w w w . L a w y e r S e r v i c e s . i n



M/s. Auto Engineering & Others v/s State Bank of India & Others


Company & Directors' Information:- S M AUTO ENGINEERING PVT LTD [Active] CIN = U34300MH1976PTC019348

Company & Directors' Information:- E R AUTO PRIVATE LIMITED [Active] CIN = U34300HR2002PTC035002

Company & Directors' Information:- K Y AUTO PRIVATE LIMITED [Active] CIN = U50300JK2013PTC003849

Company & Directors' Information:- J. S. B. AUTO PRIVATE LIMITED [Active] CIN = U50300DL2010PTC198144

Company & Directors' Information:- T & R AUTO PRIVATE LIMITED [Active] CIN = U50200TG2012PTC082553

Company & Directors' Information:- D R D B AUTO PRIVATE LIMITED [Strike Off] CIN = U74899DL1988PTC032028

Company & Directors' Information:- A-1 AUTO PVT. LTD [Active] CIN = U51502MH2006PTC165934

Company & Directors' Information:- AUTO INDIA PRIVATE LIMITED [Active] CIN = U65991TN1984PTC010923

Company & Directors' Information:- Z-AUTO PRIVATE LIMITED [Active] CIN = U50500UP2021FTC153664

Company & Directors' Information:- K V AUTO LTD [Strike Off] CIN = U28932PB1994PLC014522

Company & Directors' Information:- K G N AUTO PRIVATE LIMITED [Active] CIN = U74900PN2015PTC157675

Company & Directors' Information:- J. S. AUTO PRIVATE LIMITED [Active] CIN = U34102UP1986PTC008173

Company & Directors' Information:- P S AUTO PRIVATE LIMITED [Active] CIN = U34300MH1999PTC120052

Company & Directors' Information:- P M C AUTO LIMITED [Strike Off] CIN = U34300DL1995PLC071849

Company & Directors' Information:- B C C AUTO PVT LTD [Active] CIN = U74899DL1992PTC051439

Company & Directors' Information:- H H AUTO PRIVATE LIMITED [Amalgamated] CIN = U34100DL2009PTC192880

Company & Directors' Information:- M M AUTO PRIVATE LIMITED [Strike Off] CIN = U50300UP1988PTC009527

Company & Directors' Information:- G B AUTO PRIVATE LIMITED [Strike Off] CIN = U50400MH1998PTC114977

Company & Directors' Information:- R K AUTO ENGINEERING PRIVATE LIMITED [Active] CIN = U18101DL2001PTC109348

Company & Directors' Information:- M C AUTO PVT LTD [Under Process of Striking Off] CIN = U34300DL1977PTC008716

Company & Directors' Information:- E N B AUTO (INDIA) PRIVATE LIMITED [Active] CIN = U34300PB1988PTC008040

Company & Directors' Information:- K D R AUTO PRIVATE LIMITED [Active] CIN = U34300DL2005PTC132732

Company & Directors' Information:- K S R AUTO PRIVATE LIMITED [Active] CIN = U34300PN2011PTC140367

Company & Directors' Information:- AUTO (INDIA) ENGINEERING LIMITED [Amalgamated] CIN = U34300TN2003PLC050368

Company & Directors' Information:- J P AUTO PVT LTD [Strike Off] CIN = U50402WB1991PTC052147

Company & Directors' Information:- E G AUTO PRIVATE LIMITED [Converted to LLP] CIN = U74899DL1987PTC027016

Company & Directors' Information:- R AND H AUTO INDIA PVT LTD [Active] CIN = U74899DL1982PTC013349

Company & Directors' Information:- D D AUTO PRIVATE LIMITED [Active] CIN = U74899DL1985PTC022306

Company & Directors' Information:- C R AUTO PRIVATE LIMITED [Strike Off] CIN = U34300PB1997PTC020137

Company & Directors' Information:- B S K AUTO PRIVATE LIMITED [Strike Off] CIN = U29246PB1997PTC020704

Company & Directors' Information:- K AND K AUTO PRIVATE LIMITED [Active] CIN = U29199TZ1996PTC007431

