KOTAK MAHINDRA BANK LIMITED versus NARENDRA JAYANTILAL TRIVEDI & ANR.
[2022] 19 S.C.R. 360, Supreme Court of India, 2022
Outcome: Disposed off
Segment: Ratio
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KOTAK MAHINDRA BANK LIMITED
v.
NARENDRA JAYANTILAL TRIVEDI & ANR.
(Civil Appeal No. 4026-4027 of 2022)
MAY 13, 2022
[M. R. SHAH AND B. V. NAGARATHNA, JJ.]
Administration of Justice – Abuse of Process of Law – Debts
Due to Banks and Financial Institutions Act, 1993 – Securitisation
and Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 – Held: One after another, a number of
proceedings were initiated by respondent No.1 by which he has
delayed the proceedings initiated by the bank under the SARFAESI
Act to recover the amount due and payable since 1986 and has
stalled the recovery proceedings – In spite of the strong observations
made by the adjudicating authority in the earlier order re-produced
by the Single Judge in his judgment and the strong observations
made by the Single Judge, the Division Bench was not justified in
initially granting an ex-parte ad-interim relief and thereafter, to
continue the same on withdrawal of the Letters Patent Appeal –
Once the Division Bench did not interfere with the order passed by
the Single Judge on merits, thereafter, it was not open for the Division
Bench to pass an order permitting the Respondent No. 1 to withdraw
the Letters Patent Appeal and also make observations that any of
the observations made by the DRT as well as by Single Judge while
dismissing the writ petition shall be ignored and/or shall not be
taken into consideration – Allowing such
a practice would
tantamount to not only taking a chance before the court but would
be indeed speculative and an abuse of the process of the court –
Proceedings before the Court are not for taking the chance by the
litigants – Impugned order passed by the Division Bench of the
High Court, in so far as in terms of paragraphs 3(ii), 3(iii) and 4, is
set aside – Further, the ex-parte interim order granted in the Letters
Patent Appeal also stands vacated – Costs of Rs. 1,00,000/- to be
deposited by respondent No.1.
[2022] 19 S.C.R. 360
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CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4026
of 2022.
From the Judgment and Order dated 25.01.2022 of the High Court
of Gujarat at Ahmedabad in Letters Patent Appeal No. 75 of 2022.
With
Civil Appeal No. 4027 of 2022.
Amar Dave, Himanshu Bhushan, Advs. for the Appellant.
Ms. Sonam Anand, Santosh Krishnan, Malak Manish Bhatt, Advs.
for the Respondents.
The Judgment of the Court was delivered by
M. R. SHAH, J.
Leave granted.
1. Feeling aggrieved and dissatisfied with impugned order dated
25.01.2022 passed by the Division Bench of the High Court of Gujarat
at Ahmedabad and subsequent order dated 04.03.2022, in Letters Patent
Appeal No. 75/2022, the original respondent – Bank has preferred the
present appeals.
2. The facts leading to the present appeals are as under: -
2.1 A loan facility of Rs. 29,50,000/- was earlier extended by State
Bank of India and later assigned to the appellant – Bank to a proprietorship
firm of respondent No. 1 herein i.e., M/s Aromatics Intermediates and
Chemicals. As a security for the said loan facility, property belonging to
respondent No. 1 was mortgaged in favour of State Bank of India. In
view of default by respondent No. 1 in making payments of the outstanding
amounts, the bank filed a civil suit in the year 1986 for recovery of its
dues and enforcement of securities. Upon enactment of the Recovery
of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter
referred to as the Act, 1993), the suit was
transferred to the Debts
Recovery Tribunal (DRT), which was numbered as Transfer Application
No. 95/1995. The DRT vide order dated 03.03.2000 decreed the said
application and directed respondent No. 1 and the guarantors to pay
jointly and severally a sum of Rs. 44,01,159.47/- with cost.
