Mr K S Suresh Babu vs The Assets Reconstruction Co (1) Ltd & 6 Others on 22 February 2021

ORDER

1. The review applicants filed this review petition praying the Tribunal to review the order dated 11.07.2017 made in M.A.No.26 of 2015 in M.A.No.72 of 2012 in DRC.No.110 of 2007 in O.A.No.220 of 2009 after considering the issue framed on 07.06.2017 in the Original Application proceedings and pass such further or other orders which Tribunal may deem fit and proper in the circumstances of the case and thus render justice.

2. The gist of the case of the review petitioners is that the 1st Respondent filed an application in M.A.No.72 of 2012 in DRC.No.110 of 2007 in O.A.No.220 of 2009. Since an exparte order was passed in the said application, the Review Petitioners filed an application in M.A.No.26 of 2015 to set aside the exparte order dated 20.01.2014 made in M.A.No.72 of 2012 in DRC.No.110 of 2007 in O.A.No.220 of 2009 and this Tribunal by order dated 11.07.2017 dismissed the application filed in M.A.No.26 of 2015 and the said order copy was made available to the Petitioners on 19.07.2017.

2.1 It is stated that apart from the above said application, the petitioners also filed an application in M.A.No 44 of 2017 to reopen the case for further submissions. The said application also disposed along with the application filed in M.A.No.26 of 2015.

2.2 It is stated that the facts of the case are that originally Karnataka Bank had instituted O.A. No. 371 of 2002 and obtained an order dated 30.08.05 against the Review petitioners and the respondents 2 to 6 herein. That this Hon’ble Tribunal has issued a Recovery Certificate in the following terms are as follows:

“….(a) The Applicant bank is entitled to a recovery certificate against the defendants 1 to 6 for a sum of Rs. 30832014.54/- together with interest @ 18% P.A. compounded quarterly from 27.10.2002 till the date of realization in full with costs which also includes Advocate fees as per the rules prevailing in the state.

(b) It is further declared that the alleged sale of a part of ‘Schedule –D’ property by D-6 in favour D -7 is subject to the mortgage created in favour of the applicant bank.

(c) It is further declared that in case of default of payment by the defendant 1 to 6, the applicant bank is at liberty to sell the properties mentioned in Schedule and adjust the sale proceeds towards the amount due.

(d) If the sale proceeds shall not be sufficient after defraying the expenses of such sale for the payment of all such amounts, the defendants 2 to 6 are personally liable to pay the amount of such deficiency with interest mentioned above until realization………”

2.3 It is stated that by a Deed of Assignment dated 08.03.11 the original certificate holder Karnataka Bank assigned all its rights in favour of the 1st respondent herein. The

Certificate Holder Karnataka Bank before assigning its rights in favour of the 1st Respondent sold the Security offered by the 1st Petitioner Company namely M/s. Best Cast Constructions Pvt. Ltd., for a sum of Rs.84.00 Lakhs and amount was credited towards the Certificate debt. Furthermore, the Original Application was renumbered as O.A.No.220 of 2009 and the D.R.C proceedings are renumbered as DRC No. 110 of 2007 from DRC 15 of 2006. It is stated that on the basis of the Assignment Deed dated 08.03.11 the 1st respondent filed the following applications namely:

i) M.A.No. 54 of 2012 :- To Condone the delay of 327 days in filing the setting side application.

ii) M.A.No. 70 of 2012 : - To Set aside the order date 06.09.2011 passed in O.A.No.220 /2009 and consequently restore the matter on file.

iii) M.A.No. 71 of 2012 :- To implead the proposed Applicant in place of the applicant bank

iv) M.A.No. 72 of 2012:- To return the original documents filed in the above matter with respect to all the title documents, deposited by Mrs. Rosamma, the 4th respondent, as per memorandum of deposit of title vide paper book page No.525, Mr. Doss Naidu, the 5th respondent as per memorandum of deposit of title vide paper book page No.473 and Mr.Chandran, the 5th respondent, as per memorandum of deposit of title vide paper book page No.389, in the claim application, as the above said respondents have discharged their respective liabilities……..”

2.4 It is stated that the 1st respondent and the respondents 3 to 5 herein had entered into a private agreement dated 25.08.2011 and the said agreement was entered into behind the back of the petitioners and it was not placed before this Tribunal at any point of time. The Application filed in M.A.No.72 of 2012, not only to release the mortgaged property of the respondents 3 to 5 but also absolving them of any personal liability under the Recovery Certificate.

