Supreme Court of India (Division Bench (DB)- Two Judge)

Appeal (Civil), 1416 of 2015, Judgment Date: Feb 03, 2015

  • The issue raised by the respondent in the present case strikes at  the  very
    authority of the High Court in permitting the Court Receiver  by  its  order
    dated 3.12.1999 to auction the  mortgaged  property  of  the  respondent  in
    public auction  pursuant to the decree passed by the High  Court  in  favour
    of the appellant-Bank. The above  said  important  aspect  of  the  case  is
    required to be examined and considered by the DRT-II  in  the  Miscellaneous
    application which is remitted back to it in the  impugned  judgment  of  the
    High Court.
  •  Accordingly,  the  appeal  is
    dismissed with costs of Rs.1,00,000/- payable to the respondent. 
    
    
 

                                                             NON REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION
                        CIVIL APPEAL NO.1416 OF 2015
                 (Arising Out of SLP (C) No. 12513 of 2013)


INDIAN BANK                                              .........APPELLANT

                                     Vs.

MANILAL GOVINDJI KHONA                                  .........RESPONDENT


                               J U D G M E N T


V.GOPALA GOWDA, J.


Leave granted.

The appellant in this appeal has challenged the  judgment  and  order  dated
29.08.2012 of the High  Court  of  Judicature  at  Bombay,  passed  in  Writ
Petition No. 3652 of 2012, whereby the High Court allowed the writ  petition
and Misc. Application No. 7 of 2012  for  condonation  of  delay  in  filing
Misc. Application (L) No. 34 of 2012 filed  by  the  respondent  before  the
Debt Recovery Tribunal(for  short  "DRT")  and  quashing  the  orders  dated
10.04.2012  and  22.02.2012  passed   by   the   Debt   Recovery   Appellate
Tribunal(for short "DRAT"), Mumbai, in Misc. Appeal No.35 of  2012  and  the
DRT respectively.

The brief facts of the case are stated hereunder in a nutshell :-

     A Civil Suit No. 2636 of 1987 was filed by  the  appellant-Bank  before
the High Court of Judicature at Bombay against the respondent on  07.09.1987
for recovery of Rs.69,50,213.59 with interest @ 18.5%  p.a.  with  quarterly
rests and enforcement of the mortgage. The High Court vide its  order  dated
09.12.1996 passed a consent decree in the Civil Suit  for  the  suit  amount
together with concessional rate of interest at 12%  p.a.  which  was  to  be
paid by the respondent to the Bank on or before 31.05.1997.  On  31.05.1997,
the respondent tendered the amount in terms of the decree dated  09.12.1996,
which was refused by the appellant. The  respondent  moved  Chamber  Summons
No.1066 of 1997, inter alia, for recording the payment of  decreetal  amount
tendered on  31.05.1997.  On  01.08.1997,  the  respondent  applied  for  ad
interim relief in terms of the above Chamber Summons. However, by the  order
dated 01.08.1997, the High Court was pleased to decline to grant ad  interim
relief but adjourned the said Chamber  Summons  for  recording  evidence  to
establish the fact that the respondent  had  tendered  the  payment  of  the
decreetal amount on or before 31.05.1997. Being aggrieved by the  same,  the
respondent preferred Appeal No.960 of 1997 before the Division Bench of  the
High Court. By an order dated 05.12.1997, the said appeal was dismissed  and
the S.L.P filed by the respondent  was  also  dismissed  by  this  Court  on
23.03.1998.

