Allowed

M/S Pinakini Educational Trust v. M/S Sir M Visvesvaraya Co. Operative Bank Limited

Karnataka HC10 Jun 2024WP/14734/2024

Case brief

AI extract

What is this about?

The High Court allowed the petition, set aside the DRT order dismissing the application and amendment petitions, and held it was incumbent upon the DRT to dispose of the amendments before the main matter. The matter was remitted to the DRT.

What did the court decide?

Impugned order set aside; amendment applications allowed; matter remitted to DRT for reconsideration; proceedings concluded by 05.08.2024.

M/S Pinakini Educational Trust Vs M/S Sir M… — Banking and Recovery | Karnataka HC (2024)

¶1

¶2

NC: 2024:KHC:20310 WP No. 14734 of 2024

¶3

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10^TH DAY OF JUNE, 2024

¶4

BEFORE

¶5

THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 14734 OF 2024 (GM-DRT)

¶6

BETWEEN:

¶7

M/S PINAKINI EDUCATIONAL TRUST BEHIND RAYMOND FACTORY BYPASS ROAD, GINDAPURA, GOWRIBIDANUR-561 208, CHIKKABALLAPURA DIST. KARNATAKA REP. BY SMT. ASHA REDDY TRUSTEE.

¶8

…PETITIONER

¶9

(BY SRI. K.N. PANINDRA, SENIOR COUNSEL FOR SRI. BALARAM M L.,ADVOCATE)

¶10

AND:

¶11

Digitally signed by Vandana S Location: HIGH COURT OF KARNATAKA

¶12

M/S SIR M VISVESVARAYA CO OPERATIVE BANK LIMITED 109, CORPORATE OFFICE, SHANKARPURAM, BENGALURU-560004. REP. BY CHIEF MANAGER AND AUTHORISED OFFICER.

¶13

…RESPONDENT (BY SRI. K.V. LOKESH.,ADVOCATE)

¶14

THIS W.P IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 31/05/2024 PASSED BY THE LEARNED PRESIDING OFFICER OF THE HONBLE DRT-I, IN SA NO. 27/2023, PRODUCED AS ANNEXURE-A.

¶15

THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:

¶16

2 - NC: 2024:KHC:20310 WP No. 14734 of 2024

¶17

ORDER

¶18

In this petition, petitioner is aggrieved by the impugned final order dated 31.05.2024 passed by the Learned Presiding Office of the Hon’ble Debts Recovery Tribunal – I at Bengaluru, whereby the application filed by the petitioner / applicant under Section 17(1) of the SARFAESI Act, 2002 was dismissed by the Tribunal.

¶19

Heard learned counsel for the petitioner and learned counsel for the respondent and perused the material on record.

¶20

A perusal of the material on record will indicate that in the earlier round of litigation vide Order dated 05.02.2024 in WP.No.3201/2024, disposed of the petition directing the DRT to dispose of the applications filed by the petitioner within outer limited of 4 months from the date of the order. After the aforesaid order was passed by this Court in WP.No.3201/2024, the petitioner filed 3 applications for amendment as here under:

¶21

Application under Section 22(1) & (2) of Recovery of Debts Due to Banks & Financial Institution Act, R/w O.VI R.17 of the CPC vide Annexure – E

¶22

Application under Section 22(1) & (2)(b) of RDDBI Act, R/w O.VI R.17 of the CPC vide Annexure – F

¶23

¶24

NC: 2024:KHC:20310 WP No. 14734 of 2024

¶25

Application under Section 22(1) & (2)(b) of RDDBI Act, R/w O.VI R.17 of the CPC vide Annexure – G

¶26

The respondent – Bank filed a memo stating that the

¶27

objections filed by them to the main application to be treated as objections to the aforesaid amendment also.

¶28

It is the grievance of the petitioner that without passing any orders on the 3 interlocutory amended applications, DRT committed a patent & procedural irregularity / illegality in not disposing of the application & instead directed consideration of the said applications at the time of final disposal of the petition. Subsequently the Tribunal passed a common order dismissing the applications as well as the petition / appeal filed by the petitioner who is before this Court by way of the present petition.

¶29

Learned counsel for the respondent – Bank submits that having regard to the conduct of the petitioner in protracting the proceedings, the DRT was justified in passing the impugned order rejecting the amendment applications as well as dismissing the main appeal filed by the petitioner and the same does not warrant interference by this Court in the present petition.

¶30

4 - NC: 2024:KHC:20310 WP No. 14734 of 2024

¶31

Before adverting to the rival contentions, it would be profitable to extract the procedure prescribed for conduct for proceedings by the DRT as enumerated under Section 22 and Section 22A of the Recovery of Debts and Bankruptcy Act, 1993.

¶32

In the peculiar / special facts and circumstances of the instant case, I am of the considered opinion that not withstanding the fact that the petitioner had belatedly filed amendment applications after directions were issued by this Court in WP.No.3201/2024 supra, it was incumbent upon the DRT to dispose of the amended 3 interlocutory amended applications before proceeds to consider the main matter on merits; it follows there from with the aforesaid procedural irregularity and patent illegality on the part of the DRT in not considering or disposing of the amendment applications before taking up the main matter, is not only contrary to the provisions contained under Section 22 and Section 22A of the said Act, 1993, but is also in violation of principles of natural justice warranting interference by this Court in the present petition.

¶33

The next question that falls for consideration in the present petition is as to whether DRT was justified in rejecting the

¶34

5 - NC: 2024:KHC:20310 WP No. 14734 of 2024

¶35

amendment applications filed by the petitioner. In this context, a perusal of the proposed amendment will indicate that apart from the fact that the same related to certain facts sought to be amplified by way of amendment, no prejudice can be said to have been caused to the respondent – Bank if the proposed amendments were allowed especially the respondent – Bank would have an opportunity to controvert the same and file objections to the amended petition. Under these circumstances, instead of setting aside the impugned order and directing the DRT to reconsider the amendment applications, having regard to the nature of the proposed amendment sought for in the applications and to ensure that the directions issued by this Court in WP.No.3201/2024 are complied with and to expedite completion of the proceedings, I deem it just and appropriate to set aside the impugned order and allow the 3 interlocutory amendment applications and remit the matter back to the DRT for reconsideration of the main petition / appeal on merits within a stipulated time frame.

¶36

In the result, I pass the following:

¶37

ORDER

¶38

(i) Petition is hereby allowed.

¶39

¶40

NC: 2024:KHC:20310 WP No. 14734 of 2024

¶41

(ii) The impugned order is hereby set aside.

¶42

(iii) The matter is remitted back to the DRT for

¶43

reconsideration afresh in accordance with law.

¶44

(iv) The amendment applications filed by the petitioner vide Annexures – E,F & G, stands allowed.

¶45

(v) Parties are directed to appear before the DRT on 24.06.2024 without awaiting further notice from DRT.

¶46

(vi) The petitioner shall carry out the amendment and file the amended appeal / petition in SA.No.27/2023 on 24.06.2024.

¶47

(vii) Liberty is reserved in favour of the respondent to file additional objections to the amended petition.

¶48

(viii) The DRT shall proceed further and conclude the proceedings and pass appropriate orders on or before 05.08.2024.

¶49

(ix) It is needless to state that in view of setting aside of the impugned order and remit the matter back to the DRT, all interim orders, if any which were subsisting during the

¶50

¶51

NC: 2024:KHC:20310 WP No. 14734 of 2024

¶52

proceedings shall continue to subsist and remain in force till

¶53

conclusion of proceedings by the DRT.

¶54

Sd/JUDGE

¶55

DHA List No.: 1 Sl No.: 35