Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. /2022
(@ SLP (C) No. 2228/2022)
Kotak Mahindra Bank Limited ..Appellant (S)
Versus
Narendra Jayantilal Trivedi & Anr. ..Respondent (S)
With
CIVIL APPEAL NO. /2022
(@ SLP (C) No. 4724/2022)
J U D G M E N T
M. R. Shah, J.
Leave granted.
1. Feeling aggrieved and dissatisfied with impugned order
dated 25.01.2022 passed by the Division Bench of the
Signature Not Verified
High Court of Gujarat at Ahmedabad and subsequent
Digitally signed by Dr.
Mukesh Nasa
Date: 2022.05.13
16:49:06 IST
Reason:
order dated 04.03.2022, in Letters Patent Appeal No.
1
75/2022, the original respondent – Bank has preferred the
present appeals.
2. The facts leading to the present appeals are as under:
2.1 A loan facility of Rs. 29,50,000/ was earlier extended by
State Bank of India and later assigned to the appellant –
Bank to a proprietorship firm of respondent No. 1 herein
i.e., M/s Aromatics Intermediates and Chemicals. As a
security for the said loan facility, property belonging to
respondent No. 1 was mortgaged in favour of State Bank of
India. In view of default by respondent No. 1 in making
payments of the outstanding amounts, the bank filed a
civil suit in the year 1986 for recovery of its dues and
enforcement of securities. Upon enactment of the Recovery
of Debts Due to Banks and Financial Institutions Act,
1993 (hereinafter referred to as the Act, 1993), the suit
was transferred to the Debts Recovery Tribunal (DRT),
which was numbered as Transfer Application No.
95/1995. The DRT vide order dated 03.03.2000 decreed
the said application and directed respondent No. 1 and the
2
guarantors to pay jointly and severally a sum of Rs.
44,01,159.47/ with cost.
2.2 Thereafter, the debts under the credit facility were
assigned in favour of the appellant – bank. Pursuant to the
assignment of dues, bank issued a demand notice upon
the judgment debtor – respondent No. 1 and others under
section 13(2) of the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act,
2002 (SARFAESI Act) for a sum of Rs. 27,35,85,200.62/
as on 20.06.2011, together with further interest and
expenses and costs. Before any further measures under
section 13(4) of the SARFAESI Act could be taken by the
appellant – bank, respondent No. 1 filed an application
under section 17 of the SARFAESI Act before the DRT
being Securitisation Application No. 94/2011. Vide order
dated 06.01.2015, the Recovery Officer rejected the
objections raised by respondent No. 1 and guarantors. The
DRT dismissed the Securitisation Application No.
94/2011.
3
2.3 According to the appellant, the appellant took symbolic
possession of the mortgaged property under section 13(4)
of the SARFAESI Act on 16.07.2015. Respondent No. 1
and guarantors again raised objections in the recovery
proceedings which were rejected by the Recovery Officer
vide order dated 06.01.2015. By an order dated
15.07.2016, the Recovery Officer allowed the said
application and reviewed/modified his earlier order dated
06.01.2015. The said order was challenged by the
appellant before the DRT by way of Appeal No. 6/2016 and
was pending.
2.4 Thereafter, the appellant also filed an application under
section 14 of the SARFAESI Act before the learned Chief
Metropolitan Magistrate (CMM) being Application No.
256/2015, which came to be allowed vide order dated
16.08.2016 and allowed the bank to take physical
possession of the secured assets. Aggrieved by the
actions/measures under the SARFAESI Act, taken by the
bank, the borrowers/guarantors again approached the
DRT by way of Securitisation Application No. 171/2016.
4
Thereafter, the appellant filed a special criminal
application before the High Court challenging the order
passed by the learned CMM to the extent of not appointing
a subordinate officer for execution of the order. The High
Court disposed of the said special criminal application vide
order dated 02.12.2016. Pursuant to the order passed by
the High Court dated 02.12.2016, learned CMM authorized
the Registrar of that Court to take possession of the
secured property in question. Respondent No. 1 thereafter
filed an interlocutory application before the DRT in
Securitisation Application No. 171/2016, which came to be
rejected. Respondent No. 1 also filed a Criminal Misc.
