Kotak Mahindra Bank Limited vs Narendra Jayantilal Trivedi

Kotak Mahindra Bank Limited ..Appellant (S)

Versus

Narendra Jayantilal Trivedi & Anr. ..Respondent (S)

With

CIVIL APPEAL NO. /2022 (@ SLP (C) No. 4724/2022)

JUDGMENT

M. R. Shah, J.

Leave granted.

1. Feeling aggrieved and dissatisfied with impugned order

dated 25.01.2022 passed by the Division Bench of the Signature Not Verified Digitally signed by Dr. Mukesh Nasa High Court of Gujarat at Ahmedabad and subsequent Date: 2022.05.13 16:49:06 IST Reason:

order dated 04.03.2022, in Letters Patent Appeal No.

1 75/2022, the original respondent – Bank has preferred the

present 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

State Bank of India and later assigned to the appellant –

Bank to a proprietorship firm of respondent No. 1 herein

i.e., M/s Aromatics Intermediates and Chemicals. As a

security for the said loan facility, property belonging to

respondent No. 1 was mortgaged in favour of State Bank of

India. In view of default by respondent No. 1 in making

payments of the outstanding amounts, the bank filed a

civil suit in the year 1986 for recovery of its dues and

enforcement of securities. Upon enactment of the Recovery

of Debts Due to Banks and Financial Institutions Act,

1993 (hereinafter referred to as the Act, 1993), the suit

was transferred to the Debts Recovery Tribunal (DRT),

which was numbered as Transfer Application No.

95/1995. The DRT vide order dated 03.03.2000 decreed

the said application and directed respondent No. 1 and the

2 guarantors to pay jointly and severally a sum of Rs.

44,01,159.47/­ with cost.

2.2 Thereafter, the debts under the credit facility were

assigned in favour of the appellant – bank. Pursuant to the

assignment of dues, bank issued a demand notice upon

the judgment debtor – respondent No. 1 and others under

section 13(2) of the Securitisation and Reconstruction of

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 further measures under

section 13(4) of the SARFAESI Act could be taken by the

appellant – bank, respondent No. 1 filed an application

under section 17 of the SARFAESI Act before the DRT

being Securitisation Application No. 94/2011. Vide order

dated 06.01.2015, the Recovery Officer rejected the

objections raised by respondent No. 1 and guarantors. The

DRT dismissed the Securitisation Application No.

94/2011.

3 2.3 According to the appellant, the appellant took symbolic

possession of the mortgaged property under section 13(4)

of the SARFAESI Act on 16.07.2015. Respondent No. 1

and guarantors again raised objections in the recovery

proceedings which were rejected by the Recovery Officer

vide order dated 06.01.2015. By an order dated

15.07.2016, the Recovery Officer allowed the said

application and reviewed/modified his earlier order dated

06.01.2015. The said order was 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

section 14 of the SARFAESI Act before the learned Chief

Metropolitan Magistrate (CMM) being Application No.

256/2015, which came to be allowed vide order dated

16.08.2016 and allowed the bank to take physical

possession of the secured assets. Aggrieved by the

actions/measures under the SARFAESI Act, taken by the

bank, the borrowers/guarantors again approached the

DRT by way of Securitisation Application No. 171/2016.

4 Thereafter, the appellant filed a special criminal

application before the High Court challenging the order

passed by the learned CMM to the extent of not appointing

a subordinate officer for execution of the order. The High

Court disposed of the said special criminal application vide

order dated 02.12.2016. Pursuant to the order passed by

the High Court dated 02.12.2016, learned CMM authorized

the Registrar of that Court to take possession of the

secured property in question. Respondent No. 1 thereafter

filed an interlocutory application before the DRT in

Securitisation Application No. 171/2016, which came to be

rejected. Respondent No. 1 also filed a Criminal Misc.

Application No. 643/2017 before the learned CMM for

clarification of order dated 16.12.2016. The said

application came to be rejected by order dated 04.02.2017.

2.5 That thereafter, respondent No. 1 preferred a writ petition

before the High Court being Special Civil Application No.

