Canara Bank vs Shilpee Housing Development Pvt. Ltd. and Others

S. Chandrashekhar, J.—Aggrieved by order dated 11.04.2008 in R.P. No. 18 of 2005 which was affirmed by the Debts Recovery Tribunal, Ranchi vide order dated 22.01.2010, the present writ petition has been filed.

The brief facts of the case are that, respondent Nos. 1 to 4 in the present proceeding are the borrowers and respondent No. 5 is the guarantor. The borrowers defaulted in making payment of the loan amount and consequently, P.T. No. 198 of 1998 was instituted in which the Debts Recovery Tribunal, Patna passed order dated 14.01.2002 allowing the claim of the respondent-Canara Bank for Rs. 25,34,735.10 with pendente lite and future interest. Subsequently, R.P. No. 18 of 2005 proceeded before the Recovery Officer, Patna against the certificate-debtors who failed to pay the certified amount and accordingly, the land comprised in Khewat No. 1, Khata No. 37, Plot No. 27 (Sub Plot No. 18) under Thana No. 194 measuring 10 Katha, 10 Chhatak and 9 sq.ft. land was auctioned on 08.11.2005. The property was sold to the respondent No. 6 for Rs. 22 lacs. A sale certificate was issued in favour of respondent No. 6 on 22.12.2005 and R.P. No. 18 of 2005 was accordingly, closed. The respondent No. 6 thereafter, on 22.02.2007 filed an application before the Recovery Officer, seeking refund of Rs. 22 lacs with poundage fee and other expenses. The said application has been allowed vide order dated 11.04.2008 and the same has been affirmed by the Debts Recovery Tribunal, Ranchi vide order dated 22.01.2010. Aggrieved, the petitioner-Canara Bank has filed the present writ petition.

Mr. D.K. Prasad, the learned counsel for the petitioner submits that after the sale certificate was issued to the respondent No. 6 and R.P. No. 18 of 2005 was closed vide order dated 22.12.2005, the Recovery Officer became functus-officio and he has no jurisdiction to pass an order on an application seeking refund of the sale price. It is further submitted that the error committed by the Recovery Officer has been ignored by the Debts Recovery Tribunal, Ranchi and therefore, the petitioner was constrained to approach this Court. The learned counsel for the petitioner submits that for any defect found in the title of the land which was put on auction sale, the application dated 22.02.2007 by the respondent No. 6 was not maintainable.

Mr. L.C.N. Shahdeo, the learned counsel for the respondent No. 6 raises a preliminary objection as to the maintainability of the writ petition on the ground of availability of alternative remedy under the Recovery of Debts due to Banks and Financial Institutions Act, 1993 and submits that the present writ petition is not maintainable. It is further submitted that since it was the responsibility of the Bank to satisfy itself with the title of mortgaged property which ultimately was found imperfect, the entire auction sale stood vitiated and therefore, the respondent No. 6 was entitled for recovery of the sale amount. Since the sale certificate was issued by the Recovery Officer, the application for refund of the sale amount could have been entertained by the Recovery Officer alone.

It appears that vide order dated 22.07.2010, further proceeding in R.P. No. 18 of 2005 was stayed and notices were ordered to be issued however, except respondent No. 2, respondent Nos. 1, 3, 4 and 5 did not appear. Respondent No. 6 had already appeared in the writ petition and therefore, the petitioner was permitted to take steps for substituted service upon respondent Nos. 1, 3, 4 and 5 through paper publication. Supplementary affidavit dated 25.10.2013 has been filed stating that notice for substituted service upon respondent Nos. 1, 3, 4 and 5 was published in the daily newspaper "Aaj" on 24.03.2013. Accordingly, I find that the service of notice upon the respondents is complete.

From the materials brought on record it appears that against order dated 11.04.2008 in R.P. No. 18 of 2005 passed by the Recovery Officer, the petitioner-Canara Bank preferred Appeal No. 5 of 2008 before the Debts Recovery Tribunal, Ranchi. The said appeal has also been dismissed by the Debts recovery Tribunal vide order dated 22.01.2010. Against the order passed by the Debts Recovery Tribunal, the aggrieved person may approach the Debts Recovery Appellate Tribunal. The respondent No. 6 has raised an objection to the maintainability of the writ petition on the ground of alternative remedy provided under the Act. No reason has been disclosed in the present proceeding why, after availing remedy under the Act at the first instance, the petitioner can not approach the Debts Recovery Appellate Tribunal. The plea raised on behalf of the petitioner that the Recovery Officer has no jurisdiction to entertain the application after the R.P. No. 18 of 2005 was closed, can be raised before the Appellate Tribunal. Moreover, the issue raised by the petitioner in the writ petition would be touching upon the merits of the matter also. I do not find any special reason/circumstance disclosed by the petitioner for entertaining the writ petition. In Titaghur Paper Mills Co. Ltd. and Another Vs. State of Orissa and Others, AIR 1983 SC 603 : (1983) 34 CTR 393 : (1983) 142 ITR 663 : (1983) 1 SCALE 437 : (1983) 2 SCC 433 : (1983) 2 SCR 743 : (1983) 53 STC 315 , the assessee aggrieved by the order of assessment made by the Sales Tax Officer approached the High Court. The Hon''ble Supreme Court held that since the Act provides a complete machinery to challenge an order of assessment, the order of assessment can only be challenged by the mode prescribed by the Act and not by a petition under Article 226 of the Constitution. The Hon''ble Supreme Court has observed as under :

"11. Under the scheme of the Act, there is a hierarchy of authorities before which the petitioners can get adequate redress against the wrongful acts complained of. The petitioners have the right to prefer an appeal before the prescribed authority under sub-s. (1) of S. 23 of the Act. If the petitioners are dissatisfied with the decision in the appeal, they can prefer a further appeal to the Tribunal under sub-s. (3) of S. 23 of the Act, and then ask for a case to be stated upon a question of law for the opinion of the High Court under S. 24 of the Act. The Act provides for a complete machinery to challenge an order of assessment, and the impugned orders of assessment can only be challenged by the mode prescribed by the Act and not by a petition under Art. 226 of the Constitution. It is now well recognised that where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute only must be availed of............ "

In United Bank of India Vs. Satyawati Tondon and Others, AIR 2010 SC 3413 : (2010) 3 BC 495 : (2010) 3 CompLJ 585 : (2010) 7 SCALE 696 : (2010) 8 SCC 110 : (2010) 9 SCR 1 : (2010) 9 UJ 4395 : (2010) AIRSCW 7049 : (2010) AIRSCW 5267 after tracing the historical background for enacting the 1993 Act and SARFAESI Act, 2002, the Hon''ble Supreme Court has observed thus:

"43. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc. the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are a code onto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, the High court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute."

Considering the aforesaid facts, I am not inclined to entertain the writ petition and accordingly, it is dismissed as not maintainable. However, a liberty is reserved with the petitioner to approach the Debts Recovery Appellate Tribunal within four weeks and if such an application is filed within the said period, the same shall be decided on its own merits without being influenced by the order passed in the present writ petition.