KOTAK MAHINDRA BANK LIMITED versus NARENDRA JAYANTILAL TRIVEDI & ANR. on 13 May 2022

1. Feeling aggrieved and dissatisfied with impugned order dated25.01.2022 passed by the Division Bench of the High Court of Gujaratat Ahmedabad and subsequent order dated 04.03.2022, in Letters PatentAppeal No. 75/2022, the original respondent – Bank has preferred thepresent appeals.

2. The facts leading to the present appeals are as under: - 2.1 A loan facility of Rs. 29,50,000/- was earlier extended by StateBank of India and later assigned to the appellant – Bank to a proprietorshipfirm of respondent No. 1 herein i.e., M/s Aromatics Intermediates andChemicals. As a security for the said loan facility, property belonging torespondent No. 1 was mortgaged in favour of State Bank of India. Inview of default by respondent No. 1 in making payments of the outstandingamounts, the bank filed a civil suit in the year 1986 for recovery of itsdues and enforcement of securities. Upon enactment of the Recoveryof Debts Due to Banks and Financial Institutions Act, 1993 (hereinafterreferred to as the Act, 1993), the suit was transferred to the DebtsRecovery Tribunal (DRT), which was numbered as Transfer ApplicationNo. 95/1995. The DRT vide order dated 03.03.2000 decreed the saidapplication and directed respondent No. 1 and the guarantors to payjointly and severally a sum of Rs. 44,01,159.47/- with cost.

2.2 Thereafter, the debts under the credit facility were assigned infavour of the appellant – bank. Pursuant to the assignment of dues, bank A

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Aissued a demand notice upon the judgment debtor – respondent No. 1and others under section 13(2) of the Securitisation and Reconstructionof Financial Assets and Enforcement of Security Interest Act, 2002(SARFAESI Act) for a sum of Rs. 27,35,85,200.62/- as on 20.06.2011,together with further interest and expenses and costs. Before any furthermeasures under section 13(4) of the SARFAESI Act could be taken byBthe appellant – bank, respondent No. 1 filed an application under section17 of the SARFAESI Act before the DRT being Securitisation ApplicationNo. 94/2011. Vide order dated 06.01.2015, the Recovery Officer rejectedthe objections raised by respondent No. 1 and guarantors. The DRTdismissed the Securitisation Application No. 94/2011.

C2.3 According to the appellant, the appellant took symbolicpossession of the mortgaged property under section 13(4) of theSARFAESI Act on 16.07.2015. Respondent No. 1 and guarantors againraised objections in the recovery proceedings which were rejected bythe Recovery Officer vide order dated 06.01.2015. By an order datedD15.07.2016, the Recovery Officer allowed the said application andreviewed/modified his earlier order dated 06.01.2015. The said orderwas challenged by the appellant before the DRT by way of Appeal No.6/2016 and was pending.

2.4 Thereafter, the appellant also filed an application under sectionE14 of the SARFAESI Act before the learned Chief MetropolitanMagistrate (CMM) being Application No. 256/2015, which came to beallowed vide order dated 16.08.2016 and allowed the bank to take physicalpossession of the secured assets. Aggrieved by the actions/measuresunder the SARFAESI Act, taken by the bank, the borrowers/guarantorsagain approached the DRT by way of Securitisation Application No.F171/2016. Thereafter, the appellant filed a special criminal applicationbefore the High Court challenging the order passed by the learned CMMto the extent of not appointing a subordinate officer for execution of theorder. The High Court disposed of the said special criminal applicationvide order dated 02.12.2016. Pursuant to the order passed by the HighGCourt dated 02.12.2016, learned CMM authorized the Registrar of thatCourt to take possession of the secured property in question. RespondentNo. 1 thereafter filed an interlocutory application before the DRT inSecuritisation Application No. 171/2016, which came to be rejected.Respondent No. 1 also filed a Criminal Misc. Application No. 643/2017before the learned CMM for clarification of order dated 16.12.2016.HThe said application came to be rejected by order dated 04.02.2017.

