IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 13.02.2017 CORAM:
THE HONOURABLE MR.JUSTICE S.MANIKUMAR and THE HONOURABLE MR.JUSTICE M.GOVINDARAJ W.P.Nos.3541 & 3542 of 2017
1. S.Karthikeyan
2. Mrs.K.Aparna Devi .. Petitioners in both W.Ps. versus
1. The Authorised Officer, ICICI Bank Ltd., Arihant Insight, SP 24, Ambathur Industrial Estate, Ambathur, Chennai - 600 058.
2. Dr.V.Vivakar
3. Mrs.Karpagam Vivakar .. Respondents in both W.Ps.
Prayer in W.P.No.3541 of 2017: Writ Petition filed under Article 226 of the Constitution of India, to issue a Writ of certiorarified Mandamus, calling for the records of the impugned order dated 20.12.2016 passed in I.A.No.442/16 in M.A.No.89 of 2014 on the file of the Debts Recovery Appellate Tribunal, Chennai and quash the same and further direct the 1st respondent (i.e.) the ICICI Bank, to return the original, title deeds of the subject matter in the above said I.A.No.442 of 2016 in M.A.No.89 of 2014 on the file of the Debts Recovery Appellate Tribunal, Chennai, to the petitioners.
Prayer in W.P.No.3542 of 2017: Writ Petition filed under Article 226 of the Constitution of India, to issue a Writ of certiorarified Mandamus, calling for the records of the impugned order dated 20.12.2016 passed in I.A.No.443/16 in M.A.No.90 of 2014 on the file of the Debts Recovery Appellate Tribunal, Chennai and quash the same and further direct the 1st respondent (i.e.) the ICICI Bank, to return the original, title deeds of the subject matter in the above said I.A.No.443 of 2016 in M.A.No.90 of 2014 on the file of the Debts Recovery Appellate Tribunal, Chennai, to the petitioners.
For petitioners : Mr.G.K.R.Pandiyan in both W.Ps.
COMMON ORDER
(Order of the Court was made by S.MANIKUMAR, J.) Claiming himself to be a bonafide purchaser of property, subject matter of two possession notices dated 22.10.2013, issued under Section 13(4) of the SARFAESI Act, 2002, by ICICI Bank, SARFAESI Applications viz., S.A.Nos.235 and 236 of 2013 have been filed before the Debts Recovery Tribunal, Madurai.
2. Prayer sought for in both SARFAESI applications filed under Section 17(1) of the SARFAESI Act, 2002, are similar and therefore, this Court deems it fit to extract the prayers made in one of the SARFAESI Applications, (1) to quash the entire SARFAESI proceedings ending up with possession notice dated 22.10.2013, issued by ICICI Bank, Ambattur, Chennai as illegal and void and (2) to restore possession of the schedule properties to the appellant therein.
3. M/s.Dhanalakshmi Bank Limited, Chennai has filed O.A.No.117 of 2010 on the file of Debts Recovery Tribunal-II, Chennai against M/s.Galaxy Enterprises, a partnership firm represented by its partners and three others (one among them is the 1st petitioner), for the following prayers.
"(i) Directing the:
a. Defendants 1 to 4 jointly and severally to pay the dues under the Open Cash Credit Limit of Rs.55,29,407.65p (Rupees Fifty Five Lakhs Twenty Nine Thousand Four Hundred Seven and Paise Sixty Five Only) together with interest at the rate of 2% over the BPLR (presently 16%) i.e., 18% with monthly rests and 2% penal interest on the overdue balance from this date until payment in full and the Applicant's costs of this Application,
(ii) to issue a certificate to the Recovery Officer for recovery of the amount of debts specified in (a)
(iii) to pass an order that on default of payment of debts, the properties described in Schedule A belonging to 3rd Defendant shall be sold and the net sale proceeds be appropriated towards the debt mentioned in column (1)(a) above:
(iv) to pass an order to proceed personally against 2nd to 4th Defendants in case the debt is not cleared after the appropriation of net sale proceeds of assets under Schedule A mentioned under column (i) (a);
(v) Any other relief which this Hon'ble Tribunal may deem fit and proper on the facts and circumstances of the case be also granted to the Applicant and against the defendant."