Thereafter, the High Court directed the Court Receiver by  its  order  dated
03.12.1999, to sell the mortgaged property of the respondent  and  permitted
the appellant-Bank to participate in the auction,  and  the  Court  Receiver
issued notices for auctioning the mortgaged property. The auction  was  held
on 06.05.2000 at which the appellant-Bank purchased the  mortgaged  property
for Rs.2,00,00,000/-, the sale of which was approved by the High Court  vide
its order dated 21.07.2000. The Court Receiver issued the  Sale  Certificate
on 18.4.2002 and the same was registered in the name of the  appellant-Bank.
Thereafter, a series of applications and proceedings were initiated  by  the
respondent before the DRT, DRAT and different High Courts and  Civil  Courts
seeking various reliefs against the appellant-Bank. After the  period  of  7
years of  the  issuance  of  the  recovery  certificate  in  favour  of  the
appellant-Bank,  the  respondent  moved  a  Misc.  application  before   the
Recovery Officer to set aside the sale of the mortgaged property  which  was
dismissed  on  2.12.2011  by  DRT-II,  Mumbai.  The  respondent   moved   an
application for  rectification  of  recovery  certificate  dated  29.11.2004
along with an application for condonation  of  delay  in  filing  the  Misc.
application for rectification of recovery certificate dated  29.11.2004  and
an application seeking interim orders in respect of the property  which  was
sold in the public auction by the Court  Receiver.  The  DRT  dismissed  the
interim application by  its  order  dated  30.01.2012.  The  DRT-II  further
rejected the condonation of delay application filed  by  the  respondent  by
its order dated 22.02.2012. The  respondent  aggrieved  by  the  above  said
order filed an appeal before the DRAT and the same was dismissed vide  order
dated 10.04.2012. The respondent further chose to  challenge  the  order  of
DRAT before the High Court in W.P.No.3652 of  2012  urging  various  grounds
and prayed to quash the same and pass appropriate order in the light of  the
facts and circumstances of the case. On  29.8.2012,  the  High  Court  after
hearing the learned counsel for the parties has allowed  the  writ  petition
by setting aside the orders of the DRT and the DRAT and condoned  the  delay
in filing Misc. Application (L) No. 34 of 2012 filed by the  respondent  and
restored the Misc. application filed by him before  the  DRT-II,  Mumbai  to
its file and directed it to decide the same on its own merits in  accordance
with law afresh in the light of the law declared by this Court and the  High
Court on the subject matter.

As the issue before us is with regard to the condonation of delay in  filing
the Misc. Application by the respondent and allowing the same  in  the  writ
petition filed by the respondent which is under challenge in this appeal  at
the instance of the appellant-Bank by urging various legal grounds, we  will
deal with this aspect of the case only, in  this  judgment.  On  25.01.2012,
the respondent filed Misc. Application (L)  No.34  of  2012  before  DRT-II,
Mumbai  for  avoiding  the  sale  and  seeking  rectification  of   Recovery
Certificate and decree dated  9.12.1996,  passed  by  the  High  Court.  The
filing of that Misc. application was delayed  by  23  days.  Therefore,  the
respondent filed Misc. Application No. 7 of 2012 for  condonation  of  delay
in filing the Misc. Application(L) No.34 of 2012 before  the  DRT-II,  which
application was dismissed by its order dated  22.02.2012,  by  declining  to
exercise its discretionary power to condone the delay in filing  such  Misc.
application by the respondent.  Being  aggrieved  of  the  said  order,  the
respondent filed Misc. Appeal No. 35 of 2012  before  the  DRAT  questioning
the correctness of the above order and prayed to  set  aside  the  same  and
allow the application by condoning the  delay  in  filing  that  application
before the DRT.  The DRAT vide  its  order  dated  10.4.2012  dismissed  the
appeal holding that the same is barred  by  limitation  and  no  proper  and
satisfactory    explanation    was    assigned    by     the     respondent.





