A P Sahadevan vs State Bank Of India
2023 Latest Caselaw 8804 Ker

                IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                PRESENT
                   THE HONOURABLE MR.JUSTICE C.S.DIAS
     MONDAY, THE 14TH DAY OF AUGUST 2023 / 23RD SRAVANA, 1945
                        WP(C) NO. 24107 OF 2022
PETITIONER/S:

          A P SAHADEVAN,
          AGED 63 YEARS
          S/O.DEVAKIAMMA, EDAYALIL HOUSE, KAKKAD P.O., PIRAVOM,
          ERNAKULAM., PIN - 686664

          BY ADVS.
          MOLTY MAJEED
          C.A.MAJEED
          K.H.ASIF
          P.B.UNNIKRISHNAN NAIR
          RUBEN GEORGE ROCK
          GEORGE POONTHOTTAM (SR.)



RESPONDENT/S:

    1     STATE BANK OF INDIA,
          PIRAVOM BRANCH, REPRESENTED BY IT'SBRANCHMANAGER,
          PIRAVOM, ERNAKULAM DISTRICT., PIN - 668664

    2     VALSALAN K K,
          S/O.MR.KUMARAN, RESIDING AT 341, KOOVAKKATT, 13,
          KOTHAKULANGARA, TRIPUNITHURA, ERNAKULAM DISTRICT, PIN-
          682301., PIN - 682301

          BY ADVS.
          SRI.S.EASWARAN, SC, SBI
          M.SASIDHARAN
          S.EASWARAN




     THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
14.08.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 WP(C) NO. 24107 OF 2022
                                  2

                          JUDGMENT

The writ petition is filed, inter-alia, to quash Ext.P8

order passed by the Debt Recovery Tribunal-I,

Ernakulam and Ext.P13 order passed by the Debt

Recovery Appellate Tribunal, Chennai (in short,

"Tribunal" and "Appellate Tribunal", respectively)

2. The factual matrix, in a nut shell, for the

determination of the writ petition are:

(i) The petitioner had availed financial assistance

from the 1st respondent bank by creating an

equitable mortgage by deposit of title deeds, but

had defaulted in paying the installments. The 1 st

respondent filed OA No.165/2008 before the

Tribunal and a final order was passed on

07.07.2008. A recovery certificate was issued as

DRC No.3012/SBT on 07.07.2008. The 1st

respondent issued notice to the petitioner fixing

the liability at Rs.49,61,610/-.

(ii) Although the petitioner approached the 1st WP(C) NO. 24107 OF 2022

respondent on several occasions to avail the

benefit of the One Time Settlement (OTS)

Scheme, the 1st respondent was not amenable for

any reasonable settlement. In the meantime, an

illegal sale was conducted and the 2nd respondent

purchased the property.

(iii) On coming to learn of the illegal sale, the

petitioner filed IA No.1953/2013 in OA

No.165/2008, to set aside the sale. But the

Tribunal, by Ext.P1 order, dismissed the

application as not maintainable and relegated the

petitioner to work out his statutory remedies.

(iv) Then, the petitioner filed Appeal No.12/2013

before the Tribunal, under Section 30(1) of the

Recovery of Debts due to Financial Institutions

Act (in short "Act"), seeking various reliefs. The

petitioner also filed IA No.2465/2013 (Ext.P3) to

direct the Recovery Officer to maintain status

quo.

WP(C) NO. 24107 OF 2022

(v) Ext.P2 appeal was dismissed for default on

05.12.2013, due to the non-appearance for the

learned Counsel for the appellant. The petitioner

filed IA No.9/2017 (Et.P4) to restore the appeal.

(vi) In the meantime, the petitioner filed OP(DRT)

No.25/2019 before this Court, to stay the recovery

proceedings. By Ext.P7 judgment, this Court

relegated the petitioner to work out his statutory

remedies.

(vii) The Tribunal, by Ext.P8 order, dismissed Ext.P4

application.

(viii) The petitioner challenged Ext.P8 order before this

Court by filing OP(DRT) No.40/2019. By Ext.P9

judgment, this Court dismissed the original

petition and relegated the petitioner to exhaust

his statutory remedies.

