26 February

‘Tribunalisation is trivialisation of Justice’ – abolish it.Review petition of Rambo Fashions Ltd would convince even doubting Thomas’s

Posted by Mathews J Nedumpara

in Open Letters

IN THE DEBTS RECOVERY TRIBUNAL-II, MUMBAI

Miscellaneous Application No. _______ of 2022

Interlocutory Application no. 835 of 2021

S.A. no. 249 of 2018

Rambo Fashions Limited & Ors. … Applicant

IN THE MATTER BETWEEN

Rambo Fashions Limited & Ors. … Appellant

Versus

State Bank of India & Ors. … Respondents

GENERAL INDEX

Sr. No.	Particulars	Page No.
	*PART – A*
A	FACT SHEET
B	LIST OF DATES & EVENTS
1.	Application for review
2.	Affidavit in Support of Application
	*PART- B*
4.	List of Documents
5.	Exhibit “A” A Copy of the order 21.01.2022
6.	Exhibit – “B” A copy of the letter dated 08.08.2011 by M/s. M.V Kini & Co
7.	Exhibit – “C” A copy of the IA no. 835 of 2021
8.	Exhibit- “D” A copy of Amendment Application in SA

Advocate for Applicant

IN THE DEBTS RECOVERY TRIBUNAL-II, MUMBAI

Miscellaneous Application No. _______ of 2022

Interlocutory Application no. 835 of 2021

Securitization Application no. 249 of 2018

Rambo fashion Limited

A company incorporated under the Companies Act of 1956

Having address at 107/133/3-A, Rahul Mittal Industrial Estate, Sakinaka, Andheri East, Mumbai – 400 059.

M/s. Friends Textile Consultancy

Having address at #A/133, Rahul Mittal Industrial Estate, Sakinaka, Andheri East,

Mumbai – 400 059 …..Applicant/

Orig. Appellant

IN THE MATTER BETWEEN :

Rambo fashion Limited

A company incorporated under the Companies Act of 1956

Having address at 107/133/3-A, Rahul Mittal Industrial Estate, Sakinaka, Andheri East, Mumbai – 400 059.

M/s. Friends Textile Consultancy

Having address at #A/133, Rahul Mittal Industrial Estate, Sakinaka, Andheri East,

Mumbai – 400 059 … Appellant/Applicant

V/S

State Bank of India

Stressed Assets Management, Branch II, Mumbai, having address

At : Raheja Chambers, B-Wing, Ground Floor, Free Press Journal, Marg, Nariman Point, Mumbai – 400 001.

Authorized Officer

Stressed Assets Management, Branch II, Mumbai, having address

At : Raheja Chambers, B-Wing, Ground Floor, Free Press Journal Marg, Nariman Point, Mumbai – 400 001.

Abhishek Jhunjunwala

Auction Purcahser

c/o Authorized Officer

Stressed Assets Management, Branch II, Mumbai, having address

At : Raheja Chambers, B-Wing, Ground Floor, Free Press Journal Marg, Nariman Point, Mumbai – 400 001.

Vida Developers

Auction Purchaser

C/o Authorized Officer

Stressed Assets Management, Branch II, Mumbai, having address

At : Raheja Chambers, B-Wing, Ground Floor, Free Press Journal Marg, Nariman Point, Mumbai – 400 001.

5. Paras Dyeing and Printing Mills

(Auction Purcahser of no. 240, Kewal Industrial Estat, Senapati Bapat marg, Lower Parel (W) Mumbai , Maharastra 400 013.

…… Respondents

Application for Review of the common order dated 21.1.2022 in IA no. 835 of 2021 and 1070 of 2021 in SA no. 249/2018 preferred under Section 22(e) of the Recovery of Debts and Bankruptcy Act.

PARTICULARS OF THE APPLICANT:

Name of the Applicant : Same as given in the cause title above.

Address of the Registered :

Office of the Applicant : Same as given in the cause title above.

Address for service of notices: Same as given in the Cause title above

2. PARTICULARS OF RESPONDENTS

i) Names of the Respondents : Same as given in the cause title above

ii) Address of the Registered

Office of the Respondent : Same as given in the cause title above or on their

Counsel if and when engaged.

iii) Address for service of all notices: Same as given in the cause title above or on their Counsel as and when engaged.