2.5 Being aggrieved by the order dated 20.01.14 the Review Petitioners filed an application in M.A.No. 26 of 2015. In the meantime the order dated 20.01.14 was reiterated by an order dated 26.09.14. It is stated that both the order dated 20.01.2014 and 26.09.14 had been passed without notice to the petitioners’ counsel.

2.6 It is stated that M.A.No.26 of 2015 was ultimately dismissed by this Tribunal by its order dated 11.07.17 and that the Tribunal was of the view that in the absence of any challenge to the settlement arrived at by the secured creditor/1st respondent and certified creditor namely respondents 3 to 5 the issues raised by the applicants herein could not be adjudicated upon.

2.7 It is stated that the agreement dated 25.08.2011 is a nullity in the eye of law and cannot have any binding legal effect on the Review Petitioners herein. The 1st respondent by virtue of the agreement dated 25.08.2011 has varied and violated the terms of the certificate issued by this Hon’ble Tribunal.

2.8 It is stated that Clause 2.2 read with Clause 5(b) of the agreement dated 25.08.11 would clearly demonstrate that by a private treaty, the respondents 1 and 3 to 5 had mutually agreed to vary terms of the certificate issued by this Tribunal, more so during the pendency of recovery proceedings. This has been done despite the mandate of section 26(2) of the Act The Clause 2.2 and Clause 5(b) of the agreement dated 25.08.11 is extracted hereunder:

Clause 2.2 : Setttlement of Liability: The Guarantor(s) and Arcil hereby agree that the liability of the Guarantor(s) as per clause (2.1) above shall be deemed to be fully satisfied in the event the Guarantor(s) fulfilling the conditions herein Non-compliance of the condition(s) as given herein shall be an Event of Default and Arcil shall be at liberty to exercise the Rights and Remedies available to Arcil in the Event of Default.

Clause 5(b) : Upon payment by the Guarantor(s) in accordance with Schedule I hereto in compliance of Clause 2.2 to the satisfaction of Arcil, as stated herein above, the liability of the Guarantor(s) for Arcil debt shall be waived. The payment made by the Guarantor(s) as above shall be in full and final settlement of all liabilities of the Guarantors and Arcil shall no longer have claim over the secured properties namely the assets mortgaged by the Guarantors.

2.9 It is stated that the said terms in effect vary from the terms of the original contract of guarantee, besides the specific terms of the certificate. The agreement is hit by the provisions of Section 62 of the Indian Contract Act thereby rendering the original contract of guarantee incapable of performance. It is stated that the respondents 1 and 3 to 5 have brought into effect fraudulently a new contract between themselves without the consent or knowledge of the Review Petitioners and other certificate debtors. It is stated that the agreement dated 25.08.2011 was only a clear fraudulent document executed in collusion by AIRCIL/1st Respondent with certified debtors 3 to 5 which amounted to novation of the terms of the original contract and thus render the original contract incapable of performance in terms of Section 62 of the Indian Contract Act.

2.10 It is stated that clause 2(e) of the agreement dated 25.08.2011 fastens the entire liability on the Certificate Debtors 1 & 2 and other Certificate Debtors, contrary to clause (a) of the certificate which provide for joint liability on all the certificate debtors 1 to 6. Clause 2(e) is extracted hereunder:

Clause 2(e): Arcil reserves its right to proceed against the borrower for recovery of its outstanding dues (less payments received under the Terms Sheet) by or under the provisions of law for the time being in force and the Guarantor(s) hereby unconditionally agree that they shall have no objection to such action initiated by Arcil.

2.11 It is stated that the 1st respondent cannot disregard the specific terms of the certificate and in collusion with the few of certificate debtors and fasten the entire liability on the Review Petitioners herein contrary to the certificate issued by this Hon’ble Tribunal.

2.12 It is stated that the review petitioners had no opportunity to question the legality of the agreement dated 25.08.2011 as the 1st respondent had obtained the seal of approval without the knowledge of them. It is stated that when the above Original Application was listed for hearing on 07.06.2017, this Tribunal framed an issue for

consideration, wherein this Tribunal felt that whether release of property of Certificate Debtors 4 to 6 after accepting certain amount tantamount to violation of clause ( C ) of Recovery Certificate if so what are the legal consequences. On this issue also the counsel for Petitioners submitted their oral arguments.

