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IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
VIPIN SANGHI, RAKESH THAPLIYAL, JJ.
M/s Sapt Rishi Iron and Steel Private Limited - Petitioner
Versus
Recovery Officer-II, Debts Recovery Tribunal & Others - Respondents
Writ Petition (M/B) No. 295 of 2023
Decided On : 17-10-2023
Recovery of Debts and Bankruptcy Act - Appointment of Security Guards - The Recovery Officer directed the Certificate Holder Bank to appoint sufficient numbers of guards 24X7 for safeguarding the movable and immovable assets. The bank was also entitled to seek assistance from the police authorities in case of any resistance from the debtors or third party objectors.
Fact of the Case:
The petitioner challenged the order of the Recovery Officer directing the bank to appoint security guards. The petitioner was not aggrieved by the part of the order related to the appointment of guards but was awaiting the pronouncement of orders reserved on objections raised against e-auction.
Finding of the Court:
The court found no merit in the petition and directed the petitioner to approach the DRT if aggrieved by the impugned order.
Issues: The issues involved objections raised against e-auction and the direction to appoint security guards.
Ratio Decidendi: The court held that the petitioner should approach the DRT if aggrieved by the order passed by the Recovery Officer under Section 30 of the Recovery of Debts and Bankruptcy Act, 1993.
Final Decision: The writ petition was dismissed, and the interim relief application was also disposed of.
JUDGMENT :
Vipin Sanghi, J.
The petitioner has preferred the present writ petition to assail the order dated 25.09.2023, passed by the Recovery Officer-II, Debts Recovery Tribunal, Paras Tower, Majra, Dehradun.
2. The impugned order reads as follows :
R.C. No. 67/2019 (O.A. 201/2018)
Indian Overseas Bank V/s M/s Uttaranchal Iron & Ispat Ltd. & Ors.
Date : 25.09.2023
Present: Mr. B.P. Singh, Counsel for CH Bank,
Mr. Vibhor Maheshwari, Counsel for Third Party Objector,
Mr. Karm Solanki, Counsel for CD No. 5,
Ms. Priyanka Dabral, Counsel for Mr. Munish Kumar.
The comments of CH Bank qua objections of Third Party Objector has been filed vide dy. no. 9459, comments qua objections of CD No. 5 vide dy. no. 9461 and comments to objections of Mr. Munish Kumar purported to be director of CD No. 1 vide dy. no. 9460 of the even date 25.09.2023, which are taken on record.
Further, the CH Bank has also filed IA No. 862/2023 vide dy. no. 9458 dated 25.09.2023 praying for appointment of Receiver for taking possession of the subject properties with the assistance of Police authorities. The CH Bank has also sought permission to appoint guard at the factory premises at Plot No. 2, 3, 4, 5, 6 & 7, Jasodharpur, Industrial area, Kotdwar, Distt. Pauri Garhwal, Uttarakhand in order to safeguard the movable and immovable assets.
Heard the contesting counsels at length on the objections raised against the e-auction scheduled on 26.05.2023 and Order Reserved thereon.
In view of the scheduled auction it is expedient that the interest of the prospective purchasers are protected hence the IA of the CH Bank is taken up for consideration. The Counsel for CD No. 5 has sought time to file objections against bank’s prayer of physical possession. Allowed.
As regards the prayer of the CH Bank seeking permission to appoint security guards at the above property for ensuring the safety of the movable and immovable assets, I am of the considered view that it would be equitable to grant the said permission so that the hypothecated assets are not removed / depleted. Hence the prayer of the CH Bank is allowed.
The CH Bank is directed to appoint sufficient numbers of guards 24X7 for safeguarding the movable and immovable assets. In case any resistance is offered by the CDs or by any third party objectors towards the implementation of the said orders the CH Bank shall be entitled to seek assistance from the concerned Station House Officer of the Police authorities / District Administration towards compliance of the above order.
List on 26.09.2023 for e-auction report.
Let this order be uploaded on e-drt portal.
(Rakesh Pratap Singh)
Recovery Officer-II
DRT, Dehrdun”
3. The only operative part of this order is in relation to the Certificate Holder Bank being directed to appoint sufficient numbers of guards 24X7 for safeguarding the movable and immovable assets. It has been observed that in case any resistance is offered by the Certificate Debtors or by any third party objectors towards the implementation of the said order, the Certificate Holder Bank shall be entitled to seek assistance from the concerned Station House Officer of the Police authorities / District Administration towards compliance of the said order.
4. Counsel for the petitioner states that the petitioner is not aggrieved by that part of the order. He submits that the order had been reserved on the objections raised by the petitioner against e-auction, which was scheduled on 26.05.2023. However, that order has not been pronounced till date. Perusal of Annexure-8 filed with this petition shows that the matter was listed on 09.10.2023 for pronouncement of orders reserved on 29.05.2023. It is not disclosed – as to what transpired on the said date, i.e., 09.10.2023.
5. In our view, there is no merit in this petition. It is for the petitioner to approach the DRT, in case the petitioner is aggrieved by the impugned order passed by the Recovery Officer, under Section 30 of the Recovery of Debt
The petitioner should approach the DRT if aggrieved by the order passed by the Recovery Officer under Section 30 of the Recovery of Debts and Bankruptcy Act, 1993.
A bona fide purchaser at auction is protected, and a writ petition challenging the confirmation of sale is not maintainable if filed beyond the statutory period.
The Recovery Officer's order was treated as an interim order, and both parties were given an opportunity to present their case before the Recovery Officer for a final decision.
Recovery Officers must adhere to jurisdictional limits and cannot impose binding interim orders affecting property rights without proper evidentiary basis and due process.
The central legal point established in the judgment is the importance of upholding consent terms, the obligations of the parties, and preventing deliberate obstruction of recovery proceedings.
The Recovery Officer should cancel the auction sale if the bank's dues are paid before the sale is confirmed. The auction purchaser has no right over the property before the sale is confirmed.
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