ICICI BANK LIMITED vs UMANG PARASRAMPURIYA on 3 August 2024

**ORDER**

- 1. This appeal has been filed by the appellant-ICICI Bank Limited under section 30 (1) of RDB Act, 1993, challenging the order dated 20.08.2020, passed by the Ld. Recovery Officer in DRC No. 44 of 2003. The amount involved in this appeal is Rs. 2,02,93,215.41 plus interest and other charges as mentioned in the proclamation of sale.

- 2. Reply/objection of the appeal has been filed on behalf of the respondents/defendants.

- 3. Ld. Counsels for the parties are heard on interim application.

- 4. It is submitted by the Ld. Counsel for the appellant bank that the property in question is mortgaged with the appellant bank. The borrowers have defaulted in payment of loan, therefore, the OA was filed before this Tribunal. It is further submitted that during the pendency of the OA, the Sale Tax Department has sold the property to the auction purchaser namely Purusottam Das Parasrampururia (auction purchaser of the Sale Tax Department). The OA being T.A. </

No. 1539/2000 was allowed by this Tribunal vide order dated 30.01.2003 and recovery certificate has been issued. It is further submitted that in DRT, sale proclamation was issued on 22.05.2004 and the property was auction sold on 24.06.2004 and the successful bidder namely Jaikesh Tripathi-defendant No. 4 had deposited entire auction money in time. It is further submitted that after the sale, the 3^rd party objector namely Umang Parasrampuriah nephew of Purusottam Das Parasrampuriah filed objection and the objection was rejected by the Ld. Recovery Officer and the Sale Tax Department also filed objection which was also rejected by the Ld. Recovery Officer. Thereafter, the sale has been confirmed in favour of Jaikesh Tripathi-respondent No. 4 on 01.09.2004.

5. It is further submitted by the Ld. Counsel for the appellant i.e. ICICI Bank Limited that since the property in question has been mortgaged with the ICICI Bank, therefore, there is first charge of ICICI Bank Limited and this fact has been brought before the Ld. Recovery Officer while passing the order dated 05.07.2023. It is further submitted that the property in question was mortgaged with the ICICI Bank on 16.05.1997. It is further submitted that while arguing the case before the Ld. Recovery Officer, the appellant has relied upon the judgment passed by the Hon'ble High Court of Allahabad in the case of Smt. Urmila Devi & Ors. Vs. DRAT, Allahabad and Ors. in which the Hon'ble High Court Allahabad has held that the Cess Tax dues shall not have precedence over the right of the Bank to proceed against the property mortgaged by the borrower. While passing the above judgment, the Hon'ble High Court has also relied upon the judgment passed by the Hon'ble Supreme Court of India whereby, the Hon'ble Supreme Court of India has set aside the Recovery Certificate issued by the Cess Tax Department and it was held that the creditor with whom the property has been mortgaged has authority to sell the same. It is submitted that the order of the Hon'ble High Court and Hon'ble Supreme Court mentioned in the order of the Hon'ble High Court has not been dealt by the Ld. Recovery Officer while passing the order dated 20.08.2020. It is submitted that the Recovery Officer is going to execute the order dated 20.08.2020 and the present appeal has been filed against that order. It is further submitted that vide order dated 20.08.2020, the Ld. Recovery Officer has set aside the order of the auction sale dated 24.06.2004 and sale certificate dated 01.09.2004 and directed the appellant/CH Bank to refund the sale price to the auction purchaser Jaikesh Tripathi along with 6% interest per annum from the date of sale within one month from the date of judgment. It is further submitted that the order passed by the Hon'ble DRAT, Allahabad in TA No. 1539 of 2009 dated 31.01.2003 has never been challenged before any forum therefore, that judgment has attained finality. It is further submitted that the Recovery Officer has to execute the Recovery Certificate issued by the Hon'ble Tribunal by invoking the procedures mentioned in the Income Tax Schedule. Therefore, vide order dated 20.08.2020, the Ld. Recovery Officer has tried to circumvent the order dated

31.01.2003 passed by this Hon'ble Tribunal. It is further submitted that the Recovery Officer has no power to check the validity of the judgment/order of Recovery Certificate issued by this Tribunal. Request is made that since the Recovery Officer has passed the order beyond his jurisdiction, therefore, the subsequent order passed by the Ld. Recovery Officer on 05.07.2023 may be stayed.