2.13 It is stated that the Tribunal by order dated 11.07.2017 dismissed the application filed in M.A.No.26 of 2016, however not considered the issues framed by this Tribunal. If the Tribunal would have gone into the question about the issue framed, definitely the application ought to have been allowed as the petitioners attacked the settlement on the ground that the settlement between the 1st Respondent and the Respondents 3 to 5 and the same was without the knowledge of the Review petitioners and the said settlement will not bind the Review petitioners.

2.14. It is stated that in these circumstances, the Review petitioners filed the present application to review the order dated 11.07.2017 by the issuing the issue framed on 07.06.2017 and dispose the review application in the interest of natural justice. If the Review petition is not heard, great prejudice will be caused to the Review petitioners. Thus contending, the Review Petitioners prayed the Tribunal to review the order dated 11.07.2017 made in M.A.No.26 of 2015 in M.A.No.72 of 2012 in DRC.No.110 of 2007 in O.A.No.220 of 2009 after considering the issue framed on 07.06.2017 in the Original Application proceedings and pass such further or other orders which this Hon'ble Tribunal may deem fit and proper in the circumstances of the case and thus render justice.

3. The first respondent in its counter stated that the application filed by the petitioners No. 1 & 2/Certified Debtors No. 1 & 2/Defendants No. 1 & 2 is not maintainable either in law or on fact. Hence the same is liable to be dismissed in limine and the same is filed only to protract the proceedings.

3.1 It is stated that admittedly the applicants are the principal borrowers and the 2nd applicant in his personal capacity stood guarantor along with the other borrowers/ certified debtors and the debt is certified by this Tribunal, which binds each and every one of the parties to the proceedings and hence both applications are liable to be dismissed with exemplary costs.

3.2 It is stated that the claim application, bearing present O A No. 220/2009, after contest came to be allowed and this Tribunal was pleased to certify the claim of the original lender, namely Karnataka Bank Ltd., and till date no appeal is either filed or is pending before any Forum.

3.3 It is stated that after certification of the claim, the original lender assigned the legal right to recover the amount certified by this Tribunal, to and in favour of the 1st respondent/applicant, namely the Assets Reconstructions Company (I) Ltd., which assignment is still in force and legally binding the defendants in the above said OA.

3.4 It is stated that after the assignment of the loan account, the respondent/ applicant has got every right to recover the claim amount certified with applicable interest. It is further stated that after the assignment, the respondent/applicant, initiated proceedings to recover the amount certified and some of the mortgage property was sold and then the guarantors, namely, Rosamma, Doss Naidu and Chandran approached the company for release of their respective properties mortgaged by them and upon making the settlement amount of Rs1,30,00,000/- (Rupees One Crore and Thirty Lakh Only), the documents are released to them.

3.5 It is stated that in spite of opportunities, the applicant/ certified debtors have not participated or objected the application filed for release of the documents pertaining to the title deeds of the above 3rd party guarantors. It is stated that after allowing of the applications, the present application is filed, seeking to review the order

11/07/2017 and to declare the settlement deed dated 25/08/2011 as illegal and null and void, which are not maintainable in law.

3.6 It is stated that for releasing of the title documents of the 3rd party guarantors, the 1st respondent/Certified holder has received a sum of Rs.130 Lakh from them and an application for release of the documents is filed and is allowed by this Tribunal. It is stated further that having failed to participate in the said proceedings, the present applicants, who opted out and not participated in the said proceedings, can not have any grievances for release of the documents and further have no right to seek declaration of the agreement for settlement dated 25/08/2011.Hence I pray for dismissal of both the applications.

3.7 It is stated that payment of the above said amount, the title documents were ordered to be released and the 1st respondent/ applicant has given due credit towards the certified claim and the original title documents were released in favour of the 3rd party guarantors.

3.8 It is stated no body has disputed the value arrived by the 1st respondent/ applicant for release of the mortgaged properties of the 3rd party guarantors and having slept over the matter, now they have no legal right to dispute anything in the matter. It is stated that that the 3rd party guarantors have paid the value of the immovable properties mortgaged and with the permission of this Hon’ble Tribunal, the documents were ordered to be released, which were pertaining to the 3rd party guarantors, namely, Mrs. Rosamma, Mr. Doss Naidu and Mr. Chandran.

