TMI Blog2018 (9) TMI 925X X X X Extracts X X X X X X X X Extracts X X X X ..... have also not taken any earnest steps in spite of the knowledge of the pendency of the Civil Revision Petition. Furthermore the alleged auction purchasers, who are litigation purchasers, may not be entitled to any equity especially as the borrower has taken earnest steps to deposit the decreetal amount. The alleged auction purchaser can be treated only at par with an Pendent lite Purchaser and the alleged sale in favour of the auction purchaser during the pendency of the suit in O. S. No. 33 of 2004 will not confer any right in favour of the alleged auction purchaser beyond the outcome of the suit. In view of the mater it is not even necessary for hearing the said auction purchasers before granting relief to the Revision Petitioners in C. R. P. (NPD). (MD). No. 2332 of 2008. The principles of natural justice will not come into play in this case in view of the above findings and also in view of the exception to the above said rule on the ground of Doctrine of Empty Formality. When this Court finds that the very act of the Respondent bank in invoking SARFAESI proceedings during the pendency of the civil suit is illegal all further actions taken pursuant to such a proceeding will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 of 2008 in O. S. No. 33 of 2004 dated 20. 11. 2008. The challenge in the Civil Revision Petition in C. R. P. (MD). No. 535 of 2017 is to the order passed by the learned Principal District Munsif Court, Dindigul in I. A. No. 797 of 2014 in O. S. No. 593 of 2014 dated 02. 12. 2016. 4. Now, the only issue that arises to be considered is whether the Petitioner in C. R. P. (MD). No. 2332 of 2008 is entitled for the relief sought for and whether the action of the Respondent bank is sustainable in Law. Further the issue to be considered is whether the Petitioner in C. R. P. (MD). No. 535 of 2017 can get the plaint in O. S. No. 797 of 2014 rejected at this stage. 5. It is not in dispute that the Respondent in C. R. P. (NPD) (MD). No. 2332 of 2008 had filed the suit in O. S. No. 33 of 2004 on account of two claims namely OCC Loan account facilities and MTL/ Vehicle loan account. The Petitioner had contested the liability and admittedly the civil suit in O. S. No. 33 of 2004 was pending on the file of the learned Principal District Court, Dindigul. The liability of the Petitioner was yet to be ascertained and crystallized. Even before that the Respondent bank had without withdrawing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt on 20. 03. 2008 and the Trial Court had passed a Decree and Judgment on 26. 03. 2008. The Trial Court had in its Judgment dated 26. 03. 2008 had allowed the claim of the bank as far as the OCC Loan account was concerned and negatived the relief against the bank as regards the MTL/Vehicle loan. Therefore the claim of the bank as against the Revision Petitioner herein was only partially Decreed. Only upon passing of the said Decree, the actual liability as against the Petitioner was ascertained and crystallized. The Trial Court had given two months time from the date of Decree for the Debtor to deposit the decreetal amount. 7. It is contended by the Revision Petitioner in CRP(NPD)(MD) No. 2332 of 2008 that he had taken steps to deposit the Decreetal amount before the Trial Court. The period of two months granted by the Trial Court had come to an end on 26. 05. 2008. It is a fact that 26. 05. 2008 falling in the month of May is a vacation for the Courts. The Courts had resumed the work after the summer vacation only on 02. 06. 2008; the Petitioner had immediately filed a Lodgment Schedule on 02. 06. 2008 as seen from the copy of the detailed register of document and Court fees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it had filed the counter affidavit in I. A. No. 83 of 2008 on 01. 03. 2008 it has rushed to execute the sale deed in favour of the auction purchaser on 14. 07. 2008. The respondent bank has not taken any permission from the Trial Court for either executing the sale certificate or sale deed. Even in the counter affidavit filed in I. A. No. 83 of 2008, the Respondent bank has not disclosed the name of the auction purchaser and the other material particulars relating to the auction sale stated to have been conducted. All these conduct go to prove that the bank has not acted in a fair manner and seems to have stage managed an alleged sale in favour of an auction purchaser when the civil suit was nearing completion and even when the claim of the bank was not crystallized. When the civil Court has dismissed a part of the claim in O. S. No. 33 of 2004 and the bank was not entitled to realize the entire debt claimed by them as per the civil Court Decree, in all fairness the bank should have taken steps to cancel the auction sale if at all conducted by them. When a part of the claim debt has been declined by the Decree of a competent Civil Court, it ought not to have proceeded further and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and proceeded to sell the property, on the other hand it had kept prosecuting the suit in O. S. No. 33 of 2004 continuously and thereby kept the borrower under a confused state. The Respondent bank has pursued parallel and inconsistent remedies and simply tried to outwit the borrower and somehow bring the property for sale. The intention of the bank is clearly not realization of debt but to bring the property of the borrower for sale by continuously dodging and misleading the borrower before different Forums under different proceedings. Had the bank stopped with the proceedings in O. S. No. 33 of 2004 after at least passing of the Decree on 26. 