4. Writ petitioners have filed Miscellaneous Appeal viz., M.A.No.89 of 2014 to withdraw S.A.No.235 of 2013 from the file of Debts Recovery Tribunal, Madurai and to transfer the same to Debts Recovery Tribunal-II, Chennai, to be tried alongwith O.A.No.117 of 2010 on the file of Debts Recovery Tribunal-II, Chennai. They have also taken out another M.A.No.90 of 2014 to withdraw S.A.No.236 of 2013 on the file of Debts Recovery Tribunal, Madurai and to transfer the same to the file of Debts Recovery Tribunal-II, Chennai, to be tried alongwith O.A.No.117 of 2010 on the file of Debts Recovery Tribunal-II, Chennai.
5. Pending disposal of M.A.No.89 of 2014, I.A.No.442 of 2016 has been filed to record the compromise entered into between the writ petitioners and the authorized officer, ICICI Bank, Chennai, the 1st respondent therein and to direct the return of the original deeds to the petitioner on receipt of One Time Settlement. For a similar prayer, I.A.No.443 of 2016 has been filed in M.A.No.90 of 2014.
6. The Debts Recovery Appellate Tribunal, Chennai, before whom, M.A.Nos.89 & 90 of 2014 respectively, came up for hearing, seemed to have heard the writ petitioners on the payment made towards discharging the loan, for which ICICI Bank has issued the abovesaid two notices dated 22.10.2013, under Section 13(4) of the Act, 2002, subject matter of S.A.Nos.235 & 236 of 2013. After considering the prayer sought for in M.A.Nos.89 & 90 of 2014, the Debts Recovery Appellate Tribunal, Chennai, has passed two separate orders in the above Miscellaneous Appeals. Orders made in M.A.Nos.89 & 90 of 2014 are extracted hereunder.
M.A.No.89 of 2014
"ORDER
1. The present Appeal has been preferred seeking transfer of SA 235/2013 from the file of DRT, Madurai to DRT- II, Chennai, to be tried together alongwith OA No.117/2010.
2. The main ground for transfer is said to be the pendency of OA No.117/2010 before DRT-II, Chennai, which involves charge created over the same property owned by R2 and R3 herein from whom the Appellants have purchased the property, and has also entered into One Time Settlement (OTS), in respect of the loan account, and has paid the amount. The only thing left is to receive the title documents in respect of the mortgaged property.
3. Considering the aforesaid, there appears no harm if the SA 235/2016, which is pending before DRT, Madurai, stands transferred to DRT-II, Chennai, to be tried together with OA.117/2010.
4. Accordingly, the DRT, Madurai, is directed to send all files relating to SA 235/2013 to the DRT-II, Chennai to be tried along with OA 117/2010. On receiving the file relating to SA 235/2013 from DRT, Madurai, the DRT-II, Chennai, is directed to examine the OTS entered into between the parties and to pass necessary orders, after giving opportunity of hearing to the parties, in accordance with the law.
5. In view of the aforesaid, no specific orders are required in IA 442/2016, Direction petition which stands closed. The Appeal is allowed accordingly. No orders as to costs."
M.A.No.90 of 2014
"ORDER
1. The present Appeal has been preferred seeking transfer of SA 236/2013 from the file of DRT, Madurai to DRT- II, Chennai, to be tried together alongwith OA No.117/2010.
2. The main ground for transfer is said to be the pendency of OA No.117/2010 before DRT-II, Chennai, which involves charge created over the same property owned by R2 and R3 herein from whom the Appellants have purchased the property, and has also entered into One Time Settlement (OTS), in respect of the loan account, and has paid the amount. The only thing left is to receive the title documents in respect of the mortgaged property.
3. Considering the aforesaid, there appears no harm if the SA 236/2016, which is pending before DRT, Madurai, stands transferred to DRT-II, Chennai, to be tried together with OA.117/2010.
4. Accordingly, the DRT, Madurai, is directed to send all files relating to SA 236/2013 to the DRT-II, Chennai to be tried along with OA 117/2010. On receiving the file relating to SA 236/2013 from DRT, Madurai, the DRT-II, Chennai, is directed to examine the OTS entered into between the parties and to pass necessary orders, after giving opportunity of hearing to the parties, in accordance with the law.
