Remanded

Amitava Ghosh and Anr. v. Union Bank of India and Anr.

DRAT9 Jan 2025REGULAR APPEAL/73/2019

Case brief

AI extract

What is this about?

In an appeal against a DRAT order dismissing a SARFAESI application, the Tribunal held that the lower court violated natural justice by relying on documents filed with written notes of arguments without giving the opposing party an opportunity to rebut them. The matter was remanded for a fresh decision.

What did the court decide?

The impugned order dated 21st June, 2019 was set aside and the matter remanded to DRT-III, Kolkata to decide afresh after giving parties opportunity to file documents and rebut.

Amitava Ghosh and Anr. versus Union Bank of India and Anr. — Banking and Recovery | DRAT (2025)

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Reportable/Non-Reportable

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Appeal No. 73 of 2019-DRAT-Kolkata

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA

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Appeal No. 73 of 2019

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(Arising out of S.A. 250 of 2017 in DRT-III, Kolkata)

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THE HON’BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA

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CHAIRPERSON

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Amitava Ghosh, son of Late Anadi Ranjan Ghosh, Proprietor of M/s. Amit International, residing at I/I-8, Aswini Nagar, Pubali, Kolkata - 700 159;

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Malabika Ghosh, wife of Late Anadi Ranjan Ghosh, residing at I/I-8, Aswini Nagar, Pubali, Kolkata - 700 159.

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… Appellants

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-Versus-

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Union Bank of India, a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings Act, 1970), having its Head Office at Mumbai and a branch office amongst other at 5, Chowringhee Place, P.O. & P.S. New Market, Kolkata - 700 013;

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Authorised Officer, Union Bank of India, having its Office at 5, Chowringhee Place, P.O. & P.S. New Market, Kolkata -700 013;

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Sri Ajoy Ghosh, son of Late Lakshmi Narayan Ghosh of DC-104, Narayantala West, P.S. Baguihati, P.O. Deshbandhu Nagar, Kolkata - 700 059.

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… Respondents

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Office of the BL&LRO, Rajarhat, North 24 Pargnas, West Bengal.

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… Proforma Respondent

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Counsel for the Appellant	…	Mr. Samik Basu Mr. Partha Sankar Kundu
Counsel for Respondent Bank	…	Mr. Ranajit Chowdhury
None for Respondent No. 3	…	Mr. Nimish Mishra Mr. Manik Lal De
JUDGMENT	:	9^thJanuary, 2025

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THE APPELLATE TRIBUNAL :

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1. Instant appeal has been preferred against judgment and order dated 21^st June, 2019, passed by Learned DRT-III, Kolkata in S.A. 250 of 2017 in the matter

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Appeal No. 73 of 2019-DRAT-Kolkata of Amitava Ghosh & Another -vs- Union Bank of India whereby the learned Tribunal has dismissed the SARFAESI Application and all the interim applications were also disposed of.

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2. It appears that an application under Section 17 of the SARFAESI Act 2002 (hereinafter referred to as the Act of 2002) filed before the Learned DRT-III wherein relief of setting aside the notice under Section 13(2) of the Act of 2002 was sought to be set aside. Notice under Section 13 (4) was also sought to be set aside any further action in consequence of the notice were sought to be quashed.

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3. As per the assertions made in the application, admittedly the Appellant is the Proprietor of a proprietorship firm, viz; Amit International, having its registered office at J/H/1, Baguihati Digantika Aswini Nagar,Kolkata - 700 159. Appellant had taken a Packing Credit Facility to the tune of Rs.99.00 lac and Term Loan/SOD to the tune of Rs.57,50,000.00. Different amounts were deposited by the Appellant. Equitable mortgage of the property measuring 4 cottah, 4 chittack situated under Holding No. 199/174, Mouza Jyangra, R.S. No. 114, C.S. Khatian No. 329/273, R.S. Khatian No.329/149, present Khatian No. 3605 under Dag No. 3669 (Old 402) Touzi No. 3027, J.L. No. 16 alongwith two storied building situate at J/H/1, Baguihati Digantika Aswini Nagar, Kolkata - 700 159. Appellant was regularly depositing the interest in terms of the sanction letter and no intentional default was made. On