2763/2017, seeking compliance of order dated 15.07.2016

passed by the Recovery Officer (against which an appeal

before the DRT was pending) as well as order dated

5 04.02.2017 passed by the learned CMM in Criminal Misc.

Application No. 643/2017 and order dated 21.01.2017

passed by the DRT in Securitisation Application No.

171/2016. Thus, respondent No. 1 challenged three

different orders passed by three different authorities

passed under two different Acts. The appellant resisted the

said Special Civil Application on the grounds, inter alia,

that without exhausting alternative remedies available

under the SARFAESI Act and Act, 1993, the writ petition

under Article 226 of the Constitution of India would not be

maintainable. It was also submitted that the writ petition

under Article 226 of the Constitution of India against the

orders passed by the DRT and the orders passed under the

SARFAESI Act and Act, 1993, would not be maintainable.

That vide order dated 19.04.2021 and during the pendency

of the aforesaid writ petition before the High Court, the

DRT dismissed the Securitisation Application No.

171/2016 with cost of Rs. 25,000/­. The learned Single

Judge of the High Court subsequently dismissed the

aforesaid Special Civil Application No. 2763/2017 vide

detailed judgment and order dated 07.10.2021 with

6 exemplary cost of Rs. 1,00,000/­. The learned Single

Judge specifically observed that the said proceedings were

only preferred by respondent No. 1 to stall the recovery

proceedings under the SARFAESI Act. Learned Single

Judge also noted that respondent No. 1 remained

successful in not paying a single rupee for almost 21 years

despite the decree passed by the DRT.

2.6 Feeling aggrieved and dissatisfied with the judgment and

order passed by the learned Single Judge, respondent No.

1 preferred Letters Patent Appeal before the Division

Bench of the High Court. The Division Bench of the High

Court by the impugned ex­parte ad­interim order dated

25.01.2022 granted an ex­parte order of stay in favour of

respondent No. 1 of dispossession of the property till the

next date of hearing and also stayed the payment of cost of

Rs. 1,00,000/­ imposed by the learned Single Judge.

2.7 Feeling aggrieved and dissatisfied with the ex­parte ad­

interim stay granted by the Division Bench of the High

Court dated 25.01.2022, the bank has preferred present

7 appeal arising out of SLP (C) No. 2228/22. The present

appeal came up for hearing before this Court on

22.02.2022 and this Court passed the following order: ­

“Shri Amar Dave, learned Advocate appearing on behalf of the petitioner Bank has taken us to the reliefs sought/prayed in the main writ petition (pages 57­58). He has submitted that as such some of the reliefs sought in the main writ petition were the interim order passed by the DRT dated 21.01.2017. It is submitted that one another relief which was sought was to hold and declare that the proceedings initiated by the Bank under the Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act) are illegal being time barred. It is reported that the proceedings before the DRT are disposed of and the same have been dismissed. It is further submitted that even the order passed by the Recovery officer dated 15.07.2016 upon which the reliance has been placed by the Division Bench of the High Court is as such the subject matter of appeal before DRT filed by the Bank. It is submitted that as held by this Court in the case of Authorized Officer, State Bank of Travancore and Anr. Vs Mathew K.C. (2018) 3 SCC 85 and the recent decision of this Court in CA Nos.257­259/2022 ­ Phoenix ARC Private Limited Vs. Vishwa Bharati Vidya Mandir & Ors., the writ petition under Article 226 of the Constitution of India against the proceedings initiated under the SARFAESI Act and/or against an interim order shall not be maintainable. It is submitted that by granting such an ad­interim order, the Division Bench of the High Court has virtually stalled the proceedings under the SARFAESI Act.

Issue notice returnable on 15.03.2022.

Dasti, in addition, is permitted.

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

8 2.8 It appears that having come to know of the present appeal

and order dated 22.02.2022, calculatively respondent No.