Application No. 643/2017 before the learned CMM for
clarification of order dated 16.12.2016. The said
application came to be rejected by order dated 04.02.2017.
2.5 That thereafter, respondent No. 1 preferred a writ petition
before the High Court being Special Civil Application No.
2763/2017, seeking compliance of order dated 15.07.2016
passed by the Recovery Officer (against which an appeal
before the DRT was pending) as well as order dated
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04.02.2017 passed by the learned CMM in Criminal Misc.
Application No. 643/2017 and order dated 21.01.2017
passed by the DRT in Securitisation Application No.
171/2016. Thus, respondent No. 1 challenged three
different orders passed by three different authorities
passed under two different Acts. The appellant resisted the
said Special Civil Application on the grounds, inter alia,
that without exhausting alternative remedies available
under the SARFAESI Act and Act, 1993, the writ petition
under Article 226 of the Constitution of India would not be
maintainable. It was also submitted that the writ petition
under Article 226 of the Constitution of India against the
orders passed by the DRT and the orders passed under the
SARFAESI Act and Act, 1993, would not be maintainable.
That vide order dated 19.04.2021 and during the pendency
of the aforesaid writ petition before the High Court, the
DRT dismissed the Securitisation Application No.
171/2016 with cost of Rs. 25,000/. The learned Single
Judge of the High Court subsequently dismissed the
aforesaid Special Civil Application No. 2763/2017 vide
detailed judgment and order dated 07.10.2021 with
6
exemplary cost of Rs. 1,00,000/. The learned Single
Judge specifically observed that the said proceedings were
only preferred by respondent No. 1 to stall the recovery
proceedings under the SARFAESI Act. Learned Single
Judge also noted that respondent No. 1 remained
successful in not paying a single rupee for almost 21 years
despite the decree passed by the DRT.
2.6 Feeling aggrieved and dissatisfied with the judgment and
order passed by the learned Single Judge, respondent No.
1 preferred Letters Patent Appeal before the Division
Bench of the High Court. The Division Bench of the High
Court by the impugned exparte adinterim order dated
25.01.2022 granted an exparte order of stay in favour of
respondent No. 1 of dispossession of the property till the
next date of hearing and also stayed the payment of cost of
Rs. 1,00,000/ imposed by the learned Single Judge.
2.7 Feeling aggrieved and dissatisfied with the exparte ad
interim stay granted by the Division Bench of the High
Court dated 25.01.2022, the bank has preferred present
7
appeal arising out of SLP (C) No. 2228/22. The present
appeal came up for hearing before this Court on
22.02.2022 and this Court passed the following order:
“Shri Amar Dave, learned Advocate appearing on behalf of
the petitioner Bank has taken us to the reliefs
sought/prayed in the main writ petition (pages 5758). He
has submitted that as such some of the reliefs sought in
the main writ petition were the interim order passed by
the DRT dated 21.01.2017. It is submitted that one
another relief which was sought was to hold and declare
that the proceedings initiated by the Bank under the
Securitization and Reconstruction of Financial Assets and
Enforcement of Securities Interest Act, 2002 (SARFAESI
Act) are illegal being time barred. It is reported that the
proceedings before the DRT are disposed of and the same
have been dismissed. It is further submitted that even the
order passed by the Recovery officer dated 15.07.2016
upon which the reliance has been placed by the Division
Bench of the High Court is as such the subject matter of
appeal before DRT filed by the Bank. It is submitted that
as held by this Court in the case of Authorized Officer,
State Bank of Travancore and Anr. Vs Mathew K.C.
(2018) 3 SCC 85 and the recent decision of this Court in
CA Nos.257259/2022 Phoenix ARC Private Limited Vs.