3.9 It is stated that the Tribunal was pleased to allow the application for release of the documents by discharging the 3rd party guarantors, Mrs. Rosamma, Mr. Doss Naidu and Mr. Chandran, in view of payment of Rs.130 Lakh, as per the terms of settlement. It is stated that it can never be the case of the applicants/defendants 1 & 2 that documents ordered to be released by this Tribunal are pertaining to the properties, which are standing in their name and this Hon’ble Tribunal has no authority to release such documents to the 3rd party guarantors Further it is an admitted fact that the title documents released are pertaining the above 3rd party guarantors and hence the present applications are liable to be dismissed on this score alone.

3.10 It is stated that the applicant/defendants No. 1 & 2 cannot dictate terms to the respondent/certified creditor that for the rest of the certified claim amount, they should only go against the 3rd party guarantors and not against them and legally it is a prerogative of the respondent/claimant to go against any one of debtors and the choice is purely left with them in recovering the claim allowed by this Tribunal.

3.11 It is stated that by passing order to release the title documents of the 3rd party guarantors, this Tribunal has not curtailed the respondent/certified creditor /applicant from proceedings against the applicants/defendant No. 1 & 2, including the other borrowers. Further it is a bounden duty of the applicants/ defendant No. 1 & 2 to repay the amount certified by this Hon’ble Tribunal for having borrowed and utilized for their business establishment.

3.12 It is stated that after assignment, the 3rd party guarantors negotiated with the respondent/certified creditor for releasing of the title documents pertaining to them and it was agreed to release the title document by accepting at Rs.1,30,00,000/- and an agreement dated 25/08/2011 came to be executed. Further I state that as per the agreement terms, the 3rd party guarantors have paid the above amount of Rs.130 Lakh for release of the said documents and accordingly the documents were released by the order of this Tribunal and absolving them of any liability under the claim certified by this Tribunal, as per the agreed terms.

3.13 It is stated that the averments made in Para 7 and 8 with regards to filing of application in M A No.26/2015 is concerned, this Hon’ble Tribunal has passed a well deserved legal order, which needs no reconsideration or review.

3.14 It is stated that the averment made in Para 9 with regards to the agreement dated 25/08/2011 between the respondent/certified debtors and the 3rd party guarantors was made to facilitate in making payment of Rs.130 Lakh for them to get the title documents released to them, which are mortgaged and the said agreement at any stretch, is varied or violated the terms of the claim certificate issued by this Tribunal.

3.15 It is stated that the averment made in Para 10 with regards to the clause 2.2 read with clause 5 (b) of the agreement dated 25/08/2011 was made to receive the payment of Rs. 130lakh from the 3rd party guarantors and to release the mortgaged documents, which terms would not amount to vary the terms of the certificate issued by this Tribunal.

3.16 It is stated that the averments made in Para 11 with regards to the clause 2 (e) of the settlement terms dated 25/08/2011 is made to give due credit to the amount received by the 3rd party guarantors and for the balance, the certified creditor reserved its right to claim it from the borrower, which is well within the frame work in law of the land.

3.17 It is stated that the averments made in Para 12 & 13 are not at all correct. The 3rd party guarantors had approached the certified creditor and by entering into the agreement, by making payments at Rs. 130 Lakh towards the value of the property and upon receipt of the said amount, by the order of this Hon’ble Tribunal, the documents were released by absolving their liability and by reducing the amount payable as per the claim certified by this Tribunal.

3.18 it is stated that the averments made in Para 14 & 15 are incorrect and from the records, no such issue was framed by this Tribunal for its consideration and the agreement was entered into between the 3rd party guarantors and the certified debtors to receive a substantial amount and to the value of the properties mortgaged by the 3rd party guarantors and upon such payment, the documents were released by the order of this Tribunal and further the question of involving the borrower in the said agreement does not arise, as the 3rd party voluntarily came forward to make payment for releasing of the documents mortgaged by them.

3.19 It is stated that the averments made seeking for a declaration of the agreement dated 25/08/2011 is not maintainable, as the petitioners/ certified debtors 1 & 2 are not a parties to the said agreement. Hence the averments made in Para 2 seeking such relief is not maintainable legally and further without explaining as to how the said agreement has affected them, it can not be sought to be declared as illegal, null and void.

3.20 It is stated that the applicants/certified debtors 1 & 2 are not parties and the agreement was entered into for the performance of the parties to the said agreement and 3rd party can not have any legal right to challenge the said terms, when they are not parties to the said agreements. It is stated that the certified creditor has not violated any guidelines of the RBI and also the Banking Regulations Act,1949.