5. In view of the aforesaid, no specific orders are required in IA 443/2016, Direction petition which stands closed. The Appeal is allowed accordingly. No orders as to costs."
7. Being aggrieved by the same, W.P.Nos.3541 & 3542 of 2017, have been filed. As pleadings and submissions are common, both the Writ Petitions are taken up for hearing.
8. Referring to the record of proceedings of the Debts Recovery Appellate Tribunal, Chennai in M.A.Nos.89 & 90 of 2014, and also to the documents supporting payment towards the outstanding debt under Section 13(4) notice dated 22.10.2013, issued by ICICI Bank, Ambattur, Mr.G.K.R.Pandian, learned counsel for the writ petitioners, submitted that purchase of property, subject matter of the notices under section 13(4) of the Act, was bonafide. Writ petitioners have discharged the loan amount. According to him, when Debts Recovery Appellate Tribunal had posted the matters for an effective adjudication of the prayer of return of documents to the appellants and also to record compromise, the Debts Recovery Appellate Tribunal, ought not to have closed the direction petitions I.A.Nos.442 and 443 of 2016 filed in M.A.Nos.89 & 90 of 2014, respectively.
9. According to the learned counsel for the petitioners, when the Debts Recovery Appellate Tribunal was satisfied with the production of documents including bank account certificate, account closure statement and undertaking given by the appellants for full and final payment of debt account with ICICI, there should have been an effective adjudication on the prayers sought for, in the interim application Nos.442 and 443 of 2016 and accordingly, disposed of.
10. Learned counsel for the writ petitioners further submitted that the Debts Recovery Appellate Tribunal, Chennai ought to have passed necessary orders in the interim applications and returned the documents.
11. Heard the learned counsel for the writ petitioners and perused the materials available on record.
12. O.A.No.117 of 2010 has been filed by Dhanalakshmi Bank against M/s.Galaxy Enterprises, a partnership firm represented by its partners and three others, for the relief extracted supra. Property said to have been mortgaged with Dhanalakshmi Bank Limited, Chennai, is extracted hereunder.
"Schedule A
Thanjavur District, Thanjavur Taluk, Thanjavur District Registrar Office, Nelagiri South (Thottam Village) in Survey No.18, an extent of 28688 sq.ft. out of Ac.6.14 cents following four Boundaries:
North by : Propertied belonging to Muthuswamy and Survey No.19 & 20 South by : Remaining Land in Survey No.18 East by : Survey Nos.19 and 20 West by : Survey No.16.
Within this four boundaries 28688 sq.ft. site including pathway rights.
The above said property situated at Nelagiri South Garden within the limits of Thanjavur Taluk, Thanjavur District.
Schedule B
Tiruchirapalli District, Tiruchirapalli Taluk, Tiruchirapalli Woraiyur Sub-Registration District, Puthur Village, Old Municipal Ward-2, Block-29, Old T.S.No.1446/1 part, for which the New Ward - 'C', New Block-30, New T.S.No.17/part, Door No.6A, totalling an extent of 3120 sq.ft. land with building in boostudhi situate within the following boundaries:
Item No.1
North by : Plot No.7, South by : Allithurai Road, East by : Item No.II, West by : Plot No.9 & 10.02.2017
Measurement:
East-West on the Northern side 26 ft. Southern side 47 ft.
North-South on the Eastern Side 49 ft. Western Side 54 ft. totalling an extent of 1747 sq.ft.
Item No.2
North by : Land in T.S.No.18, South by : Allithurai Road, East by : Land in T.S.No.19/2, West by : Item No.1
Measurement:
East-West on the Northern side 37.5 ft., Southern Side 36 ft.
North-South on Eastern side 25.5ft., Western Side 49 ft. totalling an extent of 1373 sq.ft.
Item No.1 and 2 totalling an extent of 3120 sq.ft. with building in Boosthhudi and with all easmentary rights including thereon.
The property situated at Puthur within limits of Tiruchirapalli Corporation."
13. Possession notice dated 22.10.2013, in respect of Item No.1 of the schedule property-B, issued under Section 13(4) of the SARFAESI Act, 2002, by ICICI Bank, subject matter of S.A.No.235 of 2013, is extracted hereunder.