6. Ld. Counsel for the bank's auction purchaser namely Jaikesh Tripathi submitted that the auction purchaser namely Jaikesh Tripathi has never been given opportunity before passing the order dated 20.08.2020 as no notice was issued to the auction purchaser and no opportunity was given to the auction purchaser Jaikesh Tripathi before passing order dated 20.08.2020. The order dated 20.08.2020, passed of the Recovery Officer is ex-parte against the auction purchaser in which direction was given to handover the physical possession of the property in question to the auction purchaser of the Sale Tax Department and in compliance of that order, the Recovery Officer has appointed the Advocate Commissioner for taking physical possession from the auction purchaser Jaikesh Tripathi and to handover the same to the auction purchaser of the Sale Tax Department. Therefore, vide this order, the Ld. Recovery Officer has attempted to honour the order of the Sale Tax Department and dishonoured the order of this Tribunal. It is further submitted that along with the order dated 05.07.2023, the order dated 20.08.2020, passed by the Ld. Recovery Officer has also been challenged before the Hon'ble High Court of Allahabad which is pending. Despite this, the order of the PO, DRT, Ranchi, passed in appeal which was challenged before the Hon'ble DRAT and the order of the DRT, Ranchi has been set aside by the Hon'ble DRAT vide order dated 04.11.2019 and against this order, a writ petition has also been filed by the auction purchaser Jaikesh Tripathi and all above writ petitioners are connected. It is further submitted that in those writ petitions, as of today, there is no stay order. However, at initial stage, the interim protection was granted by the Hon'ble High Court but on the next date, the Hon'ble High Court has clarified that at this stage, no interim order was required as time for handover possession has been left. The Ld. Counsel for the auction purchaser of the Bank relied upon the judgment passed by the Hon'ble Supreme Court of India in the case of Stock Exchange, Bombay vs V.S. Kandalgaonkar & Ors decided on 25 September, 2014 wherein it is held that right of the secured creditor/mortgagee will prevail over any state liability. It is further submitted that if the property in question has been sold by the State Exchequer before mortgage then the Secured Creditor rights may be defeated.

7. It is submitted by the Ld. Counsel for the auction purchaser namely Umang Parasrampuraria that the order passed by the Hon'ble DRAT dated 04.11.2019 was challenged by Jaikesh Tripathi-the auction purchaser of the Bank after execution of the order dated 04.11.2019, passed by the Hon'ble DRAT. It is further submitted that against the order dated 04.11.2019, the auction purchaser namely Jaikesh Tripathi filed writ petition before the Hon'ble High

Court which is still pending, but appellant i.e. ICICI Bank has not filed any writ petition before Hon'ble High Court against the order dated 04.11.2019. It is further submitted that the order dated 20.08.2020, passed by the Ld. Recovery Officer has been challenged by the appellant ICICI Bank before this Tribunal. Further, the order dated 20.08.2020 has also been challenged by the auction purchaser Jaikesh Tripathi by way of writ petition which is still pending. It is submitted that the writ petitions are being pursued by the appellant ICICI Bank as well as the auction purchaser of the Sale Tax Department. Since there is urgency in this matter as the physical possession was fixed on 06.08.2023, therefore, the Hon'ble High Court passed the order mentioning therein to put up the matter on 08.08.2023 at 2:00 PM till then no coercive action shall be taken against the petitioner and vide order dated 08.08.2020, the Hon'ble High Court has mentioned that no interim order is required. Therefore, there is no stay order in this writ petition. It is further submitted that there is no stay order from the Hon'ble High Court as of today. It is further submitted that the order dated 04.11.2019 passed by the Hon'ble DRAT and order dated 20.08.2020, passed by the Ld. Recovery Officer are in challenge in all the writ petitions before the Hon'ble High Court. Therefore, this Tribunal has no power to grant any interim protection at this stage. It is further submitted that there was dues of the Sale Tax Department and the Sale Tax Department has initiated the proceedings for recovery in the year 1993 onwards and the property was sold by the Sale Tax Department on 14.02.2010. It is further submitted that the dues of the Sale Tax Department was first charge as it was prior to the mortgage of the property and the first charge was still with the Sale Tax Department. It is further submitted that when the property was mortgaged with the appellant ICICI Bank, the liability was either of the borrower to pay the dues or the appellant i.e. ICICI Bank was to pay the dues of the Sale Tax Department. It is submitted that the judgment cited by the Ld. Counsel for the appellant has already been considered by the Hon'ble DRAT vide judgment dated 04.11.2019 and considering the fact, vide the judgment dated 04.11.2019, the appeal was allowed. The appellant has never challenged the proceedings initiated by the Sale Tax Department in any forum rather, it wrote letter to handover the amount calculated by the Sale Tax Department by selling the property. It is further submitted that by concealing the fact that Sale Tax Department was having Tax from the borrowers, the appellant has obtained the decree from this Tribunal. The Ld. Counsel for the auction purchaser of the Sale Tax Department has relied upon the judgment passed by the Hon'ble High Court in the case of State Bank of Jaipur and Bikaner Vs. Punjab & Sind Bank in which it is decided that the first charge before the mortgage of the state government must prevail first.