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Appeal No. 73 of 2019-DRAT-Kolkata 20^th February, 2017, a Notice under Section 13 (2) of the Act was issued wherein an amount of Rs.69,33,492.30 was shown as outstanding to be paid within sixty days from the date of the notice. Details of secured assets were also mentioned. No Statement of Account is annexed with the notice. Notice was bad in law because no due care and caution was taken by the Bank. Provisions of law were violated; hence the notice was bad in law. The mandatory provisions of Section 13 (3) of the Act were violated. Details of the Sanction Letter were not mentioned. Account was not Non Performing Account. No security interest was created in favour of the Bank. Provisions of Section 2 (a) of the Act were not followed. Objection was raised by the Appellant under Section 13 (3A) of the Act on 12^th April, 2017 which was replied to by letter dated 4^th May, 2017 which is against the provisions of law. Compliance of Rule 8 (1) of Security Interest Rule 2002 was not made.

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4. No deposit was made in spite of Demand Notice. Possession Notice, under Section 13 (4) of the Act read with Rule 8 of the Rules was issued on 4^th May 2017 for taking symbolic possession of the secured assets. It was also published in two newspapers dated 13^th May 2017. Notice under Rule 8 (6) of the Rules was issued on 16^th May 2018 to the Appellant indicating that the mortgage property will be sold within 30 days. Thereafter, e-auction sale notice was issued which was served on the Appellant and also published in two newspapers one in vernacular and another in English on 14^th August, 2018. Valuation of the property was

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Appeal No. 73 of 2019-DRAT-Kolkata assessed from Registered Authority and reserve price was fixed by consent of District Magistrate’s order under Section 14 of the Act was obtained on 10^th August, 2017 for taking physical possession of the mortgaged property. E-auction was held on 18^th September, 2019 and the secured assets were sold on 18^th September, 2019 for Rs.72,10,000.00 to one Ajoy Ghosh, Respondent No. 3. On the same day auction purchaser deposited 25% of the sale price. Sale was confirmed on 19^th September, 2018. Auction Purchaser was required to deposit the remaining 75% on or before 3^rd October, 2018. Physical possession was taken on 31^st October, 2018 under the orders of the District Magistrate and Sale Certificate was issued on 1^st November, 2018. Physical possession was handed over to the Auction Purchaser on 5^th November, 2018. 5. Appellant preferred the application, under Section 17 of the Act, before the Learned DRT which was dismissed by the impugned order dated 21^st June, 2019. It was held that the mandatory provisions of the Act as well as Rules were violated. There is no discrepancy in the procedure as representation made by the Appellant was duly replied to by the Respondents. Sale was conducted within the stipulated period under the Act. Highest bidder deposited the amount within a period of 90 days from the date of auction. Accordingly, application under Section 17 of the Act was dismissed.

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6. I have heard Learned Counsel for both the parties and perused the record.

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Appeal No. 73 of 2019-DRAT-Kolkata 7. Learned Counsel for the Appellant submits that it is not disputed that loan was taken by the Appellant wherein the property in dispute was the secured asset which was mortgaged by deposit of title deeds. At the very outset, Learned Counsel submits that the Learned DRT has disposed of all the interim applications by the impugned judgment and order. Learned Counsel has drawn my attention towards the order dated 7^th December, 2018 wherein it was ordered that the Respondent Bank may file objections to the I.A.s and the I.A.s will be considered after filing of the objections. Thereafter no opportunity was given and all the I.A.s were disposed of in the main judgment. Learned Counsel has further submitted that compliance of Rule 13 (3A) of the Act was not done. Representation was dated 17^th April, 2017 but the reply was sent on 4^th May, 2017 after lapse of 15 days. It is submitted that non compliance of the mandatory provision vitiates the proceedings.

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8. Application under Section 17 of the Act was filed mainly on the ground that valid equitable mortgage was not created by the SARFAESI Applicant No. 2. Demand Notice was not served upon the SARFAESI Applicant No. 1. There is violation of Section 13 (3A) of the Act; Possession Notice was also not delivered to the Appellants in violation of Rules 8 (6) and 9 (1) of the Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as the “Rules”). Sale notice was not affixed on the mortgage property. There were defects in the notice under Section 13 (4) of the Act. An issue of violation of Rules 9 (4) and 8 (1) of the Rules was

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Appeal No. 73 of 2019-DRAT-Kolkata also taken wherein the Bank denied the allegations and stated that all the mandatory provisions of the Act were followed.

