# M/S Gulshan Rai Jain Ii, Through Its Partners and ors v. Debts Recovery Appellate Tribunal Allahabad and ors

- **Citation:** (2011) 3 ILRA 1092
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2011-09-28
- **Bench:** Devi Prasad Singh, Dr. Satish Chandra
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-gulshan-rai-jain-ii-through-its-partners-and-ors-v-debts-recovery-appellate-42045
- **Pages:** 7

## Headnote

Security Interest Act, 2002-Section-18appeal pending before the Appellate
authority since long-Tribunal without
deciding the case on merit kept the
matter
pending
by
passing
interim
orders-one
after
another-Appellate
Tribunal also failed to consider this
aspect-Court
expressed
its
great
concern-to
achieve
the
ambit
of
3 All M/S Gulshan Rai Jain Ii and others V. Debts Recovery Appellate Tribunal Allahabad and ors
1093
enactment of Act-every authority bound
to discharge their duty within such
statutory
period-order
impugned
Quashed with direction to appellate
authority to decide appeal within specific
period-for period of two month recovery
kept suspended

Held: Para 14

Needless to mention that in case the
appeal filed under Section 17 of the Act
before the Debts Recovery Tribunal or in
appeal before the Appellate Tribunal are
not decided within the statutory period
provided under the Act, then it shall
frustrate the very object and purpose of
the Act in question. The Presiding Officers
of the Tribunal are directed to ensure that
appeal filed before it are decided as far as
possible
within
the
statutory
period
provided under the Act and appeals are not
kept pending only by safeguarding the
interest of the parties by passing repeated
interim
orders
from
time
to
time.
Ordinarily, the interim orders should be
passed to secure the interest of the parties
at the time of institution of the appeal
before the Appellate Tribunal or the Debts
Recovery Tribunal, as the case may be and
thereafter, the Tribunal or the Appellate
Tribunal must proceed to decide the issue
before it on merit expeditiously within the
statutory period, provided under the Act.
Failure on the part of the Appellate
Tribunal or the Debts Recovery Tribunal to
decide the issue within the statutory
period shows inaction or incompetency on
the part of the Presiding Officer of the
Tribunals.

## Text

1092 INDIAN LAW REPORTS ALLAHABAD SERIES [2011
Others). Learned counsel also referred to a
judgment of Calcutta High Court reported
in 2001(Suppl.) R.D. 68 (Nanturam
Naskar & Others vs. Ajit Kumar Mondal).
In Harpal's case (supra), learned Single
Judge deciding the matter has held that in
the parallel proceedings, civil as well as
criminal, if the Civil Court has not passed
any order on the question of possession, in
such a case, it will be open for the
Executive Magistrate to proceed under
Section 145(1) Cr.P.C. and pass order of
attachment under Section 146(1) Cr.P.C.,
although this order will be subject to the
order passed by the Civil Court at later stage
deciding the question of possession.
Similarly in the case of Nanturam Naskar
(supra), it has been held that it is within the
competence of Executive Magistrate to
exercise powers under Sections 144 and 145
Cr.P.C. and to appoint a Receiver for taking
into custody, and to dispose the standing
crop. Further, in exercising such powers, the
prime consideration before the Magistrate
would be to assess as to whether there is a
likelihood of breach of peace, and further a
direction of maintenance of status quo
passed by Civil Court would not be a bar to
orders passed by the Executive Magistrate.

5. On due consideration of rival
submissions, we are of the view that the Sub
Divisional Magistrate could not have passed
the impugned order as it is not evident from
the records that there was the institution of
any proceeding by way of complaint under
Sections 144, 145 or 146 Cr.P.C. which was
pending with him. Moreover, it also does
not appear that there was any law and order
problem which could have necessitated
passing of such an order as impugned and
moreover, such orders should always be
based on the report submitted by the Police
Officer, which is conspicuous by absence in
this case.

6. Moreover, in the judgment rendered
by Hon'ble the Apex Court, reported in All
CJ 2002, 1110 (State of West Bengal vs.
Vishnunarayan & Associates (P) Ltd.), it
has been held that the State or its Officers
cannot interfere with the rights of citizens
except where their actions are authorized by
any specific provision of law.

7. In the instant case, there was no
sanction whatsoever behind the passing of
impugned order by the Sub Divisional
Magistrate. Thus, the act is not authorized
by the provisions of law. Hence, the
impugned order dated 10/11.08.2011 is
hereby set aside and the writ petition is
allowed and disposed of accordingly.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 28.09.2011

BEFORE
THE HON'BLE DEVI PRASAD SINGH,J.
THE HON'BLE DR. SATISH CHANDRA,J.

