PAWAN KUMAR RUIA vs IDFC First Bank Limited on 11 December 2024

JUDGMENT

IN MISCELLANEOUS APPLICATION NO.84 OF 2024 Dt.11^th December 2024

**BEFORE THE DEBTS RECOVERY TRIBUNAL-I, MUMBAI** **AT: DRT-3 MUMBAI**

**Presided over by Arun Kumar Singal, I/c Presiding Officer**

**MISCELLANEOUS APPLICATION NO.84 OF 2024**

**Presented on : 11.06.2024**

**Registered on : 17.09.2024**

**Decided on : 11.12.2024**

**Pawan Kumar Ruia,**

Adult, Indian Inhabitant having address at 5, Sunny Park, Kolkata - 700 019.

**APPLICANT**

**V/s.**

1. 1. **IDFC First Bank Limited,** having its Registered Office at KRM Tower, 7^th floor, No.1, Harrington Road, Chetpet Chennai - 600 031, Tamil Nadu also having its Office at Vibgyor Towers, 10^th floor, Opp. Hotel Trident Gate, Plot No.C-56, G Block, Bandra-Kurla Complex, Bandra (East); Mumbai 400 051.

2. 2. **Monotona Tyres Limited,** Through Liquidator, Mr. Sanjay Mehra, CA having Office at B-11, Third Floor, Geetanjali, Enclave, Opp. Aurobindo College, New Delhi, National Capital Territory of Delhi - 1100 017.

3. 3. **Jai Brijmohan Niketan Private Limited,** A company incorporated under the Companies Act, 1956 and having its present address at 9-Ezra Street, Top Floor, Room No.47, Kolkata - 700 001.

4. 4. **Jai Tridev Vihar Private Limited,**

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A company incorporated under the Companies Act, 1956 and having its present address at 9-Ezra Street, Top Floor, Room No.47, Kolkata - 700 001.

1. 5. **Jai Harihar Towers Private Limited,** A company incorporated under the Companies Act, 1956 and having its present address at 9-Ezra Street, Top Floor, Room No.47, Kolkata - 700 001.

2. 6. **Jai Vaibhav Niketan Private Limited,** A company incorporated under the Companies Act, 1956 and having its present address at 9-Ezra Street, Top Floor, Room No.47, Kolkata - 700 001.

3. 7. **Jai Ganga Nirman Private Limited,** A company incorporated under the Companies Act, 1956 and having its present address at 9-Ezra Street, Top Floor, Room No.47, Kolkata - 700 001.

4. 8. **Jai Gokul Towers Private Limited,** A company incorporated under the Companies Act, 1956 represented by Insolvency Resolution Professional, Mr. Seikh Abdul Salam, having address at 64J Linton Street, P.S., Beniapukur, Kolkata - 700 014, West Bengal.

5. 9. **Mandipa Properties Private Limited,** Having address at 5, Russell Street, 1^st floor, Police Station Shakespeare Sarani, Kolkata - 700 071.

6. 10. **Mohanlal Khandelwal,** Having address at 5, Russell Street, 1^st floor, Police Station Shakespeare Sarani, Kolkata - 700 071.

7. 11. **Questqueen Vista LLP,** Having address at C/o - Varima Fashions P. Ltd., 107/1, Park Street, Kolkata - 700 016.

...RESPONDENTS

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Argued By -

Mr. Dinesh Purandare along with Mr. Charles De Souza and Mr. Rupak Sawangikar i/b M/s. Chiyarajawala & Co., Advocate for the Applicant.

Mr. Rajesh Nagory along with Mr. Aayush Kothari and Ms. Anisha Nair i/b M/s. Naik Naik & Associates, Advocate for the Respondent No.1.

Mr. Deepak Saxena along with Mr. Jitendra Bakliwal i/b M/s. Legal Prism, Advocate for Respondent No.11 - Auction Purchaser.

Other Respondents absent.

JUDGMENT

1. 1. The case of the Applicant is that by Sanction Letter dt.06.10.2017, Capital First Limited (predecessor-in-title of Respondent No.1) had sanctioned the Term Loan of Rs.26.50 Crores to the Respondent No.2 which is secured by Deed of Mortgage dt.01.02.2018 executed by the Respondent Nos.3 to 8 in respect of the Suit property which consists of B+G+6 storied building having total covered area of 1,44,391 sq. ft. standing thereon. The said Mortgage Deed is registered with Sub-Registrar - IV, Calcutta at Sr. No.190400934/2018 who had determined the market value on 31.01.2018 at Rs.57,96,09,226/-.