SYMBOLIC POSSESSION NOTICE (For Immovable Property) Rule 8(1) LBTRI00001202123 WHEREAS the undersigned being the authorized officer of ICICI Bank Ltd., under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Second) Ordinance, 2002 (Ord.3 of 2002) and in exercise of powers conferred under Section 13(12) read with Rule 9 of the Security Interest (Enforcement) Rules, 2002 issued a demand notice dated June 29, 2013 calling upon Mr.VIVAKAR D (Borrower) & Mrs.KARPAGAM K (Co-Borrower) to repay the amount mentioned in the notice being Rs.18,46,873.86/- (Rupees Eighteen Lakh Forty Six Thousand Eight Hundred and Seventy Three and Paise Eighty Six Only) within 60 days from the date of the said notice.
The borrower having failed to repay the amount, notice is hereby given to the Borrower and the public in general that the undersigned has taken symbolic possession of the property described herein below in Schedule in exercise of powers conferred on him / her under Section 13(4) of the said Act read with Rule 9 of the said rules on 22nd Oct. 2013.
The borrower in particular and the public in general is hereby cautioned note to deal with the property and any dealings with the property will be subject to the charge of ICICI Bank Limited for an amount of 18,46,873.86/- (Rupees Eighteen Lakh Forty Six Thousand Eight Hundred and Seventy Three and Paise Eighty Six Only) and interest thereon.
DESCRIPTION OF IMMOVABLE PROPERTY SCHEDULE As described in the loan document / property document covering PLOT NO.8, IN TS.NO.17, PARTVAYALOOR MAIN ROAD, PUTHUR, TRICHY, TRICHY-620 017, Trichy District, Trichy Taluk, Trichy Woraiyur Sub Registration District, Puthur Village within Trichy Municipal Limits Old Ward No.2, Block No.29, Old T.S.No.1446/1 Part, correspondent to New Ward C, New Block No.30, New T.S.No.17 part, Door No.6A, Admeasuring an area of an extent of 1373 sq.ft of Land, along with the Balance portion of house out of the total extent of nearly about 3120 sq.ft. of land.
Bounded by, North : T.S.No.18 South : Vayalur Main Road, East : Property bearing T.S.No.19/2 and West : Property bearing T.S.No.17 Pt & Door No.6A part.
Date : 22.10.2013 Authorized Officer Place: Trichy ICICI Bank Ltd.
14. Possession notice dated 22.10.2013, in respect of Item No.2 of the schedule property-B, issued under Section 13(4) of the SARFAESI Act, 2002, by ICICI Bank, subject matter of S.A.No.236 of 2013, is extracted hereunder.
SYMBOLIC POSSESSION NOTICE (For Immovable Property) Rule 8(1) LBTRI00001202126 WHEREAS the undersigned being the authorized officer of ICICI Bank Ltd., under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Second) Ordinance, 2002 (Ord.3 of 2002) and in exercise of powers conferred under Section 13(12) read with Rule 9 of the Security Interest (Enforcement) Rules, 2002 issued a demand notice dated June 29, 2013 calling upon Mr.VIVAKAR D (Borrower) & Mrs.KARPAGAM K (Co-Borrower) to repay the amount mentioned in the notice being Rs.23,83,478.76/- (Rupees Twenty Three Lakh Eighty Three Thousand Four Hundred and Seventy Eight and Paise Seventy Three Only) within 60 days from the date of the said notice.
The borrower having failed to repay the amount, notice is hereby given to the Borrower and the public in general that the undersigned has taken symbolic possession of the property described herein below in Schedule in exercise of powers conferred on him / her under Section 13(4) of the said Act read with Rule 9 of the said rules on 22.10.2013.
The borrower in particular and the public in general is hereby cautioned note to deal with the property and any dealings with the property will be subject to the charge of ICICI Bank Limited for an amount of Rs.23,83,478.73/- (Rupees Twenty Three Lakh Eighty Three Thousand Four Hundred and Seventy Eight and Paise Seventy Three Only) and interest thereon.
DESCRIPTION OF IMMOVABLE PROPERTY SCHEDULE As described in the loan document / property document covering PLOT NO.8, IN TS.NO.17, PARTVAYALOOR MAIN ROAD, PUTHUR, TRICHY, TRICHY-620 017, Trichy District, Trichy Taluk, Trichy Woraiyur Sub Registration District, Puthur Village within Trichy Municipal Limits Old Ward No.2, Block No.29, Old T.S.No.1446/1 Part, correspondent to New Ward C, New Block No.30, New T.S.No.17 part, Door No.6A, Admeasuring an area of an extent of 1373 sq.ft of Land, along with the Balance portion of house out of the total extent of nearly about 3120 sq.ft. of land.