2.5 That thereafter, respondent No. 1 preferred a writ petitionbefore the High Court being Special Civil Application No. 2763/2017,seeking compliance of order dated 15.07.2016 passed by the RecoveryOfficer (against which an appeal before the DRT was pending) as wellas order dated 04.02.2017 passed by the learned CMM in Criminal Misc.Application No. 643/2017 and order dated 21.01.2017 passed by the DRTin Securitisation Application No. 171/2016. Thus, respondent No. 1challenged three different orders passed by three different authoritiespassed under two different Acts. The appellant resisted the said SpecialCivil Application on the grounds, inter alia, that without exhaustingalternative remedies available under the SARFAESI Act and Act, 1993,the writ petition under Article 226 of the Constitution of India would notbe maintainable. It was also submitted that the writ petition under Article226 of the Constitution of India against the orders passed by the DRTand the orders passed under the SARFAESI Act and Act, 1993, wouldnot be maintainable. That vide order dated 19.04.2021 and during thependency of the aforesaid writ petition before the High Court, the DRTdismissed the Securitisation Application No. 171/2016 with cost of Rs.25,000/-. The learned Single Judge of the High Court subsequentlydismissed the aforesaid Special Civil Application No. 2763/2017 videdetailed judgment and order dated 07.10.2021 with exemplary cost ofRs. 1,00,000/-. The learned Single Judge specifically observed that thesaid proceedings were only preferred by respondent No. 1 to stall therecovery proceedings under the SARFAESI Act. Learned Single Judgealso noted that respondent No. 1 remained successful in not paying asingle rupee for almost 21 years despite the decree passed by the DRT.

2.6 Feeling aggrieved and dissatisfied with the judgment and orderpassed by the learned Single Judge, respondent No. 1 preferred LettersPatent Appeal before the Division Bench of the High Court. The DivisionBench of the High Court by the impugned ex-parte ad-interim orderdated 25.01.2022 granted an ex-parte order of stay in favour of respondentNo. 1 of dispossession of the property till the next date of hearing andalso stayed the payment of cost of Rs. 1,00,000/- imposed by the learnedSingle Judge.

2.7 Feeling aggrieved and dissatisfied with the ex-parte ad- interimstay granted by the Division Bench of the High Court dated 25.01.2022,the bank has preferred present appeal arising out of SLP (C) No.2228/22. The present appeal came up for hearing before this Court on22.02.2022 and this Court passed the following order: - AB

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A“Shri Amar Dave, learned Advocate appearing on behalf of thepetitioner Bank has taken us to the reliefs sought/prayed in themain writ petition (pages 57-58). He has submitted that as suchsome of the reliefs sought in the main writ petition were the interimorder passed by the DRT dated 21.01.2017. It is submitted thatone another relief which was sought was to hold and declare thatBthe proceedings initiated by the Bank under the Securitization andReconstruction of Financial Assets and Enforcement of SecuritiesInterest Act, 2002 (SARFAESI Act) are illegal being time barred.It is reported that the proceedings before the DRT are disposedof and the same have been dismissed. It is further submitted thatCeven the order passed by the Recovery officer dated 15.07.2016upon which the reliance has been placed by the Division Bench ofthe High Court is as such the subject matter of appeal beforeDRT filed by the Bank. It is submitted that as held by this Court inthe case of Authorized Officer, State Bank of Travancore andAnr. Vs Mathew K.C. (2018) 3 SCC 85 and the recent decisionDof this Court in CA Nos.257-259/2022 - Phoenix ARC PrivateLimited Vs. Vishwa Bharati Vidya Mandir & Ors., the writ petitionunder Article 226 of the Constitution of India against theproceedings initiated under the SARFAESI Act and/or against aninterim order shall not be maintainable. It is submitted that byEgranting such an ad-interim order, the Division Bench of the HighCourt has virtually stalled the proceedings under the SARFAESIAct.

