Dismissed

Ritika Industries v. Canara Bank

DRT14 Jun 2023SA/334/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed a Securitisation Application filed by Ritika Industries challenging an auction sale by Canara Bank. The Tribunal held that the applicants suppressed material facts regarding six previous auctions and lacked clean hands, finding no merit in their objections such as alleging collusion. Possession was directed to be handed to the purchaser.

What did the court decide?

Securitisation Application dismissed with no orders as to costs; interim orders vacated; bank directed to hand over possession to auction purchaser.

Ritika Industries versus Canara Bank — Banking and Recovery | DRT (2023)

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IN THE DEBTS RECOVERY TRIBUNAL, AURANGABAD (BEFORE HON’BLE PRESIDING OFFICER, DRT AT AURANGABAD) ORDER SHEET

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	14.06. Sr. No	2023 .47 SA No. 334/2022
Classific ation	No. of Exh.
		SECURITISATION APPLICATION NO. 334/2022 Ritika Industries & others ..Applicants Versus Canara bank and others .. Respondents Mr. P.S.Gaikwad – Advocate for the applicants. Mr. P.N.Kapadia - Advocate for the respondent bank Mr. S.R.Vakil – Advocate for the respondent no.3. The matter is taken through VC. 1. The Securitisation Application has been filed by M/s Ritika Industries and others challenging the auction notice dated 14^th June, 2022 issued by the respondent bank and the auction dated 19^thJuly, 2022.
		2. There is an admitted position that the applicant has taken the term loan of Rs.50,00,000/- and working capital of Rs.2.50 crores. It is an admitted position that the applicants have not made payment and as such the account became NPA. 3. The learned counsel for the applicant submits that the notice under section 13(2) dated 29^thNovember, 2017 was not served on the applicants and the bank has made statement that the applicants have refused to accept the notice. However, said notice has been published as admitted by the applicant.
		4. It is further stated by the applicants that the symbolic possession has been taken on 17^thMay, 2018 it is also not been served on the applicants. Thereafter, the bank has

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[APK] (SA No.334/2022) Page 1 of 4

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IN THE DEBTS RECOVERY TRIBUNAL, AURANGABAD (BEFORE HON’BLE PRESIDING OFFICER, DRT AT AURANGABAD) ORDER SHEET

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directly issued auction sale notice.

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In this matter several rounds of pre-litigation mediation took place because the applicants wanted to save their property but at the end it appears that the applicants do not want to save the property but they only wanted to sell the property to the person known to them.

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The learned counsel for the respondent bank submits that this was the 7^th auction conducted by the bank and the property has been sold for an amount of Rs.2,80,10,000/- as against the reserve price of Rs.2,80,00,000/-. There is complete suppression of facts by the applicants that they have not disclose the fact that earlier the property has been put for auction for six times. On this sole ground of suppression of material fact from the Tribunal, this Securitisation Application is liable to be dismissed with heavy costs.

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The Hon’ble Supreme Court has already pronounced several judgments on this aspect that when the applicant is not coming with the clean hands and supressing the material facts, he should not be given any indulgence. The observations of the Hon’ble Supreme Court are that such people should be thrown out of the litigation at any stage without even providing them the opportunity to be heard. However, in this matter the Tribunal has given ample opportunity to the applicant but of no result.

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The learned counsel for the respondent bank submits that they have already adjusted the sale amount of Rs. 2,80,10,000/- in the loan account and even today they have to recover

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[APK] (SA No.334/2022) Page 2 of 4

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IN THE DEBTS RECOVERY TRIBUNAL, AURANGABAD

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(BEFORE HON’BLE PRESIDING OFFICER, DRT AT AURANGABAD)

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ORDER SHEET

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Rs.38,00,000/- from the borrowers.

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The learned counsel for the auction purchaser submits that as per the judgment of Hon’ble Supreme Court in the matter of K. Kumara G upta V/s Sri Markendaya and Shri Omkareshwara Swamy Temple and others delivered on 18^th February, 2022 the sale cannot be set aside unless the averments are being made regarding collusion, fraud and others he submits that after going through the entire Securitisation Application there is no allegation of collusion it is only after the some typographical error in the reply of the bank is written, the applicant is trying to submits that it is a collusion.

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10.The Tribunal also does not find any collusion in the matter because during the Pre-Lok-Adalat mediation the auction purchaser very categorically taken stand that the bank may return the property to the borrower and he has no objection but his money should be refunded to him with appropriate interest because he has borrowed the same from others. The mediation was also un-successful.

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11.This Tribunal do not find merit in the matter because all the

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11.This Tribunal do not find merit in the matter because all the objections taken by the applicants are customary in nature without any substantial documents to prove the same. The applicants themselves submits that the notices were served through paper publication and they have all the time from 2017 till 14^th June, 2022 to redeem their property.

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12.The learned counsel for the auction purchaser submits that the right under section 13(8) is available only till the date of

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[APK] (SA No.334/2022) Page 3 of 4

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IN THE DEBTS RECOVERY TRIBUNAL, AURANGABAD

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(BEFORE HON’BLE PRESIDING OFFICER, DRT AT AURANGABAD)

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ORDER SHEET

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pu	blication of the notice of first auction and it is not available
la	ter on. The issue as of today is not whether he has right of
re ev	demption or not because if he has a right of redemption en at the time of seventh auction that also he has lost.
13. In co re	these circumstances though I am inclined to impose heavy st for not disclosing earlier six auctions being conducted. I frain from doing so and pass the following order: ORDER
A.	Securitisation Application No.334/2022 is dismissed with no orders as to costs.
B.	All interim orders stand vacated.
C.	All pending IA in the proceeding, if any are disposed of accordingly.
D.	The bank may complete the securitisation proceeding by handing over the possession to the auction purchaser.
E.	Consign the file to the record room.
The	parties may download the order from the official web-site.
	(Vimal Gupta) Presiding Officer Debts Recovery Tribunal, Aurangabad

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[APK] (SA No.334/2022) Page 4 of 4

Ritika Industries v. Canara Bank

Case brief

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Ritika Industries v. Canara Bank

Case brief

What is this about?

What did the court decide?

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