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Bihar Distillery Ltd Versus Central Bank Of India and Others

2015 (12) TMI 1382 - PATNA HIGH COURT

Auction sale of properties purchased by the writ petitioner-appellant from Industrial Corporation Private Limited - Held that:- With regard to Rule 68B of Schedule-2 to the Recovery Rules under D.R.T. This is nothing but Rule 68 B of the Income Tax Recovery Rule. He states that the steps taken to sell the properties is now barred by limitation is provided under Rule 68B aforesaid. We are not impressed. As per the writ petitioner/appellant before us the attachment was made in the year 2009 when t .....

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ed that the proceedings to sell the properties could be beyond time. It is next submitted that only there was the first attachment which was made on 23.08.2001 soon after the proceedings had been received from Civil Court and the objections were rejected. Again we could not agree. The proceedings would show that one after another objections of different natures were taken objecting to steps being taken for sale of the properties, naturally the Recovery Officer had to decide the issue. Validity o .....

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U AGRAWAL, JJ. For The Appellant/s : Mr. Kamal Nayan Chaubey, Sr. Advocate and Mr. Ambuj Nayan Chaubey, Advocate For The Respondent : Mr. Ajay Kumar Sinha and Mrs. Manju Jha, Advocates (Per: HONOURABLE MR. JUSTICE NAVANITI PRASAD SINGH) The appellant-Bihar Distillery Limited was the unsuccessful writ petitioner. It had challenged before the writ Court the order dated 21.06.2006, passed in Recovery Proceeding No. 44 of 2001, by the Recovery Officer of the Debt Recovery Tribunal, Patna. By the sai .....

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after institution of the Money Suit for recovery of money based on substituting charge created on the properties. The learned Single Judge held that in such a situation sale of properties after the suit has been instituted would defeat the right of the creditor i.e. the plaintiff in the Money Suit, which is the Central Bank of India. The learned Single Judge further held that the order of the Recovery Officer was passed on 21.06.2006, rejecting the objections of the writ petitioner-appellants, b .....

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rounds the writ Court refused to interfere and come to the rescue of the writ petitioner in respect of sale of properties ostensibly purchased by petitioner for consideration. We have heard parties at length and we are not inclined to interfere, though for slight different reasons. In fairness to Mr. Ambuj Nayan Chaubey, learned counsel appearing in support of the appellant, we must notice a plea raised by him. He submits that it is on 28.11.1987 that an agreement for sale of certain lands was e .....

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e deed executed after the suit was instituted, sale would not be hit by the doctrine of lis pendis under Section 52 of the Transfer of Property Act. He has placed reliance on the judgment of the Apex Court reported in case of 1990 (3) SCC page 291 (Vannarakkal Kallalathil Sreedharan Vrs. Chendramallth Belakrishnan & Another). On the strength of the aforesaid decision, he submits that there being an obligation to sell by virtue of the agreement to sell aforesaid prior to the suit, subsequent .....

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the Panchrukhi Sugar Mill and the other Bihar Distillery all located at the same place. It had taken substantial amount of financial assistance from the respondent Central Bank of India for which it had mortgaged its entire properties. There was substantial default and accordingly in the year 1977 a suit being Mortgage Suit No. 42 of 1977 was filed against the Company and its Directors including its Chairman-cum-Managing Director. This suit admittedly was for enforcement of the mortgage rights i .....

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egistered in terms of the Company Act. As noted above, there were substantial defaults on all corners. It now appears that on 16.11.1987 Bihar Distillery Limited was incorporated and registered under the provisions of the Company Act, 1956. Its Managing Director later was Mr. Viren Pandey, who was also the Managing Director-cum-Chairman, I.C.P.L. at that time. On 28.11.1987 an agreement was drawn up between I.C.P.L and B.D.L. for sale of the Distillery unit of I.C.P.L. There being substantial de .....

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this on 14.07.1988 I.C.P.L. vide two registered sale deeds as noticed earlier, sold 124 bighas lands and in due course B.D.L. got their name entered into the Revenue register. While the Money Suit No. 09 of 1988 was pending the Recovery of Debts due to Banks and Financial Institutions Act, 1993 came and thereafter the Debt Recovery Tribunal at Patna was established. Consequently, Money Suit No. 09 of 1988 stood transferred to the Debt Recovery Tribunal as P.T. Case No. 04 of 1999. It may be not .....

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g also started. It is at this stage objections were once again raised when enforcement of certificate was being sought to be made and that was rejected in the year 2006. The Recovery Officer clearly held that charge on the properties had been created much prior to the agreement for sale. The entire properties had already been mortgaged first and then additional charge was also created. All this was long before the agreement for sale. Thus the agreement for sale is of no consequence and the sale .....

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re mortgaged properties and charge had been created. Thus, the obligation to sell as created by the agreement between the I.C.P.L. and B.D.L. could not take precedent over pre-existing mortgage and charge. Thus, the steps taken by the Recovery Officer to realize the dues of I.C.P.L. from the properties which now stood transferred to Bihar Distillery Limited (B.D.L.) cannot be challenged. We may also note that the learned single judge was correct in not interfering because the grave man error of .....

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mpugned order to attain finality, learned Single Judge was right in not interfering with the order impugned. We see no reason to take a different view in the matter. In fairness of Mr. Choubey, we must note that he has raised an issue with regard to Rule 68B of Schedule-2 to the Recovery Rules under D.R.T. This is nothing but Rule 68 B of the Income Tax Recovery Rule. He states that the steps taken to sell the properties is now barred by limitation is provided under Rule 68B aforesaid. We are no .....

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