3. JURISDICTION OF TRIBUNAL:

It is an agony that meaningless particulars as the instant one are required to be filled up in the standard format which has been prescribed and it is even more agonizing that inspite of the repeated demands by litigants and lawyers, the odious format is continued.

4. LIMITATION:

The Order came to be passed on 21.01.2022, so no limitation applies.

5. FACTS LEADING TO THE APPLICATION:

There is a clear distinction between review and appeal. A court is free to err within its jurisdiction provided that it has observed the principles of natural justice and acted in accordance with law. In other words, the parties to a cause are bound by a Court’s decision even where it is as manifestly erroneous as ‘1+1=0″. Against such a decision, no review will lie, but only an appeal, to put the doctrine of res judicata in the simplest of words.

While a court is free to err within its jurisdiction, it is it duty bound to observe the principles of natural justice and act in accordance with law. The jurisdiction or freedom to err is confined to facts. Where a Court fails to exercise its jurisdiction or has exceeded its jurisdiction, or where it has not observed the principles of natural justice, such an order of a Court is one which does not exist in the eye of law, is still born and one rendered void ab initio. Such an order is amenable to challenge in direct proceedings, namely, appeal, in collateral proceedings, namely, by way of a writ or a suit, so too by way of a review by the very same court.

The Applicant is constrained to institute the instant review because (a) this Court failed to observe the principles of natural justice (b) failed to exercise its jurisdiction without prejudice and bias and (c) acted contrary to law.

The order under review runs into 18 pages but the Court has failed to hold the scales evenly in as much as it misdirected itself, went at a tangent and assumed itself to be the Respondent, espousing it’s cause. This averment on the part of the Applicant is a sweeping one but the miscarriage of justice is so manifest that it pales before it and in no way constitutes to be an intemperate one.

Courts and tribunals exist to do substantive justice and not to pay obeisance to procedure. The idea behind the creation of tribunals is to make available to the litigant expeditious, hassle free, substantive justice. The prime concern of any Court or tribunal is to adjudicate the respective rights and obligations between the parties, procedure being a means to the end. In the instant case, the Court completely lost sight of the inter se rights and obligations between the parties and to do justice to them. The Petitioner begs to delve into the same as infra.

The Petitioner instituted SA no. 23 of 2012 which came to be transferred to DRT, Pune and re-numbered as SA no. 124/2014 in challenge of the wrongful classification of its account as NPA and the invocation of Sections 13(2), 13(4) and 14 of the SARFAESI Act and sought a compensation of Rs. 20 crores. While the said SA was pending, the Respondent Bank obtained orders from the District Magistrate, Thane and the CMM, Mumbai, and took physical possession of the Petitioner’s factory and properties, and further put them to auction. The Petitioner’s account was illegally classified as NPA. However, to establish the same he needed a copy of the statement of accounts which the Bank denied maliciously. He accordingly had to invoke the RTI and in the year 2018 he could secure a copy of the statement of accounts. The statement of accounts revealed that his account was regular upto 13.10.2010. A copy of the said statement of accounts is produced as Exhibit A.

The letter dated 8.8.2011 issued by M.V Kini and company as a rejoinder to the reply of the Petitioner to the notice under Section 13(2) reveals that the account was classified as NPA on 31.10.2010, namely, in just 17 days, whereas in terms of the guidelines of the RBI, no account could be classified as NPA unless it has remained irregular for a period of 90 days. A copy of the letter dated 8.8.2011 by M/s. M.V Kini & Co. is produced as Exhibit B.

The classification of the account as NPA is the core or foundation of the action under Section 13 of the SARFAESI Act as expressly stated in sub-section (2) thereof. Therefore, since the Petitioner’s account was classified as NPA when it could not have been at all, for it was irregular for a mere 17 days, the entire proceedings under the SARFAESI Act is rendered void ab initio, still born, non est in the eye of law. There is no room whatsoever to go into any other consideration, such as even the fact that MV Kini & Co. could not have stepped into the shoes of the Authorised officer, a statutory authority under the SARFAESI Act.

