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
9
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.
15
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
18
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
23
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.
27

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