NIZAR AHMED TS vs HDB FINANCIAL SERVICE LTD. on 19 July 2022

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This application is filed under Section 17(7) of the SARFAESI Act, 2002 r/w Section 22(2) (e) of the RDDB & FI Act, 1993. In the application, the prayer is to review the final order dated 27.07.2020 in SA No.208/2019 passed by the Ld. Predecessor of this Tribunal.

2. Brief Facts of the case:-

The applicant has challenged the orders of DM dated 30.05.2019 in RC No.12830/2018/C1 in the earlier proceedings in SA No.208/2019, which was disposed of by my Ld. Predecessor by a speaking order dated 27.07.2020.

3. The grounds for review in the affidavit at Paras 1 to 7 are not found, but the circumstances and facts leading to filing of SA No.208/2019 are pleaded.

4. At para – 8 it is again pleaded of a fact that the applicant herein had produced the original demand notice and that the Respondents had filed an affidavit affirming that they had not issued the second demand notice. It is his case that the demand notice dated 12.11.2018 was produced before the Tribunal without Postal Covers. It is his case that the SA was dismissed observing that the second demand notice, without withdrawing the earlier one would in no way impede the proceedings under Section 13(4) of SARFAESI Act.

5. It is pleaded that the applicant does not question the right of the bank to issue one more demand notice which the borrower can take further advantage of sixty days time. But he says the first demand notice was issued on 21.07.2017, possession notice was issued on 23.10.2017. Second demand notice was issued on 12.11.2018. With this, the earlier demand notice stands withdrawn, but the physical possession was granted on the basis of first demand notice by suppressing the fact of issuing the second demand notice before the Ld. DM.

6. Except what is narrated in para – 5 above, which is pleaded at Para – 10 in the review petition, there are no other grounds specifically pleaded for seeking review of the order. However, it is pleaded by the review petitioner that having issued the second demand notice, the taking possession based on first demand notice is against the well settled principles of law. He relies on Rulings reported in CDJ(2015) DRAT Allahabad 002 and in MANU/CG/0148/2008.

7. My Ld. Predecessor had passed an order of status-quo on 17.12.2020 on an IA No.687/2020 filed by the applicant in this review. The counter is also filed to the IA, which is being disposed of along with this review petition.

8. The matter was heard by my Ld. Predecessor on 13.11.2021 and parties were asked to file their written submissions and their rulings if any. Thereafter the Tribunal did not function for some time. On 27.04.2022, the matter was listed and kept for arguments for 06.06.2022. Both the counsels argued the matter in part. On 07.06.2022

also, the matter was partly heard and adjourned for further hearing on 05.07.2022. On that day the counsel for the applicant did not appear. The Respondent counsel argued the matter. The parties were given an opportunity to file their written arguments within a week and if not filed it is made clear that the matter would be disposed on merits with the available material on record. The Ld. Counsel for the Respondent had filed the written synopsis. Review Petitioner has not filed his arguments.

9. In the written arguments, it is pointed out by the Respondent that there is no error apparent on the face of record. Reliance is placed in Meera Bhanja Vs. Nirmala Kumari Choudhury reported in (1995) SCC 170. It is also pointed out that the aspect of first demand notice and the second demand is already discussed by the Tribunal at Paras 3.7 and 3.10, 5.18. All the relevant fourteen rulings were considered and discussed by the Ld. Predecessor. Therefore, review is not warranted. The Respondent prays for dismissal of the review.

10. IA No.687/2020:-

This IA is pending for disposal as an interim order is passed on 17.12.2020. By this IA the review petitioner had sought an order of temporary injunction restraining the Respondent from taking any further action pursuant to the 1st demand notice dated 21.07.2017, pending disposal of the review.

11. After pleading the facts of the case, it is stated in the IA that the demand notice dated 21.07.2017 was issued calling upon to pay Rs.4,45,26,274/- within sixty days. Consequently Possession Notice dated 23.10.2017 was also issued. It was replied that the secured assets is worth more than forty crores and the demand is 10% of the total value. Therefore, the borrower had offered another property to meet the debt. The same was refused by the Respondent vide letter 08.01.2018. However, another demand notice dated 12.11.2018 is issued. The 1st demand notice is deemed to be having withdrawn. The 2nd demand notice is also replied. In the meantime, since the District Magistrate was approached under Section 14 of SARFAESI Act, the applicant challenged the same in SA, and the SA was dismissed on 27.07.2020, which is now under review. Since the Respondents are taking steps to possess the property, the purpose of review would be frustrated if the injunction is not granted. Hence the IA was filed with the above averments.

12. The same is objected to by a counter affidavit. It is stated that “after pronouncing the Judgement dated . . . the lendor brought the property for public auction by a sale notification dated 26.10.2020 and fixed the sale auction on 20.11.2020. The sale notice was completed successfully and the successful bidder brought the property for a sum of Rs.4.51 Crores and they have paid the said amount in the following mannter. 1) 1st Payment made Rs.45,00,000/- 2) 2nd Payment made Rs.4,00,000/- 3) 3rd Payment made Rs.62,75,000/- 4) Full and final amount made Rs.3,38,25,000/-, total amount Rs.4.51 Crore have been paid. In the meantime, we came to know that the Hon’ble Tribunal passed status quo on 17.12.2020, after that we stopped all further process and registration.” (Para-28 of the counter to the IA).

