Allowed

Uco Bank v. Saibaba Polymer Technologies Pvt. Ltd.

DRAT27 Jan 2025MISC APPEAL/7/2025

Case brief

AI extract

What is this about?

The Appellant-Appeal challenged the interim order granting status quo to the 1st Respondent-Lessee. The Tribunal held that while the 2nd Respondent had bank consent to lease, it was conditional upon crediting rent to the borrower's Term Loan Account. Since the Lessee failed to deposit rent as admitted, protection was denied. The interim order was set aside and the appeal allowed.

What did the court decide?

The interim order passed in SA Dy.No.3067/2024 (SA SR No.16367/2024) on 09.12.2024 granting status quo is hereby set aside.

Uco Bank versus Saibaba Polymer Technologies Pvt. Ltd. — Banking and Recovery | DRAT (2025)

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IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

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Dated the 27^th day of January, 2025

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PRESENT: HON’BLE MR. JUSTICE G. CHANDRASEKHARAN

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CHAIRPERSON

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MA (SA) 7/2025

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(Arising out of SA Dy.No.3067/2024 on the file of DRT - III, Chennai)

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Between

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The Authorised Officer, UCO Bank, Chennai Main Branch, No.328, 1st Floor, Thambu Chetty Street, Chennai – 600 001 …..Appellant

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And

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1. M/s. Saibaba Polymer Technologies Pvt Limited, Authorised Signatory Mr. N.G.Naveen Kumar, No.21, Nagalapuram Road, Uthukottai, Thiruvallur, Tamil Nadu – 602 026

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2. M/s. Sindhuja Modern Dall & Rice Mills (HUF) Represented by its Kartha Mr.M.V.Sesha Rao No.T/F – 111, Ann Fruit Whole Sale Market, Koyambedu, Chennai – 600 092 …..Respondents

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Counsel for Appellant	: Mr. P.S.Ganesh
Counsel for R1	: Mr. J.Rajmohan
Counsel for R2	: None

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ORDER

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This appeal is filed challenging the interim order passed in SA Dy.No.3067/2024 (SA SR No.16367/2024) on 09.12.2024 by the Ld. Presiding Officer, DRT – 1, Chennai, in-charge for DRT – 3, Chennai.

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Ld. Counsel for the appellant filed this appeal stating that the lease in favour of the 1^st respondent is based on an un-registered Lease Deed dated 01.04.2021 for a period of six years. In view of the fact that this Lease Deed is un-registered, it cannot be received as evidence and R1 cannot seek any protection on the basis of this Lease Deed, especially when this Lease Deed, came into existence after the creation of mortgage. Taking advantage of the interim order passed by the Ld. Presiding Officer, to maintain status quo, the bank is deprived of its right to take possession and hence this appeal is filed.

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Ld. Counsel for R1 submitted that petitioner entered into a Lease agreement with the owners/borrowers for a period of six years as per the Lease deed dated 01.04.2021 and that is the reason why his possession was protected by the Ld. Presiding Officer by granting status quo order.

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When the matter was heard on 21.02.2025, it was submitted by the Ld. Counsel for R1 that the bank had given consent to R2 for leasing out the premises. Thus, this Tribunal directed the petitioner to produce the written consent given by the bank. Accordingly the letter of the bank dated 26.03.2015 vide Ref. No. CHM/Misc/140/2014-15 is produced today. The letter reads as follows:

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“With reference to your letter dated 23.03.2015 on the captioned subject, we would like to inform you as under.

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a. You are permitted to let the godown no.2 only of M/s. Sindhuja Modern Dall & Rice Mills situated at Survey No.274/12, measuring 191 cents, B Shanthi Colony, Garden Road, Alamathy, Ponneri Taluk, Thiruvallur

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District, Chennai – 52 owned by Mr. M.V.Sesha Rao to the commodity Dealers.

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b. Monthly rent will be directly credited to Term Loan of M/s. Sindhuja Modern Dall & Rice Mills account.

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c. We will not have any charge on the stocks to be stored by the commodity Dealers in godown No.2.

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You are advised to provide the Term Loan Account No.00410510000328 to the tenants for payment of rent directly to the account.”

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The reading of this letter shows that though R2 was permitted to lease the premises, it was not a blanket permission, but with a condition. The main condition is that the monthly rent shall be directly credited to the Term Loan account of M/s. Sindhuja Modern Dall & Rice Mills. It is candidly admitted by the Ld. Counsel for R1 that R1 has not deposited the monthly rent into the said loan account.

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When that be the case, R1 cannot seek any protection. Therefore this Tribunal is of the view that the interim order granted by the Ld. Presiding Officer, DRT – 1, Chennai, in-charge for DRT – 3, Chennai on 09.12.2024, granting status quo, is not in tune with the factual position legal position. Thus, the interim order passed in SA Dy.No.3067/2024 (SA SR No.16367/2024) on 09.12.2024 is hereby set aside.

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In the result, Appeal MA (SA) 7/2025 is allowed. Parties shall bear their own costs.

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8. Pending IAs, if any, stand closed.

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[Dictated to Steno (DD), transcribed by her, corrected, signed and pronounced by me in open court, this 27^th January , 2025)

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Sd/-

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(JUSTICE G. CHANDRASEKHARAN) CHAIRPERSON

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Uco Bank v. Saibaba Polymer Technologies Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

Uco Bank v. Saibaba Polymer Technologies Pvt. Ltd.

Case brief

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