Allowed

M/s Navyalnfracon Projects (India) Private Limited, v. Union of India

Andhra Pradesh HC14 Mar 2023WP/2565/2023

Case brief

AI extract

What is this about?

The High Court set aside an order from the Debt Recovery Tribunal that restrained the respondent-builder from alienating schedule property and carrying out construction work. The court held the order was unsustainable as the property was not part of the DRT proceedings, no loss or security details were furnished, and the jurisdiction belonged to the DRT for appropriate applications.

What did the court decide?

Impugned order of the Debt Recovery Tribunal dated 22.05.2022 set aside; writ petition allowed.

M/s Navyalnfracon Projects (India)… — Civil Procedure and Limitation | Andhra Pradesh HC (2023)

¶1

HON’BLE SRI JUSTICE D.V.S.S.SOMAYAJULU AND HON’BLE SRI JUSTICE V.SRINIVAS

¶2

WRIT PETITION No.2565 of 2023

¶3

ORDER:- (per Justice D.V.S.S.Somayajulu)

¶4

Heard learned Senior Counsel appearing for the petitioners and the learned Standing Counsel appearing for the respondent-bank.

¶5

In O.A.Nos.423 and 425 of 2021, the bank has moved applications against the primary borrower and the present applicant who is a builder, for recovery of certain sums. It is stated that the writ petitioner has entered into a tripartite agreement with the borrower and the bank; and a loan was sanctioned. On the failure of the borrower to pay the said loan, the present O.As were filed. The matter was heard over a period of time and ultimately orders were passed in I.A.No.948 of 2021 in O.A.No.423 of 2021 and I.A.No.950 of 2021 in O.A.No.425 of 2021. Thereafter, a separate order was passed in I.A.No.950 of 2021.

¶6

I.A.No.948 of 2021 is filed seeking a relief of restraining the 2^nd defendant from alienating the petition

¶7

¶8

schedule property which is a site situated in Chinna Waltair of Visakhapatnam City. This site is not the subject matter of dispute in the two O.As. In I.A.No.950 of 2021, also the prayer is to restrain the 2^nd defendant from alienating the property. In addition to the same, separate applications were moved in I.A.No.951 of 2021 seeking security for the O.A. amount.

¶9

The learned Senior Counsel points out that this petition schedule property is not the subject matter of the tripartite agreement nor was it mortgaged the petitioner bank. Since, an allegation is made that a letter dated 11.04.2022 was forged and issued, the impugned order came to be passed. The learned counsel submits that even if the said letter dated 11.04.2022 is a forgery and an FIR is registered as stated by the respondents, the law will have to take its own course but petitioner cannot be prevented from conducting his business and constructing in the said schedule property. He points out that, the ultimate order passed is a direction to these respondents not to do “any further work” in the schedule properties. Relying upon the building permission accorded by the Greater Visakhapatnam

¶10

¶11

Municipal Corporation (GVMC), he points out that the construction has to be commenced before 30.03.2023 and completed by 30.09.2024. It is his contention that the 2^nd defendant had offered to make a down payment of Rs.85,00,000/- and also to mortgage three or four flats in order to ensure that the interim orders are vacated stating that the petitioner will suffer irreparable loss if such an order is allowed to stand. It is prayed that the writ petition should be allowed.

¶12

In reply to this, the learned Standing Counsel submits that a fraud was committed taking advantage of the letter dated 11.04.2022 which is not issued by the Debt Recovery Tribunal (DRT) and properties were alienated by third parties. Therefore, he submits that the bank was constrained to move the applications seeking the orders restraining them from alienating the properties. It is his contention that if the properties are alienated, the bank would not be able to recoup its debt. It is also submitted that on the basis of the letter dated 11.04.2022, properties were already alienated to the third parties and that the proceeds were collected by the 2^nd defendant. Therefore, the learned

¶13

¶14

counsel justifies the order and prays that it should not be vacated or modified in any manner whatsoever.