2.2 Thereafter, the debts under the credit facility were assigned in
favour of the appellant – bank. Pursuant to the assignment of dues, bank
KOTAK MAHINDRA BANK LIMITED v. NARENDRA
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issued a demand notice upon the judgment debtor – respondent No. 1
and others under section 13(2) of the Securitisation and Reconstruction
of Financial Assets and Enforcement of Security Interest Act, 2002
(SARFAESI Act) for a sum of Rs. 27,35,85,200.62/- as on 20.06.2011,
together with further interest and expenses and costs. Before any further
measures under section 13(4) of the SARFAESI Act could be taken by
the appellant – bank, respondent No. 1 filed an application under section
17 of the SARFAESI Act before the DRT being Securitisation Application
No. 94/2011. Vide order dated 06.01.2015, the Recovery Officer rejected
the objections raised by respondent No. 1 and guarantors. The DRT
dismissed the Securitisation Application No. 94/2011.
2.3 According to the appellant, the appellant took symbolic
possession of the mortgaged property under section 13(4) of the
SARFAESI Act on 16.07.2015. Respondent No. 1 and guarantors again
raised objections in the recovery proceedings which were rejected by
the Recovery Officer vide order dated 06.01.2015. By an order dated
15.07.2016, the Recovery Officer allowed the said application and
reviewed/modified his earlier order dated 06.01.2015. The said order
was challenged by the appellant before the DRT by way of Appeal No.
6/2016 and was pending.
2.4 Thereafter, the appellant also filed an application under section
14 of the SARFAESI Act before the learned Chief Metropolitan
Magistrate (CMM) being Application No. 256/2015, which came to be
allowed vide order dated 16.08.2016 and allowed the bank to take physical
possession of the secured assets. Aggrieved by the actions/measures
under the SARFAESI Act, taken by the bank, the borrowers/guarantors
again approached the DRT by way of Securitisation Application No.
171/2016. Thereafter, the appellant filed a special criminal application
before the High Court challenging the order passed by the learned CMM
to the extent of not appointing a subordinate officer for execution of the
order. The High Court disposed of the said special criminal application
vide order dated 02.12.2016. Pursuant to the order passed by the High
Court dated 02.12.2016, learned CMM authorized the Registrar of that
Court to take possession of the secured property in question. Respondent
No. 1 thereafter filed an interlocutory application before the DRT in
Securitisation Application No. 171/2016, which came to be rejected.
Respondent No. 1 also filed a Criminal Misc. Application No. 643/2017
before the learned CMM for clarification of order dated 16.12.2016.
The said application came to be rejected by order dated 04.02.2017.
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2.5 That thereafter, respondent No. 1 preferred a writ petition
before the High Court being Special Civil Application No. 2763/2017,
seeking compliance of order dated 15.07.2016 passed by the Recovery
Officer (against which an appeal before the DRT was pending) as well
as order dated 04.02.2017 passed by the learned CMM in Criminal Misc.
Application No. 643/2017 and order dated 21.01.2017 passed by the DRT
in Securitisation Application No. 171/2016. Thus, respondent No. 1
challenged three different orders passed by three different authorities
passed under two different Acts. The appellant resisted the said Special
Civil Application on the grounds, inter alia, that without exhausting
alternative remedies available under the SARFAESI Act and Act, 1993,
the writ petition under Article 226 of the Constitution of India would not
be maintainable. It was also submitted that the writ petition under Article
226 of the Constitution of India against the orders passed by the DRT
and the orders passed under the SARFAESI Act and Act, 1993, would
not be maintainable. That vide order dated 19.04.2021 and during the
pendency of the aforesaid writ petition before the High Court, the DRT
dismissed the Securitisation Application No. 171/2016 with cost of Rs.
25,000/-. The learned Single Judge of the High Court subsequently
dismissed the aforesaid Special Civil Application No. 2763/2017 vide
detailed judgment and order dated 07.10.2021 with exemplary cost of
Rs. 1,00,000/-.
The learned Single Judge specifically observed that the
said proceedings were only preferred by respondent No. 1 to stall the
recovery proceedings under the SARFAESI Act. Learned Single Judge
also noted that respondent No. 1 remained successful in not paying a
single rupee for almost 21 years despite the decree passed by the DRT.
2.6 Feeling aggrieved and dissatisfied with the judgment and order
passed by the learned Single Judge, respondent No. 1 preferred Letters
Patent Appeal before the Division Bench of the High Court. The Division
Bench of the High Court by the impugned ex-parte ad-interim order
dated 25.01.2022 granted an ex-parte order of stay in favour of respondent
No. 1 of dispossession of the property till the next date of hearing and
also stayed the payment of cost of Rs. 1,00,000/- imposed by the learned
Single Judge.
