Partly allowed

Pradeep Kumar Gupta v. Debt Recovery Appellate Tribunal and 2 Others

Allahabad HC23 Aug 2018WRIC/27543/2018

Case brief

AI extract

What is this about?

This single-judge division of the High Court dismissed a writ petition challenging a DRAT order that reversed a DRT direction mandating the bank to refund auction proceeds. The court set aside the refund direction issued without evidence upon the purchaser's oral claim and remitted the matter back for a fresh order.

What did the court decide?

The direction to refund money to the auction purchaser is set aside; the matter remitted for a fresh order after affording opportunity to lead evidence; writ petition dismissed otherwise.

Pradeep Kumar Gupta Vs Debt Recovery Appellate Tribunal… — Property and Title | Allahabad HC (2018)

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Court No. - 36 Case :- WRIT - C No. - 27543 of 2018 Petitioner :- Pradeep Kumar Gupta Respondent :- Debt Recovery Appellate Tribunal And 2 Others Counsel for Petitioner :- Sanjay Kumar Gupta Counsel for Respondent :- Satish Chaturvedi,Sharad Ranjan Nigam

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Hon'ble Mrs. Sunita Agarwal,J.

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Heard learned counsel for the petitioner and Sri Ajit Kumar Srivastava holding brief of Sri Sharad Ranjan Nigam, learned counsel for the respondent-bank.

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The present petition is directed against the order dated 4.5.2018 passed by the Debt Recovery Appellate Tribunal in Appeal No. SR 206 of 2016 filed by the bank wherein the petitioner/borrower and one Tahir Hussain, Resolution Agent, have been impleaded as respondents.

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The said appeal was filed against the order dated 2.11.2016 passed by the Presiding Officer, DRT Allahabad, whereby the Securitization Application moved by the borrower was disposed of with the direction to the bank to release the hypothecated vehicle free from all encumbrances to the borrower with the further direction that the bank shall refund the amount of Rs. 5,00,000/- to the auction purchaser namely Mohd. Saeed within 48 hours through negotiable instrument. The bank has, however, been granted liberty to pursue the recovery certificate issued against the borrower in Original Application No. 243 of 2014, decided on 19.8.2014 in accordance with law.

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The original application filed by the appellant-bank under Section 19 of the Recovery of Debts Due to Bank and Financial Institutions Act,1993, (hereinafter referred to as 'DRT Act, 1993'), the recovery certificate for an amount of Rs. 26,82,966/was issued on 19.8.2015 wherein the bank was held entitled to recover the said amount by selling hypothecated truck with the finding that the borrower did not repay the debts.

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The sale notice dated 22.7.2016 was issued under the SARFAESI Act fixing the date of auction on 30.8.2016. The said notice was challenged by moving the Securitization Application No. 298 of 2016 on 29.8.2016 on the ground that the compliance of the mandatory provisions of the SARFAESI Act had not been made.

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The hypothecated truck was sold to one Mohd. Saeed for a sum of Rs. 5.00 lakh in the auction sale held on 30.8.2016. However,

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confirmation of sale was stayed by the Debt Recovery Tribunal.

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During pendency of the securitization application, the borrower intended to deposit outstanding debt of Rs.5.50 lakh but tendered only Rs. 5.10 lakh through bank draft. The said money has been deposited in the loan account of the petitioner.

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It further appears that on 2.11.2016 the date fixed in the securitization application filed by the borrower, one person appeared before the Presiding Officer claiming himself to be the auction purchaser namely Mohd. Saeed and made an oral statement that he had paid Rs. 6.20 lakh to Tahir Hussain the resolution agent of the bank as sale price of the truck which he had purchased in bank auction.

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The order dated 2.11.2016 reveals that on the said oral statement of the said person, without asking him to file any affidavit to depose the statements made by him, the tribunal has proceeded to issue direction to the bank to refund Rs. 5,00,000/to the auction purchaser namely Mohd. Saeed within 48 hours.

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The Appellate Tribunal has recorded a categorical finding that the auction purchaser was neither impleaded in the securitization application nor filed any intervention application. This fact is also admitted to the learned counsel for the petitioner. The assertion made during the course of proceedings before the Tribunal by a person claiming to be the auction purchaser without there being any affidavit on record, could not have been accepted to ask the bank to refund the auction money that too holding it liable for the alleged act of the recovery agent

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In view of the admission of the petitioner that the auction purchaser was not party to the proceedings before the Tribunal and further that he has not filed any intervention application supported by an affidavit, the direction issued by the Tribunal to the bank to refund the money deposited by the auction purchaser was wholly uncalled for. This Court, therefore, does not find any justification to interfere in the findings returned by the Appellate Tribunal. The order dated 2.11.2016 passed by the Debt Recovery Tribunal has rightly been set aside remitting the matter back with the direction to pass a fresh order after affording opportunity to all the concerned parties to lead their evidence.

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In view of above, no interference is required. The writ petition is dismissed as such.

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Order Date :- 23.8.2018/Pratima

Pradeep Kumar Gupta v. Debt Recovery Appellate Tribunal and 2 Others

Case brief

What is this about?

What did the court decide?

Pradeep Kumar Gupta v. Debt Recovery Appellate Tribunal and 2 Others

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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Case details

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