1 withdrew the aforesaid Letters Patent Appeal with liberty

to file appropriate proceedings before the appropriate

forum. Respondent No. 1 – original appellant also

requested to continue the earlier ex­parte ad­interim order

dated 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. The Division 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 ex­parte ad­

interim stay, granted earlier, up to 14 th March, 2022. The

Division Bench of the High Court reduced the cost

imposed by the learned Single Judge from Rs. 1,00,000/­

to Rs. 25,000/­. The Division Bench also passed an order

that appropriate forum, which is going to examine the

order dated 19.04.2016 passed by the Debts Recovery

Tribunal in case No./Securitisation Application No. 171 of

9 2016, shall deal with the case independently and without

being influenced by the observations made by learned

Single Judge, vide order dated 07.10.2021 passed in

Special Civil Application No. 2763 of 2017 and without

being influenced by the order of cost imposed by the

Appellate Bench. The earlier ex­parte ad­interim order

dated 25.01.2022 passed by the Division Bench in Letters

Patent Appeal No. 75/2022 and the subsequent order

dated 04.03.2022 of the Division Bench passed in Letters

Patent Appeal No. 75/2022, are the subject matter of the

present appeals.

3. We have heard Shri Amar Dave, learned counsel appearing

on behalf of appellant ­ bank and Ms. Sonam Anand,

learned counsel appearing on behalf of respondent No. 1 in

civil appeal arising out of SLP (C) No. 2228/2022. At this

stage, it is required to be noted that though served, nobody

has appeared on behalf of respondent No. 1 in connected

SLP (C) No. 4724/2022. This Court adjourned the matter

earlier so as to ascertain that respondent No. 1 appears in

the subsequent SLP (C) No. 4724/2022. When we enquired

10 from Ms. Sonam Anand, learned counsel, who is appearing

on behalf of very respondent No. 1 in connected matter

being SLP (C) No. 2228/2022, whether she has any

instructions to appear on behalf of respondent No. 1, she

has clearly stated at the bar that though she has informed

respondent No. 1 about SLP (C) No. 4724/2022, she has

no further instructions to appear on behalf of respondent

No. 1 in the connected matter bearing SLP (C) No.

4724/2022. We do not appreciate the conduct on the part

of respondent No. 1 in appearing in one matter and not

appearing in the connected matter though served. It

appears that in view of the subsequent order obtained by

him from the Division Bench of the High Court, which is

the subject matter of SLP (C) No. 4724/2022, by

withdrawing the Letters Patent Appeal with liberty to file

appropriate proceedings before the appropriate forum and

obtaining observations that the observations made by the

learned Single Judge in order dated 07.10.2021 passed in

Special Civil Application No. 2763/2017 may not be

considered by the appropriate forum before whom the

proceedings to be initiated which is also the subject

11 matter of subsequent SLP, deliberately respondent No. 1

has chosen not to appear in the subsequent SLP (C) No.

4724/2022.

4. At the outset, it is required to be noted that the

proceedings before the High Court initiated by respondent

No. 1 in the year 2017 by way of Special Civil Application

No. 2763/2017, as such was nothing but an abuse of

court process and only with a view to delay the

proceedings under the SARFAESI Act, initiated by the

appellant – bank, to recover the amount due and payable

since 1986. From the material available on record, it is

noted that one after another, a number of proceedings

were initiated by respondent No. 1. Thus, it can be said

that all efforts were made by respondent No. 1 – original

appellant to delay the proceedings under the SARFAESI

Act, initiated by the bank, to recover the amount due and

payable since the year 1986.

4.1 In the year 2017, despite the statutory remedies available

under the SARFAESI Act, respondent No. 1 filed a writ

12 petition before the learned Single Judge of the High Court

and prayed for the following reliefs: ­

“B) Your Lordships may be pleased to issue writ of mandamus and be pleased to direct the respondent bank not to proceed under the SARFAESI ACT further till they comply with the order passed by the Recovery officer dated 15­7­2016 in R.P No 360 at Annexure­K to this petition.