Vishwa Bharati Vidya Mandir & Ors., the writ petition
under Article 226 of the Constitution of India against the
proceedings initiated under the SARFAESI Act and/or
against an interim order shall not be maintainable. It is
submitted that by granting such an adinterim order, the
Division Bench of the High Court has virtually stalled the
proceedings under the SARFAESI Act.
Issue notice returnable on 15.03.2022.
Dasti, in addition, is permitted.
In the meantime, the Division Bench of the High
Court either to finally decide and dispose of the LPA
and/or at least the application for interim relief to be
decided on or before 09.03.2022 and the order that may
be passed to be placed before this Court on the next date
of hearing.”
8
2.8 It appears that having come to know of the present appeal
and order dated 22.02.2022, calculatively respondent No.
1 withdrew the aforesaid Letters Patent Appeal with liberty
to file appropriate proceedings before the appropriate
forum. Respondent No. 1 – original appellant also
requested to continue the earlier exparte adinterim order
dated 25.01.2022, which as such is the subject matter of
the civil appeal arising out of SLP (C) No. 2228/2022,
pending before this Court. The Division Bench of the High
Court vide impugned order dated 04.03.2022 (impugned
order in civil appeal arising out of SLP (C) No. 4724/2022)
not only permitted respondent No. 1 to withdraw the
Letters Patent Appeal, it also extended the exparte ad
th
interim stay, granted earlier, up to 14 March, 2022. The
Division Bench of the High Court reduced the cost
imposed by the learned Single Judge from Rs. 1,00,000/
to Rs. 25,000/. The Division Bench also passed an order
that appropriate forum, which is going to examine the
order dated 19.04.2016 passed by the Debts Recovery
Tribunal in case No./Securitisation Application No. 171 of
9
2016, shall deal with the case independently and without
being influenced by the observations made by learned
Single Judge, vide order dated 07.10.2021 passed in
Special Civil Application No. 2763 of 2017 and without
being influenced by the order of cost imposed by the
Appellate Bench. The earlier exparte adinterim order
dated 25.01.2022 passed by the Division Bench in Letters
Patent Appeal No. 75/2022 and the subsequent order
dated 04.03.2022 of the Division Bench passed in Letters
Patent Appeal No. 75/2022, are the subject matter of the
present appeals.
3. We have heard Shri Amar Dave, learned counsel appearing
on behalf of appellant bank and Ms. Sonam Anand,
learned counsel appearing on behalf of respondent No. 1 in
civil appeal arising out of SLP (C) No. 2228/2022. At this
stage, it is required to be noted that though served, nobody
has appeared on behalf of respondent No. 1 in connected
SLP (C) No. 4724/2022. This Court adjourned the matter
earlier so as to ascertain that respondent No. 1 appears in
the subsequent SLP (C) No. 4724/2022. When we enquired
10
from Ms. Sonam Anand, learned counsel, who is appearing
on behalf of very respondent No. 1 in connected matter
being SLP (C) No. 2228/2022, whether she has any
instructions to appear on behalf of respondent No. 1, she
has clearly stated at the bar that though she has informed
respondent No. 1 about SLP (C) No. 4724/2022, she has
no further instructions to appear on behalf of respondent
No. 1 in the connected matter bearing SLP (C) No.
4724/2022. We do not appreciate the conduct on the part
of respondent No. 1 in appearing in one matter and not
appearing in the connected matter though served. It
appears that in view of the subsequent order obtained by
him from the Division Bench of the High Court, which is
the subject matter of SLP (C) No. 4724/2022, by
withdrawing the Letters Patent Appeal with liberty to file
appropriate proceedings before the appropriate forum and
obtaining observations that the observations made by the
learned Single Judge in order dated 07.10.2021 passed in
Special Civil Application No. 2763/2017 may not be
considered by the appropriate forum before whom the
proceedings to be initiated which is also the subject
11
matter of subsequent SLP, deliberately respondent No. 1
has chosen not to appear in the subsequent SLP (C) No.
4724/2022.