Being aggrieved of the same, the respondent approached  the  High  Court  by
filing Writ Petition No.3652 of 2012  questioning  the  correctness  of  the
order dated 10.04.2012 passed by the DRAT  urging  various  grounds  with  a
prayer to set aside the above said order. The High Court after  hearing  the
parties vide its order dated 29.08.2012 has held that the  order  passed  by
the DRT-II in dismissing the application of the respondent without  deciding
the issue i.e. whether the public auction  of  the  sale  of  the  mortgaged
property conducted by the Court Receiver as per the direction  of  the  High
Court, after the  execution  proceedings  initiated  by  the  appellant-Bank
against the respondent stood transferred to the DRT in view  of  Section  31
of DRT Act as the DRT  came  into  existence  on  16.07.1999,   as  per  the
notification issued by the Central Government, is not  legal  and  valid  in
law.  The sale of the property of the respondent has affected his rights  as
the same is in contravention of the  provisions  of  the  DRT  Act  and  the
relevant rules applicable for sale of the property which go to the  root  of
the matter and therefore, he  has  prayed  to  set  aside  the  order  dated
10.04.2012 passed by the DRAT along with the order passed by the DRT on  the
Misc. Application No.7 of 2012 seeking for condonation of  delay  in  filing
Misc. Application(L) No.34 of 2012 and requested to restore the same to  its
original file of the DRT, Mumbai and also further directed it to decide  the
same on its own merits keeping in view the law declared by  the  High  Court
as well as this Court. The appellant-Bank was aggrieved by  the  above  said
judgment and order it has filed this appeal questioning the  correctness  of
the same by urging various grounds in support of its case.

The learned Solicitor General  Mr. Ranjit Kumar appearing on behalf  of  the
appellant and Mr. Rafeeq P., the learned counsel appearing on behalf of  the
respondent, have made elaborate submissions in  support  of  the  respective
claim and counter claim of the parties.

The learned Solicitor General has placed reliance upon Article  127  of  the
Schedule of  Part  I  of  the  Limitation  Act,  1963,  in  support  of  his
contention that the period of 60 days is prescribed in Limitation Act,  1963
for filing Misc. application   and a period of one year under Article 99  of
the Schedule of Part IX of the said Act is  stipulated  for  filing  a  suit
from the date of sale of the property for setting aside  the  order  of  the
sale of the mortgaged property.  He  submits  that  the  provisions  of  the
Limitation Act are applicable to the DRT proceedings as  well,  in  view  of
the relevant provisions of Section 24 of the Recovery of Debts due to  Banks
and Financial Institutions Act, 1993 (for short  "the  Act  of  1993").  The
learned Solicitor General has made submission that the  orders  of  the  DRT
and  DRAT  in  dismissing  the  condonation   of   delay   application   and
consequently, the Miscellaneous application are  erroneously  set  aside  in
the impugned judgment and order passed by the High Court as they are  barred
by limitation under the aforesaid  Articles  of  the  Schedule  referred  to
supra as the said applications are filed beyond  the  prescribed  period  of
limitation under the aforesaid provisions of the Limitation Act. In  support
of his submissions, he has  placed  reliance  upon  the  Constitution  Bench
judgment of this Court in Dadi  Jagannadham  v.  Jammulu  Ramulu  &  Ors.[1]
which decision is followed by this Court in another case  viz. Annapurna  v.
Mallikarjun & Anr.[2]. He has further contended that the decree  was  passed
by the Bombay High Court in  the  original  suit  proceedings  way  back  on
9.12.1996 in  favour  of  the  appellant-Bank  against  the  respondent  for
recovery of the debt amount due from him. The sale of the  property  of  the
respondent was conducted by the Court Receiver, who  was  appointed  by  the
High Court in the execution proceedings initiated by the  appellant-Bank  by
issuing notices on 08.09.1998 and 07.12.1998  for  conducting  the  sale  in
public auction of the said mortgaged property of the  respondent.  The  DRT,
Mumbai was established on 16.07.1999 pursuant to the notification issued  by
the Central Government under the provisions of the Act of 1993. Further,  it
has been contended by him that although, the DRT was  empowered  to  appoint
the Court Receiver for conducting the sale  of  the  mortgaged  property  in
public auction,  there  was  no  adequate  infrastructure  provided  by  the
Central Government  to  the  DRT  to  take  possession  and  charge  of  the
properties from the Court Receiver  of  the  High  Court  at  the  time  the
property was ordered to be sold in public auction  by  the  Court  Receiver.
The jurisdiction of the High Court with regard to the recovery of  debt  has
been transferred to the DRT in view of  Section  31  of  the  DRT  Act  with
effect from 16.7.1999, it was not in a position to take  possession  of  the
mortgaged properties from the Court Receiver of the High  Court  and  manage
the same as there was no  infrastructure  provided  to  it  by  the  Central
Government. Since the above assets which were in custody and  possession  of
the Court Receiver in respect of which securities were created in favour  of
the banks and financial institutions and  therefore,  the  same  should  not
have been permitted to be dissipated by the High Court  and  therefore,  the
High Court has rightly permitted the Court Receiver to  sell  the  mortgaged
property of the respondent in public auction pursuant to the  decree  passed
by it in favour of the appellant-Bank.

