Canara Bank v. M/s Maruti Nandan Foods Products Pvt. Ltd. and 4 Ors.

Appeal Dy. No. 94/2022 Date: 11.04.2022

Canara Bank Vs. M/s Maruti Nandan Foods Products Pvt. Ltd. and Ors.

Present: Shri Maneesh Mehrotra, counsel for the appellant-Bank,

Learned counsel for the appellant submits that the appellantBank granted various credit facilities to the respondent no. 1- Company and repayment of the credit facilities was secured by the personal guarantee of the respondent nos. 2 & 5 and by collateral security of immovable properties of the respondent nos. 1 & 5. He further contends that the respondent no. 1- Company had failed to maintain the financial discipline, therefore, the loan accounts were classified as NPA. The appellant-Bank initiated the proceedings for recovery of the amount due under the provisions of RDB Act, 1993 by moving an original application no. 540 of 2018, which was decreed in favour of the Bank by the DRT vide judgment and order dated 10.10.2018, pursuant to which the recovery certificate was issued against the respondents for recovery of amount due.

It is further argued that simultaneously, the appellant-Bank initiated the recovery proceedings under the SARFAESI Act and pursuant to the demand notice dated 27.04.2014 under section 13(2) of the SARFAESI Act followed by the possession notice dated 13.03.2018 under section 13(4), the appellant-Bank put the secured asset for auction vide auction sale notice dated 14.12.2020.

It is contended that the respondents challenged the aforesaid demand notice, possession notice and sale notice before the Tribunal below by filing an application under section 17(1) of the SARFAESI Act, which was registered as S.A. No. 01 of 2021 on the ground that the Bank has violated Rule 8(6) of the Security

Interest (Enforcement) Rules, 2002. The Tribunal below vide order dated 29.11.2021 (passed in I.A. No. 376 of 2021 in S.A. No. 01/2021) directed the Bank to maintain the status quo with regard to the properties in question.