Prem Kumar Agrawal & Ors. v. Bank Of Baroda .

C.K Lahiri, Presiding Officer:— This is an appeal under Section 30 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 preferred by the appellants Sri Prem Kumar Agrawal and three others against the respondent Bank of Baroda being aggrieved by and dissatisfied with the order dated 8th August,. 2004 passed by the Recovery Officer, Debts Recovery Tribunal, Allahabad in DRC No. 360 of 2002. Along with the appeal the appellants have also filed a separate application to stay the further proceedings of the DRC No. 360 of 2002 now pending before the Recovery Officer, Debts Recovery Tribunal, Allahabad.

2. The appellants preferred a Civil Miscellaneous Writ Petition No. 46702 of 2004 before the Hon'ble High Court at Allahabad and the Hon'ble Court vide order dated 5th November, 2004 was pleased to dismiss the writ petition summarily with the liberty which says:

“….It is open to the petitioner to file an application along with the appeal for interim relief. The application for interim relief may be disposed of by the Tribunal to safeguard the interest of the petitioners. No order is required in this writ petition.

The writ petition is dismissed summarily.

Dated 5th November, 2004.

Sd/-- Ashok Bhushan, J.”

3. On careful scrutiny of the records of appeal No. 20 of 2004, I am of considered opinion that the appeal on merit requires to be heard along with the prayer for interim relief and as the matter relates to recovery of debts pending since 2002. The instant proceeding need not be prolonged in the interest of expeditious determination. In this context the record of DRC No. 360 of 2002 has been called for together with related records of Original Application No. 205 of 2000 and M.A 152 of 2003 for proper adjudication of the instant appeal.

4. By the impugned order dated 18th October, 2004 passed in DRC No. 360 of 2002, the Recovery Officer, Debts Recovery Tribunal, Allahabad shifted the fixed date for auction sale from 21st October, 2004 to 29th October, 2004 as 21st October, 2004 was a Bank holiday.

5. The Instant appeal has been filed before this Tribunal on 8th November, 2004 along with an urgent application for taking up the matter on the date itself and after usual scrutiny of the Memo of Appeal, it was registered on 10th November, 2004.

6. The learned Counsel for the appellants appeared before the Registrar of this Tribunal again on 16th November, 2004 and filed a certified copy of the order dated 5th November, 2004 passed by the Hon'ble High Court at Allahabad in Civil Miscellaneous Writ Petition No. 46702 of 2004.

7. Considering the urgency of the matter the date has been fixed today and the appellants were directed to serve copy of the appeal to the respondent Bank. Respondent Bank appeared today through BH of its recorded Counsel.

Background Facts:

8. Original Application No. 205 of 2000 was initiated by the respondent Bank of Baroda against the appellants and another praying for recovery of Rs. 80,33,484.26 together with interest @ 17.75% per annum together with costs and other usual reliefs before the Debts Recovery Tribunal, Allahabad.

9. Admittedly the Original Application No. 205 of 2000 has been decided ex parte by this Tribunal on 29th November, 2002. Admittedly, DRC No. 360 of 2002 has been started arising out of the recovery certificate ordered by this Tribunal in Original Application No. 205 of 2000. Against the ex parte order and judgment dated 29th November, 2002 passed by this Tribunal in Original Application No. 205 of 2000, the appellants have already preferred one miscellaneous application under Section 22(2)(g) of the RDDBFI Act. 1993 praying to set aside the said order along with prayer for condonation of delay and staying the recovery proceedings being numbered DRC No. 360 of 2002. The M.A No. 152 of 2003 has been initiated before this Tribunal on 2nd September, 2003 and the said proceeding is at the stage of hearing arguments.