4. At the outset, it is required to be noted that the
proceedings before the High Court initiated by respondent
No. 1 in the year 2017 by way of Special Civil Application
No. 2763/2017, as such was nothing but an abuse of
court process and only with a view to delay the
proceedings under the SARFAESI Act, initiated by the
appellant – bank, to recover the amount due and payable
since 1986. From the material available on record, it is
noted that one after another, a number of proceedings
were initiated by respondent No. 1. Thus, it can be said
that all efforts were made by respondent No. 1 – original
appellant to delay the proceedings under the SARFAESI
Act, initiated by the bank, to recover the amount due and
payable since the year 1986.
4.1 In the year 2017, despite the statutory remedies available
under the SARFAESI Act, respondent No. 1 filed a writ
12
petition before the learned Single Judge of the High Court
and prayed for the following reliefs:
“B) Your Lordships may be pleased to issue writ of
mandamus and be pleased to direct the respondent bank
not to proceed under the SARFAESI ACT further till they
comply with the order passed by the Recovery officer
dated 1572016 in R.P No 360 at AnnexureK to this
petition.
C) Your Lordships may be pleased to issue a Writ of
certiorari or any other appropriate writ, order or direction
quashing and setting aside the order dated 04022017
passed by the Hon'ble Chief Metropolitan Magistrate,
Ahmedabad as annexed hereinabove as AnnexureA to
this petition;
D) Your Lordships may be pleased to issue a writ of
certiorari or any other appropriate writ, order or direction
quashing and setting aside the order dated 2112017
passed by the Hon'ble Debt Recovery Tribunal,
Ahmedabad as annexed hereinabove as AnnexureB to
this petition.
E) Be pleased to declare that the order passed dated 21
12017 by the Hon'ble Debt Recovery Tribunal is defective
being erroneous, without findings, without reasons and
non considering the points of arguments and averments
averred in the Interim Application annexed hereinabove
as AnnexureO to this petition and the arguments
canvassed.
F) Your Lordships may be pleased to issue writ of
mandamus and be pleased to hold and declare that the
said proceedings of the respondent bank under the
SARFEASI ACT are time barred.
G) Your Lordships may be pleased to issue or writ of
mandamus and be pleased to hold and declare pending
admission, hearing and final disposal of this petition be
pleased to stay the effect, operation and implementation
of impugned order dated 16122016 passed by Hon'ble
Chief Metropolitan Magistrate, Ahmedabad.
13
H) Pending admission, hearing and final disposal of this
petition be pleased to direct the respondents to maintain
status quo qua residential property bearing No. 212
2013, Azad Society, Ambawadi, Ahmedabad bearing total
378 Sq. Mtrs. of plot which is in physical possession of
the petitioner.
I) Exparte Adinterim relief in terms of para 9 (H).
J) Costs of this petition are awarded.
K) Any other relief, order or direction which may be just,
fit, proper and equitable in the facts and circumstances of
the petition.”
After the detailed judgment and order and after having
taken note of the subsequent order passed during the
pendency of the writ petition before the learned Single
Judge of the High Court and having taken note of the
subsequent order passed by the DRT/appropriate
authority dismissing the securitisation application with
cost of Rs. 25,000/, the learned Single Judge by the
detailed judgement and order dismissed the writ petition
with exemplary cost of Rs. 1,00,000/.
4.2 In fact, while dismissing the securitisation application, the
DRT made observations in paragraphs 31 to 33, which
read as under:
“31. It is worthwhile to mention here that the bank filed
the Recovery Proceedings in the year 1986 and now we
14
are in the year 2021. The bank made part recoveries
through process of law by sale of hypothecated assets and
one property situated in Vatva. The amount recovered is
merger amount, as compared to total recoverable dues.
On the date of issuance of Demand Notice, bank claimed
Rs.27,35,85,200.62 Ps, whereas amount recovered was
approximately Rs.9,33,031.20 Ps.