Company & Directors' Information:- J K M AUTO PRIVATE LIMITED [Strike Off] CIN = U34300DL2005PTC143914

Company & Directors' Information:- K AND K AUTO PRIVATE LIMITED [Not available for efiling] CIN = U34300DL1988PTC032426

Company & Directors' Information:- H B AUTO (INDIA) PRIVATE LIMITED [Active] CIN = U50401OR1988PTC002075

Company & Directors' Information:- S B G AUTO PRIVATE LIMITED [Strike Off] CIN = U50101MH2006PTC158566

Company & Directors' Information:- O P AUTO PRIVATE LIMITED [Active] CIN = U51103DL2008PTC181391

Company & Directors' Information:- D K S AUTO PVT LTD [Strike Off] CIN = U34300DL2001PTC111465

Company & Directors' Information:- C L K AUTO PRIVATE LIMITED [Strike Off] CIN = U34300DL2003PTC118551

Company & Directors' Information:- K B H AUTO PRIVATE LIMITED [Strike Off] CIN = U74899DL2000PTC107258

Company & Directors' Information:- AUTO INDIA LIMITED [Not available for efiling] CIN = U99999MH1948PLC006176

Company & Directors' Information:- R K AUTO INDIA PVT LTD [Strike Off] CIN = U99999DL2000PTC901836

    L.P.A. No. 415 of 2015

    Decided On, 27 February 2019

    At, High Court of Jharkhand

    By, THE HONOURABLE MR. JUSTICE D.N. PATEL & THE HONOURABLE MR. JUSTICE B.B. MANGALMURTI

    For the Applicants: Vijay Gopal, Sudhir Sahay, Advocates. For the Respondents: Rajesh Kumar, Rahul Gupta, Radha Krishna Gupta, Achinto Sen, Bhupal Krishna Prasad, Advocates.



Judgment Text

D.N. Patel, J.

Oral

1.This Letters Patent Appeal has been preferred by original respondent nos. 2, 3 and 4 of the writ petition bearing W.P.(C) No. 1736 of 2010. The writ petition was preferred by the present respondent nos. 2 and 3. The writ petition was allowed by the learned Single Judge vide judgment and order dated 10th September, 2014 and hence, original respondent nos. 2, 3 and 4 have preferred the present Letters Patent Appeal.

2. Factual Matrix:

These appellants (original respondent nos. 2, 3 and 4 in the writ petition bearing W.P.(C) No. 1736 of 2010 had taken loan of sizeable amount from the respondent no.1-State Bank of India against which the immovable property was mortgaged.

The loan amount was not paid by the appellants-borrowers and hence, mortgage suit was filed by the bank against these appellants bearing Mortgage Suit No. 21 of 1994 in the Court of Sub-JUDGE-I, Ranchi. The suit was decreed and legally payable amount was found at Rs. 13,13,573/- plus interest at the rate of 18.75 per cent per annum.

Because of new enactment viz. Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as "the Act, 1993" for the sake of brevity), the matter was transferred to Patna in the Debts Recovery Tribunal and it was renumbered as Patna Transfer Case No. 138 of 1998.

On 18th February, 2002, a certificate was issued for Rs. 13,13,573/- with interest at the rate of 18.75 per cent. The recovery proceedings were initiated.

Again upon bifurcation of State of Jharkhand from the erstwhile State of Bihar, the case was again transferred to Debts Recovery Tribunal, Ranchi, being R.P. Case no. 140 of 2002. Order was passed by the Debts Recovery Tribunal, Ranchi on 22nd March, 2005 for attachment of the mortgaged property of these appellants. This order was passed by the Recovery Officer, Debts Recovery Tribunal, Ranchi. Direction was given to sale the mortgaged property by public auction on 7th February, 2006. The date of auction of the mortgaged property was fixed on 21st March, 2006 and actual auction has taken place on 27th April, 2006.

Respondent nos. 2 and 3 (original petitioners in W.P.(C) No. 1736 of 2010), the highest bidders, had offered Rs. 27,31,000/- and the auction sale process was confirmed on 21st August, 2006.