10. The next date of hearing of the M.A 152 of 2003 has been fixed on 25th November, 2004. On further perusal of the order dated 11th September, 2003 of M.A No. 152 of 2003, it is seen that these appellants/defendants gave undertaking before this Tribunal to deposit Rs. 10.00 lakh by 12th September, 2003 and Rs. 52.80 lakh by 26th September, 2003 with the opposite party Bank. These appellants prayed for an order of stay of the auction sale upto 26th September, 2003 on the grounds that the compromise between the parties were in progress. It was allowed. Order dated 17th September, 2003 of M.A No. 152 of 2003 reveals that a sum of Rs. 10,00 lakh was deposited by the appellants in compliance of order dated 11th September, 2003. On that date these appellants prayed for extension of stay from 26th September, 2003 to 29th September, 2003 as “Pitrapakh” was started. This Tribunal permitted the appellants to deposit the amount of Rs. 52.80 lakh together with legal expenses by 29th September, 2003. An interim stay of auction sale of DRC No. 360 of 2002 was accordingly extended from 26th September, 2003 to 29th September, 2003. On 29th September, 2003 these appellants again prayed for extension of time beyond 29th September, 2003 to deposit the balance amount of Rs. 52.80 lakh along with legal expenses. It was considered and was refused by this Tribunal as the appellants/defendants were stealing time in the name of depositing the balance amount with the respondent Bank. The interim stay of auction sale in DRC No. 260 of 2002 was vacated by this Tribunal vide order dated 29th September, 2003.

11. Be it mentioned that the recovery proceedings being DRC No. 360 of 2002 is in progress.

12. On scrutiny of the record of DRC No. 360 of 2002, I find that these appellants earlier preferred a civil miscellaneous writ petition being numbered 54927 of 2003 before the Hon'ble High Court at Allahabad. The Hon'ble Court at Allahabad vide order dated 19th December, 2003 in Civil Miscellaneous Writ Petition No. 54927 of 2003 was pleased to pass the following order which runs as:

“……Heard the learned Counsel appeared on behalf of the parties. Till the next date of listing further proceedings of DRC No. 360 of 2002, Bank of Baroda v. J.D Polymers Ltd. pending before the debts Recovery Tribunal, Allahabad is hereby stayed provided the petitioner to deposit the balance of the amount sought to be recovered in three monthly equal instalments before the authority concerned. The first of such instalments shall be paid by the petitioner by 31 st January, 2004 and in the event of default the interim order stands automatically vacated dated 19th December, 2003.

Sd/- Anjani Kumar, J,”

13. On further perusal of the orders passed in DRC No. 360 of 2002 it is seen that the auction proceedings was stayed vide order dated 6th January, 2004 in compliance of the direction passed by the Hon'ble High Court at Allahabad in Civil Miscellaneous Writ Petition No. 54927 of 2003. On further perusal of the orders passed by the Recovery Officer. Debts Recovery Tribunal, Allahabad in DRC No. 360 of 2002, that the appellants/defendants failed to comply with the conditions imposed by the Hon'ble High Court in Civil Miscellaneous Writ Petition No. 54927 of 2003. They did not deposit the amount. Interim order of stay was automatically vacated. These appellants again moved before the Hon'ble High Court one Civil Miscellaneous Modification Application No. 52787 of 2004 for relief. The Hon'ble High Court at Allahabad in civil miscellaneous modification-application No. 52787 of 2004 vide order dated 2nd April, 2004 was pleased to pass the following order:

“By the Court:

The order dated 9th December, 2003 passed by this Court is extended subject to the condition that petitioner shall deposit Rs. 20 lakh (Rupees twenty lakh) on or before 30th April, 2004 before the authority concerned. In the event of default this interim order stands automatically vacated.

Sd/- Anjani Kumar, J.

Dt/- 2nd April, 2004.”

14. On further perusal of the order passed by the Recovery Officer, Debts Recovery Tribunal, Allahabad in DRC No. 360 of 2002 on 7th May, 2004 and 27th May, 2004 it was found that the amount as ordered by the Hon'ble High Court was not deposited by the appellants/judgment debtors till 30th April, 2004. Needless to mention that the interim stay as passed by the Hon'ble High Court at Allahabad stood vacated for not complying the condition imposed by the Hon'ble High Court at Allahabad.

15. In the instant appeal, the appellants have pleaded that the auction sale held on 29th October, 2004 is in gross violation of the rule and regulation and as such liable to be set aside. The auction sale was without any proper proclamation of sale. The proclamation was made on 25th August, 2004 whereas the auction sale was held on 29th October, 2004. The Recovery Officer had no jurisdiction to change the date of auction without issue of fresh proclamation. The impugned order dated 8th October, 2004 by which the date of auction was fixed on 29th October, 2004 i.e within 30 days, without any proclamation for sale. Although appellants offered Rs. 26.00 lakh vide their application dated 14th October, 2004 but it was rejected by the Recovery Officer, Debts Recovery Tribunal, Allahabad and the property has been auctioned for Rs. 15.4 lakh which is much less than the price offered by the appellants. The entire auction proceedings have been manipulated by the Bank to grab the property of the appellants and the genuine prospective purchasers were kept away by the device of changing the date of auction as mentioned in this proclamation dated 16th September, 2004 from 21st October, 2004 to 29th October, 2004. The newspaper notice was published on 26th October, 2004 only 2 days before the auction. The appellants are still ready and willing to make the payment to the respondent Bank and have negotiated with different parties to sell their properties and several good offers before them have been received.