 Further, it is contended by the learned Solicitor General  that  the  power
conferred upon the High Court, under Article  227  of  the  Constitution  of
India is exercised by it even after the DRT was established  permitting  the
Court Receiver of the High Court to conduct the  sale  of  the  property  of
respondent in public auction to recover the decreetal  money  in  favour  of
the appellant-Bank in terms of the judgment and decree passed by it for  the
reason the DRT had no  infrastructure  to  receive  the  possession  of  the
property from Court Receiver and sell the same. Therefore, he has  submitted
that the High Court could not have found fault with  its  earlier  order  in
permitting the Court Receiver to  sell  the  mortgaged  property  in  public
auction to recover the decreetal amount by the Bank by way of  sale  of  the
mortgaged property. The learned  Solicitor  General  has  further  contended
that the mortgaged property  sold  by  the  Court  Receiver  in  the  public
auction as per the order passed by the Bombay High  Court,  could  not  have
been interfered with by the DRT-II and the DRAT  on  the  Misc.  application
filed by the respondent along with the  condonation  of  delay  application.
Therefore, he has submitted that the  impugned  order  passed  by  the  High
Court is liable to be set aside in  this  appeal  as  the  same  is  not  in
accordance with law.

 It has been further contended by him that the order dated 3.12.1999  passed
by the learned Single Judge of the High Court of Bombay directing the  Court
Receiver to  proceed  with  the  sale  of  the  mortgaged  property  of  the
respondent in the execution proceedings pursuant to the decree passed by  it
with the respondent's consent and therefore, it is not permissible  for  him
at the belated stage to turn around and contend that the  execution  of  the
decree and sale of the property by the Court Receiver in the public  auction
is not legal and valid. Further, the High Court has exercised its  power  in
issuing the direction to the Court Receiver for conducting the sale  of  the
property through public auction on the basis of the judgment of Bombay  High
Court in the case of Industrial Credit &  Investment  Corporation  of  India
Ltd. v. Patheja Brothers Forgings And Stampings Ltd. & Ors.[3]  in which  it
has examined the provisions of Section 3 of the Act of 1993, wherein it  has
held  that  after  16.7.1999,  in  several  proceedings,  the  parties  have
challenged the power of the Court Receiver to manage the properties in  view
of the DRT Act and therefore, the Court Receiver had no authority to act  in
the matter. The High Court held that the Court Receiver,  who  is  appointed
prior to the cut-off date and pending  proceedings  before  the  High  Court
stands transferred to the DRT by virtue of the provision  under  Section  31
of the DRT Act as he had the power to sell the properties. It  is  urged  by
him that it has been held by the High Court in the above referred case  that
there is no question of conducting de novo proceedings. It is  submitted  by
him that in view of the above said statement of law laid down by the  Bombay
High Court it has passed an order dated 03.12.1999 in exercise of its  power
traceable to Article 227 of the Constitution  of  India,  in  the  execution
proceedings, wherein it has  directed the Court Receiver to  take  steps  to
recover the decreetal amount from the respondent by  selling  the  mortgaged
property in public auction and therefore,  the  same  cannot  be  interfered
with by the DRT in the Misc. Applications filed by the respondent.

