Remanded

Haneefa T.K v. M/S Poonvala Housing Finance Limited

Kerala HC24 May 2024OP (DRT)/348/2023

Case brief

AI extract

What is this about?

Justice Nagaresh disposed of an O.P. (DRT) challenging the DRT's dismissal of an application to appoint an auditor. The Court found the relief unjustified due to lack of proven anomaly but directed the Debts Recovery Tribunal to finally dispose of the underlying Special Appeal within three months. Disposition was procedural remand for speed.

What did the court decide?

The O.P.(DRT) was disposed of directing the DRT to dispose of S.A No.520 of 2022 within three months.

Haneefa T.K Vs M/S Poonvala Housing Finance… — Contract and Commercial Disputes | Kerala HC (2024)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR.JUSTICE N.NAGARESH

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FRIDAY, THE 24TH DAY OF MAY 2024 / 3RD JYAISHTA, 1946

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OP (DRT) NO. 348 OF 2023

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IN SA NO.520 OF 2022 OF DEBT RECOVERY TRIBUNAL, ERNAKULAM PETITIONER/PETITIONER/APPLICANT IN SA:

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HANEEFA T.K
AGED 45 YEARS
S/O T.K MOIDEENKUTTY, FIDHA MAHAL, THARIPANAPARAMBHU,
JAYANTHY ROAD NALLALAM POST, KOZHIKODE DISTRICT. PIN –
673027.

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BY ADV JESWIN P.VARGHESE

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RESPONDENTS/RESPONDENTS/DEFENDANTS IN SA:

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1 M/S POONVALA HOUSING FINANCE LIMITED 4TH FLOOR, CITY GALLERY, KANNUR ROAD, NEAR YMCA, CALICUT - 673001 REPRESENTED BY ITS AUTHORIZED OFFICER.

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2 M/S MAGMA FINCORP LIMITED 4TH FLOOR, CITY GALLERY, KANNUR ROAD, NEAR YMCA, CALICUT. REPRESENTED BY ITS BRANCH MANAGER, PIN – 673001.

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BY ADVS.
PHILIP T.VARGHESE
ACHU SUBHA ABRAHAM(K/001758/1999)
V.T.LITHA(K/278/2006)
JIJO PAUL(K/1009/2023)
RINEESHA RAJKUMAR(K/003394/2022)
ARAVIND SAMSON(K/001299/2023)
K.R.MONISHA(K/915/2013)

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THIS OP (DEBT RECOVERY TRIBUNAL) HAVING COME UP FOR ADMISSION
ON 24.05.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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OP (DRT) NO. 348 OF 2023 2

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JUDGMENT

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Dated this the 24^th day of May, 2024

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The O.P(DRT) has been filed by the applicant in S.A No.520 of 2022 on the files of the Debts Recovery Tribunal – 1, Ernakulam seeking to set aside Ext.P11 order dated 26.07.2023 in I.A No.1942 of 2023 in S.A No.520 of 2022.

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The pleadings in the writ petition would indicate that the petitioner had earlier approached this Court filing O.P(DRT) No.295 of 2023 seeking to extend the operation of Ext.P3 interim order in I.A No.2516 of 2022. The said O.P(DRT) was disposed of as per Ext.P6 judgment. In Ext.P6, this Court directed that Ext.P3 order passed in I.A No.2516 of 2022 in S.A No.520 of 2022 is extended till the disposal of S.A No.520 of 2022. It is an admitted position that the said direction is still current.

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The petitioner had filed I.A No.1942 of 2023 praying to direct a competent Chartered Accountant to audit the Statement of Accounts of the petitioner with respect to the Mortgage Loan availed by him with reference to the guidelines issued by the Reserve Bank of India and to submit a report before the Tribunal.

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OP (DRT) NO. 348 OF 2023 3

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The Tribunal dismissed the I.A as per Ext.P11 imposing an exemplary cost of Rs.10,000/- payable to the 2^nd respondent. It is aggrieved by Ext.P11 that this O.P(DRT) has been filed.

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The counsel for the petitioner submitted that the procedure prescribed by the Debts Recovery Tribunal has not been followed. In the present case, though Ext.P9 application has been filed under Section 19(25), the Tribunal did not adjudicate the issue invoking the powers conferred under Section 19(20). According to the petitioner, the Tribunal has seriously erred in noting that consideration of Ext.P9 application is outside the purview of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

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The Standing Counsel entered appearance on behalf of the 2^nd respondent Finance Company and resisted the writ petition by filing a counter affidavit. In the counter affidavit, it is pointed out that Ext.P11 order has been passed after proper appreciation of the facts and the law. The SARFAESI Act does not contemplate any enquiry or adjudication by the Debts Recovery Tribunal as sought for by the petitioner in Ext.P9 petition. Section 19 of the Recovery of Debts and Bankruptcy

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OP (DRT) NO. 348 OF 2023 4

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Act is only applicable to the application filed by the Banks and Financial Institutions to recover the amounts due to them and it is not applicable to proceed under the SARFAESI Act.

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I have heard the counsel for the petitioner and the Standing Counsel representing the respondents.

