Madras High Court
P.Ramalingam vs S.Chandra on 8 March, 2022
W.P.Nos.7342 of 2020 and 27135 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 08.03.2022
Coram:
THE HONOURABLE MR.MUNISHWAR NATH BHANDARI, Chief Justice
and
THE HONOURABLE MR.JUSTICE D.BHARATHA CHAKRAVARTHY
---
W.P.Nos.7342 of 2020 and 27135 of 2021
---
P.Ramalingam .. Petitioner in W.P.No.7342 of 2020
S.Chandra .. Petitioner in W.P.No.27135 of 2021
Vs.
1. S.Chandra
2. M/s.Blue Jaggers Estates Ltd.,
Rep. by its Director,
5-D, Century Plaza,
560-562, Anna Salai,
Teynampet, Chennai-600 018.
3. V.Sampath
4. R.Thangapandian
5. The Chief Manager/Authorized Officer,
Indian Bank,
Asset Recovery Management Branch,
Circle Office Building, Fourth Floor,
No.55, Ethiraj Salai,
Chennai-600 008.
6. The CEO & Managing Director,
Head Office,
Indian Bank,
No.66, Rajaji Salai,
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Chennai-600 001. .. Respondents in W.P.No.7342 of 2020
1. Indian Bank,
Represented by its Chief Manager-cum-
Authorized Officer,
Asset Recovery Management Branch,
55 (Old No.24/2), Ethiraj Salai,
Chennai-600 008.
2. P.Ramalingam .. Respondents in W.P.No.27135 of 2021
Writ Petition No.7342 of 2020 filed under Article 226 of the Constitution of
India, praying for issuance of a Writ of Certiorarified Mandamus to quash the
order passed in Crl.M.P.No.4190 of 2017 in Crl.M.P.No.1669 of 2016, dated
10.07.2018 and consequently direct the fifth and sixth respondents to hand over
the possession of the property in Flat No.B-22, VIII Floor, measuring plinth area
of 1618 Sq.Ft. at Brownstone Apartments, Mahalingapuram High Road, Chennai-
600 034 together with 1618/168092 and 160/168092 parts of undivided shares in
23 grounds 702 sq.ft. of the vacant land bearing new S.No.620/50 block No.36,
which forms part of the large extent of 490 grounds in old patta No.266, bearing
Survey Nos.610 and 653 to 668 in Mahalingapuram in Nungambakkam Village in
Egmore-Nungambakkam Taluk, Madras District as per the Sale Certificate, dated
15.11.2008 to the petitioner herein.
Writ Petition No.27135 of 2021 filed under Article 226 of the Constitution
of India, praying for issuance of a Writ of Certiorarified Mandamus to call for
records comprised in Order dated 14.06.2017 in Crl.M.P.No.1669 of 2016 passed
by the Chief Metropolitan Magistrate, Allikulam, Chennai, quash the same as
arbitrary, illegal, unconstitutional and consequently forbear first respondent from
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acting contrary to the terms of the compromise dated 24.12.2011 by seeking
possession of the Flat No.B-22, 8th Floor, Brownstone Apartment,
Mahalingapuram, Chennai-600 034.
For petitioner : Mr.E.Om Prakash, Senior Counsel for Mr.M.Guruprasad
in W.P.No.7342 of 2020
Mr.S.Ramesh in W.P.No.27135 of 2021
For respondents in W.P.No.7342 of 2020 : Mr.S.Ramesh for R-1
Batta due for RR-2 and 4
Mr.Jayesh B.Dolia for M/s.Aiyar & Dolia
for RR-5 and 6
R-3 - Tapal returned unserved
For respondents in W.P.No.27135 of 2021 : Mr.Jayesh B.Dolia for
M/s.Aiyar and Dolia for R-1
Mr.Om Prakash, Senior Counsel
for M/s.M.Guruprasad for R-2
ORDER
(The Order of the Court was made by The Hon'ble Chief Justice)
W.P.No.7342 of 2020:
Challenge is made to the order dated 10.07.2018 passed by the learned
Chief Metropolitan Magistrate, Chennai in Crl.M.P.No.4190 of 2017 in
Crl.M.P.No.1669 of 2016. The said challenge is made precisely on the ground of
competence of the Chief Metropolitan Magistrate in passing the order under
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Section 14 of the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 (SARFAESI Act). It is for the reason
that earlier, an order was passed under Section 14 of the Act, 2002, dated
14.06.2017 and now, the order passed is dated 10.07.2018. It is submitted that
when once an order was passed under Section 14 of the Act, 2002, the learned
Chief Metropolitan Magistrate becomes "functus-officio" and otherwise, he has
no power to review or recall the order, as the statute does not provide for it. It is
otherwise going against the order passed by the Supreme Court on settlement
between the parties. The Chief Metropolitan Magistrate was acting on the
application of the first respondent.
2. Coming to the facts of this case, it is stated that, after the litigation
between the borrower, the Bank and the auction purchaser, i.e. the writ
petitioner in W.P.No.7342 of 2020, a settlement was arrived at and in terms of
the settlement, a criminal appeal (in Crl.M.P.No.5469 of 2012) in Crl.A.No.1524 of
2011, before the Apex Court, was disposed of by judgment dated 07.05.2012.
