Aruna Dts Moorthy Wd/O Late Dts ... vs Uco Bank, Mid Corporate Branch, ...
2021 Latest Caselaw 10010 Bom

 Judgment                                1                      W.P.No. 2653.2021.odt


               IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
                         NAGPUR BENCH, NAGPUR.

                          WRIT PETITION NO. 2653 OF 2021


 1)       Smt. Aruna DTS Moorthy Wd/o.
          Late DTS Moorthy,
          Aged about 51 years, Occu. - Business,
          R/oi. 401 & 402 Megh Apartment,
          Yashodham Enclave, Prashant Nagar,
          Nagpur-440 015

 2)       M/s AMGC Logistic Pvt. Ltd.,
          a Company incorporated under the
          provisions of India Companies Act
          and having its registered office at
          Flat No. E-2/603, Zenith Block,
          "Kool Home Condominium",
          Mouza Mova, Raipur (C.G.) through
          its director Smt. Aruna DTS Moorthy
          Wd/o Late DTS Moorthy
          R/o 401 & 402 Megh Apartment,
          Yashodham Enclave, Prashant Nagar,
          Nagpur-440 015                      .... PETITIONERS

                                   // VERSUS //

 1)       UCO Bank, MID Corporate Branch
          Ajni Square, Wardha Road,
          Nagpur-440 015, through its
          Authorized Officer.

 2)    Union of India
       through its Chief Secretary,
       Ministry of Finance.             .... RESPONDENTS
  ______________________________________________________________
      Shri S.S.Sanyal, Advocate for the petitioners.
      Sau. Supriya Puntambekar, Advocate for respondent No.1.
      Shri C. Deopujari, Advocate h/f Shri Aurangabadkar, ASGI for
      respondent No.2.
 ______________________________________________________________




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  Judgment                                 2                      W.P.No. 2653.2021.odt


                           CORAM : SUNIL B. SHUKRE AND
                                   ANIL S. KILOR, JJ.

DATED : 30.07.2021

ORAL JUDGMENT : (Per Sunil B. Shukre, J.)

1. Heard Shri Sanyal, learned counsel for the petitioners, Sau

Supriya Puntambekar, learned counsel for respondent No.1 and Shri

Deopujari, learned counsel holding for Shri Aurangabadkar, learned

A.S.G.I. for respondent No.2.

2. Rule. Rule made returnable forthwith. Heard finally by

consent of the learned counsel appearing for the parties.

3. The petitioner, Director of petitioner No.2/Company has been

aggrieved by the notice issued under Section 32 of the Securitisation

and Reconstruction of Financial Assets and Enforcement of Security

Interest Act, 2002 (for short "SARFAESI Act"), whereby two mortgaged

properties creating security interest in favour of respondent No.1/Bank

towards repayment of loan granted to petitioner No.2/Company have

been put on auction sale.

4. The petitioners have filed an application under Section 17 of the

SARFAESI Act before the Debts Recovery Tribunal, Nagpur questioning

Judgment 3 W.P.No. 2653.2021.odt

the said sale notice. It was filed on 26.07.2021. Copy of the said sale

notice which has been impugned by the petitioners by filling an

application under Section 17 of the SARFAESI Act has been annexed to

the second set of this petition but, had not been annexed to the first

set, although in the list of annexures, it is stated that this notice has

been attached as Annexure 'A' from page No.37 to 39. These page

numbers are missing from the first set. However, this notice is available

for the perusal in the second set. We have gone through the copy of this

notice filed on record of the second set.

