BANK OF INDIA versus YADAV CONSULTANCY SERVICES (P) LTD. AND ANR.

Citation: [2017] 12 S.C.R. 67 · Decided: 05-12-2017 · Supreme Court of India · Bench: KURIAN JOSEPH · Disposal: Appeal(s) allowed
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Judgment (excerpt)

[2017] 12 S.C.R. 67 
BANK OF INDIA 
v. 
YADAV CONSULTANCY SERVICES (P) LTD. AND ANR. 
(Civil Appeal No. 5150 of2017) 
DECEMBER 05, 2017 
[KURIAN JOSEPH AND R. BANUMATHI, JJ.] 
Recovery of Debts due to Banks and Financial Institutions 
Act, 1993 -
s. 3/A - Suit for recovery, filed by Bank against debtors 
A 
B 
- Recovery proceedings - Attachment of property followed by 
C 
auction - Issuance of certificate of sale in favour of auction 
purchasers - Since, Certificate Debtors creating obstruction in 
delivery of possession of the property to auction purchasers, first 
respondent appointed as Court Commissioner - Direction to the 
Bank to pay sen1ice charges to first respondent - Even though the 
Bank had decided to discharge the Court Commissioner with effect D 
from 08.05.2007 and the Bank also paid charges of first respondent 
upto 08.05.2007, and possession of the property was handed over 
to the auction purchasers, the Recovery Officer directed the Bank 
to continue to pay the charges to first respondent - Jn appeal, 
recovery officer directed the first respondent to take steps for 
E 
recovery of its charges from auction purchasers from 08.05.07 -
First respondent after pursuing the matter before DRT, DRAT and 
High Court, sought arbitration before Micro, Small and Medium 
Enterprises Development Facilitation (MSMEDF) Council - Award 
passed by MSMEDF Council directing the Bank to pay 
Rs.J,62,82,0791- with interest @ 24% to first respondent - Upheld 
F 
by the District Judge and the High Court - On appeal, held: Order 
of the Recovery Officer makes it clear that the continuation of the 
services of the first respondent for safeguarding the auctioned 
property was only on behalf of auction purchasers and that only 
the auction purchasers were bound to pay the charges for security 0 
sen1ices to the first respondent - Bank was under no obligation to 
pay the charges to the first respondent in any case after 
24.07.2008(order of DRT) - High Court was not right in saying 
that DRT had no jurisdiction to entertain the appeal and, thus, the 
order would be non est - When the parties were vigo1vusly pursuing 
the matter before DRT, DRAT, having trappings of the civil court, 
H 
67 
68 
A 
B 
c 
D 
E 
SUPREME COURT REPORTS 
[2017] 12 S.C.R. 
and also before the High Court, first respondent was not right in 
approaching MSMEDF Council - Award passed by MSMEDF 
Council, as affirmed by District Court and also by High Court not 
sustainable - Micro, Small and Medium Enterprises Development 
Act, 2006. 
Allowing the appeal, the Court 
HELD: 1.1 The order of the Recovery Officer makes it 
clear that the continuation of the services of the first respondent 
for safeguarding the auctioned property was only on behalf of 
auction purchase1·s and that only the auction purchasers were 
bound to pay the charges for security services to the first 
respondent. The first respondent's duty as "Court 
Commissioner" had ceased to exist on 13. ! 1 .2006. After 
13.11.2006 or at least after 24.07.2008 (Order of IJRT), for th;! 
services of respondent No. 1, if any, were availed by the auction 
purchasers, only the auction purchasers are liable to pay the said 
charges to respondent No. 1. The appellant Bank, therefore, was 
under no obligation to pay the charges to the first respondent in 
any case after 24.07.2008. The High Court has not kept in view 
the order of DRT dated 24.07.2008 and the order of the Recovery 
Officer dated 25.03.2009. The High Court was not right in saying 
that DRT had no jurisdiction to entertain the appeal and, therefore, 
the order would be non est. [Para 10] [75-D, G-H; 76-A, D-E] 
1.2 After the order of the Recovery Officer, respondent 
No. 1 filed application before DRT seeking payment of charges 
for security services from the auction purchasers as directed by 
F 
DRT in its order which clearly indicates that the first respondent 
had accepted the said order of DRT and also acted upon it. Be it 
noted, the proceedings of the Recovery Officer in which all the 
parties participated proceeded mainly on tht: basis of the order 
of DRT. The High Court held that DRT had no jurisdiction to 
entertain Appeal, the order dated 24.07.2008 passed by it would 
G 
be 11011 est and hence must be ignored." The High Court did not 
keep in view that the respondent No. 1 had not challenged the 
order of DRT; and had acquiesced to the said order and also acted 
upon it. The su_bsequent proceedings clearly show that respondent 
N
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