REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(s).5696 OF 2012
[@Petition(s) for Special Leave to Appeal (Civil)23150/2012
CC 12128/2012]
M/S. OPTIEMUS INFRACOM LTD. Appellant(s)
VERSUS
M/S. ISHAN SYSTEMS PVT.LTD. & ANR. Respondent(s)
WITH
CIVIL APPEAL NO(s).5697 OF 2012
[@Petition(s) for Special Leave to Appeal (Civil)23161/2012
CC 12468/2012]
M/S.PHOENIX ARC PVT. LTD. Appellant(s)
VERSUS
M/S. ISHAN SYSTEMS PVT. LTD. Respondent(s)
O R D E R
1. Two Special Leave Petitions have been filed against the judgment
and order dated 14th February, 2012, passed by the Allahabad High Court,
in Civil Miscellaneous Writ Petition No.8409/2012.
2. The first Special Leave Petition has been filed by M/S. OPTIEMUS
INFRACOM LTD., being SLP(C)......CC 12128/12. the second Special Leave
Petition has been filed by M/S. PHOENIX ARC PVT.LTD., being
SLP(C)......CC 12468/12.
3. Delay condoned.
4. Leave granted in both the Special Leave Petitions.
5. Writ Petition No.8409 of 2012, was filed by the respondent, M/S.
ISHAN SYSTEMS PVT.LTD.& ANR., against the judgment and order dated 11th
April, 2011, whereunder the property of the respondent/judgment-debtor
Co. was put to auction. An application had been filed by the
respondent-company before the Debts Recovery Tribunal complaining of
violation of the statutory rules which regulate the auction of property.
Other grounds were also taken, but the same were rejected by the High
Court. In fact, the High Court, after examining the records of the
writ petition, had found no good ground to interfere with the order of
the Appellate Authority. Instead of stopping there, the High Court
went on further to give various directions to the Debts Recovery
Tribunal, to proceed and decide the application, which had been filed by
the respondent No.1/petitioner, being S.A.No.714/2011. By another
direction the auction purchaser was restrained from making any further
transfer of the property in question and any construction raised would
abide by the orders to be passed in the pending application before the
Debts Recovery Tribunal. With the aforesaid directions, the High Court
disposed of the writ petition finally.
6. The said judgment and order of the High Court had been questioned
on the ground that having found no ground to interfere with the order of
the Appellate Authority, the learned Judge of the High Court should not
have passed other orders, and, in particular, an order of injunction,
which was to the prejudice of the appellant before us, without issuing
notice or giving the appellant an opportunity of hearing.
7. Since the writ petition was disposed of on the very first date,
without notice to the respondents, there was no occasion to consider the
competence of the Allahabad High Court to entertain the writ petition.
Subsequently, another writ petition was filed by the respondents
herein, being No.35215 of 2012, before the Allahabad High Court, for
quashing the order dated 10th July, 2012, which had been passed by the
D.R.T.-III, Delhi, by which the application filed by the respondents
herein under Section 17(1) of the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002 (the
SARFAESI Act), was rejected. In the said petition, the question of
jurisdiction was raised and was heard and decided against the
respondents herein. In fact, reference was made in the judgment
delivered on 30th July, 2012, to the earlier writ petition and it had
been observed that although, the earlier writ petition had been
entertained by the Allahabad High Court, the issue relating to
jurisdiction had not been gone into, since the writ petition had been
disposed of on the first date, without hearing the respondents.
8. Ultimately, the learned Judge accepted the preliminary objections
raised on behalf of the appellants herein and held that the Allahabad
High Court had no jurisdiction to entertain the writ petition and
dismissed the same accordingly.
9. Both, S/Shri Venugopal and Ranjit Kumar, learned senior advocates
appearing for the appellants in these two appeals, submitted that,
although, the order of the High Court has to some extent been worked out
and the sale which had been effected has been confirmed, the only
question which remained to be considered was the competence of the
Allahabad High Court to entertain a writ petition from an order passed
by the Debts Recovery Tribunal, Delhi, and the fact that the same was
disposed of on the very first day, without notice, by issuing orders
and directions which prejudiced the appellants.
10. Mr. Chetan Sharma, learned senior advocate appearing for the
respondents, has tried to impress upon us that the order of injunction
which was passed by the Allahabad High Court was innocuous and that it
did not prejudice or adversely affect the appellants in any way and
since the sale has been confirmed, nothing further remained to be
decided, as far as the said question is concerned.
11. It is true that the impugned order has more or less worked itself
out, but it needs to be indicated that the practice which was adopted by
the Allahabad High Court, is not only arbitrary, but also contrary to
the concept of the principles of natural justice. Since the writ
petition was to be dismissed without issuing notice, it should have been
dismissed without giving any further directions in the matter.
Instead, certain positive instructions were given to the respondents and
one of the respondents was restrained from dealing with the property,
without any notice to him/them. If there was any intention on the part
of the learned Judge to protect the properties in question during the
pendency of the matter before the Debts Recovery Tribunal, the proper
course of action would have been to issue notice, and, if necessary,
pass interim orders and, thereafter, after hearing the parties to pass
final orders in the matter.
12. We hope that in future, this kind of order will be avoided in the
interest of justice and also having regard to the principles of natural
justice.
13. The appeals are allowed. The impugned judgment to the extent that
it restrains the appellants from alienating or encumbering the property,
is hereby set aside.
14. The appeals are disposed of, accordingly.
...................J.
(ALTAMAS KABIR)
...................J.
(J.CHELAMESWAR)
NEW DELHI;
August 01, 2012.
