This appeal was filed by the bank against the Debts Recovery Tribunal's order holding that taking possession was illegal due to non-following of Section 13(4) of the SARFAESI Act rules. The Tribunal affirmed the lower court's order.
The appeal RA (SA) 56/2013 is dismissed with costs.
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RA (SA) 56/2013
IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT CHENNAI
Dated the 13th of June, 2023
PRESENT: Hon’ble Mr. Justice S. Ravi Kumar CHAIRPERSON
RA (SA) 56/2013
[SA 38/2011 on the file of DRT-III, Chennai]
Between
The Authorised Officer, M/s. Bank of Baroda, (Formerly known as Dena Bank), New Regional Office at No.10, C.P. Ramasamy Road, Alwarpet, Chennai – 600 018,
Branch Office Sembudoss Street Branch, Chennai – 600 108.
……… Appellant
And
S. Mohan Velu, No.24, Ambedkar Street, New Avadi Road, Kilpauk, Chennai - 600 010.
…Respondent
Counsel for Appellant : Mr. G.R. Lakshmanan & Mr. G.L. Ramshankar Counsel for Respondent : Mr. Antony Selvam
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RA (SA) 56/2013
ORDER
1. This Appeal is against Order dated 23.04.2013 of DRTIII, Chennai, in SA 38/2011.
2. Brief facts leading to this Appeal are as follows:-
Respondent herein filed SA 38/2011 to set aside and quash proceedings initiated under Section 13(4) of SARFAESI Act, 2002, including Possession Notice dated 06.01.2011 and all further consequential action; contending that Notice dated 06.01.2011 is not delivered and published as required under Rule 8 (1) and (2) of Security Interest (Enforcement ) Rules, 2002 (hereinafter called the Rules, 2002).
Appellant herein resisted said Application and filed Counter Affidavit on 16.05.2011 denying all the averments and filed additional Counter Affidavit on 26.02.2013, contending Possession Notice under Section 13(4) of SARFAESI Act, 2002, was issued on 04.12.2007 and
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publication was also effected. Appellant further contended that after symbolic possession under Notice dated 04.12.2007, Respondent herein, approached Bank and made a request to take possession of property and sell the same at a good price, and handed over possession on 06.01.2011, and prayed to dismiss Application.
Tribunal below, on a consideration of contentions and rival contentions of both parties, allowed SA, holding that Bank has not followed Rules, therefore, possession taken by it, is illegal, particularly, for violation of Sub-Rules (1) and (2) of Rule 8 of Rules, 2002, and ordered for restoration of possession. Aggrieved by the same, present Appeal is preferred.
3. Appellant filed Written Arguments mainly contending
that Learned Presiding Officer, DRT-III Chennai, totally misconstrued the intimation Letter dated 06.01.2011 as a
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Possession Notice issued under Section 13(4) of SARFAESI Act, 2002. It is further contended that Possession Notice was issued under Section 13(4) of SARFAESI Act, 2002, on 04.12.2007, and the same was not challenged, and in pursuance of same, property is already sold and delivered the same to Auction Purchaser. Intimation dated 06.01.2011 is not a Notice under Section 13(4) of SARFAESI Act, 2002. At the time of oral arguments, while reiterating the Written Arguments, Advocate for Appellant submitted, as Notice dated 06.01.2011 is not a Notice issued under Section 13(4) of SARFAESI Act, 2002, Bank is not bound to follow Rule 8 (1) and (2) of Rules, 2002, but Tribunal below misunderstood the situation, and passed the impugned Order, therefore, liable to be set aside.
No arguments are advanced on behalf of Respondent.
4. I have perused material papers including impugned Order dated 23.04.2013.
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5. Main dispute is with regard to nature of Notice dated
06.01.2011. Respondent filed Securitisation Application contending that it is a Notice under Section 13(4) of SARFAESI Act, 2002, and as Bank has not followed the Rules, particularly, Rule 8 (1) and (2) of Rules, 2002, therefore, said Notice is liable to be set aside.
6. On the other hand, it is the contention of Bank that it is not a Notice issued under Section 13(4) of SARFAESI Act, 2002, and it is only an intimation of taking possession. It is not in dispute that Notice dated 06.01.2011, is not served on Respondent and it is also not published as required under Rule, 8 (1) and (2) of Rules, 2002. For a proper adjudication, it may be relevant to examine the very Notice, which is challenged in Securitisation Application. I t may be necessary
to scan said document for better appreciation, which is as
follows:-
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From a reading of above, it is clear that, Authorised Officer of Bank while exercising his powers under Section 13(4) of SARFAESI Act, 2002, issued said Notice. In fact, the caption given to said Notice is “ACTUAL (PHYSICAL) POSSESSION NOTICE’. In the body of Notice, it is stated that by exercising powers conferred under Section 13(4) of SARFAESEI Act, 2002, actual (physical) possession is taken.
7. Advocate for Appellant repeatedly argued that this Notice
is not a Possession Notice, and it is only an intimation to Borrower, but second para of this Notice, is akin to Format given in Appendix IV annexed to Rules, 2002, which intimates the general public cautioning them not to deal with property. In the Additional Counter Affidavit, version of Authorised Officer is that after Notice dated 04.12.2007, Borrower approached them and made a request to take physical possession, and on his own volition, he handed over possession on 06.01.2011. So, plea of Authorised Officer in
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Additional Counter Affidavit, is quite contrary to submissions
made across the bar, and also stated in Written Submissions.
If really, Borrower on his own volition handed over possession, there is no need for Authorised Officer to give a Notice on 06.01.2011, which is referred to above.
8. From a very reading of above Notice, it can safely be inferred that, it is a Notice for taking possession of property in exercise of powers conferred under Section 13(4) of SARFAESI Act, 2002, therefore, it is mandatory on the part of Authorised
Officer to follow Rule 8(1) and (2) of Rules, 2002. Admittedly, Authorised Officer has not followed, and thus, Tribunal below rightly recorded the same. So, entire argument of Advocate
for Appellant is not acceptable, which is contrary to the
pleadings made before Tribunal below.
9. On a scrutiny of entire material, I have no hesitation in
holding that Tribunal below is perfectly justified in allowing Securitisation Application and ordering delivery of possession, and the same cannot be interfered with.
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10. For these reasons, it is held that Appeal is devoid of merits and there are absolutely no grounds to interfere with Order of Tribunal below in SA 38/2011 and Appeal is liable to be dismissed.
11. In the result; Appeal RA (SA) 56/2013 is dismissed, with
costs. All pending IAs, if any, stand closed.
[Dictated to Athistamani, PS, transcribed by her, corrected, signed and pronounced by me in open court, this 13th of June, 2023]
[ Justice S. Ravi Kumar]
CHAIRPERSON
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2 issues framed by the court
Whether the bank was bound to follow Rules 8(1) and 8(2) of the Security Interest (Enforcement) Rules, 2002 for issuing a possession notice under Section 13(4) of the SARFAESI Act, 2002 when the notic
Whether the appeals Tribunal was justified in holding the bank's possession as illegal due to non-compliance with the mandatory procedure under the Security Interest (Enforcement) Rules, 2002?
2 provisions across 2 enactments
The Authorised Officer, Bank of Baroda
S. Mohan Velu
S. Ravi Kumar
As recorded by the court registry
16 orders share this CNR
Judgements on the same questions, provisions and authorities, from every court