¶15

This Court has seen the two applications that are

¶16

filed. Admittedly, this property for which a prohibitory order was granted is not the subject matter of the proceedings before the Debt Recovery Tribunal. In the affidavit that is filed in support of the applications, what is stated is that, the 2^nd defendant had sold the flat to third parties and that there is no security for the bank but no details are furnished for the alleged sales. It is also clear that this application was filed in June 2021 before the Debt Recovery Tribunal, whereas the allegedly forged letter was issued on 11.04.2022. Therefore, the connection between the two is not clearly established. Apart from that, a reading of the affidavit does not disclose

¶17

the clarity as to what exactly was violated by the 2^nd defendant. The affidavit merely states that, concealing the agreement with the bank, the flats were sold to some third parties. The details of the sale or copies of the deeds are not filed in the DRT or before this Court.

¶18

In the opinion of this Court, if such a sale is made, it would always be subject to the prior charge of the

¶19

¶20

bank and the buyer may not even get good and clear title. Lastly, this Court also notices that, the prayer made is to restrain the 2^nd defendant from alienating the properties on the ground that there is no adequate security for the bank. No details of loss or the outstanding and the value of the properties are furnished in the affidavit to enable the Debt Recovery Tribunal to come to any conclusion in this aspect.

¶21

In the opinion of this Court, this is an order which is far beyond the prayer that is made. As a businessman, the respondent will have a right to construct a building. If the bank has any claim over the same, it will have to file an appropriate application with all supporting data and then invite an order from the Court. In fact, the applications are also moved for furnishing security for the amounts due to the bank. In those circumstances, if the bank is able to move an appropriate application and seeks security, the DRT would definitely have the jurisdiction to decide the matter on its own merits. For now, however, this Court has to hold with the direction that is given not to do any work in the schedule property is not sustainable in law. In addition, while the prayer is made for restraining the 2^nd defendant from

¶22

¶23

alienating, a direction is given to the 2^nd defendant not to do any work on the schedule property in both the interlocutory applications till further orders.

¶24

The learned Senior Counsel, on instructions, reiterates that, the petitioner is willing to provide security, if the concern of the bank is only to secure the sum due. He points out that even in the impugned order, it is recorded that Rs.85,00,000/- would be made as a immediate payment and three or four flats would also be mortgaged. It is not clear why this offer has not been taken up. It is still open to the respondent-bank to consider this offer on its own merits. It is also made clear that the issue for the alleged forged letter dated 11.04.2022 is not being touched upon in this order. If the said letter is created in the manner in which it is noted, it is always be open to the DRT and the concerned authorities to take action.

¶25

Last submission made by the learned counsel for the respondent-bank about the petitioner’s failure to approach the DRT also has to be answered. The law is very clear that existence of an alternative remedy is a self imposed restriction chosen by the High Court. When there is failure of

¶26

¶27

rules of natural justice and/or a miscarriage of justice, Courts have held that a writ petition is maintainable. The objection of the learned counsel for the respondent-bank is therefore overruled.

¶28

The impugned order dated 22.05.2022 in O.A.No.423 and of 2021 passed in I.A.No.948 and 950 of 2021 as amended on 27.05.2022 is hereby set aside. It is made clear that this order would not preclude the respondent-bank from taking appropriate action to secure its interests by moving a proper application or applications.

¶29

Accordingly, the Writ Petition is allowed. There shall be no order as to costs.

¶30

As a sequel, pending miscellaneous petitions, if any, shall stand closed.

¶31

__________________________________ JUSTICE D.V.S.S.SOMAYAJULU

¶32

_______________________ JUSTICE V. SRINIVAS

¶33

14.03.2023 RKS

M/s Navyalnfracon Projects (India) Private Limited, v. Union of India

Case brief

What is this about?

What did the court decide?

M/s Navyalnfracon Projects (India) Private Limited, v. Union of India

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Parties & counsel

Coram

Case details

Similar cases

Gavinimekala Venkateswarlu Vs Union Bank of India

Y.Venu Vs M/s Shriram City Union Finance Ltd.

Bade Sperjan Raju Vs the State of Andhra Pradesh

Madamanchi Veera Raghavaiah Vs the Union Bank of India

Sri Kodandarama Boiled and Raw Rice Mill Vs Commercial Tax Officer

M/s Opus Educational Society Vs The Debts Recovery Tribunal