Misc. Bench No. - 9623 of 2011

M/S Gulshan Rai Jain Ii, Through Its
Partners and ors.
...Petitioners
Versus
Debts
Recovery
Appellate
Tribunal
Allahabad and ors.
...Respondents

Counsel for the Petitioner:
Sri Prashant Kumar

Counsel for the Respondents:
Sri Prashant Srivastava

Security Interest Act, 2002-Section-18appeal pending before the Appellate
authority since long-Tribunal without
deciding the case on merit kept the
matter
pending
by
passing
interim
orders-one
after
another-Appellate
Tribunal also failed to consider this
aspect-Court
expressed
its
great
concern-to
achieve
the
ambit
of
3 All M/S Gulshan Rai Jain Ii and others V. Debts Recovery Appellate Tribunal Allahabad and ors
1093
enactment of Act-every authority bound
to discharge their duty within such
statutory
period-order
impugned
Quashed with direction to appellate
authority to decide appeal within specific
period-for period of two month recovery
kept suspended

Held: Para 14

Needless to mention that in case the
appeal filed under Section 17 of the Act
before the Debts Recovery Tribunal or in
appeal before the Appellate Tribunal are
not decided within the statutory period
provided under the Act, then it shall
frustrate the very object and purpose of
the Act in question. The Presiding Officers
of the Tribunal are directed to ensure that
appeal filed before it are decided as far as
possible
within
the
statutory
period
provided under the Act and appeals are not
kept pending only by safeguarding the
interest of the parties by passing repeated
interim
orders
from
time
to
time.
Ordinarily, the interim orders should be
passed to secure the interest of the parties
at the time of institution of the appeal
before the Appellate Tribunal or the Debts
Recovery Tribunal, as the case may be and
thereafter, the Tribunal or the Appellate
Tribunal must proceed to decide the issue
before it on merit expeditiously within the
statutory period, provided under the Act.
Failure on the part of the Appellate
Tribunal or the Debts Recovery Tribunal to
decide the issue within the statutory
period shows inaction or incompetency on
the part of the Presiding Officer of the
Tribunals.

(Delivered by Hon'ble Devi Prasad Singh,J.)

1. Heard learned counsel for the
petitioner and Sri Agesh Anand, learned
counsel for the respondent-Bank of Baroda.

2. With the consent of parties'
counsel, we proceed to decide the writ
petition finally at the admission stage.

3. Present petition under Article 226
of the Constitution of India has been
preferred against the impugned order
dated 15.09.2011 contained as annexure
nos. A-5 to the writ petition and the order
passed by the appellate authority dated
23.03.2010.

4.

The
petitioner
has
taken
commercial loan from the respondentbank. On account of default of payment of
dues, recovery proceeding was initiated
against the petitioner, in consequence
thereof, the petitioner has approached the
Debts Recovery Tribunal. It has been
submitted
that
while
deciding
the
application, the Tribunal from time to
time passed the interim orders directing
the petitioner to pay the dues in question
in installment. However, finally, by the
impugned order, the Tribunal provided
that in case the highest bid of secured
assets comes to Rs.8.00 crores and above,
then respondent-bank may proceed with
the auction and sale of the property in
question. The operative portion of the
order passed by the Debts Recovery
Tribunal is reproduced as under:

"That the respondent bank shall not
sell the secured assets for a price of less
than Rs.8.00 crores.

It is further clarified that respondent
bank can conduct the sale of the secured
assets if the highest bid comes for Rs.8.00
crores and above. If the applicants are
having some buyer for more than the
above mentioned sum he may be directed
to participate in the auction. In case, the
bid is less than that of Rs.8.00 crores, the
respondent bank shall not to proceed in
the matter.
1094 INDIAN LAW REPORTS ALLAHABAD SERIES [2011

Fix 09.04.10 before the Ld. Registrar
for filing objection, if any by the
respondent bank.

Let copies of this order be supplied
to the parties immediately as per rules."