The Applicants made every effort to hinder the process of
covery of public money. The bank has mentioned details
of three assets as securities in the Demand Notice, but
has proceeded against one property only. To my opinion,
if bank has given details of all the securities, although
some of the securities had been sold earlier by the bank
through process of Court and has given the credit of so
recovered amount in the account of borrower in its
ultimate demand made under the Demand Notice, the
reference of already sold securities would not render
Demand Notice defective. So on that account also, I find
no merits in the Securitisation Application.
32. It is high time to curb such type of litigants, who for
their benefit, give or furnish part information and conceal
part information to the detriment of secured creditor and
with a view to mislead the Courts. The Applicants who
had filed earlier SARFAESI Act, 2002, were required to
disclose all such facts regarding death of Smt. Kokilaben
N. Trivedi and all other facts regarding sale of two secured
assets at first available opportunity that is in the
objections filed against the Demand Notice and in the
earlier filed Securitisation Application, but the Applicants
concealed factum of death of Smt.Kokilaben N. Trivedi for
about 15 years. Nondisclosure of vital and material
information and concealment of such information and
case as setup regarding recoveries made by the bank
during pendency of Civil Suit by the Applicants, at the
time of arguments reveals that the Applicants have not
come to this Tribunal with clean hands. The initial
pleadings as well as subsequent conduct during
pendency of proceedings of the litigant must be fair
enough to enable the justice delivery system/Courts to
adjudicate matters in a judicious manner. The approach
of Applicants reveals that the Applicants deliberately
acted in a manner to jeopardise fair adjudication of
matter. Once the Applicants have not come to this
Tribunal with clean hands, they are not entitled to any
reliefs on merits. We can rely on the judgment of Hon’ble
Supreme court in the case of V. Chandrasekaran v.
15
Administrative Officer reported in 2012(4) R.C.R.(Civil)
588, which is fully applicable to present case. The
Applicants for their such conduct are liable to pay cost.
33. Keeping in view, all such facts and circumstances,
Securitisation Application is dismissed with cost of
Rs.25,000/, apart from the right of the bank to recover
all expenses incurred to defend the litigation filed by the
Applicants to question validity of Securitisation Process.
Cost is to be deposited with National Defence Fund in the
Account No. 11084239799 State Bank of India at New
Delhi Main Branch (00691) and file a purshis in
compliance of orders of this Tribunal within 7 days. The
Respondent Bank may proceed further in accordance
with law.”
That thereafter the learned Single Judge dismissed the
aforesaid writ petition bearing Special Civil Application No.
2763/2017 by observing in paragraph 24 as under:
“24. From the narration of the facts made by the DRT it is
clear that the petitioner has only one goal and agenda as
not to pay any single rupee after the decree passed by the
DRT in the year 2000. The petitioner has remained
successful for almost 21 years for not paying any amount
of the outstanding dues as per the decree passed by the
DRT which has achieved finality. In such circumstances,
without adverting to the further facts and taking into
consideration the finding of the DRT which is not under
challenge and which has achieved finality, the petition is
dismissed with cost of Rs. 1 lakh. The amount of cost to
be deposited with the Gujarat State Legal Services
Authority within a period of four weeks from the date of
receipt of this order.”
4.3 Against the detailed judgment and order dated 07.10.2021
passed by the learned Single Judge in writ petition bearing
Special Civil Application No. 2763/2017 dismissing the
16
writ petition with cost of Rs. 1,00,000/, respondent No. 1
preferred the Letters Patent Appeal before the Division
Bench. Despite the strong observations made by the
learned Single Judge recorded in detailed judgment and
order dated 07.10.2021 in Special Civil Application No.
2763/2017, the Division Bench entertained the Letters
Patent Appeal. The Division Bench not only entertained
the said Letters Patent Appeal but also granted exparte
adinterim relief, granting stay against the dispossession of
the property i.e., not to take possession of the property in
question as well as stay against imposing cost of Rs.
