Patna High CourtM/S Mangalam Automobiles vs U C O Bank Through Its Zonal Manager & Ors on 11 April, 2018Author:Vikash JainBench:Vikash JainIN THE HIGH COURT OF JUDICATURE AT PATNA

                 Civil Writ Jurisdiction Case No. 4172 of 2018
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M/s Mangalam Automobiles, N.H. 19 Bye Pass Road, Near Pani Tanki, Shakti
Nagar, Chapra Saran through its Proprietor Rajendra Prasad Singh, S/o Late
Shivpujan Singh, R/o Chandmari Road, Chapra, P.S.- Chapra Mufassil, District
Saran.
                                                                       .... .... Petitioner
                                      Versus
1. UCO Bank through its Zonal Manager, Zonal office, Mauryalok Complex,
Dakbunglow Road, Patna- 800001.
2. Shri S.A. Hoda, Chief Manager, UCO Bank, Zonal Office, Mauryalok Complex,
Dakbunglow Road, Patna- 800001.
3. Senior Manager, UCO Bank, Chhapra Branch, Town- Chhapra, District- Saran.
4. The Recovery officer-II, Debts Recovery Tribunal, Karpuri Sadan, 2nd Floor,
'A' 'B' and 'F' Wings, Near Rajeev Nagar Thana, Ashiana Digha Road, Patna-
800025.
5. Kameshwar Prasad Singh, S/o Late Suraj Singh, R/o Mohalla-Masumganj,
P.S. Bhagwanbazar, District- Saran.
6. Shashi Kumari, W/o Ramnandan Singh, R/o Mohalla-Masumganj, P.s.
Bhagwanbazar, District Saran.
7. District Magistrate, Saran.
8. Superintendent of Police, Saran.
9. The State of Bihar through Principal Secretary, Finance Department,
Government of Bihar, Patna.
10. Union of India through Secretary, Finance Department, Government of
India, New Delhi.
                                                                 .... .... Respondents
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        Appearance:
        For the Petitioner            : Mr. Jitendra Singh, Senior Advocate
                                        Mr. Harsh Singh, Advocate
        For the State                : Mr. Raghwendra Kumar -SC22
        For the Bank                 : Mr. Ranjeet Kumar Pandey, Advocate
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CORAM: HONOURABLE MR. JUSTICE VIKASH JAIN
ORAL JUDGMENT
Date: 11-04-2018

            Heard learned Senior Counsel for the petitioner and learned

   counsel for the respondent-bank.


            2.    The present writ petition has been filed for the following

   reliefs -


            (i)     For issuance of an appropriate writ, order or direction in
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                         the nature of writ of certiorari for quashing the auction
                         sale of the mortgaged property of the petitioner held on
                         11.10.2017by the respondent bank under the aegis of
                         Respondent no. 4 for a sum of Rs. 56,75,000/- (Rupees fifty
                         six lakhs seventy five thousand only) and consequential sale
                         certificate issued in favour of respondent no. 5, an ex -
                         employee of the respondent bank, who had processed the
                         loan of the petitioner in the first place, as the same was
                         conducted in a         collusive and clandestine manner, by
                         grossly undervaluing the mortgaged property, which as per
                         the valuation report of the respondent bank itself was
                         assessed at Rs. 64,98,160.00 (Rupees sixty four lakhs ninety
                         eight thousand one hundred sixty only) in January, 2014.(ii)    For issuance of an appropriate writ, order or direction in
                         the nature of certiorari for quashing and setting aside
                         order dated 07.10.2017 passed in R.P. Case No. 553/2016
                         by the Recovery Officer, (Respondent No. 4) whereby and
                         whereunder the petitioner's objection with regard to the
                         undervaluation of the mortgaged property has been
                         rejected on the ground of the objection being belated.(iii)   For an appropriate writ, order or direction in the nature of
                         writ of mandamus commanding respondent no. 4 to
                         consider     afresh          the    objections   with   regard   to
                         undervaluation of the              mortgaged property and short
                         pricing of the reserve price for the purposes of auction.(iv)    For an appropriate writ, order or direction in the nature o f
                         writ of mandamus commanding the respondent authorities
                         to conduct de novo auction of the mortgaged property in a
                         fair and transparent manner after revising the reserve
                         price of the mortgaged property in terms of its current
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                          valuation, in order to enable genuine buyers to participate
                          in the same so that the optimum value of the mortgaged
                          property could be realized.(v)      For an appropriate ad-interim writ, order or direction in
                          the nature of writ of mandamus restraining the respondent
                          authorities from dispossessing the petitioner from the
                          mortgaged property and handing over the possession of
                          the same to respondent no. 5 and for maintaining status
                          quo during the pendency of the writ application.(vi)     Alternatively, if respondent no. 5 has already been put in
                          possession of the mortgaged property, then an appropriate
                          ad-interim writ, order or directions for restoring status quo
                          ante and putting the petitioner back in possession of the
                          mortgaged property during the pendency of the writ
                          application.(vii)    For an appropriate ad-interim writ, order or direction
                          restraining the respondent authorities from taking any
                          other coercive steps against the petitioner during the
                          pendency of the writ application.(viii) For any other relief/reliefs that the petitioner may be
                          found entitled to in the facts and circumstances of the
                          instant case.3.      Mr. Jitendra Singh, learned Senior Counsel appearing on

