Ms Kusum Vyapaar Pvt Ltd vs State Bank Of India on 17 September 2019

1. 1. State Bank of India, Stressed Assets Management Branch, 8^th Floor, Nagaland House, 11 and 13, Shakrespeare Sarani, Kolkata - 700 071;

2. 2. M/s. Kharkia Steels Private Limited, 3A, Hare Street, P.S. Hare Street, Kolkata 700 001.

- Respondents

Counsel for parties:

For Appellant	: Mr. Partha Bose, Counsel
For Respondent No.1 Bank	: Mr. Debasish Chakrabarti, Counsel
For Respondent No.2	: Mr. Gaurav Singh, Counsel

**FINAL ORDER / JUDGMENT**

(Delivered on 17^th September, 2019)

This appeal has been filed under Section 30 of the Recovery of Debts Due To Banks And Financial Institutions Act, 1993 against order dated 4^th March, 2019 passed by the learned Recovery Officer in R.C. 163 of 2018 (State Bank of India & Others -vs- Kharkia Steels Private Limited & Others).

2. The case of the Appellant is that the Appellant is a Third Party Intervenor in the said R.C. 163 of 2018 and has no relation with the main O.A.; being O.A. 682 of 2014, out of which the above R.C. has arisen. The case of the Appellant in brief is that the Appellant purchased a piece of land on lease for 99 years from West Bengal Industrial Development Corporation (WBIDC) through a sale deed, bearing No. 983 of 2007, on 8^th June, 2007, measuring 5.35 acres in 2Appeal No. 01 of 2019- DRT-2 Kol Mouza Kadasole, J.L. NO. 22, comprising of R.S. Plot Notes of Argument. 1474, 1475, 1476, 1477, 1478, 1479, 1480, 1481, 1482, 1483, 1484, 1485, 2710, 2711, 2712, 1527, 1528, 1529, 1530, 1531, 1532, 1533, 1534, 1535, 1536, 1537, 1538, 1539, 1540(P) and 1526(P). The Appellant set up an industrial unit in that land. According to the Appellant, the Company has a separate and distinct entrance and a passage leading to the broader part of the land which is in exclusive control of the Appellant Company. The Industrial Unit run by the Appellant was running well initially but after a couple of years due to several reasons like labour problem and market recessions the operation had to be stopped and the gates of the factory remained locked.

Few months back, the Appellant came to know that some officials of State Bank of India had forcibly entered into the premises of his factory with the help of the police and broke open the padlock. On hearing the said news the Appellant visited his factory premises on 18^th April, 2017 and found that the incident was true. The Appellant came to know that that the Bank officials had gone to take possession of the property of the adjacent Industrial Unit, namely, M/s. Kharkia Steels Private Limited for their failure to repay the loan of the Bank. The Appellant contends that the Appellant has nothing to do with the Bank nor he is a borrower but while taking possession of the property of the adjacent factory, a part of his property was taken possession of by the Bank authorities. He also came to know that the Respondent NO. 1/Bank filed a case, being O.A. 682 of 2014, for recovery of the loan amount against Respondent No. 2, M/s. Kharkia Steels Private Limited in the Debts Recovery Tribunal and the Tribunal passed order in favour of the Bank. Accordingly, R.C. proceeding was initiated and in that R.C. Proceedings aforesaid possession was taken. The Appellant contends that the Appellant is neither a borrower nor has he any relation with the Bank but his only grievance is that his property has been encroached upon while taking possession of his neighbors'

3Appeal No. 01 of 2019- DRT-2 Kol

property. Appellant, therefore, prays that his property may be released.

The Appellant filed a petition before the Recovery Officer but the learned Recovery Officer did not consider the said petition on merit and dismissed the same as not maintainable. Being aggrieved thereby, Appellant has filed the instant appeal praying for setting aside the order dated 4^th March, 2019 passed in R.C. 163 of 2018 by the learned Recovery Officer, Debts Recovery Tribunal-2, Kolkata and to restrain the Respondents from taking steps in furtherance of the impugned order dated 4^th March, 2019 and to declare the steps taken by the Respondents as illegal.

3. Respondent No. 1/Bank has filed affidavit-in-opposition in which they have categorically stated that they have not taken possession of the Appellant's property and that they have taken possession, in accordance with the direction of the Tribunal, of the property of Sri Ashok Kumar Kharkia measuring 12.73 acres in R.S. Plot No. 1457 vide Lease Deed No. 981 of 2017. Respondent Bank has strongly denied the allegations made by the Appellant that Appellant's property has been encroached upon by the Bank or that the padlock of the gate of his industrial unit has been broken by the Bank officials.

4. Respondent No. 2, M/s. Kharkia Steels Private Limited, has not filed any affidavit-in-opposition though has been represented by his Learned Counsel Mr. Gaurav Singh.

I have heard the Learned Counsel for the parties at length and have gone through the documents on record.

5. Mr. Debasish Karmakar, Learned Counsel for Appellant, has strongly argued that Respondent No. 1/Bank has knowingly or unknowingly encroached upon the property of the Appellant while taking possession of the Respondent No. 2/Borrower. Appellant, therefore, filed an application before the Recovery Officer but the Recovery Officer arbitrarily rejected the application without going into the merit of the case.

6. Mr. Debasish Chakraborti, Learned Counsel for Respondent No. 1 Bank, on the other hand, has categorically submitted that there was no question of encroaching upon the property of the Appellant because the properties are surrounded by boundary walls and according to Appellant's own admission in the Appeal that he has separate entrance, therefore the question of breaking open the padlock does not arise.