1,00,000/. The exparte adinterim order dated
25.01.2022 is the subject matter before this Court by way
of SLP (C) No. 2228/2022. The same is extracted as under
for immediate reference:
[“1. Heard learned Senior Advocate Mr. Yatin Oza with
learned advocate Ms. Minisha Sharma for the appellant
and perused the order dated 15/07/2016 passed by the
Recovery Officer, by which, objections raised by the
appellant were considered and had passed the following
order:
(1) The objections Exh.D/60 filed by CD No.2 and 3
are allowed as per above objections.
(2) CH Bank is directed to submit details of recoveries
in the accounts of CDs including this account with
clear bifurcation of entire amount recovered by
them visavis its appropriation duly supported
with statement of accounts.
17
(3) CH Bank is also directed to take steps to ascertain
and join/ bring legal heirs of deceased CDs on
record.
(4) CH Bank has to quantify the dues afresh after
deducting entire recoveries and giving affect of the
same on the dates of recoveries and take steps to
get the fresh demand notice issued accordingly.
2. The said decision is appealed by the bank before
the Debts Recovery Tribunal, which is pending for
hearing.
3. We have also gone through the order impugned in
the petition.
Issue Notice making it returnable on 23/02/2022.
CIVIL APPLICATION (FOR INTERIM RELIEF) NO. 1 of
2022:
Notice returnable on 23/02/2022. Till the next date of
hearing, there would be stay against the dispossession of
the property i.e. not to take possession of the property in
question as well as stay against imposing cost of
Rs.1,00,000/ to the present appellant – original
petitioner. Direct service is permitted.”]
4.4 While issuing the notice in the present Civil Appeal arising
out of SLP (C) No. 2228/2022, this Court passed a detailed
order which is as under:
“Shri Amar Dave, learned Advocate appearing on behalf of
the petitioner Bank has taken us to the reliefs
sought/prayed in the main writ petition (pages 5758). He
has submitted that as such some of the reliefs sought in
the main writ petition were the interim order passed by
the DRT dated 21.01.2017. It is submitted that one
another relief which was sought was to hold and declare
that the proceedings initiated by the Bank under the
Securitization and Reconstruction of Financial Assets and
Enforcement of Securities Interest Act, 2002 (SARFAESI
Act) are illegal being time barred. It is reported that the
proceedings before the DRT are disposed of and the same
have been dismissed. It is further submitted that even the
18
order passed by the Recovery officer dated 15.07.2016
upon which the reliance has been placed by the Division
Bench of the High Court is as such the subject matter of
appeal before DRT filed by the Bank. It is submitted that
as held by this Court in the case of Authorized Officer,
State Bank of Travancore and Anr. Vs Mathew K.C.
(2018) 3 SCC 85 and the recent decision of this Court in
CA Nos.257259/2022 Phoenix ARC Private Limited Vs.
Vishwa Bharati Vidya Mandir & Ors., the writ petition
under Article 226 of the Constitution of India against the
proceedings initiated under the SARFAESI Act and/or
against an interim order shall not be maintainable. It is
submitted that by granting such an adinterim order, the
Division Bench of the High Court has virtually stalled the
proceedings under the SARFAESI Act.
Issue notice returnable on 15.03.2022.
Dasti, in addition, is permitted.
In the meantime, the Division Bench of the High
Court either to finally decide and dispose of the LPA
and/or at least the application for interim relief to be
decided on or before 09.03.2022 and the order that may
be passed to be placed before this Court on the next date
of hearing.”
Respondent No. 1 appeared through his advocate Shri
Santosh Krishnan, who filed the vakalatnama on
08.02.2022.
