A P Sahadevan v State Bank of India and Valsalan K K

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE C.S.DIAS MONDAY, THE 14[TH] DAY OF AUGUST 2023 / 23RD SRAVANA, 1945** **WP(C) NO. 24107 OF 2022** ## **PETITIONER/S:** A P SAHADEVAN, AGED 63 YEARS S/O.DEVAKIAMMA, EDAYALIL HOUSE, KAKKAD P.O., PIRAVOM, ERNAKULAM., PIN - 686664 BY ADVS. MOLTY MAJEED C.A.MAJEED K.H.ASIF P.B.UNNIKRISHNAN NAIR RUBEN GEORGE ROCK GEORGE POONTHOTTAM (SR.) ## **RESPONDENT/S:** 1 STATE BANK OF INDIA, PIRAVOM BRANCH, REPRESENTED BY IT'SBRANCHMANAGER, PIRAVOM, ERNAKULAM DISTRICT., PIN - 668664 2 VALSALAN K K, S/O.MR.KUMARAN, RESIDING AT 341, KOOVAKKATT, 13, KOTHAKULANGARA, TRIPUNITHURA, ERNAKULAM DISTRICT, PIN682301., PIN - 682301 BY ADVS. SRI.S.EASWARAN, SC, SBI M.SASIDHARAN S.EASWARAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 14.08.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 24107 OF 2022 2 ## **JUDGMENT** The writ petition is filed, inter-alia, to quash Ext.P8 order passed by the Debt Recovery Tribunal-I, Ernakulam and Ext.P13 order passed by the Debt Recovery Appellate Tribunal, Chennai (in short, “Tribunal” and “Appellate Tribunal”, respectively) 2. The factual matrix, in a nut shell, for the determination of the writ petition are: (i) The petitioner had availed financial assistance from the 1[st] respondent bank by creating an equitable mortgage by deposit of title deeds, but had defaulted in paying the installments. The 1[st] respondent filed OA No.165/2008 before the Tribunal and a final order was passed on 07.07.2008. A recovery certificate was issued as DRC No.3012/SBT on 07.07.2008. The 1[st] respondent issued notice to the petitioner fixing the liability at Rs.49,61,610/-. (ii) Although the petitioner approached the 1[st] WP(C) NO. 24107 OF 2022 **==> picture [7 x 9] intentionally omitted <==** respondent on several occasions to avail the benefit of the One Time Settlement (OTS) Scheme, the 1[st] respondent was not amenable for any reasonable settlement. In the meantime, an illegal sale was conducted and the 2[nd] respondent purchased the property. (iii) On coming to learn of the illegal sale, the petitioner filed IA No.1953/2013 in OA No.165/2008, to set aside the sale. But the Tribunal, by Ext.P1 order, dismissed the application as not maintainable and relegated the petitioner to work out his statutory remedies. - (iv) Then, the petitioner filed Appeal No.12/2013 before the Tribunal, under Section 30(1) of the Recovery of Debts due to Financial Institutions Act (in short “Act”), seeking various reliefs. The petitioner also filed IA No.2465/2013 (Ext.P3) to direct the Recovery Officer to maintain status quo. WP(C) NO. 24107 OF 2022 **==> picture [7 x 9] intentionally omitted <==** - (v) Ext.P2 appeal was dismissed for default on 05.12.2013, due to the non-appearance for the learned Counsel for the appellant. The petitioner filed IA No.9/2017 (Et.P4) to restore the appeal. - (vi) In the meantime, the petitioner filed OP(DRT) No.25/2019 before this Court, to stay the recovery proceedings. By Ext.P7 judgment, this Court relegated the petitioner to work out his statutory remedies. - (vii) The Tribunal, by Ext.P8 order, dismissed Ext.P4 application. - (viii) The petitioner challenged Ext.P8 order before this Court by filing OP(DRT) No.40/2019. By Ext.P9 judgment, this Court dismissed the original petition and relegated the petitioner to exhaust his statutory remedies. - (ix) The petitioner then filed AR No.126/2018 (Ext.P10) before the Debt Recovery Appellate WP(C) NO. 24107 OF 2022 5 Tribunal, Chennai. The Appellate Tribunal, by Ext.P13 order, without proper appreciation of the facts and circumstances of the case dismissed Ext.P10 appeal. - (x) Exts.P8 and P13 are ex-facie illegal and wrong. Hence, the writ petition. 3. Heard; Sri.George Poonthottam, the learned Senior Counsel appearing for the petitioner, Sri.S.Easwaran, the learned Counsel appearing for the 1[st] respondent and Sri.M.Sasindran, the learned counsel appearing for the 2[nd] respondent. 