Dismissed

Ms Habib Oil and Grains Processing v. State Bank of India

DRT21 Nov 2023SA/715/2022

Case brief

AI extract

What is this about?

The Tribunal dismissed an application seeking to set aside measures under SA 715 of 2022, holding it barred by res judicata due to identical issues raised in prior applications (SA 324/2021) for which writs were pending. The applicants lacked locus standi and pursued parallel proceedings.

What did the court decide?

The application under S.17(1) of the Act is dismissed. The defendant is permitted to continue proceedings to enforce security interest.

Ms Habib Oil and Grains Processing versus State Bank of India — Banking and Recovery | DRT (2023)

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IN THE DEBTS RECOVERY TRIBUNAL -^1, KARNATAKA AT BENGALURU

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PRESENT: SRI IMTIAZ ALT

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PRESIDING OFFICER

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Dated the 21't day of November,2}23

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SECURITISATION APPLICATION NO.⁷¹⁵ OF 2022

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Between

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M/s Habib Oil & Grains Processing, (represented by its Partners & legal heirs of late Habib Khan) M-3, Nelson Mondela Road, Bannimantap, Musuru, Karnataka - 570015.

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Sadath Ali Khan, S/o Habib Khan, No.4530, St Mary's ltt Cross, N R Mohalla, Mysuru, Karnataka - 570007.

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J. Inayath Ali Khan, S/o Habib Khan, No.4530, St Mary's ltt Cross, N R Mohalla, Mysuru, Kamataka - 570007.

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Mohammed Ali Khan, S/o Habib Khan, No.4530, St Mary's I't Cross, N R Mohalla, Mysuru, Kamataka - 570007.

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Abid Ali Khan, S/o Habib Khan, No.4530, St Mary's 1't Cross, N R Mohalla, Mysuru, Karnataka - 510007.

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Sayeeda Begum, W/o Habib Khan, No.4530, St Mary's l't Cross, N R Mohalla, Mysuru, Karnataka - 570007.

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.^ sA71512022

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7.' Farhana Khanum, D/o late Habib Khan, 103, Arafa Abode, Wheelers Road, Cooks Town, Bengaluru, Karnataka - 560005.

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1. Shaheen Hasan, Wo Inayath Ali Khan, No.4530, St Mary's l't Cross, N R Mohalla, Mysuru, Karnataka - 570007.

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1. Farzana Aga, D/o late Habib Khan,

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, 8ll, Campbel Street Cross, Ashok Nagar, Bengaluru, Karnataka - 560025.

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...Applicants

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The authorised officer, State Bank of India, Building M No.l l/90, III Floor, Opp Trust Well Hospital, Near Old Shivaji Theatre, J C Road, Bengaluru, Kamataka- 560002. ...... Defendant

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This Securitisation Application^{havingbeenheard on 14.07.2023in the presence} , of Advocates M/s M A Rajendra^{andRavikumaraP for the applicants, and Advocates} M/s Francis Xavier and Sachin^for the^{defendant,and stoodover to this day for} consideration, the Tribunal delivered^{the following:-}

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FINAL ORDBR

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The applicants filed the above Securitisation^{Application (SA) on 20.10.2022} under S.l7(l) of the Securitisation and^{Reconstruction of FinancialAssetsand} Enforcement of Security Interest Act,^{2002as amended from time to time} -^hereinafter referred to as 'the Act' -^{praying to setaside the order dated 20.09.2022passed by the XI} additional Chief Metropolitan^{Magistrate at Bangalorein Crl Misc No.5020812021.The}

/a\

sA7t5/2022

applicants are none other than the borrowers of different financial assistances availed from the State Bank of India.

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The defendant filed a statement of objection resisting the prayer and contending among others that the application is hit by the doctrine of res-judicata and that there is no cause of action for the application.

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Going by the pleadings, it is submitted by the applicants that these lapses, in spite of placing before the Hon'ble DRT-II, in SA No.32412021 and in SA No.341/2021, the Hon'ble DRT-II, dismissed both the applications and hence, on this gross violations committed by the respondent bank, the applicants have preferred Writ Petitioners, as stated supra. Therefore, admittedly, the applicants had placed their grievances before DRT-II, Bangalore and suffered a final order aggrieved by which, they already filed Writ Petitions before the Hon'ble High Court of Karnataka, namely, WP 1432112022 and WP 1381012022, which are still pending. According to the applicants, for the same proceedings initiated by the defendant, they filed SA 51912014, SA 24212015, Dy No.170212021, SA 32412021 and SA 34112021. Though these applications have been filed in the same proceedings challenging different measures, their grievances arq almost the same. The Hon'ble Supreme Court in Ajqt Mohan v. H.N Roi keported in (2008.1 2 SCC 50U has held that the principles of res-judicata are applicable to different stages of the same proceeding. It is seen from the documents produced by either side in this proceedings that the applicants, on the pretext of challenging the order dated 20.09.2022 passed by the XI additional Chief Metropolitan Magistrate at Bangalore in Crl Misc No.50208/2021, have produced the same pleadings in SA 32412021 filed before the DRT-I1 Bangalore with a little change and modifications. Having already suffered a final order therein, they cannot re-agitate the same pleadings before this Tribunal in an application filed under S.l7(1) of the Act on the guise of an appeal. This Tribunal cannot **al^{of the same.The final order in SA 324/2021has attainedfinality. The said} ::":

