Allowed

Karnataka Bank Limited and Anr. v. Nigam Enterprises and Ors.

DRAT5 Sept 2024REGULAR APPEAL/15/2019

Case brief

AI extract

What is this about?

The DT Appeals Tribunal, Allahabad set aside the DRT Lucknow order quashing notices under Section 13 of the SARFAESI Act. The court held that the borrowers failed to prove service of their representation, finding the Tribunal's decision erroneous as the representation appeared fabricated.

What did the court decide?

The impugned order of the DRT, Lucknow allowing the borrowers' Special Application is set aside and the appeal is allowed with no order as to costs.

Karnataka Bank Limited and Anr. versus Nigam Enterprises and… — Banking and Recovery | DRAT (2024)

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IN DEBTS RECOVERY APPELLATE TRIBUNAL, ALLAHABAD

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Regular Appeal No. 15/2019

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The Authorized Officer, Karnataka Bank Ltd., Regional Office 8-B, First Floor, Rajendra Park Pusa Road, New Delhi at present through it’s Authorized Signatory.

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The Branch Manager, Karnataka Bank Ltd., Ground Floor D/No-B-1/13, Malvia Nagar, New Delhi-110060 at present through its Authorized Signatory.

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.………....……………………...……………………………………………...Appellants Versus

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Nigam Enterprises through its Proprietor Mrs. Nigam Yadav, House No. 17, Block-A Sector-15, Noida, G.B. Nagar., U.P.201301.

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Mrs. Nigam Yadav, House No. 17, Block-A Sector-15, Noida, G.B. Nagar-201301.

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Dhirendra Kumar Yadav, House No. 17, Block-A Sector-15, Noida, G.B. Nagar-201301.

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….…………………….…….………………………………………………….Respondents

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Advocates who appeared in this case

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For the appellant-Bank For the respondents-Borrowers

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Shri N. K. Srivastava, Advocate None

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JUDGMENT

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Date of Decision: 05.09.2024

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JUSTICE R. D. KHARE, CHAIRPERSON

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The present appeal has been filed under section 18 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short “the SARFAESI Act”) against the order dated 17.01.2019 passed by the DRT, Lucknow, whereby the S.A. No. 528/2016 filed by the respondents has been allowed.

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The brief facts of the case are that the respondent no. 2, proprietor of respondent no. 1 was granted O.D. facility for a sum of Rs. 2.00 crores, for which the respondent no. 3 has created an equitable mortgage over his property in question by depositing the title deed with the appellantBank and the respondent nos. 2 & 3 stood as guarantors.

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Since the borrowers could not maintain the financial discipline, therefore, the account was classified as NPA on 27.02.2015 and the demand notice dated 22.04.2015 was issued under section 13(2) of the SARFAESI Act for a sum of Rs. 2,15,14,483.50 as on 30.03.2015. Thereafter, the reply/objection dated 17.06.2015 under section 13(3-A) of the SARFAESI Act is stated to have been submitted before the Bank and the same was not decided. Since no amount was deposited by the respondents-Borrowers, therefore, the possession notice dated 29.06.2015 was issued under section 13(4) of the said Act and the same was affixed on the conspicuous part of the property in question and served upon the borrowers and the same was also published in two newspapers on 04.07.2015.

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The respondents-borrowers challenged the demand notice dated 22.04.2015 and the possession notice dated 29.06.2015 by filing the S.A. before the Tribunal below on the ground that the appellant-Bank has violated section 13(3-A), Rule 8(1) and 8(2) of the Act and Rules made thereunder. The Tribunal below vide order impugned has allowed the S.A. of the borrowers holding that there is non-compliance of section 13(3-A) of the SARFAESI Act, 2002, as the representation dated 17.06.2015 submitted by the borrowers has not been disposed off by the appellant-Bank and consequently, the demand notice and possession notice have also been set aside. Being aggrieved by the said order, the present appeal has been filed stating that the representation dated 17.06.2015 was never served upon the appellant-bank and the said document is fabricated one.

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It appears that on behalf of the respondents Shri Harsh Chopra, Advocate had appeared and filed reply, which is

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on record, but later on, no one had appeared on behalf of the respondents despite several information sent by the opposite counsel, therefore, the present case was heard ex-parte and judgment was reserved vide order dated 07.05.2024.

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Heard the learned counsel for the appellant and considered the material available on record.

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The main controversy involved in the present case is, as to whether the provision of section 13(3-A) of the SARFAESI Act has been complied with by the bank or not?

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It is to be seen that in para 2 & 3 of the reply filed by the respondents, it has been stated that the objection/representation under section 13(3-A) has been served upon the appellant-Bank through speed post and as per General Clauses Act, an Article dispatched through speed post or registered post is deemed to be delivered within 48 hours, but they have not filed any document to authenticate the same as when it was dispatched and the same was received by the Bank. In this regard, the appellant-Bank has already denied both before the Tribunal below or before this Tribunal that no such representation has ever been sent or received and the said document is a fabricated document, which was filed as an afterthought. If any postal receipt with regard to dispatch of the said representation was available and filed before the Tribunal below, the same ought to have been filed by the respondents-borrowers along with their reply to the memo of appeal before this Tribunal also, but it is not known, as to why they have not filed the same. On the basis of mere oral submission of the respondents that they have filed the representation dated 17.06.2015 before the appellant-Bank and the same was not decided, it cannot

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be held that they have sent and served the representation dated 17.06.2015 to the appellant-bank, therefore, for want of any proof with regard to the service of representation dated 17.06.2015, the finding of the Tribunal below that there is non compliance of section 13(3-A) of the SARFAESI Act appears to be erroneous. Thus, the order impugned is liable to be set aside.

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So far as the averment of the respondents-Borrowers with regard to the non-compliance of Rules 8(1) and 8(2) of the Rules, 2002 as mentioned in their reply to the memo of appeal is concerned, the Tribunal below has already decided the same in favour of the appellant-Bank vide order impugned, which has never been challenged by the respondents, therefore, the same has attained finality and they cannot be permitted to raise this issue in the present appeal filed by the appellant-Bank.

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In view of the above, the order impugned is set aside and the appeal is allowed with no order as to costs.

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A copy of this judgment be forwarded to the parties as well as to the DRT concerned and be also uploaded on the e-drt portal.

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CHAIRPERSON

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VN Giri

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Karnataka Bank Limited and Anr. v. Nigam Enterprises and Ors.

Case brief

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Karnataka Bank Limited and Anr. v. Nigam Enterprises and Ors.

Case brief

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