2016 (3) TMI 333 - HC - Indian Laws

Court allows appeal under Section 30 of RDDB Act, emphasizes broad interpretation of 'order'

RITESH OIL MILLS P LTD AND 1 Versus DENA BANK AND 2

The court held that the appeal under Section 30 of the RDDB Act was maintainable, emphasizing the broad interpretation of the term 'order' to include any ... Maintainability of appeal - whether against the order dated 22.9.2009 passed by the Recovery Officer an appeal under Section 30 of the RDDB Act was maintainable before the DRT? - Recovery of Debts Due to Banks and Financial Institution - Held that:- Undoubtedly the order passed by the Recovery Officer on 22.9.2009 has vital bearing on the rights of the petitioners. As long as the order that Recovery Officer may pass in exercise of powers under Sections 25 to 28 of the RDDB Act and which acts prejudicially or is injurious to a person, such person would be a person aggrieved. An appeal at the hands of such person would be maintainable under Section 30 of the Act. As noticed earlier, DRT had dismissed the appeal after taking into account the objections of the petitioners also. Since it is pointed out that the bank is attempting to recover the dues of the defaulters since long without success, we would instead of relegating the proceedings to the DRT, place it before the DRAT for decision on the appeal of the petitioners on merits. We would request the DRAT to give priority consideration to such appeal and dispose of the same preferably before 31.8.2016. The interim formula granted by this Court earlier shall inure till 31.8.2016. If thereafter the appeal is not disposed of, it would be open to the petitioners to apply before the DRAT for further relief. Issues Involved:1. Maintainability of the appeal under Section 30 of the RDDB Act against the order of the Recovery Officer.2. Alleged irregularities in the auction process, including the time gap between proclamation and auction, the use of a stale valuation report, and the validity of the attachment order.3. The interpretation of the term 'order' under Section 30 of the RDDB Act.Detailed Analysis:1. Maintainability of the Appeal under Section 30 of the RDDB Act:The petitioners challenged the decision of the DRAT, which dismissed their appeal on the ground that the order of the Recovery Officer dated 22.09.2009 was not appealable under Section 30 of the RDDB Act. The petitioners argued that the term 'order' under Section 30 should be interpreted broadly to include any decision by the Recovery Officer that adversely affects the parties. The court held that the scope of appeal under Section 30 is sufficiently wide to include any order passed by the Recovery Officer that impacts the rights of the appellant. The court emphasized that Section 30 starts with a non-obstante clause, allowing an appeal against any order made by the Recovery Officer under the Act, irrespective of the remedies available under the Income-tax Act's Second Schedule. The court concluded that the DRAT erred in dismissing the appeal on the ground of non-maintainability.2. Alleged Irregularities in the Auction Process:The petitioners raised three main contentions regarding the auction process:- The proclamation notice for the auction was affixed less than 30 days before the auction date, violating the statutory period.- The property was sold based on a stale valuation report that was not served to the petitioners.- The attachment order, which was more than three years old, had expired, making the auction invalid.The DRT initially dismissed the appeal, noting that these issues were not raised before the Recovery Officer. The Tribunal also considered the merits of the contentions, stating that the petitioners failed to demonstrate substantial injury due to the irregularities and questioned the necessity of a formal attachment for mortgaged property. The court noted that the DRT had already examined these objections, and therefore, instead of remanding the case to the DRT, it directed the DRAT to consider the appeal on merits.3. Interpretation of the Term 'Order' under Section 30 of the RDDB Act:The court analyzed various judicial precedents and legal interpretations to determine the meaning of the term 'order' under Section 30. It referred to the Supreme Court's observations in the case of Delhi High Court Bar Association, which upheld the right to appeal against any order of the Recovery Officer. The court also considered the definitions and interpretations of the term 'order' in different legal contexts, concluding that an order need not finally decide the rights and liabilities of the parties to be appealable. The court emphasized that any order by the Recovery Officer that has a substantial potential to adversely affect a party is appealable under Section 30.Conclusion:The court concluded that the DRAT committed an error in dismissing the appeal on the ground of non-maintainability. It directed the DRAT to consider the appeal on merits, emphasizing that the term 'order' under Section 30 should be interpreted broadly to include any decision by the Recovery Officer that impacts the rights of the parties. The court requested the DRAT to prioritize the appeal and dispose of it by 31.08.2016, extending the interim relief granted earlier until that date.