grou....
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