On the other hand, it has been contended by the learned  counsel  on  behalf
of the respondent that the Court Receiver had no jurisdiction  to  sell  the
property by way of execution of the decree  after  the  DRT  has  come  into
existence by placing the reliance upon the above case. It has  been  further
contended by him that the suit proceedings of  the  Bank  stood  transferred
automatically to the DRT by operation of law.  Further,  reliance  was  also
placed by him on behalf of the respondent upon the  case  of  Raghunath  Rai
Bareja & Anr. v. Punjab National Bank & Ors.[4]  in  support  of  his  legal
contention that in view of Section 31 of the DRT  Act,  the  Court  Receiver
had no jurisdiction to sell the mortgaged property by way  of  execution  of
the decree in the public auction as directed by the  High  Court  after  the
DRT was established by way of notification, pursuant to the DRT  Act.  Thus,
even if the direction was given by  the  Bombay  High  Court  to  the  Court
Receiver, to execute the decree and sell the mortgaged property,  he  should
not have executed the same in view of Section 31 of  the  DRT  Act,  as  the
execution proceedings were automatically transferred to the DRT.  Therefore,
the learned counsel on behalf of  the  respondent  has  contended  that  the
order dated 03.12.1999 passed by the  High  Court  in  directing  the  Court
Receiver to proceed with the sale of the mortgaged property in execution  of
the order/decree dated 09.12.1996 is null and void  ab  initio  in  law  and
therefore, the same is wholly unsustainable in law. He has  placed  reliance
upon the cases of this Court which will be adverted in the later portion  of
the judgment that the question of limitation does not arise at all in  fling
application for setting aside the sale as the same is vitiated and  void  ab
initio in law.


 The said rival legal contentions are examined by us very carefully  with  a
view to find out as to whether  the  impugned  judgment  and  order  warrant
interference keeping in view the interpretation of  the  provisions  of  the
DRT Act and the constitutional validity of the Act of 1993, which  has  been
upheld by this Court in the case of George v. State  of  Kerala[5]  and  the
other decisions of this Court referred  to  supra  upon  which  reliance  is
placed by the learned counsel on behalf of the respondent.

 The learned Solicitor  General  appearing  for  the  appellant  has  placed
reliance on the following judgments of  this  Court,  upon  which  the  High
Court has relied viz. State Bank of Bikaner & Jaipur v. Ballabh Das & Co.  &
Ors.[6] and Punjab National Bank, Dasuya v. Chajju Ram & Ors.[7] in  holding
that the High Court has no jurisdiction to pass orders and  give  directions
to the Court Receiver for sale of the property in public auction  after  the
establishment of the DRT Act. He has submitted that the said  decisions  are
distinguishable from the facts of this case that  the  properties  alongwith
the property of the respondent were in possession and custody of  the  Court
Receiver and the same could not have been transferred by him to the DRT  for
want of infrastructure, to be provided  by  the  Central  Government  to  it
after it was established.  With regard to the above  legal  contentions,  it
would be necessary for this Court to extract relevant paragraph 9  from  the
case of State Bank of Bikaner  &  Jaipur  vs.  Ballabh  Das  &  Co.  &  Ors.
(supra), for the purpose of examining the  relevance  and  validity  of  the
submissions made by the learned Solicitor General,  as  the  same  would  be
applicable to the fact situations of the  respondent.  The  learned  counsel
for the respondent has also strongly relied upon the same which reads  thus:

