Allowed

Mr Hemant Khandelwal Son of Mr Kamlesh Khandelwal v. Indian Overseas Bank

DRT18 May 2023MA/56/2023

Case brief

AI extract

What is this about?

The Tribunal allowed the application to set aside a dismissal for default and restored the main suit to file. The court set aside the bank's possession notice due to mandatory procedural violations regarding the delivery of reply to objections, permitting the bank to initiate fresh action while restoring mortgagor's possession.

What did the court decide?

MA No.56/23 allowed; Impugned possession notice set aside; Possession restored to mortgagor; TSA No.441/2023 restored to file without costs.

Mr Hemant Khandelwal Son of Mr Kamlesh Khandelwal versus… — Banking and Recovery | DRT (2023)

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MA 56/23 in TSA 441/2023

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18.05.2023

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IN THE DEBTS RECOVERY TRIBUNAL – III, CHENNAI

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Dated this the 18^th day of May, 2023

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Present: Shri GANAPATHI K.R.K. Presiding Officer

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M.A. No.56 of 23 in T.S.A. No. 441 of 2023

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(Originally filed before DRT- II, Chennai as SA No.150 of 2022 and thereafter transferred to this Tribunal and renumbered as TSA No.441 of 2023)

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Mr. Hemant Khandelwal S/o. Mr.Kamlesh Khandelwal D-16, 7^th Street Anna Nagar (East) Chennai – 600 102 ….Petitioner / Applicant

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-Vs-

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1. The Authorised Officer,

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Indian Overseas Bank

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ESPLANADE Branch

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6, Chennai House

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Esplanade, Chennai – 600 108

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2. M/s. DRA Industries Limited

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Rep.by its Director Mr.Deepak Kumar Bhatia No.106, 3^rd Floor

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Door No.423 & 424

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Ten Square Mall, Inner Ring Road Jawaharlal Nehru Salai Koyembedu Chennai – 600 107

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3. Mr.Deepak Kumar Bhatia

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S/o Mr.Dharam Pal Bhatia Flat No.A1, 1^st Floor, Road Side Samarpan Apartment Door No.46A, 46B & 46C Landons Road, Kilpauk Chennai – 600 010

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4. Mrs.Geeta Rani Bhatia W/o Mr.Deepak Kumar Bhatia Flat No.A1, 1^st Floor, Road Side

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MA 56/23 in TSA 441/2023

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18.05.2023

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Samarpan Apartment Door No.46A, 46B & 46C Landons Road, Kilpauk Chennai – 600 010

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5. Mr.Sumit Bhatia

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S/o Mr.Kulbhushan Kumar Bhatia No.53, R Block, 15^th Street Flat No.S1, Anna Nagar Chennai – 600 040 ….Respondents

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Counsels Appeared / On Record :

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Counsel for Petitioner : M/s.Aiyar & Dolia and M.S.Shanmugasundaram Counsel for 1^st Respondent bank : M/s.Rajendran Raghavan

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ORDER

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MA No.56/23 is allowed. This is an application filed by petitioner to set aside the order of dismissal for default and non-prosecution dated 24.04.2023 passed by this Tribunal. Ld.Counsel for respondent bank on receipt of notices from Ld.Counsel for applicants / petitioners has reported no objection for allowing the same. Hence, petition stands allowed. Consequently, order dated 24.04.2023 is set aside and TSA No.441 of 2023 is restored to file.

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This SA is filed by applicant challenging the Possession Notice dated 08.02.2022 issued by respondent bank, for recovery of a sum of Rs.80,89,80,095.21p

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Heard Ld. counsels appearing for both the parties.

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Sh.Jayesh Dolia, Ld.Senior counsel appearing for applicant has submitted

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that respondent bank has not followed the procedure as warranted under law and

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MA 56/23 in TSA 441/2023

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18.05.2023

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that they may be permitted to raise their legal contentions at an appropriate time if warranted, in view of submissions on behalf of respondent bank, that it may be permitted to recall their SARFAESI actions, with liberty to initiate action afresh if warranted, and also, since it is the case of applicant that he has withdrawn his guarantee and revoked his directorship from the company as early as of 2018 and that, by a subsequent sanction in 2019, he is absolved from any liability owing to novation of contract as provided under the provisions of the Indian Contract Act.