        behalf of the petitioner, has advanced detailed submissions to assail

        the action of the respondent-bank in having auctioned the petitioner's

        mortgaged property at a value far below the price which could easily

        have been fetched, through collusive means in favour of the respondent

        no. 5 at a price of Rs. 56,75,000/- only. It is stated that in the e-auction,
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        the only participants were the respondent no. 5, an ex-employee of the

        respondent-Bank, and his daughter-in-law (respondent no. 6). It is

        submitted that under-valuation of the property is manifest from a bare

        perusal of the two valuation reports dated 09.01.2014 and 12.07.2017

        by which the property has been valued by the bank's valuer at Rs.

        64,98,160/- and Rs. 66,39,000/- respectively. Considerable stress has

        been laid on an agreement dated 12.09.2017 (Annexure-11) entered

        into between the petitioner and one Dharmnath Singh for sale of the

        subject property for a consideration of Rs. 1,25,00,000/-, out of which

        an amount of Rs. 10,00,000/- was received by the petitioner as an

        advance, to submit that this was the fair market price of the property at

        which a genuine buyer had come forward to purchase it. It is therefore,

        submitted that the respondent-bank has entered into a collusive deal

        with one of its ex-employees to sell the petitioner's property for a price

        only marginally above the reserve price of Rs. 56,00,000/-.4. Learned counsel for the respondent-Bank, on the other hand,

        vehemently opposes the writ petition. At the very outset it is submitted

        that the petitioner has not approached this Court with clean hands and

        the writ petition is liable to be dismissed on this ground alo ne. It is

        pointed out that the petitioner had earlier approached this Court in

        CWJC No. 14976 of 2017 which was filed on 10.10.2017 (page 164).

        The writ petition was subsequently permitted to be withdrawn on

        21.02.2018 (Annexure-1) with liberty to file a fresh writ petition. It is
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        stated that the agreement dated 12.09.2017 which is heavily relied

        upon by the petitioner at the time of hearing to support his contention

        of under-valuation of the property, clearly makes a reference to the

        said writ petition in CWJC No. 14796 of 2017 though the same was filed

        almost a month later on 10.10.2017 as stated above. It is therefore,

        clear that the agreement in question is a fabricated and backdated

        document which has been prepared later on only after the property

        was auction sold on 11.10.2017 and the sale confirmed and sale

        certificate issued to the auction purchaser on 08.12.2017.5. Learned counsel for the respondent-bank further submits that

        the petitioner has also suppressed the material fact of the Bank's O.A.