At the time when the Petitioner instituted SA no. 23/2012, the legal position was that an application under Section 17, which is considered to be akin to a suit could be instituted in the DRT within whose territorial limits the Respondent(Bank) resides or where the cause of action, wholly or in part, arises, based on the premise that Section 19 of the Recovery of Debts and Bankruptcy Act stands incorporated in the SARFAESI Act by virtue of Section 17(7) of the SARFAESI Act.

In our country, precedents change like roster, every quarter, lamented Justice Krishna Iyer. Soon after the institution of SA no. 23/2012, came the judgment of the full bench of the Delhi High Court in Amish Jain v. ICICI Bnak Ltd AIR 2013 DEL 172. The said judgment laid down that an application under Section 17 is an execution proceedings and, therefore, an SA will lie only before the territorial limits of which the property is situated.

The said judgment meant re-writing the whole of jurisprudence. The litigants, left high and dry, have to institute separate SAs in respect of each property subjected to auction.

While so, in the year 2018, two of the Petitioner’s office premises in Andheri, Mumbai, were put to auction. Under the impression that the judgment in Amish Jain v. ICICI Bank Ltd AIR 2013 DEL 172 is binding, the Petitioner instituted SA no. 249 of 2018. Since in Amish Jain it was held that Section 17 application is an execution proceedings, the Petitioners, acting on legal advice, challenged the said auction alone in SA no. 249 of 2018. The said challenge was lost in the DRT. There upon, the Petitioner invoked the jurisdiction of the High Court under Article 226. The bench of Chief Justice Nandrajog, by order dated 25.11.2019 granted a stay of further proceedings in WP no. 2641 of 2018. Later the writ petition came to be dismissed by the bench of Justice Dipankar Dutta and the stay came to be vacated. The Court, however, relegated the Petitioner to the DRT.

The Petitioner accordingly challenged the auction of the factory premises on 15.09.2021 by filing IA no. 835 of 2021. The DRT granted a stay by order dated 20.9.2021. The said stay was vacated by order dated 21.01.2022. The Petitioner begs to delve into the same as infra.

The Petitioner had changed their lawyer and engaged Nedumpara & Nedumpara. Upon legal advice, the Petitioner filed an application pointing out that the MSMEs, the victims of the draconian SARFAESI Act are subjected to further injustice due to the erroneous and inconsistent judgments delivered by the superior courts, contrary to the very first principles of jurisprudence. It was contended that there can only be one forum/proceedings concerning the inter se dispute between the Borrower and the Creditors and the scenario where a litigant has to institute multiple proceedings is the product of the judgements of superior courts which are rendered per incuriam and sub silentio, and that the Petitioner be permitted to amend the SA no. 249 of 2018, to bring in all cause of action, all controversies and all parties before one forum and in one case. A copy of the IA no. 835 of 2021 and the application for amendment of the SA, namely, IA no. 1070 of 2021 are annexed as Exhibits C and D, respectively.

Fairness requires the DRT-II to record the submissions as above with clarity and deal with the same. However, the DRT-II, in a judgement running into 18 pages did not all record the core of the argument of Shri Nedumpara, the Petitioner’s counsel, that the Respondent Bank had classified the account of the Petitioner as NPA when it was irregular for a mere 17 days whereas the minimum period ought to have been 90 days. The further contention that the authorised officer invested of the jurisdiction under Section 13 of the SARFAESI Act is a statutory authority, a tribunal in substitution for the Civil Court and that the said function cannot be delegated and M/s. M.V Kini & Co. the law firm of SBI is a usurper of a jurisdiction which is not vested in it, and therefore, the entire proceedings under the SARFAESI Act is rendered void ab initio, finds a mention, inchoate though, in paragraph 12 of the order dated 21.1.2022.

The Petitioner’s counsel, Shri Nedumpara, had raised many other pleas, including that the notice dated 08.08.2011 putting the Petitioner’s property was not served on him/the company. The Petitioner came to know of the auction when he happened to check the SBI website by chance. However, this contention also does not find even a mention.

