Dismissed

Indian Bank v. Shantinath Cold Storage Private Limited

DRAT7 Oct 2024MISC APPEAL/14/2024

Case brief

AI extract

What is this about?

The Delhi Debts Recovery Appellate Tribunal held that an interim order of stay remains in force until varied or vacated by the court, rejecting the argument that time-bound stays automatically lapse upon expiry, following the Constitution Bench decision in High Court Bar Association v. State of U.P.

What did the court decide?

The appeal was dismissed and the impugned order dated 31.01.2024 passed by the DRT was confirmed.

Indian Bank versus Shantinath Cold Storage Private Limited — Banking and Recovery | DRAT (2024)

¶1

IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA

¶2

(Misc. Appeal No. 14 of 2024)

¶3

(Arising out of I.A No. 140 of 2024 in SA No. 94 of 2019 in DRT-II, Kolkata)

¶4

THE HON’BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA

¶5

CHAIRPERSON

¶6

Indian Bank, carrying on its branch office from Stressed Asset Management Large (SAML) Branch, 1^st Floor, 14, Indian Exchange Place, Indian Bank Building, Kolkata - 700001.

¶7

The Authorised Officer, Indian Bank, carrying out its statutory function from Stressed Asset Management Large (SAML) Branch, 1^st Floor, 14, Indian Exchange Place, Indian Bank Building, Kolkata - 700001.

¶8

…Appellants

¶9

-Versus-

¶10

Shantinath Cold Storage Private Limited, having its registered office at Village North Natagaar, Fost North Natagaar, Pancila, Sodpur (Near Prajapati Bhaban), North 24 Parganas, Kolkata 700112 and also carrying on its business from Village Joyrambati, P.O. Joyrambati, District Bankura, West Bengal, Pin Code – 722161. [Pan No. – AAMCS 1870R]

¶11

Arun Kumar Mitra, working for gain as a Director of the Applicant No, 1 company and carrying on its function from Joyrambati, P.O. Joyrambati, District Bankura, West Bengal, Pin Code - 722161, [Pan No. -A00PM5294J]

¶12

Sabyasachi Mitra, working for gain as a Director of the applicant No. 1 Company and carrying on its function from Joyrambati, P.O. Joyrambati, District Bankura, West Bengal Pin Code722161. [Pan No.- ALCPM3469J]

¶13

… Respondents

¶14

Counsel for the parties Mr. A.K. Dhandhania, Learned Senior Advocate, Mr. Pralay

¶15

¶16

Kar, Learned Counsel for the Appellant

¶17

Mr. Nimish Mishra, Learned Counsel Mr. Ankit Chatterjee, Learned Counsel Ms. Snigdha Dutta, Learned Counsel for the Respondents

¶18

JUDGMENT : On 7^th October, 2024

¶19

THE APPELLATE TRIBUNAL :

¶20

Instant Appeal has been preferred against an order dated 31^st January, 2024 passed by Learned DRT-2 Kolkata (Shantinath Cold Storage P. Ltd. and Ors versus Indian Bank and Anr.) passed in I.A. No. 140 of 2024 arising out of S.A. No. 94 of 2019. 2. As per pleadings of the parties, Respondents have availed the loan facilities from the Allahabad Bank which was subsequently merged with the Indian Bank. There was a default in the repayment of loan which was classified as NPA and proceedings under SARFAESI Act. were undertaken by the Appellants. 3. S.A. No. 1322 of 2014 was filed by the borrower challenging the Demand Notice dated 12.07.2014 and Possession Notice dated 18.11.2014. S.A. No. 1322 of 2014 was dismissed on 15.12.2014. 4. An effort for settling the amount was made which could not succeed.

¶21

¶22

5. Another S.A. No. 296 of 2018 was filed before the Learned DRT-2 Kolkata which was also dismissed on 25.01.2019.

¶23

6. Sale Notice was issued by the Bank on 12.03.2019 which was also challenged by filing the instant S.A. No. 94 of 2019. An I.A. No. 243 of 2019 was filed which was taken up for hearing on 29.03.2019 wherein apart from other directions, Bank was restrained from taking any further coercive steps including issuance of order of Sale Notice. Said interim order was extended from time to time. On 19.01.2024, I.A. No. 140 of 2024 was heard. Learned DRT extended the interim order dated 29.03.2019 till the next date of listing which is under challenge.