Possession of the mortgaged property was also taken over by respondent nos. 2 and 3 (original petitioners) on 26th August, 2006.

Meanwhile, one Mrs. Bina Singh-respondent no.4 in this Letters Patent Appeal (respondent no.5 in the writ petition) claimed to be an owner of the property by virtue of agreement to sale dated 14th August, 2002. The so called consideration was by way of cash which is approximately Rs. 4,50,000/-. This claim was brushed aside by the Debts Recovery Tribunal, Ranchi.

Judgment debtors i.e. present appellants preferred Miscellaneous Appeal before the Debts Recovery Tribunal, Ranchi against an order passed by the Debts Recovery Tribunal, Patna in Patna Transfer Case No. 138 of 1998 for setting aside ex-parte decree. This contention was not accepted and Miscellaneous Appeal No. 28 of 2006 preferred by these appellants was dismissed vide order dated 1st August, 2006 by the Presiding Officer, Debts Recovery Tribunal, Ranchi.

One more Miscellaneous Appeal was preferred by these appellants (judgment debtors) being Miscellaneous Appeal No. 17 of 2006 before the Debts Recovery Tribunal, Ranchi for setting aside auction proceedings on the ground that so called compromise was arrived at with the bank on 21st March, 2006 for Rs. 9,95,767.93.

As stated hereinabove, already an order for auction sale was passed on 7th February, 2006 and as the auction has already been taken place on 27th April, 2006 and as the possession of the property has also been taken over by the highest bidders (respondent nos. 2 and 3 in this Letters Patent Appeal) on 26th August, 2006 the said Miscellaneous Appeal was dismissed.

The said Miscellaneous Appeal No. 17 of 2006 was dismissed by the Debts Recovery Tribunal, Ranchi. Even otherwise also, the State Bank of India is fetching approximately three times the amount from the highest bidders.

Against the orders passed in M.A. No. 28 of 2006 as well as M.A. No. 17 of 2006, both dated 1st August, 2006, by the Debts Recovery Tribunal, Ranchi, an Appeal was preferred by these appellants before the Debts Recovery Appellate Tribunal, Kolkata being Appeal No. 15 of 2008. This Appeal was allowed by the Debts Recovery Appellate Tribunal, Kolkata vide order dated 10th December, 2009 and the auction of the mortgaged property was set aside.

Being aggrieved and feeling dissatisfied by the aforesaid order of the Debts Recovery Appellant Tribunal, Kolkata in Appeal No. 15 of 2008, the auction purchasers preferred the writ petition being W.P.(C) No. 1736 of 2010 before this Court. Learned Single Judge allowed the writ petition vide judgment and order dated 10th September, 2014 and the order passed by the Debts Recovery Appellate Tribunal, Kolkata in Appeal No. 15 of 2008 dated 10th December, 2009 was quashed and set aside. Hence, the judgment debtors-original respondent nos. 2, 3 and 4 of the writ petition have preferred the present Letters Patent Appeal.

3. Arguments canvassed by the counsel for the appellants (original respondent nos. 2, 3 and 4 in W.P.(C) No. 1736 of 2010):

Counsel appearing for the appellants submitted that these appellants are ready and willing to deposit compromised amount which is at Rs. 9,95,767.93 with interest out of which Rs. 9,95,767.93 was already deposited with the State Bank of India on 21.03.2006. This aspect of the matter has not been properly appreciated by the learned Single Judge and hence, judgment and order delivered by the learned Single Judge in W.P.(C) No. 1736 of 2010 dated 10th September, 2014 deserves to be quashed and set aside. This is the main and the only argument canvassed by the counsel for the appellants repeatedly. Nothing beyond this has been argued out by the counsel for the appellants.

Despite the facts which are mentioned in para-4 of this Letters Patent Appeal about ex-parte order, passed by the learned Tribunal, but, after perusing the record of the writ petition by the counsel for the appellants, this ground has not been canvassed by the counsel for the appellants. Thus, what is written in para 4 of this Letters Patent Appeal has not been argued out by the counsel for the appellants. Counsel for the appellants is satisfied that there was a due representation of these appellants before the learned Single Judge by the Advocate.

