1

* THE HON’BLE SRI JUSTICE D.V.S.S.SOMAYAJULU

AND

THE HON’BLE SRI JUSTICE DUPPALA VENKATA RAMANA

+ WRIT PETITION No.14396 and 15220 of 2023

% 22

nd

SEPTEMBER, 2023

W.P.No.14396 of 2023

# State Bank of India

… Petitioner..

AND

$ The Debt Recovery Tribunal,

Visakhapatnam and 4 others.

… Respondents.

! Counsel for the Petitioners: Mr.S.Satyanarayana Moorthy

Mr. T. Anup Kumar

^ Counsel for the respondents: Mr.N.Siva Reddy

< Gist:

> Head Note:

? Cases referred:

1) AIR 1975 AP 187

2) (1996) 3 ALD 477

3) (2012) 5 SCC 370

4) (2004) 4 SCC 311

2

HON’BLE SRI JUSTICE D.V.S.S.SOMAYAJULU

and

HON’BLE SRI JUSTICE DUPPALA VENKATA RAMANA

WRIT PETITION Nos.14396 AND 15220 of 2023

COMMON ORDER:(per D.V.S.S.Somayajulu, J)

Writ Petition No.14396 of 2023 is filed questioning the

inaction for passing orders in S.A.No.149 of 2023,

particularly the vacate stay petition, which has not been

heard and the delay that is occurring in the disposal of the

case. The further question raised is about the direction for

payment of 10 monthly installments contrary to the

provisions of the Securitization and Reconstruction of

Financial Assets and Enforcement of Security Interests Act,

2002 (for short “SARFAESI Act”)

2) The connected Writ Petition No.15220 of 2023 is

filed by the auction purchaser questioning the inaction of the

respondent bank in not receiving the balance sale

consideration.

3) With the consent of all the learned counsel the

matter was taken up for hearing. The facts are not seriously

in dispute. The writ petitioner in W.P.No.14396 of 2023 was

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issued a notice under the provisions of SARFAESI Act and

they brought to sale a particular property. The amount

outstanding as on 31.10.2021 is Rs.4,53,38,599/- along with

interest from 01.11.2021 and other charges etc. The auction

notice was issued on 20.02.2023. The 5

th respondent in this

writ petition, who is the writ petitioner in W.P.No.15220 of

2023 is the successful bidder. The auction was completed on

24.03.2023. The highest bid is for Rs.8,65,00,000/- against

the reserve price of Rs.7.35 crores.

4) The two essential grievances urged by the learned

counsel for the petitioner in W.P.No.14396 of 2023 is that

virtually an installment decree has been granted by the DRT

in this matter. As per the said order dated 17.03.2023, which

is now impugned, stay was granted in I.A.No.480 of 2023 in

S.A.No.149 of 2023 on the condition that the petitioner

therein (who is the 1

st respondent herein), shall deposit Rs.40

lakhs on or before 24.03.2023, further Rs.40 Lakhs on or

before 30.04.2023 and the balance outstandin g in equal

monthly installments. It is thus pointed out that 10 months

time has been granted for payment of the amount. Learned

counsel submits that as per Section 17 (5) of the SARFAESI

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Act the entire case should be disposed of within 60 days from

the date of application. Even if time was to be extended on

just and proper cause as recorded in writing the overall limit

is four months as per this section. Therefore, learned counsel

submits that the Court committed an error in granting such a

long period and also installments. In addition, he submits

that it is clearly pleaded in counter affidavit filed that a

successful bid was filed by the 5

th respondent herein.

Learned counsel points out that as per the provisions of the

SARFAESI Act and the rules, the balance amounts have to be

deposited by the bidder within the stipulated period of 90

days by the bidder, failing which he would suffer serious loss.

It is pointed out that despite the counter being filed and the

reply filed to the same, the matter is not being taken up and

are disposed, therefore the writ is filed.

5) Learned counsel for the petitioner also relies upon

a judgment of a learned single Judge of the Kerala High Court

in WP No.3189 of 2022. In particular he points out to para

12 about the manner and method in which such interim order

should be passed.