4.5 Despite the pendency of the present Civil Appeal arising
out of SLP (C) No. 2228/2022 and it appears that with a
view to make the present SLP (C) No. 2228/2022 having
infructuous, in a calculative move, respondent No. 1
withdrew the Letters Patent Appeal before the Division
19
Bench, with liberty to file appropriate proceedings before
the appropriate forum. The Division Bench also extended
the adinterim relief, granted earlier vide order dated
25.01.2022, till 14.03.2022, despite the fact that the SLP
against the exparte adinterim order dated 25.01.2022
was pending before this Court and this Court was seized of
the matter. Unfortunately, and without properly
appreciating the consequences and even without taking
into consideration the strong observations made by the
learned Single Judge while dismissing writ petition bearing
SCA No. 2763/2017, the Division Bench of the High Court
has not only permitted respondent No. 1 – original
appellant to withdraw the Letters Patent Appeal, but has
also extended the exparte adinterim relief, granted
earlier, upto 14.03.2022 and even reduced the cost to Rs.
25,000/ from Rs. 1,00,000/. The Division Bench has
also observed in paragraph 4 that the appropriate forum
which is going to examine order dated 19.04.2016 passed
by the Debt Recovery Tribunal1, Ahmedabad in Case No.
S.A. 171 of 2016, shall deal with the case independently
and without being influenced by the observations made by
20
learned Single Judge, vide order dated 07.10.2021 passed
in Special Civil Application No. 2763 of 2017 and without
being influenced by the order of cost imposed by this
Appellate Bench. For immediate reference the relevant
portion of the aforesaid impugned order dated 04.03.2022
is extracted as under:
[“3. ….Having considered the submissions made by the
learned advocates for the respective parties, we
pass the following order:
[i] The appellant is permitted to withdraw present
appeal with a liberty to file appropriate proceedings
before the appropriate forum.
[ii] Till the next date of hearing, interim relief, if
any, granted and which is in existence, is extended
upto 14.03.2022.
[iii] As far as the cost imposed by the learned Single
Judge is concerned, the same is reduced to
Rs.25,000/ (Rupees Twenty Five Thousand Only)
and the same shall be paid to respondent No. 1 by
RTGS on or before 11.03.2022.
4. It is needless to say that the appropriate forum,
which is going to examine the order dated
19.04.2016 passed by the Debt Recovery Tribunal –
1, Ahmedabad in Case No.S.A.171 of 2016, shall
deal with the case independently without being
influenced by the observations made by learned
Single Judge, vide order dated 07.10.2021 passed
in Special Civil Application No. 2763 of 2017 and
without being influenced by the order of cost
imposed by this Appellate Bench.
5. In view of the order passed in Letters Patent
Appeal, present civil application does not survive.
Accordingly, the same stands disposed of.”]
21
4.6 First of all, we deprecate the conduct on the part of
respondent No. 1 in withdrawing the Letters Patent Appeal
despite the fact that this Court was seized of matter in
which the exparte adinterim order dated 25.01.2022
passed by the Division Bench was under challenge and in
which respondent No. 1 was appearing before this Court.
He ought not to have withdrawn the Letters Patent Appeal
and made the proceedings before this Court infructuous.
As observed hereinabove, such act of withdrawal of the
Letters Patent Appeal on the part of respondent No. 1 –
original appellant and thereby making the proceedings
before this Court infructuous so as to avoid adjudication
on the correctness of the impugned order after order dated
22.02.2022 was passed by this Court is wholly deplorable.
4.7 Even otherwise, in the facts and circumstances of the case
a number of proceedings were initiated by respondent No.
1 by which he has delayed the proceedings initiated by the
bank under the SARFAESI Act, and has stalled the
recovery proceedings. In spite of the strong observations
made by the adjudicating authority in the earlier order re
22
produced by the learned Single Judge in his judgment and
the strong observations made by the learned Single Judge,
the Division Bench was not justified in initially granting an
exparte adinterim relief and thereafter, to continue the
same on withdrawal of the Letters Patent Appeal.
4.8 Even the observations made by the Division Bench that
the appropriate forum, which is going to examine the order
dated 19.04.2016 passed by the DRT1, Ahmedabad in
Case No. S.A. 171 of 2016, shall deal with the case
independently and without being influenced by the
observations made by learned Single Judge, vide order
dated 07.10.2021 passed in Special Civil Application No.