3.21. It is stated that if the application is dismissed, no prejudice would be caused to the petitioners/certified debtors 1 & 2. On the other hand, the answering respondent/ certified creators/applicant would be subjected to great hardship and inconvenience in the matter. Thus contending, Ld. Counsel for the 1st respondent prayed the Tribunal to dismiss the application with exemplary costs.

4. The second respondent in its counter stated in addition to the grounds raised in the above Review Application, the Impugned order dated 11.07.2017 made in M.A.No. 26 of 2015 has to be reviewed and that the findings made in the Impugned order suffers from the certain errors apparent on the face of the record.

4.1 As regards the finding that

“Admittedly the out of Tribunal settlement between the Certificate Creditor and the Certificate Debtors 4,5 & 6 was not questioned by the Petitioners or other Certificate Debtors”.

it is stated that the present Petition is only for setting aside ex-parte order and this is not an issue involved in the Petition as it pertains to merits of the case and an issue involved in M.A.No. 72 of 2012 and the issue could have been raised only after the ex- parte order is set aside and the M.A.No. 72 of 2012 is restored to file.

4.2

“When the Certificate Debtors, 4,5 & 6 settled their dues by paying the agreed amount, naturally they are entitled for return of the Documents and in ordering return of the original documents the Tribunal is not required to make any enquiry or adjudicate any issue but simply order return of the Document”

it is stated that the said finding ignores the relevant statutory provisions. Unlike in Or. XXI Rule 2 of C.P.Code, there is no provision in Second Schedule of Income Tax Act to record private adjustment between parties after issue of Recovery Certificate. It is stated that the Debts Recovery Tribunal has no jurisdiction to recognise any settlement between the parties. It is stated that in the present case the Settlement between the parties involves release of secured assets and release of certain Certificate Debtors. This correspondingly determines the quantum of liability of other Certificate Debtors. Hence it is necessary that the Recovery Certificate has to be amended and the same can be done in an Application moved for that purpose and the same is a judicial proceeding. Only in such a proceeding release of security can be ordered. Ordering return of original documents amounts to ordering release of security and the same cannot be a formal order. I submit that it is an adjudication and there has to be necessarily an enquiry.

4.3 As regards the finding that “Certificate Debtor cannot have any say in the matter”, it is stated in the present case the Certificate Creditor had released the securities on payment of an amount agreed between them and the Certificate Debtors, 4,5 & 6. Now they want to proceed against the other Certificate Debtors for the balance. The amount agreed has no nexus to the market value of the properties; and the securities were not sold in a public auction. However as per the final order in O.A. the other Certificate Debtors are liable for the balance after adjustment of sale proceeds. There is a big difference between the “amount agreed’ and “sale proceeds in a public auction”. The personal liability of the other Certificate Debtors will be substantially reduced if the property is sold in public auction. To this extend the other Certificate Debtors do have a say in the matter.

4.4

“The Question of violation of principles of natural justice also does not arise”, it is stated that the finding is contrary to the earlier orders of this Tribunal. The Certificate Holder earlier moved a Petition in M.A.No. 72 of 2016 for return of Documents of title of the securities. This Petition was to be posted before this Hon’ble Tribunal on 20.01.2014. However on 20.01.2014 it was not listed. The Respondent was not present as the matter was not listed. However on the request of Certificate Holder the Petition was taken up by this Hon’ble Tribunal and order was passed. On coming to know of the same, Certificate Debtors 1 & 2, filed a Petition in M.A.No 26 of 2015 and 27 of 2015, to set aside the order and for stay of the same.

4.5 It is sated that in this context, the Tribunal did not take the stand that no enquiry is required for ordering return of documents; on the contrary, the Tribunal found that the procedure adopted by the Tribunal was contrary to Principles of natural justice and hence ordered stay of the earlier order passed and ordered notice in set aside Petition. This means the Tribunal had decided to reconsider the matter, to ensure compliance of requirements of principles of natural justice.

4.6 It is stated that in view of the above error apparent on the face of record, it is just and necessary that the order be reviewed as prayed by the Petitioner. Thus contending, Ld. Counsel for the second respondent prayed the Tribunal to review the Impugned order and render justice.