2. 2. The fair value of the mortgaged property was the sold consideration for the Applicant giving the guarantee. The Applicant is entitled to the benefit of realisation of fair market value of the said property. The conduct of the Recovery

Proceeding No.65 of 2021 and the sale of the mortgaged property without taking into consideration the Order dt.08.01.2024 whereby the Tribunal has modified Recovery Certificate and corrected the mistake in the covered area of the property has resulted in gross travesty of justice and caused irreparable loss and prejudice to the Applicant.

1. 3. The predecessor of Respondent No.1 filed Commercial Suit (L) No.310 of 2018 for recovery of Rs.30,03,89,097/- which resulted in consent decree dt.04.04.2018 with understanding that the said property would be sold in its entirety for recovery of the debt. The Decree Holder filed Execution Application (L) No.1765 of 2018 and moved Chamber Summons (L) No.1018 of 2018 for appointment of Court Receiver and vide Order dt.30.07.2018, the Hon'ble High Court appointed the Court Receiver with power to sell the property. The Court Receiver took physical possession of the said property in August 2018 and appointed M/s. Nadkarni & Co. as valuer who submitted the valuation report dt.07.09.2018 in the sum of Rs.69.31 Crores based on which the Hon'ble High Court vide Order dt.01.10.2018 fixed the reserve price at Rs.70 Crores for auction of the said property and permitted the decree holder to introduce the private bidder for not less than Rs.70 Crores.

1. 4. Further, one Operational Creditors (Sunrise TSR Capital) of Respondent No.2 filed Company Petition No.C.P. (IB)/286(MB)2018 under Section 9 of the Insolvency and Bankruptcy Code, 2016 and vide Order dt.30.11.2018, the Ld. NCLT appointed Mr. Manoj Kumar Mishra as Interim Resolution Professional. On 23.06.2023, the Ld. NCLT passed order of liquidation of Respondent No.2 Company and appointed Mr. Sanjay Mehra, C.A. as its liquidator.

2. 5. On 30.01.2019, the Respondent No.1 filed Chamber Summons (L) No.159 of 2019 seeking transfer of execution proceeding to DRT Mumbai and vide Order dt.04.04.2019, the Hon'ble High Court allowed the Chamber Summons. The Respondent No.1 moved Miscellaneous Application No.20 of 2019 for issuance of Recovery Certificate in terms of the Consent Terms dt.04.04.2018 which was granted by an ex-parte Order dt.18.12.2020 and accordingly on 19.02.2021, the Recovery Certificate was issued by the Tribunal. The Respondent Nos.3 to 8 have filed Appeal before the Hon'ble DRAT, Mumbai challenging the Order dt.18.12.2020.

3. 6. On 14.02.2022, the Recovery Officer issued Demand Notice in R.P. No.65 of 2021 for Rs.30,06,68,557/- and by Order dt.03.10.2022, appointed Ms. Rupa Patel as Receiver in respect of

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the said property with a covered area of 1,11,068 sq. ft. instead of 1,44,391 sq. ft. On 03.11.2022, the Recovery Officer issued Order appointing Krishna Consultant as Valuer of the said property who submitted the Report dt.27.06.2023 indicating market value at Rs.32,02,49,000/-. On 31.07.2023, the Tribunal issue notice for settling the proclamation of sale returnable on 21.08.2023. On 21.08.2023, the Respondent Nos.3 to 8 -mortgagors - raised objections to the valuation report dt.27.06.2023. The Ld. Recovery Officer scheduled auction on 04.10.2023 at the reserve price of Rs.32.03 Crores subject to disposal of the objection raised by the Respondent Nos.3 to 8. On 23.08.2023, the Applicant filed Application to set-aside valuation report dt.27.06.2023.

7. Vide Order dt.08.09.2023, the Ld. Recovery Officer rescheduled the auction to 11.10.2023 and issued Sale Notice with covered area of 1,11,068 sq. ft. to which mortgagors filed Writ Petition (L) No.27508 of 2023 challenging the legality and validity of Orders dt.21.08.2023 and 08.09.2023. Vide Order dt.11.10.2023, the Hon'ble High Court was pleased to direct the Ld. Recovery Officer to decide the mortgagor's objections before confirmation of sale.

8. On 26.10.2023, the mortgagors filed Miscellaneous Application No.79 of 2023 before DRT-1, Mumbai for rectification/clarification/modification of Recovery Certificate dt.19.02.2021, *inter alia*, for recording covered area of the said property as 1,44,391 sq. ft. as per the Consent Terms dt.04.04.2018 instead of 1,11,068 sq. ft. and during the pendency of said M.A., the Ld. Recovery Officer by Order dt.20.11.2023 dismissed the objections. By Order dt.08.01.2024, the Tribunal observing that it was a typographical mistake, modified/rectified the Recovery Certificate accordingly and on 01.02.2024, the mortgagors filed Pursis placing on record the Order dt.08.01.2024 with request to act accordingly.

