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HIGH COURT OF JUDICATURE AT MADRAS
SATISH K. AGNIHOTRI & M. VENUGOPAL, JJ.
Prasanthi Cashew Company Pvt. Ltd. & Another
Versus
A. Abdul Salam & Others
W.P. Nos. 28232 & 35156 of 2014 & M.P. No. 1 of 2014
Decided On : 28-01-2015
Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 13(2) - Purpose of obtaining financial loan - Legality and validity of order - Debts Recovery - Principles of natural justice - Brief facts relevant for adjudication of dispute as projected by petitioner are that petitioner has purchased foretasted land in question on auction held by respondent bank to recover secured amount against said property which was mortgaged by first respondent for purpose of obtaining financial loan from respondent bank - Needless to state that legal requirement of issuance of demand notice under Section 13(2) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and thereafter consequential measures under Section 13(4) of SARFAESI Act were taken before land in question was put on auction by respondent bank - Case has a chequered history as parties have travelled from one Court to other Court up to Supreme Court against several interim orders passed by Debts Recovery Tribunal - Said proceedings are not relevant for adjudication of present dispute before us - Thus court are not setting out details of said proceedings – Held, Court may not be agreeable with contention urged by counsel for first respondent that issue of considering waiver application is between Court and appellant - If third respondent before Appellate Tribunal was a party respondent being auction purchaser of secured asset property in question it is not proper to give up auction purchaser petitioner herein even in waiver application - However it seems that petitioner herein is basically aggrieved by ex parte order passed by Appellate Tribunal restraining petitioner herein from alienating or encumbering or dealing with property in any way without hearing him - Law in this respect is well settled - Supreme Court in Industrial Credit and Investment Corporation of India Ltd. Industries Ltd. and Others - Further when power is given to Tribunal to make an interim order by way of an injunction or a stay it inheres in it power to grant that order even ex parte if it is so in interest of justice and as per requirements as spelt out in judgment of this Court in Morgan case which has been quoted above - Aforesaid ratio laid down by Supreme Court still holds water - Thus so far as power of Appellate Tribunal to pass an ex parte order is concerned there is no infirmity in same - However since ex parte order is only for a short a duration and it is normally granted to safeguard interest of applicant it is necessary that all parties including petitioner herein be heard before affirming ex parte order - As court are informed that all parties including writ petitioner auction purchaser are before Appellate Tribunal court are not inclined to pass any order on merits of this case – However court direct Appellate Tribunal to consider case on merits and in accordance with law after hearing all parties including auction purchaser who is petitioner before us as expeditiously as possible - Court expect that parties to proceedings will not seek adjournment on frivolous grounds and will cooperate with Appellate Tribunal for taking decision on merits and in accordance with law at earliest – Petition disposed of
SATISH K. AGNIHOTRI, J.
1. The petitioner company in W.P. No. 28232 of 2014, stating to be the owner of the land in R.S. No. 622, 624/10, 924/11, 646/17 and 646/18 at Perinadu Village, Kollam Taluk, Kollam District, Kerala, has come up with the said writ petition, questioning the legality and validity of the order dated 07.04.2014 passed in I.A. No. 452 of 2014 in AIR (S.A.) No. 141 of 2014 by the Debts Recovery Appellate Tribunal, Chennai (for short the Appellate Tribunal).
2. The brief facts relevant for adjudication of the dispute, as projected by the petitioner are that the petitioner has purchased the aforestated land in question on auction held by the respondent bank on 19.08.2011 to recover the secured amount against the said property which was mortgaged by the first respondent for the purpose of obtaining financial loan from the respondent bank. Needless to state that the legal requirement of issuance of demand notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short the SARFAESI Act) and thereafter, consequential measures under Section 13(4) of the SARFAESI Act were taken before the land in question was put on auction by the respondent bank.
3. The case has a chequered history as the parties have travelled from one Court to other Court, upto the Supreme Court against several interim orders passed by the Debts Recovery Tribunal. The said proceedings are not relevant for the adjudication of the present dispute before us. Thus, we are not setting out the details of the said proceedings.
4. The prime and precise contention of the petitioner before us is that the Appellate Tribunal, while considering the application for waiver filed by the first respondent in appeal preferred against the order dated 15.01.2014 passed by the Debts Recovery Tribunal, Ernakulam in S.A. No. 272 of 2011, passed the order to give up the petitioner herein who was the third respondent therein. Thereafter, the Appellate Tribunal proceeded to pass an ex parte order against the petitioner restraining the petitioner from encumbering or alienating or dealing with the property in any way till 21.04.2014. Thus, it is urged before us that the Appellate Tribunal committed an error in passing the restraint order against the petitioner, after giving up the petitioner from the proceedings. It is further contended that though it appears that the petitioner, being the third respondent was given up in the application for waiver, however, the restraint order was passed in the same application and as such, the impugned order is arbitrary, unreasonable and contrary to the principles of natural justice.
5. On the other hand, Mr. F.B. Benjamin George, learned counsel for the first respondent/ appellant before the Appellate Tribunal, would submit that the waiver application before the Appellate Tribunal involved adjudication between the Court and the appellant therein. The petitioner herein who was the third respondent therein had nothing to do in the matter and as such, the third respondent was given up. The petitioner herein had sufficient opportunity to contest the matter of grant of interim restraint pursuant to the notice and as such, there is no illegality or irregularity in the order sought to be impugned in this writ petition.
6. Mr. V. Girishkumar, learned counsel appearing for the respondents 2 and 3 bank contends in support of the order sought to be impugned in this writ petition.
7. We have heard the learned counsel for the parties and examined the rival contentions carefully.
8. On a bare perusal of the impugned order passed by the Appellate Tribunal, it appears that the writ petitioner was given up while passing the order in I.A. No. 452 of 2014, i.e. the application for waiver. However, in continuation, another order was passed by the Appellate Tribunal restraining the petitioner herein from alienating or encumbering or dealing with the property in any way till 21.
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