Bounded by, North : T.S.No.18 South : Vayalur Main Road, East : Property bearing T.S.No.19/2 and West : Property bearing T.S.No.17 Pt & Door No.6A part.
Date : 22.10.2013 Authorized Officer Place: Trichy ICICI Bank Ltd.
15. At this juncture, it is relevant to extract, paragraph Nos.9, 10 and 11 of M.A.Nos.89 & 90 of 2014, filed for transfer of S.A.Nos.235 and 236 of 2013 from the file of Debts Recovery Tribunal, Madurai to the file of Debts Recovery Tribunal-II, Chennai to be tried alongwith O.A.No.117 of 2010 on the file of Debts Recovery Tribunal-II, Chennai.
"9. .... The Appellants state that after filing of the above said appeal it was found that the 2nd and 3rd Respondents herein have already forged and fabricated the title deeds of the suit property and mortgaged the same with various banks and financial institutions. Now the ICICI Bank, Thillai Nagar Branch, Trichy, having office at A-10, First Floor, Lakshmi Arcade, 11th Cross Main Road, Thillai Nagar, Trichy - 620 018 and one Diwan Housing Finance Corporation Limited, having office at Sree Naga Arcade, First Floor, No.5, Williams Road, Cantonment, Trichy - 620 001 are making a claim over the suit property for various mortgages purported to have been executed by the said Dr.Vivakar with the very same document.
10. Further submit that now the 1st respondent Bank has issued possessed notice dated 22.10.2013 under Section 13(4) of the SARFAESI ACt. The amount outstanding claimed by the 1st respondent bank as per the possession notice is Rs. --. The appellants have preferred an Appeal as a 3rd party under Section 17 of SARFAESI Act against the above said Notice before the Debts Recovery Tribunal, Madras. The appellants submit that they are bonafide purchasers for a valuable consideration. Their interest has also been protected by this Hon'ble Tribunal.
11. The Appellants state that in view of the pendency of O.A.117 of 2010 on the file of Debts Recovery Tribunal, Chennai, against the very same suit property much prior to the above said M.A.No. /2013. It is just and necessary that the M.A.No.235 of 2013 on the file of DRT, Madurai has to be transferred to the file of Debts Recovery Tribunal II, Chennai in order to avoid conflicting decisions and multiplicity of procedures."
16. From the own statement of the writ petitioners, it could be deduced that the very same subject property is involved in both the transactions, and stated to have been pledged with various banks and financial institutions.
17. Record of proceedings of the Debts Recovery Appellate Tribunal, in M.A.Nos.89 and 90 of 2014, are extracted hereunder.
"M.A.89/2014 S.Karthikeyan & Anr Vs. A.O., ICICI Bank Ltd & Ors Mr.G.K.R.Pandiyan Ld. counsel for the Appellants is present.
Mr.Tamizharasan Ld. Counsel for the 1st respondent is present.
Proof of service of Respondents 2 and 3 by RPAD reflects that at "No.43, Baski Nagar, Woraiyur, Trichi - 620 003", no addressee was found.
On asking, the Ld. Counsel for the Respondent Bank provided one more address of borrower is that of his Homeopathy shop which reads as follows:
"Your Homeopathy Care, 99-A, Salai Road, Woraiyur, Trichy - 620 003."
The Ld. Counsel for the Appellants submits a set of documents including the Bank Account Certificate, Account closure statement and undertaking given by the Appellant at the time of full and final payment in the debt account.
For effective adjudication of prayer of return of documents to the Appellants, it seems necessary the borrower / Respondent should be searched efficiently and should be brought on record in this case. Hence, the Appellants are directed to take steps afresh for service of notice by RPAD on borrower / Respondent i.e. on his address of shop situated at Trichy as referred above.
List on 15.11.2016, for filing proof of service.
"M.A.90/2014 S.Karthikeyan & Anr Vs. A.O., ICICI Bank Ltd & Ors Mr.G.K.R.Pandiyan Ld. counsel for the Appellants is present.