4. Arguments canvassed by the counsel for respondent nos. 2 and 3:

Counsel appearing for respondent nos. 2 and 3 (original petitioners in W.P.(C) No. 1736 of 2010) submitted that Mortgage Suit No. 21 of 1994 filed by the bank against these appellants was decreed in favour of the bank after transfer of the case as Patna Transfer Case No. 138 of 1998 before the Debts Recovery Tribunal, Patna and the certificate of Rs. 13,13,573/- with interest at the rate of 18.75 per cent per annum was issued. Thereafter, the proceedings were transferred to Debts Recovery Tribunal, Ranchi being R.P. Case No. 140 of 2002 in which directions were given for attachment of the property and auction thereof. Later on public auction was taken place on 27th April, 2006 and respondent nos. 2 and 3, the highest bidders offered Rs. 27,31,000/- for the property in question and the said amount was paid and the auction sale was confirmed on 21st August, 2006.

It is further submitted by the counsel for respondent nos. 2 and 3 that all possible types of arguments were canvassed directly and indirectly by the judgment debtors. One Mrs. Bina Singh-respondent no. 4 in L.P.A. (original respondent no. 5 in the writ petition) claimed to be an owner of the property on the basis of agreement to sale dated 14th August, 2002. This claim was set aside by the Debts Recovery Tribunal, Ranchi. Miscellaneous Appeal No. 28 of 2006 was also preferred by the judgment debtors against the order passed by the Debts Recovery Tribunal, Patna in Patna Transfer Case No. 138 of 1998. This Miscellaneous Appeal was also dismissed vide order dated 1st August, 2006 by the Debts Recovery Tribunal, Ranchi. One more litigation was generated by the judgment debtors-appellants being Miscellaneous Appeal No. 17 of 2006 for setting aside the public auction on the ground of compromise arrived at between the bank and the judgment debtors for Rs. 9,95,767.93. This Miscellaneous Appeal was also dismissed by the Debts Recovery Tribunal, Ranchi vide order dated 1st August, 2006. Thus, the auction sale was maintained as it is and the possession of the property has been taken over by respondent nos. 2 and 3 on 26th August, 2006.

The Appeal preferred by the judgment debtors being Appeal No. 15 of 2008 before the Debts Recovery Appellate Tribunal, Kolkata has set aside the auction vide order dated 10th December, 2009, without appreciating the fact that respondent nos. 2 and 3-auction purchasers have offered Rs. 27,31,000/- whereas the so called compromise was arrived at Rs. 9,95,767.93 and that too the date on which the auction had already been started and later on completed on 21st March, 2006. Mortgage Suit No. 21 of 1994 was going on since 1994 which was decreed in favour of the bank and later on the bank has compromised on 21st March, 2006 i.e. after 12 years. The total debt is for Rs. 9,97,767.93 whereas, respondent nos. 2 and 3 (original petitioners) have already purchased the property in question for Rs. 27,31,000/- and the auction sale was confirmed on 21st August, 2006 and possession of the property was also taken over by respondent nos. 2 and 3. These aspects of the matters have not been properly appreciated by the Debts Recovery Appellate Tribunal, Kolkata while deciding Appeal No. 15 of 2008 and hence, no error has been committed by the learned Single Judge while allowing the writ petition preferred by respondent nos. 2 and 3 by quashing and setting aside the Debts Recovery Appellate Tribunal, Kolkata order dated 10th December, 2009 in Appeal No. 15 of 2008.

Counsel for respondent nos. 2 and 3 has placed reliance upon the decision rendered by the Hon'ble Supreme Court reported in (2010) 8 sCc 129. Hence also, this Letters Patent Appeal may not be entertained by this Court.

