Single Judge Must Decide All Vital Issues After Remand: Kerala HC Sets Aside Order in Canara Bank & PNB Debt Recovery Case [Read Order]

The Kerala High Court held that when a Division Bench remands a matter for fresh consideration, the Single Judge must decide all vital issues raised by the parties and failure to comply with such directions cannot be sustained. The court set aside the impugned order passed in a dispute involving Canara Bank and Punjab National Bank in a debt recovery matter.

The writ appeal was filed by Canara Bank and Punjab National Bank, who were respondents 2 and 3. They challenged the judgment passed by the learned Single Judge. The writ petition had been filed by E.T. Firoz, who was the petitioner before the Single Judge.

E.T. Firoz had approached the High Court challenging an attachment order issued by the Recovery Officer of the Debts Recovery Tribunal. The attachment related to a pre-deposit amount of Rs. 3,95,50,000 deposited before the Debts Recovery Appellate Tribunal (DRAT), Chennai.

The background shows that E.T. Firoz was the 2nd appellant before the DRAT, Chennai. The appeal was filed against an order passed by the DRT-I, Ernakulam concerning a sale conducted. As required under Section 18 of the SARFAESI Act, the DRAT directed deposit of Rs. 3,95,50,000 as statutory pre-deposit. The amount was deposited on 21.12.2023. Later, the DRAT dismissed the appeal.

After dismissal of the appeal, E.T. Firoz filed an application before the DRAT seeking release of the pre-deposit amount. Canara Bank and Punjab National Bank objected to the release, stating that attachment of the pre-deposit was under consideration. The Recovery Officer of the DRT then passed an order attaching the pre-deposit amount. Challenging this attachment, E.T. Firoz filed the writ petition.

Earlier, the learned Single Judge had disposed of the writ petition by directing E.T. Firoz to avail the appellate remedy. Against that order, E.T. Firoz filed writ appeal. A Division Bench set aside that judgment and remanded the matter for fresh consideration, observing that several vital contentions raised by the parties including maintainability of the writ petition and availability of appeal under Section 30 of the Recovery of Debts and Bankruptcy Act, had not been decided on merits.

In the subsequent judgment, the learned Single Judge again disposed of the writ petition without deciding those issues on merits and directed the Tribunal to consider the pending application regarding release of the pre-deposit.

In the present appeal, counsel for Canara Bank and Punjab National Bank argued that the learned Single Judge failed to comply with the directions in the earlier remand judgment. They submitted that vital issues pointed out by the Division Bench were not examined. Counsel for E.T. Firoz also conceded that the impugned judgment was passed without considering the directions contained in the earlier Division Bench judgment.

The Bench comprising Justice Anil K. Narendran and Justice Muralee Krishna S. observed that the earlier Division Bench had clearly remanded the matter for fresh consideration on merits. The dourt observed that the impugned judgment did not reflect consideration of those vital issues. In such circumstances, the dourt held that the impugned judgment could not be sustained.

The Kerala High Court set aside the judgment passed by the learned Single Judge and remanded the writ petition once again for fresh consideration in light of the earlier Division Bench judgment. The court clarified that Canara Bank, Punjab National Bank and E.T. Firoz are at liberty to raise all available contentions before the learned Single Judge. The writ appeal was disposed of in these terms.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates