IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 8TH DAY OF APRIL 2019 BEFORE THE HON’BLE MR. JUSTICE ALOK ARADHE WRIT PETITION NO.16016 OF 2015 (GM-DRT) BETWEEN:
M/S GLOBAL EMERGING MARKETS INDIA LIMITED HAVING OFFICE AT B-28, PUSHPANJALI FARMS, BIJWASAN, NEW DELHI-110 061.
REPRESENTED BY ITS MANAGER AND AUTHORISED REPRESENTATIVE MR. AJAY VERMA AND:
... PETITIONER (BY SRI AJESH KUMAR S., ADVOCATE) 1. AUTHORISED OFFICER, (SECURITISATION AND FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002) HOUSING AND URBAN DEVELOPMENT CORPORATION LIMITED (A GOVT. OF INDIA ENTERPRISES) BANGALORE REGIONAL OFFICE MANIPAL CENTER, 7TH FLOOR, UNIT 703 AND 704, NORTH BLOCK, No.47, DICKENSON ROAD, BANGALORE-560 042.
2. HOUSING AND URBAN DEVELOPMENT CORPORATION LIMITED (A GOVT. OF INDIA ENTERPRISES) BANGALORE REGIONAL OFFICE MANIPAL CENTER, 7TH FLOOR, UNIT 703 AND 704, NORTH BLOCK, No.47, DICKENSON ROAD, BANGALORE-560 042.
BY ITS GENERAL MANAGER ... RESPONDENTS (BY SRI GANAPATI HEGDE, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE ORDER DTD.31.3.2015 PASSED IN S.A.NO.286/2014 PASSED BY THE DEBT RECOVERY TRIBUNAL, KARNATAKA, BANGALORE VIDE ANNEX-A; DIRECT THE DEBT RECOVERY TRIBUNAL, KARNATAKA BANGALORE TO RE-HEAR SA.NO.286/2014 PASSED BY THE DEBT RECOVERY TRIBUNAL, KARNATAKA, BANGALORE OR IN THE ALTERNATIVE, ALLOW THE APPLICATION OF THE PETITIONER SA.NO.286/2014 VIDE ANNEX-K.
THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:
O R D E R Sri. Ajesh Kumar S., learned counsel for the petitioner.
Sri. Ganapati Hegde, learned counsel for the respondents.
2. With consent of the parties, the petition is heard finally.
3. In this petition under Articles 226 and 227 of the Constitution of India the petitioner inter alia seeks a writ of certiorari for quashment of order dated 31.03.2015 passed by the Debts Recovery Tribunal (hereinafter referred to as ‘the DRT’ for brevity). The petitioner also seeks a direction to the DRT to re-hear the application preferred by the petitioner.
4. Facts giving rise to filing of the petition briefly stated are that the respondents-bank had issued a public notice for e-auction sale on 26.03.2014 for sale of the property in question. The petitioner participated in the aforesaid e-auction sale. The petitioner was informed by the authorized officer that he is the successful bidder and the petitioner was directed to deposit a sum of Rs.4,52,50,000/-, immediately. The petitioner, on 07.05.2014, sent a communication seeking certain clarifications. On the same day, the petitioner received a communication from the respondent by which the petitioner was informed that a sum of Rs.3,00,00,000/- deposited by the petitioner as earnest money, was forfeited by the respondent-bank. Being aggrieved, the petitioner filed an application under Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the Act’ for brevity) before the DRT on 15.05.2014 and sought the relief of confirming the sale in favour of the petitioner or to return the earnest money deposit.
5. The DRT by an order dated 31.03.2015 dismissed the application preferred by the petitioner, relying on the decision of a Division Bench of this Court in RFA No.2102/2011 dated 04.12.2013. In the aforesaid factual background this petition has been filed.
6. Learned counsel for the petitioner submitted that the DRT has refused to exercise the jurisdiction vested in it by law. It is further submitted that the only issue which was framed by the DRT was, whether the petitioner is entitled to the reliefs sought for by him in the light of principles laid down by the Division Bench of this Court in RFA No.2102/2011 vide order dated 04.12.2013. It is also submitted that the DRT ought to have appreciated that the decision rendered by the Division Bench of this Court had no application to the fact situation of the case as the petitioner had sought the relief of either confirmation of the sale or for refund of earnest money and had not prayed for the recovery of the amount in question.
7. On the other hand, learned counsel for the respondents-bank has supported the order passed by the DRT and has submitted that the petitioner has an alternative efficacious remedy of filing an appeal before the Debts Recovery Appellate Tribunal and therefore the petitioner should be relegated to avail of the alternative remedy.
8. I have considered the submission made by the learned counsel for the parties.
9. A bench of this Court had entertained the writ petition on 16.04.2015 and thereafter by an order dated 16.06.2016 had inter alia held that the issue involved in the writ petition requires consideration as to whether the forfeiture of the earnest money deposit made by the petitioner is just and proper. Therefore, the interim order was extended. It is also pertinent to mention here that against the ad-interim order passed by the learned Single Judge, the respondents had approached the Division Bench of this Court. The Division Bench of this Court vacated the ad-interim order passed by the learned Single Judge. Being aggrieved, the petitioner approached the Hon’ble Supreme Court by filing Civil Appeal Nos.97-98/2018 which was disposed of by Hon’ble Supreme Court vide order dated 09.01.2018 by which the interim order granted by the learned Single Judge of this Court was restored and had further directed this Court to dispose of the writ petition expeditiously. In view of the law laid down by the Hon’ble Supreme Court in the case of ‘United Bank of India vs. Satyavati Tondon & Ors.’, (2010) 8 SCC 110, ordinarily this Court would have relegated the petitioner to the alternative remedy of filing an appeal. However, in view of the fact that the matter has been pending before this Court since 2015 and has been entertained on merits and the Supreme Court has directed this Court to decide the matter expeditiously, and taking into account the fact that a pure question of law arises for consideration in this writ petition namely, whether there has been a refusal on the part of the DRT to exercise the jurisdiction vested in it by law, I am not inclined to relegate the petitioner to the alternative remedy of filing an appeal.
10. From the perusal of the order passed by the Division Bench of this Court in RFA No.2102/2011 dated 04.12.2013, it is evident that the issue involved in the aforesaid appeal was with regard to refund of the amount and in the instant case, the DRT without adverting to the prayer made by the petitioner in the application filed under Section 17 of the Act, has only framed an issue whether or not the petitioner is entitled to the relief as sought for by it in the light of the principles laid down by the Division Bench of this Court in RFA No.2102/2011, and has dismissed the application filed by the petitioner. In other words, the grievance of the petitioner has not been adjudicated by the DRT on merits. Thus the DRT has failed to exercise the jurisdiction vested in it by law. The impugned order, therefore cannot be sustained in the eye of law. It is accordingly quashed. The DRT is directed to decide the application preferred by the petitioner afresh, after affording an opportunity of hearing to the parties by a speaking order within a period of three months from the date of receipt of a certified copy of the order passed today.
11. The ad-interim order granted by a bench of this Court on an earlier occasion, which was restored by the Hon’ble Supreme Court, shall continue till the matter is adjudicated by the DRT. It is made clear that this Court has not expressed any opinion on the merits of the case. Needless to state that it would be open to the parties to settle their disputes by mutual negotiations.
With the aforesaid directions, the petition is disposed of.
Sd/-
Judge RD