2.7 Feeling aggrieved and dissatisfied with the ex-parte ad- interim
stay granted by the Division Bench of the High Court dated 25.01.2022,
the bank has preferred present appeal arising out of SLP (C) No.
2228/22. The present appeal came up for hearing before this Court on
22.02.2022 and this Court passed the following order: -
KOTAK MAHINDRA BANK LIMITED v. NARENDRA
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“Shri Amar Dave, learned Advocate appearing on behalf of the
petitioner Bank has taken us to the reliefs sought/prayed in the
main writ petition (pages 57-58). He has submitted that as such
some of the reliefs sought in the main writ petition were the interim
order passed by the DRT dated 21.01.2017. It is submitted that
one another relief which was sought was to hold and declare that
the proceedings initiated by the Bank under the Securitization and
Reconstruction of Financial Assets and Enforcement of Securities
Interest Act, 2002 (SARFAESI Act) are illegal being time barred.
It is reported that the proceedings before the DRT are disposed
of and the same have been dismissed. It is further submitted that
even the order passed by the Recovery officer dated 15.07.2016
upon which the reliance has been placed by the Division Bench of
the High Court is as such the subject matter of appeal before
DRT filed by the Bank. It is submitted that as held by this Court in
the case of Authorized Officer, State Bank of Travancore and
Anr. Vs Mathew K.C. (2018) 3 SCC 85 and the recent decision
of this Court in CA Nos.257-259/2022 - Phoenix ARC Private
Limited Vs. Vishwa Bharati Vidya Mandir & Ors., the writ petition
under Article 226 of the Constitution of India against the
proceedings initiated under the SARFAESI Act and/or against an
interim order shall not be maintainable. It is submitted that by
granting such an ad-interim
order, the Division Bench of the High
Court has virtually stalled the proceedings under the SARFAESI
Act.
Issue notice returnable on 15.03.2022.
Dasti, in addition, is permitted.
In the meantime, the Division Bench of the High Court either
to finally decide and dispose of the LPA and/or at least the
application for interim relief to be decided on or before 09.03.2022
and the order that may be passed to be placed before this Court
on the next date of hearing.”
2.8 It appears that having come to know of the present appeal
and order dated 22.02.2022, calculatively respondent No. 1 withdrew
the aforesaid Letters Patent Appeal with liberty to file appropriate
proceedings before the appropriate forum. Respondent No. 1 – original
appellant also requested to continue the earlier ex-parte ad-interim order
dated 25.01.2022, which as such is the subject matter of the civil appeal
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arising out of SLP (C) No. 2228/2022, pending before this Court. The
Division Bench of the High Court vide impugned order dated 04.03.2022
(impugned order in civil appeal arising out of SLP (C) No. 4724/2022)
not only permitted respondent No. 1 to withdraw the Letters Patent Appeal,
it also extended the ex-parte ad- interim stay, granted earlier, up to
14th March, 2022. The Division Bench of the High Court reduced the
cost imposed by the learned Single Judge from Rs. 1,00,000/- to
Rs. 25,000/-. The Division Bench also passed an order that appropriate
forum, which is going to examine the order dated 19.04.2016 passed by
the Debts Recovery Tribunal in case No./Securitisation Application No.
171 of 2016, shall deal with the case independently and without being
influenced by the observations made by learned Single Judge, vide order
dated 07.10.2021 passed in Special Civil Application No. 2763 of 2017
and without being influenced by the order of cost imposed by the Appellate
Bench. The earlier ex-parte ad-interim order dated 25.01.2022 passed
by the Division Bench in Letters Patent Appeal No. 75/2022 and the
subsequent order dated 04.03.2022 of the Division Bench passed in
Letters Patent Appeal No. 75/2022, are the subject matter of the present
appeals.
3. We have heard Shri Amar Dave, learned counsel appearing on
behalf of appellant - bank and Ms. Sonam Anand, learned counsel
appearing on behalf of respondent No. 1 in civil appeal arising out of
SLP (C) No.