C) Your Lordships may be pleased to issue a Writ of certiorari or any other appropriate writ, order or direction quashing and setting­ aside the order dated 04­02­2017 passed by the Hon'ble Chief Metropolitan Magistrate, Ahmedabad as annexed hereinabove as Annexure­A to this petition;

D) Your Lordships may be pleased to issue a writ of certiorari or any other appropriate writ, order or direction quashing and setting­ aside the order dated 21­1­2017 passed by the Hon'ble Debt Recovery Tribunal, Ahmedabad as annexed hereinabove as Annexure­B to this petition.

E) Be pleased to declare that the order passed dated 21­ 1­2017 by the Hon'ble Debt Recovery Tribunal is defective being erroneous, without findings, without reasons and non considering the points of arguments and averments averred in the Interim Application annexed hereinabove as Annexure­O to this petition and the arguments canvassed.

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

G) Your Lordships may be pleased to issue or writ of mandamus and be pleased to hold and declare pending admission, hearing and final disposal of this petition be pleased to stay the effect, operation and implementation of impugned order dated 16­12­2016 passed by Hon'ble Chief Metropolitan Magistrate, Ahmedabad.

13 H) Pending admission, hearing and final disposal of this petition be pleased to direct the respondents to maintain status quo qua residential property bearing No. 212­ 2013, Azad Society, Ambawadi, Ahmedabad bearing total 378 Sq. Mtrs. of plot which is in physical possession of the petitioner.

I) Ex­parte Ad­interim 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, proper and equitable in the facts and circumstances of the petition.”

After the detailed judgment and order and after having

taken note of the subsequent order passed during the

pendency of the writ petition before the learned Single

Judge of the High Court and having taken note of the

subsequent order passed by the DRT/appropriate

authority dismissing the securitisation application with

cost of Rs. 25,000/­, the learned Single Judge by the

detailed judgement and order dismissed the writ petition

with exemplary cost of Rs. 1,00,000/­.

4.2 In fact, while dismissing the securitisation application, the

DRT made observations in paragraphs 31 to 33, which

read as under: ­

“31. It is worthwhile to mention here that the bank filed the Recovery Proceedings in the year 1986 and now we

14 are in the year 2021. The bank made part recoveries through process of law by sale of hypothecated assets and one property situated in Vatva. The amount recovered is merger amount, as compared to total recoverable dues. On the date of issuance of Demand Notice, bank claimed Rs.27,35,85,200.62 Ps, whereas amount recovered was approximately Rs.9,33,031.20 Ps.

The Applicants made every effort to hinder the process of covery of public money. The bank has mentioned details of three assets as securities in the Demand Notice, but has proceeded against one property only. To my opinion, if bank has given details of all the securities, although some of the securities had been sold earlier by the bank through process of Court and has given the credit of so recovered amount in the account of borrower in its ultimate demand made under the Demand Notice, the reference of already sold securities would not render Demand Notice defective. So on that account also, I find no merits in the Securitisation Application.

32. It is high time to curb such type of litigants, who for their benefit, give or furnish part information and conceal part information to the detriment of secured creditor and with a view to mislead the Courts. The Applicants who had filed earlier SARFAESI Act, 2002, were required to disclose all such facts regarding death of Smt. Kokilaben N. Trivedi and all other facts regarding sale of two secured assets at first available opportunity that is in the objections filed against the Demand Notice and in the earlier filed Securitisation Application, but the Applicants concealed factum of death of Smt.Kokilaben N. Trivedi for about 15 years. Non­disclosure of vital and material information and concealment of such information and case as set­up regarding recoveries made by the bank during pendency of Civil Suit by the Applicants, at the time of arguments reveals that the Applicants have not come to this Tribunal with clean hands. The initial pleadings as well as subsequent conduct during pendency of proceedings of the litigant must be fair enough to enable the justice delivery system/Courts to adjudicate matters in a judicious manner. The approach of Applicants reveals that the Applicants deliberately acted in a manner to jeopardise fair adjudication of matter. Once the Applicants have not come to this Tribunal with clean hands, they are not entitled to any reliefs on merits. We can rely on the judgment of Hon’ble Supreme court in the case of V. Chandrasekaran v.

