Remanded

M/s Samskriti v. Ms Sugan Pharma Ltd.

DRAT12 Oct 2023REGULAR APPEAL/108/2023

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal allowed the appeal and remanded the matter to the Debts Recovery Tribunal. The Tribunal held that the borrower failed to implead the second auction purchaser as directed by the High Court before seeking condonation of delay and filing the SARFAESI Application, thus violating procedural compliance.

What did the court decide?

The matter is remanded to the DRT to decide afresh after impleading the other auction purchaser as a party to the SARFAESI Application.

M/s Samskriti versus Ms Sugan Pharma Ltd. — Execution and Attachment | DRAT (2023)

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA

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Appeal No. 108 of 2023

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(Arising out of MA No. 35 of 2015 in SA No. 240 of 2018 in DRT Visakhapatnam)

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THE HON’BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA CHAIRPERSON

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M/s Samskriti, A partnership firm rep. by its Managing Partner Mr. Devineni Vara Krishna Ram, R/o. 25-114, Ramayanarao Peta, Nuzivedu, Krishna District, Andhra Pradesh

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…Appellants

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-Versus-

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M/s Sugun Pharma Ltd., Rep by Managing Director and Authorized Signatory, Chadalavada Ramesh Babu, D. No. 23-22-65, Sivalayam Street, Vijayawada.

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M/s Pridhvi Asset Reconstruction & Securitization Company Ltd., rep. by its Authorised officer and Senior Vice President, Hyderabad.

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… Respondent Counsel for the Appellants Mr. M. Narasimha Rao, Learned Advocate Counsel for the Respondent No. 1 Mr. Nemani Srinivas with Mr. Rishav Gupta, Learned Advocate

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JUDGMENT : On 12^th October, 2023

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THE APPELLATE TRIBUNAL

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Heard the Learned Counsel for the parties and perused the record. Order dated 18.02.2021 is under challenge wherein Application Under Section 5 of the Limitation Act in filing the SARFAESI Application was allowed by the Learned DRT and delay of 691 days was condoned.

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2. It appears that the SARFAESI Application No. 247 of 2012 was filed by the borrower which was disposed of on 03.05.2013. This order was challenged before the Hon’ble High Court of Andhra Pradesh by filing W.P. No. 16232/2013 which too was dismissed on 12.07.2013. SLP 28021 of 2013 was filed before the Hon’ble Apex Court which too was dismissed on 29.09.2015. Thereafter, sale notice was issued on 31.08.2013 for auction of two plots of properties. Auction sale was held on 08.10.2013 wherein both the plots were purchased by two different auction purchasers. Thereafter MA No. 35 of 2015 with an unnumbered SA was filed by the borrower on 06.06.2018 which was disposed of on 06.05.2018 by the Learned DRT. This order was challenged by the auction purchasers, Appellant herein and ARC before the Hon’ble High Court of Andhra Pradesh by filing W.P. No. 25772 of 2018 and 26140 of 2018 which were allowed vide order dated 07.12.2020 with the following order-

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“For the aforesaid reasons, both the Writ Petitions are allowed, setting aside the order dated 06.06.2018 passed by the Debts Recovery Tribunal, Visakhapatnam, passed in M.A. No. 35 of 2015 in S.A. No. 240 of 2018. Accordingly, M.A. No. 35 of 2015 stands restored to the file of the Tribunal and the matter is remanded to the Tribunal for fresh consideration and for passing appropriate orders in MA. No. 35 of 2015, strictly in accordance with law, after giving opportunity of hearing to all the stakeholders, including the auction purchaser. The auction purchaser stands impleaded as Respondent No. 2 in M.A. No. 35 of 2015 in the Securitization Application. The Tribunal shall make an endeavour to dispose of M.A. No. 35 of 2015, as expeditiously as possible, preferably, within a period of six weeks from the date of receipt of a copy of this order. The

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Tribunal shall also make an endeavour for disposal of the main Securitization Application subject to outcome of M.A. No. 35 of 2015.”

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3. It appears that thereafter the matter was again heard by the Learned DRT and impugned order was passed.

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4. At the very outset, it is argued by the Learned Counsel for the Appellant that there were two auction purchasers for two plots of properties but only the Appellant herein was impleaded as a party by the borrower but the second auction purchaser was not impleaded in compliance of the judgment of the Hon’ble High Court.

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5. Perusal of the record will show that the second auction purchaser was not impleaded as a party in the application under Section 5 of the Limitation Act and in the SARFAESI Application filed by the borrower after the orders of the Hon’ble High Court. Hon’ble High Court has specifically issued a direction for impleadment of auction purchasers before the Learned DRT. But only one auction purchaser was impleaded which is not the proper compliance of the order of the Hon’ble High Court.

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6. Accordingly, Learned DRT erred in disposing of the application under Section 5 of the Limitation Act without impleading the other auction purchaser. Accordingly, Appeal deserves to be allowed and matter is liable to be remanded to the Learned DRT for deciding afresh after impleading the auction purchaser as party.

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ORDER

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Appeal is allowed. Matter is remanded to the Learned DRT Visakhapatnam to decide it afresh after impleading the other auction purchaser as opposite party in the SARFAESI Application. Borrower shall comply these directions and the direction of the Hon’ble High Court dated 07.12.2020, failing which application under Section 5 of the Limitation Act and the SARFAESI Application shall stand dismissed. It is an old matter. Learned DRT is expected to decide the same expeditiously.

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No order as to costs.

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File be consigned to Record Room.

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

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Copy of the Judgment/ Final Order be uploaded in the Tribunal’s Website.

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Order signed and pronounced by me in the open Court on this the 12^th day of October, 2023.

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Dated: 12^th October, 2023 16/tp

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(Anil Kumar Srivastava,J) Chairperson

M/s Samskriti v. Ms Sugan Pharma Ltd.

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M/s Samskriti v. Ms Sugan Pharma Ltd.

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