Partly allowed

Smfg India Credit Company Ltd. and Anr. v. Sunil Kumar Samanta

DRAT4 Aug 2023MISC APPEAL/2/2023

Case brief

AI extract

What is this about?

In an appeal challenging a SARFAESI Act dispute order, the Tribunal set aside the direction requiring the financial institution to wait pending an interim application while ordering the lower tribunal to decide that application within one month.

What did the court decide?

Direction to wait pending application 3385 of 2022 set aside; DRT-III directed to decide the application within one month.

Smfg India Credit Company Ltd. and Anr. versus Sunil Kumar… — Banking and Recovery | DRAT (2023)

¶1

IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA

¶2

Misc. Appeal No. 02 of 2023

¶3

(Arising out of I.A. 3385 of 2022 in S.A. 344 of 2022 in DRT-III, Kolkata)

¶4

THE HON’BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA

¶5

CHAIRPERSON

¶6

04.08.2023 SMFG India Credit Company Limited & Another … Appellants -VsSunil Kumar Samanta & 2 Others … Respondents Mr. A.K. Dhandhania, Learned Senior Counsel, with Mr. Rajeev Maity and Ms. Kuheli Deb, Learned Counsel for Appellants

¶7

Mr. Joydip Banerjee with Mr. Biswajit Mal and Mr. Samrat Dandapat, Learned Counsel for Respondent

¶8

THE APPELLATE TRIBUNAL :

¶9

Instant appeal has arisen against an order dated 20^th January, 2023 passed by Learned DRT-III, Kolkata in S.A. 344 of 2022.

¶10

Heard the Learned Counsel for the parties and perused the record.

¶11

It appears that the SARFAESI Application under Section 17 of the SARFAESI Act, 2002 was filed by the Respondent challenging the SARFAESI actions undertaken by the Bank. Pending SARFAESI Application, I.A. 3385 of 2022 was filed challenging the order of District Magistrate dated 5^th December, 2022 on different grounds which was heard and disposed of by the Learned DRT by the impugned order, keeping the I.A. pending.

¶12

Learned Counsel for Appellant submits that Learned DRT did not find any prima facie case as far as violation of Section 14 of the SARFAESI Act, 2002 is concerned but at the same time it also passed an injunction order restraining the Financial Institution to wait for the decision of the I.A. 3385 of 2022. Learned Counsel submits that this

¶13

¶14

direction is contrary to the findings of the Learned DRT wherein it has held that there is no prima facie case in favour of the SARFAESI Applicant for violation of Section 14 of the SARFAESI Act. Reliance is placed on two judgments of the The Hon’ble Apex Court; (i) Kashi Math Samsthan -vs- Shrimad Sudhindra Thirtha Swamy [(2010) 1 SCC 689] and (ii) Seema Arshad Zaheer & Others -vs- Municipal Corporation of Greater Mumbai & Others [(2006) 5 SCC 282].

¶15

Learned Counsel for Respondent submits that I.A. 3385 of 2022 has yet not been finally decided. SARFAESI Applicant has made a payment of Rs.55.00 lac to the Financial Institution. Since the I.A. is still pending, there no reason for filing the appeal by the Financial Institution. It is further submitted that there is violation of the Section 14 of the Act by the District Magistrate which is yet to be determined.

¶16

As far as finding of the Learned DRT on the issue that no prima facie case is made out for violation of the provisions of Section 14 of the SARFAESI Act is concerned, this finding is not challenged by the Respondents. Further, at the same time Learned DRT issued a direction to the Financial Institution to wait till the decision of the I.A. 3385 of 2022. It is self contradictory. As far as interim order is concerned, admittedly, three necessary ingredients, i.e. prima facie case, balance of convenience and irreparable loss are to be considered while issuing an injunction order. It is submitted that without finding any prima facie case against the SARFAESI Applicant, injunction order is issued against the Respondent Bank. This direction is against the law. Now that I.A. 3385 of 2022 is pending it would be expedient that Learned DRT should dispose of the I.A. expeditiously preferably within a period of one month from the date copy of the order is received. If any adjournment is sought, Learned DRT shall be at liberty to pass appropriate orders.

¶17

Accordingly the appeal is liable to be partly allowed.

¶18

O R D E R

¶19

¶20

The appeal is partly allowed to the extent that a direction to the Financial Institution to wait for the decision of the Tribunal on I.A. 3385 of 2022 is set aside. However, Learned DRT is directed to decide I.A. 3385 of 2022 expeditiously within a period of one month from the date copy of the order is received.

¶21

Any observation made in the body of the judgment would not affect the final disposal of I.A. 3385 of 2022.

¶22

Copy of the order be supplied to Appellant and the Respondents and a copy be also forwarded to the concerned DRT.

¶23

File be consigned to Record room.

¶24

Order dictated, signed, dated and pronounced in open Court.

¶25

(Anil Kumar Srivastava,J) Chairperson

¶26

21/ac