Dismissed

Smt Alpana Paul and Anr. v. Union Bank of India

DRAT12 Mar 2025REGULAR APPEAL/49/2024

Case brief

AI extract

What is this about?

The Appellate Tribunal dismissed an appeal by guarantors against a Debt Recovery Tribunal's order dismissing a Section 17 SARFAESI application. Confirming the lower court, the Tribunal held that guarantors have no right to oppose enforcement and redemption requires a specific prayer.

What did the court decide?

Appeal dismissed; impugned judgment and order dated 16th April, 2024 passed by the Learned DRT - I Kolkata was confirmed.

Smt Alpana Paul and Anr. versus Union Bank of India — Banking and Recovery | DRAT (2025)

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Reportable/Non-Reportable

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Appeal No.49 of 2024 -DRAT-Kolkata

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT

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KOLKATA

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HON’BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA CHAIRPERSON

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Appeal No. 49 of 2024

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(Arising out of S.A. No. 58 of 2022 in DRT-I, Kolkata)

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Smt. Alpana Paul, wife of Sri Dipak Kumar Paul, residing at 11/2, Kedarnath Deuty Lane, P.O. – Kadamtala, P.S. – Bantra, Howrah-711101.

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Smt. Shibani Paul, wife of Sri Rupchand Paul, residing at 11/2/3, Kedarnath Duty Lane, P.O. – Kadamtala, P.S. – Bantra, Howrah-711101.

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.…Appellants

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-Versus-

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Union Bank of India, carrying on business at and from its Howrah South (e-CB) Branch, 506, G.T. Road, Ground Floor, Near Vivek Vihar, Howrah -711101 and also at ABB – Kolkata, 14/1B, Ezra Street, Kolkata – 700001.

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Authorized Officer, Union Bank of India, 263, G.T. Road (South) Near Kazipara More, 1^st Floor, Howrah – 711102.

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Chief Manager, Union Bank of India having its office at 263, G.T. Road (South) Near Kazipara More, 1^st Floor, Howrah – 711102.

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Asst. General Manager, The Union Bank of India, Asset Recovery Branch. 14/1B Ezra Street, Kolkata – 700001

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Assistant General Manager, Union Bank of India, Howrah South (e-CB) Branch, 506, G.T. Road, Ground Floor, Near Vivek Vihar, Howrah -711101.

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M/s. Chandimata Metal Works, (Partnership Firm), at 11/2/2, Kedarnath Duty Lane, P.O. -Kadamtala, P.S. – Bantra, Howrah 711101.

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Sri Sudin Paul, (Partner of M/s. Chandimata Metal Works), son of Sri Dilip Paul, residing at 11/2/2, Kedarnath Duty Lane, P.O. – Kadamtala, P.S – Bantra, Howrah – 711101.

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. Appeal No.49 of 2024-DRAT-Kolkata 8. Smt. Barnaly Paul, (Partner of M/s. Chandimata Metal Works), wife of Sri Sudin Paul, residing at 11/2/2, Kedarnath Deuty Lane, P.O. – Kadamtala, P.S. Bantra, Howrah – 711101.

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M/s Vulpini Overseas Pvt. Ltd., a company incorporated under the Companies Act, 1956, having its registered office at 4A, Narendra Chandra Dutta Sarani Vatsalya Chamber, 1^st Floor, Office unit No. 102, Kolkata – 700001.

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			….Respon	dents
Counsel for Appellants		Mr. Lal Ms. Anu Cou	Prasenjit Pal Mr Hazra, Mr. Somes Moutushi Hazra radha Hazra, nsel.	. Mohan h Panja, and Ms. Learned
Counsel for Respondents		Mr.	Pankaj	Kumar
		Mu	kherjee, Learned	Counsel
		for Ban	Respondent Nos. k.	1 to 5/
		Mr.	Umesh Kumar S	haw with
		Ms.	Alisha Gomes,	Learned
		Cou 6, 7	nsel for Respond and 8.	ent Nos.
JUDGMENT	:		12^thMarch, 202	5
THE APPELLATE TRIBUNAL :

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Instant Appeal has been preferred by the Appellants (who has filed the SARFAESI Application under Section 17 of the SARFAESI Act before the Learned DRT), against a judgment and order dated 16.04.2024 passed by Learned

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. Appeal No.49 of 2024-DRAT-Kolkata

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DRT-1 Kolkata dismissing the S.A. No. 58 of 2022 (Smt. Alpana Paul and another versus Union Bank of India and others) along with the I.A.s. 2. As per pleadings of the parties, the Appellants herein namely Smt. Alpana Paul and Smt. Shibani Paul are the guarantors of the Cash Credit Loan taken by M/s Chandimata Metal Works, a partnership firm from the Respondent No. 1, Bank namely Union Bank of India to an extent of Rs.40 lacs. Loan account became irregular and was classified as NPA. Notice under Section 13(2) of the SARFAESI Act was issued on 26.10.2021. A representation was made on 03.11.2021 which was replied on 16.11.2021. It was requested by the Appellants to the Bank that firstly the loan amount should be recovered from the assets of the borrower, only then the guarantors’ assets be put to auction but Bank did not yield to the same. Notice under Section 13(2) of the SARFAESI Act. is bad in law as no copy of Agreement was annexed with it. No details of interest were mentioned. Notice under Section 13(4) of the SARFAESI Act was also bad in law. A prayer was made for setting aside the notice dated 26.10.2021 and 16.11.2021. It appears that pending S.A., an amount of Rs. 58 lacs was deposited by the Appellants with the Registrar of the Learned DRT under the directions of the DRT. Secured assets were sold and sale certificate was issued on 16.02.2023. Appellants are ready and willing to deposit full claim of the Bank but no opportunity was granted to them. Possession of the secured assets was illegally taken from the Appellants.