Referring to the memo of settlement entered into between the parties, it is
submitted that as far as the right of the auction purchaser is concerned, it was
kept confirmed and in view of the above, the Bank was directed to release the
papers in favour of the borrower. By order of the Chief Metropolitan Magistrate
under challenge, now, hindrance has been created to get the possession of the
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property by the auction purchaser, despite the deposit of the entire money and
therefore, the Writ Petition had been filed not only challenging the order passed
by the Chief Metropolitan Magistrate, but also seeking further direction for
handing over the possession of the property to the auction purchaser.
3. The learned counsel appearing for the Bank submitted that pursuant to
the order of the Supreme Court, on settlement between the parties, they have
received the entire amount of sale proceeds from the auction purchaser, but
could not give possession of the property on account of the order passed by the
Chief Metropolitan Magistrate for the reason that the borrower is not allowing
the possession to be given to the auction purchaser. Thus, the Bank supported
the case of the petitioner.
4. The contest is however made by the learned counsel for the borrower.
It is submitted that the memo of settlement entered into between the parties,
does not create a right in favour of the auction purchaser, rather, if the
Annexure-II to the memo of settlement is looked into, the direction on the Bank
was to withdraw the Original Application as well as the civil and criminal
proceedings. It was with further direction to return all the original papers of title
deeds, as available in the records and they are not to pursue any other
proceedings under the Act, 2002, against any other security. In the light of the
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memo of settlement and the order passed by the Apex Court, no right was
created in favour of the auction purchaser, rather the borrower was absolved
from all liabilities and therefore, he has rightly retained the possession. The
application for passing the order by the Chief Metropolitan Magistrate was
required, as the Bank was trying to take possession and to save and protect the
borrower, the Chief Metropolitan Magistrate has passed the order, having
competence under Section 14 of the Act, 2002. This prayer is not to cause
interference with the order, rather, to dismiss the Writ Petition.
5. We have considered the rival submissions and perused the records.
6. The case has a chequered history, as narrated in the preceding
paragraphs to show that pursuant to the order passed by the Chief Metropolitan
Magistrate under Section 14 of the Act, 2002, the auction took place where the
auction purchaser was successful and thus, a sale certificate was issued.
However, the litigation remained between the parties and ultimately, it went up
to the Supreme Court in reference to the criminal case, thereby, the criminal
appeal stated above, filed by Gajapathy Rajan, was closed by the Supreme Court
by order dated 07.05.2012. Finding that during the pendency of the appeal, the
parties have compromised the matter and copy of the joint memo dated
24.12.2011 has been filed along with the application, and thereby, the parties
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were asked about the objection to the statement and finding no objection, the
order was passed by the Apex Court by endorsing the joint memo.
7. The joint memo is based on the memo of understanding and the
relevant paragraphs therein are quoted hereunder:
"Accordingly, the Bank/party of the first part
has realized a total sum of Rs.679.50 lakhs through
various recovery measures like sale of the mortgaged
properties etc on A/c of M/s.Blue Jaggers Ltd. In this
connection certain third parties have filed SA petitions
before DRT which are pending, and these petitions
will be dealt in accordance with Law and orders in
due course will bind the parties concerned."
.. ....
....
"Bank/the party of the first part having
exercised its recovery steps, as against all mortgaged
immovable assets which are not fraught with
disputes/litigations etc. reviewed the position at the
request of the borrower and agreed with the recovery
effected so far be treated as full and final settlement.
On the party of Second part approaching for a
final Compromise, the Bank/party of the First part
agreed to treat the recovery so far effected as
mentioned earlier as full and final settlement of its
dues, and also to give a quietus to other inter-se
disputes, agreed to file a Joint Memo in the Hon'ble
Supreme Court in the above said two Criminal
appeals, which forms part, and parcel of this MOU,
and is appended hereto as Annexure I.
It is understood between the parties that the
Bank/Party of the first part to make all endeavors to
request the Hon'ble Supreme Court of India to accept
the Joint Memo, and dispose of the two Criminal
appeals on the terms contained in the Joint Memo
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and the parties hereto will comply with their mutual
obligations as contained in Annexure II hereto.
To envisage, and materialize alternate proposal
for the settlement of the disputes between
themselves, irrespective of any further developments
in future, and to avoid multiplicity of proceedings, the
following understanding has been agreed between
the parties hereto, and in order to record the same in
writing, the parties hereto have entered into this
Memorandum of Understanding"
8. A perusal of the paragraphs quoted above, shows that the recovery
effected so far be treated as full and final settlement, and therefore, to file a
joint memo, recovery was satisfied on account of the auction of the property, as
borrower has not paid and satisfied the due amount. It was in view of the fact
that the sale certificate was issued prior to the memo of understanding and
therefore, with the agreement, the matter was concluded by the Apex Court.
9. The learned counsel for the borrower referred to Annexure-II to the
memo of understanding to impress upon the Court that the Bank had agreed to
withdraw the Original Application and all the criminal matters with the assurance
to return all the papers. It is only on satisfaction of the amount, and therefore,
the Bank was not having right to take the possession of the property, and
therefore, the learned Chief Metropolitan Magistrate rightly passed the order.
