R M RAJENDRAN Vs. RECOVERY OFFICER

JUDGEMENT

(1.) FOR the The petitioners in C.M.P. No. 1704 of 1999 in C.M.A. No. 211 of 1999, on the file of the IVth Additional judge, City Civil Court, Chennai, are the appellants in the above appeal. They filed the present appeal under Order 43, rule 1 of the Civil Procedure Code, 1908 (hereinafter referred to as "CPC"). The case of the appellants herein is briefly stated hereunder : The second appellant is the wife of the first appellant. They filed the present appeal against the order of the IVth Additional judge, City Civil Court, Chennai, dismissing the injunction petition to restrain the respondents herein from auctioning the schedule mentioned property and from interfering with the peaceful possession and enjoyment of them, who are subsequent purchasers of the mortgaged property of the third defendant viz., Vellore D. Narayanan, who has borrowed some amount from the second respondent-Indian Bank, Park Town, Chennai-3, on creating equitable mortgage in 1989. According to them the second respondent though claims to be obtained equitable mortgage did not file the case on the basis of mortgage and opted to file the suit as though it is a money claim. The Debt Recovery, Tribunal (hereinafter referred to as "D. R. T.") has no powers to entertain a mortgage suit. It is further stated that initially the second respondent has filed the suit in the High Court, but on its return he has filed the same before the D.R.T. Without filing proper claim based on the mortgage and without impleading the appellants herein as purchasers, obtained an order from the D.R.T. Even though they had reserved Rs. 15 lakhs in their sale, as a purchaser entitled to redeem the mortgage within 30 years from the date of mortgage. The second respondent deliberately failed to implead them as party-respondent before the D.R.T. In the absence of any decree for mortgage, the present order by the D.R.T. against the third respondent is unenforceable in so far as the properties purchased by them. In such circumstance, they filed suit O.S. No. 6286 of 1999, before the City Civil Court, Chennai and applied for interim injunction. The learned VIIIth Assistant judge, after holding that the debt is only a simple money debt, dismissed the injunction application, against which they filed appeal C.M.A. No. 211 of 1999, before the IVth Addl. judge, City Civil Court, Chennai. They also prayed for injunction in C.M.P. No. 1704 of 1999, in the said appeal praying for an order of injunction. It is stated the lower appellate court without appreciating the merits of the case simply held that since the D.R.T. has passed orders, no order can be passed, dismissed the appeal and confirmed the order of the trial court. It is also stated that the money claimed by means of certificate is not executable against them. Notwithstanding the above position, they are prepared to deposit Rs. 30 lakhs. In such circumstance, having no other remedy they filed the present appeal under Order 43, rule 1 of the Civil Procedure Code.The claim of the appellants is resisted by the chief manager of the second respondent, Indian Bank. The stand of the second respondent is briefly stated hereunder. It is stated that as on date a sum of Rs. 2, 13, 66, 230 is due and payable by Vellore D. Narayanan. FOR the recovery of the above amount, the bank had initiated recovery proceedings prior to the coming into force of the Act No. 51 of 1993. The Debt Recovery Tribunal was constituted on November 3, 1996 at Chennai. The mortgage suit filed by the bank on August 19, 1998, before the original side of this court. On coming into force of Act No. 51 of 1993, the suits which were not filed before this court for debts due to the banks and financial institutions and the suits which were not numbered prior to November 4, 1996 were returned by this Registry with a direction to represent the same before the Tribunal. The plaint was represented before the D.R.T. and the same was numbered as O.A. No. 184 of 1997. On the day when the suit was filed before this court the property was owned by the mortgagor, Vellore D. Narayanan and not by the appellants. It is further stated that the present civil miscellaneous appeal is not maintainable. In view of section 104(2) of the Civil Procedure Code, 1908, the first appellant having already exhausted his remedy under Order 43, rule 1 of the Civil Procedure Code, 1908, cannot maintain a second appeal under the same provision i.e., Order 43, rule 1 of the Civil Procedure Code, 1908. The borrower Vellore D. Narayanan on October 17, 1998, offered to settle the account with Rs. 72.62 lakhs with 16 per cent. simple interest from April 1, 1998. The bank has sanctioned an amount of Rs. 82.50 lakhs plus 16 per cent. simple interest from November 1, 1998 till the date of payment. Mr. Vellore D. Narayanan accepted the proposal on December 14, 1998, but failed to fulfil it. Even in the proposal dated October 29, 1998, he had suppressed the execution of sale deed in favour of the subsequent purchasers. The appellants herein are not bona fide purchasers without notice of the existing mortgage. Even though it is stated in the sale deed a sale consideration of Rs. 30 lakhs is said to have been retained by the appellants to settle the claim of the bank in full, admittedly, the bank is not a party to the sale transaction and there was no offer for redemption of mortgage by the mortgagor or the subsequent purchasers viz., appellants. Even on the date of sale of the property, the amount due and payable to the bank was Rs. 1, 36, 09, 944. The mortgagor viz., Vellore D. Narayanan remained ex parte before the D.R.T. in spite of publication of public notice in the newspaper viz., Makkalkural on July 3, 1997. The bank after filing D.R.C. No. 40 of 1997, before the Recovery Officer, D.R.T., Chennai, and the property was brought for auction sale held on July 21, 1999 and September 29, 1999, and for want of bidders, the auction was not held and it was posted to January 19, 2000, and on that date the auction was not held due to interim order granted by this court. It is further stated that first of all the appeal itself is not maintainable and even on merits the appellants have no case for injunction. It is also stated that in view of the provisions in the D.R.T. Act and rules, the suit filed by the appellants/plaintiffs is not maintainable and liable to be dismissed.In the light of the above pleadings, I have heard Mr. R. Krishnamoorthy, learned senior counsel for the appellants and Mr. A. L. Somayaji, learned senior counsel for the second respondent-Indian Bank.