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

33. Keeping in view, all such facts and circumstances, Securitisation Application is dismissed with cost of Rs.25,000/­, apart from the right of the bank to recover all expenses incurred to defend the litigation filed by the Applicants to question validity of Securitisation Process. Cost is to be deposited with National Defence Fund in the Account No. 11084239799 State Bank of India at New Delhi Main Branch (00691) and file a purshis in compliance of orders of this Tribunal within 7 days. The Respondent Bank may proceed further in accordance with law.”

That thereafter the learned Single Judge dismissed the

aforesaid writ petition bearing Special Civil Application No.

2763/2017 by observing in paragraph 24 as under: ­

“24. From the narration of the facts made by the DRT it is clear that the petitioner has only one goal and agenda as not to pay any single rupee after the decree passed by the DRT in the year 2000. The petitioner has remained successful for almost 21 years for not paying any amount of the outstanding dues as per the decree passed by the DRT which has achieved finality. In such circumstances, without adverting to the further facts and taking into consideration the finding of the DRT which is not under challenge and which has achieved finality, the petition is dismissed with cost of Rs. 1 lakh. The amount of cost to be deposited with the Gujarat State Legal Services Authority within a period of four weeks from the date of receipt of this order.”

4.3 Against the detailed judgment and order dated 07.10.2021

passed by the learned Single Judge in writ petition bearing

Special Civil Application No. 2763/2017 dismissing the

16 writ petition with cost of Rs. 1,00,000/­, respondent No. 1

preferred the Letters Patent Appeal before the Division

Bench. Despite the strong observations made by the

learned Single Judge recorded in detailed judgment and

order dated 07.10.2021 in Special Civil Application No.

2763/2017, the Division Bench entertained the Letters

Patent Appeal. The Division Bench not only entertained

the said Letters Patent Appeal but also granted ex­parte

ad­interim relief, granting stay against the dispossession of

the property i.e., not to take possession of the property in

question as well as stay against imposing cost of Rs.

1,00,000/­. The ex­parte ad­interim order dated

25.01.2022 is the 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 learned advocate Ms. Minisha Sharma for the appellant and perused the order dated 15/07/2016 passed by the Recovery Officer, by which, objections raised by the appellant were considered and had passed the following order:

(1) The objections Exh.D/60 filed by CD No.2 and 3 are allowed as per above objections. (2) CH Bank is directed to submit details of recoveries in the accounts of CDs including this account with clear bifurcation of entire amount recovered by them vis­a­vis its appropriation duly supported with statement of accounts.

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

(4) CH Bank has to quantify the dues afresh after deducting entire recoveries and giving affect of the same on the dates of recoveries and take steps to get the fresh demand notice issued accordingly.

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

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

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

CIVIL APPLICATION (FOR INTERIM RELIEF) NO. 1 of 2022:

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

4.4 While issuing the notice in the present Civil Appeal arising

out of SLP (C) No. 2228/2022, this Court passed a detailed

order which is as under: ­

“Shri Amar Dave, learned Advocate appearing on behalf of the petitioner Bank has taken us to the reliefs sought/prayed in the main writ petition (pages 57­58). He has submitted that as such some of the reliefs sought in the main writ petition were the interim order passed by the DRT dated 21.01.2017. It is submitted that one another relief which was sought was to hold and declare that the proceedings initiated by the Bank under the Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act) are illegal being time barred. It is reported that the proceedings before the DRT are disposed of and the same have been dismissed. It is further submitted that even the

18 order passed by the Recovery officer dated 15.07.2016 upon which the reliance has been placed by the Division Bench of the High Court is as such the subject matter of appeal before DRT filed by the Bank. It is submitted that as held by this Court in the case of Authorized Officer, State Bank of Travancore and Anr. Vs Mathew K.C. (2018) 3 SCC 85 and the recent decision of this Court in CA Nos.257­259/2022 ­ Phoenix ARC Private Limited Vs. Vishwa Bharati Vidya Mandir & Ors., the writ petition under Article 226 of the Constitution of India against the proceedings initiated under the SARFAESI Act and/or against an interim order shall not be maintainable. It is submitted that by granting such an ad­interim order, the Division Bench of the High Court has virtually stalled the proceedings under the SARFAESI Act.