5. From the rival contest, the point that arises for consideration of this Tribunal is Whether the order of this Tribunal in MA No.26/2015 dated 11.7.2017 in MA No.72/2012 in DRC No.110/2007 in OA No.220/2009 is liable to be reviewed?

Heard the Ld. Counsels for the review applicants, first respondent and second respondents, perused the record, written submissions and Case Law.

6. Point 6.1 Since this review is directed against the order of this Tribunal, dated 11.7.2017 passed in MA 26/2015 in MA 72/2012 in DRC No.110/2007 in OA 220/2009, before I proceed to discuss the respective contentions and decide the point, I feel it proper to refer to the observations of this Tribunal that led to the order of dismissal of MA 26/2015. “5. The relief sought for in the petition was, the return of the original title deeds filed by the Certificate Creditor in the OA to the petitioner, consequent to the settlement arrived at by the secured creditor with the certificate debtors 4, 5 and 6. Admittedly, the out of Tribunal settlement between the petitioner/Certificate Creditor and the Certificate Debtors 4, 5 and 6 was not question by the present petitioners or the other Certificate Debtors. Therefore, when the Certificate Debtors, 4, 5 and 6 have settled their dues by paying the agreed amount, naturally they are entitled for return of the documents and in ordering return of the original documents, the Tribunal is not required to make any enquiry or adjudicate any issue, but simply order return of documents. Thus, return of documents is a matter pertaining to the Certificate Creditor and the Certificate Debtors whose documents are sought to be released and the present petitioners who have not asserted any right over the properties of the Certificate Debtors 4, 5 and 6, which were under mortgage by the Certificate Debtors cannot have any say in the matter, especially when they failed to question the said settlement. So much so, there is no question of denying any opportunity to the petitioners before ordering release of the documents, consequently, the question of violation of principles of natural justice also does not arise. In that view of the matter, the order passed on 20.1.2014 cannot be treated as an exparte order”

6.2 According to the Ld. Counsel for the review applicants the observation of the Tribunal in its order under review, that the relief sought for by the petitioners in MA 72/2012 being for a mere return of the original deeds filed by the certificate creditor in the OA 220/2009 and in the absence of challenge to the settlement arrived at between the certificate creditor and the certificate debtors 4,5 and 6, detailed enquiry in the petition was not required amounts to a mistake and an error apparent on the face of record inasmuch as MA 72/2012 which admittedly decided ex-parte by this Tribunal on 20.1.2014 though contained multiple prayers conspicuously did not contain any prayer for discharge of the certificate debtors 4,5,and 6 from their personal liability yet this Tribunal under its above order ordered discharge of the said debtors which this Tribunal failed to notice while passing the order under review. According to the petitioners as can be seen from the order itself, MA 72/2012 was omitted to be listed on 20.1.2014 and at the instance of the applicant bank alone the matter was taken up the applicant bank alone was heard and orders were passed. Hence, the review is liable to be allowed.

6.3. Per Contra, Ld. Counsel for the first respondent submitted that the observation of the Tribunal that ultimately led to passing an order dismissing MA 26/2015 are very much sustainable and proper in the context of an undisputed settlement arrived at between the certificate creditor and the certificate debtors 4, 5 and 6, since it was natural that the above certificate debtors having paid their share of dues are entitled for return of their title deeds. Therefore, according to the Ld. Counsel for the first respondent there is neither a mistake nor an error whatsoever warranting review of the order dated 11. 7.2017.

6.4. Ld. Counsel for the second respondent sailed with the submissions of the review applicants and submitted that there is a mistake as well as an error apparent on the face of the order under review, hence the same is liable to be reviewed.

7. In the light of the rival contentions, it would be useful to once again refer to the order in MA 72/2012 dated 20.1.2014 which is as follows; “Omitted to be taken on list because Mr. Raghunathan, clerk attached to the Registrar’s Court failed to inform the Tribunal’s clerk. The Registrar was called in person and directed to issue a memo calling for explanation sine on earlier occasions also Mr. Raghunathan has omitted to list the matter before the Tribunal.