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Issue notice returnable on 15.03.2022.

Dasti, in addition, is permitted.

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In the meantime, the Division Bench of the High Court eitherto finally decide and dispose of the LPA and/or at least theapplication for interim relief to be decided on or before 09.03.2022and the order that may be passed to be placed before this Courton the next date of hearing.”

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2.8 It appears that having come to know of the present appealand order dated 22.02.2022, calculatively respondent No. 1 withdrewthe aforesaid Letters Patent Appeal with liberty to file appropriateproceedings before the appropriate forum. Respondent No. 1 – originalappellant also requested to continue the earlier ex-parte ad-interim orderHdated 25.01.2022, which as such is the subject matter of the civil appeal arising out of SLP (C) No. 2228/2022, pending before this Court. TheDivision Bench of the High Court vide impugned order dated 04.03.2022(impugned order in civil appeal arising out of SLP (C) No. 4724/2022)not only permitted respondent No. 1 to withdraw the Letters Patent Appeal,it also extended the ex-parte ad- interim stay, granted earlier, up to14[th] March, 2022. The Division Bench of the High Court reduced thecost imposed by the learned Single Judge from Rs. 1,00,000/- toRs. 25,000/-. The Division Bench also passed an order that appropriateforum, which is going to examine the order dated 19.04.2016 passed bythe Debts Recovery Tribunal in case No./Securitisation Application No.171 of 2016, shall deal with the case independently and without beinginfluenced by the observations made by learned Single Judge, vide orderdated 07.10.2021 passed in Special Civil Application No. 2763 of 2017and without being influenced by the order of cost imposed by the AppellateBench. The earlier ex-parte ad-interim order dated 25.01.2022 passedby the Division Bench in Letters Patent Appeal No. 75/2022 and thesubsequent order dated 04.03.2022 of the Division Bench passed inLetters Patent Appeal No. 75/2022, are the subject matter of the presentappeals.

3. We have heard Shri Amar Dave, learned counsel appearing onbehalf of appellant - bank and Ms. Sonam Anand, learned counselappearing on behalf of respondent No. 1 in civil appeal arising out ofSLP (C) No. 2228/2022. At this stage, it is required to be noted thatthough served, nobody has appeared on behalf of respondent No. 1 inconnected SLP (C) No. 4724/2022. This Court adjourned the matterearlier so as to ascertain that respondent No. 1 appears in the subsequentSLP (C) No. 4724/2022. When we enquired from Ms. Sonam Anand,learned counsel, who is appearing on behalf of very respondent No. 1 inconnected matter being SLP (C) No. 2228/2022, whether she has anyinstructions to appear on behalf of respondent No. 1, she has clearlystated at the bar that though she has informed respondent No. 1 aboutSLP (C) No. 4724/2022, she has no further instructions to appear onbehalf of respondent No. 1 in the connected matter bearing SLP (C) No.4724/2022. We do not appreciate the conduct on the part of respondentNo. 1 in appearing in one matter and not appearing in the connectedmatter though served. It appears that in view of the subsequent orderobtained by him from the Division Bench of the High Court, which is thesubject matter of SLP (C) No. 4724/2022, by withdrawing the LettersPatent Appeal with liberty to file appropriate proceedings before the AB

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Aappropriate forum and obtaining observations that the observations madeby the learned Single Judge in order dated 07.10.2021 passed in SpecialCivil Application No. 2763/2017 may not be considered by the appropriateforum before whom the proceedings to be initiated which is also thesubject matter of subsequent SLP, deliberately respondent No. 1 haschosen not to appear in the subsequent SLP (C) No. 4724/2022.B

4. At the outset, it is required to be noted that the proceedingsbefore the High Court initiated by respondent No. 1 in the year 2017 byway of Special Civil Application No. 2763/2017, as such was nothingbut an abuse of court process and only with a view to delay theproceedings under the SARFAESI Act, initiated by the appellant – bank,Cto recover the amount due and payable since 1986. From the materialavailable on record, it is noted that one after another, a number ofproceedings were initiated by respondent No. 1. Thus, it can be said thatall efforts were made by respondent No. 1 – original appellant to delaythe proceedings under the SARFAESI Act, initiated by the bank, toDrecover the amount due and payable since the year 1986.