9. On 01.02.2024, the DRT Receiver filed a Report placing on record a letter received by her Insolvency Resolution Professional of Respondent No.8 herein appointed by the NCLT, Kolkata by Order dt.01.01.2024 passed in Company Petition No.C.P.(IB)/218(KB)2023. The Applicant was surprised to discover an Order dt.06.03.2024 whereby the Ld. Recovery Officer made the following observations/directions:

- (i) that the issuance of confirmation of sale (ITCP-18) (ii) 13 and Sale Certificate (ITCP-20) was kept in abeyance by order dated 20/11/2023

- (ii) as per Pursis [Ex-55] filed by mortgagors on 01/02/2024 and order dated 08/01/2024, the learned Presiding Officer dhun 11.12.2024

has corrected description of mortgaged property as "1.44,391 sq. ft." instead of "1,11,068 sq. ft." and description of mortgaged property in the record of the recovery proceeding will be treated accordingly.

(iii) DRT Receiver as well as mortgagors had filed Pursis placing on record copy of order dated 01/01/2024 passed by NCLT Kolkata in respect of Respondent No.8. As per the said order, a moratorium as envisaged under section 140) of the IBC has become operative with effect from 01/01/2024.

(iv) After referring decision of the Hon'ble Supreme Court in B Arvind Kumar v. Government of India, (which was not cited by either party or any argument was advanced in respect thereof) the learned Recovery Officer observed that though by order dated 20/11/2023 issuance of confirmation of sale (WTCP-18) and Sale Certificate (ITCP-20) were kept in abeyance, but the moratorium imposed by the NCLT will apply only to the extent of share of Respondent No.8 in the sale proceeds of the said property.

(v) by said order the learned Recovery Officer proceeded to direct the Registry to issue ITCP - 18 (confirmation of sale) in favour of auction purchaser i.e. Questqueen Vista LLP despite the moratorium being operative on 06/03/2024 and

*[Signature]* 11.12.2024

that also in respect of area admeasuring about "1,44,391 sq. ft." though sale was proclaimed and purchase price was paid for area admeasuring about "1,11,068 sq. fi."

(vi) in light of NCLT order dated 01/01/2024 declaring moratorium further recovery proceeding against Respondent No.8 were kept in abeyance until further order; and

(vii) decision regarding issuance of sale certificate i.e. ITCP -20 was kept in abeyance till further order.

10. There was no hearing on 06.03.2024 nor were any arguments made and the Ld. Recovery Officer in Order dt.06.03.2024 issued confirmation of sale (ITCP-18) on 07.03.2024 and the matter was adjourned to 14.03.2024 on which date various issues were raised and argued and the Ld. Recovery Officer reserved his order and fixed 19.03.2024 for pronouncement of order however, on 15.03.2024, it was noticed that a detailed order dt.14.03.2024 though not legally pronounced by the Ld. Recovery Officer was uploaded on the website of the Tribunal which practice is highly deprecated by the Hon'ble High Court in *Kamal K. Singh Vs. Union of India*. The Respondent Nos.2 to 7 filed Writ Petition (L) No.9356 of 2024 challenging Order dt.14.03.2024 passed in

Recovery Proceeding No.65 of 2021 however, by Order dt.20.03.2024, the Hon'ble High Court disposed the Writ Petition.

11. The process followed by the Ld. Recovery Officer in respect of the mortgaged property with reduced area of 1,11,068 sq. ft. is contrary to Recovery Certificate modified by the Tribunal on 08.01.2024. Vide Order dt.08.01.2024, the Tribunal modified the Recovery Certificate and by Order dt.06.03.2024, the Ld. Recovery Officer took note of the Order dt.08.01.2024. Thereafter, the Ld. Recovery Officer ought not to have issued confirmation of sale (ITCP-18) and Sale Certificate (ITCP-20) in favour of the purchaser. The entire process issued by the Ld. Recovery Officer against the property situated at Kolkata are ex facie null and void as the Ld. Recovery Officer did not have the jurisdiction to levy execution. The Ld. Recovery Officer was bound to commence process in accordance with the corrected certificate which records area of mortgaged property as 1,44,391 sq. ft. Thus, entire process in R.P. No.65 of 2021 pursuant to the Order dt.18.12.2020 is illegal, null and void and is liable to be quashed as it is on the basis of the certificate dt.19.02.2021 and not the certificate as amended in terms of Order dt.08.01.2024 and thus abused the entire process of the Tribunal.

