Dismissed

Ms Shreevardhan Agro Pvt. Ltd. v. Indus Orgo Farmers Allied Industries Private Limited

DRT7 Feb 2023SA/50/2022

Case brief

AI extract

What is this about?

In this securitisation application, the applicant company sought to quash a private treaty sale of properties by a regulated financial entity (Defendant No.2) to a third party (Defendant No.1). The applicant claimed the bank violated SARFAESI rules regarding the bidding process and timelines. The court held that the borrower itself consented to the sale to the third party, who offered a higher pri

What did the court decide?

Application for quashing the sale transaction, setting aside sale certificate, and restraining the defendants was dismissed.

Ms Shreevardhan Agro Pvt. Ltd. versus Indus Orgo… — Contract and Commercial Disputes | DRT (2023)

¶1

Presented on: 20.01.2022 Registered on: 25.02.2022 Decided on: 07.02.2023 Duration: Y M D 1 - 18

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IN THE DEBTS RECOVERY TRIBUNAL AT PUNE (Before Shri Dilip G. Murumkar, Presiding Officer) SECURITISATION APPLICATION No.50/2022

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M/s. Shreevardhan Agro Pvt. Ltd., Registered Office at Plot No.4, Gat No.41, Golwadi Paithan Road, Aurangabad – 431 005. Through its Authorized Officer: Mr. Kisan Eknathrao Kagne, Age: 51 years, Occupation : Service Having Address at: Flat No. B-1, Gajanan Nagar, Paithan Road, Opp. Nath Seeds Vitkheda, Aurangabad-001.

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… Applicant

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Versus

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Indus Orgo Farmer Allied Industries Pvt. Ltd., A Private Limited Company registered under the Companies Act. Having Registered Office at H.No.150, Murud Latur, Latur – 413 510.

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Solapur District Central Co-operative Bank Ltd., Having its Registered Office at Main Branch, 207/8/9, Killa Road, Goldfinch Peth, Solapur- 413 007.

(SA No.50/2022)

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[KAUR]

Aditya Raj Sugar Private Limited Having its Registered Office at: At Post Hatti Near Vairag, Taluka – Barshi Solapur, Solapur Maharashtra-413 406. ... Defendants

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APPEARANCES For the Applicant Mr. Harshad N. Rathod- Advocate For Defendant No.1 Mrs. Sanobar S. Irani - Advocate For Defendant No.2 Mr. N.K. Khasbardar – Advocate For Defendant No.3 Mr. Girish Jagnade – Advocate

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JUDGMENT

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(Delivered on 7^th February, 2023)

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The applicant has claimed following reliefs in this application:

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A. Quash, cancel, terminate and/or set-aside the Sale Transaction pertaining to the suit property between defendant Nos.1, 2 and 3

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B. That this Tribunal be pleased to quash and set aside the sale certificate if issued by the defendant bank pertaining to the said all movable and immovable properties.

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C. That this Tribunal be pleased to quash and set aside the Registration of “Sale Deed” if at all executed by the Defendants.

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D. An interim order restraining the defendant Nos.1, 2 and its men, agents, officers and each from giving effect or further effect and/or acting in furtherance to the

(SA No.50/2022)

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[KAUR]

impugned sale transaction.

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E. An Interim order restraining the Defendant No.1, 2 creating any third party Interest pertaining to the sale transaction of the said property.

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F. In the alternative an order of status quo in respect of the said Scheduled properties to be maintained till the disposal of the instant application.

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G. That pending the hearing and disposal of this Application, the impugned sale transaction of the defendants may kindly be stayed with immediate effect.