5. Feeling aggrieved, with the
impugned order passed by the Tribunal,
the petitioner has preferred an appeal
under Section 18 of the Securitisation and
Reconstruction of Financial Assets and
Enforcement of Security Interest Act,
2002 before the appellate authority. The
appellate authority had observed that the
respondent-bank had taken symbolic
possession and may proceed with the
auction and sale subject to condition that
in case the petitioner pay the entire dues,
option is open to the petitioner. Operative
portion of the order passed by the
appellate authority is reproduced as
under:

"However, this Tribunal has also
directed the Bank to release the property,
which is Plot No.40, Sector 14 Kausambi,
District Ghaziabad. If the amount is
deposited by the appellant by tomorrow
as directed today, the, on production of
receipt of such deposit, the Bank shall
release the said property. So far as
another property is concerned, the
District Magistrate/Collector Ghaziabad
shall assist the Bank to take physical
possession of the property, description of
which is Plot No.518, G.T. Road, Near
Pawan Cinema, District Ghaziabad and
as directed by this Tribunal by an order
dated 05.05.2011, the appellant will not
raise any objection with regard to auction
of the second property. Shri Gulshan Rai,
Sri Manoj Jain and Smt. Suman Jain will
not create any obstacle to the Bank either
to take physical possession or to proceed
with the auction of the second property.
However, it is open for the appellant to
satisfy all the dues of the Bank before the
auction takes place of the second
property. Accordingly, the application for
extension of time is disposed of.

In view of the orders passed by this
Tribunal on 05.05.2011, 20.07.2011 and
the order passed today, nothing survives
to be adjudicated upon in the present
appeal and accordingly, the appeal also
stands disposed of."

6. Thus, it appears that instead of
deciding the issue with regards to
question involved therein, the original
authority as well as the appellate authority
has permitted the respondent-bank to
proceed with the auction and sale of the
property in question. However, the
appellate authority had make it open to
the petitioner-appellant to satisfy all the
dues of the Bank before auction takes
place of the second property.

7.

The
Securitisation
and
Reconstruction of Financial Assets and
Enforcement of Security Interest Act,
2002 (in short Act) was enacted by the
Parliament with intention to make it
convenient for the bank and financial
institutions to recover its dues without
facing the technicalities, which they were
facing before the civil court in the
recovery suits under the Act, option has
been given to the Bank or borrower to
approach the Tribunal to ventilate their
grievance. The provision contained in the
Act are the substituted provisions in place
of
regular
suits.
Meaning
thereby,
whenever aggrieved party approach the
Tribunal, constituted under the Act, then
Tribunal may pass appropriate interim
order to safeguard the rights of the parties
3 All M/S Gulshan Rai Jain Ii and others V. Debts Recovery Appellate Tribunal Allahabad and ors
1095
and also proceed to decide the question
raised by the parties in accordance to law
expeditiously.

8. Section 13 of the Act empowers
the Bank to take action and proceed with
the auction and sale of the property and
action taken thereon, shall be appealable
under Section 17 of the Act before the
Tribunal. The order passed by the Debts
Recovery Tribunal is appealable to the
Appellate Tribunal under Section 18 of
the Act.

9. Section 17 deals with the
procedure which should be followed by
the Debts Recovery Tribunal while
dealing with the petition filed before it by
the aggrieved party, which includes
financial institution as well as borrower.
Sub-section (5) of Section 17 of the Act
provides that an application made under
sub-section (1) shall be dealt with by the
Debts Recovery Tribunal as expeditiously
as possible and disposed of within sixty
days from the date of such application. In
case, application is not disposed of within
the period provided under sub-section (5)
of Section 17, any party to the application
may make an application, in such form as
may be prescribed, to the Appellate
Tribunal for directing the Debts Recovery
Tribunal for expeditious disposal of the
application pending before the Debts
Recovery Tribunal. For convenience,
Section 17 of the Act is reproduced as
under:

"17. Right to Appeal

(1)Any person (including borrower),
aggrieved by any of the measures referred
to in sub-section (4) of section 13 taken by
the secured creditor or his authorised
officer under this Chapter,[may make an
application along with such fee, as may
be prescribed,] to the Debts Recovery
Tribunal having jurisdiction in the matter
within forty-five days from the date on
which such measure had been taken.

"Provided that different fees may be
prescribed for making the application by
the borrower and the person other than
the borrower.

Explanation- For the removal of
doubts, it is hereby declared that the
communication
of
reasons
to
the
borrower by the secured creditor for not
having accepted his representation or
objection or the likely action of the
secured
creditor
at
the
stage
of
communication
of
reasons
to
the
borrower shall not entitle the person (
including
borrower)
to
make
an
application
to
the
Debts
Recovery
Tribunal under this sub-section.]

[(2) The Debts Recovery Tribunal
shall consider whether any of the
measures referred to in sub-section (4) of
section 13 taken by the secured creditor
for enforcement of security are in
accordance with the provisions of this Act
and the rules made thereunder.

