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Snow View Properties Ltd. Vs. Bank of Baroda and ors. - Court Judgment

LegalCrystal Citation
CourtKolkata Appellate High Court
Decided On
Case NumberC.O. No. 3470 of 2008
Judge
AppellantSnow View Properties Ltd.
RespondentBank of Baroda and ors.
Appellant AdvocateMr. S. P. Roychowdhury,; Mr. P. K. Dutta,; Mr. A. Roy,; Mr. O. P. Jhunjhunwala, Advs
Respondent AdvocateMr. K. V. Viswanathan,; Mr. S. N. Berra, Advs
Excerpt:
.....argument that high courts were inferior courts as appeals lie from them to the supreme court. an application for interim injunction was rejected by the trial court and the appellate court. the high court dismissed the petition holding that it was not maintainable. while allowing the appeal, the supreme court held that the order and proceedings of a judicial court subordinate to the high court are amenable to writ jurisdiction under article 226. article 227: article 227 of the constitution confers on every high court a power of superintendence over all courts and tribunals throughout the territory, in relation to which it exercises jurisdiction, excepting any court or tribunal constituted by or under any law relating to the armed forces. the distinction between articles 226 and 227 of..........19, 2007, order no.39 dated january 16, 2008 and order no.45 dated july 22, 2008 passed by the learned recovery officer, kolkata debts recovery tribunal i in r. p. case no.99 of 2003 arising out of t. a. no.74 of 1997.2. the opposite party no.1 is the certificate holder and the opposite party nos.2 to 4 are the certificate debtors. the execution proceeding, namely, r. p. proceeding no.99 of 2003 is pending before the learned recovery officer, kolkata debts recovery tribunal i for execution of the recovery certificate to the tune of rs.49,37,106.92 paisa. the certificate holder took steps for attachment of the properties of the snow view properties private limited and m/s. dheklapara tea estate situated at 42ca, ballygunge circular road, calcutta 700 019 and at 135, canning street,.....
Judgment:
1. This application is at the instance of an intervener and is directed against the order no.21 dated August 18, 2006, order no.37 dated September 19, 2007, order no.39 dated January 16, 2008 and order no.45 dated July 22, 2008 passed by the learned Recovery Officer, Kolkata Debts Recovery Tribunal I in R. P. Case No.99 of 2003 arising out of T. A. No.74 of 1997.

2. The opposite party no.1 is the certificate holder and the opposite party nos.2 to 4 are the certificate debtors. The execution proceeding, namely, R. P. Proceeding No.99 of 2003 is pending before the learned Recovery Officer, Kolkata Debts Recovery Tribunal I for execution of the recovery certificate to the tune of Rs.49,37,106.92 paisa. The certificate holder took steps for attachment of the properties of the Snow View Properties Private Limited and M/s. Dheklapara Tea Estate situated at 42CA, Ballygunge Circular Road, Calcutta 700 019 and at 135, Canning Street, Calcutta 700 001 respectively and also to appoint a receiver to take possession of the said two properties. At that time, the intervener appeared and filed an application for setting aside the impugned orders contending, inter alia, that the intervener is not the certificate debtor and as such, the properties of the concern could not be attached and no receiver could be appointed to take possession of the same. The intervener/petitioner has contended that the learned Recovery officer was not justified to direct the intervener to furnish particulars as directed in the impugned orders and that the learned Recovery officer was not also justified by passing orders restraining the intervener from dealing, disposing and / or alienating in any way encumbering the property in question at 42CA, Ballygunge Circular Road, Calcutta 700 019. Being aggrieved, this application has been preferred.

3. Now, the question is whether the impugned order should be sustained.

4. Upon hearing the learned counsel for the parties and on going through the materials on record, I find that the learned Recovery Officer has considered the documents filed by the parties and then he was under the impression that the properties to be attached under the impugned orders are under the control of the certificate debtors and / or their relatives. So, an investigation was required to determine the actual position. Accordingly, the intervernor was directed to furnish the documents to determine if the certificate debtors are actually running the intervener or not. The certificate debtors were also directed to file an affidavit detailing their assets and properties. Not only that the certificate holder was also directed to furnish further documents to establish their claim that the name of the company has been used to invade the liability of the certificate debtors. No doubt, the learned Recovery Officer was within his competence to make queries on such points under the circumstances noted in the impugned orders to decide whether the property of the intervener should be attached and sold for realisation of the dues of the certificate debtors. The learned Recovery Officer is within his competence to require any person to furnish particulars of the properties by issuance of a notice under Section 28 of the 1993 Act. Therefore, I find that apparently there is no wrong in the impugned orders in this regard.

5. So far as the restraint order is concerned, that has been imposed so that in the meantime, the property of the intervener is not transferred to evade liabilities by the certificate debtors. Such a measure could be taken particularly when the learned Recovery Officer was of the prima facie view that the properties to be attached and sold are under the control of the certificate debtors or their relatives. Till the particulars are filed by the intervener, some restraint order was required; otherwise if the intervener dispossess of the same in the meantime, the purpose of taking such measures may be frustrated. The learned Recovery Officer is authorised to attach and sell of the properties of the certificate debtors under Section 25 of the 1993 Act. So, the learned Recovery Officer was within his competence to pass the restraint order to ensure recovery of the dues of the certificate debtors.