Counsel for the applicant bank submitted that MA 54/2012 filed for substitution was allowed. The final order was passed by DRT-II on 30.8.2005 and DRC also has been issued. On 23.10.203 this Tribunal has directed the petitioner to amend the OA and also to provide a copy to the defendants for filing Reply statement on 31.12.2013 before Registrar’s Court. The applicant bank/petitioner has already submitted that since Final orders have been passed, amendment of OA is only change the name of the petitioner/substituted applicant and as such no reply statement is required to be filed by the respondent/defendants and to that extent order dated 23.10.2013 be recalled. A detailed note put up by the Registry on 2.12.2013 confirms that the final order is already passed and DRC proceedings are pending. Hence the order dated 23.10.2013 is recalled to that extent that no reply statement is to be filed. Upon amending the OA copy based on which the DRC will be amended.

Applicant Bank’s counsel submits that MA 72/2012 filed for return of documents having received a sum of Rs.135 lakhs from D4 to D6 is required to be considered.

As per the affidavit filed by the applicant bank, Mr. M.V. Suresh being the Power of Attorney Holder duly empowered by and authorized by ARCIL, submits that respondents 4, 5 and 6 paid the amounts as per the settlement and the said amounts were borrowed from third parties and as such documents may be released soon to the petitioner/applicant so that the same can be released to the concerned person. The said affidavit signed by Mr. M.V. Suresh and countersigned by the applicant counsel is taken into consideration and accordingly MA 72 /2012 is disposed with direction to release the exhibits in respect of title deeds pertaining to respondents 4, 5 and 6 to the petitioner/applicant with a direction to release the same to the concerned persons as per law. Further, counsel for the petitioner/applicant also submitted that OA is already

disposed of and DRC issued. Respondents 4, 5 and 6 are discharged of their personal liabilities and DRC proceedings to continue against other defendants”

7.1 Here it is pertinent to note that in terms of section 22(2)(e) of RDB Act, which is mutandis mutandis Order 47 Rule CPC and Rule 5A of DRT (Procedure) Rules, which are as follows, this Tribunal is vested with the power of Review of its Orders.

Section 22(2) in The Recovery of Debts Due to Banks and Financial Institutions Act, 1993

(2) The Tribunal and the Appellate Tribunal shall have, for the purposes of discharging their functions under this Act, the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit, in respect of the following matters, namely:—

(a) summoning and enforcing the attendance of any person and examining him on oath; (b) requiring the discovery and production of documents;

(c) receiving evidence on affidavits;

(d) issuing commissions for the examination of witnesses or documents; (e) reviewing its decisions; (f) dismissing an application for default or deciding it ex parte; (g) setting aside any order of dismissal of any application for default or any order passed by it ex parte; (h) any other matter which may be prescribed. 5A. Review.—

(1) Any party considering itself aggrieved by an order made by the Tribunal on account of some mistake of error apparent on the face of the record desires to obtain a review of the order made against him, may apply for a review of the order to the Tribunal which had made the order.

(2) No application for review shall be made after the expiry of a period of sixty days from the date of the order and no such application shall be entertained unless it is accompanied by an affidavit verifying the application.

(3) Where it appears to the Tribunal that there is no sufficient ground for a review, it shall reject the application 2[but where the Tribunal is of opinion that the application] for review shall be granted, it shall grant the same:

(2) Provided that no such application shall be granted without previous notice to the opposite party to enable him to appear and to be heard in support of the order, a review of which is applied for.

7.2 Thus, a reading of section 22(2)(e) and Order 47 Rule 1(a), it is clear that any person considering himself aggrieved by a decree or an order from which appeal is allowed, but from which no appeal has been preferred, and who, on the discovery of new important matter or evidence which, after exercise of due diligence was not within his knowledge or could not be produced by him at the time when the decree was passed or order made, on account of some mistake or error apparent on the face of record or for any other sufficient reason, desires to obtain a review of the decree passed or order made against him, may apply for review of the judgment of the court which passed the decree or made the order. Reading this provision, it is clear that on the ground stated therein, an aggrieved party can invoke review jurisdiction, provided against the order from which appeal is allowed, but from which no appeal has been preferred.

7.3. In Smt.Meera Bhanja Vs. Smt. Nirmala Kumari Choudhary, AIR 1995 SC 455, the Apex Court, explained what is meant by the word "Error apparent on face of record", and held that “the error which strikes one on mere looking at record and would not require any long drawn process of reasoning on points where there may conceivably be two opinions”

7.4 In Rajendra Kumar v. Rambhai, 2003 AIR SCW 92, while dealing with the foremost requirement of the review, the Apex Court held that the order to be reviewed must suffer from error apparent on the face of the record and permitting the order to stand will lead to failure of justice.