4. Sri.George Poonthottam argued that the entire sale proceedings initiated by the 1[st] respondent-bank is vitiated and illegal. He raised four points (i) the sale certificate was barred by limitation (ii) there was no prior notice issued to the petitioner (iii) the sale proceedings were conducted by the Recovery Inspector instead of the Recovery Officer and (iv) there was only WP(C) NO. 24107 OF 2022 6 one bidder in the sale. He placed reliance on the decisions of this Court in **Rathessh M.N. vs. The Debt** **Recovery Tribunal and others [W.P.(C) No.30651/2017]** and **Bio Research Pharmaceuticals (M/s.) and others vs. State Bank of Travancore and others [2016 KHC 254]** to fortify his arguments. 5. Sri.S.Easwaran countered the above submissions by arguing that, as the petitioner has exhausted his statutory remedies, he cannot assail the legality of the sale in a writ petition filed under Article 226 of the Constitution of India. He handed over the sequence of events, which led the passing of Exts.P8 and P13 orders. He supported Exts.P8 and P13 orders and prayed that the writ petition may be dismissed. 6. Sri.M.Sasindran submitted that the 2[nd] respondent is a victim of the entire episode. The 2[nd] respondent is the bidder in the sale and is unable to enjoy the fruits of the sale. The petitioner and the 1[st] WP(C) NO. 24107 OF 2022 **==> picture [7 x 9] intentionally omitted <==** respondent are continuing the litigation, which is causing hardship to the 2[nd] respondent. Hence, the writ petition may be dismissed. 7. The question is whether there is any illegality in Exts.P8 and P13 orders passed by the Tribunal and the Appellate Tribunal. 8. Eventhough the learned Senior Counsel drew the attention of this Court to the merits of the entire sale proceedings, I am of the view that since the said question is a subject matter of Ext.P2 appeal, it is not for this Court to go into the merits of the said contention, instead, all that needs to be looked into is whether the Tribunal and the Appellate Tribunal were justified in rejecting Ext.P4 application for restoration of Ext.P2 appeal. 9. Indisputably, the petitioner has challenged the sale proceedings by way of Ext.P2 appeal. 10. When the appeal came up for hearing, the WP(C) NO. 24107 OF 2022 8 Tribunal dismissed Ext.P2 appeal for non-prosecution on 05.12.2016. 11. The learned Counsel who was appearing for the petitioner had filed Ext.P4 application on 30.12.2016 to restore the appeal, inter-alia, stating that, on 05.12.2016 due to an inadvertent contingency that happened in his office, he could not appear before the Tribunal and there was no consequentially representation for the petitioners on the said date. The petitioner has serious objections in the case and there was no willful latches or negligence on the side of the petitioner in prosecuting the appeal. Hence, the appeal may be restored. 12. The application was resisted by the 1[st] respondent-bank by filing a counter affidavit and, interalia, contending that the appeal was posted for hearing on several occasions and that there was no representation for the petitioner. The sole intention of the petitioner was to protract the final determination of WP(C) NO. 24107 OF 2022 9 ## Ext.P2 appeal. ## 13. The Tribunal, after appreciating the rival pleadings, by the impugned Ext.P8 order, held thus: “8. Further it emanates from the records that on 21.09.2016 also the learned counsel for the petitioner did not advance arguments in the appeal and sought further time for hearing as a last chance. Accordingly, the Tribunal listed the matter on 27.10.2016. However, on 27.10.2016 though the learned counsel for the petitioner was present before the Tribunal, he was not ready to advance arguments in the matter and sought further time for hearing. At the specific request of the petitioner's counsel, the Tribunal again adjourned the case to 05.12.2016 for advancing final arguments in the appeal as last chance and it was made clear in the proceedings dated 27.10.2016 that no further adjournments would be given for advancing arguments in the matter and in case of failure, the appeal will have to be disposed of on 05.12.2016. 