Issue notice returnable on 15.03.2022.

Dasti, in addition, is permitted.

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

Respondent No. 1 appeared through his advocate Shri

Santosh Krishnan, who filed the vakalatnama on

08.02.2022.

4.5 Despite the pendency of the present Civil Appeal arising

out of SLP (C) No. 2228/2022 and it appears that with a

view to make the present SLP (C) No. 2228/2022 having

infructuous, in a calculative move, respondent No. 1

withdrew the Letters Patent Appeal before the Division

19 Bench, with liberty to file appropriate proceedings before

the appropriate forum. The Division Bench also extended

the ad­interim relief, granted earlier vide order dated

25.01.2022, till 14.03.2022, despite the fact that the SLP

against the ex­parte ad­interim order dated 25.01.2022

was pending before this Court and this Court was seized of

the matter. Unfortunately, and without properly

appreciating the consequences and even without taking

into consideration the strong observations made by the

learned Single Judge while dismissing writ petition bearing

SCA No. 2763/2017, the Division Bench of the High Court

has not only permitted respondent No. 1 – original

appellant to withdraw the Letters Patent Appeal, but has

also extended the ex­parte ad­interim relief, granted

earlier, upto 14.03.2022 and even reduced the cost to Rs.

25,000/­ from Rs. 1,00,000/­. The Division Bench has

also observed in paragraph 4 that the appropriate forum

which is going to examine order dated 19.04.2016 passed

by the Debt Recovery Tribunal­1, Ahmedabad in Case No.

S.A. 171 of 2016, shall deal with the case independently

and without being influenced by the observations made by

20 learned Single Judge, vide order dated 07.10.2021 passed

in Special Civil Application No. 2763 of 2017 and without

being influenced by the order of cost imposed by this

Appellate Bench. For immediate reference the relevant

portion of the aforesaid impugned order dated 04.03.2022

is extracted as under:

[“3. ….Having considered the submissions made by the learned advocates for the respective parties, we pass the following order:

[i] The appellant is permitted to withdraw present appeal with a liberty to file appropriate proceedings before the appropriate forum.

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

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

4. It is needless to say that the appropriate forum, which is going to examine the order dated 19.04.2016 passed by the Debt Recovery Tribunal – 1, Ahmedabad in Case No.S.A.171 of 2016, shall deal with the case independently without being influenced by the observations made by learned Single Judge, vide order dated 07.10.2021 passed in Special Civil Application No. 2763 of 2017 and without being influenced by the order of cost imposed by this Appellate Bench.

5. In view of the order passed in Letters Patent Appeal, present civil application does not survive.

Accordingly, the same stands disposed of.”]

21 4.6 First of all, we deprecate the conduct on the part of

respondent No. 1 in withdrawing the Letters Patent Appeal

despite the fact that this Court was seized of matter in

which the ex­parte ad­interim order dated 25.01.2022

passed by the Division Bench was under challenge and in

which respondent No. 1 was appearing before this Court.

He ought not to have withdrawn the Letters Patent Appeal

and made the proceedings before this Court infructuous.

As observed hereinabove, such act of withdrawal of the

Letters Patent Appeal on the part of respondent No. 1 –

original appellant and thereby making the proceedings

before this Court infructuous so as to avoid adjudication

on the correctness of the impugned order after order dated

22.02.2022 was passed by this Court is wholly deplorable.

4.7 Even otherwise, in the facts and circumstances of the case

a number of proceedings were initiated by respondent No.

1 by which he has delayed the proceedings initiated by the

bank under the SARFAESI Act, and has stalled the

recovery proceedings. In spite of the strong observations

made by the adjudicating authority in the earlier order re­

22 produced by the learned Single Judge in his judgment and

the strong observations made by the learned Single Judge,

the Division Bench was not justified in initially granting an

ex­parte ad­interim relief and thereafter, to continue the

same on withdrawal of the Letters Patent Appeal.

