Dismissed

R M S Vasantha v. a.O.,Uco Bank

DRAT29 Apr 2022REGULAR APPEAL/114/2019

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal dismissed an appeal against the DRT's rejection of a sale application filed under Section 17 of the SARFAESI Act. The Tribunal found the DRT was right to reject the application as the Appellants failed to show grounds for the action being oppressive and the main grievance regarding excessive interest was not maintainable in a Section 17 filing.

What did the court decide?

The appeal was dismissed; no order as to costs; all pending IAs closed.

R M S Vasantha versus a.O.,Uco Bank — Banking and Recovery | DRAT (2022)

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RA(SA)114/2019

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IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

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Dated the 29^th of April, 2022

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

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RA (SA) 114/2019

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[SASR No.481/2019 on the file of DRT-III, Chennai]

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Between

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R.M.S. Vasantha,

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Proprietrix,

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M/s. RMS Vasantha Traders,

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No.10, Subramani Koil Street,

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Lawspet, Pondicherry – 605 008.

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R.M.S. Vasantha, W/o R.M. Sethuraman, No.10, Subramani Koil Street,

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Lawspet, Pondicherry – 605 008.

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R.M. Sethuraman, S/o Murugasamy, No.10, Subramani Koil Street,

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Lawspet, Pondicherry – 605 008.

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M/s. Vikram Agencies, Proprietor, R.M. Sethuraman, S/o Murugasamy, No.10, Subramani Koil Street, Lawspet, Pondicherry – 605 008.

……Appellants

And

RA(SA)114/2019

The Authorised Officer, M/s. UCO Bank, Pondicherry Main Branch, No.7, Rue Mahe De Labour Donnais, Podnicherry – 605 001.

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….. Respondent

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Counsel for Appellants : Dr. K. Arul for M/s. Vidya Chetan Counsel for Respondent Bank : Mr. M. Muthukumaran

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ORDER

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This Appeal is against the Order dated 23.04.2019 of DRT-III, Chennai in SASR No. 481/2019.

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Appellants herein filed Securitisation Application challenging the actions of Respondent Bank taken under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [hereinafter referred to as SARFAESI Act] to take delivery of physical possession of the property.

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Appellants contended that they availed Term Loan, Mortgage Loans and Cash Credit Facilities from the

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RA(SA)114/2019

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Respondent Bank, but could not pay back the loan amounts due to their business conditions. According to Appellants, as Respondent Bank tried to bring the secured assets in auction, they filed SA–424/2016 and the same was subsequently disposed of. According to Appellants, they made substantial payments towards discharge of loan amounts and according to them they have to pay back only Rs.1.89 Crores. According to Appellants, though they are willing to redeem the mortgaged property, Respondent Bank without waiting till the expiry of time granted in OA75/2016, contemplated steps to take back possession by addressing Letter dated 24.12.2018 to the Tahsidhar for execution of orders of District Magistrate.

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Appellants filed Securitisation Application in SASR No. 481/2019 questioning the Notice dated 04.01.2019 issued by Tahisildhar cum Executive Magistrate. Tribunal below, after issuing notice on the Application and hearing both sides, dismissed the Application holding that the Appellants failed to establish grounds attracting Section 17(1) of

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RA(SA)114/2019

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SARFAESI Act and further held that Application is not maintainable. Aggrieved by the said Orders present Appeal is preferred.

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Both sides filed the Written Submissions and during the course of oral arguments, only Written Arguments are reiterated.

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The main and foremost contention of the Appellants is that there are periodical payments to a tune of Rs.4 Crores and odd, and still the Respondent Bank is contemplated action under SARFAESI Act.

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On the other hand, it is the contention of the Respondent Bank that a sum of Rs.6,89,87,858/- is due from Appellants as on 31.05.2019 and the payments pleaded by Appellants is not disputed and they have given proper credit into the loan accounts of the Appellants. It is further contended that though Appellants have given consent for one property amongst the mortgaged properties

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RA(SA)114/2019

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for sale, and handed over possession in January, 2019, they obtained interim Order in this Appeal, and not allowed the Respondent Bank to proceed further.

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I have perused the material papers including the impugned Order, Written Submissions of both sides. On a perusal of records, it is clear that the Respondent Bank filed OA-75/2016 for recovery of money and in that OA a consent order is passed. Appellants filed SA-178/2018, however, that Order was not challenged. As seen from Counter of Respondent Bank, the Appellants filed SA92/2016, SA-93/2016, SA-424/2016 also, and all these SAs including SA-178/2018 have been dismissed on merits.

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As already referred to above, the Respondent Bank filed OA for recovery of a sum of Rs.6,34,22,823/-, that OA is disposed of on 12.09.2018. In the OA, it is recorded that the Defendants therein who are Appellants herein have given time bound schedule for repayment and also

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RA(SA)114/2019

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furnished information with regard to source of repayment while admitting OA claim of Respondent Bank. A Recovery Certificate was issued in terms of undertaking given by Defendants. As per the OA Order, Appellants are permitted to enter into a private treaty for sale as regards item No.(1) of property and remit the proceeds on or before 30.09.2018, failing which, the Respondent Bank is at liberty to exercise its rights under SARFAESI Act. That order has become final.

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In spite of permission being accorded to

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Defendants/Appellants for sale of one item of property, as seen from record, the Appellants appear to have not utilized that opportunity.

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Learned Advocate for Respondent Bank submitted that Appellants handed over possession of one item of property to enable the Respondent Bank to sell it. But, the Respondent Bank could not proceed further in view of interim Orders obtained by the Appellants in this Appeal on

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RA(SA)114/2019

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13.06.2019. As seen from Order dated 13.06.2019, this Tribunal, while directing Appellants to deposit a sum of Rs.1 Crore in two instalments, ordered parties to maintain status quo .

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As rightly pointed out by Learned Advocate for Respondent Bank, if Appellants are fair enough and really interested in discharging the loan amounts by selling some properties to protect the remainings amongst other properties, they ought to have allowed the Respondent Bank to proceed against one item of property which was delivered to them for realization by making a request to modify the Order dated 13.06.2019, to the extent of that item.

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Entire arguments of Learned Advocate for Appellants is that Tribunal below wrongly awarded interest at 18% p.a., but that objection cannot be the subject to be decided in Section 17 Application. Direction to pay interest is made in OA, and admittedly that Order is not challenged and it

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RA(SA)114/2019

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has become final. Therefore, the entire contention of Appellants with regard to charging of excessive interest is not tenable and maintainable, and Tribunal below rightly dismissed the Application at registration stage as the main grievance is with regard to charging of interest.

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Learned Advocate for Respondent Bank submitted that in the final Order of OA, there was no Order as to payment of future interest on the amounts determined, and the Respondent Bank has already filed an Application for Review of the same, and it is yet to be taken up by DRT.

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On a overall consideration of submissions of both sides and material on record, I am of the considered view that the Tribunal below was right in dismissing the Application, and that there are no grounds to interfere with the Order dated 23.04.2019 passed by DRT-III, Chennai.

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RA(SA)114/2019

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For the foregoing reasons, the Appeal RA (SA) 114/2019 is dismissed with no order as to costs. All pending IAs, if any, stand closed.

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[Dictated to Athistamani, transcribed by her, corrected, signed and pronounced by me in open court, this 29th of April, 2022]

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Sd/- [ Justice S. Ravi Kumar] CHAIRPERSON

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R M S Vasantha v. a.O.,Uco Bank

Case brief

What is this about?

What did the court decide?

R M S Vasantha v. a.O.,Uco Bank

Case brief

What is this about?

What did the court decide?

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