(ix) The petitioner then filed AR No.126/2018

(Ext.P10) before the Debt Recovery Appellate WP(C) NO. 24107 OF 2022

Tribunal, Chennai. The Appellate Tribunal, by

Ext.P13 order, without proper appreciation of the

facts and circumstances of the case dismissed

Ext.P10 appeal.

(x) Exts.P8 and P13 are ex-facie illegal and wrong.

Hence, the writ petition.

3. Heard; Sri.George Poonthottam, the learned

Senior Counsel appearing for the petitioner,

Sri.S.Easwaran, the learned Counsel appearing for the

1st respondent and Sri.M.Sasindran, the learned counsel

appearing for the 2nd respondent.

4. Sri.George Poonthottam argued that the entire

sale proceedings initiated by the 1 st respondent-bank is

vitiated and illegal. He raised four points (i) the sale

certificate was barred by limitation (ii) there was no

prior notice issued to the petitioner (iii) the sale

proceedings were conducted by the Recovery Inspector

instead of the Recovery Officer and (iv) there was only WP(C) NO. 24107 OF 2022

one bidder in the sale. He placed reliance on the

decisions of this Court in Rathessh M.N. vs. The Debt

Recovery Tribunal and others [W.P.(C)

No.30651/2017] and Bio Research

Pharmaceuticals (M/s.) and others vs. State Bank

of Travancore and others [2016 KHC 254] to fortify

his arguments.

5. Sri.S.Easwaran countered the above submissions

by arguing that, as the petitioner has exhausted his

statutory remedies, he cannot assail the legality of the

sale in a writ petition filed under Article 226 of the

Constitution of India. He handed over the sequence of

events, which led the passing of Exts.P8 and P13

orders. He supported Exts.P8 and P13 orders and

prayed that the writ petition may be dismissed.

6. Sri.M.Sasindran submitted that the 2nd

respondent is a victim of the entire episode. The 2 nd

respondent is the bidder in the sale and is unable to

enjoy the fruits of the sale. The petitioner and the 1 st WP(C) NO. 24107 OF 2022

respondent are continuing the litigation, which is

causing hardship to the 2nd respondent. Hence, the writ

petition may be dismissed.

7. The question is whether there is any illegality in

Exts.P8 and P13 orders passed by the Tribunal and the

Appellate Tribunal.

8. Eventhough the learned Senior Counsel drew

the attention of this Court to the merits of the entire

sale proceedings, I am of the view that since the said

question is a subject matter of Ext.P2 appeal, it is not

for this Court to go into the merits of the said

contention, instead, all that needs to be looked into is

whether the Tribunal and the Appellate Tribunal were

justified in rejecting Ext.P4 application for restoration

of Ext.P2 appeal.

9. Indisputably, the petitioner has challenged the

sale proceedings by way of Ext.P2 appeal.

10. When the appeal came up for hearing, the WP(C) NO. 24107 OF 2022

Tribunal dismissed Ext.P2 appeal for non-prosecution

on 05.12.2016.

11. The learned Counsel who was appearing for the

petitioner had filed Ext.P4 application on 30.12.2016 to

restore the appeal, inter-alia, stating that, on

05.12.2016 due to an inadvertent contingency that

happened in his office, he could not appear before the

Tribunal and consequentially there was no

representation for the petitioners on the said date. The

petitioner has serious objections in the case and there

was no willful latches or negligence on the side of the

petitioner in prosecuting the appeal. Hence, the appeal

may be restored.

12. The application was resisted by the 1 st

respondent-bank by filing a counter affidavit and, inter-

alia, contending that the appeal was posted for hearing

on several occasions and that there was no

representation for the petitioner. The sole intention of

the petitioner was to protract the final determination of WP(C) NO. 24107 OF 2022

Ext.P2 appeal.

13. The Tribunal, after appreciating the rival

pleadings, by the impugned Ext.P8 order, held thus:

"8. Further it emanates from the records that on 21.09.2016 also the learned counsel for the petitioner did not advance arguments in the appeal and sought further time for hearing as a last chance. Accordingly, the Tribunal listed the matter on 27.10.2016. However, on 27.10.2016 though the learned counsel for the petitioner was present before the Tribunal, he was not ready to advance arguments in the matter and sought further time for hearing. At the specific request of the petitioner's counsel, the Tribunal again adjourned the case to 05.12.2016 for advancing final arguments in the appeal as last chance and it was made clear in the proceedings dated 27.10.2016 that no further adjournments would be given for advancing arguments in the matter and in case of failure, the appeal will have to be disposed of on 05.12.2016.

