BELLEY REALTORS PVT LTD Vs. ORIENTAL BANK OF COMMERCE
LAWS(DR)-2004-3-10
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on March 31,2004

Appellant
VERSUS
Respondents

JUDGEMENT

Pratibha Upasani, - (1.) THIS Misc. appeal is filed by the appellants/original objectors Belley Realtors Pvt. Ltd. and Another being aggrieved by the order dated 18.9.2003 passed by the learned Presiding Officer of the Debts Recovery Tribunal-II, Mumbai in Appeal No. 34/2002. The said appeal was filed against order of the Recovery Officer dated 5.12.2002 in Recovery Proceeding No. 39/2002. By the said order, the Recovery Officer rejected the application of the appellants dated 4.9.2002 (Exhibit 34) in which they had prayed that the attachment ordered by the Recovery Officer with respect to the property namely 4th floor of Wembley Building, Nehru Road, Vile Parle (West), Mumbai be lifted and that warrant of attachment be quashed. When the appeal was filed against that order passed by the Recovery Officer to the learned Presiding Officer under Section 30 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, the learned Presiding Officer partly allowed the said appeal and substituted the order of the Recovery Officer by giving declaration that mortgage of the 4th floor of Wembley Building, Nehru Road, Vile Parle (West), Mumbai standing on plot No. 300 in favour of the respondent No. 1 Bank shall be subject to the result as per final Order of the High Court of Judicature at Bombay in (i) Company Petition No. 294/1997 filed by the appellant No. 2 namely Pioneer Sales Agencies Pvt. Ltd. and Suit No. 922/1997 filed by the appellant No. 2 Pioneer Sales Agencies Pvt. Ltd. and against the respondent Nos. 2 to 4 namely M/s. Olympus Superstructures Pvt. Ltd., Mr. Dinky Macarena's and Smt. Bela Mascarenhas (original defendants). Being aggrieved, the present appeal is filed in this Appellate Tribunal.
(2.) Few facts, which are required to be stated to understand the controversy in this appeal are as follows: The respondent No. 1 Bank had filed a suit against the respondent Nos. 2 to 4 namely M/s. Olympus Superstructures Pvt. Ltd., Mr. Dinky Mascarenhas and Smt. Bela Mascarenhas for recovery of Rs. 76,20,688.85 with interest thereon at the rate of 17.5% per annum with quarterly rests and for enforcement of the security. The Bank had granted certain facilities to the defendants/respondent Nos. 2 to 4 herein. The defendant No. 1 company availed of the facilities and operated the account, but not satisfactorily. Hence, the outstandings were recalled. The defendants appeared but did not file their written statement and the original application was accordingly allowed in favour of the Bank after going through the evidence on record. The learned Presiding Officer while allowing the claim of the Bank in toto also gave certain consequential declarations. He declared that outstanding was secured by mortgaged property of defendant No. 2 being flats on 4th floor of Wembley Building, Nehru Road, Vile Parle (West), Mumbai, admeasuring 1634 sq. ft., standing on Plot No. 300 and that mortgagers would be at liberty to redeem the mortgage within three months of issuance of recovery certificate. As recovery proceedings commenced, since there was a declaration given by the learned Presiding Officer that the outstandings were secured by equitable mortgage of the property, the Recovery Officer levied the attachment. However, the appellants Belley Realtors Pvt. Ltd. along with appellant No. 2 Pioneer Sales Agencies Pvt. Ltd. intervened and objected to the said attachment. The main contention of the appellants was that the defendant Nos. 1 and 2 in' Original Application No. 3637/2000 might have deposited the title deeds with reaped to the' said flats in Order to create equitable mortgage but that could not have been done owing to the injunction Order passed by the High Court (Coram : Justice Variava, as he then was) on 13.6.1997 in Company Application No. 237/1997 in Company Petition No. 294/1997 taken out by the appellant No. 2 Pioneer Sales Agencies Pvt. Ltd. who had assigned its right in favour of the appellant No. 1 Belley Realtors Pvt. Ltd. This company petition was taken out, according to the contention of the appellants herein, because amount was due from the respondent No. 2 Olympus Superstructures Pvt. Ltd. and in that respect the appellant No. 1 Pioneer Sales Agencies Pvt. Ltd. had also filed suit being Suit No. 922/ 1997 in the High Court. It was further contended by the appellants that by consent terms dated 31.8.1998, the said suit came to be disposed of and the company petition also came to be disposed of by the Division Bench of the High Court (Coram : Mr. M.B. Shah C.J. and Mr. Jahagirdar J.) on 14.9.1998 in view of the consent terms. Under the consent terms, the respondent No. 2 Olympus Superstructures Pvt. Ltd. was required to make certain payments to Pioneer Sales Agencies Pvt. Ltd. within 180 days and till such payments were made, injunction in respect of various properties including the one in question was to be operated. In the event of non payment, legal rights regarding the property in question were to vest in the appellant No. 2 Pioneer Sales Agencies Pvt. Ltd. The original defendants/respondent Nos. 2 to 4 herein made attempt to challenge these consent terms, but the learned Single Judge of the High Court in Notice of Motion No. 209/1999 in Suit No. 922/1997 rejected the said Notice of Motion taken out by the defendants Olympus Superstructures Pvt. Ltd. That Order was upheld by the Division Bench of the Bombay High Court by its Order dated 21.3.2000 in Appeal No. 44/2000. It is therefore stated by the appellants that the mortgagers had no right to create mortgage and even if the same was created on or before 5.10.1997, it was not good and valid in the eye of law. In any case, it is further stated that the possession of the respondent Nos. .2 to 4 over the said property as on the date of attachment i.e. 16.5.2002 was not on behalf of the appellant No. 2 Pioneer Sales Agencies Pvt. Ltd. It is contended that the learned Recovery Officer did consider these facts but still refused to lift the attachment. The learned Recovery Officer also ordered that before resorting to the property in question, other' properties would be sold. The Bank filed reply to this application assailing averments made by the appellants, It was submitted that the Bank had no knowledge about dealings/transaction, so also about the Court matters between the respondents Nos. 2 to 4 on the one hand and the appellant No. 2 on the other. The Bank had pleaded ignorance about injunction Order passed by Justice Variava. The Bank's contention was that proper mortgage was created by the respondents Nos. 2 to 4 in favour of the bank with respect to the property situated on 4th floor of Wembley Building, Nehru Road, Vile Parle (West), Mumbai. It was further contended that whether any mortgage was valid or not, had to be decided by the Court, who granted injunction and, thus, remedy of the appellants was to approach the Civil Court and not the Tribunal. It was prayed that the application be dismissed. The Recovery Officer, so also the learned Presiding Officer, refused to lift the attachment as already stated above. Therefore, this appeal to this appellate Tribunal.
(3.) I have heard Mr. K.I. Shah for the appellants and Mr. Pandit for the respondent Bank. I have gone through the voluminous proceedings including the proceedings of Suit No. 922 of 1997, Company Petition No. 291 of 1997 and various orders passed therein. I have also gone through the proceedings of O.A. No. 3637 of 2000, so also recovery proceedings bearing R.P. No. 39 of 2002, and in my opinion, the Recovery Officer as well as the learned Presiding Officer, both committed error in passing the impugned orders.;


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