(3) If, the Debts Recovery Tribunal,
after
examining
the
facts
and
circumstances of the case and evidence
produced by the parties, comes to the
conclusion that any of the measures
referred to in sub-section (4) of section
13, taken by the secured creditor are not
in accordance with the provisions of this
Act and the rules made thereunder, and
require restoration of the management of
the
business
of
the
borrower
or
restoration of possession of the secured
assets to the borrower, it may by order,
1096 INDIAN LAW REPORTS ALLAHABAD SERIES [2011
declare the recourse to any one or more
measures referred to in sub-section (4) of
section 13 taken by the secured creditors
as invalid and restore the possession of
the secured assets to the borrower or
restore the management of the business to
the borrower, as the case may be, and
pass such order as it may consider
appropriate and necessary in relation to
any of the recourse taken by the secured
creditor under sub-section (4) of section
13.

(4) If, the Debts Recovery Tribunal
declares the recourse taken by a secured
creditor under sub-section (4) of section
13, is in accordance with the provisions of
this Act and the rules made thereunder,
then, notwithstanding anything contained
in any other law for the time being in
force, the secured creditor shall be
entitled to take recourse to one or more of
the measures specified under sub-section
(4) of section 13 to recover his secured
debt.

(5) Any application made under subsection (1) shall be dealt with by the
Debts Recovery Tribunal as expeditiously
as possible and disposed of within sixty
days from the date of such application:

Provided that the Debts Recovery
Tribunal may, from time to time, extend
the said period for reasons to be recorded
in writing, so, however, that the total
period of pendency of the application with
the Debts Recovery Tribunal, shall not
exceed four months from the date of
making such application made under subsection (1).

(6) If the application is not disposed
of by the Debts Recovery Tribunal within
the period of four months as specified in
sub-section
(5),
any
party
to
the
application may make an application, in
such form as may be prescribed, to the
Appellate Tribunal for directing the Debts
Recovery
Tribunal
for
expeditious
disposal of the application pending before
the Debts Recovery Tribunal and the
Appellate Tribunal and the Appellate
Tribunal may, on such application, make
an order for expeditious disposal of the
pending
application
by
the
Debts
Recovery Tribunal.

(7) Save as otherwise provided in
this Act, the Debts Recovery Tribunal
shall, as far as may be, dispose of the
application in accordance with the
provisions of the Recovery of Debts Due
to Banks and Financial Institutions Act,
1993 and the rules made thereunder.".]

10. A plain reading of Section 17 of
the Act, shows that it shall be obligatory
on the part of the Debts Recovery
Tribunal to decide the application filed
before it under Section 17 of the Act as
early as possible preferably say within
sixty days.

11. Needless to say that in the
present case, application was moved in
the year 2010 and the Tribunal kept the
matter pending only by passing interim
orders from time to time to give liberty to
the petitioner to pay the dues in question.
The power conferred on the Tribunal
under Section 17 of the Act, is not to keep
the matter pending under the garb of the
interim orders. In case any interim order
is not complied with, then it was
incumbent on the Tribunal to vacate the
interim order and decide the appeal filed
before it under Section 17 of the Act on
merit with due opportunity of hearing to
the parties.
3 All M/S Gulshan Rai Jain Ii and others V. Debts Recovery Appellate Tribunal Allahabad and ors
1097

12. Section 17 of the Act does not
empower the Tribunal to keep the matter
pending for indefinite period without
adjudicating the same on merit. Subsection (6) of Section 17 of the Act
provides that power conferred on the
Appellate Tribunal to issue direction to
the Debts Recovery Tribunal to decide the
appeal within the specified period.

13. In the present case, unfortunately
the Appellate Tribunal also acted in a
mechanical way and instead of directing
the Debts Recovery Tribunal to decide the
pending appeal filed under Section 17 of
the Act on an early date, may be within a
specified period, had disposed of the
pending appeal filed under Section 18 of
the Act permitting the respondents to
proceed with the auction and sale with
liberty to the appellant-petitioner to pay
all the dues to the Bank before auction
takes place. The Appellate Authority as
well as the Appellate Tribunal have been
failed to discharge their statutory duties
conferred by Sections 17 & 18 of the Act.