9. Despite the above direction, none appeared and represented for the appellant on 05.12.2016, though the name of the appellant and his counsel were called in the open Tribunal thrice; and the learned counsel appearing for respondents 1 and 2 alone were present. In such circumstance, the Tribunal, dismissed the above appeal for non-prosecution on 05.12.2016. Thus it is palpable from the record of proceedings that the learned counsel appearing for the petitioner/appellant was not diligent in prosecuting the matter.

10. The instant application for restoration of the appeal was filed by the counsel appearing for the petitioner on 02.01.2017 citing the reason in the affidavit filed by him along with the petition that due to inadvertent contingency that happened in his office, the counsel attached to his office could not appear before the Tribunal an 05.12.2016 which resulted in dismissal of the appeal by the Tribunal on 05.12.2016 and there were no willful laches or negligence either on the side of the appellant or on the side of the counsel in not appearing before the Tribunal on 05.12.2016. The reason stated by WP(C) NO. 24107 OF 2022

the learned counsel for the petitioner for his non- appearance/non-prosecution of the matter is not at all sufficient to restore the appeal as the Tribunal had afforded sufficient opportunities for them to contest the case, but they did not evince any interest in pursuing the matter.

11. However, the Tribunal is mindful that the appeal is filed challenging the sale of property held during the recovery proceedings and the successful auction purchaser who is a third party is also hauled into the proceedings. The appellant after filing the appeal not being diligent in conducting the case has successful thwart the right of the auction purchaser in enjoyment of the property for almost 07 years.

12. It is pertinent to note that the 2nd respondent who is the auction purchaser has paid sale consideration for the sale of property held on 04.02.2013 and has been put in possession of property is undergoing immense difficulties and inconvenience and unable to enjoy the property purchased by him in the court auction in the proper manner by virtue of the pendency of the litigation before the Tribunal.

13. The appellant who had filed the appeal 20.08.2013 has not addressed the arguments inspite of sufficient opportunities granted by the Tribunal and it is only on 05.12.2016 i.e., after 3 years the appeal was dismissed not for non appearance of the counsel on that date as contended in the application. Furthermore, the petitioner or his counsel has not made out a case for restoration and there is no just cause or reasonable cause to restore the appeal.

14. The Tribunal is disturbed to note that though the appellant had filed the application for restoration on 02.01.2017 had not taken any steps to substitute the State Bank of India in place of State Bank of Travancore in view of the amalgamation of State Bank of Travancore to State Bank of India vide Gazette notification dated 22.02.2017. Further it is discernible from the records that the appellant has been quite thought out the proceedings for 2 years after filing the restoration petition, suddenly woke up to the notice of the advocate commissioner intimating to take the possession on 09.02.2018 and immediately has filed the IA 245/2019 for advancing the matter on 04.02.2019 and has invoked the jurisdiction of the High Court in OP[DRT] No. 25/2019 WP(C) NO. 24107 OF 2022

being aggrieved by the pendency of the restoration application IA 9/2017.

15. The Tribunal feels it apt to mention that the general public will lose faith in the system of court/Tribunal auction sale of properties where they are un-necessarily are dragged into litigation.

16. On cumulative examination of facts and circumstances and the appellant having failed to establish his bonafide in perusing the matter promptly, the Tribunal is not convinced to restoration the appeal. Accordingly, the IA No:9/2017, a petition for restoration is dismissed. Consequently, pending IA's are also dismissed".

14. A reading of the above order, undoubtedly,

establishes that the Tribunal has not delved into the

merits of Ext.P2 appeal, instead, has dismissed the

appeal for default on the alleged laches on the part of

the Counsel for the petitioner.

15. Aggrieved by Ext.P8 order, the petitioner filed

Ext.P10 Second Appeal before the Appellate Tribunal.

The Appellate Tribunal, by the impugned Ext.P13 order,

without considering the legality of Ext.P8 order has

gone into the merits of Exts.P2 and P10 appeals, and

has rendered the impugned order. This, according to

me, is erroneous, wrong and beyond the scope of

Ext.P10 appeal.

WP(C) NO. 24107 OF 2022

16. Admittedly, Ext.P10 appeal has been filed

challenging the legality of Ext.P8 order, which is an

order rejecting the restoration application, on the

ground that there was willful laches on the part of the

Counsel for petitioner in prosecuting Ext.P2 appeal.

