Allowed

Sri. Santhosh Kumar M K v. the Federal Bank Ltd.

Karnataka HC3 Mar 2020WP/4483/2020

Case brief

AI extract

What is this about?

The High Court held that the Debt Recovery Appellate Tribunal's order directing disposal of an OA pending without reference to a stay application was unsustainable as it defeated the writ court's prior directions regarding the stay's adjudication.

What did the court decide?

Impugned DRAT order set aside; DRAT directed to dispose of stay application within two days, and DRT to decide OA within two weeks thereafter.

Sri. Santhosh Kumar M K Vs the Federal Bank Ltd. — Banking and Recovery | Karnataka HC (2020)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 3^RD DAY OF MARCH, 2020

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PRESENT

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THE HON’BLE MR. JUSTICE ARAVIND KUMAR AND

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THE HON’BLE MR. JUSTICE HEMANT CHANDANGOUDAR

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W.P. NO.4483/2020 (GM-DRT)

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BETWEEN:

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1 . SRI. SANTHOSH KUMAR M.K S/O SRI. KRISHNEGOWDA AGED ABOUT 36 YEARS.

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2 . SMT. YAMINI RAVINDRAN AGED ABOUT 35 YEARS W/O SANTHOSH KUMAR M.K

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BOTH PETITIONERS ARE RESIDING AT NO.E62 OAKYARD APARTMENT 38^TH CROSS, IX BLOCK JAYANAGAR BENGALURU – 560 069.

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...PETITIONERS

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(BY SRI. GIRIDHAR H, ADVOCATE)

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AND:

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1 . THE FEDERAL BANK LTD., REGISTERED OFFICE AT FEDERAL TOWERS, P.B. NO.103 ALUVA, KERALA – 683 101 REPRESENTED BY CHIEF MNAGER AT ITS BRANCH INDIRA NAGAR BENGLAURU – 560 038.

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2 . DR. MADHUKAR H.S S/O SRI. H.N. SUBRAMANYA AGED ABOUT 40 YEARS RESIDING AT NO.156, 8-S9 BHAGAVATHI LAYOUT HULIMAVU, BANNERGHATTA ROAD, BENGALURU – 560 076.

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3 . M/S ARJUN BUILDERS & DEVELOPERS REP. BY ITS PROPRIETOR SRI. V. KRISHNAM RAJU AGED ABOUT 55 YEARS RESIDING AT NO.45, 5^TH TEMPLLE ROAD, 13^TH CROSS MALLESWARAM BENGALURU – 560 003.

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…RESPONDENTS

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(BY SRI. VIJAYAKUMAR V, ADVOCATE FOR R/A-1; V/O DATED:25.02.2020 PETITION IS DISMISSED AGAINST R-1 & R-3)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF CONSTITUTION OF INDIA PRAYING TO QUASH THE ANNX-T AIR NO.277/2019 ORDER DATED:28.10.2019 MADE BY THE LEARNED CHAIRPERSON, DEBT RECOVERY APPELLATE TRIBUNAL, CHENNAI DIRECTING THE TO THE LEARNED PRESIDING OFFICER OF THE DEBTS RECOVERY TRIBUNAL I, BENGALURU ADJUDICATE ANNX-A APPLICATION ON 351/2011 AS EARLY AS POSSIBLE WITHOUT BEING THE PENDENCY OF ANNX-A APPEAL MEMORANDUM.

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THIS PETITION COMING ON FOR PRELIMINARY HEARING THIS DAY, ARAVIND KUMAR J, MADE THE FOLLOWING:

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O R D E R

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Though matter is listed for ‘Preliminary Hearing’,

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by consent of learned Advocates appearing for parties it is taken up for final disposal.

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Heard Sri. Giridhar H, learned counsel

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appearing for petitioners and Sri.Vijayakumar V, learned counsel appearing for respondent No.1. Petition against respondent Nos.2 and 3 has been dismissed vide order dated 25.02.2020.

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First respondent herein has filed an application under Section 19 of The Recovery of Debts Due to Banks and Financial Institutions Act, 1993, f or recovery of money due from defendants therein and said proceedings are pending before Debt Recovery Tribunal. An affidavit of evidence came to be filed by the official of the bank in-lieu of examination-in-chief and on documents being marked, defendant Nos.1 and 2 filed an application seeking permission to cross examine A.W.1 on the grounds set out in the application – Annexure-C,

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as required under Rule 12(6) of the Debt Recovery Tribunal (Procedure) Rules, 1993, as said rule mandates that sufficient grounds are to be made out by defendant/s to cross-examine plaintiffs witnesses and only on such permission accorded by the DRT, crossexamination can be proceeded with and not otherwise. Said application came to be rejected by order dated 13.11.2015. Being aggrieved by the said order, a writ petition came to be filed by the petitioners in W.P.No.4934/2016, which came to be disposed of on 08.03.2019 by setting aside said order and remitting the matter back to the tribunal to decide the application filed seeking cross-examination of applicant/defendant No.1 by a speaking order within two (2) weeks from the date of receipt of certified copy of said order. DRT reconsidered the same and by order dated 10.05.2019 dismissed the application with costs.

