Partly allowed

Punjab National Bank v. Ms Sri Mahalakshmi Construction Ventures

DRAT14 Jan 2025

Case brief

AI extract

What is this about?

In this miscellaneous appeal, the DRAT partially allowed the appellant bank's appeal. It set aside the portion of the lower court order that stayed further proceedings, noting the sale listed for 26.11.2024 had become infructuous due to lack of bidders, and permitted the bank to proceed afresh. Other legal pleas were not recorded upon.

What did the court decide?

The direction to stay further proceedings till disposal of the S.A. in the impugned order is set aside. The bank is entitled to proceed afresh to recover dues.

Punjab National Bank versus Ms Sri Mahalakshmi… — Execution and Attachment | DRAT (2025)

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Reportable/Non-Reportable

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Misc. Appeal Diary No. 1145 of 2024-DRAT-Kolkata

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA

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HON’BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA CHAIRPERSON

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Misc. Appeal Diary No. 1145 of 2024

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(Arising out of S.A. 613 of 2024 in DRT,Visakhapatnam)

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Authorised Officer, Punjab National Bank, Circle Sastra Centre, D. No. 9-13-45/2/9/1, 8^th Floor, MVR Vinayagar Plaza, CBM Compound, VIP Road, Visakhapatnam - 530 020.

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… Appellant

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-Versus-

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M/s. Sri Mahalakshmi Construction Ventures, D. No. 2-19-3, Forest Office Road, Madhav Nagar, Kakinada – 533 003;

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Sri VNV Venkateshwara Rao, Partner of Sri Mahalakshmi Construction Ventures, D. No. 2-19-3, Forest Office Road, Madhav Nagar, Kakinada – 533 003;

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Sri VNRK Sandeep, Partner & Guarantor of M/s. Mahalakshmi Construction Ventures, D. No.2-19-3, Forest Office Road, Madhav Nagar, Kakinada - 533 003;

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Smt. VNVKK Sunitha, Partner & Guarantor of Sri Mahalakshmi Construction Ventures, D. No. 2-19-3, Forest Office Road, Madhav Nagar, Kakinada – 533 003;

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Sri V Sarat Chandra, Guarantor of M/s. Sri Mahalakshmi Construction Ventures, D. No. 2-19-3, Forest Office Road, Madhav Nagar, Kakinada – 533 003;

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Sri VKRSV Prasad Rao, Son of Sri V Pedda Venkateswarlu, Partner & Guarantor of M/s. Sri Mahalakshmi Construction Ventures, D. No. 2-19-3, Forest Office Road, Madhav Nagar, Kakinada – 533 003;

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Smt. V. Vasanthi, Partner & Guarantor of M/s. Sri Mahalakshmi Construction Ventures, D. No. 2-19-3, Forest Office Road, Madhav Nagar, Kakinada – 533 003;

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Smt. V. Haritha, Partner & Guarantor of M/s. Sri Mahalakshmi Construction Ventures, D. No. 2-19-3, Forest Office Road, Madhav Nagar, Kakinada – 533 003.

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… Respondents

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Counsel for Appellant	…	Mr. Pankaj Kumar Mukherjee
Counsel for Respondents	…	K. Venugopal Rao
JUDGMENT	:	14^thJanuary, 2025

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Misc. Appeal Diary No. 1145 of 2024-DRAT-Kolkata

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THE APPELLATE TRIBUNAL :

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1. Instant appeal has arisen against judgment and order dated 26^th November, 2024, passed by Learned DRT, Visakhapatnam, in S.A. 613 of 2024 (M/s. Sri Mahalakshmi Construction Ventures & Others -vs- Punjab National Bank) whereby the Learned DRT has I.A. 3646 of 2024 and stayed further proceedings till disposal of the S.A. 2. Feeling aggrieved, Appellant Bank preferred the appeal. 3. I have heard the Learned Counsel for the parties and perused the record. 4. At the very outset Learned Counsel for Appellant would submit that SARFAESI action was initiated by the Bank against Respondents on the basis of the notices issued under Section 13 (2) and 13 (4) of the SARFAESI Act (hereinafter referred to as the ‘Act’). Thereafter Sale Notice was issued on 20.11.2024 in two newspapers. E-auction was fixed on 26.11.2024. Learned Counsel for Appellant submitted that the Sale Notice was frustrated and hence becomes infructuous. Learned Counsel for Appellant would submit that the Learned DRT passed the impugned order on two counts; firstly that the notice was issued against a dead person, namely, V. Sita Mahalakshmi who died on 08.9.2020 and secondly notice under Section 8 (6) of the Act was not published in newspaper.

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5. Per contra, Learned Counsel for Respondent would submit that one of the Partners of Respondent No. 1, M/s.

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Misc. Appeal Diary No. 1145 of 2024-DRAT-Kolkata Sri Mahalakshmi Construction Ventures, namely Smt. V. Sita Mahalakshmi, died on 08.9.2020. This fact was brought to the notice of the Bank. Partnership Reconstitution Deed is annexed with the opposition. It is further submitted that the notice under Rule 8 (6) was not published in newspaper. Accordingly, the impugned order was passed in accordance with law. Learned Counsel for Respondent further submits that the Respondents are willing to make payment of the dues to the Bank by 31^st March, 2025.

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6. At the very outset before entering into the merits of the matter, it would be appropriate to observe that Learned DRT has not only stayed the execution of Notice under Section Rule 9 (1) of the Act or stay the sale to be conducted on 26.11.2024 rather further stayed all proceedings till disposal of the S.A. When a specific plea was raised by the Respondents herein that the sale to be conducted on 26.11.2024 is bad on two counts then the Learned DRT should have confined its order to that extent only because if the sale could not be conducted on 26.11.2024 then the secured creditor would be at liberty to issue fresh Sale Notice in accordance with law. However, Learned DRT stayed all further proceedings that portion of the order could not be sustained.

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7. As far as other legal pleas are concerned, I am not recording any finding on these issues because sale which was scheduled to be held on 26.11.2024 became infructuous. Learned Counsel for Appellant would also submit that on 26.11.2024 there was no bid as no bidder

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Misc. Appeal Diary No. 1145 of 2024-DRAT-Kolkata participated in the auction proceedings. In such circumstances, I am of the considered view that the appeal is liable to be allowed partially to the extent that the portion of the impugned order staying further proceedings is liable to be set aside.

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O R D E R

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Appeal is partly allowed. The impugned judgment and order dated 26^th November, 2024, passed by Learned DRT, Visakhapatnam, in S.A. 613 of 2024 (M/s. Sri Mahalakshmi Construction Ventures & Others -vs- Punjab National Bank), is modified to the extent that direction to stay further proceedings till disposal of the S.A. is set aside. However, Bank would be at liberty to proceed afresh in accordance with law to recover its dues.

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No order as to costs.

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Copy of the order be supplied to Appellant and the Respondents and a copy be also forwarded to the concerned DRT.

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File be consigned to Record room.

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Order pronounced in open Court.

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(Anil Kumar Srivastava,J) Chairperson

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Dated: 14^th January, 2025 09/ac

Punjab National Bank v. Ms Sri Mahalakshmi Construction Ventures

Case brief

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Punjab National Bank v. Ms Sri Mahalakshmi Construction Ventures

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