7.5 In Tinkari Sen and Ors. v. Dulal Chandra Das, , while dealing with the expression "mistake or error apparent on the face of the record", it was held that when clear legal position established by a binding authority is overlooked, it becomes an error within Order 47, Rule 1 of CPC.

7.6 In Dawuri Chengal Reddi v. Devareddi Venkatasubba Reddi and Ors., 1967 (2) An.WR 432, it was held that an error of law will justify a review because an error apparent on face of record will also include an error of law.

7.7 In Mumtazuddin Khan v. Fatima Begum, AIR 1956 Hyderabad 164, it was held that that wherein a revenue case the Revenue Member's judgment is against the established law and practice of the Atiya Department, it is an error apparent on the face of record and hence the Board of Revenue is justified in setting aside the judgment in review and the decision cannot be said to be on insufficient grounds.

7.8 In Parsion Devi and Ors. v. Sumitri Devi and Ors., , the Apex Court while dealing with "Mistake or error apparent on the face of the record" it was held it should be self- evident and must not require a process of reasoning and it is distinguishable from erroneous decision.

8. Therefore, in light of the above case law and the discussion as above, when the order under review if examined carefully, the Tribunal is of the considered view that undoubtedly, there was a mistake besides an error apparent on the face of the order passed by this Tribunal in MA 26/2015 dated 11.7.2017, in as much as this Tribunal, while passing the order under review, failed to note/observe that under the order dated 20.1.2014 this Tribunal, apart from granting the relief of return of original title deeds filed by the certificate creditors to the applicants/certificate creditors also ordered that respondents 4, 5 and 6 are discharged from their personal liabilities and the DRC proceedings to continue against other defendants which relief indisputably did not form part of the relief prayed in MA 72/2012, and the Tribunal merely observed that, “since it was a mere petition for return of the Title deeds and as the petitioners have not challenged the settlement, the petition is liable to be dismissed”.

9. That apart, the order dated 20.1.2014 passed without notice or opportunity to the responders therein.

10. It is manifest from the aforesaid order that this Tribunal, in its order in MA 72/2014 dated 20.1.2014, apart from granting the relief of return of original title deeds filed by the certificate creditors to the certificate creditors, further ordered that respondents 4, 5 and 6 are discharged from their personal liabilities and the DRC proceedings to continue against other defendants,which relief indisputably did not form part of the reliefs prayed in MA 72/2012 by the certificate creditor.

11. A perusal the affidavit filed in support of the petition in MA 72/2012, order supra, and also the order above disclose that the petitioners therein did not pray for recording any settlement that they have asserted as taken place between the petitioner bank and the Certificate debtors 4, 5 and 6 or for discharge of the said defendants from their personal liability besides for leave to proceed only against the remaining certificate debtors. On the other hand, it was the self-assertion of the petitioner bank that the certificate debtors 4,5, and 6 have discharged their part of liability hence they are entitled for the return of their title deeds.

12. Therefore, the order under review apart from containing an error apparent on the face of the order , also suffer from error of law, in as much any order having far reaching consequences such as discharge of some certificate debtors from their liabilities under an alleged settlement despite the order of this Tribunal that their properties sold by public auction for realisation of the debt of the certificated creditor, even without any petition, enquiry and without any notice to the other certificate debtors is violative of the principles of natural justice, the bed rock on which this Tribunal shall function.

13. Here it is apt to refer to Sub section 1 of Section 22 of the RDB Act, which is as follows: 22(1) The Tribunal and the Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to the other provisions of this Act and of any rules, the Tribunal and the Appellate Tribunal shall have powers to regulate their own procedure including the places at which they shall have their sittings.

14. Hence, the review application is liable to be allowed. Accordingly, review is allowed by setting aside the order of this Tribunal dated 11.7.2017 passed in MA 26/2015 in MA 72/2012. Point is answered accordingly.

15. In the result, RA 4/2017 is allowed. No costs.

16. Let the Registry communicate this Order to the Ld. Recovery Officer concerned.

17. Communicate a copy of the order to the parties concerned in terms of Rule 16 read with Rule 2(c) of DRT (Procedure) Rules, 1993.

(Dictated to PA(SN), transcript revised, corrected and pronounced in the virtual court held through video conference on this 22nd Day of February, 2021).

Sd/- (Dr. N.V.BADARINATH) PRESIDING OFFICER DRT-I, CHENNAI