2763 of 2017 and without being influenced by the order of
cost imposed is also unsustainable. Such observations
made while permitting withdrawal of the Letters Patent
Appeal amounts to virtually allowing the appeal and
setting aside the orders of the DRT as well as the learned
Single Judge. Once having enjoyed the fruits of interim
orders for approximately four years and in between
initiating a number of other proceedings (even during the
23
pendency of the writ petition) and thereafter, having
invited the order in writ petition on merits and when the
learned Single Judge dismissed the writ petition with cost,
the Division Bench ought not to have passed an order
nullifying the strong observations made by the learned
Single Judge while dismissing the writ petition. In fact, the
Division Bench also did not consider the order of the
learned Single Judge on merits but has granted relief even
while permitting withdrawal of the appeal. Such conduct
on the part of the litigant to once enjoy the fruits of the
litigation for number of years, invite the order on merits,
which is against him and in the appeal initially after
obtaining the exparte adinterim relief and thereafter,
having realised that the same would not be sustained,
withdrawing the appeal and requesting that observations
made by the learned Single Judge while dismissing the
writ petition may not be considered, cannot be accepted
and such conduct reprehensible.
4.9 Once the Division Bench did not interfere with the order
passed by the learned Single Judge on merits, thereafter, it
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was not open for the Division Bench to pass an order
permitting the appellant – respondent No. 1 to withdraw
the Letters Patent Appeal and also make observations that
any of the observations made by the DRT as well as by
learned Single Judge while dismissing the writ petition
shall be ignored and/or shall not be taken into
consideration was beyond the ken of the Division Bench.
Allowing such a practice would tantamount to not only
taking a chance before the court but would be indeed
speculative and an abuse of the process of the court. The
proceedings before the Court are not for taking the chance
by the litigants.
We fail to understand as to on what basis the Division
Bench of the High Court permitted withdrawal of the
Letters Patent Appeal on the one hand while
simultaneously granting relief to the appellant.
5. Under the circumstances, the impugned order dated
04.03.2022 passed by the Division Bench of the High
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Court, in so far as paragraphs 3(i), 3(ii), 3(iii) and 4, is
unsustainable.
6. In view of the above and for the reasons stated above, the
Civil Appeal arising out of SLP (C) No. 2228/2022 is
disposed of as having become infructuous. The impugned
order dated 04.03.2022 passed by the Division Bench of
the High Court of Gujarat at Ahmedabad in Letters Patent
Appeal No. 75/2022 in so far as in terms of paragraphs
3(ii), 3(iii) and in paragraph 4 which read as under, is
hereby quashed and set aside:
3[ii] Till the next date of hearing, interim relief, if any,
granted and which is in existence, is extended upto
14.03.2022.
3[iii] As far as the cost imposed by the learned Single
Judge is concerned, the same is reduced to Rs.25,000/
(Rupees Twenty Five Thousand Only) and the same shall
be paid to respondent No. 1 by RTGS on or before
11.03.2022.
4. It is needless to say that the appropriate forum, which
is going to examine the order dated 19.04.2016 passed by
the Debt Recovery Tribunal1, Ahmedabad in Case No.
S.A. 171 of 2016, shall deal with the case independently
without being influenced by the observations made by
learned Single Judge, vide order dated 07.10.2021 passed
in Special Civil Application No. 2763 of 2017 and without
being influenced by the order of cost imposed by this
Appellate Bench.
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Further the exparte interim order granted in the
Letters Patent Appeal also stands vacated.
The present Civil Appeals arising out of SLP (C) No.
2228/2022 and SLP (C) No. 4724/2022, are
allowed/disposed of to the aforesaid extent with cost,
which is quantified at Rs. 1,00,000/ to be deposited by
respondent No. 1 with the Gujarat High Court Legal
Services Committee, within a period of four weeks’ from
today.
…………………………………J.
(M. R. SHAH)
…………………………………J.
(B.V. NAGARATHNA)
New Delhi,
May 13, 2022.
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