AJN 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.606 OF 2008 The Saraswat Co-operative Bank Limited ... Petitioner Vs. Bank of Baroda & Ors. ... Respondents Mr. Bhupesh Samant for the petitioner. Mr. A.B. Shinde for respondent 1. Mr. Herbat Noronha for respondents 5 to 7. Mr. Basavraj Talwar for respondent 8. CORAM : SMT. RANJANA DESAI & SMT. ROSHAN DALVI, JJ. DATED : FEBRUARY 04, 2008. P.C.:- 1. We have heard learned counsel appearing for the petitioner- bank and learned counsel appearing for the respondents. 2. The petitioner-bank is aggrieved by order dated 16/1/2008 AJN 2 passed by the Debts Recovery Appellate Tribunal (for short, “the DRAT”) at Bombay. 3. The appellant-bank challenged the sale confirmation by the Recovery Officer by filing an appeal before the DRT. The DRT held that the Recovery Officer cannot set aside a sale after confirmation. It rejected the appeal holding that the appeal was not tenable. The appellant-bank challenged this order before the DRAT. The sale of the properties was challenged, inter alia, on the ground that the property which was sold in execution of decree of respondent 1-bank was mortgaged to the appellant-bank also. The DRAT by the impugned order confirmed the order of the DRT rejecting the appeal filed by the appellant-bank challenging the sale of the property. 4. We have heard learned counsel appearing for the parties. Learned counsel appearing for the petitioner-bank contended that respondent 3 has availed of cash credit facility of Rs.12 lacs from the petitioner-bank and the property in question was mortgaged AJN 3 with the petitioner-bank in the year 2002. The alleged mortgage on which respondent 1-bank is relying is a bogus mortgage and is later in point of time. The petitioner-bank, therefore, has a first charge over the said property. 5. Learned counsel pointed out that the petitioner-bank had initiated recovery actions against respondent 3 under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, “the Securitization Act”). Despite notice, respondent 3 failed to pay the dues of the petitioner-bank and, therefore, the authorized officer has taken actual possession of the said property on 16/7/2007. 6. Learned counsel pointed out that the Recovery Officer put the mortgaged property for public auction on 24/1/2007. At that time, respondent 8 appeared and claimed 1/3rd share in the property. Subsequently, she relinquished her claim in favour of the highest bidder. He pointed out that the Recovery Officer modified the Recovery Certificate and recognized the claim of respondent 8. AJN 4 The petitioner-bank has serious objection to this. 7. The DRAT has taken a view that if the petitioner-bank is able to prove its mortgage then it may be entitled to share the sale proceeds of the mortgaged property along with respondent 1-bank. So far as 1/3rd share, which is claimed by respondent 8 is concerned, the DRAT has observed that it will be open for the petitioner-bank to adopt such proceedings as it is entitled to under the law for enforcement of its right. We concur with this view of the DRAT. 8. In this connection, learned counsel appearing for respondent 1-bank has drawn our attention to the judgment of this court in Dr. Anil Nandkishor Tibrewala & Anr. v. Jammu & Kashmir Bank Ltd. & Ors., in Writ Petition No.1684 of 2006 decided on 11/7/2006. In that case, respondent 1-bank herein had taken out proceedings before the DRT. That application was allowed and the Recovery Officer issued recovery certificate. Thereafter, respondent 1-bank moved an application for enforcement of AJN 5 recovery certificate for attachment of the secured assets without notice to the petitioners therein. The Recovery Officer allowed the said application. The petitioners therein made an application before the Recovery Officer. That application was neither considered nor granted. The petitioners therein, therefore, preferred an appeal before the DRT. The petitioners therein also filed a writ petition in this court. While dealing with this situation, this court held that where it is alleged that a Financial Institution has obtained an order or certificate pursuant to a mortgage created by the judgment debtor based on a fraudulent document and a party approaches the DRT and points this out to the DRT, the DRT can assume jurisdiction under section 19(25) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short, “the DRT Act”) to decide that issue and, for that purpose, exercise powers conferred under section 22 thereof. This court further held that in those cases where the Recovery Officer cannot go beyond the certificate, a party who claims title to the property or interest in the property can move the DRT by invoking jurisdiction of the DRT under section 19(25) of the DRT Act and in such cases if a prima AJN 6 facie case is disclosed, the DRT is bound to consider the application and dispose it of in accordance with law after giving an opportunity to all parties before it. The case of the petitioner-bank prima facie appears to be covered by this judgment. The petitioner-bank may, therefore, approach the DRT under section 19 (25) of the DRT Act if it is so advised. 9. In the circumstances, it is not possible for us to entertain the petition. The petition is dismissed. We leave all contentions raised by the petitioner-bank open. 10. We find that the DRAT has directed that the sale proceedings in respect of the property sold by auction will not be appropriated or paid to respondents 1 and 8 for a period of 4 weeks from the date of DRAT's order. If the petitioner-bank approaches the DRT under section 19(25) of the DRT Act and if any application is made for continuation of the protection granted by the DRAT in paragraph 8 of its order, the DRT may consider it sympathetically. We make it clear that nothing said by us in this order can be treated as our AJN 7 opinion on the merits of the case. [SMT. RANJANA DESAI, J.] [SMT. ROSHAN DALVI, J.]