IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. C.W.P. No.18298 of 2008 Date of decision: 24.10.2008 UCO Bank. -----Petitioner Vs. D.R.A.T. etc. -----Respondents AND C.W.P. No.18451 of 2008 UCO Bank. -----Petitioner Vs. D.R.A.T. etc. -----Respondents CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE L.N. MITTAL Present:- Mr. Ashok Aggarwal, Sr. Advocate with Mr. Rajesh Aggarwal, Advocate for the petitioners. Mr. K.D. Aggarwal, Advocate for the caveator. ----- ORDER: 1. This petition seeks quashing of order dated 3.12.2007 (Annexure P-12) passed by the Debt Recovery Tribunal and affirmed by order dated 1.10.2008 (Annexure P-16) passed by the Debt Recovery Appellate Tribunal. 2. The petitioner-Bank had advanced a loan to respondent- Company against mortgage of property. In addition, respondents No.1 C.W.P. No.18298 of 2008 and 2, who are said to be nephews of one of the Directors of the Company, also stood guarantors for repayment of the loan and mortgaged their property. The Bank gave notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, “the SARFAESI Act”), to which objections were filed by the borrower, but rejecting the said objections, the Bank took over the symbolic possession of the properties not only of the borrower but also of the guarantors. The guarantors filed an appeal under Section 17(1) of the SARFAESI Act. The Tribunal declined the stay, against which C.W.P. No.5356 of 2007 was filed in this Court wherein status quo was ordered vide order dated 5.4.2007. Stay was also sought by the Company and its Directors which was declined, against which C.W.P. No.7618 of 2007 was dismissed by this Court and property of the Company was sold. The entire outstanding amount of the Bank was recovered, leaving some amount surplus. Writ petition filed by the guarantors i.e. C.W.P. No.5356 of 2007 was dismissed as infructuous. The guarantors filed an application before the Tribunal for quashing the action of the Bank under the SARFAESI Act and vide order dated 7.11.2007, the said application was accepted. 3. The Tribunal held that the property of the borrower was 11,000 square yards of land with building, plant and machinery in Industrial Focal Point, Derabassi of value of more than Rs.10 crore as against the Demand Notice of 3.5 crore. The Action of the Bank in proceeding against the collateral security was uncalled for. 2 C.W.P. No.18298 of 2008 4. In paras 5 to 7 of the order of Debts Recovery Tribunal-I, Chandigarh dated 7.11.2007, it was observed:- “5. It is not disputed that secured assets in respect of principle borrower, were put to auction and respondent no.1 has already recovered its entire amount alongwith some surplus amount. It is also not disputed that sale has been confirmed, sale certificate has been issued in favour of auction purchaser and possession has been delivered to the auction purchaser. It is also admitted fact that amount deposited by the auction purchaser, has been appropriated towards its dues by the bank and now no amount is due and recoverable by it. 6. In view of the above, the prayer of the applicants/appellants to dispose off the S.A. quashing the action of the respondent bank, deserves to be allowed with costs and direction that applicants/appellants shall be entitled to counsel fee as per Advocates Act or Fee Certificate filed by the Advocate, whichever is less. Respondent No.1 is also directed to return the original title deeds of the applicants/appellants herein, within a month, from the date of pronouncement of this order. 7. In so far as the award of compensation is concerned, after examination of record, in my opinion, no case for compensation is made out. Moreover there is nothing on record to quantify the amount of compensation. Hence, the prayer of compensation is declined accordingly. IA No.325/07 stands disposed off accordingly.” 5. Thereafter, on 3.12.2007, the Tribunal took up the application filed by the guarantors under Section 17(7) of the SARFAESI Act read with Section 19(20) and 19(22) of the Recovery of 3 C.W.P. No.18298 of 2008 Debts Due to the Banks and Financial Institutions Act, 1993 (for short, “the RDDB Act”)for issuance recovery certificate. 6. The Tribunal directed that direction to pay costs be complied with by 7.12.2007 and titled deeds be returned, failing which the General Manager of the Bank should appear in person to show cause why action for disobedience of the Court’s order be not initiated. The Bank preferred an appeal to the appellate Tribunal which was disposed of vide order dated 1.10.2008. The appellate Tribunal observed:- “19. It must have been crystal clear to the Bank officers that in the instant case they could realize the outstanding dues of the Bank in full by proceeding only against the mortgaged property of the borrowers, and there was hardly any justification for issuing possession notice on 25.11.2006 in respect of the mortgaged property of respondents 1 and 2. They unnecessarily put litigational pressure on them by issuing possession notice. The Bank’s action against respondents 1 and 2 lacked