4.1 In the year 2017, despite the statutory remedies available underthe SARFAESI Act, respondent No. 1 filed a writ petition before thelearned Single Judge of the High Court and prayed for the followingreliefs: - E

“B) Your Lordships may be pleased to issue writ of mandamusand be pleased to direct the respondent bank not to proceed underthe SARFAESI ACT further till they comply with the order passedby the Recovery officer dated 15-7-2016 in R.P No 360 atAnnexure-K to this petition.

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C) Your Lordships may be pleased to issue a Writ of certiorari orany other appropriate writ, order or direction quashing and setting-aside the order dated 04-02-2017 passed by the Hon’ble ChiefMetropolitan Magistrate, Ahmedabad as annexed hereinabove asAnnexure-A to this petition; G

D) Your Lordships may be pleased to issue a writ of certiorari orany other appropriate writ, order or direction quashing and setting-aside the order dated 21-1-2017 passed by the Hon’ble DebtRecovery Tribunal, Ahmedabad as annexed hereinabove asAnnexure-B to this petition.

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E) Be pleased to declare that the order passed dated 21- 1-2017by the Hon’ble Debt Recovery Tribunal is defective beingerroneous, without findings, without reasons and non consideringthe points of arguments and averments averred in the InterimApplication annexed hereinabove as Annexure-O to this petitionand the arguments canvassed.

F) Your Lordships may be pleased to issue writ of mandamus andbe pleased to hold and declare that the said proceedings of therespondent bank under the SARFEASI ACT are time barred.

G) Your Lordships may be pleased to issue or writ of mandamusand be pleased to hold and declare pending admission, hearing andfinal disposal of this petition be pleased to stay the effect, operationand implementation of impugned order dated 16-12-2016 passedby Hon’ble Chief Metropolitan Magistrate, Ahmedabad.

H) Pending admission, hearing and final disposal of this petitionbe pleased to direct the respondents to maintain status quo quaresidential property bearing No. 212- 2013, Azad Society,Ambawadi, Ahmedabad bearing total 378 Sq. Mtrs. of plot whichis in physical possession of the petitioner.

I) Ex-parte Ad-interim relief in terms of para 9 (H).

J) Costs of this petition are awarded.

K) Any other relief, order or direction which may be just, fit, properand equitable in the facts and circumstances of the petition.”

After the detailed judgment and order and after having taken noteof the subsequent order passed during the pendency of the writ petitionbefore the learned Single Judge of the High Court and having taken noteof the subsequent order passed by the DRT/appropriate authoritydismissing the securitisation application with cost of Rs. 25,000/-, thelearned Single Judge by the detailed judgement and order dismissed thewrit petition with exemplary cost of Rs. 1,00,000/-.

4.2 In fact, while dismissing the securitisation application, the DRTmade observations in paragraphs 31 to 33, which read as under: - “31. It is worthwhile to mention here that the bank filed theRecovery Proceedings in the year 1986 and now we are in theyear 2021. The bank made part recoveries through process of A

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law by sale of hypothecated assets and one property situated inVatva. The amount recovered is merger amount, as compared tototal recoverable dues. On the date of issuance of Demand Notice,bank claimed Rs.27,35,85,200.62 Ps, whereas amount recoveredwas approximately Rs.9,33,031.20 Ps.

