SC quashes high court order on auction sale

Written by Indu Bhan | Indu Bhan | Updated: Sep 13 2013, 10:01am hrs
Auction purchaser

The Supreme Court, in the case GM, Sri Siddeshwara Co-operative Bank Ltd vs Sri Ikbal, has said that a high court while exercising its writ powers should not quash an auction sale conducted under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. In this case, Ikbal had mortgaged his immovable property against a housing loan. The borrower was a chronic defaulter and therefore the bank after issuing notice auctioned and sold the property in his presence.

After four years, Ikbal challenged the sale certificate issued in favour of the auction purchaser in the Karnataka High Court. The HC while setting aside the auction sale and directing the bank to conduct fresh sale made certain observations against the bank officer and directed its registrar to refer the matter to the Superintendent of Lokayukta police at Bijapur for further action in accordance with law. The bank and the auction purchaser moved the Supreme Court, which stated that the Act provided a remedy for the borrower to appeal in the Debts Recovery Tribunal and there was no reason to bypass it. It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the HC should entertain a petition filed under Article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective alternative remedy by filing application, appeal, revision, etc, the apex court stated, adding where a statute provides efficacious and adequate remedy, the HC will do well in not entertaining a petition under Article 226. On misplaced considerations, statutory procedures cannot be allowed to be circumvented.

RSRTC wins labour dispute

The Supreme Court, in the case Rajasthan State Road Transport Corporation vs Satya Prakash, has quashed the judgment of the Rajasthan High Court, which upheld the industrial tribunal award directing the former to reinstate an employee who was found guilty of misconduct. In this case, Prakash was working as a bus conductor on daily wages for three months. During his short span of service, he had indulged in corruption, came in drunken state for work and used abusive language against the staff. An FIR was also lodged against him after a flying squad led by the Judicial Magistrate had found that the bus conductor had collected the fare from all the passengers but had issued less tickets. This led to his dismissal from service. He chose to file a civil suit in a wrong court at Jaipur. The civil court held that the misconduct had been proved, and the termination could not be faulted. But the very court held that it did not have the territorial jurisdiction to decide the suit. When the employee filed the complaint raising technical objections under the Industrial Disputes Act, the tribunal ruled that he was illegally dismissed. Even the HC endorsed the industrial tribunal award.

On appeal, the Supreme Court stated that there was no question of his being in service even for one continuous year, since he had obviously not completed 240 days of service. During this short span of service there were various allegations against him. The corporation could have discontinued him from service as it is, since he was a daily wager.

MTNL appeal dismissed

The Supreme Court had dismissed MTNLs plea seeking handing over of vacant possession of a plot admeasuring 5,723.10 sq mt acquired by the Maharashtra government in 1973 for a telegraph office in Mumbai. In this case, since some portions of the acquired land was occupied by slum dwellers, the Special Land Acquisition Officer (LAO) had sent letters to the officers of the Bombay Telephones to rehabilitate the hutment dwellers or pay rehabilitation compensation. Correspondence between the parties was of no use. The Municipal Corporation of Greater Mumbai sanctioned redevelopment of the land for rehabilitation of slum dwellers who formed a housing society. The society signed development agreement with M/s Shree Ahuja Properties in 2003 for development of the plots. After three years, the Slum Rehabilitation Authority passed an order in 2008 directing the builder to allot built up area measuring 1,706 sq mt to MTNL free of cost. Since the Bombay HC also directed Shree Ahuja Properties to hand over the built up area of 1,706 sq mt rather than claimed 5,723.10 sq mt, MTNL after having virtually agreed to take 1,706 sq mt moved the apex court.

The top court also held MTNL guilty of not coming to this court with clean hands. It observed that after 37 years of initiation of the acquisition proceedings in (1973) and 28 years of the pronouncement of the award by the land acquisition officer, the MTNL moved the HC seeking handing over of vacant possession of the land admeasuring 5,723.10 sq mt. The appellant (MTNL) knew that it was on a weak wicket. It had filed the writ petition after almost three decades of pronouncement of the award and there was no tangible explanation for the delay, it added.