Allowed

Bank of Baroda v. Uttam Fine Tex Pvt. Ltd. & Ors.

DRAT12 Sept 2023MISC APPLICATION/427/2019

Case brief

AI extract

What is this about?

The Appellate Tribunal set aside the Single Judge's order directing the bank to restore possession of the secured asset, holding it premature as the Securitisation Application was still pending and the measuress were not non-compliant.

What did the court decide?

Impugned order directing restoration of possession of the secured asset set aside; Debts Recovery Tribunal to dispose of Securitisation Application within two months.

Bank of Baroda versus Uttam Fine Tex Pvt. Ltd. & Ors. — Company and Corporate | DRAT (2023)

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BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr Justice Ashok Menon, Chairperson

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Misc. Appeal No.46 /2019

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Between

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Bank of Baroda … Appellant/s

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V/s.

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Uttam Fine Tex Pvt. Ltd. & Ors.

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…Respondent/s

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Mr Shailesh Rai, i/b Mr Bhaskar Sharma, Advocate for Appellant Bank.

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The Appellant Bank of Baroda is in appeal impugning the order dated 15.05.2019 in Interlocutory Application (I.A.) No. 293 of 2019 in Securitisation Application (S.A.) No. 56 of 2018 on the files of the Debts Recovery Tribunal-II, Ahmedabad (D.R.T.). The Applicants in S.A. had filed the aforesaid I.A. for restoration of the possession which was taken by the bank pending consideration of the S.A. After hearing the arguments advanced by both sides, the Ld. Presiding Officer observed that the possession of the property was taken while the S.A. was pending and that there was an oral undertaking given by the Ld. Counsel who appeared for the bank to the effect that the possession would not be taken. The Ld. Presiding Officer found that taking possession of the secured asset against the undertaking given by counsel for the bank is in violation of the undertaking and therefore, specific direction was given in the impugned order directing restoration of the possession of the secured asset to the Applicants/borrowers within one week. There is also a proceeding for

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contempt filed by the Applicants in the S.A. There is also a prayer for contempt prayed in the application which was to be considered along with the S.A. The parties were directed to get ready for the disposal of the S.A. at the earliest.

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The Respondents though served did not appear to contest the appeal and have been set ex-parte.

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It is submitted by the Ld. Counsel appearing for the Appellant bank that the S.A. stands posted for final hearing on 16.10.2023 and that the pleadings have been completed therein. The possession of the secured asset still continues with the bank.

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On considering the entire facts and circumstances, I find that there was no specific order prohibiting the taking over of possession passed by the D.R.T. An undertaking by the counsel that the bank that possession could not be interpreted as an order of the Tribunal and therefore, the Tribunal probably acted in a haste by making a direction to restore possession of the secured asset to the borrowers. The relief under Sec. 17(3) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’, for short) can be granted to the Applicants in the S.A. only if the Tribunal is satisfied that after examining the facts and circumstances of the case and evidence produced by the parties, the measures referred to Sub-Section 4 of Section 13 taken by the secured creditor are not in accordance with the provisions of the Act and Rules made thereunder. In the instant case, the S.A. is still pending. The Applicants have not succeeded in establishing that the secured creditor has taken

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the Sarfaesi measures not in accordance with the provisions of the Act and Rules made thereunder. Hence, I find that the order of restoring possession of the secured asset made by the Ld. Presiding Officer was premature. The impugned order is, therefore, to be set aside and I do so.

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The S.A. is ripe for being heard and therefore, the D.R.T. is directed to dispose of the S.A. as expeditiously as possible at any rate within the period of two months from the date of receipt of this order of this Tribunal. Parties are directed to cooperate with the disposal of the S.A. without seeking any unnecessary adjournment.

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With these observations, the appeal is disposed of.

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Sd/Chairperson

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mks-17

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Bank of Baroda v. Uttam Fine Tex Pvt. Ltd. & Ors.

Case brief

What is this about?

What did the court decide?

Bank of Baroda v. Uttam Fine Tex Pvt. Ltd. & Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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