Allowed

Smt Mamata Moharana v. Bansidhar Behera

DRAT12 Apr 2024MISC APPEAL/32/2023

Case brief

AI extract

What is this about?

This appellant, a successful auction purchaser, challenged an interim order by the Debts Recovery Tribunal allowing borrowers to pay the auction amount in instalments instead of immediately. The debt recovery appellate tribunal held the order illegal post-redemption extinction. The appeal was allowed, and the impugned order was set aside.

What did the court decide?

The impugned order dated 26.09.2023 passed by the DRT Cuttack restricting possession was set aside. Parties were allowed to raise their pleas before the Learned DRT.

Smt Mamata Moharana versus Bansidhar Behera — Banking and Recovery | DRAT (2024)

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA

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(Misc. Appeal No. 32 of 2023)

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(Arising out of SA. 161 of 2023 in DRT Cuttack)

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THE HON’BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA

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CHAIRPERSON

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Smt. Mamata Moharana, aged about 43 years, D/o Ankur Sahoo, At-Malhasahi, Buxi Bazar, Dist-Cuttack-753001

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…Appellants

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-Versus-

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Bansidhar Behera, Aged about 77 years, S/o late Bairagi Behera AtMalha Sahi, Buxi Bazar, Dist-Cuttack-753001, Odisha

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Pramod Behera, Aged about 48 years, At-Malha Sahi, Buxi Bazar, DistCuttack -753001, Odisha

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Authorised Officer, Punjab National Bank, Circle Sastra Centre, Plot No. 766, 1^st Floor, Konark Centre, Cuttack-754001, Odisha

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The Branch Manager, Punjab National Bank, Buxi Bazar, Cuttack - 753001, Odisha.

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Collector & District Magistrate Cuttack, At-Collectorate Cuttack, AtCollectorate, Cuttack-753002.

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… Respondents

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Counsel for the parties

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Mr. Sandip Kumar Mishra, Learned Counsel for the Appellant

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Mr. Prasanta Kumar Satapathy, Learned Counsel for the Respondent Nos. 1 & 2.

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Mr. Debasish Chakrabarti with Ms. Sharmistha Pal, Learned Counsel for the Respondent No. 3 and 4/Bank

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JUDGMENT : On 12^th April, 2024

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THE APPELLATE TRIBUNAL :

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Heard the Learned Counsel for the parties and perused the record.

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2. Instant Appeal has been filed against an interim order dated 26.09.2022 passed by Learned DRT Cuttack in SA No. 161 of 2023. Feeling aggrieved, Appellant auction purchaser preferred the Appeal.

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3. As per pleadings of the parties, the Respondent No. 1 and 2 are the borrowers of Respondent No. 3 & 4. Loan was classified as NPA. Proceedings under SARFAESI Act were initiated by the Bank. An application under Section 14 of the SARFAESI Act, 2002 was also filed before the Learned District Magistrate, Cuttack wherein an order dated 05.08.2023 was passed. It appears that feeling aggrieved by the order SARFAESI Application was filed by Respondent Nos. 1 and 2 herein challenging the order of the Learned District Magistrate with consequential and other reliefs. 4. Pending proceedings, Respondent No. 1 and 2 offered before the Learned DRT Cuttack that they are ready and willing to make the payment of the entire auction amount and to show their willingness, a Demand Draft bearing No. 505092 for an amount of Rs.9,90,000/- (Rupees nine lacs ninety thousand) was deposited on 07.09.2023 with an undertaking to pay the balance amount within 15 days.

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Learned DRT was persuaded by the offer made by the borrowers and passed an order restraining the Bank from taking possession of the secured assets with a direction to the borrowers to deposit the balance amount of Rs.16,70,000/on or before 11.09.2023. Further, SARFAESI application was fixed for hearing inviting the objections.

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5. Feeling aggrieved, Appellant auction purchaser preferred the Appeal.

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6. Learned Counsel for the Appellant would submit that the impugned order is against law. No opportunity of hearing was given to the Appellant at the time of passing of the impugned order. Initially, he was not impleaded as party in the SARFAESI application. But subsequently, he is impleaded. He is the successful auction purchaser and sale certificate has already been issued in his favour by the Bank but the possession is not being delivered to him.

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7. Per contra, Learned Counsel for the Respondent No. 1 and 2 submits that having challenged the order of the Learned District Magistrate passed under Section 14 of the SARFAESI Act on various grounds before the Learned DRT, a Writ petition was also filed by the borrower before the Hon’ble High Court of Odisha being W.P. (C) No. 406 of 2022 which was dismissed on the ground of availability of alternative remedy. It is further submitted that Appellant were duly served. Respondent Nos. 1 and 2 are not

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claiming the right of redemption. Rather, they are challenging the order under Section 14 of the SARFAESI Act. 8. Learned Counsel for the Respondent Nos. 3 & 4 submits that impugned order cannot be upheld. No right of redemption can be extended in favour of the Respondent Nos. 1 and 2. If they have any grievance against Section 14 order, they can very well raise those pleas before the Learned DRT subject to objections to be raised by the secured creditor. It is further submitted that a Writ Petition was filed by the Appellant when the possession was not handed over to him which was decided by the Hon’ble High Court of Odisha on the ground that a settlement was made. Though possession would be handed over within 15 days but only in the meantime SARFAESI application under Section 17(1) of the SARFAESI Act was filed by the borrower and interim order was passed. 9. Bare perusal of the impugned order shows that the impugned order was passed on the ground that the Respondent No. 1 and 2 who are borrowers themselves made an offer to make payment of entire auction amount. They also made a Demand Draft for Rs. 9,90,000/- (Rupees nine lacs ninety thousand) and undertakes to pay the remaining amount within 15 days. Considering this ground Learned DRT passed the impugned order. As far as impugned order is concerned, admittedly sale certificate is issued in favour of the Appellant.

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10. It has been held in CELIR LLP Vs. Bafna Motors (Mumbai) Pvt. Ltd. & others (2024) 2 SCC 1 that-

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“We hold that as per the amended Section 13(8) of the SARFAESI Act, once the borrower fails to tender the entire amount of dues with all cost & charges to the secured creditor before the publication of auction notice, his right of redemption of mortgage shall stand extinguished/ waived on the date of publication of the auction notice in the newspaper in in accordance with Rule 8 of the Rules of 2002.”

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11. In view of the law laid down by the Hon’ble Apex Court, right of redemption of the borrower has already been exhausted when sale certificate is issued. So, the impugned order which is passed on the undertaking of the borrower to make the payment of the entire auction sale amount is perverse and illegal which could not be sustained. As far as merits of the S.A. are concerned, no findings are being recorded as the S.A. is pending before the DRT Cuttack where parties may raise their plea in accordance with law.

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Accordingly, Appeal deserves to be allowed.

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ORDER

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Appeal is Allowed. Impugned order dated 26^th September, 2023 passed by Learned DRT Cuttack in S.A. No. 161 of is set aside. Parties would be at liberty to raise their plea before the Learned DRT in accordance with law.

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No Order as to costs.

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File be consigned to Record Room.

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Copy of the order be supplied to Appellant and the Respondents and a copy be also forwarded to the concerned DRT.

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Copy of the Judgment/ Final Order be uploaded in the Tribunal’s Website.

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Order pronounced by me in the open Court today i.e. on 12^th April, 2024.

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(Anil Kumar Srivastava,J) Chairperson

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Dated: 12^th April, 2024

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9/tp

Smt Mamata Moharana v. Bansidhar Behera

Case brief

What is this about?

What did the court decide?

Smt Mamata Moharana v. Bansidhar Behera

Case brief

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