Allowed

Manish Kumar v. Bank of India

DRT9 Dec 2022SA/3/2022

Case brief

AI extract

What is this about?

This application challenged the validity of an auction sale certificate due to alleged procedural lapses by the bank and delay in filing. The Tribunal condoned the delay under Section 14 of the Limitation Act and held that the bank failed to serve statutory notices as alleged. The application was allowed, setting aside the auction sale certificate with costs.

What did the court decide?

The auction sale certificate dated 10.07.2018 is set aside with costs.

Manish Kumar versus Bank of India — Banking and Recovery | DRT (2022)

SA 03 of 2022 [J]

DRT,PATNA

EBTS RECOVERY TRIBUNAL PATNA

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Presiding Officer: Shri KaushalendraYadav

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SA- 03 of 2022

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Manish Kumar, Slo Late Narayan Prasad Srivastava, RIo Village - New Agrawa, P.S. - Motihari, District - East Champaran.

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. Applicant

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Versus

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The Bank of India through its Managing Director, Star House-C/5, G Block, Bandra Kurla Complex, Bandra East, Mumbai.

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Managing Director, Bank of India, Star House-C/5, G Block, Bandra Kurla Complex, Bandra East, Mumbai.

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General Manager, Bank of India, Bihar Patna.

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Chief Regional Manager, Bank of India, Pankaj Market, Saraiya Ganj, Zonal Office, Muzaffarpur, Bihar.

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Branch Manager, Bank of India, Motihari Branch, Motihari, East Champaran.

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Sunil Kumar Gupta, Sio Late Om Prakash Gupta, Rio - Village+P.O. - Mehta Tola, P.S. - Harsidhi, District - East Champaran.

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--respondents

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Present:

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For the Applicant : Sh. Mazharul Hassan, Advocate For the respondents Bank : Sh. Sanjay Singh Thakur, Advocate

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Dated: 09.12.2022

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JUDGMENT

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1. Present application uls 17 of SARFAESI Act has been filed with a prayer to set aside the sale certificate dated 10.07.2018 and to declare the entire auction proceeding as null. Alongwith S. application, the applicant has also filed Limitation Petition uls 5 of the Limitation Act.

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1. The brief facts of the case are that the applicant availed Term Loan Facility to the tune of RS.12,38,OOOI- from the respondent bank. On default in repayment of the dues of the bank, the account of the applicant was declared as NPA on 31.03.2016. Subsequently, the bank initiated SARFAESI Action against the borrower and lastly property was auction sold on 30.05.2018 and Sale certificate has been issued on 10.07.2018 in favour of auction purchaser. The applicant moved before Hon'ble High Court of

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DRT,PATNA

SA 03 of 2022 [J]

Patna in CWJC No. 17404 of 2018 on 01.08.2018 challenging the initiation of physical possession under Section 14 of the Act. The said Writ was disposed of by order dated 08.12.2021 with the liberty to avail alternative remedy. Accordingly, this SA has been filed by the applicant alongwith limitation petition forI condonation of delay.

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1. On the point of limitation it is submitted by the Ld. Counsel of S. applicant submitted that against auction sale notice of the bank, the applicant has moved before Hon'ble High Court of Patna by filing CWJC No. 17404'of 2018 on 01.08.2018 challenging the initiation of physical possession under Section 14 Proceeding and the advertisement of auction of his house. By order dated 08.12.2021, the Writ was disposed of by the relegation of the petitioner to the appropriate forum. As such this case has been filed before this Tribunal on 22.12.2021. The petitioner was pursuing his constitutional remedy during these periods. There was no intentional delay by the applicant. Hence, the time taken in aforesaid writ petition may be exempted under S.14 of the Limitation Act.

