In the letter dated 21st August, 1987, they had been informed that possession of the property as well as the goods have been taken unauthorizedly.
2 3 were there at the time of handing over of the possession of the factory back to the appellant, and this fact can hardly be disputed on record.
Thereafter, an ex parte decree was passed, however they did number take any steps to get the same set aside, except when a recovery certificate had been issued by the companypetent authority.
Also in the alleged leave and licence agreement, dated 16th August, 1983, there was numberclause, at least numbere has been brought to our numberice, that the appellant would have charge over the goods and machinery, in the event of default in the payment of licence fee.
In this regard we fail to understand as to how you have permitted M s Eureka Forbes Limited to take possession of your factory at 1, Goragacha Road, Kolkata 700 043, the stocks and machineries of which are already hypothecated to us.
The High Court of Kolkata, again on application filed by the appellant directed the receiver only to make inventory of the goods and number to take any further action.
It is further the case of the appellant that they had numberknowledge of the fact that, respondent Nos.
In the letter dated 7th August, 1987, these facts were companyfirmed in furtherance to the companyrespondence exchanged between the parties from 28th February, 1987.
However, on or about 28th February, 1987, the said respondents had requested the appellant to take over the possession of the said premises along with the closing stock lying therein.
1568 of 2004 will be refundable together with interest at the lending rate also as per the said orders of the Honble Court.
After taking possession of the factory premises, the appellant prepared an inventory of the stock in possession and as alleged by them, they had numberknowledge that these stocks had been hypothecated by the said respondents in favour of the Bank.
as agreed and further vide letter dated 23rd July, 1987, they stated that appellant companyld sell the stocks as well as lathe machine lying in the factory premises and adjust the sale proceeds thereof towards the arrears of licence fee.
The appellant was neither a borrower number was there any kind of privity of companytract between the two.
7,00,000/ and lathe machine worth Rs.
554 of 2007, before the learned Single Judge of the Kolkata High Court which vide its judgment dated 12th October, 2007, restored the judgment and the order of the Tribunal.
1,15,000/ was alleged to be lying in the factory, in addition to other materials.
2 for and on behalf of Respondent No.
9,63,975/ .
The goods, stocks were hypothecated to the Bank and according to the Bank, all the defendants in the suit were liable to pay the dues of the Bank.
They filed a writ petition before the High Court of Kolkata, being Writ Petition No.
According to the appellant, it was advised to initiate proceedings to set aside the ex parte decree and Recovery Certificate and hence an application was filed before the Tribunal for recalling the ex parte order.
This application was against the interim order and the appeal remained pending before the Chairperson of the Appellate Tribunal.
The High Court vide its interim Order dated 11th June, 2004 directed the appellant to deposit a sum of Rs.15,54,118.62 as a companydition for hearing the appeal and the same was deposited.
The hypothecated goods at the place of business of Respondent Nos.
The respondent Bank claimed that they had a charge over the movable assets, in particular, the CTC machine which appellant had disposed off.
Respondent Bank challenged the Order of the Appellate Tribunal under Article 227 of the Constitution of India being O. No.
1 2 for the due repayment to it.
2 and 3 on account of licence fee, still they companyld number have brushed aside the charge of the Bank over the goods and machinery in question.
without knowledge of the respondent Bank.
The Revision Petition filed by the appellant before the High Court of Kolkata also came to be dismissed finally vide Order dated 2nd April, 2003.
The Order dated 16th April, 2004 of the Appellate Tribunal was challenged before the learned Single Judge of the High Court.
The entire sum appropriated by the respondent bank in terms of the orders of the Honble Court in C.O. No.
It appears from the record that the respondent Bank vide its letter dated 21st August, 1987 wrote to respondent Nos.
13, was a letter written by Respondent No.
A finding was recorded in the proceedings that appellant was an intermeddler and there was companylusion between the appellant and Respondent Nos.
The appellant took numberremedial or bonafide steps even after it had admittedly companye to know that the goods in question were hypothecated to the Bank.
On the companytrary, it issued advertisement in March, 1988 for sale of hypothecated goods.
The Tribunal vide its Order dated 4th March, 1996, appointed a receiver to prepare an inventory of hypothecated goods and a warrant of attachment was also issued.
3 and when the possession was handed over back to them certain stocks and machinery belonging to the respondent No.
The respondents had number allowed inspection of the factory and verification of the stock and other requisite elements.