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sA 7 t5/2022

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r-\

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final order is binding on the applicants. Attempt of the applicants to dislodge the finality arrived at in the said final order by way of an application filed under S.17(1) of the Act before this Tribunal cannot be permitted. The present proceedings initiated by the applicants are clearly barred by the principles of res judicata. The title of the parties agitated in both the proceedings is identical. The matter directly and substantially in issue in SA 32412021 and SA 71512022 is the same and the same adjudicated by the earlier Tribunal had^jurisdiction over the same and both sides have submitted themselves to the said jurisdiction. It would be an abuse of the process of the Tribunal to allow new proceedings to be decided by this Tribunal in respect of the same issues. A Full Bench decision of the Hon'ble High Court of Kerala in Alappuzha Muhi:tideen Mas-iid Association v Abdulkhader frepoited in 20] I (l\ KLT 772 (F.B)lheld that the principles of res judicata will apply not only in separate subsequent proceedings but also in subsequent stages of the same proceedings. Admittedly, Writ Petitions before the Hon'ble High Court of Karnataka are pending as against such final orders. Then for what pu{pose the applicants have filed the same pleadings before this Tribunal is not known to this Tribunal. It is all the more clear from the relief sought for. What sought for in the relief portion is for a declaration to set aside the measures initiated by the defendant in Ss.'l3(2) and l3(a) of the Act only, which had already been adjudicated in SA 32412021 by DRT-2 Bangalore. The relief sought for in 5A32412021 was to declare the measures under S.13, particularly S.13(4) of the Act initiated by the defendant is illegal.

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Ld counsel for the applicants at the time of advancing arguments contended that as the defendant has bifurcated the properties by issuing different demand notices dated 06.02.2020 and 09.03.2020, the applicants are challenging the measures initiated by the defendant in respect of the Bangalore property before this Tribunal and hence, the question of res judicata does not arise at all. It may be noted that as the said demand notices were already challenged before DRT-II Bangalore, these issues could

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,-\ sA715t2022

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have been presented there in SAs filed in the year 2021. What material for the principle of res^judicata is not the identity of the properties but the identity of the tittle of the parties only. The Hon'ble High Court of Kerala in Gireesh Chandra Babu v. Divisionol Forest O-fficer freoorted in 2009 Q) KLT 909J has held that to hold that there is bar of res judicata for the subsequent suit what is required to be proved is that in both the suits, the title of the parties agitated is identical, but not the identity of the actual properties involved in the two litigations, and it reads so:-

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"When O.535 of 1965 filed by the present plaintiff's father Madhavan Anirudhan with regard to the 30 acres offorest land comprised in Re-sruvey 6 of Aryanadu Village was distnissed holding that it was a forest land not in the possession of Madhovan Anirudhan, lhe present suit filed by Madhavan Anirudhqn's sonfor partition of the possessory rights of the very same 30 acres of forest landwas not maintainable, besides being misconceived. S. I I CPC squarely applied attracting the bar of res judicata to the present suit. I4that is required to be proved or established to hold that there is bar of res judicata for the,subsequent suit is thqt in both the suits, the title of the porties agitated is identical, but not the identity of the actual properties involved in the two litigations. (parograph l2)

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The Hon'ble Supreme Court in Alka Gupta v Narender Kumar Gupta

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[reported^{in (20 ] 0) l0 SCCl4} U^{on analysingS.1 1 of the Code of Civil Procedure,1908}

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has given the essential requirements to be fulfilled to apply the bar of res judicata, and it

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reads thus:-

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"Section I I of the Code, on an analysis requires the following essential requirements to be fulfilled,^{to applythe bqrof res judicatato ony suit or issue:}

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(i) The matter must be directly and substantially in issue in the fornter suit and in the later suit. (i, The prior suit should be between the same parties or persons claiming under them. (iii) Parties should have litigated under the same title in the earlier suit. (iv) The matter in issue in the subsequent suit must hqve been heqrd and Jinally decided in the

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. first^suit.