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1. 12. The Applicant further submits that in the process of registration of Sale Certificate (ITCP-20), the jurisdictional Registrar at Kolkata has evaluated the said property admeasuring about 1,44,391 sq. ft. at Rs.85,53,28,960/- however, the auction purchaser has paid only Rs.32,03,00,000/- for purchase of area about 1,11,068 sq. ft. and issued Sale Certificate accordingly which gross abuse and misuse of process of law.

2. 13. In the circumstances, the said process issued by the Ld. Recovery Officer in Recovery Proceeding No.65 of 2021 on the basis of the Recovery Certificate dt.19.02.2021 including confirmation of sale (ITCP-18) and Sale Certificate (ITCP-20) be quashed and set aside and transfer Recovery Proceeding No.65 of 2021 to DRT Kolkata.

3. 14. In reply, the Respondent No.1, by way of affiant Mr. Abhishek Mahajan, contended that the present application has been filed with a *mala fide* intent to challenge the entire process carried out by the Ld. Recovery Officer in R.P. No.65 of 2021. He further contended that the present M.A. is not maintainable as the Applicant failed to adopt the correct remedy to challenge the said process under Section 30A of RDB Act, 1993.

4. 15. The Respondent No.1 further contended that he filed M.A. No.22 of 2019 for issuance of Recovery Certificate which was disposed of on 18.12.2020 ordering for issuance of Recovery Certificate in favour of the Respondent No.1 which was not being appealed or disputed by the Applicant and has attained finality and pursuant thereto, R.P. No.65 of 2021 was issued wherein Recovery Certificate dt.19.02.2021 was issued against the Certificate Debtors as per which the Certificate Debtors are jointly and severally liable to pay to the Respondent No.1 a sum of Rs.30,06,68,557/- with interest.

16. The Respondent No.1 further contended that the Applicant herein intentionally filing frivolous applications bypassing the mandatory provisions of the RDB Act, 1993 to stall the recovery proceedings of the certificate holder and therefore, the present M.A. be dismissed.

17. In reply, the Respondent No.11, by way of affiant Mr. Vivek Baid, contended that the Applicant has not approached this Tribunal with clean hands and suppressed the materials facts and the Applicant as well as Respondent Nos.2 to 10 are trying to defeat the Recovery Proceeding. He further contended that auction was conducted on 11.10.2023 and he was declared highest bidder vide Order dt.12.10.2023 and paid the entire bid amount by 25.10.2023 and issued ITCP-18 and ITCP-20 in favour of the Respondent No.11 - auction purchaser. Further, the Ld. Recovery Officer passed an Order dt.06.03.2024 and held that auction held on 11.10.2023 has already been confirmed on 20.11.2023 and directed the Registry to issue ITCP-18 (Order of Confirmation of Sale) and kept in abeyance the issuance of sale certificate i.e. ITCP-20 in order to maintain the legal sanctity of the Order of the Hon'ble High Court of Calcutta.

18. The Respondent No.11 further contended that the Ld. Recovery Officer, after taking on record the Hon'ble High Court of Calcutta Order dt.12.03.2024 wherein the Hon'ble High Court has recalled its Order dt.01.11.2023, directed Registry vide its Order dt.14.03.2024 to issue ITCP-20.

19. The Applicant never raised the issue of jurisdiction with respect to the recovery proceedings being conducted by the Ld. Recovery Officer.

20. The Respondent No.11 further contended that the present Application is not maintainable and is barred by provisions of Section 30 of the RDB Act, 1993. The Respondent Nos.3 to 7 herein had filed Writ Petition (L) No.9356 of 2024 before the Hon'ble High Court raising objections. The present application is also barred by the doctrine of finality and the Applicant is not entitled to invoke and exercise jurisdiction. The Respondent No.11 further contended that subsequent to issuance of Sale Certificate dt.14.03.2024 and after following necessary procedure and on payment of stamp duty on 22.03.2024, he is in possession of the subject property. He further contended that the provision under Section 19(23) of the RDB Act, 1993 is directory and not mandatory. Further, the Respondent No.11 denied and refuted each and every statement, allegations and claim made by the Applicant in its entirety on account of being false, fabricated, uncorroborated, misconceived and thus devoid of any merit. Thus, request to reject the present application.

1. 21. This Tribunal has given dispassionate consideration to the arguments advanced by the counsel for the Applicant, Respondent No.1 and Respondent No.11 and has gone through the material brought on record.

