Tilak Tewari vs The Presiding Officer, Debt ...
1999 Latest Caselaw 424 Del

JUDGMENT

Manmohan Sarin, J.

1. Petitioner by this writ petition has sought the quashing of orders dated 9.2.1998 and 12.8.1998, passed by respondent No. 1, i.e. the Debt Recovery Tribunal. Petitioner also seeks a direction to the respondent No. 1 to consider higher offers made for the purchase of hypothecated machines in question.

2. Vide order dated 9.2.1998 passed in OA 730/95, the respondent No. 1 rejected petitioner's challenge to the report of the Receiver, Late Mr. Justice G.C. Jain, recommending acceptance of the offer made by M/s. Aravali Printers and Publishers Pvt. Ltd. for the purchase of the hypothecated machinery. Petitioner has also assailed the order dated 12.8.1998 passed by the respondent No. 1 declining the request of learned counsel for the petitioner for time to file an application for better offer, noting that the sale has been affected and the earnest money has already been deposited.

3. We have heard learned counsel for the parties at length and carefully perused the petition, counter affidavit and the material produced before us in the writ petition by the parties.

4. Petitioner's challenge in the writ petition is confined to the availability of other offers which were higher than the offer of Rs. 95.0 lacs for the hypothecated machinery made by respondent No. 4 and that the Receiver and the Debt Recovery Tribunal have acted in violation of the principles of natural justice by not considering the better offer and denying an opportunity to produce the same. Learned counsel submitted that petitioner's offer of Rs. 90.0 lacs, in addition to assuming the statutory liabilities which were in the range of Rs. 80.0, lacs was a far better offer than the offer made of Rs. 95.0 lacs by respondent No. 4, which was accepted. Petitioner has not raised any grievance against the conduct of auction/sale of the hypothecated machinery.

5. Learned counsel submitted that vide the impugned order dated 8.2.1998 the respondent No. 1 declined to hear the petitioner on his challenge to the Receiver's report on the ground that the directions pass. ! on 28.11.1997, for disclosure of name of the party who had made the offer of Rs. 1.0 crore and also to file a supporting affidavit with deposit of 25% of the amount had not been complied with. Learned counsel for the petitioner during the course of arguments sought to urge that without actually determining the debt the Tribunal could not have sold the hypothecated machinery. Besides, the properties which were attached by other agencies could not be disposed of, especially when there was statutory liability of Rs. 80.0 lacs. It would be recalled that petitioner's objections hitherto before were confined to alleged non-consideration of the so called better offers and not to the sale of machinery.

6. We find that the submissions made by learned counsel for the petitioner are-devoid of merit. For an appreciation of the matter in controversy, it would be appropriate to briefly notice the essential facts and the proceedings that have taken place.

7. The Bank of Maharashtra and the Canara Bank had instituted the suits in question in the year 1985, which stood transferred to the Tribunal as OAs. Order dated 9.2.1998 has been passed in OA.730/95 while order dated 12.8.1998 has been passed in OA.615/95. We find from some of the copies of the orders produced before us that petitioner had set up the bogey of settlement as far back as 27.5.1992 and had offered to pay a sum of Rs. 1.64 crore in settlement of the pending suits by 31.8.1992. Learned counsel for the plaintiff Bank had indicated the willingness of the bank to accept the same. In the event, petitioner did not abide by the offer made and there was no settlement.

8. On 7.3.1994, with the consent of the parties, Late Hon'ble Mr.Justice G.C. Jain, a retired Judge of the High Court, was appointed as the Receiver. The Receiver invited offers for sale of the hypothecated machinery. We find that the Receiver gave full opportunity to the parties to bring better offers. Vide order dated 1.11.1997, the matter was adjourned to enable the parties to bring better offers. On 24.11.1997, the Receiver accepted the offer made by respondent No. 4, subject to the approval of the Presiding Officer. In the impugned order dated 9.2.1998, the respondent No. 1 himself recorded that the counsel for the defendant submitted before him that a party was willing to offer Rs. 1.0 crore to purchase the equipment, as against the offer of Rs. 95.0 lacs made by respondent No. 4. Defendant No. 1, i.e. the petitioner herein was directed by the respondent No. 1 to disclose the name of the parties, who were willing to purchase the equipment for Rs. 1.0 crore and also file an affidavit of the party and deposit 25 per cent of the offer amount. This direction was given on 28.11.1997. On 9.2.1998, when the impugned order was passed, petitioner had not complied with the direction given but sought to challenge the report of the Receiver for accepting the offer by M/s.Aravali Printers & Publishers Pvt.Ltd. In these circumstances, respondent No. 1 was fully justified in rejecting the application opposing the Receiver's report as it was simply a dilatory tactic to prolong the matter and avoid sale of the machinery.

9. We also find that respondent No. 3, Mr. Rajat Kumar, who was a partner of the petitioner in the firm, had earlier filed a writ petition No. 2640/98 claiming a better offer through one M/s.Abhinav Printing Press. This Court had dismissed the writ petition on 8.6.1998, holding that M/s.Anubhav Printing Press were not willing to deposit any amount to show their willingness. The Court observed, "In these circumstances, we feel that the offer is only a device to gain time. We find no merit in the petition. The petition is dismissed." The matter did not rest there. The petitioner filed the present writ petition.

10. On 14.09.1998, when the present writ petition came up for admission, learned counsel for the petitioner made a submission that he had a better offer than what had been accepted by the Receiver. This Court, even at this belated stage, gave yet another chance by directing the petitioner to bring such offer before the Court on affidavit and the person making the offer should be prepared to deposit 10 per cent of the offer made. Status quo was directed in the matter of machinery. The interim order continued and respondent No. 4 was further directed not to alienate, remove or shift the machines vide order dated 18.9.1998. In the meanwhile, on the application of the petitioner, respondent No. 4, M/s.Aravali Printers & Publishers and respondent No. 5, Canara Bank were also imp leaded. Although the matter came up before the Court 15 limes till the dale of hearing on 23.4.1999, the said offer and the affidavit have not been produced or filed. Left with this situation, learned counsel for the petitioner had attempted to place reliance on some correspondence with M/s. Uma Capital Group which dated back to 24.1.1997, which was purely tentative for taking over the complete assets of the company and was exploratory in nature.

11. We have no hesitation in concluding that petitioner had been given repeated opportunities to produce a better offer but has singularly failed to do so. Petitioner has attempted to utilise all conceivable legal stratagems with a view to delay and obstruct the sale of the equipment. The petition is an abuse of the legal process. We dismiss the writ petition with costs of Rs. 7,500/- to be deposited with the Delhi Legal Services Authority.