2228/2022. At this stage, it is required to be noted that
though served, nobody has appeared on behalf of respondent No. 1 in
connected SLP (C) No. 4724/2022. This Court adjourned the matter
earlier so as to ascertain that respondent No. 1 appears in the subsequent
SLP (C) No. 4724/2022. When we enquired from Ms. Sonam Anand,
learned counsel, who is appearing on behalf of very respondent No. 1 in
connected matter being SLP (C) No. 2228/2022, whether she has any
instructions to appear on behalf of respondent No. 1, she has clearly
stated at the bar that though she has informed respondent No. 1 about
SLP (C) No. 4724/2022, she has no further instructions to appear on
behalf of respondent No. 1 in the connected matter bearing SLP (C) No.
4724/2022. We do not appreciate the conduct on the part of respondent
No. 1 in appearing in one matter and not appearing in the connected
matter though served. It appears that in view of the subsequent order
obtained by him from the Division Bench of the High Court, which is the
subject matter of SLP (C) No. 4724/2022, by withdrawing the Letters
Patent Appeal with liberty to file appropriate proceedings before the
KOTAK MAHINDRA BANK LIMITED v. NARENDRA
JAYANTILAL TRIVEDI & ANR. [M. R. SHAH, J.]
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appropriate forum and obtaining observations that the observations made
by the learned Single Judge in order dated 07.10.2021 passed in Special
Civil Application No. 2763/2017 may not be considered by the appropriate
forum before whom the proceedings to be initiated which is also the
subject matter of subsequent SLP, deliberately respondent No. 1 has
chosen not to appear in the subsequent SLP (C) No. 4724/2022.
4. At the outset, it is required to be noted that the proceedings
before the High Court initiated by respondent No. 1 in the year 2017 by
way of Special Civil Application No. 2763/2017, as such was nothing
but an abuse of court process and only with a view to delay the
proceedings under the SARFAESI Act, initiated by the appellant – bank,
to recover the amount due and payable since 1986. From the material
available on record, it is noted that one after another, a number of
proceedings were initiated by respondent No. 1. Thus, it can be said that
all efforts were made by respondent No. 1 – original appellant to delay
the proceedings under the SARFAESI Act, initiated by the bank, to
recover the amount due and payable since the year 1986.
4.1 In the year 2017, despite the statutory remedies available under
the SARFAESI Act, respondent No. 1 filed a writ petition before the
learned Single Judge of the High Court and prayed for the following
reliefs: -
“B) Your Lordships may be pleased to issue writ of mandamus
and
be pleased to direct the respondent bank not to proceed under
the SARFAESI ACT further till they comply with the order passed
by the Recovery officer dated 15-7-2016 in R.P No 360 at
Annexure-K to this petition.
C) Your Lordships may be pleased to issue a Writ of certiorari or
any other appropriate writ, order or direction quashing and setting-
aside the order dated 04-02-2017 passed by the Hon’ble Chief
Metropolitan Magistrate, Ahmedabad as annexed hereinabove as
Annexure-A to this petition;
D) Your Lordships may be pleased to issue a writ of certiorari or
any other appropriate writ, order or direction quashing and setting-
aside the order dated 21-1-2017 passed by the Hon’ble Debt
Recovery Tribunal, Ahmedabad as annexed hereinabove as
Annexure-B to this petition.
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E) Be pleased to declare that the order passed dated 21- 1-2017
by the Hon’ble Debt Recovery Tribunal is defective being
erroneous, without findings, without reasons and non considering
the points of arguments and averments averred in the Interim
Application annexed hereinabove as Annexure-O to this petition
and the arguments canvassed.
F) Your Lordships may be pleased to issue writ of mandamus and
be pleased to hold and declare that the said proceedings of the
respondent bank under the SARFEASI ACT are time barred.
G) Your Lordships may be pleased to issue or writ of mandamus
and be pleased to hold and declare pending admission, hearing and
final disposal of this petition be pleased to stay the effect, operation
and implementation of impugned order dated 16-12-2016 passed
by Hon’ble Chief Metropolitan Magistrate, Ahmedabad.
H) Pending admission, hearing and final disposal of this petition
be pleased to direct the respondents to maintain status quo qua
residential property bearing No. 212- 2013, Azad Society,
Ambawadi, Ahmedabad bearing total 378 Sq. Mtrs. of plot which
is in physical possession of the petitioner.
I) Ex-parte Ad-interim relief in terms of para 9 (H).
J) Costs of this petition are awarded.
K) Any other relief, order or direction which may be just, fit, proper
and equitable in the facts and circumstances of the petition.”