7. Mr. Gaurav Singh, Learned Counsel for the Respondent No. 2, M/s. Kharkia Steels Private Limited, adopted the argument of Mr. Debasish Chakraborti, Learned Counsel for Respondent Bank.

8. At this point Mr. Karmakar, Learned Counsel for Appellant, has urged that in order to resolve the dispute, this Tribunal may appoint a Government approved Amin to measure the land so that it can be ascertained as to whether any part of the landed property of the Appellant has actually been encroached upon or not. To this suggestion, Mr. Chakraborti, Learned Counsel for Respondent Bank, has raised serious objection. He submits that measuring only two plots - one belonging to the Appellant and the other to the Respondent No.2, will not solve the problem because Amin measures the entire land. In this particular case, the entire land has been divided by the WBIDC in different plots and sold to different industrial units, therefore, measurement by an Amin only two plots out of many, will surely not give the correct position. Learned Counsel for Respondent Bank, therefore, seriously opposed this suggestion of the Appellant's counsel.

I have given my thoughtful consideration to the rival contentions raised by the parties.

9. The relevant portion of the impugned order, dated 4^th March, 2019, against which this appeal has been filed may be reproduced below :

*"On perusal of the judgment/order passed by the Tribunal in O.A. 682 of 2014 dated 15.06.2018, it is seen that the*

Tribunal during pendency of the O.A. 682 of 2014 appointed joint receivers who have taken physical possession of the factory premises at Barjora, District - Bankura and the Receivers have been directed to continue with the physical possession of the property in question. The order of the Tribunal for taking physical possession of the property in question has not been challenged before any higher juridical forum and the physical possession order has become confirmed and conclusive order.

In view of above status of the property situated at Barjora, the Recovery Officer has no authority to deal with the issue of physical possession of the Barjora property. There is no scope remains for the intervenor to dispute the physical possession of the Barjora property which has been taken possession during pendency of the O.A. 682 of 2014 by the order of the Tribunal. Hence, the petition filed by the intervenor, M/s. Kusum Vyapaar Pvt. Ltd., today 04.03.2019 is not maintainable, liable to be dismissed, hence dismissed and accordingly disposed of."

10. It appears that the Learned Recovery Officer has opined that the Receiver was appointed by the Tribunal during the course of proceedings and, therefore, it was not within the competence of the Recovery Officer to interfere with the order of the Tribunal and accordingly it was observed that there was no scope for the Intervenor to dispute the physical possession of the property during the pendency of the O.A. 682 of 2014 by the order of the Tribunal.

11. Learned Counsel for Applicant is aggrieved by this order only on the ground that the Recovery Officer ought to have gone into the merit of his case and should not have dismissed his petition at the threshold on the ground of maintainability.

12. The main grievance of the Appellant is that although he has no relation with his neighbor, an Industrial Unit, nor he is a borrower of the Bank in the process of taking possession of the neighbour's property, the Bank officials wrongly took possession of a part of his landed property and the Appellant wants his land to be given back to him. The Appellant, in his appeal, has clearly stated that his Company has a separate entrance and a passage leading to the broader parts of the land which is under exclusive control of the Appellant. That apart, the Appellant has enclosed a Deed of Sale at Annexure A, from which it appears that Appellant had purchased the land on 8^th June, 2007 from WBIDC on lease. WBIDC which is a necessary party to the proceedings has not been made a party to resolve the issue of the Applicant.

**13.** As per the lease agreement at para 2 (v) it is stated as follows :

*"To preserve intact the boundaries of the holding and keep them well-demarcated according to the requisition of the LESSOR or any officer authorized in that behalf by WBIDC for the purpose of identification of boundary, boundary marks should be fixed as per specification to be prescribed by the LESSOR or the officer authorized in that behalf to do so. It will be the duty of the LESSEE to maintain all the boundary marks in good condition. Should any boundary marks be missing the LESSEE shall report the fact to the LESSOR. On receipt of the report the LESSOR or the officer authorized in that behalf by WBIDC shall arrange re-location of the positions of the missing marks. Marks shall be restored by the LESSEE immediately after reallocation of the position at his own expenses."*

**14.** It will, therefore, be clear that the property is bounded. Similar, clause is also found from the property of the borrower Company, i.e. M/s. Kherkia Steels Private Limited, who purchased the properties from the same State Bank of India on lease on 8^th June, 2007, being Plot No. 1457 (part) and in para 4 (xiii) similar clause exists. It is quite apparent that the entire land belonged to Government Undertaking, WBIDC, and they sold the land to different Industrial Units and identical conditions were provided to each of the units and all the lands had boundary walls. That being the position, question of encroachment

7

does not arise. I also find from the Report of the Receiver at Annexure E to the affidavit-in-opposition filed by Respondent Bank that Receiver and his team found that the entire premises was surrounded by brick built boundary wall (page 61 of the affidavit-in-opposition). Thus, the claim of the Appellant that his part of land was encroached upon does not appear to be correct.

**15.** So far as the question of appointment of Amin is concerned, I find that there is no such requirement when the individual land of different Industrial Units are surrounded by boundary walls, the question of over-lapping with one another's land is not there and a Government Company has ensured that each unit has separate entrance. In such circumstances, I do not find any merit in the appeal. I also do not find any infirmity in the order of the Recovery Officer which is under challenge in this appeal.

**16.** In the result, the Appeal being Appeal No. 01 of 2019, fails and is accordingly dismissed. There will be no order as to costs.

Copy of the Judgment/Final Order be uploaded in the Tribunal's Website.

File be consigned to Record room.

Order pronounced by me in the open Tribunal on this the 17^th day of September, 2019.

Sd/- (M.S. Rao) Presiding Officer DRT-2, Kolkata

ac/jrc