Dismissed

T.Bhagyalakshmi & Anr. v. a.O.Standard Chartered Bank

DRAT9 Feb 2023REGULAR APPEAL/109/2018

Case brief

AI extract

What is this about?

This appeal challenged the lower Tribunal's order (05.04.2018) in SA 16/2015, which upheld the finalization of an auction sale after failing to comply with a prior direction (04.10.2017) to deposit the outstanding amount. The Tribunal held the appellants failed to prove payment of the due amount as on the date of sale within the stipulated period.

What did the court decide?

The appeal is dismissed; both parties bear their own costs; all pending IAs are closed.

T.Bhagyalakshmi & Anr. versus a.O.Standard Chartered Bank — Banking and Recovery | DRAT (2023)

¶1

RA (SA) 109/2018

¶2

IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

¶3

Dated the 9^th of February, 2023

¶4

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

¶5

RA (SA) 109/2018

¶6

[SA No.16/2015 on the file of DRT-II, Chennai)

¶7

Between

¶8

T. Bhagyalakshmi, W/o Thirumalai,

¶9

No. 155-156, T.T.K. Road, Alwarpet, Chennai – 600 018.

¶10

T. Varun Kumar, S/o Thirumalai,

¶11

No. 155-156, T.T.K. Road,

¶12

Alwarpet, Chennai – 600 018.

¶13

……Appellants

¶14

And

¶15

The Authorised Officer, Standard Chartered Bank, No. 58, Armenian Street, Chennai- 600 001.

¶16

….. Respondent

¶17

Counsel for Appellants : Mr. S. Kannathasan Counsel for Respondent : Mr. Rangarajan for M/s.R&P Partners

¶18

¶19

RA (SA) 109/2018

¶20

ORDER

¶21

This Appeal is preferred against Order dated

¶22

05.04.2018 of DRT-II, Chennai, in SA 16 /2015.

¶23

Brief facts leading to this Appeal are as follows:-

¶24

Appellants herein filed SA 16/2015 challenging Sale dated 20.01.2015, and Tribunal below, by Oder dated 17.02.2015, dismissed said Application holding that Appellants have no locus standi to invoke Section 17 of SARFAESI Act, 2002.

¶25

Aggrieved by said Order, Appellants preferred an Appeal in RA (SA) 74/2015 before this Tribunal, and my predecessor in office, through Order dated 04.10.2017, observed that in view of peculiar facts and circumstance of the case, propriety demands that Appellants should have a right to challenge the auction sale provided they make a deposit of the amount

¶26

¶27

RA (SA) 109/2018

¶28

due as on the date of sale, within a period of one month, from the date of that Order. This Tribunal also observed that Appellants will approach DRT-II, Chennai, make their appearance on 05.11.2017 along with Memo showing details of payments of the due amount as on 20.01.2015. This Tribunal also clarified that Appellants will have right of adjustment of deposits made by them in the Registry of this Tribunal, and on deposit of Sale Notice amount, impugned Order of Learned Presiding Officer will come to an end, and Learned Presiding Officer, DRT-II, Chennai, will proceed to decide the matter afresh, and failing which, Respondent Bank and Auction Purchasers will have a right to finalize the Sale and dispossess Appellants from the property, in accordance with law.

¶29

On receipt of Order of this Tribunal dated 04.10.2017, Learned Presiding Officer took up SA 16/2015, and decided the same, in which the impugned Order dated 05.04.2018, is passed. Aggrieved by the same, present Appeal is preferred.

¶30

¶31

RA (SA) 109/2018

¶32

Both parties filed Written Submissions and the same

¶33

were reiterated at the time of oral submissions.

¶34

Main argument of Advocate for Appellants is that there

¶35

are two loans; one is House Loan and other is Business

¶36

Loan, and securities were given for both loans, but Sale Notice is issued for both properties, though one property would be sufficient for realizing both outstanding amounts. He submitted that Appellants paid more than the amount due, but in spite of that, Tribunal below held that money is

¶37

not paid as per directions of Order of this Tribunal. He submitted that Learned Presiding Officer ought to have determined the amount due as on 20.01.2015, as per directions of this Tribunal, and misconstrued the directions. He submitted that Learned Presiding Officer erred in holding that Appellants failed to comply with directions of DRAT, therefore, earlier Order of DRT dated 17.02.2015 will hold good. He submitted that Order of Tribunal below is contrary

¶38

¶39

RA (SA) 109/2018

¶40

to directions given by this Tribunal, therefore, Order dated

¶41

05.04.2018 has to be set aside.

¶42

On the other hand, Advocate for Respondent Bank submitted that Appellants are not the borrowers, and they are only third parties and prayer in SA is not maintainable. He further submitted that various deposits made by Appellants to the credit of Registry, DRAT, Chennai, are in compliance of statutory requirements under Section 18 of SARFAESI Act, 2002, and in the absence of any specific direction from Appellate Tribunal or consent from Appellants, Bank cannot adjust those amounts towards repayment. He further submitted that Tribunal below mainly examined whether Appellants have complied with conditions imposed by this Tribunal in its Order dated 04.10.2017, and this Tribunal in its Order dated 04.10.2017, specifically recorded that, if those conditions are not complied with, Respondent Bank and Auction Purchasers

¶43

¶44

RA (SA) 109/2018

¶45

have a right to finalize the Sale and dispossess Appellants from the property.

