Kotak Mahindra Bank Limited vs Narendra Jayantilal Trivedi & Anr.

Kotak Mahindra Bank Limited vs Narendra Jayantilal Trivedi & Anr.   

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

    CIVIL APPEAL NO.          /2022

(@ SLP (C) No. 2228/2022)

Kotak Mahindra Bank Limited             ..Appellant (S)

Versus

Narendra Jayantilal Trivedi & Anr.                      ..Respondent (S)

With 

    CIVIL APPEAL NO.          /2022

(@ SLP (C) No. 4724/2022)

J U D G M E N T 

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.

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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

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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 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. 

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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.

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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.

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

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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

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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 ex­parte ad­interim order dated

25.01.2022 granted an ex­parte 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 ex­parte adinterim stay granted by the Division Bench of the High

Court dated 25.01.2022, the bank has preferred present

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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: ­

“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 57­58). 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.257­259/2022 ­ 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 ad­interim 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.”     

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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 ex­parte ad­interim order

dated 25.01.2022, which as such is the subject matter of

the  civil appeal 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 ex­parte adinterim 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

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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   ex­parte   ad­interim   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

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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 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

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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

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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 15­7­2016 in R.P No 360 at Annexure­K 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 04­02­2017

passed   by   the   Hon'ble   Chief   Metropolitan   Magistrate,

Ahmedabad as annexed hereinabove as Annexure­A 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 21­1­2017

passed   by   the   Hon'ble   Debt   Recovery   Tribunal,

Ahmedabad as annexed hereinabove as Annexure­B to

this petition. 

E) Be pleased to declare that the order passed dated 21­

1­2017 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   Annexure­O   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 16­12­2016 passed by Hon'ble

Chief Metropolitan Magistrate, Ahmedabad. 

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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) Ex­parte Ad­interim 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

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are  in the  year  2021.  The  bank  made  part  recoveries

through process of 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.   Non­disclosure   of   vital   and   material

information   and   concealment   of   such   information   and

case as set­up 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

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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 ex­parte

ad­interim relief, granting 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/­.   The   ex­parte   ad­interim   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   vis­a­vis   its   appropriation   duly   supported

with statement of accounts.

17

(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.”]

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 57­58). 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

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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.257­259/2022 ­ 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 ad­interim 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. 

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

19

Bench, with liberty to file appropriate proceedings before

the appropriate forum. The Division Bench also extended

the   ad­interim   relief,   granted   earlier   vide   order   dated

25.01.2022, till 14.03.2022, despite the fact that the SLP

against  the  ex­parte ad­interim  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   ex­parte   ad­interim   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 Tribunal­1, Ahmedabad in Case No.

S.A. 171 of 2016, shall deal with the case independently

and without being influenced by the observations made by

20

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. 

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.”]

21

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   ex­parte   ad­interim   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 re22

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

ex­parte ad­interim 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 DRT­1, 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   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

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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   ex­parte   ad­interim   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

24

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.             

5. Under   the   circumstances,   the   impugned   order   dated

04.03.2022   passed   by   the   Division   Bench   of   the   High

25

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 Tribunal­1, 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.          

26

Further   the   ex­parte   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.  

…………………………………J.

                (M. R. SHAH)

…………………………………J.

 (B.V. NAGARATHNA)

New Delhi, 

May 13, 2022.

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