The Appellate Tribunal dismissed the appellant bank's appeal challenging the DRT's refusal to attach respondents' properties. The Tribunal held that the bank failed to produce estimated valuation of security assets as mandated under Section 19(3A) of the RDB Act.
Appeal MA 93/2017 dismissed with costs; pending IAs closed.
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MA 93/2017
IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI
Dated the 28th of April, 2023
PRESENT: Hon’ble Mr. Justice S. Ravi Kumar CHAIRPERSON
MA 93/2017
[IA 1422/2016 in OA No.641/2016 on the file of DRT, Madurai]
Between
IDBI Bank Limited, Represented by its Authorised Signatory, Prasad Chambers, No.93/94/95, East Arockiyasamy Road, R.S. Puram, Coimbatore – 641 002.
……Appellant
And
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….. Respondents
Counsel for Appellant : M/s. Shivakumar & Suresh Counsel for Respondents : M/s. Ananda Gomathy
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ORDER
08.09.2016 in IA 1422/2016 in OA 641/2016.
Appellant herein along with Canara Bank, filed
OA 641/2016 against four Defendants for issue of Recovery Certificates for Rs.37,53,27,155.33p in favour of Appellant herein, and for Rs.17,98,29,803.96p, in favour of Canara Bank. Along with OA, Appellant filed IA 1422/2016 to direct Defendants to furnish additional security to the tune of Rs.50 Crores, and on failure to do so, attach the properties Scheduled to Interlocutory Application.
Defendants resisted said Application by filing Counter Affidavit, and on a consideration of material placed before it, Tribunal below dismissed Application holding that Appellant
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failed to produce any proof in support of apprehension indicated in the Petition. Aggrieved by the same, present Appeal is preferred.
at the time of sanction of loan is not sufficient to satisfy the debt claimed, Appellant prayed for attachment of some more properties, with a request of giving opportunity to Defendants to furnish security, but Tribunal below, has not properly considered the request of Bank. It is further submitted that properties now sought for attachment are mortgaged in favour of Kotak Mahindra Bank Ltd., but value of properties given as mortgage to Kotak Mahindra Bank Ltd., are more than money due to Kotak Mahindra Bank Ltd., therefore, no prejudice will be caused if attachment is ordered subject to mortgage claimed by Kotak Mahindra Bank Ltd.
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and some properties are landed property, and one item is
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nearly 40 acres. As per Section 19(3A) of Recovery of Debts and Bankruptcy Act, 1993, (hereinafter called the RDB Act), Bank has right to pray for attachment of properties, where security given are not sufficient to satisfy the claim. But, this remedy can be availed subject to fulfillment of certain conditions. One of the conditions is that Bank shall produce estimated value of securities offered at the time of sanction of loan, to enable Tribunal to compare this value with claim made in OA. Canara Bank also obtained securities from the same Defendants, for said loan, and as many as seven items of landed properties are given as security for the loan availed from Canara Bank. So, in total, there are 22 items of properties belonging to Defendants offered as security for loans contracted with Appellant and Canara Bank. Chief Manager filed Affidavit in support of Application, and except saying that securities given at the time of sanction of loan, are not sufficient to satisfy the claim, no valuations are referred in the Affidavit. Second Respondent filed Counter Affidavit to Application, wherein he asserted that value of properties given as security to loan
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amount of Appellant was estimated more than Rs.50 Crores at the time of sanction of loan, and their present value as on date of Counter, is Rs.97.86 Crores. Along with Counter, valuation report of mortgaged properties is also filed, and on a consideration of these material papers, Tribunal below refused to grant relief and dismissed Application.
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Respondents have asserted present value of mortgaged properties at Rs.97.86 Crores, and produced valuation report, without rebutting such material, finding fault with Tribunal below, is unwarranted.
[Dictated to Athistamani, PS transcribed by her, corrected, signed and pronounced by me in open court, this 28th of April, 2023]
CHAIRPERSON
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2 issues framed by the court
Whether the appellant bank had complied with the statutory requirement under Section 19(3A) of RDB Act to produce estimated value of securities while seeking attachment of properties.
Whether the Tribunal below was rightly justified in dismissing the application for attachment of properties due to lack of valuation proofs.
2 provisions across 1 enactments
IDBI Bank Limited
M/s. Nandhi Dall Mills
Mr. S. A. Kumar
Tmt. K. Jayanthi
Mr. K. Arun
S. Ravi Kumar
As recorded by the court registry
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