1. Present petition is directed against order dated 18.02.2012 passed by Gujarat State Cooperative Tribunal, Ahmedabad in an application for interim relief preferred in appeal proceedings being Appeal No.29 of 2011, whereby the learned Tribunal has directed the petitioner herein to deposit a sum of Rs. 14 lacs as a condition for interim relief in nature of injunction order against the auction proceedings to be conducted by the original plaintiff Bank on account of present petitioner’s consistent and persistent default in repayment of the loan – advance facility availed by him from the original plaintiff Bank.
2. The petitioner herein is undisputedly, rather admittedly, in default in making repayment of the amounts due and payable by him after having availed loan – advance facility from the original plaintiff Bank.
3. It comes out from the record that the petitioner availed loan, for construction business, somewhere in July 1997 and then after some time he started making defaults in repayment.
4. As per the details emerging from the record the learned Tribunal has recorded in the order that the petitioner does not appear to have made any payment towards the installments, since 2003.
5. Consequently, the Bank was compelled to take out proceedings in the nature of Lavad Suit which came to be decreed in favour of the original plaintiff Bank.
6. It appears that the petitioner did not attend the proceedings of the suit. Ultimately the Board of Nominees had to pass the award ex-parte on 28.07.2004.
7. The petitioner did not honour the decree, resultantly the Bank was compelled to take out execution proceedings during its pendency the process of auction proceedings commenced wherein the property was scheduled to be auction sold. The auction was advertised. The petitioner has alleged that he was not aware about the award and it is also claimed that the award was not forwarded to him thus he was not aware about the award.
8. Be that as it may, the fact remains that neither any amount was – any installments were paid towards the loan and interest.
9. At the stage when the advertisement was issued/the auction proceedings commenced or were to start or around that time the petitioner herein preferred appeal against the judgment and decree and in the appeal proceedings the petitioner moved application for interim relief seeking order in nature of stay or injunction against the auction proceedings.
10. The appeal was filed in 2011 after inordinate delay of almost 7 years (award was passed in July, 2004). The petitioner requested that the delay may be condoned. After hearing the petitioner, the learned Tribunal condoned the delay.
11. Then the appeal and the request for interim relief were taken up for hearing. After considering the request and the facts of the case and the submissions, the learned Tribunal granted, pending the appeal, conditional order requiring the petitioner i.e. the judgment debtor to deposit a sum of Rs. 14 lacs (which is part of the decree amount) as condition for staying the auction proceedings.
12. The petitioner feels aggrieved by and would submit that the amount specified by the learned Tribunal is very high and time allowed for depositing the amount is very less.
13. With such grievance the petitioner has preferred present petition.
14. So far as the other relevant facts involved in and giving rise to the present petition are concerned, it appears from the record that the Board of Nominee directed repayment of the loan amount with interest at rate of 18% per annum and cost of Rs. 6,100/-. From perusal of learned Tribunal’s order it appears that the amount due and payable by the petitioner is to the tune of about Rs.28 lacs.
15. As against the said debt, the learned Tribunal has directed the petitioner to deposit, with the plaintiff Bank, a sum of Rs. 14 lacs and on said condition it is directed that the process of auction may be deferred/stayed.
16. Mr. Trivedi, learned counsel for the petitioner has appeared and assailed the order on the ground that the impugned order is contrary to the orders passed by the High Court, whereby the High Court has passed order allowing the judgment debtor (like present petitioner) to deposit about 1/3rd (about 33%) of the awarded/decreed amount and that therefore the Tribunal ought to have followed the said orders. The learned counsel for the petitioner claimed that the Tribunal could not have asked the petitioner to deposit more than 33% of the awarded/decreed amount and should have allowed more than 30 days time to deposit 33% of the decreed amount. Mr. Trivedi, learned counsel submitted that the impugned order is bad in law and deserves to be set aside because the Tribunal has not followed the said orders passed by the High Court in different cases. Mr. Trivedi, learned counsel submitted that if, for any reason, learned Tribunal considered it appropriate to direct the petitioner to deposit more/higher amount than what ordinarily the High Court has required the judgment debtor to pay then Tribunal ought to have recorded reasons for not following the said criterion (i.e. of requiring the judgment debtor to pay 33% / 1/3rd of the awarded amount). However, in present case the learned Tribunal has neither made reference of the orders cited by the petitioner nor has the learned Tribunal recorded reasons for not following the said orders. Mr. Trivedi, learned counsel for the petitioner submitted that in view of the said lapse and defect in the order, the order is rendered vitiated and unsustainable. So as to support the said submissions, learned counsel referred to and relied upon the decision in case of Ramji Dayawala & Sons (P) Ltd. v. Invest Import [AIR 1981 SC 2085] and the decision of the Apex Court in case of Saurashtra Cement & Chemical Industries & Anrs. V. Union of India & Ors. [AIR 2001 SC 8] and also the decision of the Apex Court in case of Shri Baradakanta Mishra v. Shri Bhimsen Dixit [AIR 1972 SC 2466]. Learned counsel also relied on the order dated 23.11.2010 passed in Special Civil Application 14809 of 2010 and he also relied on the order dated 7th April 2011 passed by Division Bench in Civil Application (for condonation of delay) No.12472 of 2010 in Letters Patent Appeal No.2390 of 2010.