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The Applicants made every effort to hinder the process of coveryof public money. The bank has mentioned details of three assetsas securities in the Demand Notice, but has proceeded againstone property only. To my opinion, if bank has given details of allthe securities, although some of the securities had been sold earlierby the bank through process of Court and has given the credit ofso recovered amount in the account of borrower in its ultimatedemand made under the Demand Notice, the reference of alreadysold securities would not render Demand Notice defective. So onthat account also, I find no merits in the Securitisation Application.

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32. It is high time to curb such type of litigants, who for theirDbenefit, give or furnish part information and conceal part informationto the detriment of secured creditor and with a view to misleadthe Courts. The Applicants who had filed earlier SARFAESI Act,2002, were required to disclose all such facts regarding death ofSmt. Kokilaben N. Trivedi and all other facts regarding sale ofEtwo secured assets at first available opportunity that is in theobjections filed against the Demand Notice and in the earlier filedSecuritisation Application, but the Applicants concealed factumof death of Smt. Kokilaben N. Trivedi for about 15 years.Non-disclosure of vital and material information and concealmentof such information and case as set-up regarding recoveries madeFby the bank during pendency of Civil Suit by the Applicants, at thetime of arguments reveals that the Applicants have not come tothis Tribunal with clean hands. The initial pleadings as well assubsequent conduct during pendency of proceedings of the litigantmust be fair enough to enable the justice delivery system/CourtsGto adjudicate matters in a judicious manner. The approach ofApplicants reveals that the Applicants deliberately acted in amanner to jeopardise fair adjudication of matter. Once theApplicants have not come to this Tribunal with clean hands, theyare not entitled to any reliefs on merits. We can rely on the judgmentof Hon’ble Supreme court in the case of V. Chandrasekaran v.

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Administrative Officer reported in 2012(4) R.C.R.(Civil) 588,which is fully applicable to present case. The Applicants for theirsuch conduct are liable to pay cost.

33. Keeping in view, all such facts and circumstances, SecuritisationApplication is dismissed with cost of Rs.25,000/-, apart from theright of the bank to recover all expenses incurred to defend thelitigation filed by the Applicants to question validity of SecuritisationProcess. Cost is to be deposited with National Defence Fund inthe Account No. 11084239799 State Bank of India at New DelhiMain Branch (00691) and file a purshis in compliance of ordersof this Tribunal within 7 days. The Respondent Bank may proceedfurther in accordance with law.”

That thereafter the learned Single Judge dismissed the aforesaidwrit petition bearing Special Civil Application No. 2763/2017 byobserving in paragraph 24 as under: - “24. From the narration of the facts made by the DRT it is clearthat the petitioner has only one goal and agenda as not to pay anysingle rupee after the decree passed by the DRT in the year 2000.The petitioner has remained successful for almost 21 years fornot paying any amount of the outstanding dues as per the decreepassed by the DRT which has achieved finality. In suchcircumstances, without adverting to the further facts and takinginto consideration the finding of the DRT which is not underchallenge and which has achieved finality, the petition is dismissedwith cost of Rs. 1 lakh. The amount of cost to be deposited withthe Gujarat State Legal Services Authority within a period of fourweeks from the date of receipt of this order.”

4.3 Against the detailed judgment and order dated 07.10.2021passed by the learned Single Judge in writ petition bearing Special CivilApplication No. 2763/2017 dismissing the writ petition with cost of Rs.1,00,000/-, respondent No. 1 preferred the Letters Patent Appeal beforethe Division Bench. Despite the strong observations made by the learnedSingle Judge recorded in detailed judgment and order dated 07.10.2021in Special Civil Application No. 2763/2017, the Division Bench entertainedthe Letters Patent Appeal. The Division Bench not only entertained thesaid Letters Patent Appeal but also granted ex-parte ad-interim relief,granting stay against the dispossession of the property i.e., not to take A

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Apossession of the property in question as well as stay against imposingcost of Rs. 1,00,000/-. The ex-parte ad-interim order dated 25.01.2022 isthe subject matter before this Court by way of SLP (C) No. 2228/2022.The same is extracted as under for immediate reference:

[“1. Heard learned Senior Advocate Mr. Yatin Oza with learnedBadvocate Ms. Minisha Sharma for the appellant and perused theorder dated 15/07/2016 passed by the Recovery Officer, by which,objections raised by the appellant were considered and had passedthe following order:

(1) The objections Exh.D/60 filed by CD No.2 and 3 are allowedCas per above objections.