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Whereas Ld.Counsel for 1^st respondent bank has filed their counter and typed set of documents evidencing their actions. Copies served on the other side. Ld.Counsel for respondent bank has submitted that respondent bank has followed the procedure as warranted under law while issuing the impugned possession notice, as can be evidenced from their typed set of documents, but however, since the SARFAESI actions of respondent bank are not with full clarity with regard to payment made and as well as the persons on whom the demand is made, it is contemplated that they shall withdraw the present SARFAESI actions however with liberty to initiate action afresh, if the default of the borrower continues and prayed for recording the same.

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At this stage, Ld.Senior counsel for applicants, Sh.Jayesh Dolia, along with Shri.M.S.Shanmugasundaram submitted that applicants may be permitted to retain their right and liberty to agitate on the issues raised by them in the present SA, as the same have not fallen for consideration before this Tribunal, in view of the submissions of Ld.Counsel for respondent bank, supported by its Chief Manager, to withdraw their SARFAESI actions.

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MA 56/23 in TSA 441/2023

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18.05.2023

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It is the case of applicant that they had raised objections vide their email dated 02.06.2021 to the demand notice dated 22.04.2021 issued by the respondent bank. However, respondent bank never contemplated to issue any reply to the objections raised by the applicant herein, through the company, who is the constituent of the respondent bank. Ld.Counsel further submits that, respondent bank has not followed the rules and procedures as warranted under law, and causing a reply to the objections raised on behalf of applicant, is mandatory and not replying to the same is in violation of Sec.13(3A) of the act.

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Whereas Ld.Counsel for respondent bank submits that although applicant had raised such a plea, it was not sent to them officially by post but was only sent through an email communication which was not considered to be an objection within the meaning of Sec.13(3) and notwithstanding the same applicant had later on issued a reply subsequent to the issuance of the impugned possession notice clarifying their position with regard to the objections raised on behalf of applicant. Notwithstanding the said reply, there was also several correspondences between the parties and although there is no specific letter addressed to the borrower with regard to their email objections, respondent bank has been in continuous communication with the parties and therefore it cannot be in the mouth of the applicant to say that respondent bank has violated the provisions of law and that the actions of the respondent bank are liable to be set aside.

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From the foregone submissions, it is evident that respondent bank although has given reply to the email objections raised by the applicant for their demand notice, could not do so within the time specified under the act, but has done so at a

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MA 56/23 in TSA 441/2023

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18.05.2023

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later point of time. It is a settled proposition of law that serving the reply by the secured creditor to the objections raised in respect of the demand notice has been stated to be mandatory and not optional. It therefore concludes that actions of respondent bank are not in accordance to law, notwithstanding the submissions made by the Ld.Counsel for respondent bank, that, respondent bank intends to initiate fresh SARFAESI action as they apprehend that the present SARFAESI action needs to be revisited.

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As respondent bank intends to withdraw their SARFAESI actions with liberty to initiate action afresh, they are permitted to do so. Consequently, the impugned possession notice dated 08.02.2022 is hereby set aside and possession is restored to mortgagor.

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Accordingly, TSA No.441/2023 stands allowed, however without costs. Both parties will be at liberty to agitate upon their respective contentions, since the very cause of action, made out in the present SA, stood withdrawn by the submissions of the Ld.Counsel for respondent bank and its Chief Manager, who was present in the court hall during the course of submissions. Interim order, if any granted and subsisting till this day stands vacated and all other IAs, if any pending stand closed.

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With the above directions, this MA stands disposed.

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A copy of the order be communicated to the parties concerned as per extant guidelines.

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(Dictated to Stenographer (DD), transcribed by her, corrected, signed and pronounced by me in Open Court on this the 18^th day of May, 2023)

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Sd/-

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(GANAPATHI K.R.K) PRESIDING OFFICER

Mr Hemant Khandelwal Son of Mr Kamlesh Khandelwal v. Indian Overseas Bank

Case brief

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Mr Hemant Khandelwal Son of Mr Kamlesh Khandelwal v. Indian Overseas Bank

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