9. Despite the above direction, none appeared and represented for the appellant on 05.12.2016, though the name of the appellant and his counsel were called in the open Tribunal thrice; and the learned counsel appearing for respondents 1 and 2 alone were present. In such circumstance, the Tribunal, dismissed the above appeal for non-prosecution on 05.12.2016. Thus it is palpable from the record of proceedings that the learned counsel appearing for the petitioner/appellant was not diligent in prosecuting the matter. 10. The instant application for restoration of the appeal was filed by the counsel appearing for the petitioner on 02.01.2017 citing the reason in the affidavit filed by him along with the petition that due to inadvertent contingency that happened in his office, the counsel attached to his office could not appear before the Tribunal an 05.12.2016 which resulted in dismissal of the appeal by the Tribunal on 05.12.2016 and there were no willful laches or negligence either on the side of the appellant or on the side of the counsel in not appearing before the Tribunal on 05.12.2016. The reason stated by WP(C) NO. 24107 OF 2022 10 the learned counsel for the petitioner for his nonappearance/non-prosecution of the matter is not at all sufficient to restore the appeal as the Tribunal had afforded sufficient opportunities for them to contest the case, but they did not evince any interest in pursuing the matter. 11. However, the Tribunal is mindful that the appeal is filed challenging the sale of property held during the recovery proceedings and the successful auction purchaser who is a third party is also hauled into the proceedings. The appellant after filing the appeal not being diligent in conducting the case has successful thwart the right of the auction purchaser in enjoyment of the property for almost 07 years. 12. It is pertinent to note that the 2[nd] respondent who is the auction purchaser has paid sale consideration for the sale of property held on 04.02.2013 and has been put in possession of property is undergoing immense difficulties and inconvenience and unable to enjoy the property purchased by him in the court auction in the proper manner by virtue of the pendency of the litigation before the Tribunal. 13. The appellant who had filed the appeal 20.08.2013 has not addressed the arguments inspite of sufficient opportunities granted by the Tribunal and it is only on 05.12.2016 i.e., after 3 years the appeal was dismissed not for non appearance of the counsel on that date as contended in the application. Furthermore, the petitioner or his counsel has not made out a case for restoration and there is no just cause or reasonable cause to restore the appeal. 14. The Tribunal is disturbed to note that though the appellant had filed the application for restoration on 02.01.2017 had not taken any steps to substitute the State Bank of India in place of State Bank of Travancore in view of the amalgamation of State Bank of Travancore to State Bank of India vide Gazette notification dated 22.02.2017. Further it is discernible from the records that the appellant has been quite thought out the proceedings for 2 years after filing the restoration petition, suddenly woke up to the notice of the advocate commissioner intimating to take the possession on 09.02.2018 and immediately has filed the IA 245/2019 for advancing the matter on 04.02.2019 and has invoked the jurisdiction of the High Court in OP[DRT] No. 25/2019 WP(C) NO. 24107 OF 2022 11 being aggrieved by the pendency of the restoration application IA 9/2017. 15. The Tribunal feels it apt to mention that the general public will lose faith in the system of court/Tribunal auction sale of properties where they are un-necessarily are dragged into litigation. 16. On cumulative examination of facts and circumstances and the appellant having failed to establish his bonafide in perusing the matter promptly, the Tribunal is not convinced to restoration the appeal. Accordingly, the IA No:9/2017, a petition for restoration is dismissed. Consequently, pending IA's are also dismissed”. 