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M/S.Orikam Buildcon Pvt.Ltd. v. State of Odisha

Orissa HC16 Aug 2018WP(C)/10699/2018

Case brief

AI extract

What is this about?

The High Court quashed an order by the Tahasildar that halted mutation proceedings after a bank auction. The Court held that since the High Court previously declined to restrain the mutation process, the Tahasildar could not stop it. The petitioner is directed to complete the mutation within six weeks.

What did the court decide?

Quashing of the impugned order; direction to Tahasildar to proceed with mutation proceedings and complete the exercise within six weeks.

M/S.Orikam Buildcon Pvt.Ltd. Vs State of Odisha — Property and Title | Orissa HC (2018)

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W.P.(C) NO. 10699 OF 2018

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16.08.2018 Heard.

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2 . This writ application has been filed with a prayer for quashment of an order dated 18.05.2018 passed by the Tahasildar, Athagarh in Mutation Case No. 3195 of 2017.

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3 . The petitioner-Company is the purchaser of the property in question in an e-auction held by the Bank-opposite party no.6 for sale of the mortgaged property which was the secured asset in their hands for recovery of the loan dues of the Company i.e. M/s. Mahabali Alloys Pvt. Ltd and its Directors following the procedure under section 13(4) of the SARFAESI Act, 2002 and rule 8 and 9 of the Security Interest (Enforcement) Rules, 2002. The auction having been held by the opposite party no.6-Bank, the same has been finalized and the petitioner-Company has been issued with necessary sale certificate as mandated under rule-9 of the Security Interest (Enforcement) Rules, followed by execution of deed of conveyance to that effect. It is pertinent to state here that the opposite party no. 6-Bank before holding the auction had taken physical possession of the property in question with the assistance of the authorities as per the order of the District Magistrate, Cuttack on an application under section 14 of the SARFAESI Act and accordingly, the petitioner-Company has been delivered with the possession of the property purchased in that e-auction. On the strength of all these above, the petitioner-Company has filed the application for mutation of the said land in their name.

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= 2 =

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4 . The opposite party no.4 and 5 having gathered information about the initiation of the above mutation case had earlier moved this Court in W.P.(C) No. 7874 of 2018 praying for a direction to the Tahasildar not to proceed further in that till disposal of the O.A. No. 630 of 2014 and S.A. No. 19 of 2016. It had been contended therein that since the opposite party no. 3 to 5 had raised the question of their liability in the matter of repayment of loan dues before the Debts Recovery Tribunal, Cuttack in that original application filed by the opposite party no.6Bank and had challenged the very said auction of the property made by the opposite party no. 6-Bank also by filing application under section -17 of the SARFAESI Act, the mutation of the land in question as prayed for be not made.

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5 . This Court on 10.05.2018 has disposed of the said writ by the following order:-

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“W.P.(C) No. 7874 of 2018

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10.05.2018: Heard learned counsel for the

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parties.

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During course of argument, Shri Bhuyan, learned counsel for the petitioners confined this writ petition to the prayer no. 2 only.

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Considering the averments made in this petition and looking to the prayer no.2, this Court disposes of this writ petition with an observation that any development in the Mutation Case Nos. 3194, 3195 & 3197 of 2017 shall be subject to the ultimate result of the O.A. No. 630 of 2014 and S.A. No.19.2006.”

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= 3 =

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6 . After the above order, the Tahasildar has passed the impugned order as under:-

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“18.05.2018: This case is taken up today. Gone through the case record. It is found that notices have been issued to the applicant and the objectors. The learned Advocate for the petitioner is present and filed hazira. Again the learned Advocate on behalf of the objector Deepak Agarwal is present and filed memo along with the certified copy of the orders dt. 10.05.2018 of the Hon’ble High Court Odisha, Cuttack passed in W.P.(C) No. 7874 of 2018 wherein the Hon’ble High Court Odisha, Cuttack has been pleased to dispose of the writ petition with an observation that “any development in the mutation case No. 3194. 3195 and 3197 of 2017 shall be subject to the ultimate result of the O.A. No. 630 of 2014 and S.A. No. 19 of 2016.

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As this case is also related to the petitioner in the writ, I am inclined not to proceed with this case in compliance to the orders dated 10.05.2018 of the Hon’ble High Court Odisha, Cuttack passed in W.P.(C) No. 7874 of 2018.”

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7 . Fact remains that the sale certificate issued in favour of the petitioner-Company and the consequential deed of conveyance stand valid and their invalidity would only arise if so found by the Debts Recovery Tribunal in that S.A. No. 19 of 2016, holding the entire process of auction as illegal being contrary to the mandatory provisions of the SARFAESI Act and the

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= 4 =

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Security Interest (Enforcement) Rules. In that event only the sale certificate as well as the deed of conveyance would lose all their legal force and the consequential actions, if any, would accordingly stand annulled. This appears to have been the reasons behind the observations made by this Court on the earlier occasion. Although the same has not been stated in so many words, yet it is so evident when it is seen that this Court only after having declined to interfere with the progress of the mutation proceeding for its culmination has gone to observe that the final order as would be passed therein would be so governed by the final outcome of the S.A. No. 19 of 2016 or in that O.A. No. 630 of 2014.

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It goes without saying that even though the mutation is made as per the prayer of this petitionerCompany, it would stand varied in terms of the order in that S.A. or in O.A. But so long as no final order has been passed in that S.A. No. 19 of 2016 annulling the auction, the sale certificate as well as the deed of conveyance have to be given due regard to and the weightage as is admissible to those under the law cannot be ignored unless of course there is any specific order in restraint of such further action by any competent court in a duly constituted proceeding which is not the case here. In the case in hand, the Tribunal or any other court has not passed an order of restraint upon the mutation authority to proceed for its culmination in accordance with law. Rather this Court while declining to do so has disposed of the matter with the general observation that the result of the proceeding of mutation would remain subject to the

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= 5 =

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order in the S.A. No. 19 of 2016 and O.A. No. 630 of 2014. This shows that this Court has refused to take cognizance of the factum of challenge to the e-auction for a halt in the process of mutation proceeding.

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In that view of the matter, the order as passed by the Tahasildar in Mutation Case No. 3195 of 2017 is not only found to be contrary to the settled position of law but also against the letter and spirit of the order of this Court as passed in W.P.(C) No. 7874 of 2018. It is also shocking to note that when this Court has refused to put a break to the movement of the mutation proceeding, the Tahasildar has done so by passing the impugned order which is not at all appreciated.

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Accordingly, the impugned order cannot be allowed to stand and is hereby quashed.

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Consequent upon the above, the Tahasildar is directed to proceed with the mutation proceeding to pass appropriate order; keeping in view the aforesaid observations and in accordance with law and complete the exercise as aforesaid within a period of six weeks from the date of production of the certified copy of this order.

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The writ application is accordingly disposed of. Issue urgent certified copy as per rules.

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…………………….. D. Dash, J.

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Narayan

M/S.Orikam Buildcon Pvt.Ltd. v. State of Odisha

Case brief

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What did the court decide?

M/S.Orikam Buildcon Pvt.Ltd. v. State of Odisha

Case brief

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