The Petitioner’s counsel, Shri Nedumpara, took the plea that the Bank had obtained a decree behind the back of the Petitioner from the DRT-I by resort to fraud in OA no. 11 of 2012 and that that decree, though amenable to challenge by the Petitioner is final, binding and authoritative so far as the Bank is concerned and that the decree estops the Bank from initiating any other mode of recovery. Though he argued elaborately on the doctrine of cause of action estoppel, res judicata, the said contentions hardly find any reference in the judgment.

To keep this petition brief, the Petitioner refrains from delving into the other contentions raised by Shri Nedumpara. Suffice to say that the DRT-II, for reasons difficult to be fathomed, did not consider any one of the said contentions. The only saving grace is that the Court has recorded in paragraph 12 as follows:

“M/s. M.V Kini & Co. Law Firm, is not an authorised officer to which Mr. Shah did not choose to respond.”

19. The tribunal therefore has admitted the fact that there is no challenge to the plea of the Petitioner that the authorised officer is a coram non judice, that he had no authority whatsoever to invoke the jurisdiction under Section 13 of the SARFAESI Act and as a consequence thereof all proceedings under Section 13 of the SARFAESI Act is rendered void ab initio.

20. The failure to record the contentions of the Petitioner and to deal with the same amount to violation of the principles of natural justice which a Court is duty bound to observe. The judgment under reference above, therefore, is liable to be recalled/ reviewed.

21. The courts and tribunals exist to do justice and procedure is only a means to an end, a handmaid of justice. The DRT-II has exhausted pages after pages delving into the reasons as to why an application for amendment of the SA to bring all necessary parties and pleadings ought to be rejected. DRT-II rejected the application for amendment on the plea that the Petitioner has come with unclean hands. The tribunal missed the obvious that no one is presumed to be bad- ‘nemo praesumitur malus’.

22. The unkindest cut of all has been the finding of DRT-II in paragraph 39 that:

“I do not see that the applicants suffer any loss if the interim relief stands declined. This Tribunal is competent to award costs to the applicant if they finally succeed.”

23. Possession is the 11th of point in law. That possession if lost, is lost forever, is an undeniable reality and restitution is only a myth. It is the very foundation of the equitable remedies and that is the reason for which Section 52 of the Transfer of Property of Act bars alienation pendente lite.

24. The order of DRT-II would shock the conscience of any right thinking person. The DRT is created in substitution of the Civil Court, to dispense procedure hassle free, expeditious and substantive justice. The administration of justice through the mechanism of tribunals is to ward off the menace of procedural injustice. Like a court of equity, the DRT need only look into the substantive and real justice. The concept of amendment of pleadings, a concept embodied in the CPC, can have no strict application so far as DRTs are concerned. Because Section 22 of the Recovery of Debts and Bankruptcy Act expressly excludes the application of the CPC. To put it in even more simpler terms, since the CPC has no application, concepts like amendment of pleadings can have no application. The Annexure A statement of accounts is part of the application for injunction and injunction was sought on the ground that the Petitioner’s account was wrongfully classified as NPA when the account was irregular for a mere 17 days instead of the minimum requirement of 90 days. Therefore, the entire proceedings under the SARFAESI Act is void ab initio. The DRT-II, Mumbai, failed to record these contentions of the Petitioner which is the core of his case. In doing so, the DRT acted in violation of the principles of natural justice, so too its duty to act fairly as is expected of a judicial tribunal.

25 In this Application the petitioner is seeking setting aside of the auctions illegally conducted under the SARFAESI Act and restoration of possession and other consequential remedies. The Auction purchasers are therefore are necessary parties and in their absence the reliefs sought for cannot be granted. They are therefore brought on the party array.

26. The orders of the DRT-II dated 21.01.2022 is therefore liable to be recalled/reviewed on the following among other:

6. GROUNDS

The grounds are elaborated in the statement of facts itself and therefore need not be repeated. Suffice to say that the order dated 21.1.2022 is vitiated by errors apparent on the face of the record.