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The averments made in the application can be summarized as under:

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It is contended by the applicant Company that defendant No.3 Adityaraj Sugar Private Limited, is the borrower of defendant No.2 Solapur District Central Cooperative Bank Ltd. (for short “SDCC Bank”) which defaulted in repayment of loan. Due to default in repayment of loan, on 27^th January, 2016 the defendant No.2 SDCC Bank took possession of the suit properties i.e. (1) Gat No.8 out of which area admeasuring 0.40.50R belonging to Mr. Arun S.Kapse, (2) Gat No.11 area admeasuring 1H 32R belonging to M/s. Adityaraj Sugar Pvt. Ltd, and (3) Gat No.8 out of which area

(SA No.50/2022)

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[KAUR]

admeasuring 2H 0.1R belonging to Mrs. Mangala C. Kapse situated at Village Hattij, Taluka Barshi, District Solapur along with Plant and Machinery, Godown at Gat Nos.11 and 8 and construction thereon under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short “SARFAESI Act”). The defendant No.2 SDCC Bank wanted to sell the suit properties as per the provisions of SARFAESI Act.

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On 30^th June, 2021 the applicant Company passed a Resolution to purchase the suit properties from the defendant No.2 SDCC Bank by way of Private Treaty and offered the price of Rs.9,30,00,000/- to the defendant No.2 SDCC Bank.

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Thereafter, defendant No.2 SDCC Bank invited the applicant Company for private negotiation. On 5^th July, 2021 the applicant visited the defendant No.2 SDCC Bank and in presence of defendant No.3, Adityaraj Sugar Private Limited offered immediate payment of 25% of offer price of Rs.9,30,00,000/- and issued cheque of Rs.50,00,000/- in favour of defendant No.2 SDCC Bank towards Private Treaty.

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On 06^th July, 2021 the defendant No.2 SDCC Bank accepted the offer and informed the applicant Company to deposit balance 75% amount within three months as per Rule

(SA No.50/2022)

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[KAUR]

9(4) of Security Interest (Enforcement) Rules, 2002.

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Further, the defendant No.2 SDCC Bank informed the applicant Company to attend final negotiation meeting of intended buyers on 29^th July, 2021 wherein the defendant No.2 SDCC Bank disclosed that there will be bidding process amongst four other bidders. However, all other parties failed to deposit 25% amount within seven days. The defendant No.2 SDCC Bank has not issued any Public Notice for bidding process.

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On 16^th August, 2021 the applicant Company communicated its preparedness to deposit 25% of sale price as no other participating bidders deposited said money till 16^th August, 2021.

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The applicant Company further contended that the defendant No.2 SDCC Bank has neither communicated the detailed status of sale transaction by Private Treaty nor otherwise, despite several reminders.

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The applicant Company then preferred Writ Petition No.5569 of 2021 before Hon’ble Bombay High Court wherein defendant No.1 vide IA No.2268/2021 intervened in the proceeding. The Hon’ble High Court disposed of the Writ Petition and granted liberty to the applicant Company to

(SA No.50/2022)

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[KAUR]

approach the Tribunal u/s 17 of the SARFAESI Act.

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Meanwhile, the applicant Company came to know about the sale transaction between defendant No.1 M/s. Indus Orgo Farmer Allied Industries Pvt. Ltd. and defendant No.2 SDCC Bank. Defendant No.1 and defendant No.2 SDCC Bank has suppressed the material facts before the Hon’ble Bombay High Court. The defendant No.2 SDCC Bank has not complied with Rule 8(6) and violated Rule 9(1), 9(4) of the Security Interest (Enforcement) Rules, 2002. Defendant No.2 SDCC Bank has given time beyond three months to defendant No.1 to deposit the money and has given illegal possession to defendant No.1 on 16^th December, 2021. The applicant Company issued legal Notice and filed Police complaint against defendant No.1.

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Being aggrieved by the aforesaid facts, the applicant Company has filed the present application on the grounds that measures taken by defendant No.2 SDCC Bank are not in accordance with the provisions of SARFAESI Act and Rules made thereunder.

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The learned Advocates appearing for defendant Nos.1 to 3 resisted the application by oral arguments.