17. In the above situation, the Appellate Tribunal

ought to have confined itself only to the merits of

Ext.P8 order and nothing more. That is whether the

petitioner has made out sufficient cause for his non-

appearance on 05.12.2016 in order to restore Ext.P2

appeal.

18. In G.P.Srivastavav.R.K.Raizada & Others

[2000 KHC 1023] the Hon'ble Supreme Court has held

that the crucial aspect to be considered in an

application filed under Order IX of the Code of Civil

Procedure (Code) is whether the defendant has made

out 'sufficient cause' for his nonappearance on the date

the case was posted. The court is not bound to look into

the antecedents of the defendant against whom an ex WP(C) NO. 24107 OF 2022

parte order/decree is passed. It is further held that

'sufficient cause' contemplated under Order IX of the

Code has to be liberally construed so as to enable the

Court to do complete justice between the parties. The

term 'sufficient cause' is an elastic expression for which

there is no hard and fast rule. The Court is to be given a

wide discretion in deciding what is 'sufficient case'.

19. In Robin Thapa v. Rohit Dora [2019 KHC

6641], the Hon'ble Supreme Court has held that,

ordinarily a litigation is based on adjudication on the

merit of the contention of the parties and litigation may

not be terminated by default of either the plaintiff or

the defendant. The cause of justice does require that, as

far as possible, adjudication be done on merits.

20. The above principles also squarely apply to an

application filed to restore an appeal.

21. A reading of the affidavit filed in support of

Ext.P4 application would substantiate that when the WP(C) NO. 24107 OF 2022

appeal was posted on 05.12.2016, due to an inadvertent

contingency that was occurred in the petitioner's

Counsel's office, he could not attend the hearing of

Ext.P2 appeal. Consequently, the appeal was dismissed

on 05.12.2016.

22. Indisputably, the restoration application was

filed well within the stipulated time period of 30 days

that is on 30.12.2016. The Tribunal, for the reason that,

though Ext.P4 application was dated 30.12.2016 and

filed on 02.01.2017, did not move the same until the 1 st

respondent proceeded with the recovery proceedings,

felt that there was no bonafides on the part of the

petitioner.

23. It is trite, what needs to be looked into in an

application for restoration of a suit/appeal is only

whether sufficient cause has been made out for the non-

appearance of the party on the date the case was listed

for hearing. The antecedents of the party cannot be

looked into.

WP(C) NO. 24107 OF 2022

24. On an overall analysis of the pleadings and

materials on record, I hold that the Tribunal as well as

the Appellate Tribunal have transgressed beyond the

brief and passed the impugned orders on findings

beyond the scope of the application and appeal, which

is impermissible in law.

25. Going by the affidavit sworn by the petitioner,

that there was a contingency in his Counsel's office, the

Tribunal as well as the Appellate Tribunal ought to have

taken a lenient view and restored the appeal, and then

decided the appeal on its merits rather than on default,

by adopting a hyper-technical and pedantic approach.

26. Viewed in the above background, I am of the

view that the impugned orders warrants to be

interfered with by this Court by exercising its plenary

powers under Article 226 of the Constitution of India. At

the same time, this Court is not oblivious of the fact

that the appeal is of the year 2013, and, therefore, the

Tribunal is to be directed to consider and dispose of the WP(C) NO. 24107 OF 2022

appeal within a time period fixed by this Court in

precedence to other pending matters, which in turn

would do complete justice to all parties.

Resultantly, I order the writ petition as follows:

(i) Exts.P8 and P13 orders are set aside.

(ii) Ext.P2 appeal is restored back to file.

(iii) The Debt Recovery Tribunal-I, Ernakulam is

directed to consider and dispose of Appeal

No.12/2013, in accordance with law and as

expeditiously as possible, at any rate within a

period of two months from the date of receipt of a

certified copy of this judgment, after affording all

the parties an opportunity of being heard.

(iv) The parties are directed to mark appearance

before the Tribunal on 04.09.2023, either in

person or through their respective Counsel.

(v) It is made clear that, this Court has not expressed WP(C) NO. 24107 OF 2022

anything on the merits of Ext.P2 appeal, and the

Tribunal shall decide the appeal untrammeled by

any observation in this judgment or the quashed

orders.

