VIRENDRA SINGH Vs. STATE BANK OF INDIA
LAWS(DR)-2006-5-4
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on May 25,2006

Appellant
VERSUS
Respondents

JUDGEMENT

P.K.Deb, - (1.) THIS appeal has been preferred against the interlocutory order dated 23rd February, 2004 passed by the learned Presiding Officer, D.R.T., Allahabad in M.A. No. 154/03, whereby and whereunder some directions and observations have been made regarding the compromise proposal came up before the learned Presiding Officer between the creditor Bank and the judgment debtor-borrower.
(2.) According to the appellant, who happens to be the auction purchaser in D.R.C. proceedings namely D.R.C. case No. 299/02, such observations and directions given in the impugned order by the learned Presiding Officer, rather takes away his right as an auction purchaser. Without going into the detailed facts of the case, this much is sufficient to be stated that on the recovery certificate being issued in favour of the respondent-Bank against the respondent-borrower, D.R.C. case No. 299/02 was started and in that D.R.C. proceeding mortgaged property has been sold and the appellant being the highest bidder his interest accrued over the property concerned. Against the auction sale, the judgment-debtor borrower filed application before the Recovery Officer for setting aside the auction on various grounds of irregularity and illegality vital of which was the insufficiency of the price of the property concerned. After hearing the parties concerned, the learned Recovery, Officer of D.R.T., Allahabad had set aside the auction sale mainly on the ground of insufficiency of the price and also on other grounds. The said order of the Recovery Officer was challenged by the auction purchaser-appellant before the D.R.T., Allahabad under Section 30 of Recover of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter shall be referred to as the RDDBFI Act). During the pendency of such appeal, the proposal came for compromise between the creditor-Bank and the judgment debtor-borrower as per One Time Settlement of the R.B.I. guidelines and on the basis of such proposal, the impugned order has been passed, wherein some observation has been made regarding finalization of the compromise. Being aggrieved by that order the appellant auction purchaser had filed the writ petition being Writ Petition No. 1210/04 before the Lucknow Bench of the Allahabad High Court and Hon'ble Single Judge, of the Hon'ble Allahabad High Court, Lucknow Bench after making various discussions on the points being raised regarding compromise etc. had ultimately observed that as an alternative remedy is available for filing of an appeal under Section 20 of the RDDBFI Act before this Appellate Tribunal, the writ petition was dismissed by making observation that although delay has been caused due to filing of writ petition against the impugned order, if the appeal is filed within the time frame, delay should be condoned by this Appellate Tribunal and that the appeal if so filed shall be heard along with Miscellaneous Appeal No. 154/03. Hence the present appeal has been filed. It appears that on assuming wrong jurisdiction the writ petition was filed before the Lucknow Bench of Allahabad High Court, although the matter relates to the Allahabad Bench of the High Court of Judicature at Allahabad and it could also be found that the order of hearing the present appeal along with the Miscellaneous Appeal No. 154/03 was also misconceived as M.A. No. 154/03 is pending before the learned Presiding Officer, D.R.T., Allahabad having sole jurisdiction over it under Section 30 of the RDDBFI Act and as such this Appellate Tribunal has got no jurisdiction to withdraw the appeal i.e. M.A. No. 154/03 from the file of D.R.T., Allahabad for hearing the same along with the present appeal. This matter was considered at the time of admission of the present appeal and detailed observation was made in my order dated 25th January, 2006 and the appeal was admitted only in respect of the impugned order alone. I do not want to reiterate the matter as the order dated 25th January, 2006 had never been challenged before the Hon'ble High Court.
(3.) NOW coming to the factual and legal position, the appellant being the auction purchaser is a third party having no right to question about the deal of compromise between the decree holder creditor Bank and the judgment debtor borrower. He comes to the picture and scenario only as an auction purchaser. Even if any compromise is arrived at between the judgment debtor and the decree holder, the appellant cannot have any say except that of his protection regarding his financial involvement as deposited on the basis of auction sale. Before this Appellate Tribunal learned Counsel for the appellant was harping much to the effect that there cannot be any compromise on the basis of R.B.I, guidelines issued from time to time under Sections 21 and 35(a) of the Banking Regulation Act, when such circular of the R.B.I. is only applicable with regard to the pending cases and not with the cases where decree has already been passed. Whether the settlement comes within the purview of O.T.S. as per R.B.I. guidelines or not is a matter to be considered by the authority which to accept the same. On the other hand it has been submitted by the learned Counsel for the judgment debtor borrower that the compromise has been arrived at not on the basis of O.T.S. Scheme and as such the question of R.B.I. guidelines etc. do not arise and the auction purchaser being a third party cannot question the settlement arrived at between the judgment debtor and the decree holder. I find much force in such submission but when auction purchaser has also come into the scenario then his interest should also be protected as per the provisions of Order 21 of the CPC and the different provisions of the IInd Schedule of the Income-tax Act, which are acceptable under Section 29 of the RDDBFI Act. Practically there is no scope of this Appellate Tribunal to enter into such matter. If the appeal regarding the auction sale is being allowed holding the sale being valid by the Appellate Court i.e. D.R.T., Allahabad under Section 30 of the RDDBFI Act, then also compromise can be effected in respect of the balance amount between the decree holder and the judgment debtor and if the order of the Recovery Officer was found to be proper and justified, then also there is no bar in holding the validity of the compromise between the J.D. and the D.H. and at that contingency the burden remains on the D.R.T. to protect the interest of the auction purchaser-appellant as per provisions of Order 21 of the CPC read with different provisions of the Second Schedule of the Income-tax Act together with guidelines given by the Apex Court in respect of such contingencies. Practically there is no scope of this Appellate Tribunal to enter into the merit of the appeal in M. A. No. 154/03 as the same is within the seisin and exclusive jurisdiction of the learned Presiding Officer, D.R.T., Allahabad. In that way, giving weightage to the observation made by the Hon'ble Single Judge of the Allahabad High Court, Lucknow Bench, although lacking in jurisdiction, I hold that the present appeal is an immatured one having no finalization being made till date towards the acceptance of the compromise and regarding the validity or otherwise of the auction sale by which the appellant auction purchaser came into the picture. The appeal is thus disposed of on the basis of the above observation that if any compromise proposal is there before the D.R.T., Allahabad at the instance of the creditor and the borrower, then the same should be considered along with the fate of the appeal i.e. M.A. No. 154/03. As the matter is pending for a long time because of the appellant being approaching different Forums/platforms at different times, let the miscellaneous appeal be heard as expeditiously as possible preferably within a period of two months next and the parties to the proceeding are hereby directed through their Counsel to appear before the D.R.T., Allahabad in M.A. No. 154/03 on 21st June, 2006. It is made clear that any observation made in the impugned order dated 23rd March, 2004 shall not be binding on the learned Presiding Officer, D.R.T., Allahabad and he shall be guided by the observations made in the appeal above.;


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