Mr.Tamizharasan Ld. Counsel for the 1st respondent is present.
Proof of service of Respondents 2 and 3 by RPAD reflects that at "No.43, Baski Nagar, Woraiyur, Trichi - 620 003", no addressee was found.
On asking, the Ld. Counsel for the Respondent Bank provided one more address of borrower is that of his Homeopathy shop which reads as follows:
"Your Homeopathy Care, 99-A, Salai Road, Woraiyur, Trichy - 620 003."
The Ld. Counsel for the Appellants submits a set of documents including the Bank Account Certificate, Account closure statement and undertaking given by the Appellant at the time of full and final payment in the debt account.
For effective adjudication of prayer of return of documents to the Appellants, it seems necessary the borrower / Respondent should be searched efficiently and should be brought on record in this case. Hence, the Appellants are directed to take steps afresh for service of notice by RPAD on borrower / Respondent i.e. on his address of shop situated at Trichy as referred above.
List on 15.11.2016, for filing proof of service."
18. Though, the Debts Recovery Appellate Tribunal has posted the matter for adjudication on the prayer sought for in the interim applications viz., I.A.Nos.442 & 443 of 2016 in M.A.Nos.89 & 90 of 2014, respectively, the Appellate Tribunal, Chennai, while considering the main ground of transfer, at paragraph 2, has ordered as hereunder.
"2. The main ground for transfer is said to be the pendency of OA No.117/2010 before DRT-II, Chennai, which involves charge created over the same property owned by R2 and R3 herein from whom the Appellants have purchased the property, and has also entered into One Time Settlement (OTS), in respect of the loan account, and has paid the amount. The only thing left is to receive the title documents in respect of the mortgaged property."
19. Thus, the tribunal has considered the submissions of the writ petitioners as to why transfer of S.A.Nos.235 and 236 of 2013 from the file of Debts Recovery Tribunal, Madurai to Debts Recovery Tribunal-II, Chennai, is necessitated and accordingly, ordered transfer. The Debts Recovery Appellate Tribunal, Chennai has also taken note of the prayer, regarding return of documents in respect of the mortgaged properties. Thus, while ordering transfer in S.A.No.235 & 236 of 2013, from Debts Recovery Tribunal, Madurai to Debts Recovery Tribunal-II, Chennai, the Debts Recovery Appellate Tribunal, Chennai has directed the Debts Recovery Tribunal-II, Chennai, to examine the OTS entered into between the parties and to pass necessary orders, after giving opportunity of hearing to the parties, in accordance with law. Accordingly, I.A.Nos.442 and 443 of 2016, filed for directions stated supra, have been closed.
20. Though, Mr.G.K.R.Pandian, learned counsel for the petitioners laid stress on the adjudicatory proceedings and submitted that Debts Recovery Appellate Tribunal, Chennai, ought not to have closed the interim applications, should have recorded compromise, and ordered ICICI Bank to return the documents, this Court is not inclined to accept the said contentions for the reason that, if the Debts Recovery Appellate Tribunal, Chennai, has recorded the compromise and ordered for return of documents, then, nothing survives in S.A.Nos.235 & 236 of 2013, filed to quash the Possession notices dated 28.10.2013, issued under Section 13(4) of the SARFAESI Act, 2002. The Debts Recovery Appellate Tribunal, Chennai, cannot be expected to pass an order in the interim applications, exceeding the prayer sought for in the main S.A.Nos.235 & 236 of 2013. It should be noted that, on the averments extracted supra, regarding the need for transfer of S.A.Nos.235 & 236 of 2013 to be tried along with O.A.No.117 of 2010, orders have been passed. Thus, while ordering transfer as prayed for by the writ petitioners, the Appellate Tribunal has also directed Debts Recovery Tribunal - II, Chennai, to examine the OTS also.
21. In the light of the above discussion, we do not find any manifest illegality in the impugned orders, warranting intervention. Both the writ petitions are dismissed. No costs.
Index: Yes/No. Internet: Yes ars [S.M.K., J.] [M.G.R., J.] 13.02.2017
S. MANIKUMAR, J.
AND M.GOVINDARAJ, J.
ars W.P.Nos.3541 & 3542 of 2017
13.02.2017