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There is already an order in I.A No.2516 of 2022 in S.A No.520 of 2022. The said Ext.P3 order stands extended by this Court as per Ex.P6 judgment.

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In this O.P(DRT), the petitioner challenges the order of the Debts Recovery Tribunal in I.A No.1942 of 2023. The I.A was an application to appoint a Chartered Accountant to audit the Statement of Accounts.

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It is to be noted that even the petitioner does not have a consistent case relating to any anomalies in the account. In paragraph 10 of Ext.P9 I.A, the petitioner has stated that he is not an expert in the field of financial accounting/auditing and that he cannot point out the irregularities in the accounting being carried out by the defendants with respect to the loan availed by

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the petitioner. The petitioner himself is uncertain about the

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OP (DRT) NO. 348 OF 2023 5

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anomaly in accounting. The Tribunal therefore found that the 2^nd respondent therein had initiated proceedings under the Arbitration Act and the sole Arbitrator has passed an ex parte Award. The Award of the Arbitrator has not been challenged from any quarters. The Award stands confirmed. Therefore, the prayer of the petitioner to appoint a Chartered Accountant is not justified.

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I do not find any illegality in the findings of the Debts Recovery Tribunal in Ext.P11 order. Be that as it may, the petitioner already enjoys the interim order in I.A No.2516 of 2022. In the circumstances, it would only be just and proper that the O.P(DRT) is disposed of directing the Tribunal to finally dispose of S.A No.520 of 2022 expeditiously.

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The O.P(DRT) is therefore disposed of directing the Debts Recovery Tribunal I, Ernakulam to hear and dispose of S.A No.520 of 2022 as expeditiously as possible, at any rate, within a period of three months.

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N.NAGARESH JUDGE

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Sru

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OP (DRT) NO. 348 OF 2023 6

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APPENDIX OF OP (DRT) 348/2023

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`PETITIONER EXHIBITS` `Exhibit P1`	`A TRUE COPY OF MEMORANDUM OF S.A. NO.` `520/2022 ALONG WITH ANNEXURE A1 TO A6 FILED` `BY THE PETITIONER BEFORE DEBT RECOVERY` `TRIBUNAL - 1, ERNAKULAM.`
`Exhibit P2`	`A TRUE COPY OF I.A. NO. 2516/2022 IN S.A. NO.` `520/2022 FILED BY PETITIONER BEFORE DRT - 1,` `ERNAKULAM DATED 26.10.2022.`
`Exhibit P3`	`A TRUE COPY OF INTERIM ORDER PASSED BY DEBT` `RECOVERY TRIBUNAL - 1, ERNAKULAM IN I.A. NO.` `2516/2022 IN S.A. NO. 520/2022 DATED` `09.11.2022.`
`Exhibit P4`	`A TRUE COPY OF RECEIPT FOR REMITTING` `RS.3,01,420/- DATED 09.12.2022.`
`Exhibit P5`	`A TRUE COPY OF RECEIPT FOR REMITTING` `RS.3,01,420/- DATED 09.01.2023.`
`Exhibit P6`	`A TRUE COPY OF JUDGMENT IN O.P (DRT) NO.` `295/2023 DATED 04.08.2023.`
`Exhibit P7`	`A TRUE COPY OF WRITTEN STATEMENT FILED BY THE` `DEFENDANTS IN S.A. NO. 520/2022 DATED` `19.04.2023.`
`Exhibit P8`	`A TRUE COPY OF THE REJOINDER FILED BY THE` `PETITIONER / APPLICANT IN S.A. NO. 520/2022` `DATED 31.05.2023.`
`Exhibit P9`	`A TRUE COPY OF I.A. NO. 1942/2023 IN S.A. NO.` `520/2022 FILED BY PETITIONER BEFORE DEBT` `RECOVERY TRIBUNAL - 1, ERNAKULAM DATED` `31.05.2023.`
`Exhibit P10`	`A TRUE COPY OF THE COUNTER AFFIDAVIT FILED BY` `RESPONDENTS IN I.A. NO. 1942/2023 IN S.A. NO.` `520/2022 DATED 20.06.2023.`
`Exhibit P11`	`A TRUE COPY OF THE ORDER PASSED BY DRT - I,` `ERNAKULAM IN I.A NO. 1942/2023 IN SA NO.` `520/2022 DATED 26.07.2023.`

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OP (DRT) NO. 348 OF 2023 7

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Exhibit P12A TRUE COPY OF I.A NO. 2477/2023 FILED BY
PETITIONER BEFORE DEBT RECOVERY TRIBUNAL - I,
ERNAKULAM DATED 24.07.2023.

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RESPONDENTS EXHIBITS
Exhibit R2True copy of the Certificate of Incorporation
issued by the Registrar of Companies, Kolkata
dated 22.07.2021.

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Exhibit R2(b)True copy of the Judgment in W.P ( C)
27058/2022 dated 25.08.2022.
Exhibit R2(a)True copy of the letter issued by the
petitioner dated 18.08.2022 along with typed
copy.

Haneefa T.K v. M/S Poonvala Housing Finance Limited

Case brief

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Haneefa T.K v. M/S Poonvala Housing Finance Limited

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