14. Needless to mention that in case
the appeal filed under Section 17 of the
Act before the Debts Recovery Tribunal
or in appeal before the Appellate Tribunal
are not decided within the statutory period
provided under the Act, then it shall
frustrate the very object and purpose of
the Act in question. The Presiding
Officers of the Tribunal are directed to
ensure that appeal filed before it are
decided as far as possible within the
statutory period provided under the Act
and appeals are not kept pending only by
safeguarding the interest of the parties by
passing repeated interim orders from time
to time. Ordinarily, the interim orders
should be passed to secure the interest of
the parties at the time of institution of the
appeal before the Appellate Tribunal or
the Debts Recovery Tribunal, as the case
may be and thereafter, the Tribunal or the
Appellate Tribunal must proceed to
decide the issue before it on merit
expeditiously within the statutory period,
provided under the Act. Failure on the
part of the Appellate Tribunal or the
Debts Recovery Tribunal to decide the
issue within the statutory period shows
inaction or incompetency on the part of
the Presiding Officer of the Tribunals.

15. In view of above, the appeal is
allowed. The impugned order dated
15.09.2011 passed by the Appellate
Tribunal, contained as Annexure no. 5 to
the writ petition is set aside. The Debts
Recovery Tribunal is directed to decide
the appeal under Section 17 of the Act
expeditiously say within a period of two
months from the date of receipt of a
certified copy of the present order, after
providing due opportunity of hearing to
the parties. For a period of two months,
the further recovery proceedings shall
remain suspended subject to condition the
petitioner deposits an amount of Rs.1.00
crore within a period of one month from
today.

16. Let a copy of this order be send
to
the
Chairman,
Debts
Recovery
Tribunal, who shall circulate the same to
the Presiding Officers of the Appellate
Tribunal as well as Debts Recovery
Tribunal immediately for compliance.
---------
1098 INDIAN LAW REPORTS ALLAHABAD SERIES [2011
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 03.09.2011

BEFORE
THE HON'BLE S.C. AGARWAL,J.

Criminal Misc. Writ Petition No. - 15145 of 2011

Raj Kumar

 ...Petitioner
Versus
State of U.P. and others ...Respondents

Counsel for the Petitioner:
Sri R.K. Shahi

Counsel for the Respondents:
A.G.A.

Code of Criminal Procedure-156(3)-
Power of Magistrate-complainant filed
affidavit before C.J.M. Requesting for
direction to Investigation Officer To
record the statement of complainant
and her witnesses-rejection thereofnot proper-after issuing direction for
registration and investigation-its but
is not came to an end-duty bound to
ensure
fair
investigationconsequential directions issued.

Held: Para 6

In view of the aforesaid decision of
the Apex Court, it is obvious that it is
a duty of the Magistrate to ensure that
investigation is done impartially and
in
a
fair
manner.
When
the
complainant
alleged
that
the
statements of the complainant and the
witnesses have not been recorded by
the
Investigating
Officer,
the
Magistrate could have forwarded the
affidavits
filed
on
behalf
of
the
revisionist
to
the
Investigating
Officer. The Magistrate cannot wash
his hands of the case after passing an
order under Section 156 (3) Cr.P.C.
Case law discussed:
2008 (60) ACC 689

(Delivered by Hon'ble S.C. Agarwal,J. )

1. Heard learned counsel for the
petitioner and learned AGA for the
State.

2. This writ petition has been filed
with a prayer to issue a writ, order or
direction in the nature of certiorari to
quash the order dated 1.6.2011 passed
by the Chief Judicial Magistrate, Court
No. 17, Deoria in Case No. 214 of
2011, Raj Kumar Vs. Samodh & others,
under Section 304B, 201 IPC, P.S.
Rudrapur, District- Deoria and also to
issue a writ, order or direction in the
nature of mandamus commanding and
directing the respondents to act in
accordance with law as settled by the
Apex Court in the case of Sakiri Vasu
Vs. State of U.P. & others, 2008 (60)
ACC 689.

3.

The
petitioner
is
the
complainant in Crime No. 314 of 2011,
under Sections 498A, 304B, 201 IPC
and D.P. Act, P.S. Rudrapur, District-
Deoria.

4. The grievance of the petitioner
is that the case is not being investigated
by the police in a fair manner and still
the statements of the complainant and
the witnesses have not been recorded
by the Investigating Officer. The
affidavits of the complainant and the
witnesses were filed before the C.J.M.,
Deoria with a prayer to forward the
same to the Investigating Officer but
the prayer has been rejected vide order
dated 1.6.2011 passed by the C.J.M.
Deoria
on
the
ground
that
the
complainant himself may produce his
affidavit
before
the
competent
authority.