Counsel for respondent nos. 2 and 3 (original petitioners in the writ petition) has further submitted, as stated in paragraph no. 17 of the writ petition, that the so called compromise upon which these appellants are harping have got no value in the eye of law looking to the Reserve Bank of India guidelines (Annexure-3 of this Letters Patent Appeal). It is further submitted by the counsel for respondent nos. 2 and 3 that as per the Reserve Bank of India guidelines if a decree is already passed in a suit filed by the bank one time settlement guidelines are not applicable. To fortify this contention, learned counsel appearing for respondent nos. 2 and 3 has placed reliance upon the decision rendered by the Hon'ble Supreme Court reported in (2005) 10 SCC 265. On the basis of the aforesaid decision, it is further submitted by the counsel for respondent nos. 2 and 3 that one time settlement can be offered only during the pendency of the recovery proceedings, but, not once the decree is passed against the judgment debtor.

5. Arguments canvassed by the counsel for respondent no.1. (original respondent no.1 in the writ petition).

Counsel appearing for the State Bank of India has adopted the arguments canvassed by the counsel for respondent nos. 2 and 3 (original petitioners) and has submitted that there is no question whatsoever arises of one time settlement for Rs. 9,95,767.93 on the date of auction, especially when the auction purchasers have already offered Rs. 27,31,000/- and has also deposited Rs. 27,31,000/-, so called compromise has also been brushed aside by the Debts Recovery Tribunal, Ranchi vide order dated 1st August, 2006 in Miscellaneous Appeal No. 17 of 2006 and the State Bank of India has never challenged the said order. The State Bank of India has accepted the order of Debts Recovery Tribunal, Ranchi in Misc. Appeal No. 17 of 2006 meaning thereby to the compromise arrived at with judgment debtors for Rs. 9,95,767.93 is not acceptable to the State Bank of India especially when the highest bidders respondent nos. 2 and 3 (original petitioners) have already offered Rs. 27,31,000/- for the very same mortgaged property.

REASONS

6. Having heard counsels for both the sides and looking to the facts and circumstances of the case, we, see no reason to entertain this Letters Patent Appeal mainly for the following facts, reasons and judicial pronouncements:

(i) These appellants have taken loan of sizeable amount from respondent no.1-State Bank of India. As the amount was not paid, the State Bank of India filed Mortgage Suit No. 21 of 1994 before the Sub Judge-I, Ranchi for recovery of the loan amount with interest.

(ii) Because of enactment viz. Recovery of Debts Due to Banks and Financial Institutions Act, 1993, the matter was transferred to Debts Recovery Tribunal, Patna being Patna Transfer Case No. 138 of 1998 where the suit was decreed in favour of the bank and a certificate of Rs. 13,13,573/- was issued with interest at the rate of 18.75 per cent per annum vide order dated 18th February, 2002.

(iii) The recovery proceedings were started on 12th March, 2002. The matter was transferred thereafter to Debts Recovery Tribunal, Ranchi being Recovery Proceeding Case No. 140 of 2002.

(iv) Immovable property which was mortgaged was ordered to be attached on 22nd March, 2005. Further direction was given to put the mortgaged property for sale by public auction vide order dated 7th February, 2006.

(v) Auction date was also fixed by the Debts Recovery Tribunal, Ranchi on 21st March, 2006 and actual auction has taken on 27th April, 2006 wherein respondent nos. 2 and 3 (original petitioners in the writ petition) had offered the highest price and the auction sale was confirmed on 21st August, 2006. Respondent nos. 2 and 3 (original petitioners) offered Rs. 27,31,000/- and the possession of the property was also handed over to the auction purchasers-respondent nos. 2 and 3 (original petitioners) on 26th August, 2006.

(vi) It further appears from the facts of the case that all possible types of pleas have been taken by the judgment debtors either directly or indirectly to retain the property without paying debts to the bank.

(vii) One Mrs. Bina Singh claimed to be an owner of the property, who is respondent no. 4 in this Letters Patent Appeal (original respondent no. 5 in the writ petition). Her claim was based on agreement to sale dated 14th August, 2002. The claim was made on 9th May, 2005 by Mrs. Bina Singh that she is an owner of the property in question. This claim was brushed aside by the Debts Recovery Tribunal, Ranchi and auction date was fixed on 21st March, 2006, actual auction was taken on 27th April, 2006, the auction sale was confirmed on 21st August, 2006 and the possession of the property was handed over to the highest bidders on 26th August, 2006.

