At, Debt Recovery Appellate Tribunal At Delhi
By, ALLAH RAHAM (CHAIRPERSON)
K. I. Shah, A. R. Bamne, A. R. Bamne and Company, H. N. Dave
The Judgment was delivered by : Allah Raham (Chairperson)
This appeal impugns order dated 7th January, 2010 passed in Appeal No. 14/2009 by I/C Presiding Officer, DRT- I, Ahmedabad, whereby application (Ext.T-8) was allowed and successful bidder was ordered to be joined as a party respondent.
2. Appeal No. 14/2009 filed under Sec. 30 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short the RDDBFI Act) was pending before the Tribunal. The auction of the property had taken place. Respondent No. 2 was the highest bidder for the property. The auction was challenged in the appeal on the ground of irregularities.
3. The auction purchaser approached the Tribunal with a prayer to implead him as a party respondent. His contention is that he has acquired interest in the property being the highest bidder for the same.
4. The appellant has opposed the impleadment of the auction purchaser simply on the ground that he has no locus to be impleaded as a party to the Appeal because the sale is yet to be confirmed in his favour.
5. After hearing the learned counsel for the parties, the Presiding Officer passed impugned order and held that for effective adjudication of the controversy the presence of the auction purchaser was necessary in the appeal.
6. Aggrieved against the aforesaid order, appellants have filed this appeal.
7. I have heard Mr. K.I. Shah, Advocate for the appellants, Mr. A.R. Bamne, Advocate for the respondent No. 1 and Mr. H.N. Dave, Advocate for the respondent No. 2 and have carefully perused the record.
8. Mr. K.I. Shah, learned counsel for the appellants, placing reliance upon two judgments of the Hon'ble Supreme Court reported in A.I.R. 1970 S.C. 2037 (Navalkha & Sons v. Sri Ramanya Das, and (2008) 145 Comp. Cas. 36 (S.C.) (Valji Khimji and Co., v. Official Liquidator of Hindustan Nitro Product (Gujarat) Ltd., has submitted that the property in question does not vest in the auction purchaser as the sale is yet to be confirmed. His contention, therefore, is that the auction purchaser is a stranger to Appeal No. 14 of 2009, hence he cannot be impleaded as a party to the appeal. He also placed reliance on a judgment of the Hon'ble Supreme Court reported in, and has submitted that the auction purchaser has no interest in the property which is the subject matter of the auction.
9. Mr. A.R. Bamne, learned counsel for the respondent No. 1, has supported judgment of the Tribunal. Mr. H.N. Dave, learned counsel for the respondent No. 2, has submitted that he is admittedly the highest bidder in the auction. The appellant has challenged the auctron on the ground of irregularities. The auction purchaser being the highest bidder has acquired an interest in the properly, therefore, he is a necessary party to the appeal. The factual position is not in dispute. The auction purchaser is the highest bidder. The sale has not yet been confirmed in his favour. Being the highest bidder he has acquired an interest in the property. The respondent No. 1 bank has realized its claim, therefore, it cannot be expected that the bank will take same interest in opposing the appeal as it would have done when its claim was not realized. In such circumstance, the auction purchaser must be impleaded as party to the appeal. It is he (the auction purchaser) who can properly watch and protect his interest rather than the bank protecting the interest of the auction purchaser. The Tribunal rightly held that impleadment of the auction purchaser is not going to cause any prejudice to the appellants. It cannot be disputed that the provisions of the Second Schedule to the Income-tax, Act 1961, applies in this case. The possibility of Rule 60 or Rule 61 of the Second Schedule coming into play at some stage or the other may also not be ruled out. In these eventualities the presence of the auction purchaser will be necessary in the appeal. Only then, the rights and contentions of the parties can be effectively adjudicated upon.
10. I find no ground to interfere with the order passed by the Tribunal. The appeal has no merit and deserves to be dismissed with the following order:-
The appeal is hereby dismissed with no order as to costs.
Since the appeal itself has been dismissed, the M.A. No. 79 of 2010 for stay does not survive and the same is also hereby dismissed accordingly.
The appellants shall incorporate the amendment in the Memo of appeal on 9th February, 2010.