Top Hill Furniture Palace & others v. IDBI Bank Ltd & Tip Top Furniture Pvt. Ltd

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE C.S.DIAS WEDNESDAY, THE 7[TH] DAY OF JUNE 2023 / 17TH JYAISHTA, 1945 ## OP (DRT) NO. 197 OF 2023 AGAINST THE ORDER DATED 29.3.2023 IN S A 161/2021 OF DEBT RECOVERY TRIBUNAL, ERNAKULAM ## PETITIONERS/APPELLANT IN S.A.: - 1 M/S TOP HILL FURNITURE PALACE, AGED 68 YEARS DOOR NO.EP 4/619, N.H.KOTTAKKAL, EDARIKODE (P. O). MALAPPURAM - 676501 REPRESENTED BY ITS MANAGING PARTNER K.T.SAIDALAVI - 2 M/S TIP TOP FURNITURE LAND, AGED 68 YEARS DOOR NO.1/1159, N.H.KOTTAKKAL, MALAPPURAM, 676501,REPRESENTED BY ITS MANAGING PARTNER K T SAIDALAVI - 3 M/S TIP TOP FURNITURE MART, AGED 68 YEARS K. P 1/1157-1158, KOTTAKKAL (P. O). MALAPPURAM PROPRIETARY CONCERN REPRESENTED BY K T SAIDALAVI, PIN - 676501 - 4 M/S. TIP TOP FURNITURE INDUSTRIES, AGED 68 YEARS SANTHI NAGAR, PARAPPUR(P.O), MALAPPURAM REPRESENTED BY ITS MANAGING PARTNER K.T.SAIDALAVI, PIN - 676501 - 5 M/S MOZART GLOBAL FURNITURE, AGED 68 YEARS K.P 23 A-C, N.H KOTTAKKAL EDARIKODE (P. O). MALAPPURAM REPRESENTED BY ITS MANAGING PARTNER K T SAIDALAVI., PIN - 676501 - 6 K.T. SAIDALAVI, AGED 68 YEARS, S/O.KUNHIKOYA KUNNATHODI, KUNNATHODI HOUSE, ATTEERI, PUTHUR (P.O) MALAPPURAM, PIN - 676503 - 7 K.T. SULFIKER ALI, AGED 41 YEARS S/O K.T.SAIDALAVI, KUNNATHODI, KUNNATHODI HOUSE ATTEERI, PUTHUR (P.O) MALAPPURAM, PIN - 676503 - 8 A. THITHUMMA @ A. THITHEEMA, AGED 60 YEARS W/O.K.T.SAIDALAVI, KUNNATHODI HOUSE, ATTEERI, PUTHUR (P.O)MALAPPURAM, PIN - 676503 - 9 K.T.ASKARALI, AGED 38 YEARS S/O K.T.SAIDALAVI, KUNNAODI HOUSE, ATTEERI, PUTHUR (P.O),MALAPPURAM, PIN - 676503 - 10 K.T.YASAR ARAFAT, AGED 36 YEARS /O K.T SAIDALAVI, KUNNATHODI HOUSE, ATTEERI, PUTHUR (P.O) MALAPPURAM, PIN - 676503 - 11 RAHEENA KALODI, AGED 37 YEARS W/O K.T. SHAJAHAN, KUNNATHODI HOUSE, ATTEERI, PUTHUR (P.O) MALAPPURAM, PIN - 676503 - 12 BABY ASSA FATHIMA, AGED 13 YEARS D/O K.T.SHAJAHAN,KUNNATHODI HOUSE, ATTEERI, PUTHUR (P.O) MALAPPURAM MINOR REPRESENTED BY GRAND FATHER, K.T.SAIDALAVI., PIN - 676503 OP (DRT) NO. 197 OF 2023 :: 2 :: - 13 MASTER ASAM FAS, AGED 12 YEARS, S/O.K.T. SHAJAHAN, KUNNATHODI HOUSE, ATTEERI, PUTHUR (P.O) MALAPPURAM ,MINOR REPRESENTED BY GRAND FATHER K.T.SAIDALAVI, PIN - 676503 - 14 BABY ASVA FATHIMA, AGED 9 YEARS, D/O.K.T.SHAJAHAN, KUNNATHODI HOUSE, ATTEERI, PUTHUR (P.O) MALAPPURAM MINOR REPRESENTED BY GRAND FATHER, K.T.SAIDALAVI, PIN – 676503 BY ADV S.EASWARAN ## RESPONDENTS: - 1 THE IDBI BANK LTD, GHIYATHI TOWER, CHANGUVETTY, KOTTAKKAL, MALAPPURAM -676501 REPRESENTED BY ITS AUTHORISED OFFICER & CHIEF MANAGER - 2 M/S TIP TOP FURNITURE PVT. LTD, AGED 55 YEARS A COMPANY REGISTERED UNDER THE COMPANIES ACT, 1956, HAVING ITS REGISTERED OFFICE AT E.P/704 A, CHANGUVETTY, KOTTAKKAL (P.O), MALAPPURAM -676 501 REPRESENTED BY ITS LIQUIDATOR, CA. M. SURESH KUMAR, HAVING OFFICE AT- NO.27/9, NIVEDH VIKAS, PANKAJA MILL ROAD, PULIYAKULAM, COIMBATORE, PIN – 641045 BY ADV C.AJITH KUMAR THIS OP (DEBT RECOVERY TRIBUNAL) HAVING COME UP FOR ADMISSION ON 07.06.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: OP (DRT) NO. 197 OF 2023 :: 3 :: ## JUDGMENT Dated this the 7[th] day of June 2023 The Original Petition is filed under Article 226 read with 227 of the Constitution of India to set aside Ext.P7 order passed by the Debt Recovery Tribunal-1, Ernakulam (in short ‘Tribunal’) in S.A.No.161/2021. 2. The petitioner’s case is that they were applicants in S.A.161/2021 filed before the Tribunal. The petitioners 6 to 14 are the guarantors and mortgagers. The properties of the applicants 6 to 11 before the Tribunal were mortgaged and the petitioners 12 to 14 are minors, who are represented by the 6[th] petitioner. The second respondent is a company that is registered under the Companies Act. Initially, the second respondent was arrayed as the 4[th] respondent in S.A.161/21. During the pendency of proceedings, the first respondent filed an application under the Insolvency and Bankruptcy Code, 2016, before the National Company Law Tribunal, Kochi, OP (DRT) NO. 197 OF 2023 :: 4 :: which was allowed as per Ext.P1 order. Thereafter, the first respondent initiated proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short ‘SARFAESI Act’) by issuing six separate notices under Section 13(2) of the Act. Later, the first respondent filed an application under Section 14 of the Act, before