2. 22. It is an admitted fact that the Respondent No.2 availed the loan of Rs.26.50 Crores from the predecessor in title of Respondent No.1 and Respondent Nos.3 to 8 mortgaged the Suit property consisting of B+G+6 storied building having total covered area of 1,44,391 sq. ft. standing thereon. The said Mortgage Deed is registered with Sub-Registrar - IV, Calcutta at Sr. No.190400934/2018 and Respondent No.10 (now Applicant in this M.A.) stood guarantor. Since the Respondent No.2 failed to repay the loan amount, so, the predecessor of Respondent No.1 filed Commercial Suit (L) No.310 of 2018 for recovery of

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Rs.30,03,89,097/- which resulted in consent decree on 04.04.2018 and in view of that consent decree, property was to be sold in its entirety for recovery of the debt and execution was filed and Court Receiver was appointed by the Hon'ble High Court and physical possession of the Suit property was taken by the Court Receiver in August 2018 and M/s. Nadkarni & Co. was appointed as valuer who in his valuation report dt.07.09.2018 assessed the value of the Suit property at Rs.69.31 Crores and the Hon'ble High Court vide Order dt.01.10.2018 fixed the reserve price at Rs.70 Crores for auction of the said property and permitted the decree holder to introduce the private bidder for not less than Rs.70 Crores.

1. 23. On filing of Chamber Summons(L) No.159 of 2019 on 30.01.2019 by the Respondent No.1, the execution was transferred to DRT, Mumbai and the Respondent No.1 moved Miscellaneous Application No.20 of 2019 for issuance of Recovery Certificate in terms of Consent Terms dt.04.04.2018 which was granted by an ex-parte Order dt.18.12.2020 and Recovery Certificate was ordered to be issued as prayed for in clause VI(i) to (iii) and the Ld. Recovery Officer was ordered to appoint Receiver as per Clause VI(iv) of M.A. No.20 of 2019 and accordingly Recovery Certificate was issued on 19.02.2021 and the Recovery Certificate covered the total area of the property as about 1,11,068 sq. ft. and the Ld. Recovery Officer ordered for valuation of the immovable property to Shri Kishan P. Nenwani of area about 1,11,068 sq. ft. and in that Order, valuer was also directed to state in his report the sale price of at least one recent transaction of comparable property within or in the vicinity of the locality where the property valued is situated and the value as per the ready reckoner issued by the Competent Authority for the area besides intimating the statutory claims.

24. The valuation report was submitted and proclamation of sale was issued wherein area of property was mentioned as about 1,11,068, the present Applicant who was Certificate Debtor No.10, vide his Application (Exh.32), took exception to the valuation report dt.27.06.2023 submitted by DRT Valuer for the mortgaged property, allegedly prepared in undue haste and not in accordance with the prescribed norms and not complying with the directions issued by the Tribunal and in that Application, it was specifically mentioned that the said report discloses covered area of 1,30,114 sq. ft. whereas, the indenture of mortgage dt.01.02.2018 records the total built up area of mortgaged property to be about 1,44,391 sq. ft. but, that Application was dismissed vide Order dt.20.11.2023 and e-auction held on 11.10.2023 was confirmed in favour of the Auction Purchaser i.e. Questqueen Vista LLP - Respondent

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No.11 herein - and it can be noted that the confirmation was regarding about 1,11,068 sq. ft. and Receiver was directed to issue ITCP-18 and ITCP-20 in favour of the Auction Purchaser. On the same day, Advocate appearing for the Jay Badrinath Niketan Private Limited and Jay Raghveer Enclave Private Limited placed the pursis along with the Annèxure-1 (Order of the Hon'ble High Court at Calcutta in C.O. No.4004/2023) to take the above Order on record and stay the proceeding with respect to the third party's property and kept the issuance of ITCP-18 and ITCP-20 in abeyance. This Tribunal has failed to understand as to why the two Orders, one for confirmation of sale and issuance of ITCP-18 and ITCP-20 and second of keeping in abeyance the issuance of ITCP-19 and ITCP-20 were issued on the same day i.e. 20.11.2023. When the ITCP-18 and ITCP-20 were kept in abeyance, the confirmation of sale also could have been kept in abeyance as this Order dt.20.11.2023 has been scribed at the same time and not in two tranches.

25. Perusal of the record would show that the Applicant - Jai Brijmohan Niketan Private Limited preferred M.A. No.79 of 2023 bringing to the notice of the Tribunal that in the Recovery Certificate dt.19.02.2021, the covered area of the mortgaged property was wrongly mentioned as 1,11,068 sq. ft. in place of 1,44,391 sq. ft. and Hon'ble Tribunal, after perusal of the record,