"9. ......As the suits were filed by the Bank before  establishment  of  the
Tribunal and were pending in the civil court when the Tribunal  came  to  be
established under the Act, Section 31 became applicable to those  suits  and
they shall have to be treated as transferred to the  Tribunal  on  and  from
the date the Tribunal was established. Section 31 of the Act makes it  clear
that the transfer  is  automatic  because  of  the  operation  of  law  and,
therefore, the Bank was really not  required  to  file  applications.  Those
applications should have been really treated as applications for  forwarding
the records of the suits to the Tribunal...."
                                               (emphasis laid by this Court)

Further, it would be relevant for us to extract the  paragraph  7  from  the
case of Punjab National Bank, Dasuya v. Chajju Ram & Ors.  (supra),  wherein
this Court has held as under:-

"7.  Learned counsel for the respondents  submitted  that  the  use  of  the
words "cause of action" in Section 31 indicated  that  it  is  only  pending
suits which could be tr[pic]ansferred. We are  unable  to  agree  with  this
submission. The words "cause of action" are preceded by the words  "being  a
suit or proceeding". Section 31 contemplates not  only  the  transfer  of  a
suit but also transfer of a proceeding which may be other than a suit,  like
an execution application........"
                                               (emphasis laid by this Court)

In view of the law laid down by this Court in the  above  cases  upon  which
strong reliance is placed by the learned counsel  for  the  respondent,  the
submission made by the learned Solicitor General to distinguish the same  on
facts cannot be accepted by us as the same is contrary to the law laid  down
by this Court.
The other contention of the learned Solicitor General that the sale  of  the
mortgaged property made by the Court Receiver in favour  of  the  appellant-
Bank by way of execution of the decree dated 09.12.1996 passed by  the  High
Court and issuance of the sale certificate in favour of  the  appellant-Bank
and handing over of the  possession  of  the  schedule  property  to  it  on
08.08.2000, and  the  Miscellaneous  Application  filed  by  the  respondent
before the DRT seeking the relief as stated  above,  cannot  be  entertained
and accepted by us in view of the above referred  cases  upon  which  strong
reliance placed by the learned counsel on behalf  of  the  respondent.   The
contention urged on the question of  limitation  by  the  learned  Solicitor
General on behalf of the appellant-Bank placing reliance upon the  decisions
of this Court in the cases of Dadi Jagannadham  and  Annapurna  (supra)  are
wholly inapplicable to the fact situation of the case on  hand  in  view  of
the decision of the three Judge Bench  judgment  of  this  Court  in  Sushil
Kumar Mehta v. Gobind Ram Bohra[8]. In this case, this Court has dealt  with
regard to the Limitation Act, in exercise of its power under Article 136  of
the Constitution after examining the fact situation in the above  said  case
in support of the proposition of law that a decree, which is passed  by  the
court without jurisdiction is a nullity in the  eye  of  law  and  the  same
cannot be allowed to operate and such decree is executed during pendency  of
the Special Leave Petition before this Court,  in such cases it would  grant
relief to the aggrieved party, who has suffered from  injustice  by  setting
aside the execution order and further held that defect  of  jurisdiction  of
the court cannot be cured by consent or waiver of the parties. In  the  said
case this Court has elaborately considered the relevant  factual  and  legal
aspect of the case and  has  laid  down  the  law  at  paragraph  10,  after
referring to its earlier decision of  a  Four  Judge  Bench  of  this  Court
speaking through Venkatarama Ayyar, J.  in  Kiran  Singh  v.  Chaman  Paswan
(1955) 1 SCR 117, which would be worthwhile to be extracted as under:-
"10.......It is a fundamental principle   well  established  that  a  decree
passed by  a  court  without  jurisdiction   is  a  nullity,  and  that  its
invalidity could be set  up  whenever  and  wherever  it  is  sought  to  be
enforced or relied upon,  even  at  the  stage  of  execution  and  even  in
collateral proceedings. A defect of jurisdiction, whether  it  is  pecuniary
or territorial, or whether it is in respect of the  subject  matter  of  the
action, strikes at the very authority of the court to pass any  decree,  and
such a defect cannot be cured even by consent of parties.  If  the  question
now under consideration fell to be determined only  on  the  application  of
general principles governing the matter, there can  be  no  doubt  that  the
District Court of Monghyr was coram non judice, and that  its  judgment  and
decree would be nullities."

