WRITTEN ARGUMENT of the Certificate Debtors No. 1, 2, and 3

 

BEFORE THE Ld. RECOVERY OFFICER
DEBTS RECOVERY TRIBUNAL – I, KOLKATA

 

R.C. No. 64 of 2024
(Arising out of O.A. No. 251 of 2009)

 

In the matter of ;

Bank of Baroda

… Certificate Holder Bank

 

-Versus-

 

M/s. Apurba Overseas Pvt. Ltd. & Ors.

… Certificate Debtors

 

WRITTEN ARGUMENT

{of the Certificate Debtors No. 1, 2, and 3};

 

I. NATURE AND LIMIT OF JURISDICTION

 

1. At the outset, it is respectfully submitted that the present proceedings arise out of a Recovery Certificate issued under Section 19(22) of the Recovery of Debts and Bankruptcy Act, 1993 (hereinafter referred to as “the RDB Act”). The jurisdiction of the Learned Recovery Officer in such proceedings is strictly executory in nature and is confined to enforcement of the Recovery Certificate as issued by the Hon’ble Tribunal.

 

2. It is a settled principle of law that execution proceedings cannot go behind the decree. The Recovery Officer derives jurisdiction only from the Recovery Certificate, which in turn flows from the pleadings and reliefs claimed in the Original Application. The Recovery Officer cannot enlarge, vary, modify or introduce any new asset, property or security at the stage of execution.

 

3. Therefore, any recovery action, attachment, appointment of Receiver or sale can only be undertaken in respect of those properties which were specifically pleaded in the Original Application, adjudicated by the Tribunal, and crystallised in the Recovery Certificate. Any deviation therefrom would be wholly without jurisdiction.

 

II. NON-COMPLIANCE WITH MANDATORY STATUTORY PROCEDURE

 

4. The Certificate Holder Bank has failed to comply with the mandatory procedure prescribed under Sections 25 to 29 of the RDB Act read with the Second Schedule to the Income Tax Act, 1961, which governs all recovery proceedings before the Recovery Officer.

 

5. Service of demand notice is the foundational requirement before initiation of any coercive recovery proceedings. In the present case, the Certificate Debtors categorically deny having received any valid demand notice in accordance with law.

 

6. The Certificate Holder Bank has not produced any acknowledgment card, postal receipt, tracking report, certificate of service, or proof of affixture to demonstrate lawful service of demand notice. In absence of valid service, the entire recovery action is vitiated and unsustainable in law.

 

7. Further, attachment of immovable property is a condition precedent to any proclamation of sale or appointment of Receiver under Rules 48 to 53 of the Second Schedule to the Income Tax Act. In the present case, no attachment order has been passed by the Learned Recovery Officer.

 

8. In absence of a lawful attachment order, the prayer for appointment of Receiver / Special Officer and proclamation of sale is premature, illegal and without jurisdiction, and therefore liable to be rejected in limine.

 

III. ABSENCE OF ANY MORTGAGE OR SECURITY INTEREST

 

9. It is an admitted position that the Certificate Holder Bank does not possess any registered mortgage deed, memorandum of deposit of title deeds, or any document evidencing creation of mortgage or charge over the alleged scheduled property.

 

10. It is further admitted that no original title deeds of the alleged property were ever deposited with the Bank with intent to create security. In absence of deposit of original title deeds, no equitable mortgage under Section 58(f) of the Transfer of Property Act, 1882 can exist in the eyes of law.

 

11. The entire reliance of the Certificate Holder Bank is upon an affidavit / declaration dated 22.11.2004 allegedly executed by Certificate Debtor No. 4. It is settled law that an affidavit or declaration is not an instrument of transfer and does not create or confer any right, title or interest in immovable property.

 

12. A mere declaration of ownership, even if assumed to be genuine, cannot substitute the mandatory statutory requirement of creation of mortgage or charge. Therefore, the alleged property never became a secured asset of the Bank.

 

13. In absence of any legally enforceable security interest, the Bank has no right to seek appointment of Receiver or sale of the alleged property, as such drastic measures can be resorted to only when a valid mortgage or charge exists.

 

IV. PROPERTY SOUGHT TO BE PROCEEDED AGAINST IS OUTSIDE THE ORIGINAL APPLICATION

 

14. The immovable property now sought to be attached, placed under receivership and sold does not find place anywhere in the pleadings, schedules or reliefs of the Original Application being O.A. No. 251 of 2009.

 

15. The Original Application discloses entirely different properties as alleged collateral security, as described in Schedule-X and Schedule-Y therein, which differ materially in area, measurement, Dag numbers and municipal description from the present Schedule.

 

16. The present Schedule refers to a property bearing Premises No. 4519, Narendrapur Station Road, Sonagaon 1 No. Gate, Teghoria, which is completely absent from the Original Application and the Recovery Certificate.

 

17. The attempt of the Certificate Holder Bank to introduce a new and altered property at the execution stage amounts to enlarging the scope of the decree, which is impermissible in law.