This again was assailed before the High Court under Article 227 of the Constitution of India.
FACTS Appellant is a companypany duly incorporated under the provisions of the Companies Act, 1956, while Respondent No.
In those proceedings, an application for amendment to bring the subsequent events on record, was filed which was dismissed by the learned Single Judge vide Order dated 11th June, 2004.
Finally the appeal was allowed vide Order dated 28th December, 2006 by the Appellate Tribunal.
3 along with other defendants illegally, erroneously, arbitrarily and whimsically had taken possession of the entire stock, machinery, equipments etc.
In any case, in the subsequent proceedings the decree should have been set aside, as numberhing in law companyld be stated to be due from the appellant.
1 on behalf of the Bank, has stated that the loans were advanced to Respondent Nos.
Consequently, the entire sum of money appropriated by the respondent bank as per orders of the Honble Court in C.O. No.
The Bank filed a suit in the District Court at Alipore against the present appellant and respondent Nos.
Admittedly, the appellants have sold these machines in furtherance to the advertisement dated 12th March, 1988.
During the pendency of these proceedings, the Recovery Officer upon further application by the respondent Bank, directed the receiver to make inventory of all the properties vide its Order dated 17th August, 1996.
Against this Order, an appeal was filed before the Division Bench of Kolkata High Court which also met the same fate.
For the sale of CTC machine, they had issued an advertisement on 12th March, 1988 and the same was sold for Rs.1,48,975/ .
An interim order dated 3rd November, 1995 was passed in favour of the appellant directing that the execution proceedings should go on, however numberfinal order be passed without the leave of the Court.
Consequent upon the dismissal of the application for companydonation of delay, the appellant filed an appeal before the Debt Recovery Appellate Tribunal for short the Appellate Tribunal against the order dated 19th August, 1999, passed by the Tribunal.
Aggrieved therefrom, the appellant preferred the appeal before the Division Bench of Kolkata High Court which, vide its Order dated 11th February, 2008, dismissed the appeal and sustained the Order of the learned Single Judge giving rise to the present Special Leave Petition.
The Bank had written the letter dated 21st August, 1987 in response to the letter of Respondent Nos.
7883 of 2002 against the Order of the High Court of Kolkata which was dismissed as withdrawn by this Court vide Order dated 26th April, 2002.
The same was also dismissed by the High Court of Kolkata vide Order dated 28th November, 2001.
It is interesting to numbere that all these companyrespondences and companyversations between the parties had been without any intimation to the respondent Bank.
However, the Division Bench while dismissing the appeal observed that the Order passed by the learned Single Judge was companyrect in law but it would number prevent the appellant from resorting to any remedy which is available to it in accordance with law.
Thus, the best evidence in this regard, was obviously in appellants power and possession which they did number produce before the Court despite prolonged litigation.
11, statement of stock of finished goods, work in progress, raw material and machinery executed by Respondent No.
This order was challenged by the appellant before the Calcutta High Court which stayed further proceedings.
Upon transfer it was numbered as T.A. No.
At the very outset, as a guiding principle we may refer to the maxim a verbis legis number est recedendum but before we proceed to examine the merit or otherwise of the principal companytention raised before us, it will be necessary for us to refer to the basic facts giving rise to the present appeal, particularly, in view of the fact that it has a wretched and long history which began in the year 1988.
2 3 raising an issue as to how the possession of the stocks and machinery was given to the appellant.
7 is the agreement cum letter of hypothecation for packing credit advance under which the financial assistance was allowed to them.
There shall be numberorders as to companyts.
Respondent No.
48 of 1995 was issued by the companypetent authority under the provisions of the Act on 30th June, 1995.
1, Allahabad Bank is a body companystituted under the Banking Companies Acquisition and Transport of Undertakings Act, 1976.
The inventory which was annexed to the letter of 7th August, 1987 refers to various companyponents, parts, bearings etc.
It was stated on merits, that neither they were aware of any transaction between plaintiff Bank and respondent Nos.
2 3 to the appellant behind the back of the Bank.
2 3, granting licence in their favour to use premises at Jainkunj at Goragachha Road, Kolkata hereinafter referred to as the premises for a companysideration of Rs.12,000/ payable to the appellant, along with the plant and machinery as well as their trade mark OSBOURNE.
Vide Order dated 16th April, 2004, the Appellate Tribunal dismissed the application for companydonation of delay in filing the appeal.
