Allowed

M/S Brigade Enterprises Ltd. v. Hdfc Bank Ltd.

DRAT3 Aug 2022REGULAR APPEAL/153/2017

Case brief

AI extract

What is this about?

The Appellate Tribunal, Chennai, allowed an appeal against a DRT order that incorrectly granted a recovery certificate against the appellant guarantor. The Tribunal held that since the bank specifically prayed for recovery only against the borrowers and not the guarantor, the DRT erred in including the guarantor in the recovery certificate.

What did the court decide?

Impugned order dated 23.7.2015 set aside to the extent of recovery against Defendant No. 3; appeal allowed regarding Defendant No. 3.

M/S Brigade Enterprises Ltd. versus Hdfc Bank Ltd. — Contract and Commercial Disputes | DRAT (2022)

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RA 153/2017

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IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

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Dated the 3^rd of August, 2022

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

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RA 153/2017

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(OA 818/2011 on the file of DRT, Bangalore)

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Between

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M/s Brigade Enterprises Ltd. Rep. by its Authorised Signatories Mr. Jitendra C.P.,

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Regd. Office at

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Pent House, Brigade Towers, Bangalore 560 025

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……Appellant

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And

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M/s HDFC Bank Limited Regional office at 2^nd Floor, ‘B’ Wing,

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Golden Towers,

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Old Air Port Road, Kodihalli, Bangalore 560 017.

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Mr. Raghu, C.R. S/o Mr. C.V. Rajappa, R/o No.42/2, 8^th Main, 5^th Cross, RMV Extension, Bangalore.

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Mrs. Sowmya Jagadish W/o Mr. Raghu C.R. R/o No.42/2, 8^th Main,

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5^th Cross, RMV Extension,

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Bangalore. ….. Respondents

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RA 153/2017

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Counsel for Appellants : M/s Iyer and Thomas Counsel for first respondent bank : T.K.M. Sai Krishnan

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ORDER

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This Appeal is preferred under Section 20 of the Recovery of Debts

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Due to Bank and Financial Institution Act, 1993 against judgment dated 23.7.2015 in OA 818/2011 on the file of DRT, Bangalore.

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The appellant herein is 3^rd defendant in the said OA and first respondent is bank and respondents 2 and 3 are borrowers. First respondent bank filed above OA for recovery of a sum of Rs.13,62,310.65p being principal and interest due thereon. As per prayer portion, defendants 1 and 2 are personally liable for the said amount and a recovery certificate is prayed against them. Tribunal below dismissed the OA against defendants 1

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and 2 but granted recovery certificate against 3^rd defendant for the suit amount of Rs.13,62,310.65p. Aggrieved by the same, present appeal is preferred.

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Heard both sides.

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RA 153/2017

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Main argument of advocate for appellant is that in the prayer of OA it

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is only against defendants 1 and 2 and no relief is claimed against 3^rd defendant for the reason that bank received Rs.55,94,091/- from 3^rd defendant, appellant herein and issued a discharge certificate dated 5.10.2010, but Tribunal below without any relief against appellant granted a recovery certificate and discharged the borrowers against whom relief is claimed. It is submitted that order of Tribunal below is contrary to law and even against the relief claimed by the bank and for that reason order of Tribunal below is liable to be set aside.

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On the other hand, advocate for first respondent bank submitted that in the pleadings of OA, bank specifically contended that both borrowers and the guarantor viz., defendants 1 to 3 are jointly and severally liable for claim amount of Rs.13,62,310.65p but in the relief portion claim is made against borrowers only, which is a mistake on the part of bank and that cannot be rectified at this stage. It is further submitted that for dismissal of claim against defendants 1 and 2, advice is already given for filing an appeal and it is under process.

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RA 153/2017

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I have perused material papers and impugned order dated

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23.7.2015. I have also perused copy of OA, which is filed along with Memorandum of Appeal. In the relief portion of OA, bank specifically prayed in following lines.

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“(a) Pass an Order in favour of the applicant directing the first and second defendants personally to pay the applicant, the application claim amount of Rs.13,62,310.65p (Rupees Thirteen lakh six two thousand three hundred ten and sixty five paise only) including current and future interest at the rate of 14.00% p.a. on 13,62,310.65p from the date of application till the date of realisation”

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Therefore, very request of bank is to grant a recovery certificate against defendants 1 and 2 only for Rs.13,62,310.65p and no relief is claimed against appellant herein. As seen from the impugned order, Tribunal below appear to have passed such order on the basis of pleadings of R2 & R3 i.e., borrowers. But no counter claim is made by borrowers. On the basis of pleadings of D1 & D2, liability cannot be fixed on a co-defendant i.e. D3, which is not prayed by applicant i.e. Bank. As rightly pointed out by advocate for appellant, bank left appellant herein for the reason that appellant paid Rs.55,94,091/-, for which, bank issued a letter discharging defendant No.3 from guarantorship and the very same fact is also pleaded

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by Defendant No.3 in the statement of objections filed to OA, specifically

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pleading that relief is claimed against defendants 1 and 2 only. It is also

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RA 153/2017

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pleaded that defendant No.3 paid Rs.55,94,091/- and bank discharged 3^rd

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defendant from guarantorship.

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Considering these aspects, I am of the considered view that Tribunal

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below grossly erred in allowing OA against Defendant No.3 when bank itself has not prayed for such a relief.

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For these reasons, impugned order dated 23.7.2015 is liable to be set

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aside. Accordingly, appeal, RA 153/2017 is allowed to the extent of

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Defendant No.3, with no order as to costs.

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10. All pending IAs, if any, stand closed.

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[Dictated to Steno(SN), transcribed by him, corrected, signed and pronounced by me in open court, this 3^rd August, 2022]

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M/S Brigade Enterprises Ltd. v. Hdfc Bank Ltd.

Case brief

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M/S Brigade Enterprises Ltd. v. Hdfc Bank Ltd.

Case brief

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