@JUDGMENTTAG-ORDER
Chitra Venkataraman, J.@mdashThe present Civil Revision Petition is filed by the auction purchaser challenging the order passed by the Debts Recovery Appellate Tribunal dated 30.08.2011 in I.A. No. 1183 of 2009 in AIR (SA) No. 607 of 2009 contending that it is totally in violation of the order passed by this Court in W.P. Nos. 21486 and 22218 of 2009 dated 01.12.2009. The said W.P. No. 21486 of 2009 was preferred by the auction purchaser/petitioner herein against the order of the Debts Recovery Appellate Tribunal, Mumbai whereby the Tribunal ordered that the borrowers were not liable to deposit any amount under second proviso to Section 18(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. It is seen from the documents placed before this Court that the creditor Bank, sixth respondent herein brought the secured asset for sale to realise the amount due and payable by the first respondent company. The Civil Revision Petitioner was the successful bidder and accepting the offer, a Sale Certificate was registered in the name of the Civil Revision Petitioner on 24.08.2006. After satisfying the dues to the Bank, there was further sum left with the bank to be refunded to the defaulter company. Challenging the sale, the defaulter filed an application before the Debts Recovery Tribunal to set aside the sale alleging inclusion of plant and machinery in the secured assets for sale. The Debts Recovery Tribunal rejected the petition holding that the Bank had not acted in contravention of the Rules and the surplus amount was divested pursuant to the direction of this Court order dated 19.09.2006 in W.P. No. 11379 of 2005. Aggrieved by this, the Directors of the Company filed an application before the Debts Recovery Appellate Tribunal. The Debts Recovery Appellate Tribunal, Mumbai, considered the defaulter''s application in IA No. 1183 of 2009 for waiver of depositing the statutory payment under second proviso to Section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The Tribunal passed an order on 01.10.2009 holding the view that considering the recovery of the entire amount by the Bank and the sale of the property under the Sale Certificate registered in the name of the Revision Petitioner before this Court and that there was no amount due as on date payable by the defaulter, the question of making any pre-deposit of any debt due u/s 18(1) of the SARFAESI Act would not arise. Even though the application was contested by the Bank and the auction purchaser, the Debts Recovery Appellate Tribunal viewed that since the defaulter had sought for cancelling the sale and for restoration of the property to the defaulter, nevertheless the secured asset having been sold for a sum of Rs. 50.20 crores and that the amount claimed from the defaulter was less than the sale consideration, the Debts Recovery Appellate Tribunal thought it fit to allow the application and holding that no deposit was to be made under second proviso to Section 18 of the SARFAESI Act. Thus the appeal was held to be entertainable.
2. Before this court, the auction purchaser preferred a writ petition in W.P. No. 21486 of 2009 and the Bank preferred a separate writ petition in W.P. No. 22218 of 2009 as against the order passed by the Debts Recovery Appellate Tribunal dated 01.10.2009.
3. While accepting the contention of the writ petitioner (Civil Revision Petitioner), this Court pointed out that having regard to the provisions under SARFAESI Act, particularly Section 18, the amount recovered on sale of the property could not be counted to be the amount paid by the borrower. Therefore, the amount of Rs. 50.20 crores deposited by the auction purchaser and recovered by the Bank could not be taken into consideration to reduce the amount payable as deposit under the third proviso to Section 18(1) of the SARFAESI Act, particularly when such sale was under challenge.
4. In para No. 13 of the order, this Court while setting aside the order of the Debts Recovery Appellate Tribunal, Mumbai dated 01.10.2009 remitted the matter back to the Debts Recovery Appellate Tribunal, Mumbai/Chennai, whichever is dealing with the matter to re-consider the application filed by the defaulter for waiver of deposit as contemplated under the second proviso to Section 18(1) of the SARFAESI Act within 15 days from the date of receipt/production of the copy of the said order. If the borrowers failed to deposit the statutory amount in terms of the second proviso to Section 18(1) of the SARFAESI Act read with the waiver, if any, allowed under the third proviso to Section 18 of the SARFAESI Act, the Debts Recovery Appellate Tribunal would not entertain the appeal and dismiss the same.