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. Appeal No.49 of 2024-DRAT-Kolkata 3. Learned DRT dismissed the SARFAESI Application. It is recorded that an O.A. No. 121 of 2022 was also filed by the secured creditor for issuance of certificate. Secured assets were auctioned on 18.11.2022 and Sale Certificate was also issued on 16.02.2023. I.A. No. 241 of 2023 was filed on 24.11.2023 challenging the sale conducted on 18.11.2022 and the sale certificate and further to quash the order of the Learned District Magistrate dated 31.01.2023. It is held that opportunity for redemption was granted to the Appellants. Placing reliance upon the judgment of the Hon’ble Apex Court in CELIR LPP -vs- Bafna Motors (Mumbai) Private Limited & Others [(2024) 2 SCC 1] , Learned DRT held that challenge to sale after the conclusion of sale without tendering the outstanding dues, borrower waived his right of redemption. Learned DRT further held that all the steps taken by the secured creditor were in accordance with law. Accordingly, dismissed the SARFAESI Application.

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4. I have heard the Learned Counsel for the parties and perused the records. 5. Learned Counsel for the Appellant would submit that the Sale Notice was published on 15.10.2022 and was served on 30^th October, 2022 while the sale was conducted on 18.11.2022. It is submitted that there is non-compliance of Rule 8(6) and 9(1) of the Security Interest (Enforcement) Rules, 2002. It is further submitted that one property of the borrower was sufficient to satisfy the loan amount of the three properties but all the three properties were sold which were against law.

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. Appeal No.49 of 2024-DRAT-Kolkata 6. It is recorded in the order dated 21.12.2023 passed by Learned DRT that an amount of Rs. 58 lacs was deposited in the DRT vide order dated 01/12.2023. An order of status quo was passed. But this order was not considered by the Learned DRT. It is submitted that the Appellants are ready and willing to redeem the property by making the full payment, but were not allowed by the Bank for the same. 7. Per contra, Learned Counsel for the Respondent Bank would submit that the Appellants are the guarantors of the loan. Loan was rightly classified as NPA. Notice under Section 13(2) and 13(4() of the SARFAESI Act were issued in accordance with law.

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8. It is not in dispute that the Appellants are guarantors of the secured creditor who have also executed the required documents. Loan and guarantee documents were duly executed by the borrowers as well as the guarantors. Secured assets were duly mortgaged and security interest was created.

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9. Liability of the borrower and the guarantor is joint and several. It is a prerogative of the secured creditor to opt from which property the want to realize the dues. As a guarantor, the Appellants cannot claim any protection against enforcement of security interest. Secured creditor is entitled to proceed simultaneously against the property of the borrower as well as guarantors.

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10. In Bank of Bihar Ltd. versus Dr. Damodar Prasad, AIR 1969 S.C. 297, Hon’ble Apex Court, approving the judgment of Lachhman Joharmal versus Bapu Khandu

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. Appeal No.49 of 2024-DRAT-Kolkata

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(1869), 6 Bom HCR 241, held that “the very object of the guarantee is defeated if the creditor is asked to postpone his remedies against the surety.”

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11. In SBI versus Indexport Registered 1 (1992) 3 SCC 159 159 , it was held that “the decree Holder Bank can execute the decree against the guarantor without proceeding against the principal borrower.” In Industrial Investment Bank of India Ltd. versus Biswanath Jhunjhunwala (2009) 9 SCC 478 , it was held that “ the liability of the guarantor and principal debtors is co extensive and not in alternative. ”

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12. Accordingly, Bank/ secured creditor is at liberty to exercise its rights against the borrower or guarantor as per its own wisdom.

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13. A Writ Petition No. WPA 13662 of 2023 I.A. No. CAN 01 of 2023 CAN 02 of 2023 was filed by the Appellants before the Hon’ble Calcutta High Court wherein Hon’ble High Court held that possession has already been taken by the Respondent Bank in pursuance of the law and a sale Certificate with regard to the property has been issued long back as on February, 16, 2023. Summons were also served upon the petitioners. Accordingly, there is a categorical finding of the Hon’ble High Court that the possession was taken in accordance with law.

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14. A plea of violation of Rule 8(6) and 9(1) of the Security Interest (Enforcement) Rules, 2002 was raised during the arguments but no such plea is taken by the Appellants in Application under Section 17 of the SARFAESI Act. It is

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. Appeal No.49 of 2024-DRAT-Kolkata settled legal proposition that a plea not taken in the pleadings could not be considered. Accordingly, it could not be considered at this stage.

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15. It is vehemently argued that an amount of Rs. 58 lacs was deposited by the Appellants before the Learned DRT which shows that the Appellants are ready and willing for the redemption. But the record shows that no prayer were ever made by the Appellants for redemption rather, amount was deposited in DRT on the basis of an order which was a conditional order. No benefit could be extended in favour of the Appellants on the basis of those deposits.

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16. No plea of fraud, collusion or under-value of the secured assets at the time of auction have been taken by the Appellants in their Section 17 Application.

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17. On the basis of discussion made above, I am of the considered view that Learned DRT has not erred in passing the impugned judgment. No interference is called for. Appeal lacks merit and is liable to be dismissed.

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ORDER

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Appeal is dismissed. Impugned judgement and order dated 16^th April, 2024 passed by Learned DRT - I Kolkata in S.A. No. 58 of 2022 (Smt. Alpana Paul and anr. Versus Union Bank of India and others) is confirmed.

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No Order as to costs.

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File be consigned to Record Room.

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. Appeal No.49 of 2024-DRAT-Kolkata 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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Copy of the Judgment/ Final Order be uploaded in the Tribunal’s Website.

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Order signed and pronounced by me in the open Court on this the 12^th day of March, 2025.

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