4.8 Even the observations made by the Division Bench that

the appropriate forum, which is going to examine the order

dated 19.04.2016 passed by the DRT­1, Ahmedabad in

Case No. S.A. 171 of 2016, shall deal with the case

independently and without being influenced by the

observations made by learned Single Judge, vide order

dated 07.10.2021 passed in Special Civil Application No.

2763 of 2017 and without being influenced by the order of

cost imposed is also unsustainable. Such observations

made while permitting withdrawal of the Letters Patent

Appeal amounts to virtually allowing the appeal and

setting aside the orders of the DRT as well as the learned

Single Judge. Once having enjoyed the fruits of interim

orders for approximately four years and in between

initiating a number of other proceedings (even during the

23 pendency of the writ petition) and thereafter, having

invited the order in writ petition on merits and when the

learned Single Judge dismissed the writ petition with cost,

the Division Bench ought not to have passed an order

nullifying the strong observations made by the learned

Single Judge while dismissing the writ petition. In fact, the

Division Bench also did not consider the order of the

learned Single Judge on merits but has granted relief even

while permitting withdrawal of the appeal. Such conduct

on the part of the litigant to once enjoy the fruits of the

litigation for number of years, invite the order on merits,

which is against him and in the appeal initially after

obtaining the ex­parte ad­interim relief and thereafter,

having realised that the same would not be sustained,

withdrawing the appeal and requesting that observations

made by the learned Single Judge while dismissing the

writ petition may not be considered, cannot be accepted

and such conduct reprehensible.

4.9 Once the Division Bench did not interfere with the order

passed by the learned Single Judge on merits, thereafter, it

24 was not open for the Division Bench to pass an order

permitting the appellant – respondent No. 1 to withdraw

the Letters Patent Appeal and also make observations that

any of the observations made by the DRT as well as by

learned Single Judge while dismissing the writ petition

shall be ignored and/or shall not be taken into

consideration was beyond the ken of the Division Bench.

Allowing such a practice would tantamount to not only

taking a chance before the court but would be indeed

speculative and an abuse of the process of the court. The

proceedings before the Court are not for taking the chance

by the litigants.

We fail to understand as to on what basis the Division

Bench of the High Court permitted withdrawal of the

Letters Patent Appeal on the one hand while

simultaneously granting relief to the appellant.

5. Under the circumstances, the impugned order dated

04.03.2022 passed by the Division Bench of the High

25 Court, in so far as paragraphs 3(i), 3(ii), 3(iii) and 4, is

unsustainable.

6. In view of the above and for the reasons stated above, the

Civil Appeal arising out of SLP (C) No. 2228/2022 is

disposed of as having become infructuous. The impugned

order dated 04.03.2022 passed by the Division Bench of

the High Court of Gujarat at Ahmedabad in Letters Patent

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 and which is in existence, is extended upto 14.03.2022.

3[iii] As far as the cost imposed by the learned Single Judge is concerned, the same is reduced to Rs.25,000/­ (Rupees Twenty Five Thousand Only) and the same shall be paid to respondent No. 1 by RTGS on or before 11.03.2022.

4. It is needless to say that the appropriate forum, which is going to examine the order dated 19.04.2016 passed by the Debt Recovery Tribunal­1, Ahmedabad in Case No. S.A. 171 of 2016, shall deal with the case independently without being influenced by the observations made by learned Single Judge, vide order dated 07.10.2021 passed in Special Civil Application No. 2763 of 2017 and without being influenced by the order of cost imposed by this Appellate Bench.

26 Further the ex­parte interim order granted in the

Letters Patent Appeal also stands vacated.

The present Civil Appeals arising out of SLP (C) No.

2228/2022 and SLP (C) No. 4724/2022, are

allowed/disposed of to the aforesaid extent with cost,

which is quantified at Rs. 1,00,000/­ to be deposited by

respondent No. 1 with the Gujarat High Court Legal

Services Committee, within a period of four weeks’ from

today.

…………………………………J. (M. R. SHAH)

…………………………………J. (B.V. NAGARATHNA) New Delhi, May 13, 2022.

27