6. Mr. S. P. Roychowdhury, learned senior counsel appearing for the petitioner, has contended that the company has a separate existence apart from its shareholders, directors or officers under management of the company. Since the intervener is not a certificate debtor, property of the intervener cannot be attached.

7. In support of his contention, Mr. Roychowdhury has referred to the decision of AIR 1970 SC 564, 2004(121) Company Cases 783, AIR (32) 1945 Cal 298 and also the decisions of the Honble Justice Dipankar Datta in W.P. No.411 of 2007 and judgment dated October 5, 2010 of the Division Bench in APOT No.6 of 2010 arising out of W.P. No.411 of 2007, order dated April 5, 2006 passed by the Honble Justice Maharaj Sinha in Suit No.662 of 1986 and thus, he submits that the property of the intervener could not be attached in any way.

8. On the other hand, Mr. K. V. Biswanathan, learned Advocate appearing on behalf of the opposite party no.1, has referred to the decisions of AIR 2001 SC 3208, 2010 (3) Bank CLR 281 (SC), AIR 1996 Cal 323 and AIR 1997 Delhi 325 and thus, he submits that the Honble High Court will not entertain the petition under Article 226 of the Constitution of India where an effective remedy is available to the aggrieved person. Similarly, the petition under Article 227 of the Constitution of India is not maintainable when remedy of appeal is available under Section 30 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. Thus, he submits that the present application is not maintainable. There is no doubt that an appeal to the concerned tribunal is maintainable against the impugned orders under Section 30 of the Act of 1993. But instead of doing that, this application under Article 227 of the Constitution of India has been preferred. The decision of AIR 2001 SC 3208 has clearly laid down that the application under Article 227 of the Constitution of India challenging the impugned orders is a bar on the ground that an alternative and efficacious remedy is available by way of filing of an appeal. The Honble Apex Court has also held in 2010(3) Bank CLR 281 (SC) particularly the paragraph no.18 that in entertaining an application under Article 227 of the Constitution of India when stay is granted by the Honble Court, such order of stay would have adverse serious impact on the financial health of such bodies or institutions which ultimately proved detrimental to the economy of the nation. The High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Our Honble High Court has also held in AIR 1996 Cal 323 that the petition under Article 227 of the Constitution of India is not maintainable when the remedy of appeal under Section 30 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 is available. The same view was also endorsed by the decision of the Delhi High Court in AIR 1997 Delhi 325.

9. On the other hand, the decision of AIR 1970 SC 564 filed by Mr. Roychowdhury has referred to the fact that a company is a legal person and it is distinct from its individual members. The property of the company is not the property of the shareholders. Therefore, the impugned order should be set aside submitted by Mr. Roy Chowdhury. There is no dispute that a company registered under the Companies Act is a legal person and it is quite separate from its individual members and that the property of the company is not the property of the shareholders. But the fact of the instant case remains that the learned Recovery Officer has found prima facie that the properties to be attached are under the control of the certificate debtors and / or their relatives. For that reason an enquiry is to be held. So, the learned Recovery Officer is within his competence to take the appropriate measures according to the situation. The decision of AIR 1970 SC 564, I hold, will not be a bar to conduct such query. Similarly, the decision of the Division Bench of this Honble Court in APOT No.6 of 2010, I hold, will not be applicable in the situation; otherwise the purpose of enquiry as adopted by the learned Recovery Officer will be frustrated. Similarly, the decision of AIR (32) 1945 Cal 298, I hold, will not be applicable in the instant situation for the selfsame reasons, as discussed above. In that case, the question of dispossession of a person who is not a party in the suit arose and it was observed that person who is in possession cannot be removed when none of the parties to the suit had the present right to remove. The learned Recovery Officer has started to hold an enquiry about the matter and for that reason pending furnishing particulars, as asked for by the impugned order, the interim measures have been taken. So, this decision is not also applicable in the instant situation. After furnishing particulars by the parties, if the enquiry reveals that the intervener is not the certificate debtors property, it may be absolved at the appropriate stage. The decision dated April 5, 2006 passed by the Honble Justice Maharaj Sinha in Suit No.662 of 1986, I hold, cannot be relevant because in that suit, the order of dismissal of the suit for non-prosecution was passed as the matter had been settled out of the Court by the parties.

10. In view of the above discussions, I am of the opinion that the learned Recovery Officer has not exceeded his jurisdiction in passing the impugned orders. The learned Recovery Officer cannot be said to have acted without jurisdiction. So, this revisional Court exercising jurisdiction under Article 227 of the Constitution of India should not interfere with the impugned orders. This application is not maintainable. Accordingly, this application fails to succeed. The application is, therefore, dismissed.

11. Considering the circumstances, there will be no order as to costs.

12. Urgent xerox certified copy of this order, if applied for, be supplied to the learned Advocates for the parties on their usual undertaking.


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