Mr Sanar Manjunath Raj and Another vs The Authorized Officer The National Co Operative Bank Ltd on 25 June 2021

1. The applicants are the borrowers who have filed Review application being aggrieved by the order of dismissal dated 16.04.2018 in SA 96/2017 Under Rule 5 A of the Debts Recovery Tribunal (Procedure) Rules, 1993 of RDDBFI Act.

2. The case of the applicants in the RA are that alleged borrowers and demand notice issued on 06.08.2016 and the Scheduled properties are not legally mortgage to the respondent. Hence, the bank cannot initiate SARFAESI proceedings. The account of the applicants is not NPA as per Sec 2(o) and clause 4.1, 4.1.1, 4.1.2 of Asset Classification of RBI guidelines, hence the issue of jurisdiction is to be decided as preliminary issue before proceeding further.

3. Admittedly, the possession notice is received by the applicants by post and the possession notice dated 24.01.2017 is published as in The New Sunday Express newspaper on 29.01.2017.

4. It is contented Annexure -A Order dated 16.04.2018 is illegal, unsustainable and the same is in gross violation of SARFAESI Act; is biased in favour of the bank. Hence, the order is liable to be interfered and the same to be set aside and restored the SA for proper adjudication of the appeal.

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5. The main observation in the review sought for is that the applicant had raised grounds about classification of account as NPA and Tribunal as held that after classification as NPA on 28.03.2015, as no objection were raised by the applicant at least after receipt of the demand notice, the same cannot be entertained at this stage and such contentions are rejected.

6. However, it is contended, that the objections were raised in the SA in time, hence the order passed by the Tribunal are liable to be interfere. The not raising objections under rule 3-A is not bar from raising objections in appeal and the legal provision were raised under section 17(1) of the act challenging the measures taken by the bank under section 13(4).

7. The second ground is that Authorized Officer has no jurisdiction to invoke SARFAESI Act and relies on classification of the account as NPA as per Section 2(o) and clause 4.1,4.1.1 and 4.1.2 of RBI guidelines. It is submitted that, Supreme Court of India is Balvan N. Viswamitra And Ors Vs. Yadav Sadashiv Mule (D) has held as under: *"Where a court lacks inherent jurisdiction in passing a decree or making an order, a decree or order passed by such court would be without jurisdiction non est and void ab initio. A defect of jurisdiction of the court goes to the root of the matter and strikes at the very authority of the court to pass a decree or make an order.*

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*Such defect has always been treated as basic and fundamental and a decree or order passed by a court or an authority having no jurisdiction is nullity. Validity of such decree or order can be challenged at any stage, even in execution or collateral proceedings".* As per Article 141 of the Constitution of India, the law laid down of the Supreme Court is binding on all courts/Tribunals or authorities in India. The issuing of the demand notice without jurisdiction or authority under section 2(o) and clause 4.1,4.1.1 and 4.1.2 of RBI guidelines is liability to be set aside.

8. The other contention is raised as observation in the order is that the applicant has denied creation of mortgage over the subject of property and no such objection was raised by the applicants on receipt of the demand notice. Hence, it is contented with not raising objection under rule 3-A not a bar for objections in appeal.

9. The Tribunal rejected the contention of the applicant based on the agreement on 12.03.2004 duly signed by both the applicants had proved creation of security interest over the subject property. Thus, the Tribunal had failed in its mandatory duties under sec.17(3) to examine the documents produced by the bank, as to whether these documents conforms to the creation of valid legal mortgage.

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10. Further, the Tribunal failed to examine the following documents:

- a) Annexure R-2(a) and R-2(b) are not legal and valid mortgage deeds as per Sec.59(f) of transfer of property Act, and further these documents are inadmissible in evidence as documentary proof of mortgage, due to nonpayment of proper stamp duty as per Sec.34 of Karnataka Stamp Act.

- b) The date on which title deeds are deposited is not mentioned in the agreement, which is an essential requisite of date of mortgage.

- c) What are the description and nature and number of title deeds deposited are not mentioned in the agreement.

- d) Annexure R-2(a) dated 12.03.2004 for Rs.10.00lakhs is closed, as the demand notice is not issued on debt of Rs.10.00lakhs dated 12.03.2004, and Smt. Sudha Sheela Raj is discharged as mortgager.

- e) Annexure-R2(b) dated 17.08.2005, the liability is only Rs.9,70,345/- and the demand notice issued for Rs.30,63,559/- is illegal.

