U C O Bank v. M/ S J S Tractors and Ors.

Appeal Dy. No. 1157/2022 Date: 10.01.2023

UCO Bank Vs. M/s J. S. Tractors & Ors.

Present: Shri Adarsh Bhushan, counsel for the appellant,

Heard the learned counsel for the appellant.

The present appeal has been filed under section 18 of the SARFAESI Act against the interim order dated 16.12.2022 passed by the DRT, Allahabad in S.A. No. 861/2022, whereby the auction sale fixed by the Bank has been stayed, which is scheduled to be held on 20.01.2023 subject to deposit of 25% of the amount due.

Learned counsel for the appellant submits that the interim order passed by the Tribunal below is in the teeth of the order of the Hon’ble Apex Court rendering in the matter of Bank of Baroda Vs. Karwa Trading Company and Anr., (2022)5 SCC 168. Reference has been made to the paragraph nos. 12 & 13 of the said judgment and has stated that the interim order passed by the Tribunal below is in gross contravention of section 13(8) of the SARFAESI Act. It is further submitted that merely by giving direction to the borrower to deposit 25% of the total outstanding amount, the entire auction proceedings have been stayed, is against the provisions of the Act and Rules and also frustrates the purpose, for which the enactment has been made. It is further submitted that the Bank will not get any buyer, if such order is permitted to be implemented, as no buyer would like to bid for any property, which is encumbered or in which the interim stay order has been granted. It is also argued that at least 50% of the amount due should have been ordered by the Tribunal below to be deposited, in case the borrower had any bonafide intention to pay the amount and redeem the property.

After hearing the learned counsel for the appellant, the present appeal is disposed off with direction that in case, the borrower deposits 50% of the total outstanding amount, the order of the DRT for restraining the auction may be followed. If any such amount is deposited by the borrower prior to the date fixed, the auction scheduled to be held on 20.01.2023 be kept in abeyance, otherwise, the respondent-bank shall be free to proceed with the auction sale as scheduled. The Tribunal below may pass necessary order on the situation, as may exist at the point of time, in accordance with law.