Allowed

Sepco Electric Power Construction Corporation v. State Bank of India

DRAT20 Apr 2023REGULAR APPEAL/315/2018

Case brief

AI extract

What is this about?

The Debts Recovery Appellate Tribunal allowed the appeal against the special appearance dismissed by DRT-2 Hyderabad, holding that the mortgage was created in defiance of a High Court interim order, making the DRT finding unsustainable and liable to be set aside.

What did the court decide?

The appeal was allowed, the judgment and order of DRT-2 Hyderabad were set aside, and the special appearance (T.S.A. No. 161 of 2018) stands allowed.

Sepco Electric Power Construction Corporation versus State… — Banking and Recovery | DRAT (2023)

¶1

¶2

IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA

¶3

Appl No. 315 of 2018

¶4

(Arising out of S.A. No. 161 of 2018 – DRT-2 Hyderabad)

¶5

THE HON’BLE JUSTICE SHRI ANIL KUMAR SRIVASTAVA, CHAIRPERSON

¶6

20.04.2023

¶7

M/s. Sepco Electric Power Construction Corporation having its works and projects site office at Janjgir Champa District, Chattisgarh.

¶8

… Appellant

¶9

Vs. 1. State Bank of India, SAMB Branch, Secunderabad,

¶10

1. M/s GVS Infra & Industries Pvt. Ltd. represented by its Managing Director, Mr. Sirnivas Gundluri, residing at 12-2-460, Srinivas Gundluri Complex, Amba Gundluri Complex, Amba Gardens, Mehdipatnam, Hyderabad.

¶11

1. Mr. Sirnivas Gundluri, residing at 12-2-460, Srinivas Gundluri Complex, Amba Gundluri Complex, Amba Gardens, Mehdipatnam, Hyderabad.

¶12

1. Mrs. Bharathi Devi Gundluri, residing at 12-2-460, Srinivas Gundluri Complex, Amba Gundluri Complex, Amba Gardens, Mehdipatnam, Hyderabad.

¶13

….. Respondents

¶14

For Appellant : Mr. N. Srinivas, Learned Counsel For Respondent : Mr. S. Pal Chowdhury, Learned Counsel with Ms. Swasati Sikdar, Learned Counsel.

¶15

JUDGEMENT

¶16

Instant appeal has arisen against the judgement and order

¶17

dated 05.10.2018 passed by learned DRT-2, Hyderabad in T.S.A. 161 of 2018 [M/s. Sepco Electric Power Construction Corporation Vs. State Bank of India & three others] arising out of old S.A. No.

¶18

¶19

507 of 2013 whereby S.A. was dismissed. Feeling aggrieved the appellant has preferred the appeal.

¶20

Heard learned counsel for the parties, that is appellant as well as respondent no.1 and perused the records.

¶21

S.A. was filed before the learned DRT with the prayer to declare the e-auction notice dated 06.12.2012 fixing e-auction on 08.09.2013 be void and further to declare the scheduled property attached to O.A. 646 of 2012 by the respondent bank is not subject to the mortgage in favour of respondent bank. After dismissal of the S.A. secured assets were auctioned in favour of M/s. Ramakrishna Township & Projects Pvt. Ltd. Writ Petition No. 5058 of 2019 was filed by the auction purchaser against the bank as well as the borrower which was decided by the Hon’ble High Court of Telangana at Hyderabad on 29.10.2019. 4. Impugned judgement was passed on the ground that the applicant having no order of attachment in its favour as on the date of mortgage cannot interdict the proceedings initiated by first respondent bank against the S.A. scheduled properties under the provisions of SARFAESI Act. Accordingly, dismissed the S.A. 5. In the Writ Petition No. 5058 of 2019 the Hon’ble Division Bench of the High Court at Telangana has clearly held that the first respondent bank has colluded with the second respondent and has played fraud on the petitioner and other auction purchasers in acting arbitrary and highhanded manner unbecoming of a public financial institution. It was also observed

¶22

¶23

that the mortgage was created in defiance of the order of the Civil Court directing to maintain the status quo. Accordingly, writ petition was allowed and bank was directed to refund a sum of Rs.4,40,25,000/-. Thereafter, a contempt petition was filed before the Hon’ble High Court.

¶24

In para 42 and 44 of the Hon’ble High Court order as under :

¶25

“In any event it is not the case of first respondent bank that it was dismissed before 31.10.2018. Therefore, as on 31.10.2018 the said litigation in relation to the subject property was subsisting and created a cloud on the right of the first respondent to alienate the subject property. As a public financial governed by Article 14 of the Consritution of India it iwas the duty of the first respondent bank not to proceed with the auction on 31.10.2018 till the litigation in respect of the said property ended.”

¶26

Accordingly, the writ petition is allowed with costs of Rs.20,000/to be paid by the first respondent to the petitioner and first respondent is directed to refund forthwith the sum of Rs.4,40,25,000/- deposited by the petitioner with it on 26.10.2018/01.11.2018 with interest at 9% per annum till the date of repayment. The Chairman and Managing Director of State Bank of India shall indentify the officers responsible for this arbitrary action and initiate disciplinary action against them.”

¶27

In view of the observation made by the Hon’ble High Court in the above writ petition whereby specifically held that mortgage was made despite the interim order of status quo passed by learned Civil Court which was against the law. Accordingly, the finding of the learned DRT on this count cannot be upheld on the basis of the observation made by the Hon’ble High Court at Telengana. Accordingly, impugned order cannot be sustained and is liable to be set aside.

¶28

O R D E R

¶29

. Appeal is allowed. Judgement and order passed by learned DRT-2 Hyderabad is set aside. Consequently, T.S.A. No. 161 of

¶30

¶31

2018 filed by the S.A. applicant stands allowed. No order as to costs.

¶32

File be consigned to record room.

¶33

Copy of the order be supplied to the appellant and the respondents and a copy be also forwarded to the concerned DRT.

¶34

Copy of the judgement/Final Order be uploaded in the Tribunal’s website.

¶35

Order dictated, signed and pronounced by me in the open Court on this the 20^th day of April, 2023.

¶36

(Anil Kumar Srivastava, J) Chairperson

¶37

Dated : 20.04.2023 08/pkb

Sepco Electric Power Construction Corporation v. State Bank of India

Case brief

What is this about?

What did the court decide?

Sepco Electric Power Construction Corporation v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Parties & counsel

Coram

Case details

All orders in this case

Similar cases

Dr Binod More versus Indian Overseas Bank & Ors.

Deepak Agarwal And Another versus Punjab National Bank

Bengal Rajnagar Realtors Pvt. Ltd. versus Union Bank of India

Mennonite Brethren property association of India Pvt. Ltd. versus Punjab National Bank

Ms Choice Precitech India Pvt. Ltd. versus State Bank of India

Canara Bank versus Gottipati Suneetha