- f) There are no mortgage deeds for the loan amount of Rs.8.00 lakhs dated 28.09.2006 and for loan amount of RA.No.1/2021 | 6

Rs.10.00lakhs dated 13.06.20009, as mentioned in the 1^st page table column of demand notice dated 06.08.2016.

The applicant has relied upon the judgement of the Hon'ble Gujarat High Court in SCA 4822/10 between Pranjvan V/s Deena bank. It is contended that the para 7 of the order dated 16.04.2018, the service of the possession notice is admitted by the applicants and the bank has affixed photos as Annexurer-4 (Colly) and copy of paper publication. Hence the Tribunal conclude that the bank has followed the procedures laid down under the Act and Accordingly, the applicant appeal was dismissed.

11. It is contended that the Tribunal failed to examine the documents and not taken in to account violation of Rule 8(2) as detailed in para 5.11 of the appeal. Firstly, in the photographs produced by the bank regarding affixture of the possession notice, no banker seen in the photos and the date of affixture of possession notice is also not mentioned; there is no Mahajar/Panchanama who has visited the Scheduled Property. Hence, it is that there is no affixture of the possession notice by the respondent bank. The review applicant has relied on the following judgments in support of his contention.

12. The judgment of the Delhi High Court in the case titled Agarwal Tracom Pvt Ltd V/S Punjab National Bank in LPA 699/2015, RA.No.1/2021 | 7

wherein the Supreme Court explained this approach in the case of Shri Ram Saha Vs. State of West Bengal, (2004) II SCC 497, In para 19 the court stated as follows: - "It is well-settled principle of interpretation that a statute is to be interpreted on its plain reading; in the absence of any doubt or difficulty arising out of such reading of a statute defeating or frustrating the object and purpose of an enactment, it must be read and understood by its plain reading. However, in case of any difficulty or doubt arising in interpreting a provision of an enactment, courts will interpret such a provision keeping in mind the objects sought to be achieved and the purpose intended to be served by such a provision so as to advance the cause for which enactment is brought into force. If two interpretations are possible, the one which promotes or favors the object of the Act and purpose it serves, is to be preferred. At any rate, in the guise of purposive interpretation, the courts cannot re-write a statute. A purposive interpretation may permit a reading of the provision consistent with the purpose and object of the Act but the courts cannot legislate and enact the provision either creating or taking away substantial rights by stretching or straining a piece of legislation."

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13. The above rule of interpretation was also noted by the Supreme Court in Sindhi Education Society and Anr.Bs. Chief Secretary Govt. of NCT of Delhi and Ors.(2010)8 SCC 49.

14. The Hon'ble Madras High Court (DB) in L.Ramaselvam v/s Indian Overseas Bank on 29 July, 2009 (writ petition No.9729 of 2009) Held in para 17, It is a well-entrenched concept, that when the manner of exercising power is laid down, such power is to be exercised in the manner prescribed or not at all as observed in the decision of the Supreme Court in Indian Bank Association vs. Devkala Consultancy Services (2004 (11) S.C.C., 1): (PARA 28) "It is well settled that when a procedure is laid down Statutory Authority must exercise its power, in the manner prescribed or not at all".

In VimalabenAjitbhai Patel vs VatsalabenAshokbhai Patel (2008 (4) SCC., 649) (Para 42) "The right to property is no longer a fundamental right, but still it is Constitutional right. Apart from constitutional right it is also a human right. The procedures laid down for deprivation must be scrupulously complied with."

15. On these grounds, the applicant has filed the present Review applicant to set aside the final order of dismissal in SA 96/2018.

*Heard the submission of applicant counsel and perused the records.*

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16. The issue for consideration is whether the applicant has made out a case for review of the order dated 16.04.2018 in SA 96/2018.

17. The provision to review the order of the Tribunal is enumerated in S.22(2)(e) of the Recovery of Debts due to Banks and Financial Institutions Act,1993 read with Rule 5-A of the Debts Recovery Tribunal [Procedure] Rule,1993.