(vi) Until such time a decision is taken on Ext.P2

appeal, the delivery of the secured asset shall

stand deferred.

Sd/-

C.S.DIAS JUDGE rkc/14.08.23 WP(C) NO. 24107 OF 2022

APPENDIX OF WP(C) 24107/2022

PETITIONER EXHIBITS

Exhibit.P1 A TRUE COPY OF THE ORDER DATED 15/07/2013 IN IA 1953/2013 IN OA 165/2008

Exhibit.P2 A TRUE COPY OF THE APPEAL NO.12 OF 2013 FILED BEFORE THE DRT, ERNAKULAM

Exhibit.P3 A TRUE COPY OF THE ORDER DATED 21/08/2013 OF THE DRT, ERNAKULAM BENCH IN I.A.NO.2465 OF 2013 IN APPEAL NO.12 OF 2013

Exhibit.P4 A TRUE COPY OF THE RESTORATION PETITION DATED 30/12/2016 IN APPEAL 12 OF 2013

Exhibit.P5 A TRUE COPY OF THE NOTICE DATED 21/01/2019 ISSUED BY THE ADVOCATE COMMISSIONER

Exhibit.P6 A TRUE COPY OF THE ADVANCE PETITION IA 245/2019 DATED 02/02/2019 IN APPEAL 12 OF

Exhibit.P7 A TRUE COPY OF THE JUDGMENT DATED 11/02/2019 IN OP (DRT) 25 OF 2019

Exhibit.P8 A TRUE COPY OF THE ORDER OF THE DEBTS RECOVERY TRIBUNAL, ERNAKULAM, DATED 18/02/2019 IN IA 9 OF 2017 IN APPEAL 12 OF

Exhibit.P9 A TRUE COPY OF THE ORDER DATED 01/03/2019 IN OP (DRT) 40/2019 OF THIS HON'BLE COURT

Exhibit.P10 A TRUE COPY OF THE APPEAL PREFERRED BY THE PETITIONER BEFORE THE DRAT, WITHOUT EXHIBITS

Exhibit.P11 A TRUE COPY OF THE ORDER DATED 08/08/2019 IN AIR 126/2019 OF THE DEBT RECOVERY APPELLATE TRIBUNAL, CHENNAI

Exhibit.P12 A TRUE COPY OF THE ORDER DATED 18/12/2019 OF THIS HON'BLE COURT IN W P (C) NO 23576/2019

Exhibit.P13 A TRUE COPY OF THE ORDER DATED 01/06/2022 IN WP(C) NO. 24107 OF 2022

MA 13/2021

Exhibit.P14 A TRUE COPY OF THE NOTICE DATED 18/07/22 ISSUED BY THE ADVOCATE COMMISSIONER

Exhibit.P15 A TRUE COPY OF THE ORDER DATED 22/07/2022 IN OP(DRT) 307/2022

RESPONDENT EXHIBITS

EXHIBIT R1(A) COPY OF THE AFFIXTURE REPORT DATED 20/12/2012 SUBMITTED EBFORE RECOVERY OFFICER, DRT ERNAKULAM IN DRC NO 3012

EXHIBIT R1(B) COPY OF THE LETTER DATED 27/6/2013 ISSUED BY ASSITANT GENERAL MANAGER OF ERSTWHILE STATE BANK OF TRAVANCORE TO RECOVERY OFFICER OF DRT ERNAKULAM

EXHIBIT R1(C) COPY OF THE ACKNOWLEDGMENT CARD SIGNED BY THE PETITIONER IN THE WRIT PETITION

PETITIONER EXHIBITS

Exhibit.P-16 A true copy of the proposal dated 24/11/2012 submitted by the Petitioner

Exhibit P-17 TRUE COPY OF PROCEEDINGS DATED 04/02/2013

Exhibit P-18 TRUE COPY OF RECOVERY CERTIFICATE DATED 07/07/2008

Exhibit P-19 TRUE COPY OF THE MAIL DATED 04/02/2013 BY RECOVERY OFFICER TO 2ND RESPONDENT

Exhibit P-20 A CERTIFIED COPY OF THE APPLICATION FOR GRANTING CERTIFIED COPY OF THE AUTHORIZATION CONTAINING THE PROCEEDINGS THEREIN DATED 1.10.2022