After the detailed judgment and order and after having taken note
of the subsequent order passed during the pendency of
the writ petition
before the learned Single Judge of the High Court and having taken note
of the subsequent order passed by the DRT/appropriate authority
dismissing the securitisation application with cost of Rs. 25,000/-, the
learned Single Judge by the detailed judgement and order dismissed the
writ petition with exemplary cost of Rs. 1,00,000/-.
4.2 In fact, while dismissing the securitisation application, the DRT
made observations in paragraphs 31 to 33, which read as under: -
“31. It is worthwhile to mention here that the bank filed the
Recovery Proceedings in the year 1986 and now we are in the
year 2021. The bank made part recoveries through process of
KOTAK MAHINDRA BANK LIMITED v. NARENDRA
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law by sale of hypothecated assets and one property situated in
Vatva. The amount recovered is merger amount, as compared to
total recoverable dues. On the date of issuance of Demand Notice,
bank claimed Rs.27,35,85,200.62 Ps, whereas amount recovered
was approximately Rs.9,33,031.20 Ps.
The Applicants made every effort to hinder the process of covery
of public money. The bank has mentioned details of three assets
as securities in the Demand Notice, but has proceeded against
one property only. To my opinion, if bank has given details of all
the securities, although some of the securities had been sold earlier
by the bank through process of Court and has given the credit of
so recovered amount in the account of borrower in its ultimate
demand made under the Demand Notice, the reference of already
sold securities would not render Demand Notice defective. So on
that account also, I find no merits in the Securitisation Application.
32. It is high time to curb such type of litigants, who for their
benefit, give or furnish part information and conceal part information
to the detriment of secured creditor and with a view to mislead
the Courts. The Applicants who had filed earlier SARFAESI Act,
2002, were required to disclose all such facts regarding death of
Smt. Kokilaben N. Trivedi and all other facts regarding sale of
two secured assets at first available opportunity that is in the
objections filed against the Demand
Notice and in the earlier filed
Securitisation Application, but the Applicants concealed factum
of death of Smt. Kokilaben N. Trivedi for about 15 years.
Non-disclosure of vital and material information and concealment
of such information and case as set-up regarding recoveries made
by the bank during pendency of Civil Suit by the Applicants, at the
time of arguments reveals that the Applicants have not come to
this Tribunal with clean hands. The initial pleadings as well as
subsequent conduct during pendency of proceedings of the litigant
must be fair enough to enable the justice delivery system/Courts
to adjudicate matters in a judicious manner. The approach of
Applicants reveals that the Applicants deliberately acted in a
manner to jeopardise fair adjudication of matter. Once the
Applicants have not come to this Tribunal with clean hands, they
are not entitled to any reliefs on merits. We can rely on the judgment
of Hon’ble Supreme court in the case of V. Chandrasekaran v.
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Administrative Officer reported in 2012(4) R.C.R.(Civil) 588,
which is fully applicable to present case. The Applicants for their
such conduct are liable to pay cost.
33. Keeping in view, all such facts and circumstances, Securitisation
Application is dismissed with cost of Rs.25,000/-, apart from the
right of the bank to recover all expenses incurred to defend the
litigation filed by the Applicants to question validity of Securitisation
Process. Cost is to be deposited with National Defence Fund in
the Account No. 11084239799 State Bank of India at New Delhi
Main Branch (00691) and file a purshis in compliance of orders
of this Tribunal within 7 days. The Respondent Bank may proceed
further in accordance with law.”
That thereafter the learned Single Judge dismissed the aforesaid
writ petition bearing Special Civil Application No. 2763/2017 by
observing in paragraph 24 as under: -
“24. From the narration of the facts made by the DRT it is clear
that the petitioner has only one goal and agenda as not to pay any
single rupee after the decree passed by the DRT in the year 2000.
The petitioner has remained successful for almost 21 years for
not paying any amount of the outstanding dues as per the decree
passed by the DRT which has achieved finality. In such
circumstances, without adverting to the further facts and taking
into consideration the finding of the DRT which is not under
challenge and which has achieved finality, the petition is dismissed
with cost
of Rs. 1 lakh. The amount of cost to be deposited with
the Gujarat State Legal Services Authority within a period of four
weeks from the date of receipt of this order.”
4.3 Against the detailed judgment and order dated 07.10.2021
passed by the learned Single Judge in writ petition bearing Special Civil
Application No. 2763/2017 dismissing the writ petition with cost of Rs.