bona fides. The Bank unnecessarily created a panicky situation for them, forcing them to run for legal succour. As against respondents 1 and 2 herein, the authorized officer of the Bank issued possession notice without application of mind in a mechanical manner with unrealistic approach. The case of respondents 1 and 2 herein in their application under Section 17 of the SARFAESI Act was that on 17.1.2007 Mr. V.K. Gupta, Manager of the UCO Bank, Sector 22, Chandigarh along with musclemen of private security agency came to their office to take possession by physically evicting them from their premises.” xx xx xx xx 4 C.W.P. No.18298 of 2008 24. On cumulative consideration of the concomitant facts and circumstances, I endorse the view of the Tribunal below whereby the S.A. No.3/2007 filed by respondents 1 and 2 was disposed of with costs and the advocate’s fee. The respondents 1 and 2 herein paid a court fee of Rs.1,50,000/- on S.A. 3/2007 before the Tribunal below. However, counsel fee of Rs.1,52,500/- and costs of miscellaneous application amounting to Rs.2,500/- were also claimed. In my opinion, the counsel fee should be quantified at Rs.30,000/- only because the matter came to an end half-way without full-fledge trial. There are no details to justify the claim of Rs.2,500/- on account of miscellaneous applications. It would just, fair and reasonable to allow total costs of Rs.1,80,000/- (Rs.1,50,000 paid towards court fee on S.A. + Rs.30,000/- towards counsel fee) only. The appellant Bank should pay this amount of Rs.1,80,000/- to respondents 1 and 2 within three weeks from the date of this order. Failing that, at the motion of respondents 1 and 2 herein, the DRT shall summon the General Manager of the Bank to proceed ahead for disobedience of the Court’s order and for suffering punishment, besides realizing the amount in question.” 7. We have heard learned counsel for the Bank as well as counsel for the guarantors/caveators. 8. Contention raised on behalf of the Bank is that action of the Tribunal in awarding costs and further action against the Bank in requiring the presence of the General Manager on failure of complying with the order, are without jurisdiction. 5 C.W.P. No.18298 of 2008 9. It has been pointed out that the Tribunal has limited jurisdiction and has no authority to impose costs beyond the parameters laid down in Section 19. The action of the Bank was justified in proceeding against the guarantors as liability of the guarantors was co-extensive with the liability of the principal debtor and the Bank was under no obligation to assess the evaluation of property of the principal debtor. The property of the guarantors was also secured interest and the guarantors had not raised any objection to notice under Section 13(2) of the SARFAESI Act. 10. We do not find any merit in the contentions raised. 11. If the Tribunal in its discretion found case for awarding costs, the said order cannot be held to be without jurisdiction. It cannot be held that the Tribunal made any patent error in exercise of jurisdiction in awarding costs. As regards the contention that the Bank was under no obligation to evaluate the property of principal debtor before proceeding against guarantors, we are of the view that no right to act recklessly could be claimed by any public authority even where there is existence of power. The property of the principal borrower being of manifold value cannot be held to be an irrelevant fact on the question of jurisdiction to proceed against the guarantors. 12. As regards the contention that the Tribunal was not a Court of record and could not exercise power of requiring the General Manager to appear if the order was not carried out, we are of the view that the statutory Tribunal which has to adjudicate upon the dispute has also power to implement its order. We may refer to observations of the 6 C.W.P. No.18298 of 2008 Hon’ble Supreme Court in State of Karnataka v. Vishwabarathi House Building Co-op. Society AIR 2003 SC 1043:- 59. It is well settled that the cardinal principle of interpretation of statute is that courts or tribunals must be held to possess power to execute their own order. 60. It is also well settled that a statutory Tribunal which has been conferred with the power to adjudicate a dispute and pass necessary order has also the power to implement its order. Further, the Act which is a self contained Code, even if it has not been specifically spelt out, must be deemed to have conferred upon the Tribunal all powers in order to make its order effective.” 13. The above observations fully apply to the present situation. 14. Apart from express power to impose costs under Section 19 of the SARFAESI Act, there is statutory power under Section 19(25) of the RDDB Act which has been made applicable by virtue of Section 17 (7) of the SARFAESI Act to pass such orders as may be expedient to give effect to the orders of the Tribunal. 15. There is, thus, no merit in the writ petition. 16. Dismissed. ( ADARSH KUMAR GOEL ) JUDGE October 24, 2008 ( L. N. MITTAL ) ashwani JUDGE 7