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1. On the point of merit of the case, it is submitted by the Ld. Counsel of S. applicant that due to sudden attack of paralysis to the father of applicant, the applicant could not repay the amount after 30.11.2016. The respondent bank on 20.04.2018 published the auction notice in the newspapers with respect to the house of the applicant in which the date of auction was fixed for 30.05.2018. Accordingly, the applicant contacted the bank and offered for settlement but the bank refused the same. Thereafter, the applicant filed a case bearing no. 06/2018 before the Lok Adalat, Motihari, East Champaran praying for amicable settlement but the bank didn't appear in the matter till 02.07.2018. In the meantime, the applicant came to know that with regard to pendency of Case no. 48/2017 before the District Magistrate, East Champaran, Motihari under section 14 of the SARFAESI Act for taking physical possession of the secured asset. It has been further submitted that neither demand notice issued u/s 13 (2) nor possession notice issued u/s 13(4) of the SARFAESI Act has been served to the applicant. The bank failed to comply with the provision of the Act and failed to comply with Rule 8(1) and (2) of the Security Interest (Enforcement) Rules, 2002. The property was auctioned on 30.05.2018 at much lower price as the property was valued at more than RS.35Lacs.

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1. On the contrary, Ld. Counsel of the respondent bank submits that this

DRT,PATNA

SA 03 of 2022 [J]

application is time barred as the S. applicant u/s 17(1) is to be filed any time before the date of E-auction i.e. on 30.05.2018 while this application has been filed on 22.12.2021 i.e. after more than 42 months of E-auction of the mortgage property. As per settled law laid down by the Hon'ble DRAT, Allahabad in Baleshwar Dayal case, the DRT has no power to condone the delay u/s 5 of the Limitation Act. The applicant was aware about the E- auction notice dated 20.04.2018 fixing the date of E-auction on 30.05.2018 as per letter dated 28.05.2018 annexed with the application as annexure -6. The Hon'ble Patna High Court while disposing the said Writ did not give any direction with regard to condonation of delay. The liberty granted to avail alternative remedy does not entitle the applicant to claim reliefs as a matter of right. No Reply on the merit of the case has been filed by the Bank.

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1. I have heard Ld. Counsel for the parties and gone through the record.

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1. It has been alleged that no notice issued under SARFAESI Act & Rules had been served to the applicants. He came to know about the SARFAESI Action of the bank when the e-auction sale notice dated 21.04.2018 published in newspaper fixing the date of e-auction on 30.05.2018. Thereafter, he sent a letter to the bank on 28.05.2018 requesting therein to stay the auction proceeding and grant some time for payment. Further, after issuance of Sale Certificate dated 10.07.2018 in favour of auction purchaser, the applicant approached the Hon'ble High Court by filing Writ bearing no. 17404 of 2018 on 01.08.2018.

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1. The judgment cited on behalf of the respondent does not apply in the present case as the applicant is entitled to exemption of the time during writ petition under section 14 of the Limitation Act. which runs as under-

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Exclusion of time of proceeding bona fide in court without

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jurisdiction.-(1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect ofjurisdiction or other cause of a like nature, is unable to enterlain it.

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1. In view of the above discussion, the application to condone the delay deserves to be allowed. ~.v.yV

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DRT,PATNA

SA 03 of 2022 [J]

1. As It has been specifically alleged that neither demand notice issued u/s 13 (2) nor possession notice issued u/s 13(4) of the SARFAESI Act has been served to the applicant. The property was auctioned on 30.05.2018 at much lower price as the property was valued at more than RS.35 Lacs.

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1. The respondent did not file any reply against this point. As such the burden to prove the above fact which may be in special knowledge of the respondent has not been discharged. Accordingly, the bank failed to comply with the provision of the Act and failed to comply with Rule 8(1) and (2) of the Security Interest (Enforcement) Rules, 2002. Consequently all the measures taken by respondents are bad in the eyes of law.

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ORDER

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The application under Section 17 of the SARFAESI Act filed by Manish Kumar, with all pending lAs is allowed with costs. The Auction sale certificate in question, dated 10.07.2018 is set aside.

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;: [Kaushalend raYadav]

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Presiding Officer

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Debts Recovery Tribunal, Patna

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Judgment signed, sealed, dated and pronounced in the open court on ~.-I' this OgTH Day of December, 2022. i-:

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i-: -v'V' -t. _C\\ry_

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[KaushalendraYadav]

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Presiding Officer

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Debts Recovery Tribunal, Patna

Manish Kumar v. Bank of India

Case brief

What is this about?

What did the court decide?

Manish Kumar v. Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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