Dismissed

Corporation Bank v. M/s Yojaka India Pvt. Ltd.

DRAT5 Aug 2025MISC APPEAL/29/2019

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal, Chennai, dismissed an appeal filed by a bank against an order directing restitution of possession taken in violation of High Court directions and statutory deprivation authorities. The Tribunal held that possession by a Village Assistant was illegal due to lack of delegation authority.

What did the court decide?

The appeal was dismissed; the order directing restoration of possession was confirmed.

Corporation Bank versus M/s Yojaka India Pvt. Ltd. — Banking and Recovery | DRAT (2025)

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT CHENNAI

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Dated the 05^th of August, 2025

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PRESENT: Hon’ble Mr. Justice G. Chandrasekharan CHAIRPERSON

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M.A.(S.A):29/2019

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(S.A. No. 59 of 2019 before DRT-I, Karnataka at Bangalore)

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BETWEEN

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THE ASSISTANT GENERAL MANAGER, CORPORATION BANK (Ex-Corporation Bank) Pandeswar Branch, Mangalore 575 001.

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UNION BANK OF INDIA, SAMV Branch, Jeevan Sampige(LIC Building) 1/1 First Floor,2 nd Main Road, Malleshwaram Bangalor 560003. ….Appellant

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AND

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1. M/S. YOJAKA INDIA PRIVATE LTD.,

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Door No.3/28/43, II Floor, ABCO Trade Centre, NH 66, Kottara Chowki, Mangalore 575 006.

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Rep. By its Managing Director Jagadish Boloor, S/o Late Gopalakrishna Swarna, Aged about 57 years, Residing at “Siddhi”, Flat No.1006, 10^th Floor, Abhiman Palace, Opp. Canara High School, Mannagudda, Mangalore – 575 003

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Mr. NITHIN SHEETY S/o Kodange Lokkayya Shetty, 3-1-12/13, Bejai church road. Bejai Mangalore Dhakhina Kannada. Bijai, Karnataka- 575 004.

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1. DEVI PRIYA KRISHNA PRASAD RAI W/o. Krishna Prasad Rai. Flat No. 102, Tower No.6, Rustamjeee Ozone Gorgaon Mulund Link Road.] Behind MTNL, Motilal Nagar. Mumbai- 400 104.

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…..Respondents

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Counsel for Appellant : Mr. S. Sethuraman and Mr. N. Sivabalan Counsel for 1^st Respondents : Mr. T. R. Sundaram Counsel for R2 and R3 : Mr. T. S. Gopalan

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ORDER

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This Appeal is filed against the order passed in I.A. No. 577/2019 in S.A. No. 59/2019 challenging a portion of the order dated 12.04.2019 by Learned Presiding Officer, DRT-I, Bengaluru.

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First Respondent filed S.A. No. 59/2019 challenging the order dated 04.12.2018 passed by the Learned District Magistrate, Dakshina Kannada District in MAG (2) CR/358/2018/46846/C4 under section 14 of the SARFAESI Act, 2002. In pursuance of this order, the Appellant Bank has taken possession of the property, the secured asset, therefore, 1^st Respondent filed I.A. No.577/2019 in S.A. No. 59/2019 for restoration of the property since the possession was taken violating the status quo order passed by Hon’ble High Court. Learned Presiding Officer dealt with both I.A. No. 577/2019 and S.A. No. 59/2019 and passed an order on 12.04.2019. In the said order, Learned Presiding Officer passed order stating that impugned order dated 04.07.2018 passed by the Learned District Magistrate, Dakshna

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Kannada District in MAG (2) CR/358/2018/46846/C4 under Section 14 of the SARFAESI Act, 2002, is valid and in accordance with law, however, he held that, I.A. No. 577/2019 filed for redelivery was allowed and directed the Appellant Bank to re-deliver the possession of six items of property within 7 days from the date of that order. Now, this Appeal is filed by the Bank challenging the order passed in I.A. No. 577/2019.