1,00,000/-, respondent No. 1 preferred the Letters Patent Appeal before
the Division Bench. Despite the strong observations made by the learned
Single Judge recorded in detailed judgment and order dated 07.10.2021
in Special Civil Application No. 2763/2017, the Division Bench entertained
the Letters Patent Appeal. The Division Bench not only entertained the
said Letters Patent Appeal but also granted ex-parte ad-interim relief,
granting stay against the dispossession of the property i.e., not to take
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possession of the property in question as well as stay against imposing
cost of Rs. 1,00,000/-. The ex-parte ad-interim order dated 25.01.2022 is
the subject matter before this Court by way of SLP (C) No. 2228/2022.
The same is extracted as under for immediate reference:
[“1. Heard learned Senior Advocate Mr. Yatin Oza with learned
advocate Ms. Minisha Sharma for the appellant and perused the
order dated 15/07/2016 passed by the Recovery Officer, by which,
objections raised by the appellant were considered and had passed
the following order:
(1)
The objections Exh.D/60 filed by CD No.2 and 3 are allowed
as per above objections.
(2)
CH Bank is directed to submit details of recoveries in the
accounts of CDs including this account with clear bifurcation
of entire amount recovered by them vis-a-vis its
appropriation duly supported with statement of accounts.
(3)
CH Bank is also directed to take steps to ascertain and
join/ bring legal heirs of deceased CDs on record.
(4)
CH Bank has to quantify the dues afresh after deducting
entire recoveries and giving affect of the same on the dates
of recoveries and take steps to get the fresh demand notice
issued accordingly.
2.
The said decision is appealed by the bank before the Debts
Recovery Tribunal, which is pending for hearing.
3.
We have also gone through the order impugned in the
petition.
Issue Notice making it returnable on 23/02/2022.
CIVIL APPLICATION (FOR INTERIM
RELIEF) NO. 1 of
2022:
Notice returnable on 23/02/2022. Till the next date of hearing,
there would be stay against the dispossession of the property i.e.
not to take possession of the property in question as well as stay
against imposing cost of Rs.1,00,000/- to the present appellant –
original petitioner. Direct service is permitted.”]
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4.4 While issuing the notice in the present Civil Appeal arising out
of SLP (C) No. 2228/2022, this Court passed a detailed order which is
as under: -
“Shri Amar Dave, learned Advocate appearing on behalf of the
petitioner Bank has taken us to the reliefs sought/prayed in the
main writ petition (pages 57-58). He has submitted that as such
some of the reliefs sought in the main writ petition were the interim
order passed by the DRT dated 21.01.2017. It is submitted that
one another relief which was sought was to hold and declare that
the proceedings initiated by the Bank under the Securitization and
Reconstruction of Financial Assets and Enforcement of Securities
Interest Act, 2002 (SARFAESI Act) are illegal being time barred.
It is reported that the proceedings before the DRT are disposed
of and the same have been dismissed. It is further submitted that
even the order passed by the Recovery officer dated 15.07.2016
upon which the reliance has been placed by the Division Bench of
the High Court is as such the subject matter of appeal before
DRT filed by the Bank. It is submitted that as held by this Court in
the case of Authorized Officer, State Bank of Travancore and
Anr. Vs Mathew K.C. (2018) 3 SCC 85 and the recent decision
of this Court in CA Nos.257-259/2022 - Phoenix ARC Private
Limited Vs. Vishwa Bharati Vidya Mandir & Ors., the writ petition
under Article 226 of the Constitution of India against the
proceedings initiated under the SARFAESI Act
and/or against an
interim order shall not be maintainable. It is submitted that by
granting such an ad-interim order, the Division Bench of the High
Court has virtually stalled the proceedings under the SARFAESI
Act.
Issue notice returnable on 15.03.2022.
Dasti, in addition, is permitted.
In the meantime, the Division Bench of the High Court either
to finally decide and dispose of the LPA and/or at least the
application for interim relief to be decided on or before 09.03.2022
and the order that may be passed to be placed before this Court
on the next date of hearing.”
Respondent No. 1 appeared through his advocate Shri Santosh
Krishnan, who filed the vakalatnama on 08.02.2022.
