Dismissed

Ms Ganekar Co. and Anr. v. Ao Canara Bank

DRAT8 Jun 2023REGULAR APPEAL/129/2018

Case brief

AI extract

What is this about?

The Appellate Tribunal dismissed the appeal filed by borrowers against an order dismissing their securitisation application. The Tribunal held that claims that objections were not considered are barred by the explanation to Section 17 of the SARFAESI Act and that the appeal was devoid of merits.

What did the court decide?

The appeal RA (SA) 129/2018 was dismissed with costs. All pending intervention applications were closed.

Ms Ganekar Co. and Anr. versus Ao Canara Bank — Banking and Recovery | DRAT (2023)

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RA (SA) 129/2018

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IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

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Dated the 8^th of June, 2023

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

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RA (SA) 129/2018

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[SA 57/2017 on the file of DRT-II, Chennai]

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Between

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M/s. Ganekar & Co.,

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Proprietor Sri. V. Elangavan,

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No.71, Elaya Mudali Street,

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Old Washermanpet, Chennai – 600 021.

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M. Velayutham (Deceased)

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2a) Mangaiarkarasi, (Deceased)

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2b) A Vasugi,

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2c) V. Mahendran,

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2b) to 2c) are legal heirs of 2^nd & 2a) Appellants and residing at No.71, Elaya Mudali Street,

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Old Washermanpet, Chennai – 600 021.

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……Appellants

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And

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The Authorised Officer, Canara Bank, Tondairpet Branch,

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No.50, G A Road, Tondairpet, Chennai – 21.

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R. Raju,

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S/o Radhakrishnan,

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No. 83/48, Balakrishna Naidu Colony, 1^st Street, Kaladipet, Thiruvottiyur, Chennai – 1.

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….. Respondents

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Counsel for Appellant : M/s. R. Chandrasudan Counsel for R.1 : Mr. S. Kesavan Counsel for R2 : Mr. R.K.M. Suresh

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RA (SA) 129/2018

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ORDER

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This Appeal is preferred against Order dated

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25.10.2017 in SA 57/2017 of DRT-II, Chennai.

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Brief facts leading to this Appeal are as follows:-

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First Respondent initially issued Notice under Section 13(2) of SARFAESI Act, 2002, on 03.07.2015, for which, Reply dated 05.09.2015, is given raising certain objections, and thereafter, a fresh Notice under Section 13(2) of SARFAESI Act, 2002, is issued, on 24.06.2016, for that also, Reply dated 26.08.2016, is given, and thereafter, Bank issued Possession Notice under Section 13(4) of SARFAESI Act, 2002, on 08.02.2017, and on receipt of that Notice, Appellants herein filed Securitisation Application SA 57/2017, questioning said Notice, contending that impugned Notice dated 08.02.2017 issued under Section 13(4) of SARFAESI Act, 2002, is contrary to provisions of the Act,

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RA (SA) 129/2018

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2002; That Notice issued under Section 13(4) is without any basis and contrary to the agreed terms and conditions of loan facility; Issue of Notice under Section 13(4) of the Act, 2002, is without considering the objections raised through Representation dated 26.08.2016 and said Notice is totally arbitrary and unsustainable, both in law and on facts.

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First Respondent resisted the Application by filing Reply. On a consideration of contentions and rival contentions of both the parties, Tribunal below dismissed the Application holding that Applicants failed to show any valid grounds for violation of mandatory provisions of Act and Rules; Aggrieved by the same, present Appeal is preferred.

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Heard both sides.

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When this Appeal has come up for hearing, Advocate for Appellants submitted that the primary ground on which SA is filed and Order of Tribunal challenged before this Tribunal is that, the Objections of Appellants dated

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RA (SA) 129/2018

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26.08.2016, are not considered by Bank, thereby issue of Section 13(4) Notice, is unwarranted and illegal. On hearing this, when it is put to Advocate for Appellants, about the explanation attached to Section 17 of SARFAESI Act, 2002, which says that borrower shall not entitle to file an Application before DRT contending that Objections are not properly considered, when such is the bar under statute, any length of argument in respect of Objection, cannot be entertained.

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When Advocate for Appellants is requested to show on what grounds Section 13(4) Notice issued under SARFAESI Act, 2002, is challenged, he failed to give any answer, except saying that the primary objections with regard to Objection dated 26.08.2016, is not considered by Bank. Since, the explanation to Section 17 of SARFAESI Act, 2002, bars remedy, arguments of Advocate for Appellants, cannot hold good.

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RA (SA) 129/2018

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When specific Rules are framed under SARFAESI Act, 2002, to be followed by Bank/Financial Institution, while taking recourse to measures for possession of property, and if any of those Rules are not followed, the parties are entitled to challenge said measures or action. For example, if Notice issued under Section 13(4) of SARFAESI Act, 2002, is challenged on the ground that it was not duly served and it was not duly affixed and it was not duly published, then, the borrower or aggrieved party, will have every right to challenge such Notice. But, here in this case, no such objections are taken, except vaguely saying that Section 13(4) Notice is contrary to the provisions of the Act. It is not sufficient to make omnibus statement, without specifically stating violation of specific Rule or provision.

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On the other hand, Advocate for 1^st Respondent submitted that, after filing of SA, Tribunal below granted conditional stay and borrower failed to comply with said conditional Order, therefore, Bank proceeded further, and issued E-auction Sale Notice on 26.04.2017 fixing auction on

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RA (SA) 129/2018

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01.06.2017, in which 2^nd Respondent herein became a successful bidder and Sale Certificate is issued on 18.11.2017. He submitted, borrower separately filed SA challenging said Sale and the same is pending before DRT. He further submitted, in view of that, Appeal itself has become infructuous .

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I have perused material papers including impugned Order dated 25.10.2017.

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As already referred to above, when specific grounds are provided to challenge the Notice issued under Section 13(4) of SARFAESI Act, 2002, and when those grounds are not availed, it not open to Appellants to contend that Tribunal below has not properly considered the grounds taken by Appellants.

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As seen from Securitisation Application, the entire case of Appellants is about non-consideration of Objection dated

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26.08.2016, which cannot be a ground to invoke Section 17

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RA (SA) 129/2018

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of SARFAESI Act, 2002. Therefore, I am of the considered view that Tribunal below is perfectly justified in dismissing Application, and there are absolutely no grounds to interfere with Order dated 25.10.2017, and Appeal is devoid of merits.

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In the result:- Appeal RA (SA) 129/2018 is dismissed with costs. All pending IAs, if any, stand closed.

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[Dictated to Athistamani, PS, in open court, transcribed by her, corrected and signed by me, this 8^th of June, 2023]

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[ Justice S. Ravi Kumar]

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CHAIRPERSON

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Ms Ganekar Co. and Anr. v. Ao Canara Bank

Case brief

What is this about?

What did the court decide?

Ms Ganekar Co. and Anr. v. Ao Canara Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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