the Chief Judicial Magistrate Court, Manjeri and separate orders were passed by the learned Magistrate, which are challenged by the petitioners in S.A.161/21 (Ext.P3). The first respondent resisted the application by filing Ext.P4 written statement to Ext.P3 application. The petitioners filed Ext.P5 rejoinder to Ext.P4 written statement. The Tribunal, by the impugned Ext.P7 order, has dismissed Ext.P3 application. Ext.P7 is manifestly wrong and unsustainable in law. In view of the manifest illegality in Ext.P7 order, the petitioner has invoked the writ jurisdiction and the supervisory jurisdiction of this Court under Articles 226 and 227 of OP (DRT) NO. 197 OF 2023 :: 5 :: the Constitution of India, notwithstanding the alternative statutory remedy. Hence, the original petition. 3. The first respondent has filed a counter affidavit refuting the allegations in the original petition. It is emphatically contended that the petitioners are not entitled to invoke the plenary powers of this court under Article 226 and the supervisory powers of this Court under Article 227 of the Constitution of India in view of the law laid down by the Honourable Supreme Court in Punjab National Bank v O.C.Krishnan and others [2001 (6) SCC 569]. If the petitioner is aggrieved by Ext.P7, they have a right royal remedy of appeal under Section 18 of the Act before the Appellate Authority. Hence, the original petition may be dismissed on this sole ground. 4. Heard; Sri.S.Easwaran, the learned counsel for the petitioners and Sri.C.AjithKumar, learned counsel appearing for the first respondent. In view of the judgment that I propose to pass, I dispense with notice to OP (DRT) NO. 197 OF 2023 :: 6 :: the second respondent company, which is stated to be liquidated. 5. Sri.S.Easwaran, reiterated the contentions in the original petition and placed reliance on the decisions of this court in Shibu George v. State of Kerala [2016 KHC 2940] and Canara Bank Ltd. v. Stephen John and others [2018 (3) KHC 670] to canvass the position that, as there was an apparent mistake in the application that was filed under Section 14 of the Act, the Magistrate ought not to have taken cognizance of the application and ought to have directed the first respondent to rectify the mistake before passing an order. Although this pertinent aspect was urged in Ext.P3 application, the same was not considered by the Tribunal in Ext.P7 order. As there is an infraction and non-adherence to the law laid down by this court, there is no necessity to further perpetuate the illegality by filing an appeal under Section 18 of the Act before the Appellate Authority. Therefore, this court may exercise its OP (DRT) NO. 197 OF 2023 :: 7 :: powers under Articles 226 and 227 of the Constitution of India and set aside Ext.P7. 6. Sri.C.Ajithkumar, on the contrary, submitted that in view of the plethora of precedents by the Hon’ble Supreme Court that, unless there are extraordinary circumstances, this court may not entertain a writ petition challenging orders passed by the Tribunal. Therefore, the petitioners may be relegated to exhaust their statutory remedies. In the case on hand, the Tribunal has explicitly given its reasons in paragraph 7 of Ext.P7 order that there was only a typographical mistake in the application filed under Section 14 of the Act. Furthermore, the petitioners were served with demand notices with the correct details and the same have been acknowledged by them. Accordingly, the Tribunal felt that no prejudice was caused to the petitioners in view of the typographical mistake in the application. Therefore, this Court may not sit in judgment over the impugned order in an original petition filed under Article OP (DRT) NO. 197 OF 2023 :: 8 :: 226/227 of the Constitution of India. Hence the original petition may be dismissed. 7. The point is whether Ext.P7 order warrants interference by this Court under Articles 226 and 227 of the Constitution of India. 8. The original petition is filed both under Articles 226 and 227 of the Constitution of India. 9. In Radhey Shyam v. Chhabi Nath and others [2015 5 SCC 423] the Hon’ble Supreme Court has categorically held that judicial orders of a Civil Court/Tribunal is not amenable to the writ jurisdiction under Article 226 of the Constitution of India. 10. In the light of the above declaration of law, I treat the original petition as one filed under Article 227 of the Constitution of India. 