(viii) Miscellaneous Appeal was preferred by these appellants (judgment debtors) against the order passed by the Debts Recovery Tribunal, Patna, in Patna Transfer Case No. 138 of 1998 being Miscellaneous Appeal No. 28 of 2006. This Miscellaneous Appeal was dismissed by the Debts Recovery Tribunal, Ranchi vide order dated 1st August, 2006.

(ix) One more Miscellaneous Appeal was preferred by these appellants-judgment debtors being Miscellaneous Appeal No. 17 of 2006 on the ground that these appellants have entered into compromise with the State Bank of India on 21st March, 2006 for Rs. 9,95,767.93 and hence, the auction sale should be quashed and set aside. This Miscellaneous Appeal was dismissed by the Debts Recovery Tribunal, Ranchi vide order dated 1st August, 2006.

(x) Infact, no error has been committed by the Debts Recovery Tribunal, Ranchi while deciding M.A. No. 17 of 2006 vide order dated 1st August, 2006 mainly for the reasons that:

(a) the mortgage suit was filed in the year 1994 thereafter it was transferred to Debts Recovery Tribunal, Patna where the decree was passed in favour of the bank. Recovery proceedings were also initiated. Mortgaged property was attached and was put to public auction on 21st March, 2006 and on the same day the so called compromise was arrived at Rs. 9,95,767.93 whereas, in the public auction the highest bidders-respondent nos. 2 and 3 (original petitioners) had offered Rs. 27,31,000/-. Thus, the amount offered by the highest bidders is approximately 2.5 times more than the compromised amount.

(b) the bank authority appears to be much more lenient than necessary. It ought to be kept in mind by the high ranking administrative officers of the State Bank of India that no compromise can be arrived at after the decree has already been passed in a suit filed by the bank.

(c) either there is too much ignorance on the part of the State Bank of India or there is a connivance by the State Bank of India and hence, no error was committed by the Debts Recovery Tribunal while dismissing M.A. No. 17 of 2006 vide order dated 1st August, 2006. No appeal has been preferred by the State Bank of India against the order passed by the Debts Recovery Tribunal, Ranchi in M.A. No. 17 of 2006 meaning thereby to the State Bank of India is also compromising the debt, by compromising the principles especially the guidelines issued by the Reserve Bank of India (Annexure-3 to the memo of this Letters Patent Appeal).

(d) Looking to Annexure-3 to the memo of this Letters Patent Appeal which are guidelines, issued by the Reserve Bank of India, no compromise can be arrived at by the State Bank of India once the decree has already been passed in favour of the bank or once the decree has already been passed against a loanee.

(e) the State Bank of India could have arrived at one time settlement during pendency of Mortgage Suit No. 21 of 1994 (after transfer it was renumbered as Patna Transfer Case No. 138 of 1998). Bank could not compromise with the judgment debtor after passing of the decree. Hence also, the so called compromise between the bank and these appellants for a meagre amount of Rs. 9,95,767.93 has got no value in the eye of law. These aspects of the matter have been lost sight of by the Debts Recovery Appellant Tribunal, Kolkata while deciding Appeal No. 15 of 2008 vide order dated 10th December, 2009. Infact, no error was committed by the Debts Recovery Tribunal, Ranchi while deciding M.A. No. 17 of 2006 vide order dated 1st August, 2006.

(f) it has been held by the Hon'ble Supreme Court in the case of X-Calibre Knives (P) Ltd. & Another vs. State Bank of India reported in (2005) 10 SCC 265 especially in paragraph nos. 3 and 6 as under:

"3. We are unable to accept the contention of the appellants that the guidelines of Reserve Bank of India come into play and that the Bank was unjustified in not settling the dues in accordance with the revised guidelines. The guidelines of 29-12003 lay down: "These guidelines will cover cases on which the banks have initiated action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and also cases pending before courts/DRTs/BIFR, subject to consent decree being obtained from the courts/DRTs/BIFR."