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3. Learned Counsel for Appellant Bank submitted that

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there was no challenge to the execution of warrant in Securitisation Application. Section 13 of Karnataka Land Revenue Act gives powers to Tahsildar to delegate the power to Officers. When the order passed under Section 14 of the SARFAESI Act, 2002, was found in order, allowing the Application for re-delivery on the ground that possession was taken by a person not authorised, it not correct. Possession was taken by following the procedures as per the provision of the SARFAESI Act, 2002. Therefore, he prayed for setting aside the order passed in I.A. No. 577/2019.

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Learned Counsel for 1^st Respondent submitted that 1^st Respondent filed Writ Petition No.55520/2018 and Writ Petition No.56873-891/2018 on the file of Hon’ble High Court of Karnataka at Bangalore. When the matter was listed for hearing on 04.02.2019, Learned Counsel appearing for Respondents therein including the Petitioner/Appellant herein, were present, and with the consent of all the parties, Writ Petition was taken up for final hearing and disposed of. On considering the rival submissions, the Hon’ble High Court taking note of the fact, 1^st Respondent already approached the Tribunal and filed an Application for stay, directed the 1^st Respondent to deposit a sum of Rs. 50 Lakhs before the Tribunal on or before 06.02.2019, and the Tribunal was directed to consider the Stay Application on or before 08.02.2019. Till 08.02.2019, “ status quo with regard

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to possession as it exists today in respect of secured asset was ordered to be maintained.”

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It is further submitted that despite this order, official of Appellant Bank, in violation of Hon’ble High Court order,

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took physical possession of the property with help of Police and Goondas. It amounts to contempt of Hon’ble High Court order. The submission of Learned Counsel for Appellant is that the possession was taken even before the High Court passed order, is not correct. That apart, the order of District Magistrate empowers only Tahsildar and Special Tahsildar, Mulki, Mangaluru Taluk, to take possession, but possession was taken by Village Assistant. It is against the law. In the said circumstances, Learned Presiding Officer rightly allowed the I.A. No. 577/2019 and he prayed for dismissal of this Appeal.

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Learned Counsel appearing for Respondent Nos. 2 and 3 submitted that the property had already been sold to these Respondents. When the property has been sold, how the 1^st Respondent can seek possession. The Auction Purchasers’ interest has to be protected. In support of his submissions, Learned Counsel for Respondents 2 and 3, Auction Purchasers relied on the judgement of Hon’ble Supreme Court in Celir LLP Vs. Bafna Motors (Mumbai) Private

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Limited a nd Ors., reported in (2024) 2 SCC for the proposition that courts have to zealously protect the sanctity of any auction conducted and would loath in interfering with auctions. Otherwise, it would frustrate the very object and purpose of auctions and deter the public confidence and participation. He also relied on the judgement of Hon’ble Supreme Court in the case of Sidhartha Sarawgi V/s Board

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of Trustees for the Port of Kolkata and Ors ., reported in (2014) 16 SCC 248, for the proposition that implementation of ministerial or clerical task may be delegated to authorised officers. Therefore, the possession taken by the Village Assistant and handing over to Auction Purchaser, cannot be fault with.

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Considered the rival submissions and perused the records.

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From the submissions of Learned Counsel appearing for the parties, especially, Learned Counsel for 1^st

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Respondent, it is clear that the main grounds taken are (i) in

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violation of Hon’ble High Court order in Writ Petition No.55520/2018 and Writ Petition No.56873-891/2018, the possession had been taken. (2) when the District Magistrate empowers only Tahsildar and Special Tahsildar, Mulki, Mangaluru Taluk, to take possession, taking of possession by a Village Assistant, is not illegal.

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The perusal of records, especially, the order passed by Hon’ble High Court in Writ Petition No.55520/2018 and Writ Petition No.56873-891/2018, shows that the Hon’ble High Court, on hearing the Learned Counsel appearing for the parties to Writ Petition, took up Writ Petition for final hearing. Taking note of the fact that 1^st Respondent had already approached DRT under Section 17 of the SARFAESI Act, 2002, challenging the order passed under Section 14 of the SARFAESI Act, 2002, directed the 1^st Respondent to make deposit of Rs.50 Lakhs before the Tribunal on or before 06.02.2019 and directed the Tribunal to decide the Stay Application on or before 08.02.2019. Till 08.02.2019 status

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quo with regard to possession as existed on the date of hearing was ordered to be maintained.