¶24

7. I have heard the Learned Counsel for the parties and perused the records.

¶25

8. Learned Counsel for the Appellant would submit that the Learned DRT erred in passing the impugned order as the same was not extended on different dates. Interim orders were not extended after 14.07.2022. When there was no extension of the time bound interim order, it means that the interim order got vacated by not extending the same. Learned Counsel has placed reliance upon Ashok Kumar and others versus State of Haryana and another (2007) 3 SCC 470 and Arjan Singh versus Punit Ahluwalia and others (2008) 8 SCC 348. On the strength of case laws, Learned Counsel submits that the interim order, when not extended by the DRT, amounts to vacation of the same. It is further

¶26

¶27

argued that when an injunction order was operative upto a particular date, technically the order of injunction shall not remain operative thereafter.

¶28

9. Per contra, Learned Counsel for the Respondent has placed reliance upon the judgment of a Constitution Bench of Hon’ble Apex Court in Criminal Appeal No. 3589 of 2023 High Court Bar Association, Allahabad versus State of U.P. & Ors. decided on 29^th February, 2024. On the strength of the judgment, Learned Counsel argued that the interim order passed pending proceedings cannot automatically expire only by reason of lapse of time.

¶29

10. The only issue to be decided in the Appeal is as to whether an interim order passed by the Court/ Tribunal upto a particular date would automatically be treated as vacated on expiry of the date or the specific order of vacation of interim order is required to be passed by the Tribunal?

¶30

11. Learned Counsel for the Appellants had placed reliance upon Ashok Kumar and others versus State of Haryana and another (supra) wherein the issue before the Hon’ble Apex Court was that-

¶31

11. The short question which arises for consideration in this appeal is as to whether the order of ad interim injunction granted by the learned Civil Judge, Senior Division, Panipat, was operative till 9-9-1998 or 198-2000. We have noticed hereinbefore the nature of the orders passed by the learned Civil Judge. Although in its order dated 30.08.1997, the learned Civil Judge, used the term “in the meantime”, which was repeated in its order dated 24-9-1997, but in the subsequent orders beginning from 29-11-1997 the expression used was “till then”.

¶32

12. It was held in Appeal No. 12 of the judgment that –

¶33

“12. The term of the order of the Learned Judge, in our opinion, does not leave any manner of doubt whatsoever that the interim order was

¶34

¶35

only extended from time to time. The interim order having been extended till a particular date, the contention raised by the respondents herein that they were under a bona fide belief that the injunction order would continue till it was vacated cannot be accepted.”

¶36

13. Consequently, the Hon’ble Apex Court held that –

¶37

“There is no warrant for the proposition, as was stated by the High Court that unless an order of stay passed once even for the limited period is vacated by an express order or otherwise, the same would continue to operate.”

¶38

14. Reliance is also placed upon a judgment of Hon’ble Apex Court in Arjan Singh versus Punit Ahluwalia and others (supra) wherein it was held that if the order of injunction was operative upto a particular date, technically the order of injunction shall not remain operative thereafter.

¶39

15. In the recent judgment of Constitution Bench of the Hon’ble Apex Court in Criminal Appeal No. 3589 of 2023 High Court Bar Association, Allahabad versus State of U.P. & Ors. decided on 29^th February, 2024 issue has been settled by the Constitution Bench of the Hon’ble Apex Court wherein the Hon’ble Apex Court framed the following two issues-

¶40

(a) Whether this Court, in the exercise of its jurisdiction under Article 142 of the Constitution of India, can order automatic vacation of all interim orders of the High Courts of staying proceedings of Civil and Criminal cases on the expiry of a certain period?

¶41

(b) Whether this Court, in the exercise of its jurisdiction under Article 142 of the Constitution of India, can direct the High Courts to decide pending cases in which interim orders of stay of proceedings has been granted on a day to day basis and within a fixed period?’

