In a defective admission order, the Tribunal dismissed the appeal against the DRT because the appellant concealed facts regarding previous sale notices. The court held the appellant did not come with clean hands and was not entitled to any relief.
Appeal dismissed in limine at the admission stage. All I.A.s stand disposed of.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA
THE HON’BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA CHAIRPERSON
Misc. Appeal Diary No. 427 of 2024 (Arising out of T.S.A. 16 of 2023 in DRT-I, Kolkata)
Order No. 02
16.5.2024
M/s. Deep Cement Suppliers & 2 Others … Appellants -VsPunjab National Bank & 2 Others … Respondents
Mr. Gaurav Singh with Mr. Siddhartha Ghosh, Learned Counsel for the Appellant
THE APPELLATE TRIBUNAL :
For Admission
Heard the Learned Counsel for Appellants and perused the record.
2. Instant Misc. Appeal has arisen against order dated 23.4.24 whereby I.A. 1043 of 2023 and I.A. 1275 of 2023 were dismissed by the Learned DRT holding that the case law of the Hon’ble Apex Court in CELIR LPP -vs- Bafna Motors (Mumbai) Private Limited & Others [(2024 2 SCC 1] did not apply in the facts of the case as the Borrower has not tendered the outstanding dues till the publication of Sale Notice and after publication of the Sale Notice sale has already been conducted.
Heard the Learned Counsel for Appellant and perused the record.
3. At the very outset, it is to be observed that the instant Sale Notice was the fifth Sale Notice. In both the I.A.s Appellant has concealed the fact about the fate of the earlier
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four sale notices in I.A. 1275 of 2023. In paragraph 3 it is stated that two earlier attempts for sale could not succeed as the Appellant herein filed an interim application but no bidder came forward in the sale. However, what happened to other two Sale Notices is not stated by the Appellant in either of the two I.A.s. Even in the appeal no such fact is brought on record.
4. It is settled legal proposition that a litigant seeking equity must come with clean hands before the Court. He must bring on record all the necessary facts. To adjudicate the matter, if any relevant fact is concealed by the Appellant then it shall be presumed that he has not come with clean hands before the Court.
5. In the present matter, Appellant has concealed the material facts regarding fate of earlier four Sale Notices which amounts to concealment of facts and the Appellant is not entitled for any relief. 6. Further as far as applicability of Bafna Motors (supra) is concerned, Appellant himself has admitted that two earlier Sale Notices were challenged by him. In Bafna Motors (supra) reliance has been placed on the case of Mathew Varghese -vs- M. Amritha Kumar & Others [(2014) 5 SCC 610) wherein it was held in paragraph 53 that :
“53. We, therefore, hold that unless and until a clear 30 days' notice is given to the borrower, no sale or transfer can be resorted to by a secured creditor. In the event of any such sale properly notified after giving 30 days' clear notice to the borrower did not take place as scheduled for reasons which cannot be solely attributable to the borrower, the secured creditor cannot effect the sale or transfer of the secured asset on
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any subsequent date by relying upon the notification issued earlier. In other words, once the sale does 9 not take place pursuant to a notice issued under Rules 8 and 9, read along with Section 13(8) for which the entire blame cannot be thrown on the borrower, it is imperative that for effecting the sale, the procedure prescribed above will have to be followed afresh, as the notice issued earlier would lapse. In that respect, the only other provision to be noted is sub-rule (8) of Rule 8 as per which sale by any method other than public auction or public tender can be on such terms as may be settled between the parties in writing. As far as sub-rule (8) is concerned, the parties referred to can only relate to the secured creditor and the borrower. It is, therefore, imperative that for the sale to be effected under Section 13(8), the procedure prescribed under Rule 8 read along with Rule 9(1) has to be necessarily followed, inasmuch as that is the prescription of the law for effecting the sale as has been explained in detail by us in the earlier paragraphs by referring to Sections 13(1), 13(8) and 37, read along with Section 29 and Rule 15. In our considered view any other construction will be doing violence to the provisions of the SARFAESI Act, in particular Sections 13(1) and (8) of the said Act.” (emphasis supplied)
7. In the present case Sale Notice has already been published accordingly, since the Appellant himself has tried to frustrate the earlier Sale Notices it means that he was having full knowledge of the SARFAESI proceedings being undertaken by the secured creditor. In view of the law laid down in Bafna Motors (supra) wherein reliance is also placed upon Mathew Varghese (supra) since earlier sales could not take place due to the same being challenged by the borrower by filing interim application, he is not entitled to any relief.
8. Further since Appellant has suppressed and concealed the material facts and has not come to the DRT with clean hands, he is not entitled to any relief.
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Accordingly, I do not find any illegality in the impugned order dated 23.4.24 whereby I.A. 1043 of 2023 and I.A. 1275 of 2023 were dismissed by the Learned DRT. Appeal is liable to be dismissed in linimi at the admission stage itself.
I.A. 235 of 2004 stands dismissed.
O R D E R E D
Appeal is dismissed in linimi at the admission stage. All I.A.s stand disposed of.
No order as to costs.
Copy of the order be supplied to Appellant and the Respondents and a copy be also forwarded to the concerned DRT.
File be consigned to Record room.
Order signed, dated and pronounced in open Court.
(Anil Kumar Srivastava,J) Chairperson
Dated 16th May, 2024 03/ac
2 issues framed by the court
Whether the appellant is entitled to relief regarding the dismissal of earlier Interim Applications for quashing sale notices.
Whether the concealment of facts regarding the fate of earlier Sale Notices precludes the appellant from seeking equity.
Colour shows how this judgement treated each authority
CELIR LPP vs Bafna Motors (Mumbai) Private Limited & OthersReferred¶11
_CELIR LPP -vs- Bafna Motors (Mumbai) Private Limited & Others_ [(2024 2 SCC 2024)] · Who else cites this
Mathew Varghese vs M. Amritha Kumar & OthersReferred¶17
Mathew Varghese -vs- M. Amritha Kumar & Others [(2014) 5 SCC 610] · Who else cites this
2 provisions across 2 enactments
M/s. Deep Cement Suppliers & 2 Others
Punjab National Bank & 2 Others
Anil Kumar Srivastava
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