5. Thus, this Court allowed the writ petitions, after setting aside the order of the Debts Recovery Appellate Tribunal, Mumbai. This order was taken on appeal before the Apex Court by the defaulter and by order dated 19.11.2010, at the request of the petitioner therein/(defaulter), the SLP was dismissed as withdrawn, so that the Tribunal could examine the matter in terms of the High Court remand order. Subsequent to the above development, once again the Debts Recovery Appellate Tribunal passed an order on 30.08.2011 as follows:
Ld. Counsel Shri. Balasubramanim appearing on behalf of the respondent bank states that the entire dues of the bank have been realized. Ld. Counsel Ms. Indumathi appearing for the petitioner states that the mandatory requirement under Sec. 18 has been met with and prays that the appeal may be entertained.
Heard both sides.
In view of the facts and circumstances of the case more particularly in view of the fact that the entire dues of the bank have been realized it has to be deemed that the requirement u/s 18 is met with and accordingly the following order is passed.
Number the appeal and call on 07.12.2011.
6. Aggrieved by this, the present Civil Revision Petition by the auction purchaser.
7. Learned Senior Counsel appearing for the Revision Petitioner pointed out that when this Court had specifically directed the Debts Recovery Appellate Tribunal to consider the second proviso to Section 18(1) of the SARFAESI Act and pass considered order, the Debts Recovery Appellate Tribunal committed serious error in overlooking the observation made in para 12 of the order that the amount, which was deposited by the auction purchaser could not be counted as the amount paid by the borrower. Thus, the question as to whether, the defaulter has to comply with the second proviso to 18(1) of the SARFAESI Act or not, is an issue, which the Debts Recovery Officer is duty bound to consider and more so, in the context that the case before the Apex Court was also withdrawn by the defaulter. In the circumstances, the observation of the Debts Recovery Appellate Tribunal, the satisfaction of the entire dues of the Bank as a ground for ordering waiver of deposit is totally contrary to the direction of this Court and hence unsustainable.
8. As is evident from the facts narrated above, we agree with submission made by the learned Senior Counsel appearing for the auction purchaser/Civil Revision Petitioner. It had been pointed out by the learned Senior Counsel that it is not the case of the bank that on realising their dues on the sale of the asset, the proviso to section 18 of the SARFAESI Act stood satisfied. A reading of the order of the Debts Recovery Appellate Tribunal shows that, all that the Bank stated before the Debts Recovery Appellate Tribunal was that the dues of the Bank had been realised. Thus, except for that observation, no concession was given by the Bank relating to second proviso to Section 18(1) of the Act, in considering the application for waiver. The Debts Recovery Appellate Tribunal alone is the authority to take judicial note of the requirements of law and pass orders in accordance with law; thus, the order passed by the Debts Recovery Appellate Tribunal is totally in violation of the directions of this Court particularly in para Nos. 12 and 13 passed in W.P. Nos. 21486 and 22218 of 2009, wherein, this Court while setting aside the order of the Debts Recovery Appellate Tribunal restored the matter once again to the files of the Debts Recovery Appellate Tribunal, to pass orders afresh in accordance with law.
9. Learned Counsel appearing for the defaulter/first respondent, however, submitted that considering the observation of the Debts Recovery Tribunal, in Point No. 9 in para No. 76 that the records as well as the machineries, which were not sold to the auction purchaser are still available in the premises, this Court could exercise its jurisdiction of what has been reserved for the Debts Recovery Appellate Tribunal to exercise.
10. We do not propose to exercise any such discretion converting this Court as the Debts Recovery Appellate Tribunal constituted for the provisions of the SARFAESI Act. When this Court had already directed the Debts Recovery Appellate Tribunal to consider the prayer of the borrower and when there is an effective remedy available in the light of the statutory forum created by law for redressal of grievance, we do not find that this Court should exercise the jurisdiction of Debts Recovery Appellate Tribunal and pass an order as has been requested by the defaulter/first respondent herein.
11. In the decision reported in
12. Thus, in the back ground of the decision as stated above, and as per the direction given by this Court, the judgment having attained finality as of today, we have no hesitation in setting aside the order of the Debts Recovery Appellate Tribunal thereby allowing the Civil Revision Petition to restore the matter back to the files of the Debts Recovery Appellate Tribunal for its consideration in accordance with law.
13. It is stated that the Bank has also filed W.P. No. 6254 of 2012 challenging the order of the Debts Recovery Appellate Tribunal.
14. In the light of the order passed by this court in allowing the Civil Revision Petition, the writ petition also stands allowed. In the result, both the Civil Revision Petition and the Writ Petition are allowed. No costs. Consequently, the connected miscellaneous petitions are closed.