¶42

16. It was held in Para 28 that –

¶43

“The principles laid down in the decision will apply even to civil cases before the trial courts. The same principles will also apply to a direction issued to the High Courts to decide cases on a day-to-day basis or within a specific time. Thus, the directions of the Court that provide for automatic vacation of the order of stay and the disposal of

¶44

¶45

all cases in which a stay has been granted on a day-to-day basis virtually amount to judicial legislation. The jurisdiction of this Court cannot be exercised to make such a judicial legislation. Only the legislature can provide that cases of a particular category should be decided within a specific time. There are many statues which incorporate such provisions. However, all such provisions are usually held to be directory.”

¶46

17. Further, it was held that once the High Court stays a trial, it takes a long time for the High Court to decide the impugned case. Ad interim relief, once granted, can be vacated or affirmed only after application of mind by the concerned Court.

¶47

18. In Para 36 of the judgment Hon’ble Apex Court held that –

¶48

“We hold that there cannot be automatic vacation of stay granted by the High Court. We do not approve the direction issued to decide all the cases in which an interim stay has been granted on a day-to-day basis within a time frame. We hold that such blanket directions cannot be issued in the exercise of the jurisdiction under Article 142 of the Constitution of India. We answer both the questions framed in paragraph 5 above in the negative.”

¶49

19. However, in Para 38 of the judgment Hon’ble Apex Court clarified that –

¶50

“We clarify that in the cases in which trials have been concluded as a result of the automatic vacation of stay based only on the decision in the case of Asian Resurfacing, the orders of automatic vacation of stay shall remain valid.”

¶51

20. Learned Counsel for the Appellants have drawn my attention towards Para No. 8 of the judgment of Hon’ble Mr. Justice Pankaj Mithal who was also member of the Constitution Bench who wrote a separate judgment wherein it is held that-

¶52

“Accordingly, it is expedient in the interest of justice to provide that a reasoned stay order once granted in any civil or Criminal

¶53

¶54

proceedings is not specific to be time bound would remain in operation till the possession of the main matter or until and unless an application is moved for its vacation and a speaking order is passed adhering to the principles of natural justice either extending, modifying varying or vacating the same.”

¶55

21. Judgment of the Hon’ble Apex Court in the High Court Bar Association (supra) has set the controversy at rest. Hon’ble Constitution Bench has delivered a judgment wherein all the Hon’ble Judges have unanimously settled the law. It is submitted by the Learned Counsel for the Appellant that the judgment of Arjan Singh and Arun Kumar (supra) were not considered by the Hon’ble Constitution Bench. Hence, those judgments still hold good and cannot be treated as overruled by the Hon’ble Constitution Bench. 22. Hon’ble Constitution Bench has laid down the law which is subsequent in time as well as a judgment of Constitution Bench of the Hon’ble Apex Court which has binding effect upon all the Courts and Tribunals wherein it is settled that there cannot be a specific vacation of the interim order passed by the Courts. At this stage, Learned Counsel for the Appellant submits that the judgment of the Hon’ble Constitution Bench was settled on 29^th February, 2024 while the impugned order was passed on 31^st January, 2024. It is submitted that at the time of passing of the impugned order, law as has been held in Arjan Singh (supra) and Arun Kumar (supra) were good laws. Hence, the impugned order cannot be sustained.

¶56

¶57

23. As far as validity of the impugned order is concerned, as on date, law is settled by the Constitution Bench of the Hon’ble Apex Court.

¶58

24. Accordingly, when the law is settled by the Hon’ble Apex Court Constitution Bench, I am of the considered opinion that an interim order, unless moved, varied or vacated by the Court, shall remain in force.

¶59

25. On the basis of the discussion made above, I am of the considered view that the Appeal lacks merit and is liable to be dismissed.

¶60

ORDER

¶61

Appeal is dismissed. Impugned order dated 31^st January, 2024 passed by Learned DRT-2 Kolkata (Shantinath Cold Storage P. Ltd. and Ors versus Indian Bank and Anr.) passed in I.A. No. 140 of 2024 arising out of S.A. No. 94 of 2019 is confirmed.

¶62

No Order as to costs.

¶63

File be consigned to Record Room.

¶64

Copy of the order be supplied to Appellant and the Respondents and a copy be also forwarded to the concerned DRT.

¶65

Copy of the Judgment/ Final Order be uploaded in the Tribunal’s Website.

¶66

Order signed and pronounced by me in the open Court on this the 7^th day of October, 2024.

¶67

(Anil Kumar Srivastava,J)