City v. Doshi

(Per : HONOURABLE MS. JUSTICE R.M.DOSHIT) This Appeal preferred under Clause 15 of the Letters Patent arises from the judgment and order dated 9th March, 2006 passed by the learned Single Judge in above Special Civil Application No.19130 of 2005.

The appellant before this Court is the City Cooperative Bank Ltd. (hereinafter referred to as `the Bank'). According to the Bank, the Bank had advanced certain loans to one Pragati Alcochem Pvt.Ltd. - the respondent no.6. In the suit for recovery filed in the Court of Nominees, the decree has been passed against the said Pragati Alcochem Pvt.Ltd. In execution of the said decree, the Bank has taken over the possession of the properties of the said Pragati Alcochem and has sealed the premises. The plant and machinery in question was purchased by one Cellulose Products of India Ltd. in Court sale with the consent of one Doshi Chemicals Pvt.Ltd. (hereinafter referred to as the ?SDoshi Chemicals??) the confirming party. On the date of taking over possession by the Bank, the Doshi Chemicals was in possession and was running the factory. Feeling aggrieved by the action of the Bank in taking over the possession of the plant and machinery and sealing the premises, the Doshi Chemicals preferred the above Special Civil Application No.19130 of 2005. By impugned judgment and order dated 9th March, 2006, the learned Single Judge held that the Bank was entitled to attach the property but not to take over the possession or seal the same. The learned Judge was pleased to hold that ?Sthe action of the Administrator and the Sale officer, Shri Mevawala Original Respondent No.17 of taking actual physical possession and of applying seals over the factory premises situated at Survey No.35,36,37,38,39,40 and 45 of Village Pungam, District Bharuch is outside the scope and ambit of the power of judgment of an immovable property under Section 159 of the Act, read with Rule 118 of the Rules and, therefore, the said action is hereby quashed and set aside.?? The Bank was directed to remove the seals and hand over the actual physical possession of the factory premises. It is this direction which is the subject matter of challenge in the present Appeal.

Mr.Nanavaty has appeared for the Bank. He has submitted that earlier the very Doshi Chemicals had approached this Court in the very subject matter in Special Civil Application No.3914 of 2004. The said petition was withdrawn by the Doshi Chemicals with a view to availing of the alternative remedy. Instead of availing the alternative remedy, the Doshi Chemicals filed the above Special Civil Application No.19130 of 2005, a substantive writ petition. The petition was not maintainable on the ground of the alternative remedy available to the petitioner. He has submitted that unless the Bank takes over the possession of the factory premises, the Bank cannot dispose of the properties by public auction. The Court ought to have allowed the Bank to retain the possession of the disputed premises.

The Appeal is contested by Mr.Shelat. Mr.Shelat has relied upon Order XXI Rule 46 of the Civil Procedure Code. He has submitted that the attachment need not be coupled with the possession. The learned Single Judge has rightly directed the Bank to remove the seal and hand over the possession though the attachment may continue. In support thereof, he has relied upon the judgments in the matters of Chouthi Prasad Gupta v/s Union of India and others [AIR 1967 SC 1080]; and of Nagarmal Marwari and others V/s Emperor [AIR 1932 Patna 279]. He has further submitted that since the petition was admitted, the learned Single Judge had rightly decided the same on merits. The petitioner was not required to be relegated to the alternative remedy. In support thereof, he has relied upon the judgment in the matter of L.K.Verma V/s H.M.T.Ltd. and another [JT 2006(2) SC 99]. He has submitted that pursuant to the order dated 11th August, 2004 made in Special Civil Application No.3914 of 2004, the Doshi Chemicals did approach the appropriate forum i.e. the Board of Nominees in the subject matter. At the relevant time, however, the Bank had assured the Doshi Chemicals that there was no scope of the Bank taking over the possession of the disputed properties. Thus, on the assurance given by the Bank, that matter was allowed to be disposed of. Soon thereafter, the Bank issued the order of attachment and sealed the factory premises. He has submitted that the order of the learned Single Judge is in consonance with the settled law and requires to be confirmed.

Learned advocate Mr.Gandhi has appeared for the above referred Pragati Alcochem Pvt.Ltd. He has disputed that the Pragati Alcochem Pvt.Ltd. was indebted to the Bank. He has submitted that the Pragati Alcochem Pvt.Ltd. had applied for loan to the Bank. Those pending applications were utilized by the Bank fraudulently without the instructions issued by the Pragati Alcochem Pvt.Ltd. or without the knowledge of Pragati Alcochem to advance a loan of more than Rs.9 crores. On the same day, the said sum was deposited in an account and was also withdrawn. The said transactions were a paper entry without the exchange of cash. The Reserve Bank of India has also made investigation and has found that the Bank had perpetrated fraud in collusion with one Suryapur Cooperative Bank Ltd. Thus, the entire claim of the Bank is fraudulent. The decree has been obtained from the Court of Nominees under coercion and duress.

Be that as it may. Indisputably, the factory premises was in possession of the Doshi Chemicals, a party other than the judgment debtor. In that case, the Bank could have made order of attachment but could not have sealed the premises or taken over the actual possession of the premises.

No case for interference is made out. The Appeal is dismissed in limine.

The Civil Applications stand disposed of.

( Ms.R.M.Doshit, J ) ( Sharad D Dave, J ) srilatha Top