        No. 216 of 2016 having been allowed by order dated 11.11.2016

        passed by the Debts Recovery Tribunal (DRT), Patna (Annexure-B to

        the counter affidavit), inter alia, directing as follows -"Defendants are debarred from transferring, alienating,
                   encumbering or otherwise dealing with or disposing of
                   the mortgaged or hypothecated or any other properties
                   and assets without paying the       aforesaid adjudicated
                   dues to the applicant bank to secure the ends of justice.Let a certificate of recovery be drawn up forthwith and
                   put up for signatures in terms of provisions contained in
                   Section 19(22) of the Act to be issued, on the basis of the
                   order of the Tribunal to the Recovery Officer. The
                   Recovery Officer shall realise the amount as per the
                   certificate in the manner and mode prescribed under
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                   Section 25 and 28 of the Act from the defendants."Consequent upon the aforesaid order of the DRT, Patna, the

        Recovery Officer passed order dated 28.03.2017 in R.P. No. 553 of

        2016 (Annexure-C to the counter affidavit), by which the immovable

        property enumerated therein were ordered to be attached. Thereafter

        by order dated 05.08.2017 (page 140) the Recovery Officer further

        ordered that the immovable mortgaged properties attached by order

        dated 28.03.2017 were to be sold by auction sale on 11.10.2017 at a

        reserve price of Rs. 56,00,000/- and according to details enumerated

        therein. It is submitted that the petitioner instead of availing of the

        statutory remedy against such order, rushed to this Court firstly in

        CWJC No. 14796 of 2017 and upon its withdrawal, with the present

        writ petition, all of which are calculated merely to somehow obstruct

        and delay the recovery process by the respondent-bank.6. It is therefore, submitted that the petitioner has acted in a

        contumacious manner by entering into the aforesaid agreement dated

        12.09.2017 despite the specific prohibition by the DRT against the

        petitioner transferring, alienating , encumbering and otherwise dealing

        with or disposing of the mortgaged property, more so, when the

        mortgaged property had already been directed to be attached. In any

        event the e-auction has been conducted in a fair and transparent

        manner and for which the services were required to be provided by an

        outside agency, M/s e-Procurement Technology Limited, as stated in
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        the public auction notice dated 07.09.2017 itself (Annexure-6). It is

        also pointed out from the public auction notice that the bidders were

        required to register with the service provider well in advance upon

        payment of earnest money deposit, but no interested buyer other than

        the purchaser and his daughter in law had come forward to do so, nor

        had anyone made any complaint in this regard. The petitioner also did

        not produce any interested buyer to obtain a better price for the

        property at the auction sale.7. Learned counsel for the petitioner, in reply, has sought to

        justify the date of agreement stated as 12.09.2017 as an inadvertent

        error which was wholly bona fide. It is submitted that the agreement

        was in fact entered into only for the purpose of demonstrating that the

        property was worth at least double the price for which it has been sold,

        without there being any intention to in fact transfer or alienate the

        property pursuant to agreement of sale. This is evident from the fact

        that the petitioner himself had brought the agreement of sale on record

        in order to rely upon the same. It is therefore, submitted that there is

        no question of suppression of any material fact as there was never any

        intention to contravene the orders of the DRT in OA No. 216 of 2016

        aforesaid. It is submitted that in any event, even if a shadow is cast

        upon the agreement of sale dated 12.09.2017, the same has no bearing

        upon the main relief sought in the writ petition, and these two facets of

        the matter must be segregated. Reliance is placed on the following
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        decisions of the Hon'ble Supreme Court -(i)     AIR 1969 Supreme Court 7 (Jyotish Chandra Chaudhary
                           v. The State of Bihar)(ii)    (2007) 6 SCC 120 (Arunima Baruah v. Union of India and
                           others)(iii)   (2012) 11 SCC 511(Ram Kishun and others v. State of
                           Uttar Pradesh and others)(iv)    (2016) 11 SCC 378 (Uddar Gagan Properties Limited v.Sant Singh and others)8. Having heard the parties and on consideration of the materials

