Dismissed

Tamilnad Mercantile Bank Limited v. Mr Sundaresan, Son of Mr. a S Natarajan

DRAT10 Oct 2023MISC APPEAL/19/2023

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal dismissed an Applicant Bank's request for speedy disposal of a pending Securitisation Application under Section 17(6) of the SARFAESI Act. The Bank failed to show compelling reasons to ignore older pending cases of the same bank and did not file the application in the prescribed format.

What did the court decide?

Application MA (SA) 19/2023 was dismissed with costs; all pending Interim Applications stand closed.

Tamilnad Mercantile Bank Limited versus Mr Sundaresan, Son of… — Banking and Recovery | DRAT (2023)

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MA (SA) 19/2023

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IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

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Dated the 10^th of October, 2023

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

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CHAIRPERSON

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MA (SA) 19/2023

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(SA No. 561/2022 on the file of DRT – II, Ernakulam )

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Between

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The Authorised Officer, Tamilnad Mercantile Bank Ltd.; Bangalore Region, 19 F, B.V. K, Iyengar Road, Bengaluru – 560 009.

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… Applicant

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And

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Mr. N. Sundaresan,

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S/o Mr. A.S. Natarajan,

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No. 564 (22/361), Ayyanar House, 14 Vayaskarakunnu,

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Kottayam, Kerala – 686 001.

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Mr. R. Devasenapathi,

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S/o Mr. A.S. Rajagopalan,

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No. 646, 7^th Cross, 4^th Main, 4^th Stage, BEML Layout, Kr. R. Nagar, Bengaluru – 560 098.

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Mr. R. Kulbhushan Pandian, S/o Mr. A. S. Rajagopalan, No. 646, 7^th Cross, 4^th Main, 4^th Stage, BEML Layout, Kr. R. Nagar, Bengaluru – 560 098.

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….. Respondents

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Counsel for Applicant

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: Mr. S. Sethuraman

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MA (SA) 19/2023

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O R D E R

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Tamilnad Mercantile Bank Ltd., filed this Application invoking Section 17(6) of SARFAESI Act, 2002.

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As seen from record, this Application came up for hearing on 14.08.2023; after hearing Advocate for Applicant, it is felt that presence of person who signed the Application is found necessary, therefore, posted the matter for his appearance, and accordingly, Authorised Officer, who signed the Application, appeared on 17.08.2023. His presence was felt necessary to enquire as to how many Securitisation Applications relating to this Bank, are pending before DRT-II, Ernakulam. When he is enquired about the purpose of filing, he represented that as DRT-II, Ernakulam has not passed any Orders in SA 561/2022 and in connected IAs, this Application is filed. As he was not in a position to show number of cases pending before DRT-II, Ernakulam relating to Tamilnad Mercantile Bank Ltd., details are called for from DRT-II, Ernakulam. As per details furnished, there are

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MA (SA) 19/2023

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seven SAs relating to Tamilnad Mercantile Bank Ltd., pending before DRT-II, Ernakulam from 2020 onwards, including this SA 561/2022.

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Advocate for Applicant reiterated contents of Application and submitted that as per Section 17(6) of SARFAESI Act, 2002, this Tribunal has to direct DRT-II, Ernakulam for speedy disposal of SA 561/2022.

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I have perused the Application.

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In the Application, all the daily orders from 11.11.2022

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are extracted, and at the end, it is stated that, aggrieved by the Orders passed by DRT-II, Ernakulam, present Appeal is preferred on the grounds indicated; but, Section 17(6) of SARFAESI Act, 2002, is not an Appeal, it is only an Application, and a Format is given in Appendix VIII as per Rule 12 (2) of Security Interest (Enforcement) Rules, 2002, (hereinafter called the Rules), an Application to be filed under Section 17(6) of SARFAESI Act, 2002.

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MA (SA) 19/2023

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Though, as per Section 17 of SARFAESI Act, 2002,

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DRTs are expected to dispose of SARFAESI Application, within 60 days from the date of Application, and by recording reasons before expiry of four months period, it is known factor to all Banks and Advocates that the Tribunals are not in a position to stick on to this time limit because of pendency of work. In fact, DRTs are constituted under RDB Act, 1993, for deciding Original Applications (OAs) filed by Banks/Financial Institutions, seeking recovery of money. After enactment of SARFAESI Act, 2002, this additional work is entrusted to Tribunals. In most of the Tribunals, Securitisation Applications are pending for years, and their filings are increasing day by day. Every Tribunal has to give its preference to old cases and for taking up new cases on out of turn basis, there must be some compelling reasons.

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Here, as seen from Application, it appears that, Bank filed Application IA 3244/2022 to advance the hearing, and Tribunal below dismissed the same on 24.11.2022. Admittedly, that Order is not challenged by Bank. It is not

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MA (SA) 19/2023

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known on what ground, Applicant sought to advance the hearing of SA 561/2022. Even in this Application, no reasons are given for taking up SA 561/2022, on out of turn basis. When the same is put to Advocate for Applicant, he represented that as amount involved is heavy, Bank sought for advance hearing. As seen from record, the amount involved in this case is Rs.3.22 Crores. From the details furnished by DRT, out of seven SAs pending since, 2020, in four SAs, value is more than Rs.1 Crore relating to the very same Bank. In fact, the value involved in SA 14/2020 is Rs.6.31 Crores; value involved in SA 125/2022 is Rs.3.33 Crores and value involved in this case is Rs.3.22 Crores.

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As per language of Section 17(6) of SARFAESI Act, 2002, discretion is given to DRAT to direct Tribunal below for speedy disposal. According to Section 17(6), the word is used ‘may’, but not ‘shall’. For exercising the discretion, this Tribunal must be convinced that there are compelling circumstances to take up cases on out of turn basis, leaving the old cases. When this very Bank is having Securitisation

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MA (SA) 19/2023

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Applications of the year 2020 in the same DRT, directing Tribunal below to take up this case ignoring those old matters, in my view, cannot be justified, unless compelling reasons are shown. In fact, this Application is not filed in the Format prescribed in Appendix VIII, as per Rule 12 (2) of Rules.

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In view of the above reasons, it is held that the Applicant failed to show reasons, leave alone valid reasons for exercising discretion under Section 17(6) of SARFAESI Act, 2002, therefore, Application is liable to be dismissed.

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For the above reasons, MA (SA) 19/2023 is dismissed

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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 10^th of October, 2023]

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[ Justice S. Ravi Kumar] CHAIRPERSON

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Tamilnad Mercantile Bank Limited v. Mr Sundaresan, Son of Mr. a S Natarajan

Case brief

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What did the court decide?

Tamilnad Mercantile Bank Limited v. Mr Sundaresan, Son of Mr. a S Natarajan

Case brief

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What did the court decide?

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