(2) CH Bank is directed to submit details of recoveries in theaccounts of CDs including this account with clear bifurcationof entire amount recovered by them vis-a-vis itsappropriation duly supported with statement of accounts.

D(3)CH Bank is also directed to take steps to ascertain andjoin/ bring legal heirs of deceased CDs on record.

(4) CH Bank has to quantify the dues afresh after deductingentire recoveries and giving affect of the same on the datesof recoveries and take steps to get the fresh demand noticeEissued accordingly.

2. The said decision is appealed by the bank before the DebtsRecovery Tribunal, which is pending for hearing.

3. We have also gone through the order impugned in thepetition.

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Issue Notice making it returnable on 23/02/2022.

CIVILAPPLICATION(FORINTERIMRELIEF)NO.1of2022:

Notice returnable on 23/02/2022. Till the next date of hearing,Gthere would be stay against the dispossession of the property i.e.not to take possession of the property in question as well as stayagainst imposing cost of Rs.1,00,000/- to the present appellant –original petitioner. Direct service is permitted.”]

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4.4 While issuing the notice in the present Civil Appeal arising outof SLP (C) No. 2228/2022, this Court passed a detailed order which isas under: - “Shri Amar Dave, learned Advocate appearing on behalf of thepetitioner Bank has taken us to the reliefs sought/prayed in themain writ petition (pages 57-58). He has submitted that as suchsome of the reliefs sought in the main writ petition were the interimorder passed by the DRT dated 21.01.2017. It is submitted thatone another relief which was sought was to hold and declare thatthe proceedings initiated by the Bank under the Securitization andReconstruction of Financial Assets and Enforcement of SecuritiesInterest Act, 2002 (SARFAESI Act) are illegal being time barred.It is reported that the proceedings before the DRT are disposedof and the same have been dismissed. It is further submitted thateven the order passed by the Recovery officer dated 15.07.2016upon which the reliance has been placed by the Division Bench ofthe High Court is as such the subject matter of appeal beforeDRT filed by the Bank. It is submitted that as held by this Court inthe case of Authorized Officer, State Bank of Travancore andAnr. Vs Mathew K.C. (2018) 3 SCC 85 and the recent decisionof this Court in CA Nos.257-259/2022 - Phoenix ARC PrivateLimited Vs. Vishwa Bharati Vidya Mandir & Ors., the writ petitionunder Article 226 of the Constitution of India against theproceedings initiated under the SARFAESI Act and/or against aninterim order shall not be maintainable. It is submitted that bygranting such an ad-interim order, the Division Bench of the HighCourt has virtually stalled the proceedings under the SARFAESIAct.

Issue notice returnable on 15.03.2022.

Dasti, in addition, is permitted.

In the meantime, the Division Bench of the High Court eitherto finally decide and dispose of the LPA and/or at least theapplication for interim relief to be decided on or before 09.03.2022and the order that may be passed to be placed before this Courton the next date of hearing.”

Respondent No. 1 appeared through his advocate Shri SantoshKrishnan, who filed the vakalatnama on 08.02.2022.