                         (emphasis laid by this Court)

    Further, vide paragraphs 16 and 17 in Sushil Kumar Mehta  (supra),  this
Court held as under:-

"16. In  Ledgard v. Bull, (1886) 11 App Cas  648,  the  Privy  Council  laid
down that where  the  original  court  in  a  suit  was  inherently  lacking
jurisdiction, and was incompetent to  try  the  same,  on  its  transfer  by
consent of parties, to a  court  with  jurisdiction  such  consent  did  not
operate as a waiver of the plea of want of jurisdiction.

17. In   Barton  v.  Fincham, (1921) 2 KB 291, 299, wherein it was held
that:

"... the court cannot  give  effect  to  an  agreement  whether  by  way  of
compromise or otherwise, inconsistent with the provisions of the Act."

In view of the aforesaid legal principle  laid  down  by  this  Court  after
referring to its earlier decision,  Privy  Council  judgment  and  also  the
Kings Bench decision, we are of the view that the decree which is sought  to
be executed by the Court Receiver as per the order  dated  3.12.1999  passed
by the High Court, giving directions to him to sell the  mortgaged  property
of the respondent in  the  execution  proceedings  of  the  decree  and  the
subsequent proceedings of the Court Receiver, including the confirmation  of
the sale and  the  issuance  of  the  sale  certificate  in  favour  of  the
appellant-Bank is void ab initio in law. In view of the  law  laid  down  by
this Court in the cases referred to supra,  the  contentions  urged  by  the
learned  Solicitor  General  on  behalf  of  the  appellant-Bank  cannot  be
accepted and therefore, we have to  hold  that  the  impugned  judgment  and
order cannot be interfered with by this Court.

We are of the view that the High Court has rightly found fault with the  DRT
and DRAT in rejecting the Misc. Application filed  by  the  respondent,  who
has sought for rectification of  the  recovery  certificate  filed  by  him.
Therefore, the High Court has rightly rejected the same after  adverting  to
the judgments in the cases of State Bank of Bikaner & Jaipur v. Ballabh  Das
& Co. & Ors. (supra) and Punjab National Bank, Dasuya v. Chajju Ram  &  Ors.
(supra). The exercise of jurisdiction by  the  High  Court  for  giving  the
direction to the Court Receiver to sell the mortgaged  property  even  after
the DRT was established  at  Mumbai  and  in  view  of  the  fact  that  the
proceedings before the High Court were automatically transferred  to  it  in
view of Section 31 of the DRT Act and therefore it was impermissible in  law
for the High Court to direct the Court Receiver to sell the property of  the
respondent in public auction by executing the Court decree, which action  of
the Court Receiver is void ab initio in law. Therefore,  the  order  of  the
DRT and the DRAT, in dismissing the condonation of delay application by  the
respondent holding that the same is barred by  limitation  and  consequently
dismissing Misc. Application to set aside the sale is untenable in  law  and
therefore, the High Court has rightly  answered  the  legal  contentions  in
favour of the respondent by giving valid and cogent reasons in the  impugned
judgment in exercise of its Judicial Review power.

The provisions of the Limitation Act are applicable to  the  proceedings  of
the DRT in view of Section  24  of  the  Act  of  1993  and  therefore,  the
provisions of Section  5  of  the  Limitation  Act  are  applicable  to  the
provisions of the said Act. The same has not been  examined  and  considered
by the DRT-II and the DRAT at the time of passing  the  impugned  orders  in
the writ petitions. Therefore, the High  Court  has  rightly  exercised  its
discretionary power keeping in view the rights of the  respondent  upon  the
immovable property involved in this case and it has condoned  the  delay  in
filing Misc. Application and accordingly the orders of the  DRT-II  and  the
DRAT impugned in the writ petition are set aside by allowing the same.