14. A reading of the above order, undoubtedly, establishes that the Tribunal has not delved into the merits of Ext.P2 appeal, instead, has dismissed the appeal for default on the alleged laches on the part of the Counsel for the petitioner. 15. Aggrieved by Ext.P8 order, the petitioner filed Ext.P10 Second Appeal before the Appellate Tribunal. The Appellate Tribunal, by the impugned Ext.P13 order, without considering the legality of Ext.P8 order has gone into the merits of Exts.P2 and P10 appeals, and has rendered the impugned order. This, according to me, is erroneous, wrong and beyond the scope of Ext.P10 appeal. WP(C) NO. 24107 OF 2022 12 16. Admittedly, Ext.P10 appeal has been filed challenging the legality of Ext.P8 order, which is an order rejecting the restoration application, on the ground that there was willful laches on the part of the Counsel for petitioner in prosecuting Ext.P2 appeal. 17. In the above situation, the Appellate Tribunal ought to have confined itself only to the merits of Ext.P8 order and nothing more. That is whether the petitioner has made out sufficient cause for his nonappearance on 05.12.2016 in order to restore Ext.P2 appeal. 18. In **G.P.Srivastavav.R.K.Raizada & Others** [2000 KHC 1023] the Hon'ble Supreme Court has held that the crucial aspect to be considered in an application filed under Order IX of the Code of Civil Procedure (Code) is whether the defendant has made out 'sufficient cause' for his nonappearance on the date the case was posted. The court is not bound to look into the antecedents of the defendant against whom an ex WP(C) NO. 24107 OF 2022 13 parte order/decree is passed. It is further held that 'sufficient cause' contemplated under Order IX of the Code has to be liberally construed so as to enable the Court to do complete justice between the parties. The term 'sufficient cause' is an elastic expression for which there is no hard and fast rule. The Court is to be given a wide discretion in deciding what is 'sufficient case'. 19. In **Robin Thapa v. Rohit Dora** [2019 KHC 6641], the Hon'ble Supreme Court has held that, ordinarily a litigation is based on adjudication on the merit of the contention of the parties and litigation may not be terminated by default of either the plaintiff or the defendant. The cause of justice does require that, as far as possible, adjudication be done on merits. 20. The above principles also squarely apply to an application filed to restore an appeal. 21. A reading of the affidavit filed in support of Ext.P4 application would substantiate that when the WP(C) NO. 24107 OF 2022 14 appeal was posted on 05.12.2016, due to an inadvertent contingency that was occurred in the petitioner's Counsel's office, he could not attend the hearing of Ext.P2 appeal. Consequently, the appeal was dismissed on 05.12.2016. 22. Indisputably, the restoration application was filed well within the stipulated time period of 30 days that is on 30.12.2016. The Tribunal, for the reason that, though Ext.P4 application was dated 30.12.2016 and filed on 02.01.2017, did not move the same until the 1[st] respondent proceeded with the recovery proceedings, felt that there was no bonafides on the part of the petitioner. 23. It is trite, what needs to be looked into in an application for restoration of a suit/appeal is only whether sufficient cause has been made out for the nonappearance of the party on the date the case was listed for hearing. The antecedents of the party cannot be looked into. WP(C) NO. 24107 OF 2022 15 24. On an overall analysis of the pleadings and materials on record, I hold that the Tribunal as well as the Appellate Tribunal have transgressed beyond the brief and passed the impugned orders on findings beyond the scope of the application and appeal, which is impermissible in law. 25. Going by the affidavit sworn by the petitioner, that there was a contingency in his Counsel's office, the Tribunal as well as the Appellate Tribunal ought to have taken a lenient view and restored the appeal, and then decided the appeal on its merits rather than on default, by adopting a hyper-technical and pedantic approach. 