11. The petitioners case is that the first respondent has erroneously stated the dates on which the Section 13(2) OP (DRT) NO. 197 OF 2023 :: 9 :: notices were issued to them. Dehors the apparent mistake, the learned Magistrate took cognizance of Section 14 application and passed the order, which was challenged before the Tribunal. The Tribunal, without adverting to the law laid down by this court in Shibu George and Canara Bank (supra), has confirmed the order passed by the Magistrate through the impugned Ext.P7 order, which is a manifest illegality, warrants interference by this Court under Article 227 of the Constitution of India. 12. The power of superintendence of this Court under Article 227 of the Constitution of India is well settled in a host of judicial pronouncements. The earliest of the decisions on the point is the decision in Waryam Singh and another v. Amarnath and another [AIR 1954 SC 215] , wherein a five Judge Bench of the Hon’ble Supreme Court held thus: “12. This power of superintendence conferred by Article 227 is, as pointed out by Harries C.J., in Dalmia Jain Airways Ltd. v. Sukumar Mukherjee [AIR 1951 Cal 193], to be exercised most OP (DRT) NO. 197 OF 2023 :: 10 :: sparingly and only in appropriate cases in order to keep the subordinate courts within the bounds of their authority and not for correcting mere errors. xxx xxx xxx”. 13. In Shalini Shyam Shetty & anr. V. Rajendra Shankar Patil [(2010) 8 SCC 329] , the principles in Waryam Singh have been reiterated by the Hon’ble Supreme Court as follows: “49. On an analysis of the aforesaid decisions of this Court, the following principles on the exercise of High Court's jurisdiction under Article 227 of the Constitution may be formulated: (a) A petition under Article 226 of the Constitution is different from a petition under Article 227. The mode of exercise of power by the High Court under these two articles is also different. (b) In any event, a petition under Article 227 cannot be called a writ petition. The history of the conferment of writ jurisdiction on High Courts is substantially different from the history of conferment of the power of superintendence on the High Courts under Article 227 and have been discussed above. (c) High Courts cannot, at the drop of a hat, in exercise of its power of superintendence under Article 227 of the Constitution, interfere with the orders of tribunals or courts inferior to it. Nor can it, in exercise of this power, act as a court of appeal over the orders of the court or tribunal subordinate OP (DRT) NO. 197 OF 2023 :: 11 :: to it. In cases where an alternative statutory mode of redressal has been provided, that would also operate as a restrain on the exercise of this power by the High Court. (d) The parameters of interference by High Courts in exercise of their power of superintendence have been repeatedly laid down by this Court. In this regard the High Court must be guided by the principles laid down by the Constitution Bench of this Court in Waryam Singh [AIR 1954 SC 215] and the principles in Waryam Singh [AIR 1954 SC 215] have been repeatedly followed by subsequent Constitution Benches and various other decisions of this Court. (e) According to the ratio in Waryam Singh [AIR 1954 SC 215] , followed in subsequent cases, the High Court in exercise of its jurisdiction of superintendence can interfere in order only to keep the tribunals and courts subordinate to it, “within the bounds of their authority”. (f) In order to ensure that law is followed by such tribunals and courts by exercising jurisdiction which is vested in them and by not declining to exercise the jurisdiction which is vested in them. (g) Apart from the situations pointed in (e) and (f), High Court can interfere in exercise of its power of superintendence when there has been a patent perversity in the orders of the tribunals and courts subordinate to it or where there has been a gross and manifest failure of justice or the basic principles of natural justice have been flouted. (h) In exercise of its power of superintendence High Court cannot interfere to correct mere errors of law or fact or just because another view than the one taken by the tribunals or courts subordinate to OP (DRT) NO. 197 OF 2023 :: 12 :: it, is a possible view. In other words the jurisdiction