18. A careful reading of sub-section (2) of S.22 of the Act will clearly demonstrates that grounds for review mentioned in O.47 R.1 of the CPC are available to a review petitioner before the Tribunal. But sub-rule (1) of R.5-A of the Rules conveys that the Tribunal shall have power to review its own orders only on two grounds namely, some mistake or error apparent on the face of record for review under R.5-A of the Rules,

19. For proper appreciation of facts, Section 5A in The Debts Recovery Tribunal (Procedure) Rules, 1993 is extracted which reads as follows: - "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.*

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(2) No application for review shall be made after the expiry of a period of thirty 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:

*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.]"*

The Tribunal relies upon the judgement of the Hon'ble Supreme Court in the case titled the Thungabhadra Industries Ltd. v. Govt. of A.P [reported in AIR 1964 SC 1372] wherein it has distinguished an erroneous decision and a decision which could be characterised as vitiated by 'error apparent' and it reads thus:- *"[There is a distinction which is real, though it might not always be capable of exposition, between a mere erroneous decision and a decision which could be characterised as vitiated by 'error apparent'. A review by no means an appeal in disguise whereby an erroneous decision is reheard and corrected but lies only for patent error ..... where without any elaborate argument one could point to the error, and say, here is a substantial point of law which stares one in the face, and there could reasonably be no two opinions entertained about it, a clear case of error apparent on the face of record would be made out."*

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In AribamTuleshwar Sharma v. AribamPishak Sharma [reported in AIR 1979 SC 1047] the Hon'ble Supreme Court has held that there are definite limits to the exercise of power of review and it reads thus:- *"It is true as observed by this court in Shivdeo Singh v State of Punjab there is nothing in Article 226 of the Constitution to preclude a High Court from exercising the power of review which inheres in every court of plenary jurisdiction to prevent miscarriage of justice or to correct grave and palpable errors committed by it. But, there are definitive limits to the exercise of the power of review. The power of review may be exercised on the discovery of new and important matter or evidence which, after the exercise of due diligence was not within the knowledge of the person seeking the review or could not be produced by him at the time when the order was made; it may be exercised where some mistake or error apparent on the face of the record is found; it may also be exercised on any analogous ground. But, it may not be exercised on the ground that the decision was erroneous on merits. That would be the province of a court of appeal. A power of review is not to be confused with appellate powers which may enable an appellate court to correct all manner of errors committed by the subordinate court".*

20. A reading of the above judgments, it is apparent the Tribunal can review its own order on two grounds, first there is some mistake or error apparent on the face of record and the petitioner discovered new and important documents which he could not produced before the adjudication.

21. In the instant matter it is evident that the applicant has failed to establish that there is an error apparent on the fact of the RA.No.1/2021 | 12

records as attempted to be presented by the review applicants nor the applicants have a case that they discover any new and important matter or evidence which, after the exercise of due diligence, was not within their knowledge or could not be produced by them at the time of adjudication of the matter before the Order was passed.

22. Further as per Rule 5A, there is no error made out by the applicant in dismissing the SA, on the other hand, the applicant has attempted to interpret the observation made in the order to their benefit and has endeavoured to file the present RA raising contentions of an appeal.

23. Furthermore, the Tribunal has examined the documents produced by both the parties and after due consideration of the pleading raised in the SA 96/2018 and on examination of the documents produced has passed detailed order with reasoning upholding the measures initiated by the bank under the Act. Hence, Annexure A- orders dated 16.04.2018 in SA 96/2018 does not call for interference for a review. In fact there is no legal grounds to review the order.

24. In absence of any legal and valid case made for a review, the present RA1/2021 does not merit any consideration. On the other hand, the Review application is in nature of an appeal. If the petitioner is aggrieved by the Order dated 16.04.2018, the RA.No.1/2021 | 13

remedy available to the petitioner is to prefer an appeal under S.17 of the Act before the Hon'ble DRAT, Chennai.

25. For the foregoing discussion, the present RA1/2021 is dismissed. Consequently, pending IA's are also dismissed. Interim Order if any stands vacated. There is no order as to costs.

*(Dictated to the Stenographer (BL), after its transcription and necessary corrections, signed and pronounced by me in the Open Court on this day 25^th June, 2021)*

**(Sd/-)** **PRESIDING OFFICER** **DRT-II, BENGALURU**


RA.No.1/2021 | 14**APPENDIX****LIST OF DOCUMENTS PRODUCED BY THE APPLICANT**

<table border="1"><thead><tr><th><b>Sl.No.</b></th><th><b>Particulars</b></th></tr></thead><tbody><tr><td>1</td><td>Review Application Under Rule 5A of the Debts Recovery Tribunal (Procedure) Rules, 1993 R/W Section 17 of SARFAESI Act 2002</td></tr><tr><td>2</td><td>ANNEXURE-A, certified copy of the orders dated 16.04.2018</td></tr></tbody></table>

(Sd/-) **PRESIDING OFFICER DRT-II, BENGALURU**

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