17. I have considered the submissions made by learned counsel for the petitioner and also considered the material on record.
18. The appeal preferred by the petitioner is still pending before the learned Tribunal.
19. The order impugned in present petition is passed at interim / interlocutory stage and has been passed on an application (Exh.5) praying for interim relief in pending appeal and the petitioner has come to the Court at an interlocutory stage.
20. The learned Tribunal has, in exercise of discretion and having regard to the facts of the case and the material on record, conditionally allowed/granted the petitioner’s application for interim relief filed in pending appeal and the petitioner has come to the Court at an interlocutory stage.
21. The learned Tribunal has passed the order dated 18.02.2012 (which is impugned in present petition) requiring the petitioner to deposit a sum of Rs.14 lacs (which is about 50% of the amount due and payable at the relevant time) as a condition for order staying the auction process.
22. Before proceeding further it is necessary and appropriate to note that during the hearing of present petition the Court inquired from the learned counsel for the petitioner about petitioner’s readiness to deposit the amount specified by the learned Tribunal if some more time was allowed. At the request of petitioner’s counsel even the hearing was adjourned to enable the petitioner to convey his response to the Court. However, learned counsel for the petitioner submitted that the petitioner can deposit only 33% of the awarded amount and that too within period of about 6 months.
23. Differently put, the petitioner did not show readiness to deposit the amount specified by the learned Tribunal and even for the reduced amount the petitioner desired that further time of 6 months may be granted.
24. The order in question has been passed on 18th February 2012 and the learned Tribunal had granted 30 days time to deposit the amount in question, however, the petitioner has not paid the amount due to the financial institution or the amount as per the order.
25. It is submitted that the petitioner would want six months time to pay part of the due amount and that also reduced amount than what is specified by the learned Tribunal.
26. Now, another relevant aspect is required to be kept in focus so far as the petitioner’s default in making the payment is concerned i.e. as observed by the learned Tribunal, the petitioner has not paid any installment / amount to the plaintiff Bank since 2003.
27. Differently put, according to the observation by the learned Tribunal for almost last 8 years the petitioner has not made any payment to the Bank.
28. Thus, a person who is in default in making payment to financial institution after having availed loan facility is before this Court.
29. It is also relevant to note that the Board of Nominees passed the award in July 2004, whereas, the petitioner filed the appeal before the learned Tribunal in 2011 i.e. after almost 7 years.
30. It is in the said belatedly filed appeal (after 7 years) that the petitioner preferred application for interim relief against auction and the learned Tribunal passed the conditional order. The learned Tribunal has condoned the delay caused in filing the appeal.
31. However, the fact remains that it is in an appeal preferred in 2011 against the order dated 28.07.2004 that (i.e. order passed before almost 7 years) the learned Tribunal has passed the aforesaid order dated 18th February 2012, which is impugned in present petition.
32. During the hearing of present petition the learned counsel for the petitioner also tried to put a dent in the impugned order by raising dispute about the quantification of the due amount and he submitted that the rate of interest is not properly applied and the interest calculation is not properly done. The said and such other aspects are the issues which can be considered and decided by the Board or the learned Tribunal at the time of hearing the appeal or the application on merits, however, at this interlocutory stage of the proceedings this Court is not inclined to make any observations on this count lest the observations may affect either side at premature stage. In the facts of the case the Court is not inclined to interfere with impugned discretionary order. It is pertinent that in present case the dues of financial institution are not paid since many years and the repayment is being avoided or delayed.
