2023 (9) TMI 1562 - HC - Indian Laws

Recovery of the amount due from the borrower - Recovery of Debts and Bankruptcy Act, 1993 - HELD THAT - The respondents' limited contention before this Court was regarding an error committed by the learned DRAT in not noticing that the amount, as directed to be paid, already stood discharged. In this context, this Court had observed that if there was a factual error, the respondents ought to have approached the learned DRAT. The respondents had reserved the right to do so as is apparent from paragraph no.3 4 of this Court's order dated 17.09.2020. In terms of the order dated 04.08.2020, a recovery certificate was issued by the learned DRT, which was sought to be enforced by the recovery officer. There is some controversy before the recovery officer as to who could represent the TFCI in that case. Apparently, Edelweiss's counsel had sought to represent the TFCI in those proceedings as the recovery certificate was issued in favour of the TFCI. The respondents have sought to raise another controversy in regard to whether the recovery certificate issued in favour of the TFCI could be enforced in favor of Edelweiss. Although the scope of controversy now before the learned DRAT is limited to the review petition confined to the amount of the recovery certificate. It appears that the respondent has sought to expand the scope of controversy before the learned DRAT and has filed an application under section 340 of the Code of Criminal Procedure, 1973 (hereafter 'CrPC') being Miscellaneous Application No.33/2021. According to the petitioner, the said application is not maintainable as Appeal No. 280/2019 has already been disposed of. It is not apposite to set aside the proceedings relating to the application filed by the respondents under Section 340 of the Cr.PC as it would be for the learned DRAT to first examine whether it has any jurisdiction to proceed with the said application - the present petition is disposed of with the direction that the learned DRAT will, in the first instance consider the petitioner's challenge to the maintainability of the application (Miscellaneous Application No. 33/2021) as a preliminary question, before proceeding further.

Summary

Issues:
1. Quashing of proceedings in MA No. 33/2021 in Appeal No. 280/2019
2. Set aside the Order dated 01.10.2021 passed by the DRAT
3. Direct DRT-1 to dispose of OA No. 280/1999 within a reasonable time
4. Costs of the petition to be allowed to the Petitioner
5. Dispute regarding recovery of financial facilities extended to the borrower
6. Restoration of OA 280/1999 dismissed in default
7. Appeal before DRAT and subsequent directions
8. Writ petition filed before the High Court regarding recovery certificate
9. Enforcement of recovery certificate by the recovery officer
10. Controversy over representation of TFCI in enforcement proceedings
11. Review petition filed before DRAT on various grounds
12. Scope of review limited to the amount directed to be paid
13. Filing of application under section 340 of CrPC
14. Jurisdiction of DRAT to proceed with the application under section 340 of CrPC

Analysis:
1. The petitioner sought a writ of mandamus to quash the proceedings in MA No. 33/2021 in Appeal No. 280/2019 and set aside the DRAT's order dated 01.10.2021. They also requested DRT-1 to dispose of OA No. 280/1999 in a reasonable time. The case involved a dispute over recovery of financial facilities extended to a borrower, leading to dismissal and subsequent restoration of OA 280/1999.

2. The DRAT directed the issuance of a recovery certificate for a specific amount, leading to a writ petition before the High Court. The respondents contested the recovery amount and withdrew the petition with liberty to file a review before the DRAT. The High Court observed that any factual errors should be addressed at the DRAT level.

3. A recovery certificate was issued by the DRT, triggering a controversy over representation in enforcement proceedings. The DRAT allowed the petitioner's application for substitution and considered a review petition regarding the recovery amount. The DRAT's order on the review petition was limited to the amount directed to be paid, with no further steps taken by the respondents to challenge it.

4. The respondents filed an application under section 340 of CrPC, which raised questions about the jurisdiction of the DRAT. The High Court directed the DRAT to first consider the challenge to the application's maintainability before proceeding further. The court emphasized expeditious disposal of OA No. 280/1999 within three months. All rights and contentions regarding the application under section 340 of CrPC were reserved.