03. 2008, the bonafides of the bank could be believed. On the other hand, the bank had painted the picture as if it will be abiding by the Decree in O. S. No. 33 of 2004 and had led the borrower to believe as if he could obtain his remedy in the civil proceedings. The bank had strangely filed an appeal in A. S. No. 217 of 2009 before this Court against the Judgment and Decree in O. S. No. 33 of 2004 seeking more interest and other relief. When the bank itself has preferred an appeal against the Judgment and Decree in O. S. No. 33 of 2004 it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis that the borrower is already under a liability. On the other hand the question whether the borrower is under a liability and if at all to what extent will be finalized by the civil Court only after passing of the Decree. At least till that stage is reached since the proceedings under the SARFAESI Act and the Civil Court proceedings are inconsistent, the bank cannot pursue both the remedies simultaneously. In such circumstance the principles of doctrine of election can also be invoked and the bank should have elected either of the two remedies and ought not to have simultaneously proceed under both the remedies. Let us assume that in a given case of similar nature the suit filed by the Creditor Bank came to be dismissed for any reason like bar of limitation, etc. , what would be the effect if by that time the bank sells the property by invoking the provisions of the SARFAESI Act? It would clearly be illegal and unlawful and therefore Law would not permit such inconsistencies and illegalities to be committed. In this case the Trial Court had not accepted the entire claim of the Respondent bank. So the bank was not entitled to invoke the SARFAESI Act for the entire debt amount cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticle 227 of Constitution of India by this Court. In fact as early as 2007 i. e. , before even the conclusion of the trial, the borrower has deposited a substantial portion of the debt. The bank had not taken any earnest step to settle the dispute by receiving the debt amount especially when the debtor had come forward to deposit the decreetal amount. The bank has even now not furnished any particulars pertaining to the alleged sale said to have been conducted by it. The bank has not filed any documents for this Court to at least have a glance to satisfy itself as to whether the bank followed at least rudimentary principles of auction sale. This shows that the bank is not willing to frankly disclose the facts and it reflects upon the illegal way in which the bank had tried to bring the borrowers property for sale instead of trying to realize the debt. The alleged auction purchasers as stated above have also not taken any earnest steps in spite of the knowledge of the pendency of the Civil Revision Petition. Furthermore the alleged auction purchasers, who are litigation purchasers, may not be entitled to any equity especially as the borrower has taken earnest steps to deposit the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ine can be decided during the trial. The Revision Petitioner/ Creditor Bank have vehemently contented that the civil Court has no jurisdiction to decide the suit. 16. The Trial Court has rightly concluded that the suit is maintainable and the other aspects regarding the tenancy can be decided in the trial of the suit. The Hon ble Apex Court in Vishal N . Kalsaria Vs . Bank of India others reported in (2016)3 SCC 762 has held that neither the landlord nor the bank can be permitted to exploit the fact of non-registration of tenancy deed against the tenants. The Hon ble Apex Court in Paragraph 37 of the above said Judgment has held hereunder:- 37 . It is a settled position of law that once tenancy is created, a tenant can be evicted only after following the due process of law, as prescribed under the provisions of the Rent Control Act . A tenant cannot be arbitrarily evicted by using the provisions of the SARFAESI Act as that would amount to stultifying the statutory rights of protection given to the tenant . A non obstante clause (Section 35 of the SARFAESI Act) cannot be used to bulldoze the statutory rights vested in the tenants under the Rent Control ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on . When it is known to the auction purchaser that there is a civil suit and the proceedings are being continued in C. R. P. (NPD). (MD). No. 2332 of 2008 and also in A. S. (MD). No. 217 of 2009, they cannot claim any protection beyond the outcome of the said proceedings by this Court. The alleged sale in favour of the auction purchasers should vanish at once when the entire proceedings resulting in an auction sale is found to be vitiated on so many grounds. 19. For the reasons assigned above, this Court is of the view that the impugned order passed by the learned Principal District Judge, Dindigul in I. A. No. 83 of 2008 in O. S. No. 33 of 2004 dated 20. 11. 2008 is liable to be interfered with and accordingly, the same is set aside. The Petitioner in C. R. P. (NPD). (MD). No. 2332 of 2008 is directed to deposit the amount Decreed in O. S. No. 33 of 2004 as modified in A. S. (MD)No. 217 of 2009 after deducting ₹ 3, 00, 000/- (Rupees Three Lakhs) within a period of four weeks from the date of receipt of a copy of this order before the learned Principal District Judge, Dindigul to the credit of the Decree in O. S. No. 33 of 2004 dated 26. 03. 2008. The learned Principal Di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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