Dismissed

Sv Arun Prakash v. Tamilnad Mercantile Bank Limited

DRAT4 Feb 2025MISC APPEAL/12/2024

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal rejected the appellant's challenge to an order directing a deposit of Rs. 50 lakhs. The Tribunal held that existing mortgaged properties were insufficient to recover the outstanding debt, even allowing for valuation variances, and thus confirmed the DRT order.

What did the court decide?

The appellant was directed to deposit Rs. 50 lakhs with the First Respondent Bank; failure to do so would result in attachment of properties in the schedule.

Sv Arun Prakash versus Tamilnad Mercantile Bank Limited — Execution and Attachment | DRAT (2025)

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IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

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Dated the 4^th day of February, 2025

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PRESENT: HON’BLE MR. JUSTICE G. CHANDRASEKHARAN

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CHAIRPERSON

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MA 12/2024

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(a rising out of IA 528/2021 in OA No.229/2017 on the file of DRT, Coimbatore)

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Between

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Mr. S. V. Arun Prakash,

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S/o Sivagurnathan, C-5, Nelson Chambers,

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No.115, Nelson Manickam Road,

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Aminjikarai, Chennai 600 029

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…..Appellant

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And

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1. M/s Tamilnad Mercantile Bank Ltd., Rep. by its Branch Manager, 539-540, D.B. Road, R.S. Puram, Coimbatore 641 002.

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2. M/s Indo Mikasa Green Lighting Pvt. Ltd., No.16, R.M.S. Apartments, Old No.23, New No.12, Gopalakrishnan Street, T. Nagar, Chennai 600 017.

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3. Mr. C. Giridharan, S/o PPC Chidambaram, 91A, Harvey Nagar 3^rd Street, Madurai 625 016.

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4. Mr. G. Senthilraj, S/o T. Ganesan, No.27, Nathan Nagar, Subramaniapuram, R.S. Puram, Coimbatore 641 002.

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also at: 1334-B, Thirumoorthi Layout, Thadagam Road, R.S. Puram, Coimbatore 641 002. …..Respondents Counsel for Appellant : M/s N. Nandakumar & Co. Counsel for 1^st bank : Shri A. Arokia Satheesh Counsel for R2 to R4 : None

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ORDER

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This appeal is filed under Section 20 of the RDDB & FI Act, challenging the order passed in IA 528/2021 in OA 229/2017 on the file of DRT, Coimbatore dated 12.1.2024.

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The 1^st Respondent Bank herein filed IA 528/2021 seeking an order of attachment of property before judgment described in the Schedule of the OA, for the reason that security available with the Bank is not sufficient to cover the money due to the Bank, i.e. Rs.1,12,35,344.06p, on the date of filing of the OA.

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On hearing Learned Counsel appearing for the Applicant Bank and R1 to R3 in IA 528/2021, Learned Presiding Officer, DRT, Coimbatore was pleased to pass an order directing the Appellant herein, who is R4 in IA 528/2021, to deposit a sum of Rs.50 Lakhs with the Bank by the next date of hearing, failing which, the Schedule mentioned property shall be attached. Challenging the said order, this Appeal is filed.

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When the matter was heard on 28.11.2024, Learned Counsel for Appellant submitted that according to the Applicant, the mortgaged property was valued at more than Rs.10.00 Crores, and according to the Respondent No.4, the value was Rs.15.00 Crores.

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Learned Counsel for Appellant submitted that without any valuation certificate produced by the Bank, the order directing to deposit Rs.50.00 lakhs by the Appellant is not correct. In the said circumstances, this Tribunal directed the 1^st Respondent Bank to produce the valuation of mortgaged property.

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Accordingly, the Valuation Certificate is produced by 1^st Respondent Bank. A perusal of Valuation Certificate shows that the fair market value of mortgaged property, is Rs.2,71,18,000/- and forced/distress sale value of mortgaged property, is Rs.2,30,50,300/-. It is the submission of Learned Counsel for 1^st Respondent Bank that as per the statement of accounts, the amount of debt due from the Appellant as on 29.12.2024, is Rs.4,89,26,925.33p. It is submitted, the order directing to deposit Rs.50 Lakhs, is just and proper and it needs no interference.