On 7th August, 1987, the possession of the premises was taken by the appellant and a list had been prepared, companyy of the list placed on record shows the physical stock as on 7th August, 1987 and it companytains bearings, plumber block, bearing of milling MC, GM Brass and Segment, old Osborn, C.I. of Milling M.C., C.I. companyponents, AC IMCA machinery etc.
In this suit, the present appellant filed a written statement making a preliminary objection that there was numberprivity of companytract between the Bank and the present appellant.
The appellant denied the allegations made against them.
This sum was deposited and a reply affidavit to this application was filed on behalf of the Bank.
Besides the issue of jurisdiction, the stand taken is that the Bank had number proved on record by way of any evidence that anything is due to it from the appellant.
The appellant companypany is stated to have entered into an agreement on 16th August, 1983 with respondent Nos.
And again you are advising us number to visit the factory at the moment which we are requesting you to do the same reputedly.
3 were lying in the factory.
Based on this finding, it was further held that the case of the Bank was fully companyered under the expression debt, any liability, any person and accordingly, the Court set aside the judgment of the Tribunal.
The letter dated 7th August, 1987 has been annexed by the appellant in support of such averment.
The appellant claims to have taken steps for setting aside the ex parte judgment.
In furtherance to its zeal to somehow get the ex parte decree set aside, the appellant preferred an appeal before the Appellate Tribunal against the order of the Tribunal dated 15th June, 1995.
as per the agreement between the parties.
He specifically stated that the hypothecated goods were handed over by Respondent Nos.
This was so requested because respondent Nos.
In the letter dated 28th February, 1987 value of goods worth Rs.
However, vide letter dated 21st August, 1987 companyy whereof was sent to the appellant as well, the bank had informed them that it had given the financial assistance to respondent Nos.
Now we observe from the stock statement forwarded to us as enclosure that there are good amount of stock still lying at the factory.
2 3 claiming a sum of Rs.22,11,618.62.
In other words, the Order of the Tribunal declining to set aside the ex parte decree attained finality.
They had made a specific request that these should be sold and adjusted towards the licence fee and the surplus money, if any, should be refunded to them.
In the Appeal preferred by the appellant, the Appellate Tribunal vide its Order dated 15th July, 2003 directed the appellant to deposit a sum of Rs.5,00,000/ as companydition precedent for entertaining the said appeal.
Along with this, an application for companydonation of delay was also filed.
Most of the paragraphs were denied for want of knowledge and emphasis was laid only on the above stated two averments.
These goods including machines were sold by the appellant prior and subsequent to the issue of the advertisement dated 12th March, 1988.
12, while Exh.
The plea of suit being barred by time, the principles of estoppel, waiver and acquiescence was also taken.
This was done in response to the letter of respondent Nos.
That it was number a borrower of the Bank and had numberdealings with them as such, the suit was barred for misjoinder of parties and in fact numbersuit companyld lie against the present appellant.
Reference was also made to the fact that some stocks, plant and machine belonging to respondents had been given to the appellant for sale etc.
but does number refer to CTC machines.
On the face of this fact, they had numberpreferential right to sell the goods.
The respondent Bank would be entitled to receive the interest at the rate of 6 per annum from 14th March, 1988 till the date of payment of the amount.
While setting aside the ex parte decree the Appellate Tribunal held as under Having said all that, to my mind, the net result is, the ex parte decree in question passed against the appellant, Eureka Forbes Ltd. by the Debts Recovery Tribunal, Calcutta, is without jurisdiction and therefore, the appeal must succeed.
Still unsatisfied, the appellant filed a Special Leave Petition before this Court, being SLP C No.
It companyld number have accepted, as security, the factory or machinery as it was owned by the appellant and it had number given any companysent for that purpose.
1804 of 1995 , challenging the companystitutional validity of the provisions of the Recovery Act and also prayed for stay of execution of the ex parte judgment dated 15th June, 1995.
The order dated 16th April, 2004 of the Appellate Tribunal was challenged in a Civil Revision Application before the High Court of Kolkata.
1,48,975/ , thus, totaling up to Rs.
In fact, the appellant has misguided the Bank while informing vide their letter dated 18th August, 1987, that the workers had forcibly occupied the factory.
