Introduction: This case study explores the legal proceedings in the matter of Simplex Housing Projects Ltd. (the SA applicant) vs. State Bank of India (the Respondent Bank) before the Debts Recovery Tribunal (DRT) in Jaipur. The case focuses on the application filed by the Education Committee of Maheshwari Samaj (Society) as the Auction Purchaser to be impleaded as a necessary party to the ongoing proceedings.
Background: On 22.08.2023, an auction was conducted, and the Education Committee of Maheshwari Samaj (Society) emerged as the highest bidder, offering an amount of Rs. 63,07,00,000/- and depositing an initial amount of Rs. 15,88,00,000/-. They raised concerns that any decision made by the DRT in this matter could adversely affect their interests and sought to be impleaded as a necessary party, invoking the provisions of Order 1, Rule 10 of the Civil Procedure Code (C.P.C).
Legal Arguments: The Counsel for the SA applicant argued that the impleadment was necessary to safeguard the Society’s rights. They also filed a case before the Rajasthan High Court on 04.09.2023 (CW. 14100/2023) against the Respondent Bank. The Respondent Bank, represented by its counsel, opposed the impleadment, stating that the Society could only participate as an intervener since they had no grounds to challenge the proceedings.
Key Points and Findings:
- Auction Deposit: The IA applicant (Education Committee of Maheshwari Samaj) deposited Rs. 15,88,00,000/- after winning the auction, where the highest bid was Rs. 63,07,00,000/-. This indicated a substantial financial interest in the outcome of the case.
- Lack of Disclosure: The Respondent Bank failed to disclose the actions initiated by the Directorate of Enforcement regarding the mortgaged property, even though they were aware of it since 19.02.2018. This information was brought to light through an “Additional Affidavit” filed by the Respondent Bank on 08.09.2023, under the direction of the DRT.
- High Court Petition: The Auction Purchaser (IA applicant) had also filed a writ petition before the Rajasthan High Court, but the outcome of the High Court’s decision was not mentioned in the DRT’s order.
Decision:
The Presiding Officer made the following key decisions:
- Impleadment: The IA applicant’s prayer to be impleaded as a necessary party to the proceedings of this SA was allowed. This decision was made due to the significant amount involved and the involvement of the Enforcement Directorate.
- Future Proceedings: The SA applicant was directed to provide a copy of the SA to the IA applicant within three days. The IA applicant was also instructed to file a reply to the SA within one week, given their status as a newly impleaded party.
- Sale Registration: The request from the Respondent Bank to allow the registration of the sale was kept pending. This decision was influenced by the lack of response from the Enforcement Directorate and the ongoing High Court proceedings.
The case was scheduled for a future hearing on 25.09.2023 to consider the order of the High Court and compliance with the DRT’s directives.
Conclusion: This case study outlines the legal proceedings involving Simplex Housing Projects Ltd. and State Bank of India at the Debts Recovery Tribunal in Jaipur. It highlights the impleadment of the Education Committee of Maheshwari Samaj as a necessary party, the lack of disclosure by the Respondent Bank, and the pending High Court proceedings. The case is ongoing, with future hearings and compliance actions planned.
