Dismissed

Sahadevan Ap v. State Bank of India

DRAT1 Jun 2022MISC APPEAL/13/2021

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal rejected an appeal seeking restoration of a previously dismissed appeal. The court held the appeal was not maintainable as it did not specifically challenge the Recovery Officer's order under RDB Act, failing to exhaust remedies under Income Tax Act. Additionally, the appellant provided insufficient grounds for restoration.

What did the court decide?

The Appeal is dismissed with costs. All pending IAs stand closed.

Sahadevan Ap versus State Bank of India — Banking and Recovery | DRAT (2022)

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MA 13/2021

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IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

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Dated the 1^st of June, 2022

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PRESENT: Hon’ble Mr. Justice S. Ravi Kumar CHAIRPERSON

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MA 13/2021

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[IA-9/2017 in Appeal 12/2013 (DRC No.3012) on the file of DRT-I, Ernakulam]

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Between

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A.P Sahadevan, S/o Devaki Amma, Adayaril House, Kakkad Kara, Piravom Village, Ernakulam District, Kerala – 668 664

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……Appellant

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And

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State Bank of India,

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Piravom Branch,

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Represented by its Branch Manager,

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Piravom, Ernakulam District, Kerala – 668 664.

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Valsalan K.K., S/o Mr. Kumaran, Residing at 341, Koovakkattu, 13, Kodankulangara, Tripunithura,

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Ernakulam District, Kerala – 682 301.

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….. Respondents

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Counsel for Appellant : Mr. S. T. Bharath Gowtham for Ms. Akshayaa Benjamin Counsel for R Bank : Mr. B. Raghavulu Naidu for M. K. Chandrasekaran Counsel for R2 : Mr. Sasidharan

MA 13/2021

ORDER

This Appeal is preferred against Orders of Learned Presiding Officer of DRT-I, Ernakulam passed in IA 9/2017 in Appeal No.12/2013 on the file of DRT-I Ernakulam.

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Brief facts leading to this Appeal are as follows:-

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Appellant herein filed Appeal No.12/2013 before DRT-I, Ernakulam and that Appeal was dismissed on 05.12.2016 for nonprosecution. Appellant, thereafter, filed IA 9/2017 for restoration of Appeal No. 12/2013 that IA is dismissed on merits through impugned Order dated 18.02.2019. Aggrieved by the same, present Appeal is preferred.

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Appellants, Respondent No.1 and Respondent No.2 filed their respective Written Arguments and reiterated the same at the time of oral submissions.

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MA 13/2021

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Written Arguments of the Appellant runs into five pages, but most of the contents are in respect of merits of Appeal (Appeal No.12/2013 of DRT-I, Ernakulam). Only relevant facts for the purpose of this Appeal are in paragraphs 4 and 5. According to Appellant, he filed Appeal No. 12/2013 before DRT-I, Ernakulam and it was dismissed on 05.12.2016 for non appearance, and for its restoration, he filed IA 9/2017, which was being adjourned from time to time, and it was adjourned from 28.01.2019 to 22.05.2019. According to Appellant, to his utter dismay, he received notice dated 21.01.2019 from Advocate Commissioner intimating that he is going to take possession of property on 09.02.2019. According to Appellant, he immediately approached DRT-I, Ernakulam and filed Petition to advance hearing of IA 9/2017 and that advance Petition was posted to 06.01.2019 and thereafter, again posted to 18.02.2019, therefore, Appellant approached Hon’ble High Court of Kerala by filing OP (DRT) 25/2019 in which Hon’ble High Court of Kerala passed an Order on 11.02.2019 granting stay of recovery proceedings with a direction to DRT-I, Ernakulam to dispose of Restoration Application.

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MA 13/2021

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According to Appellant, Tribunal below, without proper appreciation of facts and circumstances, dismissed IA 9/2017 by Order dated 18.02.2019. Learned Counsel for Appellant submitted that Appellant has got very fair and good case and an opportunity may be given to prosecute Appeal No.12/2013 so that it can be decided on merits, in which rights of parties can be adjudicated.