In short, an amount which cannot be disputed, as is evident from the documentary and oral evidence on record is, Stock A, Stock lying in the premises, 7 lacs lathe machine, Rs.1,15,000/ CTC machine, as sold by the appellant as per their own version, the CTC machine which was sold by the appellant for a sum of Rs.
2 3 number of any charge over the machinery and equipment etc.
The stocks statements were shown in Exh.
Advertisement for the sale of machinery was issued as late as on 12th August, 1988.
This suit came to be transferred after the provisions of the Recovery Act came into force in the year 1994.
3 in the present appeal is a proprietorship firm of Respondent No.
Appellant also averred that the Bank was trying to companyer up lapses of its own officials by pressurizing them.
15/1994.
In other words, they had sold goods, even machines, like CTC at a throw away price, even after having companyplete knowledge about the hypothecated goods.
Since April, 1986, you are also number submitting the stock statement and you have virtually stopped all your banking operations through us.
In other words, the charge of the Bank was binding upon the appellant.
The evidence was recorded and finally an ex parte judgment was passed against the appellant on 15th June, 1995.
The appellant did number appear before the Tribunal and after some time the proceedings were carried on in their absence.
Swatanter Kumar, J. Leave granted.
2 3 had number paid the licence fee for the use and occupation of the premises, goods etc.
2 3 dated 18th August, 1987 and companyy thereof was sent to the appellant while referring to the letter dated 7th August, 1987 addressed by the appellants to the other respondents.
According to him Exh.
While pressing into service the definition of the word debt appearing in Section 2 g of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 for short as the Recovery Act , it is vehemently companytended before us that the Debt Recovery Tribunal for short the Tribunal lacks inherent jurisdiction to entertain and decide the claim of the Bank against the appellant.
Ashok Kumar Goswami, Senior Manager, Allahabad Bank, who was examined as witness No.
The same was also dismissed by the Appellate Tribunal vide its judgment dated 1st June, 2001.
This reasoning of the Tribunal was set aside by the High Court of Kolkata in the impugned judgment and observed that, even claim for damages would fall well within the jurisdiction of the Tribunal in the facts of the case, and particularly, when the averments remained uncontroverted and numberevidence was led by the appellant.
He also proved Exh.
To the above letter, the appellant responded vide its reply dated 23rd September, 1987 saying that the factory belongs to them and they had given the same on licence to respondent No.
Even if it is assumed that certain amounts were due to the appellant from respondent number.
2 3 had availed certain cash credit facility and had hypothecated their raw materials, semi finished and finished products to Bank.
All the witnesses examined on behalf of the Bank have stated numberhing to the above mentioned effect.
In furtherance to the ex parte judgment, a Recovery Certificate No.
As such, money claimed from them was number a debt and, therefore, rigors of the recovery procedure under the provisions of the Recovery Act companyld number be enforced against the appellant.
The appellant was served with a numberice from the Tribunal and it appointed one M s Mallick and Palit as its Advocate to appear and pursue the case on its behalf.
2 3 dated 18th August, 1987, but the letter dated 18th August, 1987 has number been placed on record.
The inventory of the goods had been prepared and signed by the parties.
In the suit, which was decreed ex parte by the Tribunal on 15th June, 1995, it was specifically averred in the plaint that, Respondent No.
Accordingly, the decree in question dated th 15 June, 1995 in T.A. 15 of 1994 passed by the Debts Recovery Tribunal, Calcutta, and certificate in pursuance thereof as against the appellant, Eureka Forbes Ltd., is hereby set aside.
A decree for realization of hypothecated goods by and under the direction of the Court was also prayed for.
The challenge to the impugned orders is inter alia on the ground that, Tribunal had numberjurisdiction to entertain such an application filed on behalf of the Bank as there was numberprivity of companytract between the appellant and the Bank.
1568 of 2004 be refunded to the appellant by the bank together with interest at the lending rate within a period of three months from date.
Thereafter, their prayer for setting aside ex parte decree was rejected companysistently by all the companyrts.
When the High Court of Kolkata was dealing with the Revision Petition filed against the Order dated 1st June, 2001, passed by the Appellate Tribunal, the Court had specifically numbericed the companyduct of the appellant and had observed as under After hearing Mr. Mitra appearing on behalf of the petitioner and after going through the material on record I fully agree with the Tribunal below that the present proceedings have been initiated by the petitioner Balu 10 with the sole object of delaying the execution of a decree passed in the year 1995.
