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JHARKHAND HIGH COURT
D.N. Patel and B.B. Mangalmurti, JJ.
M/s Auto Engineering through its sole proprietor Sri Jagdish Prasad Saboo and Ors. —Appellants
versus
State Bank of India and Ors. —Respondents
L.P.A. No. 415 of 2015
Decided on 27.2.2019
For the Appellant:Mr. Vijay Gopal and Mr. Sudhir Sahay, Advocates
For the Respondent No.1:Mr. Rajesh Kumar, Advocate
For the Respondent Nos.2 and 3:Mr. Rahul Gupta, Mr. Radha Krishna Gupta and Mr. Achinto Sen, Advocates
For the Respondent No.4:Mr. Bhupal Krishna Prasad, Advocate
IMPORTANT POINT
No compromise can be arrived at by State Bank of India once decree has already been passed in favour of bank or once decree has already been passed against a loanee.
Headnote:Recovery of Debts Due to Banks and Financial Institutions Act, 1993 – Section 25 – Auction sale of mortgaged asset – Appellants have taken loan of sizeable amount from respondent no.1-State Bank of India and loan amount was not repaid – No compromise can be arrived at by State Bank of India once decree has already been passed in favour of bank or once decree has already been passed against a loanee – Amount offered by highest bidders is approximately 2.5 times more than compromised amount – View taken by Single Judge upheld and Letters Patent Appeal dismissed with cost of Rs.25,000/-. (Paras 6 and 7)
Letters Patent Appeal dismissed with costs.
D.N. Patel, J.—This Letters Patent Appeal has been preferred by original respondent nos. 2, 3 and 4 of the writ petition bearing W.P.(C) No. 1736 of 2010. The writ petition was preferred by the present respondent nos. 2 and 3. The writ petition was allowed by the learned Single Judge vide judgment and order dated 10th September, 2014 and hence, original respondent nos. 2, 3 and 4 have preferred the present Letters Patent Appeal.
2. Factual Matrix:
• These appellants (original respondent nos. 2, 3 and 4 in the writ petition bearing W.P.(C) No. 1736 of 2010 had taken loan of sizeable amount from the respondent no.1-State Bank of India against which the immovable property was mortgaged.
• The loan amount was not paid by the appellants-borrowers and hence, mortgage suit was filed by the bank against these appellants bearing Mortgage Suit No. 21 of 1994 in the Court of Sub-Judge-I, Ranchi. The suit was decreed and legally payable amount was found at Rs.13,13,573/- plus interest at the rate of 18.75 per cent per annum.
• Because of new enactment viz. Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as “the Act, 1993” for the sake of brevity), the matter was transferred to Patna in the Debts Recovery Tribunal and it was renumbered as Patna Transfer Case No. 138 of 1998.
• On 18th February, 2002, a certificate was issued for Rs. 13,13,573/- with interest at the rate of 18.75 per cent. The recovery proceedings were initiated.
• Again upon bifurcation of State of Jharkhand from the erstwhile State of Bihar, the case was again transferred to Debts Recovery Tribunal, Ranchi, being R.P. Case no. 140 of 2002. Order was passed by the Debts Recovery Tribunal, Ranchi on 22nd March, 2005 for attachment of the mortgaged property of these appellants. This order was passed by the Recovery Officer, Debts Recovery Tribunal, Ranchi. Direction was given to sale the mortgaged property by public auction on 7th February, 2006. The date of auction of the mortgaged property was fixed on 21st March, 2006 and actual auction has taken place on 27th April, 2006.
• Respondent nos. 2 and 3 (original petitioners in W.P.(C) No. 1736 of 2010), the highest bidders, had offered Rs. 27,31,000/- and the auction sale process was confirmed on 21st August, 2006.
• Possession of the mortgaged property was also taken over by respondent nos. 2 and 3 (original petitioners) on 26th August, 2006.
• Meanwhile, one Mrs. Bina Singh-respondent no.4 in this Letters Patent Appeal (respondent no.5 in the writ petition) claimed to be an owner of the property by virtue of agreement to sale dated 14th August, 2002. The so called consideration was by way of cash which is approximately Rs.4,50,000/-. This claim was brushed aside by the Debts Recovery Tribunal, Ranchi.
• Judgment debtors i.e. present appellants preferred Miscellaneous Appeal before the Debts Recovery Tribunal, Ranchi against an order passed by the Debts Recovery Tribunal, Patna in Patna Transfer Case No. 138 of 1998 for setting aside ex-parte decree. This contention was not accepted and Miscellaneous Appeal No. 28 of 2006 preferred by these appellants was dismissed vide order dated 1st August, 2006 by the Presiding Officer, Debts Recovery Tribunal, Ranchi.
• One more Miscellaneous Appeal was preferred by these appellants (judgment debtors) being Miscellaneous Appeal No. 17 of 2006 before the Debts Recovery Tribunal, Ranchi for setting aside auction proceedings on the ground that so called compromise was arrived at with the bank on 21st March, 2006 for Rs. 9,95,767.93.
• As stated hereinabove, already an order for auction sale was passed on 7th February, 2006 and as the auction has already been taken place on 27th April, 2006 and as the possession of the property has also been taken over by the highest bidders (respondent nos. 2 and 3 in this Letters Patent Appeal) on 26th August, 2006 the said Miscellaneous Appeal was dismissed.
• The said Miscellaneous Ap