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6) In reply to this learned counsel for the

respondents argued that there is nothing wrong with the said

order and that they are already complying with the same, and

almost the entire loan has been discharged. Therefore he

submits that no fault can be led at the door steps of the DRT

and that an endeavor was to seek recovery of the money and

that is being accomplished in legal manner. Therefore, Sri

N.Siva Reddy opposes the prayer.

7) Learned counsel for the auction purchaser, who is

also the writ petitioner in W.P.No.15220 of 2023, Sri T. Anup

Kumar, learned counsel argues that his rights as a bidder are

being seriously impaired since he has become the successful

bidder in the auction and the rules permit only 90 day period

for the payment of the money.

COURT:

8) This Court has heard all the learned counsel at

length and notices that the similar orders are being passed

both by civil courts and by tribunals.

9) An injunction is an order that should not be

granted for mere asking. For the sake of good order the

following judgments are relied upon:

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(i) Nawab Mir Barkat Ali Khan v Nawab

Zulfiquar Jah Bahudur

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“14. It is well-settled that the grant or refusal of a

temporary injunction is covered by three well

established principles viz., (1) whether the petitioners

have made out a prima facie case (2) whether the

balance of convenience is in their favour i.e., whether

it would cause greater inconvenience to them if the

injunction is not granted than the inconvenience

which the opposite party or persons claiming through

the opposite party would be put to if the temporary

injunction is granted and (3) whether the petitioners

would suffer irreparable injury. With the first

condition as sine qua non, at least two conditions

should be satisfied by the petitioners conjunctively

and a mere proof of one of the three conditions does

not entitle the petitioners to obtain a temporary

injunction in their favour.”

(ii) Sheela Harry v Capt. Mohd. Mirza

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“43. In the case of T.A. George v. D.D.A. (3) AIR 1995

Delhi 131, the Delhi High Court observed that

injunctions were a form of equitable relief and had to

be adjusted in aid of equity and justice to the facts of

each particular case. No Court had ventured to lay

down absolute propositions and thereby forged

fetters. However, some principles were too well

entrenched and they were (1) Whether the petitioner

had made out a prima facie case; (2) whether the

balance of convenience was in his favour i.e. whether

it would cause greater inconvenience to him if the

1

AIR 1975 AP 187

2

(1996) 3 ALD 477

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injunction was not granted than the inconvenience

which the opposite party or persons claiming through

the opposite party would be put to, if the temporary

injunction was granted; and (3) whether the

petitioner would suffer irreparable injury. It was

further observed that the mere circumstance that the

party had a prima facie case did not necessarily mean

that the order of temporary injunction must follow.

The Court had also to consider the question of

irreparable or serious injury and the balance of

convenience. With the first condition as sine qua non,

the party must satisfy at least two conditions

conjunctively. A mere proof of one of the three

conditions would not take the party out of woods.”

(Emphasis supplied)

(iii) Maria Margarid Sequiera Fernandes and

others v Erasmo Jack De Sequiera (dead)

through LRs.,

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“83. Grant or refusal of an injunction in a civil suit is

the most important stage in the civil trial. Due care,

caution, diligence and attention must be bestowed by

the judicial officers and Judges while granting or

refusing injunction. In most cases, the fate of the

case is decided by grant or refusal of an injunction.

Experience has shown that once an injunction is

granted, getting it vacated would become a nightmare

for the defendant. (emphasis supplied)

84. In order to grant or refuse injunction, the judicial

officer or the Judge must carefully examine the entire

pleadings and documents with utmost care and

seriousness. The safe and better course is to give a

short notice on the injunction application and pass

an appropriate order after hearing both the sides. In

3

(2012) 5 SCC 370

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case of grave urgency, if it becomes imperative to

grant an ex parte ad interim injunction, it should be

granted for a specified period, such as, for two weeks.

In those cases, the plaintiff will have no inherent

interest in delaying disposal of injunction application

after obtaining an ex parte ad interim injunction.”

