Telangana High Court
Smt.S.Anuradha And Another vs Sri C.V.N. Bhaskar Rao And 2 Others on 25 June, 2021
Bench: M.S.Ramachandra Rao, K.Lakshman
HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO
AND
HONOURABLE SRI JUSTICE K. LAKSHMAN
CONTEMPT CASE NO.254 OF 2020
O R D E R:
(Per Sri Justice M.S.Ramachandra Rao)
This Contempt Case is filed alleging willful disobedience of the
order dt.06.11.2019 in W.P.No.2455 of 2019.
The events leading to filing of W.P.No.2455 of 2019
2. The petitioners herein had purchased the subject property under
a registered sale deed dt.04.09.2017 from their previous vendors and
they were in possession of the said property.
3. It appears that the vendors of the petitioners suppressed from
the petitioners that the said property had been mortgaged with Union
Bank of India (for short, 'the Bank') by deposit of it's title
deed/registered sale deed No.10565 of 2008 for a loan taken by their
vendors; and on coming to know of the same, the petitioners lodged a
complaint on 12.01.2018 before the Station House Officer, Medipally
Police Station alleging that their vendors committed offences of
Cheating and Criminal Breach of Trust.
4. The said Bank invoked the provisions of the SARFAESI Act,
2002 for auction of the subject property on 28.02.2018 on the ground
that the property has been mortgaged to it and there was a default in
payment of the loan by the vendors of the petitioners.
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5. Though the petitioners requested the Bank to stop the auction,
the auction went ahead and the 3rd respondent herein became the
highest bidder by quoting Rs.82,25,000/-.
6. Though only small part of the bid amount of (i) Rs.4,10,000/-
was paid on 16.08.2018, and (ii) Rs.8,00,000/- was paid on
17.08.2018, still letter of confirmation dt.20.08.2018 was issued to the
3rd respondent without payment of balance sale consideration by him.
The 3rd respondent paid the remaining sale consideration of
Rs.60,15,000/- on 29.01.2019, long after the confirmation of sale was
done. In spite of the same, the Bank had even issued sale certificate
on 30.01.2019 and delivered physical possession of the property to the
3rd respondent though the sale certificate was not registered.
7. The petitioners credited Rs.40,00,000/- on 21.08.2018 to the
Bank and attempted to redeem the property, and though the amount
was received by the Bank, it was not credited to the loan account in
view of the auction held on 10.08.2018.
8. Petitioners therefore filed W.P.No.2455 of 2019 in this Court
challenging the said action of the Bank and sought setting aside of the
said sale in favour of the 3rd respondent by it.
The order in W.P.No.2455 of 2019
9. This Court heard all the parties and by its order dt.06.11.2019
allowed the Writ Petition, holding that there was violation by the
Bank of the mandatory conditions contained in Rules 9(3), 9(4) and
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9(5) of the Rules framed under SARFAESI Act because the 3rd
respondent did not adhere to the schedule of payments prescribed in
the said Rules.
This Court also found that the Bank and the Assistant General
Manager showed undue favoritism to the 3rd respondent by allowing
him to deposit the sale consideration as per his whims and fancies and
not within the 15 day period from the date of confirmation of sale as
prescribed in the above referred Rules
It also gave a finding that the petitioners are innocent
purchasers who believed their vendors who had told them that their
link/title document was lost, and the petitioners only later came to
know about suppression of fact by their vendors of the deposit of the
original title deed of the subject property with the Bank for the loan
transaction. This Court also noted that they were willing to clear the
balance loan amount and the Bank had already received
Rs.40,00,000/- from them on 21.08.2018 and so permitted the
petitioners to pay the balance amount due to the Bank within one
week.
This Court directed the petitioners to pay the balance loan
amount of Rs.17,58,711/- (payable by the vendors of the petitioners)
to the Bank along with interest within one week from the date of
receipt of a copy of it's order; the amount already deposited by the
petitioners as well as the amount of Rs.17,58,711/- and interest if any
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paid, was directed to be adjusted by the Bank to the loan dues of the
borrower and the loan account of the borrower was directed to be
closed.
This Court also set aside the confirmation of sale of the
property in favour of the 3rd respondent made on 20.08.2018 and the
sale certificate issued on 30.01.2019 in his favour and directed the 3rd
respondent to redeliver possession of the subject property to the
Bank/its Assistant General Manager (respondents 2 and 3); and the
latter were directed to handover possession of the subject property to
the petitioners along with original link documents of the subject
property on the payment of the balance dues by petitioners. The
Bank was also directed to refund the amount deposited by the 3rd
respondent immediately after receipt of the balance amount from the
petitioners without interest.
