Remanded

Mr.Shivanand.G. Naganalli & Ors. v. M s a K Jajee

DRAT21 Nov 2023REGULAR APPEAL/46/2021

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal allowed appeals against an impugned order setting aside a bank's sale of secured assets. Addressing the Supreme Court's stance on delays, the Tribunal set aside the order and remitted the matter for a fresh consideration after giving parties an opportunity to be heard.

What did the court decide?

Impugned Order dated 13.11.2018 set aside and matter remitted to DRT-III, Chennai for fresh consideration after giving opportunity to all parties.

Mr.Shivanand.G. Naganalli & Ors. versus M s a K Jajee — Banking and Recovery | DRAT (2023)

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RA (SA) 185/2019 & RA (SA) 46/2021

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IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

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Dated the 21^st day of November, 2023

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PRESENT: HON'BLE MR. JUSTICE S.RAVI KUMAR CHAIRPERSON

RA (SA) 185/2019

and

RA (SA) 46/2021

(SA 196/2013 on the file of DRT-III, Chennai)

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RA (SA) 185/2019

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Between

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M/s. UCO Bank, Represented by Authorised Officer, Mr. Rajiv Gupta, Gulbarga Branch, Super Market, Gulbarga – 585 101.

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…..Appellant

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AND

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M/s. A. K. Jajee,

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Represented by its Managing Partner, Sri Kedarnath Jajee, Nehru Gunj Area, 8-1433/1, Filter Bed Road, Gulbarga – 585 101.

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Shivanand G. Naganalli, R/o Block No.12, Neelambika Niwas, Siddeshwar Nagar, Gulbarga.

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RA (SA) 185/2019 & RA (SA) 46/2021

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Sushil Ashok Guttedar, R/o H.No.-1-1495/1D, Godutai Nagar, Jewargi Road, Gulbarga.

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Praveen G. Guttedar, R/o H.No.-1-1495/1D, Godutai Nagar, Jewargi Road, Gulbarga.

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Dr. Ravindra M. Halkai, R/o H. No. 3-246, Shivkrupa Building, M Land Chowk, Gazipura Gulbarga.

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Mallinath A. Halkai, R/o Plot No.48, A4, Anveer Krupa, Opp. PDA Engineering College, Gulbarga.

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Chidambar Rao, S/o Shantappa Patil, R/o Plot No.139, Mahalaxmi Nagar, Narayandas Oil Mills Compound, Humnabad Road, Gulbarga.

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Sugurappa Occ. Advocate, S/o Sanganna Aspalli, R/o Vasant Nagar Near Government Printing Press, Gulbarga.

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Mahadevappa A. Halkai, R/o Shivakrupa Building, Milind Chowk, Gazipura, Gulbarga.

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RA (SA) 185/2019 & RA (SA) 46/2021

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10 . Suraj Prassad Tiwari, S/o Keshav Prasad Tiwari, R/o H.No. 10-105/13/B, Jayalaxmi Sharan Nagar,

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Gulbarga.

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Rajshekhar Deshmukh, S/o Chandra Rao Deshmuk, R/o. Garampalli, Taluk, Chincholli District,

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Gurbarga.

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Shivaraj S/o Siddalingappa Bhasagi, R/o Venkatesh Nagar, Gulbarga – 585 101.

…..Respondents

RA (SA) 46/2021

Between

Shivanand G. Naganalli, R/o Block No.12, Neelambika Niwas, Siddeshwar Nagar, Gulbarga.

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Sushil Ashok Guttedar, R/o H.No.-1-1495/1D, Godutai Nagar, Jewargi Road, Gulbarga.

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Praveen G. Guttedar, R/o H.No.-1-1495/1D, Godutai Nagar, Jewargi Road, Gulbarga.

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RA (SA) 185/2019 & RA (SA) 46/2021

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Dr. Ravindra M. Halkai, R/o H. No. 3-246, Shivkrupa Building, M Land Chowk, Gazipura Gulbarga.

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Chidambar Rao, S/o Shantappa Patil, R/o Plot No.139, Mahalaxmi Nagar, Narayandas Oil Mills Compound, Humnabad Road, Gulbarga.

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Mahadevappa A. Halkai, R/o Shivakrupa Building, Milind Chowk, Gazipura, Gulbarga.

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…..Appellants

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AND

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M/s. A. K. Jajee, Represented by its Managing Partner, Sri Kedarnath Jajee, Nehru Gunj Area, No. 8-1433/1, Filter Bed Road, Gulbarga – 585 101.

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M/s. UCO Bank, Represented by Authorised Officer, Gulbarga Branch, Super Market, Gulbarga – 585 101.

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Mallinath A. Halkai, R/o Plot No.48, A4, Anveer Krupa,

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Opp. PDA Engineering College, Gulbarga.

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Sugurappa Occ. Advocate, S/o Sanganna Aspalli,

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R/o Vasant Nagar Near Government Printing Press,Gulbarga.

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RA (SA) 185/2019 & RA (SA) 46/2021

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Suraj Prassad Tiwari, S/o Keshav Prasad Tiwari, R/o H.No. 10-105/13/B, Jayalaxmi Sharan Nagar,Gulbarga.

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Rajshekhar Deshmukh, S/o Chandra Rao Deshmuk, R/o. Garampalli, Taluk Chincholli, District, Gurbarga.

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Shivaraj S/o Siddalingappa Bhasagi, R/o Venkatesh Nagar, Gulbarga – 585 101. ……..Respondents

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(Respondent No.6 is given up)

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Counsel for Bank : M/s. K.S. Viswanathan, Sr. Advocate for Mrs. T.Hemalatha Counsel for borrower : Mr. T.N.Premnath Counsel for Auction Purchasers : Mr. S.V. Praveen Rathinam

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RA (SA) 185/2019 & RA (SA) 46/2021

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COMMON ORDER

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These two Appeals are against Orders dated 13.11.2018 of DRT-III, Chennai, in SA 196/2013.

