Allowed

Canara Bank v. M/ S Dev Shiva Agro Pvt. Ltd.

DRAT11 Nov 2022REGULAR APPEAL/11/2022

Case brief

AI extract

What is this about?

The Tribunal allowed a review application to reopen a previously dismissed special appeal and re-adjudicate the matter. The Court held that review is limited to correcting clerical errors or mistakes apparent on the face of the record and cannot be used to re-adjudicate the entire case. Since the respondents failed to file an appeal under Section 18, the review order is set aside.

What did the court decide?

The review application was held unsustainable and the impugned order dated 01.09.2021 setting aside the dismissed appeal was set aside.

Canara Bank versus M/ S Dev Shiva Agro Pvt. Ltd. — Banking and Recovery | DRAT (2022)

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Regular Appeal No. 11/2022 Date: 11.11.2022

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Canara Bank Vs. M/s Dev Shiva Agro Pvt. Ltd.

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Present: Shri S. K. Srivastava, counsel for the appellant, Shri Khurseed Alam, counsel for the respondent,

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Heard the learned counsels for the parties.

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Learned counsel for the appellant submits that the present appeal has been filed against the judgment and order dated 01.09.2021, which has been appended as Annexure No. 1 to the memo of appeal, by which the review application no. 06 of 2019 filed by the respondents was allowed by the Tribunal below setting aside the order dated 20.03.2020, whereby, the S.A. No. 208/2018 was dismissed.

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It is contended that vide impugned order dated 01.09.2021 the review application has been allowed and the matter has been decided a fresh, which cannot be the done as per settled law even by the Hon’ble Apex Court. It is further contended that the clerical or typographical error and mistake on the face of record can be taken into consideration in review but the matter cannot be re adjudicated.

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It is also contended that initially the S.A. number 208/2018 was dismissed vide order dated 20.03.2019 at which point of time, no auction proceedings were initiated by the respondent-Bank against the secured asset. The review application 06/2019 was filed by the respondents before the Tribunal below and for the same relief the respondents also filed a writ petition No. 18204/2019 before the Hon’ble High Court Patna. However no appeal was filed by the respondents under section 18 of the SARFAESI Act, against the order dated 20.03.2019.

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It is also argued that District Magistrate had passed an order dated 12.07.2019 under section 14 of the SARFAESIC Act which was challenged by the respondents by filing S.A. No. 187/2019 and also challenged the same in the pending writ petition No. 18204/2019 before the Hon’ble Patna High Court. It is stated at Bar at the said S.A. No. 187/2019 filed by the respondents was withdrawn in June 2022, whereas in this said S.A. the appellant Bank was granted permission to auction the property, which was auctioned subject to the condition that sale shall not be confirm. It is also contended that there is no power vested with the Tribunal below to review its order passed under the SARFAESI Act. In the last it is canvassed that without there being any pleadings and amendment with regard to the auction proceedings or without there being any appeal filed against the order dated 20.03.2019, the order impugned has been passed by the Tribunal below which is not sustainable in the eye of law as such the impugned order deserves to be set aside and the appeal be allowed.

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Learned counsels for the respondents contents that the contention of the appellant that the DRT, does not have power to review under the SARFAESI Act is not correct, as the same question came-up for adjudication before the Hon’ble High Court Patna in LPA No. 1029 of 2018 arising out of civil writ petition no. 15034 of 2017- Dilip Kumar Vs. The Union of India and &, decided on 27.09.2018, copy of which has been produced and which is being taken on record. It is argued that the Hon’ble High Court after considering the entire provisions of the SARFAESI Act came to a conclusion that the DRT has power to review its order passed under the SARFAESI Act and the said judgment still holds good.

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Learned counsel for the respondents further contends that there were certain submissions and documents on record,

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which were not considered by the Tribunal below, therefore, there was apparent error on the face of record, which could be reviewed by the Tribunal below.

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It is further contended on behalf of the respondent that for erasing the said irregularity or illegality, the respondents were having two remedies, first of filing appeal and second of filing review, but the respondents chose to file review application. It is also contended that the Tribunal below vide impugned order has given liberty to the appellant Bank to proceed a fresh from the stage of section 13(3A) of the SARFAESI Act.

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It is further argued that the order under section 14 of the SARFAESI Act was obtained from the District Magistrate by the Appellant Bank by suppressing the material fact, as the fact of pendency of the review application was not brought on record before the District Magistrate.

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However, the learned counsel for the respondents agrees with the legal position of law that the review is maintainable only to correct the clerical mistake/typographical error apparent on the face of record, as has been repeatedly held by the Hon’ble High Courts as well as the Hon’ble Apex court. Further, once the Tribunal below had granted liberty to the appellant bank to proceed a fresh from the stage of section 13(3A), there is no prejudice caused to the Bank.

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The learned counsel for the respondents further contents that the activity, which was carried out, was business of cold storage, which is agriculture in nature and the question is, as to whether the loan extended for such purpose would come under the purview of agriculture and whether the provisions of the SARFAESI Act would be applicable. Next contention is

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that the auction was done by the Bank on single bid pursuant to single sale notice, which is not permissible in law.

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The learned counsel for the appellant in rejoinder has stated that the sale notice was issued, affixed and published in the Newspapers and all the procedures as laid down in the Act and Rules made thereunder have been followed and there was no irregularity in conducting the sale. Next contention is that the property, which was sought to be auctioned and the land, for which the loaning was done, was cold storage, which was not being used for agriculture purpose, therefore, the argument of the respondents that the business of cold storage comes under the preview of agriculture in nature, has no force.

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After hearing the learned counsels for the parties and considering the settled proposition of law, I am of the view that the review can only be done in the cases, where the error is apparent on the face of record or to correct the mistake/ typographical error, but under the review the whole case cannot be reopened and re-adjudicated afresh. The contention of the respondents that there was error on the face of record, as some documents and submissions on record were left to be considered by the Tribunal below, is not sustainable on the ground that if any irregularity or illegality has been committed by the Tribunal below, there is remedy to file an appeal under section 18 of the SARFAESI Act for deciding the matter on merits and not the review application, since there is limited scope of review, but the respondents have not challenged the order dated 20.03.2019 by filing the appeal under section 18 of the SARFAESI Act. The error, which is shown to be on the face of record, may be construed to be an illegality and irregularity for the respondents, for which appropriate remedy

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is to approach before the Appellate Tribunal and not to file review application for re-adjudicating the matter afresh.

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In view of the above, the order impugned dated 01.09.2021 is liable to be set aside and the same is set aside. Accordingly, the appeal is allowed with no order as to costs.

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Justice R. D. Khare Chairperson

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VN Giri

Canara Bank v. M/ S Dev Shiva Agro Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/ S Dev Shiva Agro Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

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