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The learned Advocate appearing for the applicant relied upon the following Authority:

(SA No.50/2022)

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[KAUR]

(1) S. Karthik & Others Vs. N. Subhash Chand Jain and others [LNIND 2021 SC 339]

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The learned Advocate appearing for defendant No.2 SDCC Bank relied upon the following Authority:

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(1) GM, Sri Siddeshwara Co-operative Bank Ltd. and others Vs. Ikbal and Others [MANU/SC/0856/2013]

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Heard all the parties. Perused the documents and Authorities cited by the parties.

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The following points arise for my determination and I record my findings as under:

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(1) Whether the applicant is entitled for reliefs as claimed?

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(2) What order?

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Findings:

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Point No.1 – In the negative.

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Point No.2 – As per final order.

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REASONS

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As to Point Nos.1 and 2

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On 27^th January, 2016 the defendant No.2 SDCC Bank had taken possession of the suit properties of defendant No.3, Aditya Raj Sugar Private Limited under the provisions of SARFAESI Act. Defendant No.2 SDCC bank decided to sell the suit properties through Private Treaty. The applicant

(SA No.50/2022)

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[KAUR]

Company and defendant No.1 Company and other intended buyers participated in the Meeting held on 29^th July, 2021 called by defendant No.2 SDCC Bank for negotiation. The officers of applicant Company and defendant No.1 Company attended that meeting. The applicant Company by letter dated 16^th August, 2021 (Exhibit-F annexed to the Application) intimated that they are ready to purchase the suit properties for Rs.9,30,00,000/-. Simultaneously, defendant No.1 Company by letter dated 7^th August, 2021 intimated defendant No.2 SDCC Bank that they are ready to purchase the movables and immovable assets of defendant No.3, Aditya Raj Sugar Private Limited for Rs.9,61,00,000/-.

¶72

Most pertinent is that defendant No.3, Aditya Raj Sugar Private Limited has also participated in the proceeding of sale of the suit properties by Private Treaty. Defendant No.3, Aditya Raj Sugar Private Limited by letter dated 5^th August, 2021 (Page-60 [Exhibit-C] annexed to the Application) had given consent to accept and confirm the offer of defendant No.1 Company. Therefore, defendant No.2 SDCC Bank by letter dated 17^th August, 2021 (Exhibit-E annexed to the Application) accepted and confirmed offer made by defendant No.1 Company. Thereafter, defendant No.1 Company

(SA No.50/2022)

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[KAUR]

deposited the amounts as claimed by defendant No.2 SDCC Bank as per rules of the Security Interest (Enforcement) Rules, 2002. Defendant No.3, Aditya Raj Sugar Private Limited also gave consent to sell the suit properties to defendant No.1 Company by written communication.

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In view of these observations, I hold that the amount of offer made by defendant No.1 Company was higher than the amount of offer made by applicant Company. Further, defendant No.3, Aditya Raj Sugar Private Limited consented for sale transaction between defendant No.1 Company and defendant No.2 SDCC Bank. Consequently, the applicant Company now has no locus standi to agitate/dispute regarding sale transaction of suit properties. Therefore, it is not entitled for reliefs as claimed. Hence, the application is liable for dismissal.

¶78

Before parting with Judgment, I, with great regard, mention that the Authority cited supra on behalf of the applicant is not applicable to the present case as ratio laid down therein is different than facts of the case in hand.

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Hence , I pass the following order:

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ORDER

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A. The application is hereby dismissed.

(SA No.50/2022)

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[KAUR]

B. Interlocutory Applications, if any, also stand disposed of.

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Pronounced in open Court.

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Sd/(Dilip G. Murumkar) Place : Pune Presiding Officer Date: 07.02.2023 Debts Recovery Tribunal, Pune

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(SA No.50/2022)

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[KAUR]

Ms Shreevardhan Agro Pvt. Ltd. v. Indus Orgo Farmers Allied Industries Private Limited

Case brief

What is this about?

What did the court decide?

Ms Shreevardhan Agro Pvt. Ltd. v. Indus Orgo Farmers Allied Industries Private Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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