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4.5 Despite the pendency of the present Civil Appeal arising out
of SLP (C) No. 2228/2022 and it appears that with a view to make the
present SLP (C) No. 2228/2022 having infructuous, in a calculative move,
respondent No. 1 withdrew the Letters Patent Appeal before the Division
Bench, with liberty to file appropriate proceedings before the appropriate
forum. The Division Bench also extended the ad-interim relief, granted
earlier vide order dated 25.01.2022, till 14.03.2022, despite the fact that
the SLP against the ex-parte ad-interim order dated 25.01.2022 was
pending before this Court and this Court was seized of the matter.
Unfortunately, and without properly appreciating the consequences and
even without taking into consideration the strong observations made by
the learned Single Judge while dismissing writ petition bearing SCA No.
2763/2017, the Division Bench of the High Court has not only permitted
respondent No. 1 – original appellant to withdraw the Letters Patent
Appeal, but has also extended the ex-parte ad-interim relief, granted
earlier, upto 14.03.2022 and even reduced the cost to Rs. 25,000/- from
Rs. 1,00,000/-. The Division Bench has also observed in paragraph 4
that the appropriate forum which is going to examine order dated
19.04.2016 passed by the Debt Recovery Tribunal-1, Ahmedabad in
Case No. S.A. 171 of 2016, shall deal with the case independently and
without being influenced by the
observations made by learned Single
Judge, vide order dated 07.10.2021 passed in Special Civil Application
No. 2763 of 2017 and without being influenced by the order of cost imposed
by this Appellate Bench. For immediate reference the relevant portion
of the aforesaid impugned order dated 04.03.2022 is extracted as under:
[“3.
….Having considered the submissions made by the learned
advocates for the respective parties, we pass the following
order:
[i]
The appellant is permitted to withdraw present appeal with
a liberty to file appropriate proceedings before the
appropriate forum.
[ii]
Till the next date of hearing, interim relief, if any, granted
and which is in existence, is extended upto 14.03.2022.
[iii]
As far as the cost imposed by the learned Single Judge is
concerned, the same is reduced to Rs.25,000/- (Rupees
Twenty Five Thousand Only) and the same shall be paid to
respondent No. 1 by RTGS on or before 11.03.2022.
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4.
It is needless to say that the appropriate forum, which is
going to examine the order dated 19.04.2016 passed by
the Debt Recovery Tribunal – 1, Ahmedabad in Case
No.S.A.171 of 2016, shall deal with the case independently
without being influenced by the observations made by
learned Single Judge, vide order dated 07.10.2021 passed
in Special Civil Application No. 2763 of 2017 and without
being influenced by the order of cost imposed by this
Appellate Bench.
5.
In view of the order passed in Letters Patent Appeal,
present civil application does not survive. Accordingly, the
same stands disposed of.”]
4.6 First of all, we deprecate the conduct on the part of respondent
No. 1 in withdrawing the Letters Patent Appeal despite the fact that this
Court was seized of matter in which the ex-parte ad-interim order dated
25.01.2022 passed by the Division Bench was under challenge and in
which respondent No. 1 was appearing before this Court. He ought not
to have withdrawn the Letters Patent Appeal and made the proceedings
before this Court infructuous. As observed hereinabove, such act of
withdrawal of the Letters Patent Appeal on the part of respondent No. 1
– original appellant and thereby making the proceedings before this Court
infructuous so as to avoid adjudication on the correctness of the impugned
order after order dated 22.02.2022 was passed by this Court is wholly
deplorable.
4.7 Even otherwise, in the facts and circumstances of the case a
number of
proceedings were initiated by respondent No. 1 by which he
has delayed the proceedings initiated by the bank under the SARFAESI
Act, and has stalled the recovery proceedings. In spite of the strong
observations made by the adjudicating authority in the earlier order
re-produced by the learned Single Judge in his judgment and the strong
observations made by the learned Single Judge, the Division Bench
was not justified in initially granting an ex-parte ad-interim relief and
thereafter, to continue the same on withdrawal of the Letters Patent
Appeal.
4.8 Even the observations made by the Division Bench that the
appropriate forum, which is going to examine the order dated 19.04.2016
passed by the DRT-1, Ahmedabad in Case No. S.A. 171 of 2016, shall
KOTAK MAHINDRA BANK LIMITED v. NARENDRA
JAYANTILAL TRIVEDI & ANR. [M. R. SHAH, J.]