Contentions of petitioners in the Contempt Case
10. In this Contempt Case, it is the contention of the petitioners that
pursuant to the said order, the petitioners approached the 2nd
respondent, who was the then Branch Manager of the Bank, on
08.11.2019 along with a sum of Rs.17,58,711/- for complying with
the direction contained in this Court's order for deposit, but the Bank
asked them to produce a copy of the judgment in the Writ Petition;
that on receipt of the judgment by the petitioners, they approached the
Bank on 12.11.2019 with the balance amount; that the petitioners
were again asked to approach on 13.11.2019 with the amount and a
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challan was filled and furnished to the petitioners, and they then
deposited Rs.17,65,695/- as calculated by the Bank to the credit of the
loan account of the borrower/vendors of the petitioners. The
petitioners contended that they were asked to approach the Bank after
a week for receipt of original link documents and on 21.11.2019
original documents were handed over to the petitioners.
11. The petitioners contended that on receipt of the original
documents, they requested the Bank to hand over possession and loan
clearance certificate, but the 2nd respondent informed that possession
was not given to the Bank by the 3rd respondent, and the 3rd
respondent might have approached the Supreme Court of India
questioning the orders passed by this Court on 06.11.2019 in the Writ
Petition.
12. The petitioners contended that the 3rd respondent did file SLP
No.30278 of 2019 in the Supreme Court challenging the order passed
by this Court in W.P.No.2455 of 2019 dt.06.11.2019, but the SLP was
also dismissed on 07.01.2020.
13. The petitioners contended that they even submitted the order of
the Supreme Court on 08.01.2020 to respondent No.s 1 and 2 but they
did not take any steps to hand over possession taking a plea that the
3rd respondent did not give them possession.
14. The petitioners therefore contended that non-compliance with
the direction of this Court in its order dt.06.11.2019 in W.P.No.2455
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of 2019 is willful disobedience by the respondents and they are all
liable to be punished under the Contempt of Courts Act for the same.
15. In the Contempt case the petitioner impleaded the authorized
officer of the Bank at it's Regional Office, Punjagutta as respondent
no.1, the then Branch Manager of the Saifabad Branch of the Bank as
respondent no.2 and the auction purchaser as the respondent no.3.
Events after filing of the Contempt Case
16. The Contempt Case was listed before this Bench on 07.02.2020
and this Court issued notice to the respondents.
17. Notices were served on respondents 1 and 2 in February, 2020
itself. Sri A.Krishnam Raju, counsel entered appearance for
respondents 1 and 2 on 04.03.2020.
18. But there was a delay in service of notice on the 3rd respondent
on account of the 3rd respondent having been moved to a new place of
residence. The 3rd respondent appears to have been served only in
2021 and he engaged Sri R.K.Chittaa, counsel who filed Vakalat on
14.06.2021.
19. As things stand today, possession of the property as directed in
this Court's order dt.06.11.2019 in W.P.No.2455 of 2019 has not been
delivered to the petitioner though more than 19 months have elapsed
since the passing of the said order.
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The stand of the respondents and it's consideration by this Court
20. Admittedly under the order dt.6.11.2019 in WP.No.2455 of
2019 we had directed redelivery of possession of the subject property
by the 3rd respondent to respondent nos.1 and 2 and the latter were
directed to hand over possession of the property to the petitioners
along with original documents of the borrower on payment of balance
dues by the petitioners, which occurred on 14.11.2019.
21. So, we shall first see what the 3rd respondent had done to
discharge his duty to deliver possession of the subject property to the
Bank.
22. A perusal of his counter-affidavit shows that though the SLP
filed by him was dismissed on 07.01.2020, he did not attempt to
deliver possession of the property to the Bank and wrote a letter
Ex.R.2 - dt.10.02.2020 to respondent nos.1 and 2 stating that after
SLP was dismissed, the order in the Writ Petition is subsisting, and
'there is no order preventing so far the order of the High Court in the
above matter'.
23. Thus, he never came forward to deliver possession of the
subject property to the Bank after his SLP was dismissed.
24. No doubt, this Court had directed the respondent nos.1 and 2 to
refund the amount which the 3rd respondent had paid them in the
auction which had been set aside by the High Court in the order
dt.06.11.2019 in Writ Petition No.2455 of 2019. As per the order
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passed by this Court the said refund of amount deposited by the 3rd
respondent was to be done immediately after receipt of the balance
amount from the petitioners, without interest.
25. Therefore, the respondent nos.1 and 2 ought to have refunded
the amount deposited by the 3rd respondent to him without interest
either on 14.11.2019 (when the petitioners had deposited as per the
direction granted by this Court) or at least on 07.01.2020 (when the
SLP No.30278 of 2019 filed by the 3rd respondent in the Supreme
Court was dismissed) when they came to know about it on 08.01.2020
when the petitioner informed the 2nd respondent about such dismissal
of SLP.