5. The sale notice calls upon the petitioners to pay the outstanding

dues amounting to Rs.5,87,10,380.23/- together with applicable

interest and costs within 15 days on receipt of the notice, failing which,

the notice further informs, that the respondent No.1/Bank would be

constrained to sell the secured assets mentioned in the notice, one is an

apartment bearing No.106, 'Nirman Enclave', situated at Gajanan

Nagar, Ajani, Nagpur and the other is office/chamber No.301, 3 rd floor,

'Lotus Plaza' situated at Gokulpeth Layout, Gokulpeth, Nagpur, for

realisation of the dues. It appears that the petitioners did not pay the

outstanding dues as demanded in this notice within the stipulated

period of 15 days. It also appears that the petitioners did not question

this notice for its validity immediately after its receipt and almost about

25 days thereafter, chose to knock at the doors of Debts Recovery

Judgment 4 W.P.No. 2653.2021.odt

Tribunal, the Tribunal competent to hear the application under Section

17 of the SARFAESI Act on 26.07.2021. It is seen from the record of the

case that the petitioners have made a request for urgent hearing on the

application through video conference on 28.07.2021. But, the request

was rejected on the ground that the petitioners approached the

Tribunal at the last moment and time of four days had not elapsed

since the physical filing of the application under Section 17 by the

petitioners.

6. Now, the contention of the petitioners is that the petitioners in

spite of having a right of hearing, are not being heard by the Debts

Recovery Tribunal, the only forum available for redressal of grievances

arising from the measures taken under Section 13 of the SARFAESI Act

and which has affected the fundamental rights of the petitioners.

7. What we see from the rejection of the request of the petitioners

to grant urgent hearing on 28.07.2021 by the Debts Recovery Tribunal,

Nagpur made on 26.07.2021 is that urgent hearing has not been

basically refused by the Debts Recovery Tribunal, Nagpur. The Debts

Recovery Tribunal, Nagpur has refused to grant hearing on 28.07.2021

as requested by the petitioners. There is a difference between refusal to

hear a matter on a particular date and refusal to hear the matter at all.

In the instant case, it appears to us that Debts Recovery Tribunal has

Judgment 5 W.P.No. 2653.2021.odt

not said that it would not hear the application and thus the request for

grant of urgent hearing has not been altogether rejected by the Debts

Recovery Tribunal, Nagpur. It is true that the rejection, on the face of it,

has come from the Registrar of the Debts Recovery Tribunal and it has

not come from the Presiding Officer of the Debts Recovery Tribunal. We

are not aware of the rules and procedures being followed by Debts

Recovery Tribunal. But, we find, considering the facts and

circumstances of the case, that in this particular case, the Registrar of

the Debts Recovery Tribunal, instead of taking a decision himself, ought

to have placed the request for urgent hearing before the Presiding

Officer of the Debts Recovery Tribunal and allowed the Presiding

Officer to take appropriate decision in the matter. These facts and

circumstances indicated that there was urgency pleaded and so the

need of the situation was to let the Presiding Officer take a suitable

decision.

8. The urgency of the matter had arisen from the auction sale that

was scheduled to be held on 28.07.2021 between 01.00 pm. to 05.00

pm. If this auction sale was to go ahead and finalization of the sale of

the properties in the auction had indeed taken place, it would have

resulted into adversely affecting the rights of the petitioners even

without hearing the petitioners and the further consequence would

Judgment 6 W.P.No. 2653.2021.odt

have been of another grievance of violation of principles of natural

justice.