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On the other hand, Learned Counsel for Respondent No.1 Bank submitted that account of Appellant is declared as NonPerforming Asset (NPA) on 01.11.1999 and Bank filed Suit for recovery of Rs.5,76,259/- and Decree is passed in favour of Bank on 05.09.2001. He further submitted that in pursuance of Order dated 07.07.2008 of DRT-I, Ernakulam in OA -165/2008, Recovery Certificate was issued in favour of Respondent No.1 Bank and Recovery Officer issued notice to Appellant and thereafter proceeded with issuance of sale proclamation etc.

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Learned Counsel for Respondent No.1 Bank would submit

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that Demand Notice was issued on 19.08.2008 and sale was conducted on 02.04.2013 and same was confirmed on 12.05.2013

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MA 13/2021

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and he further submitted that Sale Certificate was registered on

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12.06.2013 and thereafter Appellant filed Appeal No.12/2013 before DRT-I, Ernakulam in the month of August, 2013. He further submitted that Tribunal below gave ample opportunity for the Appellant to argue Appeal No. 12/2013, but for the reasons best known to the Appellant, he has not utilized those opportunities. It is further submitted Tribunal below posted the matter with condition, and as Appellant failed to fulfill said condition, Appeal was dismissed on 15.12.2016. He further submitted that there are no convincing reasons for restoration of Appeal, and Tribunal below rightly dismissed the Restoration Application and there are no grounds to interfere.

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Learned Counsel for Respondent No.2, Auction Purchaser submitted that on account of these proceedings and interim orders obtained by Appellant, Auction Purchaser could not get possession of the property though he paid the entire money and obtained Sale Certificate and prayed for dismissal of Appeal.

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MA 13/2021

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I have perused material papers including the impugned Order dated 18.02.2019.

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The main contention of the Appellant is that Tribunal below ought to have given an opportunity to Appellant to focus his rights

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so that rights can be adjudicated on merits. As verified from material papers when Appeal No.12/2013 was taken up for hearing on 27.06.2016, there was no representation for Appellant, therefore, Tribunal below while adjourning matter to 27.07.2016 directed the Appellant to appear either in person or through Advocate. On 27.07.2016, it appears that Advocate for Appellant appeared and sought time for arguing the case and on a specific request of Advocate for Appellant, the matter appears to have been posted to 21.09.2016. On 21.09.2016, Advocate for Appellant again sought time and Tribunal below accommodated and adjourned the case to 27.10.2016. On 27.10.2016, Advocate for Appellant was not ready to advance arguments and again sought further time and Tribunal below posted the case to 05.12.2016 as last chance with condition if Appellant failed to advance arguments

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on that date, the Appeal will be disposed of on 05.12.2016.

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MA 13/2021

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In spite of such conditional Order, no one appeared on 05.12.2016 before Tribunal below and Tribunal below have no options except to give effect to the conditional Order and dismissed the Appeal on 05.12.2016.

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Appellant herein filed IA 9/2017 for restoration of Appeal. Counsel for Appellant filed an Affidavit in support of Restoration Petition stating that due to an inadvertent contingency that happened in office, the Counsel attached to the office could not appear before DRT on 05.12.2016 when the Appeal was taken up for hearing and it is stated that there are no willful latches or negligence either on the side of the Appellant or on the side of the Counsel in not appearing before DRT on 05.12.2016 and no harm will be caused to the opposite parties if the Appeal is decided on merits after giving opportunities to the parties. Tribunal below held that the reasons stated in the Affidavit filed in support of Application is not at all sufficient reason to restore the Appeal and the Appellant was not diligent in conducting the case for almost seven years, therefore, held that the Appellant is not entitled for the relief claimed.

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MA 13/2021

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As already referred to above, Advocate for Appellant mainly harped on the ground that Appellant has fair and good case in Appeal No. 12/2013 and Tribunal below ought to have given an opportunity to the Appellant. Though in Restoration Application, merits of the case will not be taken up and only reason for absence, the day on which Appeal is dismissed for non-prosecution alone will be looked into, but still, as Appellant is harping that he has got a fair and good case, it has to be examined at least whether Appellant has got any prima facie case.