8. Considered the rival submissions advanced on behalf of the Ld. Counsels for the parties and perused the records.

9. On perusal of records, it appears that in the year 1997, by mortgaging their property being flat no. 801, 8^th Floor, Kalpana Tower, 3/16 A-Vishnupuri, Kanpur, the borrowers M/s Kashiram Pannalal Industries-respondent No. 5 and others obtained loan from the Bank of Rajasthan Limited which is subsequently amalgamated into ICICI Bank-the present appellant. Since the borrowers defaulted to pay the dues of the Bank therefore, a suit for recovery of a sum of Rs. 2,02,93,215.41 was filed before the DRT, Jabalpur on 04.10.1999 which was subsequently transfer to this Tribunal and was numbered as T.A. No. 1539 of 2000. There was trade tax dues of the Commercial Tax Department upon the respondent No. 5 which was recoverable as land revenue and for recovery of the same, the property which was mortgaged with the applicant-ICICI Bank by the respondent No. 5 was attached by the respondent No. 3- Assistant Collector/Assistant Commissioner (Admin/Assessment/R.R.O.), Trade Tax, Kanpur vide order dated 23.12.1999. Thereafter, the respondent No. 3 published sale notice on 10.02.2000, fixing 14.02.2000 for auction sale and the property was sold in favour of respondent No. 2 namely Sri Purushottam Das Parassanpuria and Smt. Shakuntala Devi. The said sale was confirmed by the Commissioner, Kanpur Division, Kanpur vide order dated 26.03.2000 and sale certificate was also issued on 14.07.2000.

10. In the meantime, the arguments in T.A. No. 1539 of 2000 were already advanced and the said T.A. was reserved for judgment and vide order dated 31.01.2003, the T. A. No. 1539 of 2000 was decreed in favour of the appellant Bank i.e. ICICI and recovery certificate was also issued being DRC No. 44 of 2003 and in pursuance of the aforesaid recovery certificate, the Recovery Officer, DRT, Allahabad issued sale proclamation FORM-13 on 22.05.2004 fixing 24.06.2004 for auction and the mortgaged property was sold to respondent No. 4- Mr. Jaikesh Tripathi on 24.06.2004. Against this, the respondent No. 2- Purusottam Das Parasrampurpuria filed objection before the Recovery Officer against which the Certificate Holder Bank i.e. ICICI Bank has also filed objection. The objection of the respondent No. 2- Purusottam Das Parasrampurpuria was rejected by the Recovery Officer vide order dated 31.08.2004. The auction sale was confirmed by the Recovery Officer vide order dated 01.09.2004 in favour of the auction purchaser namely Mr. Jaikesh Tripathi and the possession of the mortgaged property was also handed over to the auction purchaser Mr. Jaikesh Tripathi on 31.05.2010. Against the order dated 31.08.2004, the TPO filed an appeal No. 03/2015 before this Tribunal and against this order dated 31.08.2004, the State Government also filed an appeal No. 04/2015. Both the appeals were transferred to DRT, Ranchi which were decided by the DRT, Ranchi vide common order dated 07.01.2016. The DRT, Ranchi did not set aside the Sale Deed made in favour of the TPO but only set aside the sale made in favour of the TPO by the revenue authorities.

Against the order dated 07.01.2016, passed by the DRT, Ranchi an appeal Sr. No. 25 of 2016 was filed by the TPO before the DRAT, Allahabad. The above said appeal was allowed by the DRAT, Allahabad vide order dated 04.11.2019 by virtue of which the order dated 07.01.2016 passed by the Presiding Officer, DRT, Ranchi and the order dated 31.08.2004 passed by the Recovery Officer were set aside and the matter was remanded back to the Recovery Officer, DRT, Allahabad to decide the case afresh independently in accordance with law without being influenced by the observation of the DRAT in any manner. In pursuance of the order dated 04.11.2019 of the DRAT, Allahabad, the Recovery Officer afforded opportunity of hearing to the parties. Subsequently, vide order dated 20.08.2020, the Ld. Recovery Officer has held that the property is not liable to be put on Public Auction by the Recovery Officer unless and until the sale by the Trade Authority in the matter is cancelled by the competent authority and allowed the objection filed by the TPO and set aside the Public Auction done by the Recovery Officer and also cancelled the order of Confirmation of Sale (FORM 18) and Sale Certificate (FORM 20) issued on 01.09.2004 to the respondent NO. 4- Mr. Jaikesh Tripathi.

11. On perusal of record it appears that along with the order dated 05.07.2023, the order dated 20.08.2020, passed by the Ld. Recovery Officer has also been challenged before the Hon'ble High Court of Allahabad which is pending. Further, the order dated 07.01.2016 passed by the DRT, Ranchi has been set aside by the Hon'ble DRAT vide order dated 04.11.2019 and against the order dated 04.11.2019, passed by the Hon'ble DRAT, Allahabad, the auction purchaser namely Jaikesh Triapthi has also filed writ petition before the Hon'ble High Court which is still pending.

12. In view of above, since several writ petitions have been filed by the parties before the Hon'ble High Court wherein the same facts are under consideration of the Hon'ble High Court, and the writ petitions are still pending. Therefore, this Tribunal is of the considered view that it would not be appropriate to pass any order on interim relief at this stage.

13. List this case on 10.09.2024 i.e. the date already fixed in the matter for further proceedings.

[R. M. Kushawaha] Presiding Officer Debts Recovery Tribunal, Allahabad

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