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The case set up by Learned Counsel for the parties, is a contrasting case with regard to taking of possession. It is the case of the Appellant Bank that the possession was taken prior to the Hon’ble High Court passing the order. On the other hand, it is the case of the 1^st Respondent that only after knowing the order, the possession was taken.

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It is seen from the records produced by the 1^st Respondent, especially, proceedings relating to taking of possession and the Inventory, there are different timings are

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given with regard to taking of possession. In page 43 of the typed set filed by the 1^st Respondent, taking of possession of movables is shown as 3.10 p.m. to 4.05 p.m., on 04.02.2019. In page 45 Panchanama, for taking possession of immovable property situated at R.S. No. 292 (P) , T. S. No. 869 (post) measuring 12 cents at Boloor Village, Boloor word, Mangalore Taluk, timing of taking possession was given as

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3.10 p.m. to 4.05 p.m. on 04.02.2019. In Panchanama available at page 51, timing of taking possession was given as 2.00 p.m. to 2.30 p.m. on 04.02.2019. In Inventory available at page 53, timing of taking possession of movables was given as 11.00 a.m. to 01.30 p.m. There is a correction in the timing. In Panchanama available at page 57, timing of taking possession is given as 11.00 am to 01.30 p.m. Therefore, it is seen that the process to take possession was going from 11 a.m. to 4.30 p.m. Both the parties have not placed any material to show that what was the time of hearing the Writ Petitions No.55520/2018 and No.56873891/2018, and passing the order. Therefore, it could not be ascertained with certainty as to whether the period of taking possession was the prior to passing of order or after the passing of order. In either case, when Writ Petition No.55520/2018 and Writ Petition No.56873-891/2018 were listed and decided by Hon’ble High Court after hearing the Counsel for the parties, including the Counsel for the Appellant herein, it is not known why so much of urgency was shown in taking possession, when the challenge to the

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possession was being heard by Hon’ble High Court. Therefore, there is every reason to believe that possession had been taken in violation of the Order of Hon’ble High Court in Writ Petition No.55520/2018 and Writ Petition No.56873-891/2018. The fact that the Station House Officer

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has signed the letter for taking possession only on 05.02.2019 lends support to this view.

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With regard to the submission of Learned Counsel for 1^st Respondent that the possession had been taken by Village Assistant instead of Tahsildar and Special Tahsildar authorized by the District Magistrate, this Tribunal finds that the Appellant and Respondent No.1 concedes this fact that the possession was, in fact, taken and handed over by the Village Assistant.

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Learned Counsel for Respondents 2 and 3 relying on the judgement reported in Sidhartha Sarawgi V/s Board of Trustees for the Port of Kolkata and Ors ., reported in (2014) 16 SCC 248, justifies taking of possession by Village Assistant on the ground that Tahsildar empowered to depute

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Village Assistant to take possession . The relevant portions are extracted hereunder:-

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“5. ……………Once the power is conferred, after exercising the said power, how to implement the decision taken in the process, is a matter of procedure. The Legislature may, after laying down the legislative policy, confer discretion on an administrative agency as to the execution of the policy and leave it to the agency to work out the details within the framework of that policy[3]. So long as the essential functions of decision making is performed by the delegate, the burden of performing the ancillary and clerical task need not be shouldered by the primary delegate. It is not necessary that the primary delegate himself should perform the ministerial acts as well. In furtherance of the implementation of the decision already taken by the primary delegate as per the delegation, ministerial or clerical tasks may be performed by authorized officers. The complexity of modern day administration and the expansion of functions of the State to the economic and social spheres have made it necessary that the Legislature gives wide powers to various authorities when the situation requires it. Today’s governmental functions are a lot more complex and the need for delegation of powers has become more compelling. It

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cannot be expected that the head of the administrative body performs each and every task himself.

