Allowed

A.O.Canara Bank v. v.Rajan & Anr.

DRAT2 Sept 2025MISC APPEAL/30/2018

Case brief

AI extract

What is this about?

The DRAT allowed the bank's appeal, holding the lower tribunal acted without law and procedure by disposing of the main appeal without hearing the bank after restoring the dismissed appeal in the first instance matter.

What did the court decide?

Order disposing the main appeal set aside; Matter remanded to DRT-III, Chennai to dispose SA SR No. 513/2016 on merits. Possession of respondents 3-7 protected.

A.O.Canara Bank versus v.Rajan & Anr. — Banking and Recovery | DRAT (2025)

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT CHENNAI

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Dated the 02^nd of September 2025

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PRESENT: Hon’ble Mr. Justice G. Chandrasekharan

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CHAIRPERSON

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MA (SA) 30/2018

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(Arising out of MA 54/2017 in SA.SR. No. 513 of 2016 on the file of DRT-III, Chennai)

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Between

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The Authorised Officer, Canara Bank, Thiyagarajapuram Branch, 09 Officers Lane, OPP. To Lakshmi Theatre, Vellore 632 001. …Appellant

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And

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V. Rajan (Deceased)

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Smt. Hemalatha,

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Auction Purchaser, C/o Canara Bank, Thiyagarajapuram Branch, 09, Officers Lane, Opp. To Lakshmi Theatre, Vellore. 632 001.

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Sheela W/o V. Rajan

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Shalini D/o V. Rajan

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Vansanth S/o V. Rajan

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Anand S/o V. Rajan

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Nandhini D/o V. Rajan All are residing at No.3/70 Banjanaikoil Street, Konavattam, Vellore 632 013. .. .Respondentd

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Counsel for Appellant : M/s. T.S. Gopalan & Co Counsel for Respondent -3 to 7 : M/s. T.S. Gopalan & Co. Counsel for Respondent -2 : M/s. Ramalingam Associats

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ORDER

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This appeal is filed against the order passed in MA 54/2017 in the SA SR No.513/2016. MA 54/2017 was filed by the deceased first respondent in setting aside the order of dismissal of SA SR No.513/2016, which was dismissed for non prosecution on 01/05/2017.

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The grievance of the appellant is that while allowing the application for setting aside the order of dismissal for nonprosecution, the learned Presiding Officer, had also allowed the SA itself. It is further ordered to set aside the sale held on 29/02/2016 and directed the Bank/appellant to refund the amount received from the auction purchaser with interest at the rate of 12% p.a. (simple) recoverable from the borrower along with over due interest from the respective dates till the final discharge of the entire amount. The

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Bank was also directed to discharge the mortgage and deliver the original title deeds to the mortgagor/ respondents herein. In case, the borrower fails to remit the amount within 30 days, the Bank was given entitlement to proceed under the SARFAESI Act in accordance with law.

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Learned counsel for the appellant/Bank submitted that

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it is not appropriate for the learned Presiding Officer to dispose the main appeal itself while allowing the application filed for setting aside the exparte order of dismissal of the SA, especially without giving opportunity to contest the case by production of necessary documents.

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Learned counsel for the second respondent adopted the arguments of the learned counsel for the first respondent.

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Leaned counsel for R3 to R7, who are the L.Rs. of the deceased first respondent, is not ready.

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This matter is pending from the year 2018. This Tribunal finds from the order of the learned Presiding Officer, DRT-III, Chennai, that it is explicitly against the law and without following the procedure. The reason is that when MA 54/2017 filed for setting

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aside the exparte order of dismissal of SA SR. 513/2016, the proper course is to dispose the MA 54/2017 first, followed by the restoration of SA SR.513/2016 and its disposal after giving the opportunity of hearing to both the parties. Whereas, in the case on hand, after allowing the MA 54/2017, the learned Presiding Officer, DRT-III, Chennai has not given any opportunity to the Bank to advance their submission on the main SA SR. No.513/2016 and disposed. This course is not accepted by law.

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Therefore, the order of the learned Presiding Officer, DRT-III, Chennai, in disposing SA SR No.513/2016 alone is set aside while confirming the order of the restoration of SA SR No. 513/2016.

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Thus, the appeal in MA (SA) 30/2018 is disposed of and the matter is remanded to the learned Presiding Officer, Debts Recovery Tribunal-III, Chennai, to dispose the SA SR No. 513/2016 as expeditiously as possible on merits and in accordance with law.

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It is informed that respondents 3 to 7 are in possession of the property and learned counsel for respondents 3 to 7 apprehends that the auction purchaser would take steps for taking possession of the property.

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Learned counsel for the Bank informed that possession of

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the property is not taken.

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Therefore, possession of the property in the hands of respondents 3 to 7 is protected till the Bank lawfully takes possession by following measures under the SARFAESI Act.

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Parties are directed to bear their own costs.

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Pending IAs. If any, is closed.

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[Dictated in open Court to Steno (RA), transcribed by her, corrected, signed by me, this 2^nd day of September, 2025]

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Sd/-

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(JUSTICE G. CHANDRASEKHARAN) CHAIRPERSON

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A.O.Canara Bank v. v.Rajan & Anr.

Case brief

What is this about?

What did the court decide?

A.O.Canara Bank v. v.Rajan & Anr.

Case brief

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