Pegasus Assets Reconstruction Pvt. Ltd. v. M/s. Punjab Tractor & Ors.

1. There are several reasons why we are not inclined to interfere with the impugned order passed by the Debt Recovery Appellate Tribunal (DRAT).

2. The first reason is that the order-in-original was passed by the DRAT on 07.11.2012. The said order disposed of the original application filed by the Central Bank of India. The petitioner herein by way of the Assignment Deed dated 22.03.2013 stepped into and acquired rights from Central Bank of India. Subsequently, they filed an appeal before the DRAT on 03.07.2013. The said appeal was belated and delayed by 192 days and has been dismissed by the DRAT for the said reason, vide order dated 25.03.2014. The order dated 25.03.2014 2014:DHC:3860-DB has not been challenged in the present writ petition, but, order dated 28.05.2014 passed by the DRAT dismissing the review application is the subject matter of the challenge before us. Nevertheless, it is obvious that there was delay in filing of the appeal before the DRAT. It is also apparent that possibly Central Bank of India, the original applicant did not want to prefer any appeal and had accepted the order dated 07.11.2012.

3. We first examine the explanation and justification for delay.

4. Learned counsel for the petitioner has submitted that there was delay in execution of the Assignment Deed and in fact, the original transaction between the Central Bank of India and the petitioner herein was made on 22.03.2013. No papers in support are on record, though it is apparent that the assignment was accepted by Debt Recovery Tribunal (DRT) vide order dated 22.05.2013. Delay between 22.03.2013 and 22.05.2013 is not explained. No cause or reason relating to this period of inaction between 22.03.2013 and 22.05.2013 is palpable and ascertainable.

5. Learned counsel for the petitioner has submitted that the property No. A4/40, Paschim Vihar, Delhi, which was the subject matter of mortgage in OA No. 75/1998 titled Central Bank of India Vs. M/s. Punjab Tractors was also subject matter of a second mortgage in SA No. 03/2006, M/s. Cogen Projects (I) Ltd. Vs. Allahabad Bank. The petitioner herein had also purchased rights of Allahahad Bank pursuant to the Assignment Deed executed in March, 2007. It is stated that Rs. 8 Crores is due and payable and has to be recovered from the sale of the mortgage property in this case. SA No. 3/2006 were separate proceedings and relate to a separate debt. The order passed by the DRAT and the order passed today, will have no bearing on the debt due and payable and which was subject matter of SA No. 3/2006. Said submission has no connect and effect on the issue of delay and cause thereof, raised in this petition.

6. Learned counsel for the petitioner submits that the present petitioner, on coming to know about OA No. 75/98 and as they were assignees of Allahabad Bank had filed an application for impleadment in OA No. 75/98. He refers to the order passed by the High Court in Writ Petition No. 6973/2012 and also the order passed by the DRT on the application filed by the petitioner herein also dated 07.11.2012 to the effect that final decree in OA No. 75/98 dated 07.11.2012 would be taken only after the application for impleadment filed by the petitioner herein before the DRAT was decided. The said application subsequently was dismissed as infructuous vide order dated 22.09.2013 by the DRAT. The pendency of the aforesaid application is of no relevance or consequence as far as filing of the appeal against final adjudication order dated 07.11.2012 was concerned. This explanation does not and would not explain and justify the delay. The two proceedings were separate and independent.

7. We may have taken a sympathetic and lenient view in the matter of limitation, but, we find that the DRT in paragraph 24 of their order dated 07.11.2012 had recorded the following facts to award interest @ 12% per annum. The said paragraph is reproduced for the sake of convenience:- “24. The applicant has claimed interest @ 20.75% p.a. with quarterly rest w.e.f. 24.2.1998. Even though, this is the contractual rate, as far as pendente lite and future interest is concerned, it is excessive. A substantial portion of the amount comprises of interest. The original borrower Gurdial Singh expired. Thereafter, Smt. Kartar Kaur was a party and she also expired. Having due regard to the facts and circumstances of the case, I am of the opinion that interest @ 12% p.a. shall be reasonable and adequate and proper in this case. D[1], as the principal borrower and D[2] and D[3] as the guarantors are liable. D[4] to D[6] stand discharged. All the interim applications are closed in view of the above”.

8. Thus, DRT had given several reasons for awarding interest pendente lite and future @ 12% per annum, observing that this was reasonable and adequate, firstly, as the original borrower Gurdial Singh had expired. Thereafter, Kartar Kaur also expired. It was accepted that the borrower had paid substantial part of the principal amount. The principal amount borrowed was Rs. 1.[3] Crores out of which Rs. 75 lakhs was paid before the date of filing of the original application. Recovery proceedings had been filed for Rs. 1.27 Crores, which included interest.

9. In view of aforesaid facts, we are not inclined to entertain this writ petition in exercise of power of judicial review. There are a number of defects and defaults, on the part of the petitioner, which in the facts of the present case should not be overlooked and ignored.

10. With the aforesaid observations, the writ petition is dismissed.

SANJIV KHANNA, J

V. KAMESWAR RAO, J

AUGUST 12, 2014