Partly allowed

Bank of India v. Ms Everyoung Polymer And Energy Engg Pvt. Ltd.

DRAT28 Jul 2022IA/309/2022

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal quashed the portion of the DRT order adjudicating the quantum of dues and interest in a Securitization Application as it was ultra vires. The Tribunal upheld the order setting aside the sale of assets.

What did the court decide?

The impugned order is set aside to the extent it adjudicated the quantum of dues and interest; the setting aside of the sale is upheld.

Bank of India versus Ms Everyoung Polymer And… — Contract and Commercial Disputes | DRAT (2022)

¶1

BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr Justice Ashok Menon, Chairperson

¶2

Misc. Appeal No. 97/2022

¶3

Between

¶4

Bank of India&Anr. V/s.	… Appellant/s
M/s. Everyoung Polymer & Energy Engg. Pvt. Ltd&Ors.	…Respondent/s

¶5

Mr Ismail A. Nashikwala, Advocate for Appellants.

¶6

Mr. Rajesh Nagori, i/b Ms. SanjanaGhogare, Advocate for Respondents.

¶7

-: Order dated: 28/07/2022:-

¶8

Heard the Ld. Counsel for the Appellant and the Respondent. 2. It is seen that the DRT had passed an injunction order dated 02.03.2022 and considered several interlocutory applications and particularly I.A. No. 268/2022 which is for contempt filed by Applicant in the S.A. No. 112/2020. The Ld. P.O. accepted the unconditional apology submitted by the Authorized Officer of the Bank for confirming the sale despite there being a stay applying the decision of the Hon’ble Supreme Court of India in “ KeshrimalJivji Shah &Ors. V/s Bank of Maharashtra&Ors. MANU/MH/0344/2004” wherein the Hon’ble High Court of Bombay had observed that in case of contempt or any other default on the part of the Bank, the sale which has been wrongfully confirmed could be set aside. The Ld. Counsel appearing for both sides submitted that the above cited order of the Hon’ble Bombay High Court has been confirmed in Appeal by the Hon’ble Supreme

¶9

¶10

Court of India. Applying the decision the Ld. P.O. set aside the sale. But in the impugned order, it is stated that the Ld. Counsel appearing for the Bank had consented to the sale being set aside. On going through the affidavit filed before the DRT, which is produced before me, I do not find any such consent by the counsel to set aside the sale. It is however observed in paragraph 11 of the impugned order that, with the consent of the parties, the sale was set aside. In fact, no written consent was given by the Ld. Counsel appearing for the Bank. The Ld. P.O. should not have taken that there was Ld. Counsel appearing for the Bank had consented to set aside the sale, without there being a written consent on record to that effect. The sale could have been set aside on the merits of the case as a decision taken by the Ld. P.O. after considering the matter on merits.

¶11

Moreover, the Ld. P.O. in the impugned order passed at an interlocutory stage in the S.A. proceedings held that the balance amount in consequent to setting aside the sale, deposited by the auction purchaser has to be returned to him together with simple interest @ 10% per annum. Furthermore, it is also observed that the Applicant shall pay a sum of ₹ 6.58 lacs to the Bank to compensate the auction purchaser for the amount which has been expended for the purpose of registration of the sale certificate. It is also decreed that an amount of ₹ 45 lacs which has been crystalized in the LokAdalat Award as the amount due to be paid by the borrower to the Bank shall be paid together with interest @12% per annum.

¶12

¶13

All these observations made by the Ld. P.O. from paragraphs 11 to 14 in the impugned order, are according to this Tribunal, without jurisdiction, and it is outside the purview of the powers conferred on the Ld. P.O. considering an application in the S.A. proceedings. What could be considered in a Securitization Application is only sustainability of the infirmities in the securitization measures taken by the Bank. And if it is found to be in default, even the sale or any other proceedings which have been taken in this regard can be nullified. Even in the Securitization Application, there was no specific prayer to determine the amount that is due from the borrower to the creditor. And therefore, I hold all those decisions taken by the Ld. P. O. in the impugned falls outside the scope of the Securitization Application, and therefore, the impugned order is set aside to that extent, in part. However, the order of the Ld. P.O. setting aside the sale is upheld and retained. All other contentions raised in the S.A. with regard to the securitization measures are left open for the parties to agitate in accordance with the law, and the Ld. P.O. shall decide the S.A. on the basis of the materials placed before him.

¶14

In view of the above, this Appeal is disposed of with a direction that S.A. No. 112/2020 still pending on the files of the DRT Pune shall be disposed of in accordance with the law, as expeditiously as possible, untrammelled by whatever is observed in the impugned order.

¶15

mks-02

¶16

Bank of India v. Ms Everyoung Polymer And Energy Engg Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

Bank of India v. Ms Everyoung Polymer And Energy Engg Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Punjab National Bank versus State Bank of India & Ors.

Lokesh Janardhan Waghmare versus Union Bank of India

Bank of Baroda versus Shri Naushad Taufiq Khan

Phoenix ( India )& Ors. versus Bank of Baroda

M/S Phoenix ( India ) & Ors. versus Bank of Baroda

M/s Mitexco and Ors. versus Canara Bank