33. Though the learned Tribunal has condoned delay in preferring the appeal, however the condonation of delay caused in filing appeal does not wipe out the fact that since many years the dues of the financial institutions have not been paid by the petitioner. A financial institution engaged in lending activity cannot afford such defaults as they lead the Banks into liquidation. In a case where delay, neglect and default in repayment are shown over a long span then the said fact demonstrates persistent and consistent defaults. In such facts it does not appear appropriate or just to set aside an order requiring such judgment debtor to deposit a certain sum of the debt – say 50% of the awarded amount – and substitute it with some other direction. The obligation to repay is now overdue and the submissions of the plaintiff gives out that even after such long time the petitioner wants to still further delay and avoid the payment. Besides this, the learned counsel for petitioner also did not claim that the two orders on which the petitioner claims to have relied at the hearing of appeal i.e. the orders passed by the learned Single Judge and the Division Bench do not pronounce a legal proposition and invariable rule that in all cases and irrespective of the facts and circumstances of each case only 33% of the awarded amount should be directed to be deposited and in any case any higher amount cannot be directed to be deposited, notwithstanding the facts of the particular case.
Thus, in the facts of this case, this Court is not convinced to and is not inclined to interfere with and set aside the impugned order.
34. The facts of present case distinguish if from the cited two cases wherein the High Court passed the orders on which the petitioner has heavily relied and in view of this Court the facts of present case do not offer any strong and convincing ground and justification so as to allow present petitioner to have the benefit of the said orders.
35. If the petitioner's claim viz. that the said two orders were submitted on record before the learned Tribunal and they were expressly referred to any relied on, and if one proceeds on such assumption then it does appear true that the learned Tribunal has, in its order which is impugned in present petition, not made reference of the orders passed by the High Court and has not recorded reasons for not following the said orders. However, so far as the petitioner is concerned he is not justified in claiming, merely on such ground and by disregarding the glaring facts of his own case and ignoring his own defaults, that the impugned order and direction should be set aside and the matter should be remanded for fresh decision only because the learned Tribunal has directed the petitioner to pay amount at a rate/percentage higher than the rate/percentage which the High Court has mentioned in the said orders and has not recorded reasons for not prescribing the same percentage.
36. I have considered the two orders cited by the learned counsel for the petitioner. One of the two orders is passed by the learned Single Judge in Special Civil Application No.14809 of 2010 with Special Civil Application No.14811 of 2010 and the other order is passed by the Hon’ble Division Bench in Civil Application (for condonation of delay) No.12472 of 2010 in Letters Patent Appeal No.2390 of 2010. The said orders have been passed in the facts and circumstances of each/respective case. In the former case the Hon’ble Court took into consideration an earlier order passed in Special Civil Application No.12447 of 2009 and connected matters and passed the said order without inviting the Bank to appear before the Court. The factual background which gave rise to the petition, the length of period of non-payment and the length and number of defaults, the details of explanation and justification urged before the Court about the course for defaults etc. are not in the order thus it cannot be presumed that the judgment debtor in the said case also was in consistent and persistent default since last so many years as the judge in present case and that the award passed by the trial Court was, in that case, also, challenged after delay of 7 years. In the latter case the Hon’ble Division Bench has recorded that the Bank itself had called upon and asked the debtor to pay 33% of the claim amount and the learned Single Judge had passed order on that premise and that therefore when the Bank itself had asked that 33% may be paid and on that basis when the learned single Judge issued directions accordingly, the Hon'ble Division Bench did not find it necessary to take any other view and interfere with the order. The said order also does not recite that the debtor in the said case had been in default for such long period as in present case and/or that the appeal in the said case also was filed after long delay as in present case.
37. Hence, in my humble view, in view of the facts of this case the said two orders do not lend support to petitioner’s case. The said orders have been passed in the facts of said cases whereas the facts of this case restrains and prohibits this Court to accept petitioner’s request.
38. The learned counsel has then relied on the decision of the Apex Court. The observations made by the Apex Court in the decision in case of Shri Baradkanta Mishra (supra) have been made in light of the provisions contained under Contempt of Courts Act.
39. In present case the nature and scope of the petition and the prayer do not call for consideration of the case in light of the provisions under the Contempt of Courts Act. It is, however, needless to mention that in hierarchical system the subordinate authority or the Court should pass order, after considering the ratio of the judgment of higher forum and its applicability to the facts of the case before it, in consonance with the ratio of said judgment. However, in facts of present case it appears, at this stage, that it would be harsh and unjust to assume, in absence of relevant and cogent material, to assume and treat the impugned order as an intentional act so as to constitute contempt of court. Having regard to the requirement of judicial discipline and propriety the learned Tribunal will certainly remain conscious and mindful of the above mentioned aspects.