 

18. The Learned Recovery Officer, being an executing authority, lacks jurisdiction to proceed against any property which was not part of the Original Application and the Recovery Certificate.

 

V. LOSS OF IDENTITY OF PROPERTY — IRRECONCILABLE DESCRIPTIONS

 

19. A bare examination of the Bank’s own records reveals three materially different descriptions of property, namely: (i) the description in the Original Application; (ii) the description in the alleged affidavit dated 22.11.2004; and (iii) the description in the present Schedule.

 

20. The description in the Original Application refers to two separate parcels of land measuring 60 Satak and 89.44 Satak respectively, while the alleged affidavit refers to a composite land measuring 149.44 Satak, and the present Schedule refers to only 44 Decimal of land.

 

21. The Dag numbers, area, situational particulars and municipal identification differ materially and are not reconcilable. No document has been produced to demonstrate how or when the alleged composite property was fragmented or re-identified into the present Schedule.

 

22. Certainty of identity of immovable property is a sine qua non for attachment, appointment of Receiver or sale. Where the identity of the property itself is doubtful, no coercive recovery action can be sustained in law.

 

23. The shifting and inconsistent descriptions adopted by the Bank render the entire recovery process arbitrary, vague and unsustainable.

 

VI. THIRD-PARTY PROPERTY OF CERTIFICATE DEBTOR NO. 4

 

24. The present Schedule itself admits that the property stands recorded in the name of Certificate Debtor No. 4, an independent individual.

 

25. Certificate Debtor No. 4 is not a mortgagor, not a guarantor and not a security provider in respect of the loan facilities availed by Certificate Debtors Nos. 1 to 3.

 

26. No document has been produced to demonstrate that Certificate Debtor No. 4 ever voluntarily offered his property as collateral or that any charge was created over the said property.

 

27. It is settled law that third-party property cannot be attached or sold in recovery proceedings unless a lawful mortgage or charge is established. Mere impleadment as a Certificate Debtor does not render independent property liable to execution.

 

28. Proceeding against the property of Certificate Debtor No. 4 in the present proceedings is therefore wholly without jurisdiction.

 

VII. VALUATION REPORT — LEGALLY NON-EST

 

29. The Certificate Holder Bank has relied upon a valuation report allegedly obtained after issuance of the Recovery Certificate. The said valuation report bears inconsistent dates and pertains to a property alien to the Recovery Certificate.

 

30. No notice of valuation was served upon the Certificate Debtors, no joint inspection was conducted, and no title verification was undertaken prior to valuation.

 

31. Valuation presupposes existence of a lawful mortgage or charge. In absence thereof, the valuation report is legally meaningless and cannot cure the foundational defect of lack of security interest.

 

 

VIII. WITHOUT PREJUDICE — BONAFIDE SETTLEMENT EFFORT

 

32. Without prejudice to the aforesaid objections, it is submitted that the Certificate Debtors have submitted a One-Time Settlement proposal which is pending consideration, and substantial payment has already been made and accepted by the Bank.

 

33. Continuation of coercive recovery proceedings during pendency of bona fide settlement negotiations would cause irreparable prejudice and frustrate the possibility of amicable resolution.

 

IX. CONCLUSION

 

34. The cumulative effect of the above facts is that there exists no mortgage, no attachment, no identity of property, and no jurisdiction to proceed against the present Schedule.

 

35. The Bank is attempting to convert an unsecured debt into a secured one at the execution stage, which is impermissible in law.

 

36. The impugned application is therefore wholly without jurisdiction, procedurally illegal and liable to be rejected in limine.

 

PRAYER

 

For the reasons stated above, it is most humbly prayed that this Hon’ble Recovery Officer may be pleased to:

 

a)    Reject the application seeking appointment of Receiver / Special Officer;

 

b)   Reject the prayer for proclamation of sale;

 

c)    Declare that the present Schedule property is not executable under RC No. 64 of 2024;

 

d)   Keep recovery proceedings in abeyance pending decision on the OTS proposal;

 

e)    Pass such further or other order(s) as may be deemed fit and proper.

 

 

 

 

 

Before the Hon’ble Recovery Officer

In the Debts Recovery Tribunal Kolkata–1,

9^th Floor, Jeevan Sudha Building, 42-C, Jawahar Lal Nehru Road, Kolkata – 700071

 

RC/64/2024

in

OA/251/2009

 

In the matter of;

Bank of Baroda,

                                 ________Applicant/CHB

 

-        Versus–

 

M/s. Apurba Overseas Private Limited and Others,

                                 ________Defendants/CD

 

 

 

 

WRITTEN ARGUMENT

OF THE CERTIFICATE DEBTOR NO. 1, 2, & 3, M/S. APURBA OVERSEAS PRIVATE LIMITED & OTHERS;

 

 

 

 

Advocate-On-Record;

 

Ashok Kumar Singh, Advocate

High Court Bar association Room No. 15, High Court Calcutta Mobile Number : 9883070666 / 9836829666 Email : aksinghadvocate@rediffmail.com