found that in the mortgage dt.01.02.2018, the Consent Terms as well as in the Order of Hon'ble High Court dt.30.07.2018, the details of the mortgaged property was provided as : "All that piece and parcel of land or ground thereto containing/admeasuring about 41 cottahs 02 chittacks and 12 sq. ft. forming part of dag nos.61, 63, 64 & 65 under RS Khaitan No.152 (L.R. Nos.1147, 1148 and 1149) in Mouza Mondalghati under PS Rajarhat at present Airport, in the District North 24 Parganas 700 052 present known and numbered as Municipal Holding No.43/72, Mondalghanti (presently known as 1, Kazi Nazrul Islam Avenue), under Municipal Ward No.13, formerly 26, within the limits of Bidhannagar Municipal Corporation formerly Rajarhat Gopalpur Municipality together with B+G+6 storied building having total cover area of about 1,44,391 sq. ft. standing thereon with present and future superstructures standing on the land together with all the development right, present and future, FSI/FAR, tenements, hereditaments, structures, sewers, drains, ways, ditches, watercourses, premises." and finding apparent typographical mistake in Annexure-A of M.A. No.22 of 2019 on the part of Respondent - Financial Institution while described the mortgaged property as inclusive of area about 1,11,068 sq. ft. instead of correct area of 1,44,391 sq. ft. and that M.A. was disposed of and it was clarified that the area of the mortgaged property i.e. all that piece and parcel of land or ground thereto containing/admeasuring about 41 cloths 202 chittacks and 12 sq. ft. forming part of dag nos.61,

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63, 64 & 65 under RXS Khaitan No.152 (L.R. Nos.1147, 1148 and 1149) in Mouza Mondalghati under PS Rajarhat at present Airport, in the District North 24 Parganas 700 052 present known and numbered as Municipal Holding No.43/72, Modalghanti (presently known as 1, Kazi Nazrul Islam Avenue), under Municipal Ward No.13, formerly 26, within the limits of Bidhannagar Municipal Corporation formerly Rajarhat-Gopalpur Municipality together with B+G+6 storied building having total cover area, shall be read as, '1,44,391 sq. ft.' instead of '1,11,068 sq. ft.' and this Order dt.08.01.2024 was put up before the Ld. Recovery Officer.

26. The Order dt.17.01.2024 shows that record and proceeding was received from Hon'ble Presiding Officer and matter was adjourned to 01.02.2024 for further hearing/steps and matter was adjourned again for further steps with direction to the Certificate Holder Bank to file synopsis and comments/status report of Exh.56 on or before next date of hearing and on 28.02.2024, the last opportunity was granted to the Certificate Holder Bank to offer their comments/status report on Exh.56 and matter was adjourned to 04.03.2024 but, due to administrative reason, board was discharged and case was adjourned to 06.03.2024 and on 06.03.2024, the Ld. Recovery Officer considered the Order dt.08.11.2024 passed by the Ld.

Presiding Officer of DRT-1, Mumbai whereby, area of the mortgaged property was corrected as 1,44,391 sq. ft. in place of 1,11,068 sq. ft. but without hearing the parties passed Order as below:

"Keeping in view the legal position and the facts elaborated hereinabove, especially the fact that the open public e-auction sale of the aforesaid Mortgage Property conducted on 11.10.2023 has already been confirmed on 20.11.2023 in favour of the Auction Purchaser, i.e. Quest Queen LLP Pvt. Ltd., read with the judgment of the Hon'ble Supreme Court of India in the matter of B. Arvind Kumar (Supra), the rights of the Auction Purchaser have already been confirmed qua the aforesaid Mortgage Property. It was only in order to maintain the legal sanctity of the order of the Hon'ble High Court at Calcutta, issuance of the Sale Certificate to the Auction Purchaser was kept in abeyance. Therefore, the applicability of the moratorium against CD No.4 in the present Recovery Proceedings by virtue of the Order dated 01.01.2024 passed by the Hon'ble NCLT (Division Bench, Court No.II), Kolkata, is at present to the extent of the share of CD No.4 qua sale proceeds of the aforesaid auctioned Mortgaged Property.

In view of the above and the fact the open public e-auction sale of the aforesaid Mortgage Property conducted on 11.10.2023 has already been confirmed on 20.11.2023 in favour of the Auction Purchaser, i.e. Quest Queen LLP Pvt. Ltd., Registry is directed to issue ITCP-18 (Order of

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Confirmation of Sale) in favour of the Auction Purchaser, i.e., Quest Queen LLP Pvt. Ltd.

In order to maintain the legal sanctity of the order of the Hon'ble High Court at Calcutta and keeping in view the provisions of RDB Act, the decision with respect to the issuance of the Sale Certificate, i.e. ITCP-20 with regard to the mortgaged property shall continue to be in abeyance till next date of hearing.