40. The observations by the Apex Court in the decision in case of Ramji Dayawala & Sons (P) Ltd. (supra) are made in different context and with reference to different set of facts and circumstances. However, in the facts of present case the said decision would not come to the rescue of the petitioner. The facts of this case would not permit this Court to hold, in absence of relevant and cogent material to justify such conclusion, that discretion is exercised according to whim and caprice.
41. The observations by the Apex Court in the decision in case of Saurashtra Cement & Chemical Industries Ltd. (supra) are made with reference to and in light of doctrine of Stare Decisis.
42. In the facts and circumstances of the case the observations by the Apex Court in light of Doctrine of Stare Decisis would not be applicable in present case. As mentioned earlier the two orders relied on by the petitioner do not pronounce, as a proposition of law, an invariable rule that in all cases the Court cannot ask the debtor-defaulter to pay/deposit, amount at a rate higher than 33% notwithstanding the relevant facts like length and number of defaults, delay in taking action in law, bonafides or otherwise of the petitioner etc. Hence, the observations by the Apex Court in said case would not help the petitioner in facts of present case to urge that the impugned order should be set aside and the case should be set aside because the learned Tribunal has not passed directions in consonance with the cited two cases.
43. In present case, as noticed hereinabove (a) the petitioner has not made payment since 2003,
(b) the award has been passed by the Board of Nominee in 2004 i.e. almost 7 years before,
(c) even thereafter the award has not been honoured and complied with,
(d) after delay of almost 7 years appeal has been preferred. In the interregnum the petitioner has not taken steps to discharge his financial obligations and to get himself released from debt,
(e) in the appeal an application for interim relief was preferred,
(f) the said proceedings have been taken out only after the Bank issued notice for auction sale of the property. On the application for interim relief the order is passed on 18th February 2012,
(g) the petitioner has not disputed the relevant factual aspects i.e. he has not disputed that he has availed loan facility from the plaintiff – respondent Bank and he has also not disputed that he has been in default in making repayment since many years. It is also not in dispute that the amount is due and payable. However, the order is sought to be assailed on technical ground that in the advertisement one month’s time has not been allowed. Even in response to the query for showing readiness to deposit the amount the petitioner has informed the Court that he would be ready to deposit only 33% of the amount and that too over a period of about 6 months.
44. The conditional relief granted by the Court is also being disputed and the scheduled date of auction process has rolled-by without the petitioner depositing any amount.
45. All these aspects when considered conjointly, it emerges that the attempt of the petitioner seems to be in the direction of only avoiding and delaying the payment due to a Bank.
46. The appeal proceedings are still pending before the learned Tribunal.
47. The balance of convenience is overwhelmingly in favour of the plaintiff – respondent Bank inasmuch as the consistent and persistent default of the petitioner is established and the plaintiff – respondent Bank is holding a decree / award in its favour. The plaintiff – respondent Bank seems to have established before the Board of Nominee and the learned Tribunal that strong prima facie case is also in its favour. It also emerges from the record that if at all the petitioner succeeds in the appeal then the petitioner can be, at the relevant stage, compensated in terms of money by appropriate order including the direction to the Bank to repay the excess amount with interest to the petitioner. Thus, all the ingredients required to be considered while granting or declining interim relief appear to have been taken into account by the learned Tribunal and the order does not appear to be infected by any infirmity on this count. In the facts and circumstances of the case the discretion exercised by the learned Tribunal in asking the petitioner to deposit about 50% of the awarded amount, in my view, cannot be said to be arbitrary exercise of discretion, in view of the facts of present case. This does not appear to be a fit case to call for any interference at the hands of this Court against the impugned order.
of jurisdiction in present order which would warrant exercise of jurisdiction by this Court against a discretionary order passed at interim / interlocutory stage by the Tribunal in appeal proceedings pending before it. This Court is not convinced or inclined to exercise the jurisdiction or the discretion and upset the impugned order. The petition, therefore does not deserve to be accepted. Hence, the same is rejected with the direction to hear and decide the appeal as early as possible and preferably within 6 weeks after this order.
(K.M.THAKER, J.) jani