6. The stand taken by the respondent Bank is reinforced by the clarification issued by Reserve Bank of India in its communication dated 7-10-2003 that the guidelines were not applicable to cases where decrees/necessary orders have already been passed by the Tribunal." (Emphasis supplied)

In view of the aforesaid guidelines issued by the Reserve Bank of India (Annexure-3 to the memo of this Letters Patent Appeal) as well as in view of the aforesaid decision rendered by the Hon'ble Supreme Court of India, the so called compromise arrived at by the State Bank of India, upon which these appellants are harping repeatedly for Rs. 9,95,767.93, is violative of Reserve Bank of India guidelines and is running counter to the decision rendered by the Hon'ble Supreme Court and hence, no error was committed by the Debts Recovery Tribunal, Ranchi while deciding M.A. No. 17 of 2006 vide judgment and order dated 1st August, 2006.

(xi) It further appears from the facts of the case that these appellants had preferred Appeal No. 15 of 2008 before the Debts Recovery Appellate Tribunal, Kolkata, challenging the order passed by the Debts Recovery Tribunal, Ranchi in Miscellaneous Appeal No.28 of 2006 as well as in Miscellaneous Appeal No. 17 of 2006, both orders are dated 1st August, 2006 passed by the Debts Recovery Tribunal, Ranchi. It appears that during course of the arguments of Appeal No. 15 of 2008, these appellants had not pressed the order passed by the Debts Recovery Tribunal in M.A. No. 28 of 2006. Thus, the only argument canvassed by these appellants in Appeal No. 15 of 2008 before the Debts Recovery Appellate Tribunal, Kolkata was against the order passed by the Debts Recovery Tribunal, Ranchi in M.A. No. 17 of 2006 which is mainly about the so called compromise with the bank on 21st March, 2006-the date on which the public auction had already taken place. The learned Debts Recovery Appellate Tribunal, Kolkata allowed the appeal preferred by these appellants without appreciating the fact that the State Bank of India had no power, jurisdiction and authority to enter into a compromise with the judgment debtor. Once the mortgage suit is decided and decree is already passed in favour of the bank the State Bank of India seized to have power to compromise especially looking to Reserve Bank of India guidelines which are at Annexure-3 to the memo of this Letters Patent Appeal. This compromise is also running counter to the ratio decidendi propounded by the Hon'ble Supreme Court of India in the decision reported in (2005) 10 SCC 265 (para 3 and 6 thereof). These aspects of the matter were not properly appreciated by the Debts Recovery Appellate Tribunal, Kolkata while deciding Appeal No. 15 of 2008 vide judgment and order dated 10th December, 2009 hence, the judgment and order delivered by the Debts Recovery Appellate Tribunal, Kolkata in Appeal No. 15 of 2008 deserves to be quashed and set aside. These aspects of the matter have been properly appreciated by the learned Single Judge while deciding the writ petition preferred by respondent nos. 2 and 3. No error has been committed by the learned Single Judge while deciding W.P.(C) No.1736 of 2010 vide judgment and order dated 10th September, 2014 and we see no reason to take any other view than what is taken by the learned Single Judge.

(xii) It has been held by the Hon'ble Supreme Court in the case of Indian Bank vs. Blue Jaggers Estates Limited & others reported in (2010)8 SCC 129 especially in paragraph no. 25 as under:

"25. The Court cannot lose sight of the fact that the bank is a trustee of public funds. It cannot compromise the public interest for benefiting private individuals. Those who take loan and avail financial facilities from the bank are duty-bound to repay the amount strictly in accordance with the terms of the contract. Any lapse in such matters has to be viewed seriously and the bank is not only entitled but duty-bound to recover the amount by adopting all legally permissible methods. Parliament enacted the Act because it was found that legal mechanism available till then was wholly insufficient for recovery of the outstanding dues of banks and financial institutions. Reference in this connection deserves to be made to the judgments of this Court in Delhi Transport Corpn. vs. D.T.C. Mazdoor Congress, Central Bank of India vs. State of Kerala and United Bank of India vs. Satyawati Tondon." (Emphasis supplied)