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At this juncture, Learned Counsel for Appellant sought time to read the Valuation Report and accordingly matter was posted to 08.01.2025, for continuation of arguments.

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On 8.1.2025 Learned Counsel for the appellant, in continuation of his submission made on 02.01.2025 submitted that in the Valuation Report many items have been left out. He brought to my notice, in the form of typed set, to show that, of the six items and two more items referred in Annexure – I, available at 1st page of the Additional documents filed on behalf of appellant only the first four properties had been valued. The remaining properties, namely the properties under Survey Nos. 227/2 and 278/2B are commercial properties and they are valued more. Without considering the serial nos. V, VI and the property in Survey Nos. 227/2 and 278/2B, the Forced / Distress Sale value was given valuing only the

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first four items at Rs. 2,30,50,300/-. Thus, the valuation report filed by the bank is not complete and correct. As Learned Counsel for the respondent bank sought time for verification, matter was posted to 22.01.2025 for verification and continuation of the arguments and from 22.1.2025 the matter was posted to this date for continuation of arguments.

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Heard the further submissions of Learned Counsel for appellant and R1 bank on the basis of valuation reports produced, at length.

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As per the Valuation Report filed by R1 Bank, market value of the property is Rs.2,71,18,000/-. As per the Valuation Reports produced by the appellant i.e., as per the first valuation report given by RBJ Construction, fair market value of the property is Rs.8,56,55,250/- and as per valuation report given by Divine Associates, fair market value of the property is Rs.9,22,55,250/-. When these valuation reports are produced, it is brought to my notice by Learned Counsel for R1 Bank that guideline value of these properties is given as Rs.41,31,000/- in the valuation report of RBJ Construction and as Rs.60,66,150/- in the valuation report of Divine Associates. It is a common knowledge that guideline value can be got from the data available in the website of the Registration Department. Therefore, there cannot any variance in the guideline value of the property. But, there is no details as to the data which made the said valuers to give valuation reports indicating fair market value as a) Rs.8,56,55,250/- and b) Rs.9,22,55,250/- respectively. Market value depends upon the location of the property, nature of property, accessibility and other factors. Sale deeds in respect of sale of similarly placed properties have to be secured and analyzed to arrive at a fair market value. It appears that no such exercise has been taken. In the

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said circumstances, this Tribunal cannot accept the valuation reports produced by appellant.

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As on today, as per the statement of accounts produced by the first respondent bank, the amount due to the first respondent bank is Rs.4,89,26,925.33p. Even assuming that valuation of the first respondent bank is marginally low and some allowance is given for increasing the market value, still the amount due to the first respondent bank cannot be recovered by sale of the schedule mentioned property. It is seen that OA is still pending. It was filed in the year 2017 and it may take further time for disposal of the OA. It is also to be seen that future interest from the date of filing till the date of disposal of the OA and from the date of disposal till the date of realization of the amount due has also to be taken into consideration.

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Taking all these facts into consideration, this Tribunal finds that the amount that would be realized by sale of mortgaged property will not be sufficient enough to recover the loan amount due to the bank by the appellant.

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Therefore, this Tribunal finds no illegality or irregularity in the order of Learned Presiding Officer, DRT, Coimbatore directing the appellant to deposit Rs.50.00 lakhs with the first respondent bank. In the event of non deposit, attachment of properties given in the schedule before judgment will follow.

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Therefore, the order of Learned Presiding Officer, DRT, Coimbatore dated 12.1.2024 passed IA No.528/2021 in OA 229/2017 is confirmed and Appeal MA 12/2024 is dismissed. Learned Presiding Officer, DRT,

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Coimbatore is directed to dispose of OA No.229/2017 as expeditiously as possible.

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Parties are directed to bear their own costs. Pending IAs, if any, stand closed.

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[Dictated to Steno(SN), transcribed by him, corrected, signed and pronounced by me in open court, this 4^th January , 2025)

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Sd/-

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(JUSTICE G. CHANDRASEKHARAN) CHAIRPERSON

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Sv Arun Prakash v. Tamilnad Mercantile Bank Limited

Case brief

What is this about?

What did the court decide?

Sv Arun Prakash v. Tamilnad Mercantile Bank Limited

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

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Case details

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