2013 (7) TMI 1068 - HC - Companies Law

Summary

Issues involved: Challenge to order passed by recovery officer under Recovery of Debts due to Banks and Financial Institutions Act, 1993; Jurisdiction of High Court to entertain challenge despite availability of appeal u/s 30 of said Act; Adjudication on possession vs. title by recovery officer; Validity of order of attachment by recovery officer.

The High Court of Calcutta heard a case where the writ petitioners contested an order issued by a recovery officer under the Recovery of Debts due to Banks and Financial Institutions Act, 1993, alleging lack of jurisdiction. The petitioners claimed that despite being appellable u/s 30 of the Act, the order could be challenged in the High Court. The respondent bank had initiated proceedings under Section 19 of the Act, obtained a certificate, and applied for execution of the same, leading to an order of attachment on an immovable property. The petitioners, who had purchased the property at a court sale in 2007, sought to annul the attachment, asserting lack of knowledge regarding the bank's interest in the property. The recovery officer's order was challenged on grounds of exceeding jurisdiction by delving into title disputes, which was beyond the officer's authority.

The petitioners cited legal precedents to support their argument that a writ of certiorari could be issued when the jurisdiction of a quasi-judicial authority is questioned, even if other remedies are available. They also relied on a judgment emphasizing that a recovery officer should only assess possession, not title, of the property in question. The recovery officer's actions were deemed beyond jurisdiction as they involved adjudication on title, which was not within the officer's purview. The High Court, therefore, set aside the recovery officer's order and the attachment, noting that the officer had overstepped authority and disregarded a previous court sale of the property.

The Court allowed the writ petitions, setting aside the recovery officer's order and the attachment. The respondent bank's claim to the property was deemed invalid due to the property belonging to the petitioners at the time of attachment. The petitioners, if able to clarify the circumstances of the property sale during ongoing court proceedings, would have been entitled to substantial costs. Ultimately, no costs were awarded in the case.