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(v) The court trying the former suit must have been competent to try the particular issue in queslion. "

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When SAs were filed against the defendant with respect to the Mysore properties, the grievance as against the Bangalore properties ought to have been raised in the same proceedings as the parties to the suit and the pleadings related to the issue are the same and the said Tribunal was having a part^jurisdiction of the properties against which the measures have been taken by the defendant. Subsequent application with the

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same pleadings though against different properties before this Tribunal is bared by the principles of res judicata. So, a claim or relief which ought to have been made a ground

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sA71512022

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in the former applications shall deem to be a matter directly and substantially in issue in those applications. Therefore, when applications were filed against the same defendant with respect to the properties in Mysore which are part of the same measure taken under S.l3(4) of the Act by the defendant, the relief with respect to the Bangalore properties ought to have been raised in the earlier applications. Therefore, the present application is barred by the principles of constructive res^judicata also. Hence, the bar under Explanation IV to S.1l of the Code of Civil Procedure, 1908 also squarely applies since the applicants omitted to raise the claim with respect to the Bangalore properlies in the previous applications, which were only part of the same measure, though said to be issued in two different notices. Therefore, it ought to be taken as forgotten. The Hon'ble Supreme Court while distinguishing the principles of res^judicata in Direct Recruit Closs II Engg. Ofrcers'Assn. V State o.f Maharashtra [reported in^{(]990</sup> 2 SCC 715 : 1990 SCC (L&5.) 339 :⁽¹⁹⁹⁰⁾ 13 ATC 348J has held that an adjudication is conclusive and final not only as to the actual matter determined but as to every other matter which the parties might and ought to have litigated and have had decided as incidental to or essentially connected with subject-matter of the litigation and every matter coming into the legitimate purview of the original action both in respect of the matters of claim and defence.}

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A party cannot pursue two parallel proceedings simultaneously or , afterwards for the same subject matter. He cannot file two suits for the same cause of action also. By doing so, no doubt, the applicants are trying to make out some undue advantage by fishing in troubled waters by way of forum hunting irrespective of the fact that the relief prayed for is genuine or not. On a perusal of the pleadings and the reliefs sought for in the above applications, it is evident that the ultimate relief sought for is one and the same though different language and style are used in the respective prayers. The core issue is centred on the infirmity in the issue and delivery of the mandatory notices t*t-:

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sA 715/2022

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under sub-sections⁽²⁾ and^(a) of S.l3 of the Act. The applicants have^{placedthe same} pleadings in SA 32412021before DRT-II Bangalore challenging the notices issued by the defendant under sub-sections⁽²⁾ and^(a) of S.13 of the Act along with sale^{notice while} they placed the same pleadings and relief^with a^{little modifications and changesin SA} 71512022 before this Tribunal challenging the notices issued by the^{defendant under sub-} sections (2) and^(a) of S.l3 of the Act along^{with the order obtained by the defendant} under S.l4 of the Act. The Writ Petitions^filed by^{the applicantsas against the dismissal} of SA 32412021 before the Hon'ble High Court of^{Kamataka are still pending. Things} being so, the applicants, on 20.10.2022 filed^{SA 71512022before this Tribunal seeking} for an order setting aside the same measures taken^{by the defendantunder sub-sections} (2) and (a) of S.1 3 of the Act. In spite of opening the lid by the defendant^{the applicants} did not care to produce a copy of SA^{32412021 beforethis Tribunal for perusal and} verification of the facts^put forth^{by them. It is settledlaw andrule of practice that the} applicants have to declare before^{this Tribunal that the matter regarding the application} filed is not pending before^{any court of law or forum. Though the applicantsin the} affidavit accompanying the application^{have submittedthat thereis no otherapplication/} appeal or case initiated by them^{or no other SA proceedingsfiled by them in respectof} the same matter are^pending adjudication,^{the fact is thattheirgrievances have already} been adjudicated in the final^{order in SA 32412021 against whicli Writ Petitionsare} pending. The applicants have no business^{to do so in the eye of law. This Tribunaltakes} a serious view of the matter.^{The. applicants,in the above facts and circumstancesof the} case, are not entitled to seek^{for any relief from this Tribunalas they have come with} unclean hands.

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The employment of the^{words 'any person (includingborrower),} aggrieved by any of the measures^{referredto in sub-section(a) of S.l3 of the Acttaken} secured creditor or his^{authorisedofftcer'under 5.17(1) of the Act clearly} :"-,n"

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sA715t2022

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indicates that only those persons who are really aggrieved by any of the measures taken under S.l3(4) of the Act are having the right to file an application thereunder. The applicants have not established by reason or otherwise that they are deprived of any of their rights guaranteed under the Constitution or under any law for the time being in forge, by way of the measure taken under S.13(4) of the Act by the defendant. They could not show that any legal injury caused to them. Therefore, the applicants do not come under the definition of 'aggrieved person' to make an application under S.17(1) of^the Act. Thus, the applicants are having no locus standi to^present such an application^as rightly argued by the 1't defendant.