(xiii) It also appears from the facts of the case that one Mrs. Bina Singh-respondent no. 4 (original respondent no. 5 of the writ petition) has stated that she is an owner of the property in question on the basis of agreement to sale dated 14th August, 2002. This claim has also been brushed aside by the Debts Recovery Tribunal, Ranchi and has rightly given a direction to attach the mortgaged property and to sale the same by public auction and auction date has also rightly been fixed by the Debts Recovery Tribunal, Ranchi. Looking to the said agreement to sale contention, sizeable amount of cash has been paid by Mrs. Bina Singh-respondent no.4. We therefore, request the Principal Commissioner of Income Tax, Ranchi to look into the matter and the contentions of Mrs. Bina Singh-respondent no. 4 in this Letters Patent Appeal (respondent no. 5 in W.P.(C) No. 1736 of 2010). She has also filed counter affidavits in the writ petition as well as in this Letters Patent Appeal. We also direct the Registrar General of this Court to supply copy of the writ petition alongwith all its annexures and the affidavits to the Principal Commissioner of Income Tax, Ranchi. We also direct the Registrar General of this Court to supply copy of this Letters Patent Appeal alongwith all its annexures and the affidavits filed in this Letters Patent Appeal to the Principal Commissioner of Income Tax, Ranchi and all other relevant documents filed in the writ petition as well as in the Letters Patent Appeal shall also be supplied so that proper action can be initiated by the Principal Commissioner of Income Tax, Ranchi, if need arises. It has been pointed out in the affidavit filed by Mrs. Bina Singh-respondent no. 4 in this Letters Patent Appeal that she

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has paid Rs. 4,50,000/- as well as she has constructed some property. The Principal Commissioner of Income Tax, Ranchi shall go in all the details how the amount has been obtained by Mrs. Bina Singh after giving adequate opportunity of being heard to Mrs. Bina Singh-respondent no.4. (xiv) It further appears from the facts of the case that the so called amount of compromise which is at Rs. 9,95,767.93 has also been paid by these appellants which is absolutely in violation of the Reserve Bank of India guidelines (Annexure-3 to this Letters Patent Appeal) and against the decision rendered by the Hon'ble Supreme Court reported in (2005) 10 SCC 265. It further appears that these appellants have also deposited in cash the amount of Rs. 9,95,767.93. If it is so, the Principal Commissioner of Income Tax, Ranchi shall also enquire into these aspects of the matter from these appellants and will take all the legal actions against these appellants after giving adequate opportunity of being heard to these appellants. (xv) We also direct the Registrar General of this Court as well as the Debts Recovery Tribunal, Ranchi to supply all the papers to the Principal Commissioner of Income Tax, Ranchi which are relevant to this case. (xvi) We also direct the State Bank of India-respondent no.1, Main Branch, Court Compound, Ranchi to cooperate with the Principal Commissioner of Income Tax, Ranchi, as and when any details are required or called for by the said officer. 7. In view of the aforesaid facts, reasons and judicial pronouncements, no error has been committed by the learned Single Judge while deciding W.P.(C) No. 1736 of 2010 vide judgment and order dated 10th September, 2014. We see no reason to take any other view than what is taken by the learned Single Judge. There is no substance in this Letters Patent Appeal and the same is hereby, dismissed with a cost of Rs. 25,000/- (Rupees twenty five thousand only). This amount will be deposited by these appellants before the Secretary, Department of Women and Child Development & Social Welfare, Government of Jharkhand, Ranchi, towards the Juvenile Justice Fund. This amount will be deposited in the Bank Account No. 3734498462-5, Jharkhand Juvenile Justice Fund, State Bank of India, Project Bhawan, Hatia, Ranchi, either by cheque or bank draft, within a period of twelve weeks from today, towards Juvenile Justice Fund. This amount shall be utilised for the welfare of the juveniles as per the duties assigned to the State under the Juvenile Justice Act. 8. A copy of this order will be sent to the: (a) Principal Commissioner of Income Tax, Ranchi; (b) Secretary, Department of Women and Child Development & Social Welfare, Government of Jharkhand, Ranchi; (c) Member Secretary, Jharkhand State Legal Services Authority, Nyaya Sadan, Doranda, Ranchi.
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