26. Viewed in the above background, I am of the view that the impugned orders warrants to be interfered with by this Court by exercising its plenary powers under Article 226 of the Constitution of India. At the same time, this Court is not oblivious of the fact that the appeal is of the year 2013, and, therefore, the Tribunal is to be directed to consider and dispose of the WP(C) NO. 24107 OF 2022 16 appeal within a time period fixed by this Court in precedence to other pending matters, which in turn would do complete justice to all parties. Resultantly, I order the writ petition as follows: - (i) Exts.P8 and P13 orders are set aside. - (ii) Ext.P2 appeal is restored back to file. - (iii) The Debt Recovery Tribunal-I, Ernakulam is directed to consider and dispose of Appeal No.12/2013, in accordance with law and as expeditiously as possible, at any rate within a period of two months from the date of receipt of a certified copy of this judgment, after affording all the parties an opportunity of being heard. - (iv) The parties are directed to mark appearance before the Tribunal on 04.09.2023, either in person or through their respective Counsel. - (v) It is made clear that, this Court has not expressed WP(C) NO. 24107 OF 2022 17 anything on the merits of Ext.P2 appeal, and the Tribunal shall decide the appeal untrammeled by any observation in this judgment or the quashed orders. - (vi) Until such time a decision is taken on Ext.P2 appeal, the delivery of the secured asset shall stand deferred. ## **Sd/-** **C.S.DIAS JUDGE** rkc/14.08.23 WP(C) NO. 24107 OF 2022 18 ## **APPENDIX OF WP(C) 24107/2022** PETITIONER EXHIBITS Exhibit.P1 A TRUE COPY OF THE ORDER DATED 15/07/2013 IN IA 1953/2013 IN OA 165/2008 Exhibit.P2 A TRUE COPY OF THE APPEAL NO.12 OF 2013 FILED BEFORE THE DRT, ERNAKULAM Exhibit.P3 A TRUE COPY OF THE ORDER DATED 21/08/2013 OF THE DRT, ERNAKULAM BENCH IN I.A.NO.2465 OF 2013 IN APPEAL NO.12 OF 2013 Exhibit.P4 A TRUE COPY OF THE RESTORATION PETITION DATED 30/12/2016 IN APPEAL 12 OF 2013 Exhibit.P5 A TRUE COPY OF THE NOTICE DATED 21/01/2019 ISSUED BY THE ADVOCATE COMMISSIONER Exhibit.P6 A TRUE COPY OF THE ADVANCE PETITION IA 245/2019 DATED 02/02/2019 IN APPEAL 12 OF 2013 Exhibit.P7 A TRUE COPY OF THE JUDGMENT DATED 11/02/2019 IN OP (DRT) 25 OF 2019 Exhibit.P8 A TRUE COPY OF THE ORDER OF THE DEBTS RECOVERY TRIBUNAL, ERNAKULAM, DATED 18/02/2019 IN IA 9 OF 2017 IN APPEAL 12 OF 2013 Exhibit.P9 A TRUE COPY OF THE ORDER DATED 01/03/2019 IN OP (DRT) 40/2019 OF THIS HON'BLE COURT Exhibit.P10 A TRUE COPY OF THE APPEAL PREFERRED BY THE PETITIONER BEFORE THE DRAT, WITHOUT EXHIBITS Exhibit.P11 A TRUE COPY OF THE ORDER DATED 08/08/2019 IN AIR 126/2019 OF THE DEBT RECOVERY APPELLATE TRIBUNAL, CHENNAI Exhibit.P12 A TRUE COPY OF THE ORDER DATED 18/12/2019 OF THIS HON'BLE COURT IN W P (C) NO 23576/2019 Exhibit.P13 A TRUE COPY OF THE ORDER DATED 01/06/2022 IN WP(C) NO. 24107 OF 2022 19 MA 13/2021 Exhibit.P14 A TRUE COPY OF THE NOTICE DATED 18/07/22 ISSUED BY THE ADVOCATE COMMISSIONER Exhibit.P15 A TRUE COPY OF THE ORDER DATED 22/07/2022 IN OP(DRT) 307/2022 RESPONDENT EXHIBITS EXHIBIT R1(A) COPY OF THE AFFIXTURE REPORT DATED 20/12/2012 SUBMITTED EBFORE RECOVERY OFFICER, DRT ERNAKULAM IN DRC NO 3012 EXHIBIT R1(B) COPY OF THE LETTER DATED 27/6/2013 ISSUED BY ASSITANT GENERAL MANAGER OF ERSTWHILE STATE BANK OF TRAVANCORE TO RECOVERY OFFICER OF DRT ERNAKULAM EXHIBIT R1(C) COPY OF THE ACKNOWLEDGMENT CARD SIGNED BY THE PETITIONER IN THE WRIT PETITION PETITIONER EXHIBITS Exhibit.P-16 A true copy of the proposal dated 24/11/2012 submitted by the Petitioner Exhibit P-17 TRUE COPY OF PROCEEDINGS DATED 04/02/2013 Exhibit P-18 TRUE COPY OF RECOVERY CERTIFICATE DATED 07/07/2008 Exhibit P-19 TRUE COPY OF THE MAIL DATED 04/02/2013 BY RECOVERY OFFICER TO 2ND RESPONDENT Exhibit P-20 A CERTIFIED COPY OF THE APPLICATION FOR GRANTING CERTIFIED COPY OF THE AUTHORIZATION CONTAINING THE PROCEEDINGS THEREIN DATED 1.10.2022