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SUPREME COURT REPORTS
[2022] 19 S.C.R.
deal with the case independently and without being influenced by the
observations made by learned Single Judge, vide order dated 07.10.2021
passed in Special Civil Application No. 2763 of 2017 and without being
influenced by the order of cost imposed is also unsustainable. Such
observations made while permitting withdrawal of the Letters Patent
Appeal amounts to virtually allowing the appeal and setting aside the
orders of the DRT as well as the learned Single Judge. Once having
enjoyed the fruits of interim orders for approximately four years and in
between initiating a number of other proceedings (even during the
pendency of the writ petition) and thereafter, having invited the order in
writ petition on merits and when the learned Single Judge dismissed the
writ petition with cost, the Division Bench ought not to have passed an
order nullifying the strong observations made by the learned Single Judge
while dismissing the writ petition. In fact, the Division Bench also did not
consider the order of the learned Single Judge on merits but has granted
relief even while permitting withdrawal of the appeal. Such conduct on
the part of the litigant to once enjoy the fruits of the litigation for number
of years, invite the order on merits, which is against him and in the appeal
initially after obtaining the ex-parte ad-interim relief and thereafter, having
realised that the same would not be sustained, withdrawing the
appeal
and requesting that observations made by the learned Single Judge while
dismissing the writ petition may not be considered, cannot be accepted
and such conduct reprehensible.
4.9 Once the Division Bench did not interfere with the order
passed by the learned Single Judge on merits, thereafter, it was not open
for the Division Bench to pass an order permitting the appellant –
respondent No. 1 to withdraw the Letters Patent Appeal and also make
observations that any of the observations made by the DRT as well as
by learned Single Judge while dismissing the writ petition shall be ignored
and/or shall not be taken into consideration was beyond the ken of the
Division Bench. Allowing such a practice would tantamount to not only
taking a chance before the court but would be indeed speculative and an
abuse of the process of the court. The proceedings before the Court are
not for taking the chance by the litigants.
We fail to understand as to on what basis the Division Bench of
the High Court permitted withdrawal of the Letters Patent Appeal on the
one hand while simultaneously granting relief to the appellant.
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5. Under the circumstances, the impugned order dated 04.03.2022
passed by the Division Bench of the High Court, in so far as paragraphs
3(i), 3(ii), 3(iii) and 4, is unsustainable.
6. In view of the above and for the reasons stated above, the Civil
Appeal arising out of SLP (C) No. 2228/2022 is disposed of as having
become infructuous. The impugned order dated 04.03.2022 passed by
the Division Bench of the High Court of Gujarat at Ahmedabad in Letters
Patent Appeal No. 75/2022 in so far as in terms of paragraphs 3(ii), 3(iii)
and in paragraph 4 which read as under, is hereby quashed and set aside:-
3[ii] Till the next date of hearing, interim relief, if any, granted and
which is in existence, is extended upto 14.03.2022.
3[iii] As far as the cost imposed by the learned Single Judge is
concerned, the same is reduced to Rs.25,000/- (Rupees Twenty
Five Thousand Only) and the same shall be paid to respondent
No. 1 by RTGS on or before 11.03.2022.
4. It is needless to say that the appropriate forum, which is going
to examine the order dated 19.04.2016 passed by the Debt
Recovery Tribunal-1, Ahmedabad in Case No. S.A. 171 of 2016,
shall deal with the case independently without being influenced by
the observations made by learned Single Judge, vide order dated
07.10.2021 passed in Special Civil Application No. 2763 of 2017
and without being influenced by the order of cost imposed by this
Appellate Bench.
Further the ex-parte interim order granted in the Letters
Patent
Appeal also stands vacated.
The present Civil Appeals arising out of SLP (C) No. 2228/2022
and SLP (C) No. 4724/2022, are allowed/disposed of to the aforesaid
extent with cost, which is quantified at Rs. 1,00,000/- to be deposited by
respondent No. 1 with the Gujarat High Court Legal Services Committee,
within a period of four weeks’ from today.
Divya Pandey and Amarendra Kumar
Appeals disposed of.
(Assisted by : Adnan Khan, LCRA)
KOTAK MAHINDRA BANK LIMITED v. NARENDRA
JAYANTILAL TRIVEDI & ANR. [M. R. SHAH, J.]