Further, as the Hon'ble NCLT (Division Bench, Court No.II), Kolkata, has passed Order dated 01.01.2024 bringing in force moratorium against Jai Gokul Towers Private Limited (CD No.4 herein), further Recovery Proceedings against CD No.4 in the present R.P. are kept in abeyance until further Orders. The issue with regard to disbursal of sale proceeds, except for the expenses in the present R.P. incurred by the CH Bank and the applicable charges of DRT Receiver to be disbursed, shall be subject to the appropriate Order of the Hon'ble NCLT (Division Bench, Court No.II), Kolkata, to the extent of the share of Jai Gokul Towers Private Limited (CD No.4 herein) in Company Petition (IB) No.218/KB/2023 in the matter of "Miller Traders Private Limited Vs. Jai Gokul Towers Private Limited".

26. Further, Ld. Recovery Officer relied upon the law laid down in Judgement in B. Arvind Kumar Vs. Government of India and Others and also observed that a property sold in public auction pursuant to the Order of the Court whereas, the sale is confirmed, it become absolute and the title vests with the Auction Purchaser. If it is so then, sale was confirmed on 20.11.2023 and it must have become absolute regarding area 1,11,068 sq. ft. and once it has become absolute, the Ld. Recovery Officer, on receipt of Order dt.08.01.2024 from the Presiding Officer in M.A. No.79 of 2024, could not have ordered that description of mortgaged property in the records of present Recovery Proceeding be treated and read as 1,44,391 sq. ft. instead of 1,11,068 sq. ft. Moreover, the Ld. Recovery Officer to justify his unjust act taking aid of Meriam Webstar Dictionary, meaning of the word 'about' observed to 'almost' or 'around', that is to say, the covered area of structure is almost or around 1,11,068 sq. ft. or 1,44,391 sq. ft. Even Ld. Recovery Officer went to the extent of saying 'In other words, the covered area as indicated in Exhibit-4 in M.A. No.20 of 2019 and in the indenture of Mortgage (Exhibit-B, Page 41 of Exhibit-32) is not specific' whereas, in these documents, the covered area is specific i.e. 1,44,391 sq. ft. It appears that Ld. Recovery Officer was in a hurry to issue ITCP-20 for an area of 1,44,391 sq. ft. By this act of the Ld. Recovery Officer, the Auction Purchaser became owner of much more area of 1,44,391 sq. ft. whereas, he submitted his bid for purchase of area of 1,11,068 sq. ft. which was offered to sale afm 11.12.2024

pursuant to the Original Recovery Certificate. There is unjust enrichment of the Auction Purchaser because of unjust act of the Ld. Recovery Officer.

28. Even otherwise also, the Ld. Recovery Officer could not have passed that order of substitution of area 1,44,391 sq. ft. in place of 1,11,068 sq. ft. in the Sale Certificate as auction was held for area of 1,11,068 sq. ft. and not for 1,44,391 sq. ft. Even Receiver was appointed and valuation was obtained for area of 1,11,068 sq. ft. and not for 1,44,391 sq. ft. Also, proclamation of sale was for 1,11,068 sq. ft. If the proclamation had been there for area of 1,44,391 sq. ft. with reserve price of 30,03,89,097 then, it was quite possible that more buyers might have come forward. The proper course for the Ld. Recovery Officer was to issue fresh proclamation of sale and get the valuation of area of 1,44,391 sq. ft. done but instead of ignoring the earlier sale for area of 1,11,068 sq. ft., made a short-cut and interpolated area of mortgaged property as 1,44,391 sq. ft. in place of 1,11,068 sq. ft. which act appears to have been done by the Ld. Recovery Officer in a haste and thus he misused and abused the process of law.

29. Further in this case, valuation of the same property was got done twice, once at the instance of Hon'ble High Court in Commercial Suit (L) No.310 of 2018 whereby the valuer valued the mortgaged

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property at 69.31 Crores thereafter, the valuation was got done by the Ld. Recovery Officer from Krishna Consultants who valued the property of area of 1,30,114 sq. ft. at Rs.31,02,48,800/- which is highly discrepant as compared with the valuation got done by valuer appointed at the instance of the Hon'ble High Court on 07.09.2018 and on perusing both the reports, this Tribunal finds that valuation done by the valuer appointed by the Ld. Recovery Officer is very very less as compared to the valuation done by the valuer appointed by the Hon'ble High Court. Even the valuer appointed by the Ld. Recovery Officer has not taken into consideration the directions given by the Ld. Recovery Officer while appointing the valuer. So, all these facts indicate that the Ld. Recovery Officer has not followed due procedure.