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Issues

A4.5 Despite the pendency of the present Civil Appeal arising outof SLP (C) No. 2228/2022 and it appears that with a view to make thepresent SLP (C) No. 2228/2022 having infructuous, in a calculative move,respondent No. 1 withdrew the Letters Patent Appeal before the DivisionBench, with liberty to file appropriate proceedings before the appropriateforum. The Division Bench also extended the ad-interim relief, grantedBearlier vide order dated 25.01.2022, till 14.03.2022, despite the fact thatthe SLP against the ex-parte ad-interim order dated 25.01.2022 waspending before this Court and this Court was seized of the matter.Unfortunately, and without properly appreciating the consequences andeven without taking into consideration the strong observations made byCthe learned Single Judge while dismissing writ petition bearing SCA No.2763/2017, the Division Bench of the High Court has not only permittedrespondent No. 1 – original appellant to withdraw the Letters PatentAppeal, but has also extended the ex-parte ad-interim relief, grantedearlier, upto 14.03.2022 and even reduced the cost to Rs. 25,000/- fromRs. 1,00,000/-. The Division Bench has also observed in paragraph 4Dthat the appropriate forum which is going to examine order dated19.04.2016 passed by the Debt Recovery Tribunal-1, Ahmedabad inCase No. S.A. 171 of 2016, shall deal with the case independently andwithout being influenced by the observations made by learned SingleJudge, vide order dated 07.10.2021 passed in Special Civil ApplicationENo. 2763 of 2017 and without being influenced by the order of cost imposedby this Appellate Bench. For immediate reference the relevant portionof the aforesaid impugned order dated 04.03.2022 is extracted as under:

[“3.….Having considered the submissions made by the learnedadvocates for the respective parties, we pass the followingForder:

[i]The appellant is permitted to withdraw present appeal witha liberty to file appropriate proceedings before theappropriate forum.

[ii]Till the next date of hearing, interim relief, if any, grantedGand which is in existence, is extended upto 14.03.2022.

[iii]As far as the cost imposed by the learned Single Judge isconcerned, the same is reduced to Rs.25,000/- (RupeesTwenty Five Thousand Only) and the same shall be paid torespondent No. 1 by RTGS on or before 11.03.2022.H

4. It is needless to say that the appropriate forum, which isgoing to examine the order dated 19.04.2016 passed bythe Debt Recovery Tribunal – 1, Ahmedabad in CaseNo.S.A.171 of 2016, shall deal with the case independentlywithout being influenced by the observations made bylearned Single Judge, vide order dated 07.10.2021 passedin Special Civil Application No. 2763 of 2017 and withoutbeing influenced by the order of cost imposed by thisAppellate Bench.

5. In view of the order passed in Letters Patent Appeal,present civil application does not survive. Accordingly, thesame stands disposed of.”]

4.6 First of all, we deprecate the conduct on the part of respondentNo. 1 in withdrawing the Letters Patent Appeal despite the fact that thisCourt was seized of matter in which the ex-parte ad-interim order dated25.01.2022 passed by the Division Bench was under challenge and inwhich respondent No. 1 was appearing before this Court. He ought notto have withdrawn the Letters Patent Appeal and made the proceedingsbefore this Court infructuous. As observed hereinabove, such act ofwithdrawal of the Letters Patent Appeal on the part of respondent No. 1– original appellant and thereby making the proceedings before this Courtinfructuous so as to avoid adjudication on the correctness of the impugnedorder after order dated 22.02.2022 was passed by this Court is whollydeplorable.

4.7 Even otherwise, in the facts and circumstances of the case anumber of proceedings were initiated by respondent No. 1 by which hehas delayed the proceedings initiated by the bank under the SARFAESIAct, and has stalled the recovery proceedings. In spite of the strongobservations made by the adjudicating authority in the earlier orderre-produced by the learned Single Judge in his judgment and the strongobservations made by the learned Single Judge, the Division Benchwas not justified in initially granting an ex-parte ad-interim relief andthereafter, to continue the same on withdrawal of the Letters PatentAppeal.

