(1.) The appellant is the applicant in OA-41/1999 on the file of DRT, Bangalore. OA was filed for the recovery of the amount from the defendants, holding them personally liable to pay the amount, and also for the sale of Schedule I hypothecated stocks, Schedule II pledged machineries, Schedules III and V mortgaged properties, for the realisation of the debt. The Tribunal by its Order dated 15.10.2004, allowed the OA, holding that the defendants 1 to 5 personally liable to pay the amount and sale of Schedules I and II hypothecated properties alone, and the reliefs sought for the sale of Schedules III and V immovable properties, was disallowed, Aggrieved by the same, the applicant Bank has preferred this appeal.
I have heard the learned Advocates for the appellant Bank and the respondents.
The learned Advocate for the appellant Bank would submit that the execution of the mortgage by deposit of title deeds by the defendants in respect of Schedules III and V immovable properties was accepted by the Tribunal, but it took a view that the appellant Bank has not produced any document relating to the mortgage of Schedules III and V properties even though the documents were mentioned in Schedules IV and VI to the OA, and dismissed the claim of the appellant Bank to bring those immovable properties for sale. It is pointed out that it is in evidence that the mortgagors have confirmed the mortgages created by deposit of title deeds by their letter dated 19.6.1991 and though the defendants denied the mortgage, they could not substantiate the same, in view of the clinching documentary evidence filed on behalf of the appellant Bank. It is further submitted that the documents relating to these properties shown in Schedules IV and VI were kept in the safe custody of the appellant Bank in J.C. Road Branch, as they are all originals. As the Bank mainly relied upon the confirmation of the mortgage executed by the respondents, they have not filed the original documents. It is further submitted that it is a usual practice that original title deeds were not filed for two reasons, (1) that they are not insisted upon and (2) for fear of being misplaced or lost. It is further submitted that filing of the original title deeds even before the execution of the order is not a legal requirement, as contemplated under Order 34 of the Code of Civil Procedure and the said provision is also applicable with necessary changes, for the proceedings before the DRT. It is further submitted that in order to obviate the obsession created, the appellant had taken out an application (IA-354/2006) before this Tribunal for reception of the original documents in the form of additional evidence, which were not filed before the DRT in the circumstances explained above.
(2.) On the contrary, the learned Advocate for the respondents would contend that the reasons given by the appellant for not having filed the original documents before the DRT are not convincing and it is not the case of the appellant Bank that they could not produce the documents before the Tribunal in spite of exercise of due diligence, and therefore, the application filed by them to produce those documents as additional evidence, before this Tribunal is not sustainable. That in the absence of the original title deeds, the Tribunal was right in dismissing the claim of the appellant in respect of the immovable properties set out in Schedules III and V.
Now, let us consider whether the non-production of original documents in respect of the mortgaged properties, would disentitle the Bank from getting a decree.
Order 34 of Code of Civil Procedure deals with suits relating to mortgage of immovable property. It may be stated that Code of Civil Procedure is not applicable to the proceedings before the DRT. Section 22(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 states thatï¿½
The Tribunal and the Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 to 1908), but shall be guided by the principles of natural justice and, subject to the other provisions of this Act and of any rules, the Tribunal and Appellate Tribunal shall have powers to regulate their own procedure including the places at which they shall have their sittings.
But, however, Sub-clause (2) of Section 22 states thatï¿½
The Tribunal and the Appellate Tribunal shall have, for the purposes of discharging their functions under this Act, the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit, in respect of the following matters, namely, (a) summoning and enforcing the attendance of any person and examining him on oath, etc....
Therefore, the application of Code of Civil Procedure, in the absence of specific rule, or regulations under the RDDB & FI Act, is not prohibited.
(3.) THE learned Advocate for the appellant submitted that in a suit on a mortgage, the production of original documents before the Court, at the time of filing the suit is not necessary. In support of the above said submission, the appellant relied upon Rule 3 of Order 34, which speaks about passing of final decree in a foreclosure suit, statesï¿½
Where, before a final decree debarring the defendant from all right to redeem the mortgaged property has been passed, the defendant makes payment into Court of all amounts due from him under Sub-rule (1) of Rule 2, the Court shall, on application made by the defendant in this behalf, pass a final decreeï¿½
(a) Ordering the plaintiff to deliver up the documents referred to in the preliminary decree....
Relying upon this Rule, appellant states that the filing of the documents would arise only when the defendants make payment to Court of all the amounts due from them before passing of the final decree. THEn, the Court shall, that too on the application made by the defendants, order the plaintiff to deliver up the documents. It shows that the original documents will continue to be in the hand of the plaintiff and there was no legal compulsion that it should be filed in the Court itself. Incidentally, Rule 5 of Order 34 is also relied upon by the appellant, wherein also, it is stated that after passing of final decree and before confirmation of the sale, if the defendant makes payment to the Court, the Court shall, that too on the application of the defendant, order the plaintiff to deliver up the documents referred to in the preliminary decree. That even in a suit for redemption, Rule 8 of Order 34 states that, where, before the final decree is passed, debarring the plaintiff to exercise the right of redemption, if the plaintiff makes the payment into the Court of all amounts due from him, then the Court, that too on the application made by the plaintiff, pass an order directing the defendant to deliver up the documents' referred to in the preliminary decree. By relying upon all these Rules in Order 34 Code of Civil Procedure, the appellant contends that there was no necessity to produce the original documents of title deeds along with the plaint or OA claim, and therefore, the order passed by the DRT disallowing the appellant's claim to bring the immovable properties set out in Schedules III and V for sale, for non-filing of the original title deeds, is not proper.;