10) To the same effect is the judgment of the learned

single Judge in W.P.No.31891 of 2022 which was passed after

considering the leading judgment in Mardia Chemicals Ltd.,

v Union of India

4 the following was held in para 12 of this

judgment:

“….Moreover the judgment in Mardia Chemicals

(supra) declares in no uncertain terms that the

Tribunal has the power to grant conditional interim

orders. Whether any amount is to be deposited or the

extent of amount to be deposited will depend on the

prima facie appreciation by the Tribunal on the

merits of the contentions taken by both sides and on

the application of the well settled principles governing

the grant of interim relief namely (i) strong prima

facie case; (ii) balance of convenience; and (iii)

irreparable injury. While it may not be necessary to

the Tribunal to write a detailed order touching upon

merits of each and every contention taken before the

Tribunal as well as the response by the

banks/financial institutions to such contentions, the

order of the Tribunal must, on a reading, indicate

4

(2004) 4 SCC 311

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that it was alive to the contentions raised in the

Securitization Application.”

11) As pointed out by the Hon’ble Supreme Court of

India, the fate of the case is often decided by the grant of an

order. Therefore, due care and caution must be taken before

such an order is passed. A reading of the impugned order

does not indicate that the issues of prima facie case, balance

of convenience and irreparable injury were in fact considered.

This Court agrees with the learned single Judge of the Kerala

High Court that in every case a detailed order need not be

written in interim orders, but at the same time the order

should indicate that these essential elements were taken into

account before a conclusion is reached.

12) The need for reasons in an order cannot be over

emphasized. Time and again the highest courts of the land

have held that the reasons, even if they are brief, should be

given in an order.

13) It is also borne from the record that the 5

th

respondent has become successful bidder and therefore his

interest has also to be safeguarded in the circumstances and

cannot be overlooked. The purpose in enacting the RDDB Act

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and the SARFAESI Act has been considered in more than one

judgment of the Hon’ble Supreme Court o f India and other

courts of the land. Both these Acts are meant for speedy and

effective disposal of cases relating to banks and financial

institutions and to facilitate the recovery of debts without

intervening of the courts. New simplified procedures have

been laid down permitting the sale of the property in which

security interest has been created. This overall purpose, for

which Act was enacted, should always be kept in mind. In

the case on hand 10 months time has been given for the

deposit of the amount, while this is virtually an “installment

decree”. Installment decrees are not to be granted for the

asking. These are the decrees which can be passed under

certain circumstances only as for example set out in Order 20

Rule 11 C.P.C. The power of the Court to impose conditions

for granting a stay order etc., are also clear but the same is an

exception rather than the rule. The power to grant

installment decree where a mortgage is created is also very

doubtful. In most cases before DRT a security interest is

created for the loan. This aspect is to be kept in mind also.

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14) It is also to be noted that keeping in view the

overall scheme of the Act and the purpose for which these

Acts are enacted there should not be a great delay in

disposing the matters. In the case on hand there is an

innocent third party (the auction purchaser), who has

participated in the Bid. His interest should also be

safeguarded to. In the counter affidavit filed this is brought to

the notice of the Court. This Court is of the opinion that

there is enough power vested in the Tribunal to take up the

matter and decide the same on the merits. Delay defeats the

justice. This is more so when matters are heard by Tribunals

under specific enactment. This need not be reiterated again

and again.

15) Without going anything further on the merits of

the matter, this Court is of the opinion that the Writ Petition

should be allowed. Accordingly, W.P.No.14396 of 2023 is

allowed. A direction is given to the DRT, Visakhapatnam, to

hear and dispose of the I.A.No.480 of 2023 in S.A.No.149 of

2023 within three weeks from the date of receipt of a copy of

this order. The matter should be heard on merits and a

detailed speaking order should be passed, without being

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influenced by the fact that the High Court has directed the

case to be heard and disposed of. Depending on the order

passed by the DRT Visakhapatnam, further steps should be

taken with regard to the auction purchaser, the receipt of the

balance sale consideration, registration of the sale certificate

etc. Since the W.P.No.14396 of 2023 is allowed

W.P.No.15220 of 2023 is disposed of. The DRT should follow

all the directions of the Courts and the procedures stipulated

meticulously and scrupulously.

16) Consequently, the Miscellaneous Applications

pending in these writ petitions, if any, shall stand closed

__________________________

D.V.S.S.SOMAYAJULU, J

_________________________________

DUPPALA VENKATA RAMANA , J

Date: 22.09.2023.

NOTE: LR copy be marked

B/o

Ssv