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Brief facts leading to these Appeals are as follows:-

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First Respondent in both the Appeals filed SA 196/2013 to set aside Sale Notice dated 16.03.2007 and consequential Sale held on 21.03.2007 and Sale Certificates issued by Appellant in RA (SA) 185/2019 in favour of Appellants in RA (SA) 46/2021.

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Said Application is resisted by both Bank and Auction Purchasers, i.e., Appellant in both the Appeals herein, and the Tribunal below allowed Securitisation Application holding that Bank i.e. Appellant in RA (SA) 185/2019 failed to establish its actions in bringing the subject property to Sale and thereby declared Sale Notice as null and void and set aside the same. Aggrieved by said Order, Bank preferred

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RA (SA) 185/2019 & RA (SA) 46/2021

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Appeal in RA (SA) 185/2019 and Auction Purchasers preferred Appeal in RA (SA) 46/2021.

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Heard both sides.

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Main arguments on behalf of Appellants is that they have raised many objections with regard to relief claimed in Securitisation Application, particularly, on limitation and for non impleading International Asset Reconstruction Company Private Limited, in whose favour, Bank assigned the debt and remaining secured assets as per Assignment Deed dated 19.03.2010. It is further submitted that Tribunal below failed to consider the objections raised on behalf of Bank and Auction Purchasers, for the simple reason that it reserved Orders on 12.02.2016, but pronounced judgement on 13.11.2018, and because of this time gap, Learned Presiding Officer must have forgotten the submissions made on behalf of Appellants. It is submitted, in similar circumstances, Hon’ble Supreme Court observed that long delay in delivery of judgement gives rise to unnecessary speculations in the

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RA (SA) 185/2019 & RA (SA) 46/2021

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minds of parties to a case. It is further submitted that

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Hon’ble Supreme Court also observed, the parties may have the apprehension that arguments raised at the Bar may not have been reflected or appreciated while dictating judgements due to long gap, and in such cases, the matter has to be remitted back for a fresh consideration.

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Advocate appearing for first Respondent submitted that Tribunal below is right in allowing Securitisation Application as there is no clear 30 days’ in between Sale Notice and Sale, which is in violation of Rules 8 and 9 of Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as Rules, 2002], but, Advocate for first Respondent has not disputed the fact as to the delay in pronouncement of judgement.

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On verification of material papers, when it is brought to notice that Tribunal below pronounced the Orders nearly 2 ½ years, after hearing the case, it may not be proper for me to examine the merits and demerits of the case, particularly, in view of the judgement of Hon’ble Supreme Court in

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RA (SA) 185/2019 & RA (SA) 46/2021

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Bhagwandas Fatechand Daswani and Ors. Vs. HPA

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International and Ors., reported in ( 2000) 2 SCC 13 .

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As seen from the impugned Order, though specific objections are raised on behalf of Bank and Auction Purchasers with regard to limitation and with regard to not impleading International Asset Reconstruction Company Private Limited, in whose favour, the loan and remaining assets are assigned; no findings are given on these objections. Further, the Sale was held on 21.03.2007, for which, Sale Certificates are issued and duly registered in the year, 2009, and Securitisation Application is filed in the year 2013. It is also noticed from the Counter of Auction Purchasers to Securitisation Application, a specific contention is raised that Sale Notice dated 14.03.2007 is not first Notice, thereby there is no requirement of 30 days’ clear Notice as per judgements of superior courts, in spite of that, same is not decided and simply allowed the Securitisation Application by calculating the days from the date of Sale Notice and date of Sale.

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RA (SA) 185/2019 & RA (SA) 46/2021

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Further, Sale Notice is dated 14.03.2007, but relief is to set aside Notice dated 16.03.2007. Further, when Auction Purchasers are parties to Securitisation Application, and Sale Certificates are also duly registered, Tribunal below has not referred to anything in respect of rights of the Auction Purchasers. Further, when Sale is held in the year 2007 and while its legality is decided in the year 2018, minimum expected from the Tribunal below is to look into the principles of natural justice and also about the money parted by Auction Purchasers. So, for these reasons, I am of the considered view that the impugned Order dated 13.11.2018 cannot be sustained, and the matter has to be remitted back for a fresh consideration, in view of the judgement of Hon’ble Supreme Court, referred to above.

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For the above reasons, impugned Order dated 13.11.2018 is set aside. Tribunal below shall restore the Securitisation Application to its original number and decide

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RA (SA) 185/2019 & RA (SA) 46/2021

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the same in accordance with law, after giving opportunity to all parties.

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Since it is an old matter, the Tribunal below shall dispose of the same, as expeditiously as possible.

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In the result :- Both the Appeals RA (SA) 185/2019 and RA (SA) 46/2021 are allowed. The matter is remitted back for a fresh consideration. Impugned Order dated 13.11.2018 is set aside. Tribunal below shall restore the Securitisation Application to its original number and decide the same in accordance with law, after giving opportunity to all parties. Both parties shall bear their own costs. All pending IAs, if any,

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stand closed.

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[Dictated to Athistamani, PS transcribed by her, corrected, signed and pronounced by me in open court, this 21^st of November, 2023]

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[Justice S. Ravi Kumar] CHAIRPERSON

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Mr.Shivanand.G. Naganalli & Ors. v. M s a K Jajee

Case brief

What is this about?

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Mr.Shivanand.G. Naganalli & Ors. v. M s a K Jajee

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