(2.) EVEN at the outset Mr. A. L. Somayaji, learned senior counsel for the second respondent raised an objection regarding maintainability of the present appeal. According to him, inasmuch as the appellants have already exhausted their remedy of an appeal under Order 43, rule 1 of the Civil Procedure Code, 1908, by filing C.M.A. No. 211 of 1999, before the IVth Additional judge, City Civil Court, Chennai, against the order in I.A. No. 15641 of 1999, dated November 11, 1999, dismissing their injunction application, they cannot maintain further appeal under Order 43, rule 1 of the Civil Procedure Code, 1908. Admittedly, against the dismissal of injunction application viz., I.A. No. 15641 of 1999, the appellants herein filed appeal, viz., C. M. A. No. 211 of 1999, under Order 43, rule 1(r) of the Civil Procedure Code, 1908, and the said appeal is still pending before the IVth Addl. judge, City Civil Court, Chennai. Pending disposal of the said appeal they also filed C.M.P. No. 1704 of 1999, seeking an order of injunction till the disposal of C.M.A. No. 211 of 1999. Since the lower appellate court has dismissed the injunction petition, again the appellants herein filed present appeal under Order 43, rule 1 of the Civil Procedure Code, 1908, which undoubtedly cannot be maintained. The said aspect has not been seriously disputed by learned counsel for appellants. Though the present appeal is liable to be dismissed on the said ground, since both counsel advanced arguments on merits and invited this court to pass an order on the merits, I am constrained to consider the claim of both parties.Regarding the merits of the claim made by the appellants viz., grant of injunction restraining respondents Nos. 1 and 2 herein from any way auctioning the schedule mentioned property or interfering with their possession, it is not the case of the appellants that they purchased the suit property without knowledge of the earlier mortgage. It is also not disputed that Vellore D. Narayanan borrowed loan from the second respondent-bank after executing a mortgage deed. Since he did not repay the amount the second respondent-bank constrained to file suit against the said Vellore D. Narayanan before the original side of this court under Order 43, rule 1 of the Civil Procedure Code, 1908, read with Order 37, rule 1 of the original side rules. Learned senior counsel for the second respondent has brought to my notice the reliefs claimed in the aforesaid suit. Perusal of the records shows that the suit is based on the mortgage created by Vellore D. Narayanan for the credit facility availed of by him from the bank. It is further seen that the suit was instituted on August 18, 1996 and consequent on the constitution of the D.R.T., Chennai, by virtue of notification issued on November 4, 1996, in exercise of the powers conferred by section 4 of the Recovery of Debts Due to Bank and Financial Institutions Act, 1993 (hereinafter referred to as Act No. 51 of 1993), the suit pending in this court had been transferred to D.R.T. under section 31 of the Act and the suit has been numbered as O.A. No. 184 of 1997. Though certain doubts have been raised regarding the nature of the relief claimed and the transfer of the suit from the original side of this court to the D.R.T. after perusing the records, I am satisfied that the said suit had been filed initially on the original side of this court based on the mortgage created by Vellore D. Narayanan. Further, it is also relevant to refer to the endorsement of the Registry directing the plaintiff (bank) to represent the same before the Tribunal. The endorsement is as follows : "In view of the constitution of the Debts Recovery Tribunal under section 4 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (Central Act No. 51 of 1993), this may be represented before the Tribunal. Sd./Assistant Registrar II, dated December 9, 1996."