        on record, this Court is in agreement with the submissions made on

        behalf of the respondent-bank.9. The submission made on behalf of the petitioner that the date

        on the agreement of sale was inadvertently stated as 12.09.2017 is too

        far-fetched to be accepted, more so, when such date has been written

        in hand not only by the intending seller-petitioner, but also by the

        intending purchaser, Dharmnath Singh, as well as the two witnesses,

        Shashi Shekhar and Shobha Singh. The submission that the document

        had been executed on 12.10.2017 and the error in stating the date as

        12.09.2017 was wholly bonafide, is also not acceptable in absence of

        any corroborating material. The non-judicial stamp paper on which the

        agreement is printed bears the date as 29.11.2015 and affords little

        support to the petitioner's contention. So also, the date of any cheque

        or Demand Draft through which the advance of Rs. 10,00,000/- might

        have been accepted, has also not been stated. These aspects cast
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        serious doubt about the genuineness and authenticity of the agreement

        of sale (Annexure-6). Moreover, it is a rather extraordinary coincidence

        that the Petitioner entered into the agreement for sale on 12.10.2017

        as claimed by him, just a day after the auction was held on 11.10.2017,

        but the intending purchaser did not participate with his bid in the

        auction. This prima facie supports the stand of the Respondent Bank

        that the agreement of sale is not a document worthy of reliance.10. As regards the failure of the petitioner to bring the order of

        the DRT dated 11.11.2016 (Annexure-B to the counter affidavit) to the

        notice of this Court by which he had been prohibited from dealing with

        the subject property, the petitioner has little justification to offer save

        and except that he had never intended to actually go forward with the

        sale. This Court is not impressed with this submission, more so, when a

        substantial amount of Rs. 10,00,000/- was admittedly taken by the

        petitioner in the form of advance.11. The judgments of the Hon'ble Supreme Court relied upon by

        the petitioner do not also come to his aid. In those decisions by far, the

        suspect documents would not have had much impact on the main

        question for decision of the Court.InArunima Baruah's case (supra), it

        was held as follows -"12. It is trite law that so as to enable the court to refuse to
                   exercise its discretionary jurisdiction suppression must be of
                   material fact. What would be a material fact, suppression
                   whereof would disentitle the appellant to obtain a
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                   discretionary relief, would depend upon the facts and
                   circumstances of each case. Material fact would mean
                   material for the purpose of determination of the lis, the logical
                   corollary whereof would be that whether the same was
                   material for grant or denial of the relief. If the fact suppressed
                   is not material for determination of the lis between the
                   parties, the court may not refuse to exercise its discretionary
                   jurisdiction. It is also trite that a person invoking the
                   discretionary jurisdiction of the court cannot be allowed to
                   approach it with a pair of dirty hands. But even if the said dirt
                   is removed and the hands become clean, whether the relief
                   would still be denied is the question."In the present case, the petitioner has placed considerable reliance on

        the agreement of sale dated 12.09.2017 to submit that the mortgaged

        property was grossly undervalued. It cannot therefore, be said that

        taking the agreement of sale into consideration would not influence the

        decision on the main question of valuation of the property involved in

        the present writ petition. In other words, the dirt cannot be said to

        have been removed or the hands become clean.12. In the above circumstances, this Court is not inclined to

        interfere in the matter in its extraordinary writ jurisdiction. The

        petitioner is at liberty to avail of any statutory remedy as may be

        available to it in accordance with law.13. It is made clear that this Court is not expressing its opinion

        on the merits of the rival submissions of the parties and the statutory

        forum, upon being approached, would decide the matter on its own
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                merits without being influenced by any of the observations herein. It

                would also have regard to the present proceeding being pursued by the

                petitioner while considering any issue relating to condonation of delay,

                if applicable.14. The writ petition stands dismissed.(Vikash Jain, J)
Chandran

AFR/NAFR          AFR
CAV DATE          NA
Uploading Date    16.04.2018
Transmission Date NA