A. The principle grievance of the Petitioner is that the contentions which his counsel had advanced came to be omitted to be recorded and, therefore, the order of this Court dated 21.1.2022 is one rendered void ab initio, being in violation of the first principles of natural justice. The Petitioner cannot assert a right for a decision in his favour even while on the merits of the case would lead to an irresistible conclusion in his favour, because a Court is free to err within its jurisdiction and even an erroneous decision is as binding as a right one. However, the Petitioner has a right to assert that his core contentions be recorded and dealt with by the Court. The failure of the Court to even record the Petitioner’s contention and the resultant non-consideration of his contentions, violate the doctrine of the right to be heard which certainly takes within its ambit, the contentions being considered. Had this Court considered and dealt with the Petitioners contentions and rejected them for even wrong reasons, then no review would lie, but only an appeal.

B. It is not open to the Petitioner to plead before the appellate court that the forum of original jurisdiction has not considered the plea of the Petitioner, and if he does so, the appellate forum is certainly duty bound to revert the Petitioner to the DRT-II, the court of first instance.

C. The primary duty of a Court/tribunal is to adjudicate upon the inter se rights and obligations between parties. Procedural law is an aid, a servant of justice. Where the plain application of law leads to injustice, the doctrine of equity is employed to undo the injustice arising out of the strict application of law. Injunction, an equitable remedy comes in aid of law, to subserve the ends of justice as its servant. Legal right, generally speaking, exist independent of equity. The absolute estate, right title, ownership, possession and enjoyment of the factory premises, land, plant and machinery, all vests in the Applicant, Rambo Fashions, as its lawful owner. The Respondent Bank asserts a right as a mortgagee. Therefore, the rights of the Applicant/Petitioner, in the worst scenario, is subject to a mortgage, which is a charge on the property. The Petitioner’s (Rambo Fashion’s) estate, right, title, ownership etc. do not extinguish assuming its that its hands are unclean. No one is liable to be contemned unheard. The Applicant/Petitioner indeed did make a mention of the various proceedings including writ petitions, SAs, even the OA filed by the Bank against him along with IA nos. 835/2021 and 1070/2021. Copies of the various writ petitions, SAs, OA or its judgements were produced. The DRT-II without perusing the documents which are part of the record and of which detailed reference was made, came to the conclusion that the Petitioner has come with unclean hands, is guilty of suppression of facts and is dishonest. The failure of the tribunal to peruse the records which are before it, and the coming to a conclusion that the he had concealed facts, when all facts were disclosed and all documents were produced, amount to an error apparent on the face of the record.

Hence the instant Review

7. RELIEF SOUGHT:

FOR THE REASONS STATED HEREINABOVE AND THOSE TO BE URGED AT THE TIME OF HEARING, IT IS MOST HUMBLY PRAYED THAT THIS HON’BLE TRIBUNAL MAY BE PLEASED TO:

declare that the common order dated 21.01.2022 in IA no. 835/2021 and IA no. 1070/2021 in SA no. 249/2018 does not contain the core submissions of the Petitioner’s counsel and thus rendered void ab initio and further that the order of the Court being a record of the Court it can only be corrected by an appropriate application before this court (DRT II) and not by means of an appeal;

Recall/review the order of this Court dated 21.01.2022 in IA no. 835/2021 and IA no. 1070/2021 in SA no. 249/2018, the same being rendered void ab initio being vitiated by errors apparent on the face of record;

any other order in favour of the Applicant that the Hon’ble Tribunal may kindly be passed as may be deemed fit and proper owing to the nature of present and still on-going circumstances ;

8. INTERIM ORDER AS PRAYED FOR :

That pending the hearing and final disposal of this Miscellaneous Application, this Hon’ble Tribunal may be pleased to:

Restore status quo ante, namely, to restore the possession of the Petitioner’s properties which the Respondent Bank falsely claim to be secured assets at its hands, took forceful possession and alienated/sold illegally invoking SARFAESI Act , and/or otherwise had deprived the Petitioner of its enjoyment, and further to restrain the Auction purchasers from alienating the properties they had purchased and from committing any waste, injury , loss and damage .