26. The D.D.No.38296674 dt.07.02.2020 was prepared and handed
over only on 10.02.2020 to the 3rd respondent. Why the respondent
nos.1 and 2 waited to refund the amount deposited by the 3rd
respondent till 10.2.2020 i.e., for more than a month is not explained
by them.
27. It was incumbent on the 3rd respondent to hand over possession
of the property to respondent nos.1 and 2 after the dismissal of the
SLP by the Supreme Court on 07.01.2020.
28. When the 3rd respondent did nothing, the 2nd respondent merely
addressed (i) a letter dt.09.01.2020 by RPAD to the 3rd respondent
requesting for handing over of physical possession, and (ii) another
letter on 10.02.2020 again to him enclosing the Demand Draft for
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Rs.80,25,000/- reiterating its request to him to hand over possession
and then kept quiet, when the 3rd respondent did not do anything.
29. In our opinion, it was the duty of the respondent nos.1 and 2 to
take steps for compliance of the order passed by this Court on
06.11.2019 in Writ Petition No.2455 of 2019 by moving a Contempt
application in this Court against the 3rd respondent for his non-
compliance after 7.1.2020.
30. When the 3rd respondent received the auction amount deposited
by him on 11.02.2020, he too only endorsed on the covering letter
dt.10.02.2020 of the Bank denying some statements made by the Bank
about his inaction to deliver physical possession of the property to the
Bank, but maintained silence about delivery of possession of the
property to the Bank.
31. Cleverly, the 3rd respondent wrote a letter Ex.R.4 on 25.02.2020
to respondent nos.1 and 2 stating that he re-delivered possession of the
subject property on the date of receiving the Demand Draft from the
Bank on 11.01.2020 when he received the Demand Draft.
32. There is no basis for this assertion on the part of the 3rd
respondent.
33. The further statement in the last paragraph of Ex.R.4 letter
dt.25.02.2020 that respondent nos.1 and 2 should not pressurize him
for delivery of possession of the property is clearly an attempt on his
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part to create a false impression that he had delivered possession of
the property.
34. The respondent nos.1 and 2 have filed a Panchanama
dt.02.03.2020 stating that when its representatives visited the subject
property on 02.03.2020, they noticed that the entrance door in the
ground floor was locked both from inside and outside, and that they
observed that 'Joy and Joy Bar' is using the ground floor by putting
tables and chairs, that there was a generator set belonging to the Bar in
the ground floor, and when they requested the people to remove the
same, they refused to do so. The said Panchanama recorded that the
Bank could not take re-possession of the property. Photographs have
also been filed in support of the said Panchanama.
35. Instead of reporting the said fact to this Court or to the
petitioners, the 2nd respondent wrote a letter dt.04.03.2020 to the 3rd
respondent mentioning these facts, and making an allegation that he
had given possession to the people running the Bar instead of the
Bank, and demanding that he give possession. On the same day,
respondent nos.1 and 2 had entered appearance in this contempt Case
through counsel Sri A. Krishnam Raju.
36. This case was listed on 06.03.2020, and even on that date the
counsel for respondent nos.1 and 2 did not inform the Court of the
information which was already in possession of 2nd respondent about a
Bar being run in the subject property.
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37. More importantly, when matter was listed next on 26.04.2021
and again on 04.06.2021, no counter-affidavits were filed by
respondent nos.1 and 2 informing the Court about this event, though
more than 1 year has elapsed.
38. No doubt, on account of COVID-19 pandemic there was a
disruption in Court work for a short time and the matter could not be
listed.
39. But, admittedly from July, 2020, through virtual mode the
Court had been functioning and all counsel were aware of it. So, it
was incumbent on respondent nos.1 and 2 to have brought to the
notice of the Court what they knew even by 02.03.2020 about third-
parties being in possession of the property. During the intervening
period from 02.03.2020 till 04.06.2021, the respondent nos.1 and 2
maintained a stony silence and did nothing. They filed counter-
affidavits only on 10.06.2021 stating these facts showing their utter
disregard to the implementation of the orders passed by this court.
40. We strongly deprecate not only the conduct of 3rd respondent
but also the inaction on the part of respondent nos.1 and 2 during this
entire period.
41. The stand of respondent no.1 in the Contempt Case is that the
1st respondent had worked as Regional Head of Union Bank of India
at Regional Office, Hyderabad from 14.10.2019 to 30.06.2020 and
even thereafter; that the Regional Office, Hyderabad at Panjagutta was
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where the 1st respondent was posted, but it was the Regional Office,
Hyderabad at Koti which was the Controlling Office in respect of
Saifabad Branch of the Bank which was a party in the Writ Petition.
But this, even according to the 1st respondent, happened only
from 01.07.2020 and only thereafter the Regional office where the 1st
respondent was working ceased to be the Controlling Authority of the
Saifabad Branch of the Bank.
So, the 1st respondent cannot wash his hands off the obligation
to restore possession to the petitioner after the SLP was dismissed on
07.01.2020.
As a Regional Head of the Bank, it was the duty of the 1st
respondent to take the initiative and guide the 2nd respondent and
neither of them can escape their culpability for inaction in regard to
informing this Court and taking steps to implement the order of this
Court in the Writ Petition.
We do not accept the plea of the 1st respondent that he could
not have been made a party in the Writ Petition for the aforesaid
reasons.
The 1st respondent cannot throw the blame on the 2nd
respondent and seek to escape his culpability.
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We also decline to accept the apology tendered by the 1st
respondent for the above reasons and also because we are of the
opinion that there is no contrition or genuine repentance by him.
42. Coming to the 2nd respondent, except writing letters to the 3rd
respondent to deliver possession on 09.01.2020 and another letter on
10.02.2020, he did nothing except blaming the 3rd respondent
forgetting his own obligation to seek direction from this Court if there
was any impediment for complying with the orders passed by it in the
Writ Petition No.2455 of 2019.
When the 3rd respondent was, according to 2nd respondent,
avoiding delivery of possession, the 2nd respondent cannot keep quiet
and do nothing.
Moreover, no reason is assigned why the 2nd respondent did not
inform the counsel Sri A. Krishnam Raju engaged by him in the
contempt case while handing over Vakalat signed by him on
04.03.2020, about the events recorded in the Panchanama
dt.02.03.2020, so that the said counsel could have informed the same
to the Court through an affidavit, when the matter was listed on
06.03.2020. This would have enabled this Court to give appropriate
directions for delivery of possession to the petitioners.
The fact that the 2nd respondent got transferred to Bareilly
Regional Office in Uttar Pradesh on 12.06.2020 does not absolve him
of inaction either prior to that date or after that date. He cannot
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simply plead helplessness for his inaction and seek to escape the
consequences of such inaction.
We disagree with his plea that he had discharged his obligation
and complied with the orders passed by this Court or there was no
willful negligence or wanton delay on his part in delivering property
to the petitioners.
We also refuse to accept the unconditional apology tendered by
him for the same reason that we did not accept such apology of the 1st
respondent.
43. For the aforesaid reasons, we hold that respondent nos.1 to 3
have willfully disobeyed the order dt.06.11.2019 in Writ Petition
No.2455 of 2019 and they are liable to be punished for the same.
44. Accordingly, the Contempt Case is allowed; the 3rd respondent
is sentenced to suffer 2 months imprisonment and to pay a fine of
Rs.2000/- within 4 weeks. The petitioners are directed to deposit
subsistence allowance @ Rs.250/- per day within four (04) weeks.
The sentence of imprisonment imposed on respondent no.3 is
suspended for six (06) weeks.
45. The respondents 1 and 2 are sentenced to fine of Rs.2000/-
within four (04) weeks. The Union Bank of India rep. by it's
Chairman , Union Bank Bhavan, 239, Vidhan Bhavan Marg, Nariman
Point, Mumbai - 400 021, Maharashtra, India is directed to initiate
disciplinary action against the respondents 1 and 2 for their negligence
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and inaction in implementing the order dt.6.11.2019 in W.P.2455 of
2019.
46. The respondents 1 and 2 shall approach immediately and take
the assistance of the Commissioner of Police, Rachakonda Police
Commissionerate and the Station House Officer, Medipally, secure
possession of the subject property from any third party who is
currently in enjoyment/occupation thereof and deliver the same to the
petitioners under a panchnama within one week from today.
47. The respondents 1 to 3 shall each pay costs of Rs.20,000/- each
to petitioners.
48. As a sequel, miscellaneous petitions pending if any, in this
contempt case, shall stand closed.
____________________________
M.S.RAMACHANDRA RAO, J
____________________
K. LAKSHMAN, J
Date: 25-06-2021
Note : CC to be furnished in two (2) days to the parties.
Copy of this order be sent to :
(i) The Chairman, Union Bank of India, Union Bank Bhavan,
239, Vidhan Bhavan Marg, Nariman Point, Mumbai - 400
021, Maharashtra, India;
(ii) The Commissioner of Police, Rachakonda Police
Commissionerate; and
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(iii) Station House Officer, Police Station, Beside the
Grampanchayat Office, Medipally, Medipally Mandal,
Medchal District.
B/o.
SVV / NDR