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9. It would appear from the impugned judgment that the Learned DRT has taken note of certain documents which were not filed by the Respondent Bank along with the affidavit rather they were filed along with the written notes of arguments. Reliance is placed on a letter dated 30^th January, 2017 wherein the SARFAESI Applicant confirmed overdue liability. Further, in the written notes of arguments, Respondent Bank annexed a representation dated 17.4.2017 allegedly filed by the Applicant. The representation dated 17.4.2017, along with its postal despatch receipt, was also taken into consideration which was filed along with the written notes of arguments. 10. Apart from the finding recorded by the Learned DRT on the merits of the matter, at the very outset, I am constrained to observe that Learned DRT committed a manifest error in considering the document filed by the Bank along with the written notes of arguments. Law is well settled that the Tribunal should look into the material available on record during the hearing of the matter. Written notes of arguments cannot be treated as a pleading or as an evidence. Written notes of arguments are filed by the parties after conclusion of the oral submissions with the leave of the Tribunal. Such leave is granted to make a party entitled to bring on record the submissions made by the Learned Counsel. Such written notes of arguments are only

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Appeal No. 73 of 2019-DRAT-Kolkata to assist the Tribunal to arrive at a conclusion in the matter. Additional evidence cannot and should not be filed along with written notes of arguments. Even if any such additional document is filed, the same cannot be made part of the records. Further, decision of the Tribunal cannot be based relying on such evidence. There is obvious reason for not accepting evidence or documents with written notes of arguments. It is settled legal principle of law that if any material/document is filed by a party then opportunity to rebut the same should always be given to the other side; thereafter, such evidence can be taken into consideration to arrive at a finding. If a document is filed along with written notes of arguments then there is no opportunity available to the other side to rebut the same as written notes of arguments are filed after conclusion of the hearing. If such evidence, filed with the written notes of arguments, is taken into consideration by the Learned DRT, it is against law.

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11. In the present case, Learned DRT has taken into consideration the documents filed by the Bank along with the written notes of arguments wherein the other side did not have an opportunity to rebut the same. Learned DRT has adopted a wrong procedure which is against law.

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12. I am not entering into the other issues involved in the matter as there is an inherent mistake committed by the Learned DRT. When certain documents filed by the Bank are taken into consideration by the Learned DRT then opportunity have to be given to the other side to rebut the same.

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Appeal No. 73 of 2019-DRAT-Kolkata 13. There is another aspect of the matter. Bank filed the documents without any affidavit with the written notes of arguments. There is a procedure prescribed under the law for filing of the documents but that procedure has not been followed by the Learned DRT. If the Bank wanted to produce certain documents even after conclusion of the hearing then there is a settled procedure which should have been followed by the Bank by seeking leave of the Tribunal to file documents but the Bank circumvented the procedure and followed a method for filing the documents which is not prescribed under the law.

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14. Accordingly, I am of the considered view that the matter should be remanded to the Learned DRT with a direction to decide the matter afresh after giving opportunity of hearing to the parties in the light of the observation made in the body of the judgment. Either of the party would be at liberty to file the documents and if filed the other side should be given an opportunity to rebut the same. Thereafter, Learned DRT should decide the matter afresh.

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15. According the appeal is liable to be allowed.

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O R D E R

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Appeal is allowed. The judgment and order dated 21^st June, 2019, passed by Learned DRT-III, Kolkata in S.A. 250 of 2017 (Amitava Ghosh & Another -vs- Union Bank of India), is set aside. Matter is remanded to Learned DRT to decide it afresh in the light of the observation made

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Appeal No. 73 of 2019-DRAT-Kolkata in the body of the judgment. It is made clear that the Learned DRT should give opportunity of hearing to the parties. If either of the party files documents then opportunity for rebuttal should be granted to the other side and then the matter should be disposed of in accordance with law. It is directed that the Learned DRT should decide the matter expeditiously without granting any unnecessary adjournments to either party.

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No order as to costs.

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File be consigned to Record room.

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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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Copy of the Judgment/Final Order be uploaded in the Tribunal’s Website.

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Order dictated, signed, and pronounced in open Court.

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(Anil Kumar Srivastava,J) Chairperson

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Dated: 9^th January, 2025 ac

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Appeal No. 73 of 2019-DRAT-Kolkata

Amitava Ghosh and Anr. v. Union Bank of India and Anr.

Case brief

What is this about?

What did the court decide?

Amitava Ghosh and Anr. v. Union Bank of India and Anr.

Case brief

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