9. In the case of Mardia Chemicals Ltd. Etc. Vs. Union of India and

Ors., AIR 2004, SC 2371, the Hon'ble Supreme Court has held that the

central theme of the provisions made in the SARFAESI Act is of fairness

and transparency in the procedure adopted while taking such drastic

measures as taking over of the possession of the secured assets and

they being sold in realization of the dues payable to the banks, without

any intervention of any judicial authority. So, it was necessary for the

Registrar of the Debts Recovery Tribunal, Nagpur to either grant urgent

hearing to the petitioners or at least place the matter for its appropriate

consideration and decision before the Presiding Officer of Debts

Recovery Tribunal, Nagpur. This was all the more necessary as Section

34 of the SARFAESI Act excluded jurisdiction of Civil Court from

entertaining any suit or proceedings in respect of any matter which the

Debts Recovery Tribunal or the Appellate Tribunal would be

empowered by or under the SARFAESI Act to determine. It also raises

an embargo upon the power of the Civil Court to grant injunction in

respect of any action taken or to be taken in pursuance of the powers

conferred by under this Act or under the Recovery of Debts and

Bankruptcy Act, 1993. Thus, the mandate of Section 34 leaves a party

aggrieved by the action of the Bank taken under Section 13 of the

Judgment 7 W.P.No. 2653.2021.odt

SARFAESI Act with only one forum to raise its grievance before it. This

would further underline the need for any Debts Recovery Tribunal to

be careful in denying urgent hearings to the parties.

10. After all, opportunity of hearing is an integral part of our

constitutional philosophy and it is well embedded in Articles 14 and 21

of the Constitution of India. Urgency of hearing is of course determined

by the facts and circumstances of a particular case. Therefore, it

becomes necessary for a competent judicial authority to judiciously

apply its mind to the facts and circumstances of each case to determine

as to whether or not there is any case for urgent hearing made out by

the parties. Such authority is also required to take into consideration

the consequences that may ensue if such hearing is denied to the party.

All these aspects of the matter would only indicate the onerous nature

of responsibility of Register of the Debts Recovery Tribunal and as said

earlier, in the present case, this responsibility required Registrar of the

Debts Recovery Tribunal to place request for grant of urgent hearing

made by the petitioners before the Presiding Officer of the Debts

Recovery Tribunal. The Registrar of the Debts Recovery Tribunal,

Nagpur, however, has failed to perform his duty in the matter and,

therefore, the order passed by him on 26.07.2021 denying hearing on

28.07.2021 would have to be held as illegal.

Judgment 8 W.P.No. 2653.2021.odt

11. There is one more reason why this order has to be held as illegal.

While rejecting such a request for granting urgent hearing on

28.07.2021, the Registrar of Debts Recovery Tribunal, Nagpur has not

taken care to grant hearing within a reasonable time frame. The

hearing that he has granted is on 25.08.2021, which is a date falling

about a month after holding of the auction sale of the secured assets.

Such hearing granted by Registrar of Debts Recovery Tribunal is

unrealistic, rather illusory, in the facts and circumstances of this

particular case. Since all these facts noted above are a matter of record,

we do not think that any reply of respondent Bank would have been

necessary in the present case and, therefore, the request made on

behalf of respondent Bank to grant a week's time to file reply in the

matter need not be considered by us.

12. In the result, we partly allow the petition. The impugned order

passed by the Registrar, Debts Recovery Tribunal, Nagpur is quashed

and set aside.

13. Debts Recovery Tribunal, Nagpur is directed to hold urgent

hearing on the application of the petitioners which is S.A. No. 95 of

2021 and request made for interim relief on 02.08.2021 at 11.00 am.

The petitioners and respondent Bank are directed to appear before the

incharge Presiding Officer of Debts Recovery Tribunal, Nagpur on

Judgment 9 W.P.No. 2653.2021.odt

02.08.2021 at 11.00 am. The incharge Presiding Officer of Debts

Recovery Tribunal, Nagpur is further directed to grant effective

opportunity of hearing to the petitioners and respondent Bank and to

take a decision on the prayer for grant of interim relief, if any, in

accordance with law.

14. Meanwhile, we direct respondent No.1/Bank to not finalize the

auction sale of the properties, if any, till decision is taken by Debts

Recovery Tribunal, Nagpur on the prayer of the petitioners for grant of

interim relief or till 08.08.2021, whichever is earlier.

15. Rule is made absolute in the above terms.

16. Authenticated copy of the order be furnished to the learned

counsel for the petitioners and learned counsel for respondent

No.1/Bank.

            (ANIL S. KILOR, J.)                (SUNIL B. SHUKRE J.)




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