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The Hon'ble Supreme Court in Ravi Yashwant Bhoir v District Collector freported in 20]2^{(2t KLT SN I (C.No.1.lSCI has lieldthata person cannot be heardas a} party unless he answers the description of aggrieved^party, and it^{reads so:-}

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, "A person who suffers from legal injury can only challenge the act or omission.^{There may be} some harm or loss that may^not be^{wrongful in the eyes of law becattse it maynot result in iniuryto a legal} right or legally protected interest of^{the complainant but judiciallyharm of this descriptionis called} damnum sine injuria. The complainant^{hasto establish that hehas beendeprivedof or deniedof a legal} right and he has sustained injury to^{any legally protected interest.In case he has no legal peg} for^a justiciable claim to hang on, he cannot be heard as o pqrty in a lis.^A fanciful or^{sentimentalgrievance may} not be sfficient to confer a locus standi to^{sue uponthe indivirfual.There must be injuria or a legal} grievance which can be appreciated and^not a^{stat pro ralione valuntas reasonsi.e,a claimdevoidof} reasons. Under the^garb of being^{necessarypqrty,a person cennolbe permilted to ntake q case as that of} general public interest. A person having o^{remote interestcqnnot be permitted to becomeq pqrtyin thelis,} as the personwants to become a^{party in a case,has lo estoblish thathe hasa proprietaryrightwhichhas} been or is threatened to be violated, for^{the reasons thata legal injurycreates a remedial right in the} injured person. A person connot^{be heard qs a partyunless he answersthe description of aggrieved} party."

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In the above circumstances and in^view of^{the discussionsas above, it is}

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found that the applicants are not aggrieved^{by the recourseand measures taken by the} defendant under sub-section^(a) of^{S.13of the Act by virtue of the orderdated20.09.2022} passed by the XI additional Chief Metropolitan^{Magistrateat Bangalorein Crl Misc} No.50208/2021 inrespect of A to^{C scheduleimmovable properties.}

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1 1. In view of the facts and circumstances of^{the case and the discussionas} above, the SA is liable to be^{dismissed,and, therefore, notwithstandinganything} contained in any other law for the time^{beingin force,the defendantis entitled to}

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^q sA 7 t5/2022

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continue with further proceedings pursuant to the order dated 20.09.2022 passed by the XI additional Chief Metropolitan Magistrate at Bangalore in Crl Misc No.5020812021 for recovery of its secured debt by enforcing its security interest over the SA schedule secured asset.

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In the result, IA No.286212022 is closed and SA 71512022 is dismissed. The defendant, notwithstanding anything to the contrary contained in any other law for the time being in force, is permitted to continue with the further proceedings in pursuant to the order dated 20.09.2022 passed by the XI additional Chief Metropolitan Magistrate at Bangalore in Crl Misc No.5020812021 for recovery of its secured debt from the secured debtors by enforcing its security interest over the secured asset. The parties shall suffer their respective costs.

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Communicate copy of this final order to both parties as provided in subsection (7) of S.l7 of the Act r/w R.l6 of the Debs Recovery Tribunal^(Procedure) Rules, 1993 (as amended from time to time).

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[Dictated^{to ny PA directlyon the computer, correctedand pronounced by me in the open TriQunalon thisthe 2]"} day ofNovember, 20231

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\y' \

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I^{rr\trTrAz ALr} ] PRESIDING OFFICER

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IN THE DEBTS RECOVERY TRIBI.INAL - I, KARNATAKA AT BANGALORE

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PRESENT: Szu IMTIAZ ALI PRESIDING OFFICER

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Dated the 2l't day of November,2023

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SECURITISATION APPLICA'I'ION NO. 7I5 OF 2022 Between

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M/s Habib Oil & Grains Processing, (represented by its Partners &legal heirs of late Habib Khan) M-3, Nelson Mondela Road, Bannimantap, Musuru, Karnataka - 570015 and eight others. And The authorised ol}-rcer, State Bank of India. Building M No.11190, III Floor, Opp Trust Well Hospital, Near Old Shivaji Theatre, J C Road, Bengaluru, Karnataka - 560002.

.. Applicants

Def-endant

FINAL OITDEII.

\ ).*^ue g'

Ms Habib Oil and Grains Processing v. State Bank of India

Case brief

What is this about?

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Ms Habib Oil and Grains Processing v. State Bank of India

Case brief

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