16. In this premises, the appellants have prayed to allow the appeal after setting aside the impugned order dated 8th October, 2004 passed by the Recovery Officer, Debts Recovery Tribunal. Allahabad in DRC No. 360 of 2002.

17. Now the points are to be determined:

(i) Whether the appeal is maintainable in its present form and in law?

(ii) Whether the impugned order dated 8th October, 2004 passed by the Recovery Officer, Debts Recovery Tribunal, Allahabad in DRC No. 360 of 2002 suffers from infirmities, material irregularities and is liable to be set aside?

(iii) Whether the appeal preferred by the appellants is liable to be allowed?

Decision with reasons

Point No. 1.

The appeal has been preferred by the appellants/judgment debtors/defendants against the order of the Recovery Officer, Debts Recovery Tribunal, Allahabad passed on 8th October, 2004 in DRC No. 360 of 2002 in accordance with the provision of Section 30 of the RDDBFI Act, 1993. The appeal has been preferred within the stipulated period and after depositing the required Court fees. The appeal is well maintainable in present form and in law. This point is answered in favour of the appellants.

Point Nos. 2 and 3.

Both the points are taken up together for sake of convenience and their inter-relatedness.

Admittedly, vide order dated 25th August, 2004, the Recovery Officer, Debts Recovery Tribunal, Allahabad in DRC No. 360 of 2002 fixed the date for sale of the three properties in public auction by Recovery Inspector on 21st October, 2004 at 11.00 a.m onwards at the premises of Bank of Baroda, Branch, Chunniganj, Kanpur. The properties are mentioned as Lot No. 1, Lot No. 2 and Lot No. 3.

Admittedly, subject matter of the dispute is immovable property relating to Lot No. 1. Lot No. 1 is one flat being premises No. 7/22, Priya Apartments, Tilak Nagar, Kanpur measuring 73.55 sq. yds. Reserve price of the said flat (Lot No. 1) was fixed at Rs. 12.00 lakh (Rs. twelve lakh).

Admittedly the Recovery Officer, Debts Recovery Tribunal, Allahabad vide his order dated 8th October, 2004 changed the date of auction from 21st October, 2004 to 29th October, 2004 on the prayer of the Bank. It was pointed out by the learned Counsel for Bank before the Recovery Officer that the date 21 st October, 2004 was a Bank holiday. Next date i.e 22nd October, 2004 was a gazetted holiday. It was considered appropriate to fix some other date for auction. Accordingly the date of auction was shifted from 21st October, 2004 to 29th October, 2004. Recovery Officer further ordered to carry out the publicity of the change of date in the concerned area in the public announcement system, by making publication in the newspaper. His order passed on 25th August, 2004 was accordingly modified. It is further seen from the record of DRC 360 of 2002 that judgment debtors filed one application on 14th October, 2004 together with another application dated 11th October, 2004 supported by affidavit of Sri Prem Kumar Agrawal.

In the application dated 11th October, 2004 the appellants/judgment debtors/defendants sought permission to negotiate and sell the plant and machineries hypothecated to the Bank to one prospective buyers M/s. Sima Scrap Traders, Friends Colony, Roorkie through proprietor for a sum of Rs. 20.00 lakh which has been offered by the prospective buyers.

As regards the property i.e Lot No. 1 (i.e Flat at Tilak Nagar, Kanpur) the appellants sought permission for negotiating the sale for an amount of Rs. 26.00 lakh with prospective buyer who was ready to purchase the same. The Recovery Officer in his order dated 14th October, 2004 under proper perspective and analysis has observed that the deal with the prospective buyers is not supported by any evidence or affidavit and even it did not appear to be in the final shape. The Recovery Officer has further observed that judgment debtors were granted several opportunities to pay their dues by the DRT, Allahabad and the Hon'ble High Court at Allahabad in the past but they did not pay the dues. They simply stole the time in the name of depositing the balance amount with the applicant Bank. The Recovery Officer further observed that the change of date was due to administrative reason and it was not necessary to consult with the judgment debtors/defendants who were not appearing before him for last several dates.