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It is not in dispute that Appeal No. 12/2013 is filed under Section 30 of Recovery of Debts and Bankruptcy Act, 1993 (hereinafter called RDB Act). According to this Section, an Appeal

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is provided challenging the Order passed by Recovery Officer. As seen from the grounds of Appeal in Appeal No. 12/2013, the main challenge in the said Appeal is in respect of sale held on 04.02.2013. The very first ground in the grounds in the Appeal No. 12/2013 is that Annexure A-2 is liable to be set aside. Annexure

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A-2 is nothing but Order of Recovery Officer dated 13.05.2013

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MA 13/2021

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confirming the sale held on 04.02.2013. Even if we look at the prayer in the Appeal, the prayer is to declare that the sale conducted on 04.02.2013 as irregular and void.

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15. When Section 30 of RDB Act, 1993 provided remedy to the parties to challenge Order of Recovery Officer, the prayer in the Appeal ought to be, to set aside the Order of Recovery Officer of a particular date. But here in the Appeal, Appellant has not indicated the date of Order of Recovery Officer which he is challenging, but prayed to set aside the sale.

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16. Admittedly, Recovery Officer has to conduct the sale by following the Rules under II Schedule to the Income Tax Act, 1961 as per Section 29 of RDB Act, 1993. When a sale is conducted, remedy is provided under Rule 60 of II Schedule to the Income Tax Act, 1961, challenging such sale and that Application has to be

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filed before Recovery Officer himself, and the person filing such Application has to comply with certain conditions which are incorporated in Rule 60 of II Schedule to Income Tax Act, 1961.

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MA 13/2021

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17. But here, the Appellant, without resorting to the statutory remedy provided under Rule 60 of II Schedule to Income Tax Act, 1961, filed an Appeal seeking remedy which is prima facie incorrect. For an Appeal under Section 30 of RDB Act, 1993, Appellant should specifically plead and pray which Order of the Recovery Officer has to be set aside. As already referred to above, Appellant for the reasons best known to him has neither indicated in the grounds of Appeal nor in the relief as to which Order of Recovery Officer is challenged or the Order which is liable to be set aside.

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18. In other words, when invoking Section 30 of RDB Act, 1993, it is only open to the party to question a particular Order of Recovery Officer which has to be attached to the Appeal grounds, but not the sale held on 04.02.2013, for which separate remedy is provided before Recovery Officer himself, and not before appellate forum. So, without exhausting remedy before Recovery Officer, the Appellant straightaway approached appellate forum thereby the Appeal itself is prima facie not maintainable.

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MA 13/2021

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19. Therefore, the argument of Learned Advocate for Appellant that Appellant has got a good case and valid grounds in the Appeal, is not acceptable. As rightly pointed out by Learned Advocate for Respondent No.1 Bank and also Advocate for Respondent No.2, Auction Purchaser, Appellant successfully prolonged or postponed delivery of the property to the Auction Purchaser and also successfully obtained adjournments in the main Appeal (Appeal No.12/2013) without arguing and Tribunal below rightly dismissed the Appeal in view of conditional Order.

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20. When Restoration Application is filed except vaguely saying that due to inadvertent contingency, Counsel could not appear before Tribunal on 05.12.2016, no specific reasons are given. Without giving any such sufficient reasons, it is very unfortunate they requested the Tribunal below to restore the Appeal and again making such a request before appellate forum.

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MA 13/2021

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21. On scrutiny of entire material, I am of the considered view that Tribunal below rightly dismissed the Restoration Application and there are absolutely no merits or grounds in the Appeal and the same are liable to be dismissed.

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22. In view of my above discussions and observations, Appeal M A 13/2021 is dismissed with costs. All pending IAs, if any, stand closed.

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[Dictated to Athistamani, PS transcribed by her, corrected, signed and pronounced by me in open court, this 1^st of June, 2022]

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Sd/- [ Justice S. Ravi Kumar] CHAIRPERSON

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Sahadevan Ap v. State Bank of India

Case brief

What is this about?

What did the court decide?

Sahadevan Ap v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

Parties & counsel

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