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Being aggrieved by the said order a writ petition was preferred by the petitioners in W.P.Nos.28988-989/2019, which came to be disposed of

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by order dated 15.07.2019-Annexure-P reserving liberty to the petitioners to file an appeal before appellate tribunal, since order impugned was an appealable order. Liberty was also granted to the petitioners to file an application for stay before the Debt Recovery Appellate Tribunal (for short ‘DRAT’) and DRAT was directed to dispose of the appeal as well as application for stay, which may be preferred by the petitioners, by a speaking order within a period of two (2) weeks from the date of receipt of certified copy of order, subject to the rider that till application of stay is decided by DRAT, DRT should not deliver the judgment in O.A.No.351/2011. Hence, appeal came to be filed before DRAT in AIR No.277/2019 along with an interlocutory application for stay. By impugned order DRAT has directed the presiding officer of the DRT adjudicating O.A.No.351/2011 to dispose of the said OA as early as possible without reference to the pendency of the appeal.

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A plain reading of the said order would clearly indicate that despite direction issued by the learned

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Single Judge in W.P.No.28988-89/2019, that appeal as well as stay application pending before DRAT be disposed of and till adjudication of the application for stay the DRT should not pass the judgment, said order has been over-taken by the impugned order. It is rather very intriguing that appellate tribunal has taken this recourse. When the writ Court has directed the DRAT to dispose of the appeal and application for stay by a speaking order within a period of two weeks and till such time DRT having been directed not to pass judgment, said direction cannot be truncated or frustrated by DRAT in directing DRT to dispose of OA. Without reference to pendency of appeal, particularly when application for stay which has been filed is not disposed of. If such recourse is taken then purpose of filing the appeal itself would be defeated. It is because of this precise reason the writ Court had directed DRAT in W.P.Nos.28988989/2019 by order dated 15.07.2019-Annexure-P to dispose of the application for stay within two (2) weeks and till application for stay is not disposed, it had also directed the DRT not to deliver the judgment in

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O.A.No.351/2011. Now by virtue of the impugned order DRT has to comply with the direction issued by DRAT which would result in the direction issued to DRAT in the writ petition being defeated. As such we are of the considered view that impugned order cannot sustain the test of law.

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The entire issue before DRT as well as DRAT revolves around the permission sought for by petitioners who are defendant Nos.1 and 2 before DRT to cross examine A.W.1. An application came to be filed under Rule 12(6) of the appellate proceedings rules seeking leave to cross examine A.W.1 on the premise that defendant Nos.3 and 4 had sold the property clandestinely. Permission to cross-examine can be permitted only on sufficient grounds being made out and it is not for mere asking. As could be seen from order dated 10.05.2019-Annexure-M primary reason assigned by defendant Nos.1 and 2 for cross-examination of A.W.1 is on the ground that bank had not taken steps or action against defendant Nos.3 and 4 for having sold the flats.

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Thus, if fourth defendant has played fraud on first respondent by selling the flats to third defendant and also to third parties, it would necessarily be open for the first defendant to work out his claim against defendant Nos.3 and 4 as well as third parties. In fact in the written statement filed by the defendant Nos.1 and 2 also there is no whisper with regard to alleged fraud or misrepresentation made by the applicant/bank. Further, defendants have admitted the execution of suit documents. Be that as it may. It is for the DRAT to examine these aspects in the appeal pending before said appellate authority.

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Whether to permit or not to permit the defendant Nos.1 and 2 i.e., writ petitioners to cross examine A.W.1, is an issue which is at large before DRAT and it has to take a decision in that regard and no opinion is expressed in that regard. However, on account of impugned order having been held as not sustainable in law, this petition deserves to be allowed.

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Hence, we proceed to pass the following:

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ORDER

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(i) Writ petition is allowed.

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(ii) Order dated 28.10.2019-Annexure-T passed by the Debt Recovery Appellate Tribunal, Chennai, in AIR

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No.277/2019 is set aside and DRAT is requested to dispose of the application for stay, which is said to have been filed by the petitioners along with the appeal, expeditiously at any rate within two (2) days from the next date of hearing and DRT shall dispose of the OA within two (2) weeks thereafter by taking into consideration the order that would be passed by the DRAT.

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(iii) First respondent -bank is at liberty to move DRAT for preponing the case and if such application is filed, DRAT shall consider the same sympathetically and time fixed hereinabove would

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commence from the date of hearing as may be fixed by the DRAT.

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SD/JUDGE

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SD/JUDGE

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Sri. Santhosh Kumar M K v. the Federal Bank Ltd.

Case brief

What is this about?

What did the court decide?

Sri. Santhosh Kumar M K v. the Federal Bank Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

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