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6………………………….. The Judges are already overburdened with the task of performing judicial functions and the constraints on their time and energy are so demanding that it is in public interest to allow them to devote time and energy as much as possible in discharging their judicial functions, relieving them of the need for diverting their limited resources of time and energy to such administrative or ministerial functions, which, on any principle of propriety, logic, or necessity are not required necessarily to be performed by the Judges. Receiving a cause or a document and making it presentable to a Judge for the purpose of hearing or trial and many a functions post- decision, which functions are administrative and ministerial in nature, can be and are generally entrusted or made over to be discharged by the staff of the High Court, often by making a provision in the Rules or under the orders of the Chief Justice or by issuing practice directions, and at times, in the absence of rules, by sheer practice. The practice gathers the strength of law and the older the practice the greater is the strength…”

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This Tribunal finds from this judgement that, even for that, there must be a provision in the Rules or orders for delegation of powers. There is no material produced by Appellant Bank to show that Tahsildar has authority to delegate his powers to Village Assistant, and in pursuance of that authority, he gave a written order to the Village Assistant to take possession. In the absence of such authority and written order, taking possession of the property by a Village Assistant is certainly against the law. This view finds support of Hon’ble High Court of Bombay in

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the case of Anand Rathi Global Finance Ltd., Vs. The State of Maharastara and Anr., in WP No.218/2022 . The relevant portions are extracted hereunder:-

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“4. Responding to our query, Mr. Kakade, learned Government Pleader appearing for the State states that the Tahsildar-cum-Executive Magistrate, Thane shall not be personally present at the site when possession is delivered to the petitioner; instead, the Tahsildarcum- Executive Magistrate, Thane shall appoint the Nayab Tahasildar for taking over possession of the secured asset and for delivering it to the petitioner.

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5.………………………………

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6. The statutory mandate is that the District Magistrate or the Chief Metropolitan Magistrate, as the case may be, can himself take possession of the secured asset; in the alternative, the concerned magistrate can appoint any officer subordinate to him to take possession.

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7. In view of such mandate of the statute and having regard to the fact that the District Magistrate, Thane in the present case by his order under section 14 of the SARFAESI Act appointed the Tahsildar-cum-Executive 30-WP-218-2022 Magistrate, Thane to take possession of the secured asset, it is the said tahsildar-cumexecutive magistrate and no one else who would have the authority to take possession. Having regard to the maxim delegatus non potest delegare, the Tahsildarcum-Executive Magistrate, Thane cannot appoint any officer subordinate to him for the purpose of taking possession.”

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In the said case, Tahsildar cum Executive Magistrate, Thane, was the person authorized to take possession of the property. However, in the hearing, it was reported by

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Learned Government Pleader that Tahsildar cum Executive Magistrate, Thane shall not be personally be present at the site when the possession is delivered to the Petitioner, instead, the Tahsildar cum Executive Magistrate, Thane, shall appoint the Nayab Tahasildar for taking over possession of the secured asset. This arrangement was not approved by Hon’ble High Court, and it was found that except Tahsildar cum Executive Magistrate, no one else who would have the authority to take possession. Having regard to the maxim delegatus non potest delegare . This judgement gives clear indication that when the District Magistrate authorizes the Tahsildar cum Executive Magistrate to take possession, he cannot sub-delegate his task to Nayab Tahasildar for taking possession.

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Here in this case, without any legal sanction or authority by Tahsildar, he sub delegated his power to take possession to the Village Assistant. This taking of possession by Village Assistant is certainly not approved by law and it is against the law. Therefore, possession taken by

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Village Assistant from 1^st Respondent is illegal and liable to be set aside, which was rightly done by Learned Presiding Officer, DRT-I, Bengaluru, and he ordered restoration of possession of the secured asset taken possession on 04.02.2019 by allowing IA 577/2019. This Tribunal finds no infirmity or illegality in the order passed in IA 577/2019. Therefore, order passed by Learned Presiding Officer in IA577/2019 is confirmed.

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In the result, the Appeal in M.A.(S.A):29/2019 is dismissed confirming the order of Learned Presiding Officer, DRT-I, Bengaluru. Both the parties shall bear their own

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costs. All pending IAs, if any, stand closed.

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[Dictated to Athistamani, PS, transcribed by her, corrected and signed by me this 05^th of August, 2025]

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[ Justice G. Chandrasekharan] CHAIRPERSON

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Corporation Bank v. M/s Yojaka India Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

Corporation Bank v. M/s Yojaka India Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

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