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10. We find that the Chief Metropolitan Magistrate had no power to pass
the order after the order was earlier passed exercising the jurisdiction under
Section 14 of the Act of 2002. The Chief Metropolitan Magistrate is not clothed
with the power of review or recall under the Act, 2002. He is not having inherent
powers for it or, as otherwise it remains with the High Court or the Supreme
Court. The power of review or recall can be exercised by the Administrative
Officers or the authorities or the quasi-judicial and Judicial Officers only when
such powers are given under the statute and not otherwise. It is in view of the
judgment of the Apex Court in the case of Kalabharati Advertising Vs. Hemant
Vimalnath Narichania and others, reported in 2010 (9) SCC 437 =
MANU/SC/0674/2010, wherein, it was observed by the Apex Court as follows:
"12. It is settled legal position that unless the statute/rules
so permit, the review application is not maintainable in case of
judicial/quasi-judicial orders. In absence of any provision in the
Act granting an express power of review, it is manifest that a
review could not be made and the order in review, if passed is
ultra-vires, illegal and without jurisdiction. (vide Patel Chunibhai
Dajibha Vs. Narayanrao Khanderao Jambekar and Anr.
MANU/SC/0287/1964 : AIR 1965 SC 1457 and Harbhajan Singh
Vs. Karam Singh and Ors. MANU/SC/0015/1965 : AIR 1966 SC
641).
13. In Patel Narshi Thakershi and Ors. Vs. Shri Pradyuman
Singhji Arjunsinghji MANU/SC/0433/1970 : AIR 1970 SC 1273;
Maj. Chandra Bhan Sinigh Vs. Latafat Ullah Khan and Ors.
MANU/SC/0042/1978 : AIR 1978 SC 1814 ; Dr.Smt.Kuntesh
Gupta Vs. Management of Hindu Kanya Mahavidhyalaya, Sitapur
(U.P) and Ors. MANU/SC/0104/1987 : AIR 1987 SC 2186; State of
Orissa and Ors. Vs. Commissioner of Land Records and
Settlement, Cuttack and Ors. MANU/SC/0549/1998 : 1998 (7) SCC
162 and Sunita Jain Vs. Pawan Kumar Jain and Ors.
MANU/SC/7012/2008 : 2008 (2) SCC 705, this Court held that the
power to review is not an inherent power. It must be conferred
by law either expressly/specifically or by necessary implication and
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in absence of any provision in the Act/Rules, review of an earlier
order is impermissible as review is a creation of statute.
Jurisdiction of review can be derived only from the statute and
thus, any order of review in absence of any statutory provision for
the same is nullity being without jurisdiction.
14. Therefore, in view of the above, the law on the point
can be summarised to the effect that in absence of any statutory
provision providing for review, entertaining an application for
review or under the garb of clarification/modification/correction is
not permissible."
11. In view of the above decision of the Supreme Court, firstly, the Chief
Metropolitan Magistrate has no power to pass the order under Section 14 of the
Act, 2002, as it was passed earlier, and thereby, he became "functus-officio" for
all purposes therein and having no power to review or recall. Thus, the Chief
Metropolitan Magistrate exceeded his jurisdiction and passed the impugned
order. It is otherwise going against the order passed by the Supreme Court
endorsing the settlement between the parties. It is based on the settlement that
the auction purchaser has paid the entire due amount to the Bank, but has not
given possession. It is precisely in view of the order passed by the Chief
Metropolitan Magistrate at the instance of the borrower. We find that the action
of the Chief Metropolitan Magistrate, so also the borrower to create hindrance in
execution of the memo of understanding and the order of the Supreme Court,
thus, needs to be dealt with by issuing appropriate direction.
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12. Accordingly, the impugned order passed by the Chief Metropolitan
Magistrate, dated 10.07.2018 is quashed. W.P.No.7342 of 2020 is allowed. The
Bank is directed to give possession of the property in question to the auction
purchaser within 15 days and for that, the borrower is directed to give
possession of the property to the Bank within the period aforesaid. Looking at
the act of the borrower, creating hindrance despite an order of the Supreme
Court in terms of the memo of understanding, costs of Rs.25,000/- (Rupees
twenty five thousand only) be paid by the borrower to the petitioner for the
litigation within a period of 15 days. In case of non-compliance of the order, the
Registrar (Judicial) of this Court shall take steps to list this Writ Petition for
appropriate orders.
W.P.No.27135 of 2021:
11. In view of the allowing of W.P.No.7342 of 2020 as above, we dismiss
W.P.No.27135 of 2021 with costs of Rs.25,000/- (Rupees twenty five thousand
only) to be paid by the petitioner to the Tamil Nadu State Legal Services
Authority, High Court Buildings, Chennai-600 104.
(M.N.B., C J) (D.B.C.J)
08.03.2022
Index: Yes/no
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Speaking Order: Yes/no
cs
THE HONOURABLE CHIEF JUSTICE
and
D.BHARATHA CHAKRAVARTHY, J
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