13. It is also pointed out that the review petitioner did not pay a single penny towards the pending due amount despite dismissal of SA on 27.07.2020. Hence the property was sold under the circumstances and there was no malafide intention in the said sale. It is further pleaded that since the review itself is not maintainable the IA is liable to be dismissed.

14. Arguments of the parties:- The review petitioner has not filed the written arguments. The matter is being disposed of on the strength of the pleadings.

Respondent filed the written arguments and submits that review is not maintainable in law as there no error apparent on the face of the record. The contention of the respondent is already culled out above at Para-9 and not repeated to avoid the prolixity.

15. Point for determination:- With the available pleadings and the contentions of the parties, the only point that arises for determination is “whether the petitioner has made out a case for review of the order dated 27.07.2020 in SA No.208/2019 passed by the Ld. Predecessor of this Tribunal? If so, whether the petitioner is entitled for injunction as prayed for in the IA?”

16. Answer to the Point for determination:-

It is common prudence that the salient requirements for review of any order or judgement by a judicial or quasi – judicial authority confines to: (I) The discovery of new and important matter which could not be canvassed despite due diligence, cropping up requiring a re-look. (II) Mistake or error apparent on the face of record. (III) Or for any sufficient reason.

If there are no sufficient grounds for review, the petition stands rejected.

The main ground on which the review is filed is that the second demand notice dated 12.11.2018 was issued which would annul the earlier demand notice 21.07.2017.

This aspect is not the new discovery of or important matter or evidence, which the review petitioner could not produce at the time of SA. This is evidenced from the earlier orders for the following reasons. (I) There is a reference to the 2nd demand notice in Para-2.5 and 2.10 and at several places which is part of the documents filed along with the SA and the same is found at Page – 43 of the paper book. (II) At para 3.7 my Ld. Predecessor had clearly noted that “It is stated that the alleged 2nd notice dated 12.11.2018 produced before this Hon’ble Tribunal on 23.12.2019 is without the original cover of the said Notice and that the authenticity of the same is under question as there is no signature of the Authorised Officer and no concrete dispatch proof of the same is produced.” (III) At para 5.14, 5.16 and 5.18, the Tribunal again considered the 2nd demand notice.

Therefore there is clear cut appreciation of the second demand notice in the order under review. Since this is not a new material or evidence touching the subject, the first ground for review is untenable.

17. The entire order of my Ld. Predecessor is carefully perused. There is no error apparent on the face of record or there is a mistake. Such error or a mistake is also not made out in the review petition, except harping on the second demand notice. Therefore there is no scope to interfere in the review.

18. What is highlighted in the review petition is about a ruling of which title is not mentioned, but reference is given at Para – 11 of the review petition, as CDJ 2015 DRAT

All 002, which principle of law is laid down is that the second demand notice without withdrawing the first demand notice shall be deemed as the bank having withdrawn the first demand notice. Likewise in Para – 12 of the review petition a reference is made to the ruling of Hon’ble Chattisgargh High Court reported in MANU/CG/0148/2008. This ruling is also discussed by my Ld. Predecessor at Para-5.20.

19. After perusal of the review petition, it is to be noted that the petitioner has not made any grounds for review. Non application of the case law to decide the case in his favour cannot be a ground for review. Instead of appealing against the order, review is sought without there being any legal grounds for review. After careful reading of the impugned order and the grounds for review, this Tribunal cannot sail with the review petitioner that he has made out a ground for reviewing the earlier order. There are no other grounds or sufficient cause to revisit the considerate and speaking order passed by my Ld. Predecessor.

This Tribunal had gone through the records in SA No.208/2019 also. Both the demand notices are already on record. After careful perusal of the first demand notice, which is issued found at Page – 28 of SA paper book, it is emanating from HDB Financial Services Mumbai, showing the Registered Office address at Ahmedabad. In the second demand notice at Page – 43 of the SA paper book emanates from Hyderabad and does not show the address of the Registered Office. The rubber stamp seals are also compared and they are different. The first notice bears the initials of the author. The second one lacks it. This being the major difficulty to believe the authenticity had cropped up in the mind of the Ld. Predecessor and the same is flagrantly stares for ever to believe averments in the review petition.

The law on this aspect is very clear. In Meera Bhanja Vs. Nirmala Kumari (Supra) it is held that “It is well settled that the review proceedings are not by way of an appeal and have to be sxtrictly confined to the scope and ambit of Order 47, Rule1, CPC.”

20. As far as the second aspect of the point for determination is concerned, regarding the entitlement of an injunction order restraining the respondents from taking further steps till the disposal of the review, it is to be noted that when the review itself is not maintainable, the relief of injunction cannot be granted. However, the Ld. Predecessor by an order dated 17.12.2020 has passed an order to maintain status-quo as on 17.12.2020. The same cannot be extended and the IA stands dismissed since the review itself is not maintainable. Consequently the following order:-

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The review petition RA No.1/2020 stands dismissed. The Order dated 17.12.2020 passed in IA No.687/2020 is hereby withdrawn. No order as to costs.

Sd/-

(A.S.JAYACHANDRA)

PRESIDING OFFICER

DRT-I, CHENNAI

(Dictated to PS, transcribed by him, corrected, signed and pronounced by me on this 19th day of July, 2022)