Partly allowed

Ms Eluri Co. operative Urban Bank Ltd. v. Sri Gajavalli Kishore

DRAT17 May 2024

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal partly allowed the bank's appeal against the DRT order setting aside an e-auction. It set aside the direction to return possession to the borrower while confirming that the borrower must redeem the property by paying the full debt.

What did the court decide?

Direction to re-deliver possession was set aside; other directions confirming the loan redemption requirement were retained.

Ms Eluri Co. operative Urban Bank Ltd. versus Sri Gajavalli… — Banking and Recovery | DRAT (2024)

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IN THE DEBT RECOVERY APPELLATE TRIBUNAL - KOLKATA

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HON'BLE Justice Anil Kumar Srivastava, Chairperson

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APPEAL Dy. No. 557 of 2021

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(Arising out of S.A. No. 82 of 2019 – DRT-Visakhapatnam)

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17.05.2024

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The Authorised Officer, M/s. Eluri Cooperative Urban Bank Limited, Macharala Branch, Guntur Dist. D No. 132-170/21, Palanadu College Complex, Mecherla – 522426.

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... Appellant

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--Vs--

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Sri Gajavali Kishore, residing at D No. 11-1-299, Ward No. 11, Mecherla – 522426, Guntur Dist.

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2.Sri Mogulluri Lakshmana Rao, residing at D No. 12-1148, Sai Teja Bazar, Macherla – 522426, Guntur Dist.

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... Respondents

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For Appellant : Mr. Nemani Srinivas, ld. Adv. For Respondent: Mr. P Sreenivas, ld. Adv.

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The Appellate Tribunal

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Instant appeal is filed against the judgement and order dated 30.08.2021 passed by learned DRT, Visakhapatnam in S.A. 82 of 2019 [Sri Gajavalli Kishore Vs. M/s. The AO, Eluri Cooperative Urban Bank Ltd. & Anr.] whereby S.A. was allowed holding the e-auction notice dated 09.05.2019 and auction sale held on 12.06.2019 are illegal. Further, bank was directed to redeliver the physical possession of the scheduled property to the SARFAESI applicant i.e. borrower. It was also held

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that SARFAESI applicant is entitled to redeem the property by paying entire debt due to the bank within three months from the date of the order. Feeling aggrieved by the direction to re-deliver the possession of the scheduled property, appellant bank preferred the appeal.

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Heard learned counsel for the parties and perused the records. 3. As far as facts of the matter are concerned, there is no dispute that the respondent, Gajavalli Kishore, who filed the SARFAESI application, was the borrower of the bank. Repayment of loan was irregular. Loan account was classified as NPA. Secured creditor bank proceeded under the SARFAESI Act, 2002. Possession of the secured asset was taken by the bank. E-auction notice was issued on 09.05.2019 fixing auction sale date on 12.06.2019.

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Learned DRT allowed the SARFAESI application setting aside the e-auction notice dated 09.05.2019 and auction sale held on 12.06.2019. Further direction was issued to re-deliver the physical possession of the secured asset to the SARFAESI applicant. Further, applicant was directed to approach the bank for redemption of the scheduled property by making payment of entire debt due within three months. Admittedly this amount was not paid by the respondent herein. Although certain applications were made by the respondent, but that did not find favour

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of the appellant bank. Ultimate result is that debt due amount was not paid.

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As far as issue of re-delivery of possession is concerned, no doubt, auction sale notice and auction sale were set aside by the learned DRT, but the bank was not required to hand over the possession till the debt was due against the borrower. Possession was taken by the bank from the borrower in accordance with the law. Further, bank was given a liberty to proceed for realization of the debt due in accordance with law. Hence, direction of the learned DRT regarding re-delivery of the scheduled property is liable to be set aside. However, there was a direction to redeem the scheduled property which should have been availed by the borrower. Learned counsel for the bank submitted that auction amount has already been refunded to the auction purchaser. In such circumstances, if the borrower makes a proposal for settlement to the bank, bank is well advised to consider the same sympathetically in accordance with the rule. Accordingly, the appeal is liable to be allowed in part.

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O R D E R

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Appeal is partly allowed with the observations made in the body of the judgement. Direction issued by the learned DRT regarding re-delivery of the schedule property is set aside. Other directions made by the learned DRT in

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the impugned judgement and order are confirmed. No

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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 the appellant and the respondents and a copy be also forwarded to the concerned DRT.

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

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Order dictated, signed and pronounced by me in the open Court on this the 17 day of May, 2024.

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(Anil Kumar Srivastava, J) Chairperson

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Dated : 17.05.2024 /pkb

Ms Eluri Co. operative Urban Bank Ltd. v. Sri Gajavalli Kishore

Case brief

What is this about?

What did the court decide?

Ms Eluri Co. operative Urban Bank Ltd. v. Sri Gajavalli Kishore

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

All orders in this case

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