Admittedly, auction has been held on 29th October, 2004 and one highest bidder has already succeeded and she has deposited a sum of Rs. 15.4 lakh towards the price of lot No. 1 properties.

It is seen from the materials on record of DRC No. 360 of 2002 that the proper steps were taken for publicity of the auction held on 29th October, 2004 by beating of drum, supplying handbills and publication of notice for property auction in the newspaper. It cannot be said that the public in general were kept in dark about the auction of the property held on 29th October, 2004. Arrangement of public auction involves lot of expenses.

Since 21st October, 2004 was Bank holiday so it was shifted to 29th October,. 2004. By that shifting of the date no gross violation has been caused. It is not known that what prevented the appellants to file their so-called prospective buyers for lot No. 1 property for participating in the auction held on 29th October, 2004. The appellants then selves were well aware that the auction was going to be held on 29th October, 2004. They could have easily requested their prospective buyers to participate in the auction sale of lot No. 1 property held on 29th October, 2004. They cannot now take plea of gross violation of rules and regulation by the Recovery Officer, Debts Recovery Tribunal, Allahabad. It is seen from the record of DRC No. 360 of 2003 that they remained absent on several occasions on 1 st July, 2004, 23rd July, 2004, 11th August, 2004 and 25th August, 2004. It appears they were watching the recovery proceedings from outside and allowed it to proceed. Only at the stage of crucial juncture like fixation of date of public auction of the attached properties they jumped into matter and with an intention to any how spoil the entire process.

What is apparent that the appellants are always in the habit of alluring the Bank and the Tribunal that they have prospective buyers of their properties who are ready to offer higher prices. This story of the appellants has been continuing for a long time.

As already discussed earlier that this Tribunal took sympathetic view to allow them to deposit residual amount and stayed the auction proceedings in the last year. They failed. They further prayed for extension which was allowed. Finally they did not deposit. Hereafter these appellants moved before the Hon'ble High Court at least twice seeking time to deposit the balance amount. The Hon'ble High Court was pleased to grant them time for twice to deposit the balance amount but they did not comply with the direction of the Hon'ble High Court. It is not known whether these appellants while moving the writ petition No. 46702 ??? 2004 before the Hon'ble High Court highlighted about their non-compliance of earlier orders passed by the Hon'ble High Court in writ petition No. 54927 of 2003 and Civil Miscellaneous Modification Application No. 52787 of 2004. The conduct of the appellants as I see from the different records is somewhat deceitful. Despite several opportunities were allowed by the Hon'ble High Court and this Tribunal to deposit the residual amount with the Bank, they have simply bought time in the name of depositing the amount. In reality these appellants have no earnestness to repay the dues of the Bank, all the time they are showing that they have prospective buyers in their hands who are always ready to pay lucrative price for their properties which will be finally deposited with the Bank for adjustment of their dues, but some time after it proves that their assurance is nothing but empty, such style of functioning of the appellants in the name of repayment of dues and by any means to steal time in the recovery proceedings and by delaying the entire process of public auction cannot be encouraged by this Tribunal.

I find no cogent reason to interfere with the order passed by the Recovery Officer of this Tribunal on 8th October, 2004 in DRC No. 360 of 2002. I am of considered opinion that the order of the Recovery Officer, Debts Recovery Tribunal, Allahabad in DRC No. 360 of 2002 passed on 8th October, 2004 by shifting the date from 21 st October, 2004 to 29th October, 2004 (the earlier date was a Bank holiday) was under proper perspective and analysis.

The order dated 8th October, 2004 deserves to be sustained and the matter of stay for confirmation of sale pursuant to the auction sale held on 29th October, 2004 need not be granted.

The rest points for determination arc accordingly answered against the appellants.

In the result, the appeal does not succeed.

It is, therefore, ordered—

That the appeal No. 20 of 2004 together with the prayer for stay initiated by the appellants is hereby dismissed on contest.

There will be no order as to costs.

The impugned order dated 8th October, 2004 passed by the Recovery Officer. Debts Recovery Tribunal. Allahabad in DRC No. 360 of 2002 be sustained.

The appeal is thus disposed of.

Appeal dismissed.