In view of the foregoing reasons,  the legal contentions urged on behalf  of
the appellant-Bank have no substance in the matter for the reason  that  the
recovery certificate issued on 29.11.2004, was sought to be modified by  the
appellant-Bank itself by filing an application before  the  DRT-II  and  the
same has  not  been  modified,  which  is  another  strong  ground  for  the
respondent to file Misc. application for the cancellation  of  the  sale  of
the property in favour of the  appellant-Bank,  along  with  condonation  of
delay application urging tenable grounds.

The issue raised by the respondent in the present case strikes at  the  very
authority of the High Court in permitting the Court Receiver  by  its  order
dated 3.12.1999 to auction the  mortgaged  property  of  the  respondent  in
public auction  pursuant to the decree passed by the High  Court  in  favour
of the appellant-Bank. The above  said  important  aspect  of  the  case  is
required to be examined and considered by the DRT-II  in  the  Miscellaneous
application which is remitted back to it in the  impugned  judgment  of  the
High Court.

Further, we make it  clear  that  we  have  recorded  our  reasons  in  this
judgment on the basis of the rival legal contentions urged on behalf of  the
parties. Nonetheless, the DRT-II is required to  examine  the  Miscellaneous
application of  the  respondent  independently  on  its  own  merit  and  in
accordance with law without being influenced by  our  observations  made  in
this judgment.

 For the above stated reasons, the impugned judgment  and  order  passed  by
the High Court by setting aside the orders of DRT-II and  DRAT  and  further
remanding  the  matter  to  DRT-II   for   its   re-consideration   of   the
Miscellaneous application, is in accordance with the provisions of  the  Act
and the law laid down by this Court in this regard and the  same  cannot  be
found fault with by this Court. Hence, there is no  merit  in  this  appeal,
and the  same  is  liable  to  be  dismissed.  Accordingly,  the  appeal  is
dismissed with costs of Rs.1,00,000/- payable to the respondent.

The parties are directed to maintain status quo of the property involved  in
these proceedings which  exists  as  on  today  till  the  disposal  of  the
Miscellaneous Application by the DRT-II.



.....................................................................J.

                            [V. GOPALA GOWDA]


.....................................................................J.

                            [C. NAGAPPAN]

New Delhi,
February 3, 2015
ITEM NO.1A-For Judgment      COURT NO.12               SECTION IX

               S U P R E M E  C O U R T  O F  I N D I A

                       RECORD OF PROCEEDINGS

Civil Appeal No(s)........../2015 arising from SLP(C)No  12513/2013

INDIAN BANK                                        Appellant(s)

                                VERSUS

MANILAL GOVINDJI KHONA                             Respondent(s)

Date : 03/02/2015 This petition was called on for pronouncement of JUDGMENT
today.

For Appellant(s)     Mr. Himanshu Munshi,Adv.
             Mr. Durga Dutt, Adv.

For Respondent(s)    Mr. Praveen Swarup,Adv.


            Hon'ble Mr. Justice V.Gopala Gowda pronounced  the  judgment  of
the Bench comprising His Lordship and Hon'ble Mr. Justice C. Nagappan.

            Leave granted.

            The appeal is dismissed in terms of  the  signed  Non-reportable
Judgment.

   (VINOD KR. JHA)                         (MALA KUMARI  SHARMA)       COURT
MASTER                                    COURT MASTER

         (Signed Non-Reportable judgment is placed on the file)
-----------------------
[1]    (2001) 7 SCC 71
[2]    (2014) 6 SCC 397
[3]    (2000) 2 BOMLR 567

[4]    (2007) 2 SCC 230

[5]    (2002) 4 SCC 475
[6]    (1999) 7 SCC 539
[7]    (2000) 6 SCC 655
[8]    (1990) 1 SCC 193

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