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2016 Supreme(Tri) 324
IN THE HIGH COURT OF TRIPURA, AGARTALA
S. TALAPATRA, J.
Sri Asish Kr. Das – Petitioner
Versus
Assam Financial Corporation – Respondent
W.P. (C) No. 414 of 2012
Decided On : 27-09-2016
For the Petitioners: Mr. A.K. Bhowmik, Mr. R. Dutta and Ms. A. Banik.
For the Respondents: Mr. D.R. Choudhury, Mr. K.K. Roy, Mr. R. Dasgupta, Mr. B.N. Majumder, Mr. R. Saha and Ms. A.S. Lodh.
Headnote:
The sale of the pledged property by the financial corporation under Section 29 of the State Financial Corporations Act, 1951 (the Act) was set aside as it was not in accordance with the due process of law. The court held that Section 29 of the Act deals with the property of the industrial concern, whereas Section 31 takes within its sweep both the property of the industrial concern and of the surety. The court further held that the pledged property of the surety cannot be sold out in a process commenced under Section 29 of the Act.
Fact of the Case:
The petitioners had challenged the sale of their land, which was mortgaged to a financial corporation, by the corporation under Section 29 of the Act. The petitioners argued that they were not given due notice of the sale and that the corporation had not exhausted all the processes to realize the due from the borrower before proceeding against them as guarantors. The corporation, on the other hand, contended that the sale was carried out in accordance with the provisions of Section 29 of the Act and that the petitioners had been duly notified of the sale.
Finding of the Court:
The court found that the petitioners were not given due notice of the sale and that the corporation had not exhausted all the processes to realize the due from the borrower before proceeding against them as guarantors. The court also held that the pledged property of the surety cannot be sold out in a process commenced under Section 29 of the Act.
Issues: 1. Whether the sale of the pledged property by the financial corporation under Section 29 of the Act was in accordance with the due process of law. 2. Whether the petitioners were given due notice of the sale. 3. Whether the corporation had exhausted all the processes to realize the due from the borrower before proceeding against the petitioners as guarantors.
Ratio Decidendi: The court held that the sale of the pledged property by the financial corporation under Section 29 of the Act was not in accordance with the due process of law because Section 29 of the Act deals with the property of the industrial concern, whereas Section 31 takes within its sweep both the property of the industrial concern and of the surety. The court further held that the pledged property of the surety cannot be sold out in a process commenced under Section 29 of the Act.
Final Decision: The court set aside the sale of the pledged property and directed the corporation to take appropriate action in respect of the pledged property under Section 31 of the Act within 8 months. The court also directed the corporation to pay interest and compensation to the purchaser of the pledged property if the sale was not set aside by the competent court under Section 31 of the Act.
1. By means of this petition, the petitioners have challenged the sale of the land measuring 1.50 acres in Mouja-Bikramnagar, Tahasil-Bikramnagar, Sekerkote comprised in Khatian No. 1281/1, 1281/2 C.S. Plots No. 2520, 2517, 2548, 2549, 2550, 2514, 2515 and 2516, hereinafter referred to as the pledged property, pursuant to the sale notice dated 05.07.2010, Annexure-2 to the writ petition. The petitioners have further urged, as consequential reliefs, for prohibiting or restraining the respondents from interfering with the possession of the petitioners in the pledged property and for cancelling Khatian No. 2958 in respect of the said pledged property opened in favour of the respondent No. 3 who purchased the pledged property in terms of the said sale notice, Annexure-2 to the writ petition.
2. The facts are mostly undisputed. The pledged property originally belonged to Sharnamoyee Datta and Brojendra Kishore Datta who transferred the pledged property to Akshay Kr. Das. After death of Akshay Kr. Das the petitioners along with their mother Radha Rani Das, now deceased, inherited the said pledged property in equal shares. Radha Rani Das died on 20.06.2007. Thus, the petitioners became the owners of the said pledged property. Radha Rani Das and the petitioners stood guarantors for the loan availed by the respondent No. 4, hereinafter the borrower, from the respondent No. 1, a financial corporation within the meaning of Section 2(b) of the State Financial Corporations Act, 1951, hereinafter the Act in short. The petitioners and their mother created mortgage by a registered deed. In addition, they deposited the title deed of the pledged property with the respondent No. 1. The petitioners have asserted further that the borrower is their cousin brother. When the Khatian was finally published on 02.03.2011, Radharani Das was shown as the permissive possessor of Swarnamoyee Datta and Brajendra Kishore Datta although they had long ago transferred the land to Akshay Kr. Das. The petitioners asserted their possession over the pledged property stating that “they have been cultivating and growing paddy in the said landed property.” In the middle of July, 2012 the petitioner found the respondent No. 3, the purchaser in the said sale, excavating earth on one part of the pledged property. When they questioned the purchaser why he was trying to occupy that part of the landed property he disclosed that he purchased the said property from the financial corporation in pursuance to a sale notice. The purchaser further revealed that the record of right (Khatian) in respect of the said land has been mutated in his name. What was revealed by the respondent No. 3 was found to be true on search by the petitioners. They found the said property has been recorded in Khatian No. 2958 in favour of the respondent No. 3 showing the petitioners as permissive occupier under column No. 16. The petitioners came to know that a sale notice was published in ‘Tripura Darpan’ a daily newspaper published from Agartala, on 05.07.2010. Further they came to know that the respondent No. 3 [the respondent No. 3 has been referred in various parts of the writ petition as the respondent No. 4 erroneously as the respondent No. 4 is the borrower, not the purchaser] purchased the land in the sale commenced in pursuance to the sale notice dated 05.07.2010. [Even though at the end of paragraph 4 it has been mentioned that the sale notice dated 05.07.2010 and its English translation are respectively marked Annexures-3 and 4, but no such annexures are available with the writ petition].
3. The petitioners’ grievance as laid in the writ petition is that even though the property belonged to them but in the sale notice their names were not reflected and thus by suppressing the names of the real owners and only mentioning the name of the borrower the said sale notice wa
