Debt Recovery Appellate Tribunal - Madras
S.K. Viji And Anr. vs Indian Overseas Bank And Ors. on 23 March, 2006
Equivalent citations: 3(2006)BC148
ORDER
K. Gnanaprakasam, J. (Chairperson)
1. The appellant have filed two applications in IAs 771 and 772/2004 in OA 305/2002, before the DRT-I at Chennai, for grant of interim injunction restraining the respondent Bank from proceeding further in pursuance of the notice dated 14.10.2004 issued under Section 13(2) of the Securitisation Act, till the disposal of the OA 305/2002 and both the applications came to be dismissed by order dated 22.2.2006. Aggrieved by the same, these appeals have been filed.
I have heard the learned Advocate for appellants and the 1st respondent Bank.
2. The 1st respondent Bank filed OA for recovery of the amount due by one M/s. Krishna Agro Chem Ltd., and for the loan obtained by the said company it appears that the appellants' property was given as security when they were minors. But however, the Court permission was obtained for mortgaging the property for the loan obtained by the said company. Now it is stated that the said company has been sold out to third parties and they arc in possession of the said company and the same is also a running company. The respondent Bank after having filed the OA, has also resorted to proceedings under the Securitisation Act, and issued necessary notice under Section 13(2) and also taken measures as contemplated under Section 13(4) of the Securitisation Act. It appears that when the petitions filed by the appellants were pending, as further proceedings were taken by the respondent Bank, the appellant have approached the High Court, Madras, and their writ petitions came to be dismissed by observing that their case is covered by the judgment in M/s. Digivision Electronics Ltd. v. Indian bank and Anr. The appellants have also filed an application for clarification of the order of the High Court dated 18.7.2005, and the same was clarified by further order dated 25.8.2005, thereby directing the DRT to dispose of the applications filed by the appellants, which are pending before the DRT. It is submitted that in spite of that, the DRT has not disposed of the petitions and, therefore, the appellants are constrained to approach the High Court in WP No. 2846/2006, and the said writ petition came to be disposed of by order dated 2.2.2006, wherein direction was given to the DRT to dispose of the petitions of the appellants in IAs 771 and 772/2004. Pursuant to the same, the applications of the appellants were taken up by the DRT and those petitions were dismissed and the respondent Bank can take measures under the Securitisation Act to realise the amounts due to the Bank. DRT further added that if in case, the petitioners (appellants) are so aggrieved, it is open for them to challenge the action by filing an application under Section 17 of the Securitisation Act. At against the said order only, these appeals have been filed.
3. The learned Advocate for the appellants is trying to make a submission that they have been wrongly prosecuting the applications in the OA thinking that their petitions have been filed only under the Securitisation Act, challenging the measures taken by the respondent under Section 13(4) of the Securitisation Act. It is further submitted that they have wrongly quoted the provision of law as if it was filed under the RDDB and FI Act, 1993, and actually meant these petitions have been filed under the SARFAESI Act, under Section 17 challenging the measures taken by the respondent Bank.
4. The above said submission of the appellants was opposed by the learned Advocate for the respondent Bank by pointing out that the application have been filed only in the OA and they have been prosecuting these petitions only in the OA and as a matter of fact, when the writ petitions were pending in the High Court, the respondent bank have filed a counter affidavit wherein they have pointed out that the applications filed by the appellants are not maintainable in the OA proceedings and in spite of that the appellants have not chosen to take up necessary proceedings under the concerned Act and it is too late for the appellants to contend and say that they have been mistakenly prosecuting their applications as if it was taken under the Securitisation Act.
5. During the pendency of these proceedings, it is made out that the respondent Bank had already brought the properties for sale and the sale was also held on 23.2.2006 and the auction purchaser has also deposited 25% of the sale amount. But however, it is stated that the balance of 75% of the sale amount was not deposited by the auction purchaser and time was extended for the auction purchaser to deposit the amount upto 27.3.2006. It is stated that under the Act and rules, the Authorised Officer is empowered to grant time for payment of the balance amount even beyond 15 days.
6. The learned Advocate for the appellants once again submitted that there are number of properties belonging to the 1st defendant company and under the Securitisation Act, the respondent Bank having issued notice under Section 13(2) on respect all the items of the properties, cannot bring the appellants/guarantors' properties alone, for sale and the respondent Bank is wantonly bringing the properties of the appellants alone, without assigning any reason and the appellants have no objection for bringing the properties of the 1st defendant company and the same is worth several crores of rupees, but whereas their liability due to the respondent is only in lacs. It is further submitted that the appellants properties were given security when they were minors and that should also be taken note of in bringing the properties for sale by the respondent Bank, but they have not. It is, therefore, submitted that the properties of the appellants, which were brought to sale, is not legal and proper.
7. Reverting back to the further submissions made by the learned Advocate for the respondent Bank, it is submitted that the Bank is at liberty to bring any one of the items or all the items of the properties secured and the appellants/guarantors have no say over the matter. Be that as it may.
8. Now it transpires that the properties of the appellants were sold on 23.2.2006, and the auction purchaser has also deposited 25% of the amount as required and it is further stated that the sale was also confirmed. But, however, it is stated that the auction purchaser did not pay the balance 75% sale consideration and time was extended upto 27.3.2006.
9. After hearing both the parties and after going through the appeal papers, it is made out that the appellants have filed the petitions only in the pending OA and only in the said circumstances, the DRT has rightly come to the conclusion that the respondent Bank is entitled to take measures as contemplated under the Securitisation Act to release the amount due to the Bank and if at all the appellants are aggrieved, it is open to them to challenge the action by filing application under Section 17 of the Securitisation Act. I do not find any infirmity in the order passed by the DRT, which requires indeference by this Tribunal.
10. In the result, both the appeals are dismissed. But however it is left open to the appellants to file appeal under Section 17 of the Securitisation Act, if they are so advised. In that event, time taken in prosecuting the appeal will not come in the way for the purpose of limitation. As it is stated that time was given for the auction purchaser to deposit the amount till 27.3.2006. I am inclined to grant stay of further proceedings only upto 31.3.2006.