has to be very sparingly exercised. (i) The High Court's power of superintendence under Article 227 cannot be curtailed by any statute. It has been declared a part of the basic structure of the Constitution by the Constitution Bench of this Court in L. Chandra Kumar v. Union of India [(1997) 3 SCC 261 : 1997 SCC (L&S) 577] and therefore abridgment by a constitutional amendment is also very doubtful. (j) It may be true that a statutory amendment of a rather cognate provision, like Section 115 of the Civil Procedure Code by the Civil Procedure Code (Amendment) Act, 1999 does not and cannot cut down the ambit of High Court's power under Article 227. At the same time, it must be remembered that such statutory amendment does not correspondingly expand the High Court's jurisdiction of superintendence under Article 227. (k) The power is discretionary and has to be exercised on equitable principle. In an appropriate case, the power can be exercised suo motu. (l) On a proper appreciation of the wide and unfettered power of the High Court under Article 227, it transpires that the main object of this article is to keep strict administrative and judicial control by the High Court on the administration of justice within its territory. (m) The object of superintendence, both administrative and judicial, is to maintain efficiency, smooth and orderly functioning of the entire machinery of justice in such a way as it does not bring it into any disrepute. The power of interference under this article is to be kept to the minimum to ensure that the wheel of justice does OP (DRT) NO. 197 OF 2023 :: 13 :: not come to a halt and the fountain of justice remains pure and unpolluted in order to maintain public confidence in the functioning of the tribunals and courts subordinate to the High Court. (n) This reserve and exceptional power of judicial intervention is not to be exercised just for grant of relief in individual cases but should be directed for promotion of public confidence in the administration of justice in the larger public interest whereas Article 226 is meant for protection of individual grievance. Therefore, the power under Article 227 may be unfettered but its exercise is subject to high degree of judicial discipline pointed out above. (o) An improper and a frequent exercise of this power will be counterproductive and will divest this extraordinary power of its strength and vitality. 14. Recently, the Hon’ble Supreme Court in M/S Garment Craft vs Prakash Chand Goel [(2022) 4 SCC 181] has held as follows: “15. Having heard the counsel for the parties, we are clearly of the view that the impugned order [Prakash Chand Goel v. Garment Craft, 2019 SCC OnLine Del 11943] is contrary to law and cannot be sustained for several reasons, but primarily for deviation from the limited jurisdiction exercised by the High Court under Article 227 of the Constitution of India. The High Court exercising supervisory jurisdiction does not act as a court of first appeal to reappreciate, reweigh the evidence OP (DRT) NO. 197 OF 2023 :: 14 :: or facts upon which the determination under challenge is based. Supervisory jurisdiction is not to correct every error of fact or even a legal flaw when the final finding is justified or can be supported. The High Court is not to substitute its own decision on facts and conclusion, for that of the inferior court or tribunal. [Celina Coelho Pereira v. Ulhas Mahabaleshwar Kholkar, (2010) 1 SCC 217 : (2010) 1 SCC (Civ) 69] The jurisdiction exercised is in the nature of correctional jurisdiction to set right grave dereliction of duty or flagrant abuse, violation of fundamental principles of law or justice. The power under Article 227 is exercised sparingly in appropriate cases, like when there is no evidence at all to justify, or the finding is so perverse that no reasonable person can possibly come to such a conclusion that the court or tribunal has come to. It is axiomatic that such discretionary relief must be exercised to ensure there is no miscarriage of justice. 16. Explaining the scope of jurisdiction under Article 227, this Court in Estralla Rubber v. Dass Estate (P) Ltd. [Estralla Rubber v. Dass Estate (P) Ltd., (2001) 8 SCC 97] has observed : (SCC pp. 101-102, para 6) “6. The scope and ambit of exercise of power and jurisdiction by a High Court under Article 227 of the Constitution of India is examined and explained in a number of decisions of this Court. The exercise of power under this article involves a duty on the High Court to keep inferior courts and tribunals within the bounds of their authority and to see that they do the duty expected or required of them in a legal manner. The High Court is not vested with any unlimited prerogative to correct all kinds of hardship or wrong decisions made within the limits of OP (DRT) NO. 197 OF 2023 :: 15 :: the jurisdiction of the subordinate courts or tribunals. Exercise of this power and interfering with the orders of the courts or tribunals is restricted to cases of serious dereliction of duty and flagrant violation of fundamental principles of law or justice, where if the High Court does not interfere, a grave injustice remains uncorrected. It is also well settled that the High Court while acting under this Article cannot exercise its power as an appellate court or substitute its own judgment in place of that of the subordinate court to correct an error, which is not apparent on the face of the record. The High Court can set aside or ignore the findings of facts of an inferior court or tribunal, if there is no evidence at all to justify or the finding is so perverse, that no reasonable person can possibly come to such a conclusion, which the court or tribunal has come to.” 15. Recently, the Hon’ble Supreme Court in South Indian Bank Limited v. Naveen Mathew Philip [2022 LiveLaw SC 230] after adverting to the earlier judicial pronouncements has categorically declared the law that High Court shall not, unless in extra ordinary circumstances, interfere in proceedings initiated under the SARFAESI Act in writ petitions. OP (DRT) NO. 197 OF 2023 :: 16 :: 16. Indisputably the petitioners have an alternative statutory remedy of appeal under Section 18 of the Act, to challenge Ext.P7 order before the Appellate Tribunal. 17. On a consideration of the pleadings and materials on record, and after appreciating the arguments of the learned Counsel and the law laid down by the Honourable Supreme Court in the aforecited precedents, I do not find any extraordinary circumstances made out in this original petition to entertain the original petition under Article 227 of the Constitution of India. Nonetheless, it would be upto the petitioners to workout their statutory remedies as provided under law. The undertaking made by the learned counsel for the first respondent before this Court on 09.05.2023, that the first respondent would not proceed against the properties of the second respondent shall continue to remain in force for a period of one month. The petitioners would be at liberty to approach the Appellate Authority and seek exclusion of time period from 21.4.2023 till today, for calculating the period of delay in filing the OP (DRT) NO. 197 OF 2023 :: 17 :: appeal. If such application is filed, the same shall be considered by Tribunal in accordance with law. Resultantly, the original petition is dismissed; without prejudice to the right of the petitioners to workout their statutory remedies in accordance with law. SD/- C.S.DIAS JUDGE jes OP (DRT) NO. 197 OF 2023 :: 18 :: ## APPENDIX OF OP (DRT) 197/2023 ## PETITIONERS’ EXHIBITS: - ExhibitP1 COPY OF THE ORDER DATED 8-2-2023 IN IA (IBC) NO. 444/KOB/2022 IN C.P (IB) NO. 29/KOB/2021 ON THE FILES OF NCLT KOCHI - ExhibitP2 COPY OF THE MINUTES OF MEETING OF COC HELD ON 26-10-2022 - ExhibitP3 COPY OF SA NO 161 OF 2021 ON THE FILES OF DRT- 1 ERNAKULAM - ExhibitP4 COPY OF THE WRITTEN STATEMENT FILED BY THE 1ST RESPONDENT HEREIN TO SA NO 161 OF 2021 ON THE FILES OF DRT-1 ERNAKULAM - ExhibitP5 COPY OF THE REJOINDER FILED BY THE PETITIONERS HEREIN IN SA NO 161 OF 2021 ON THE FILES OF DRT-1 ERNAKULAM - ExhibitP6 COPY OF THE MEMO DATED 16-2-2023 FILED BY THE 1ST RESPONDENT HEREIN IN SA NO 161 OF 2021 ON THE FILES OF DRT-1 ERNAKULAM - ExhibitP7 COPY OF THE ORDER DATED 29-3-2023 IN SA NO 161 OF 2021 ON THE FILES OF DRT-1 ERNAKULAM - Exhibit P8 PHOTOGRAPHS OF THE MACHINERIES INSTALLED IN THE PREMISES OF THE 2ND PETITIONER ## RESPONDENTS’ EXHIBITS: - Exhibit-R1(a) TRUE COPY OF THE DEED OF HYPOTHECATION DATED 27/03/2015 EXECUTED BY 2ND PETITIONER THROUGH ITS PARTNERS, IN FAVOUR OF 1ST RESPONDENT. - Exhibit-R1(b) TRUE COPY OF THE SECTION 13(2) NOTICE DATED 12/04/2019 ISSUED BY 1ST RESPONDENT // TRUE COPY // P.S. TO JUDGE