30. Now, coming to the arguments of the counsel for the Applicant that one of the mortgagors filed Civil Writ Petition No.27508 of 2023 which was dismissed with liberty to the Petitioners to avail all the alternative remedies available under Section 30 of the RDB Act, 1993 and it was made clear by the Hon'ble High Court that they have not opined on the merits of the matter which shall be decided by the DRT, if approached by the Petitioners under Section 30 of the RDB Act, 1993 and it was also clarified that before any Appeal is entertained under Section 30, the

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Petitioners will have to comply with the mandatory provisions of Section 30(A) of the RDB Act, 1993. So, it is the plea of the Applicant that the proper course for the Applicant was to file Appeal and not M.A. under Section 19(25) of RDB Act, 1993. This contention of the Respondent is not tenable in view of the special provisions of the RDB Act, 1993.

1. 31. As per Section 7(2) of the RDB Act, 1993, the Ld. Recovery Officer and other officers and employees of a Tribunal shall discharge their functions under the general superintendence of the Presiding Officer and Section 19(25) empowers this Tribunal to make such Order and give such directions as may be necessary or expedient to give effect to its orders or to prevent abuse of its process or to secure the ends of justice.

2. 32. There is no dispute regarding observation of Hon'ble High Court in Writ Petition No. 27508 of 2023 but in such like cases in hand, the Ld. Recovery Officer works under the superintendence of this Tribunal and if the Ld. Recovery Officer flouts the Order of the Tribunal and if there is abuse of its process then, the party can avail the remedy available under Section 19(25) so as to secure the ends of justice. Even otherwise also, this Tribunal is empowered to take suo moto cognizance of the acts of omissions and commissions of the Ld. Recovery Officer and if directions of

the Tribunal are not complied with in letter and spirit and the Ld. Recovery Officer on correction of the area in the Recovery Certificate by the Presiding Officer should have initiated Recovery Proceeding afresh by obtaining fresh valuation of the area measuring 1,44,391 sq. ft. and then issuing proclamation of sale for that area. So, the M.A. filed by the Applicant is maintainable. The Order passed by the Hon'ble High Court does not debar the Applicant who is guarantor to file this Application as he was not a party to the Writ Petition No.27508 of 2023. In this case, the Applicant has got remedy to file Appeal as well as M.A. under Section 19(25). The Applicant chose to file the present Application which in the peculiar circumstances of this case is maintainable. The Ld. Recovery Officer is bound to execute the Recovery Certificate as it is and he cannot substitute his own finding regarding area i.e. the covered area of structure is almost or around 1,11,068 sq. ft. or 1,44,391 sq. ft. He cannot make any addition, deletion, modification or substitution in the Recovery Certificate while executing the same.

33. In this case an error crept in the Recovery Certificate issued on 19.02.2021 and whole Recovery Proceeding was carried out by the Ld. Recovery Officer on the basis of the area of the mortgaged property i.e. 1,11,068 sq. ft. mentioned in the Recovery Certificate and mortgagor had to file M.A. No.79 of 2024 and that error was rectified and area was corrected as 1,44,391 sq. ft. in place of 1,11,068 sq. ft. whereas, the Ld. Recovery Officer had confirmed the sale of area of 1,11,068 sq. ft. Since the Ld. Recovery Officer failed to give effect to the Order dt.08.01.2024 and abused the process while interpolating the area 1,44,391 sq. ft. in the Sale Certificate in place of 1,11,068 sq. ft. for which the sale was confirmed in the back date has resulted into miscarriage of justice and there is patent abuse of the process of law by the Ld. Recover Officer. So, in the considered opinion of this Tribunal, in such cases, there is no necessity to file appeal. Even in such cases the Tribunal can take suo moto cognizance of the unjust acts of the Ld. Recovery Officer who works under the superintendence of the Tribunal. So, all the proceedings of Recovery Proceeding No.65 of 2021 instituted on the basis of original Recovery Certificate dt.19.02.2021 are declared null and void and are hereby set aside.

34. Since the property is situated in the jurisdiction of Kolkata DRT, so, in view of Section 19(23) of RDB Act, 1993, this Tribunal is of the opinion that to obtain a fair market price, the execution of the Recovery Certificate be transferred to the Tribunal situated in Kolkata in whose local limits the property is situated. The Copy of the Recovery Certificate dt.19.02.2201, corrected vide Order dt.08.01.2024, be sent to the Hon'ble DRAT, Mumbai to assign

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the same to the Tribunal in whose jurisdiction the secured asset/mortgaged property admeasuring 1,44,391 sq. ft. is situated.

35. The Miscellaneous Application No.84 of 2024 is hereby allowed.

36. File of the present M.A. No.84 of 2024 be tagged with the Recovery Proceeding No.65 of 2021.

37. Copies of this Judgment be sent to the parties free of cost and file be consigned to Record Room.

Given under my hand and the seal of this Tribunal on this date : 11.12.2024.

*Arun Kumar* (ARUN KUMAR SINGAL) I/c PRESIDING OFFICER DRT-I, MUMBAI

Typed By - S S Bhawale, PS