4.8 Even the observations made by the Division Bench that theappropriate forum, which is going to examine the order dated 19.04.2016passed by the DRT-1, Ahmedabad in Case No. S.A. 171 of 2016, shall A

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Adeal with the case independently and without being influenced by theobservations made by learned Single Judge, vide order dated 07.10.2021passed in Special Civil Application No. 2763 of 2017 and without beinginfluenced by the order of cost imposed is also unsustainable. Suchobservations made while permitting withdrawal of the Letters PatentAppeal amounts to virtually allowing the appeal and setting aside theBorders of the DRT as well as the learned Single Judge. Once havingenjoyed the fruits of interim orders for approximately four years and inbetween initiating a number of other proceedings (even during thependency of the writ petition) and thereafter, having invited the order inwrit petition on merits and when the learned Single Judge dismissed theCwrit petition with cost, the Division Bench ought not to have passed anorder nullifying the strong observations made by the learned Single Judgewhile dismissing the writ petition. In fact, the Division Bench also did notconsider the order of the learned Single Judge on merits but has grantedrelief even while permitting withdrawal of the appeal. Such conduct onthe part of the litigant to once enjoy the fruits of the litigation for numberDof years, invite the order on merits, which is against him and in the appealinitially after obtaining the ex-parte ad-interim relief and thereafter, havingrealised that the same would not be sustained, withdrawing the appealand requesting that observations made by the learned Single Judge whiledismissing the writ petition may not be considered, cannot be acceptedEand such conduct reprehensible.

4.9 Once the Division Bench did not interfere with the orderpassed by the learned Single Judge on merits, thereafter, it was not openfor the Division Bench to pass an order permitting the appellant –respondent No. 1 to withdraw the Letters Patent Appeal and also makeFobservations that any of the observations made by the DRT as well asby learned Single Judge while dismissing the writ petition shall be ignoredand/or shall not be taken into consideration was beyond the ken of theDivision Bench. Allowing such a practice would tantamount to not onlytaking a chance before the court but would be indeed speculative and anabuse of the process of the court. The proceedings before the Court areGnot for taking the chance by the litigants.

We fail to understand as to on what basis the Division Bench ofthe High Court permitted withdrawal of the Letters Patent Appeal on theone hand while simultaneously granting relief to the appellant.

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5. Under the circumstances, the impugned order dated 04.03.2022passed by the Division Bench of the High Court, in so far as paragraphs3(i), 3(ii), 3(iii) and 4, is unsustainable.

6. In view of the above and for the reasons stated above, the CivilAppeal arising out of SLP (C) No. 2228/2022 is disposed of as havingbecome infructuous. The impugned order dated 04.03.2022 passed bythe Division Bench of the High Court of Gujarat at Ahmedabad in LettersPatent Appeal No. 75/2022 in so far as in terms of paragraphs 3(ii), 3(iii)and in paragraph 4 which read as under, is hereby quashed and set aside:- 3[ii] Till the next date of hearing, interim relief, if any, granted andwhich is in existence, is extended upto 14.03.2022.

3[iii] As far as the cost imposed by the learned Single Judge isconcerned, the same is reduced to Rs.25,000/- (Rupees TwentyFive Thousand Only) and the same shall be paid to respondentNo. 1 by RTGS on or before 11.03.2022.

4. It is needless to say that the appropriate forum, which is goingto examine the order dated 19.04.2016 passed by the DebtRecovery Tribunal-1, Ahmedabad in Case No. S.A. 171 of 2016,shall deal with the case independently without being influenced bythe observations made by learned Single Judge, vide order dated07.10.2021 passed in Special Civil Application No. 2763 of 2017and without being influenced by the order of cost imposed by thisAppellate Bench.

Further the ex-parte interim order granted in the Letters PatentAppeal also stands vacated.

The present Civil Appeals arising out of SLP (C) No. 2228/2022and SLP (C) No. 4724/2022, are allowed/disposed of to the aforesaidextent with cost, which is quantified at Rs. 1,00,000/- to be deposited byrespondent No. 1 with the Gujarat High Court Legal Services Committee,within a period of four weeks’ from today.

Divya Pandey and Amarendra Kumar(Assisted by : Adnan Khan, LCRA)

Appeals disposed of.

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