¶46

I have perused the material papers, Order of this Tribunal dated 04.10.2017 and impugned Order dated 05.04.2018.

¶47

This Tribunal in RA (SA) No. 74/2015, specifically directed Appellants herein to deposit the amount due as on date of Sale i.e. 20.01.2015, within a period of one month from the date of that Order. So, it is bounden duty of Appellants to deposit the due amount as on 20.01.2015, on or before 03.11.2017. It is also bounden duty of Appellants

¶48

to produce appropriate material documents complying with above said directions.

¶49

Here before this Tribunal, Appellants filed a Memo showing proof of payment details made by Appellants. In the said Memo, according to Appellants a sum of

¶50

¶51

RA (SA) 109/2018

¶52

Rs.2,80,75,400/- is paid as against actual payment of Rs.2,62,45,032/-, as on 20.01.2015, but, this is contrary to the document of borrower dated 17.03.2018, which is filed in Appeal RA (SA) 83/2019, a Certificate issued by Narendran & Co., Chartered Accountant, who issued this Certificate on the request of M/s. Maruthi Paper Converters, i.e. borrower. According to which, a sum of Rs.1,51,06,434/- is due as on 15.01.2015, after adjusting all the payments made upto that date, whereas, in the Memo filed by Appellants herein, the payments pleaded upto 20.01.2015 is Rs.2,80,75,400/-, whereas, all those payments are subsequent to 20.01.2015, then, how can Appellants contend that they made payment of Rs.2,80,75,400/- as on 20.01.2015. Further, as rightly pointed out, most of those payments are towards statutory deposit.

¶53

These details are not produced before Tribunal below,

¶54

even then, as rightly pointed out by Advocate for Respondent Bank, most of these payments are towards the statutory

¶55

¶56

RA (SA) 109/2018

¶57

deposit under Section 18 of SARFAESI Act, 2002, in compliance of their earlier Appeal or this Appeal or the Appeal filed by borrower, but those amounts, without the consent of parties, cannot be appropriated towards the loan account. When this Tribunal, by considering peculiar facts and circumstances of the case of Appellants, permitted them to pay the outstanding, within one month, which means they had to pay outstanding on or before 03.11.2017, and produce evidence before Tribunal below; having failed in complying said directions, it is not open to Appellants to contend that they have complied with the directions. As per record, it appears that Appellants filed a Memo on 03.11.2017, before Tribunal below showing payments, but all those payments were prior to 04.10.2017, i.e., prior to directions given by this Tribunal. If those payments would discharge the loan amount, Appellants ought to have produced those material before this Tribunal itself, before passing Order on 04.10.2017, in which case, there may not be an occasion to this Tribunal to direct Appellants to deposit the amount within one month, which was due as on

¶58

¶59

RA (SA) 109/2018

¶60

the date of Sale, thereby meaning, Appellants have not approached this Tribunal with clean hands. Tribunal below, has elaborately considered all the contentions of both parties and recorded a finding that Appellants failed to place any material complying with directions of this Tribunal dated 04.10.2017, therefore, the question of adjudicating afresh, does not arise. As rightly observed by Tribunal below, only when the deposit is made, earlier Order of Tribunal below will come to an end and Learned Presiding Officer shall proceed to decide the matter afresh, and on failure, Respondent Bank and Auction Purchaser were permitted to finalize the Sale and dispossess Appellants. As there was failure, sale was finalized, and therefore, Tribunal below was right in saying that, its earlier Order will hold good.

¶61

Though Appellants raised many aspects in their Written Submissions, all those aspects are in respect of merits of the case, but the crucial issue is whether earlier Order of this Tribunal is complied with or not; only on complying the

¶62

¶63

RA (SA) 109/2018

¶64

directions, question of examining merits would arise. As already referred to above, as Appellants failed to comply with conditions imposed by this Tribunal, entire submissions of Advocate for Appellants in respect of merits of the case, have no bearing.

¶65

On a scrutiny of the material, I am of the considered view that Tribunal below has not committed any error and there are no grounds to interfere with Order dated

¶66

05.04.2018.

¶67

For these reasons, Appeal RA (SA) 109/2018 is dismissed. Both the parties shall bear their own costs. All pending IAs, if any, stand closed.

¶68

[Dictated to Athistamani, PS transcribed by her, corrected, signed and pronounced by me in open court, this 9^th of February, 2023]

¶69

Sd/- [ Justice S. Ravi Kumar ]

¶70

T.Bhagyalakshmi & Anr. v. a.O.Standard Chartered Bank

Case brief

What is this about?

What did the court decide?

T.Bhagyalakshmi & Anr. v. a.O.Standard Chartered Bank

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

All orders in this case

Similar cases

S Ganesh versus Indian Bank and Ors.

P Selvi versus Bank of Baroda

M s M R Enterprises versus Bank of Baroda

M/s Maruthi Paper Converters & Ors. versus a.O.,Standard Chartered Bank

Tamilnad Mercantile Bank Limited versus Sri Gayathri Chashews

Mrs. Usharani versus Bank of India