9. MATTER NOT PENDING WITH ANY OTHER COURT, ETC:

In a miscellaneous application in a pending case, this sort of entry has no relevance. This Hon’ble Tribunal ought to take judicial notice of this and undo the needless burden and mischief this sort of entry/requirement causes to the litigant public.

10. LIST OF ENCLOSURES

As per Index

Place: MUMBAI

Date : –

Advocate for Applicant Applicant

BEFORE THE HON’BLE DEBT RECOVERY TRIBUNAL – II

AT: MUMBAI

Misc. Application No. ________ of 2022

Interlocutory Application no. 835 of 2021

Securitisation Application no. 249 of 2018

Rambo fashion Limited & anr …Applicant/

Orig. Appellant

IN THE MATTER BETWEEN

Rambo Fashion Ltd & Anr. …Appellant

V.s

State Bank of India & Ors. …Respondents

AFFIDAVIT IN SUPPORT

May it please your Honour:-

I, Balasaheb Kaluram Bhintade, the Director of M/s. Rambo Fashions Ltd., the Applicant abovenamed having address at Plot no. 18C/506, Zenith Co-op Hsg. Soc. Ltd., Bhavani Nagar, Marol Maroshi Road, Andheri € , Mumbai – 400 059, on solemn affirmation states as under;

I am filing the present Application for Review of the common order dated 21.1.2022 in IA no. 835 of 2021 and 1070 of 2021 in SA no. 249/2018 preferred under Section 22(e) of the Recovery of Debts and Bankruptcy Act.

Whatever I have stated in the application for review is true and corrects to the best of my knowledge and believes it to be true.

Solemnly affirmed at Mumbai )

On this day of January, 2022 )

(Applicant/Appellant)

Before me:

BEFORE THE HON’BLE DEBT RECOVERY TRIBUNAL-II, AT: MUMBAI

Misc. Application No. ________ of 2022

Interlocutory Application no. 835 of 2021

Securitisation Application no. 249 of 2018

Rambo fashion Limited & anr …Applicant/

Orig. Appellant

IN THE MATTER BETWEEN

Rambo Fashion Ltd & Anr. …Applicants

V.s

State Bank of India & Ors. …Respondents

=======================

Affidavit in Support of

Application for Review

==========================

Dated _____ day of January’ 2022

MARIA NEDUMPARA

NEDUMPARA & NEDUMPARA ADVOCATES

Advocate for Applicant

502, 5th Floor, Rehman House Premises CHS, Nadirshah Sukhia Street,

Fort, Mumbai- 400 001

(Mobile: 9820535428/9447165650)

Email id :nedumparaassociates@gmail.com

BEFORE THE HON’BLE DEBT RECOVERY TRIBUNAL-II, AT: MUMBAI

Misc. Application No. ________ of 2022

Interlocutory Application no. 835 of 2021

Securitisation Application no. 249 of 2018

Rambo fashion Limited & anr …Applicant/

Orig. Appellant

IN THE MATTER BETWEEN

Rambo Fashion Ltd & Anr. …Applicants

V.s

State Bank of India & Ors. …Respondents

=======================

Application for Review of the common order dated 21.1.2022 in IA no. 835 of 2021 and 1070 of 2021 in SA no. 249/2018 preferred under Section 22(e) of the Recovery of Debts and Bankruptcy Act.

==========================

Dated _____ day of February’ 2022

MARIA NEDUMPARA

NEDUMPARA & NEDUMPARA ADVOCATES

Advocate for Applicant

502, 5th Floor, Rehman House Premises CHS, Nadirshah Sukhia Street,

Fort, Mumbai- 400 001

(Mobile: 9820535428/9447165650)

Email id :nedumparaassociates@gmail.com

‘Tribunalisation is trivialisation of Justice’ – abolish it.Review petition of Rambo Fashions Ltd would convince even doubting Thomas’s

2. PARTICULARS OF RESPONDENTS

i) Names of the Respondents : Same as given in the cause title above

3. JURISDICTION OF TRIBUNAL:

4. LIMITATION:

Advocate for Applicant

Advocate for Applicant

Disclaimer: