Allowed

Ms Umed Fashion v. State Bank of India

DRT19 Aug 2023SA/50/2023

Case brief

AI extract

What is this about?

The Tribunal quashed the Demand Notice dated 14.01.2020 because the Respondent Bank failed to provide a detailed statement of the outstanding amount as required under Section 13(3A) of the SARFAESI Act and High Court directives. The Bank is permitted to initiate proceedings afresh.

What did the court decide?

Demand Notice dated 14.01.2020 and all further actions by the Respondent Bank are quashed; Bank at liberty to proceed afresh.

Ms Umed Fashion versus State Bank of India — Company and Corporate | DRT (2023)

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1 SA 50/2023

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DEBTS RECOVERY TRIBUNAL, JAIPUR PRESIDING OFFICER: SH. VIVEK SAXENA

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SA No.- 50/2023

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1. M/s. Umed Fashion, a Partnership Firm through its Partner-Shri Ganpat Mal Sand S/o. Shri Umed Mal Sand, having its Office at Plot No. 8, Tractor Auto Repair Association Scheme, Near Hans Om Sai Building, Jodhpur342008 (Rajasthan).

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2. Ganpat Mal Sand S/o. Shri Umed Mal Sand, Resident of A-276, Shastri Nagar, Jodhpur-34203 (Rajasthan).

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3. Smt. Sandeepa Sancheti W/o. Shri Sunil Sancheti, Resident of Plot No. 8, Tractor Auto Repair Association Scheme, Near Hans Om Sai Building, Jodhpur-342008 (Rajasthan).

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4. Shri Sunil Sancheti S/o. Shri Jaswant Mal Sancheti, Resident of Plot No. 8, Tractor Auto Repair Association Scheme, Near Hans Om Sai Building, Jodhpur-342008 (Rajasthan).

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5. Shri Sidharth Jain S/o. Shri Jaswant Mal Sancheti, Resident of Plot No. 8, Tractor Auto Repair Association Scheme, Near Hans Om Sai Building, Jodhpur-342008 (Rajasthan). adaps Sanchot"

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6. Smt. Shilpa Jain W/o. Shri Sidharth Jain, Resident of Plot No. 8, Tractor Auto Repair Association Scheme, Near Hans Om Sai Building, Jodhpur-342008 (Rajasthan).

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………Applicants

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Versus

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State Bank of India, H-1, New Power House Link Road, Shastri Nagar, Jodhpur-342003, through its Authorised Officer. email i.d.: [email protected]

2 SA 50/2023

Present:

Shri Atul Saxena, Counsel for the Applicant

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Shri Anil Kumar Sharma, Counsel for the Respondent Bank/FI

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Ms. R K Salecha, Proxy Counsel for M/s Dharmveer Textile, Respondent 2, 3 & 4

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(Final Order)

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(19.08.2023)

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Present SA was filed by applicants being aggrieved by the actions initiated by the respondent bank (hereinafter referred as „bank‟) under the provisions of SARFAESI Act of 2002.

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As per Demand Notice dated 14.01.2020, account was declared as NPA on 10.01.2020 and bank have a right to enforce right of recovery on the property at Plot No. 9, Khasra No. 835/71, Tractor Auto Repair Association Scheme, Jodhpur. As per said Demand notice issued to Smt. Sandeepa Sancheti, applicant no. 3, one of the guarantor, amount of credit facility is Rs. 16,25,00,000/-

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Reply to SA was filed on 09.02.2023 and vide order dated 18.01.2023, an order of status quo was passed by this Tribunal, said order was challenged by the bank before the Hon‟ble DRAT, Delhi. Hon‟ble DRAT Delhi, vide order dated 09.02.2023 directed this Tribunal, to dispose of this SA in accordance with law within a period of six weeks.

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In the month of March & April 2023, Ld. Counsels kept abstain themselves from appearing in Courts of Rajasthan, so no proceedings took place. Said order dated 09.02.2023 was brought on record by the Bank on 09.03.2023 vide Dy. No. 2257.

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As this Tribunal remained busy in other time bound matter, Ld. Counsel for the Applicant sought adjournments, Ld. Counsel for IA applicant for IA no. 387/2023, other

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3 SA 50/2023

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guarantors filed application for impleadment as necessary party to the proceeding and matter could not be disposed of, in the given time frame.

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Heard finally, and perused the written arguments as well as record filed by all the parties to the proceedings.

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Proceedings of SA No. 295/2020 filed by same set of applicants is required to be discussed here, before proceedings ahead, because SA No. 295/2020 was filed being aggrieved the same actions taken by the Respondent Bank, which are now again under challenge.

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Ld. Counsel for the Respondent Bank raised the preliminary objection and he argued that considering the principal of “Res Judicata” the SA applicant are now barred to raise any issue, because all the actions have already been decided by this Tribunal because SA no. 295/2020 was disposed of dismissed.

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Here it is important mention that SA No. 295/2020 was dismissed vide order dated 23.03.2023 and since 24.03.2023 the bank was at liberty to proceed ahead for recovery of outstanding amount but they failed to do so till 09.02.2023 i.e. about 11 months time, when an order of status quo was passed by this Tribunal, in this SA.

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Ld. Counsel for the Applicant raised following issues which requires to be decided in the light of reply by the bank:-

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The bank failed to decide the objections/ reply dated 17.02.2020 (Annexure 3), given by SA applicant against the Demand Notice dated 14.01.2020, so entire proceedings in the light of Demand Notice dated 14.01.2020 are required to be quashed and set aside.

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4 SA 50/2023

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Account was illegally classified as NPA because account was no longer NPA and NPA could be declared on or after expiring of 180 days.

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The bank failed to give detailed bifurcation of outstanding amount, in the light of judgment of Hon‟ble Gujrat High Court, in the matter of Mithilanchal Industries V/s PNB.

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The bank do not have any right to proceed ahead under the provisions as contained in Section 31(9) of SARFAESI Act of 2002 because amount so claimed as outstanding for Rs. 2.95 Crore, is less than 20% of the principal amount so sanctioned and interest thereon because amount so sanctioned is Rs. 16.25 Crore and further SA applicant already deposited an amount of Rs. 90.00 Lac after filing of this SA, so all proceedings are required to be quashed and set aside.

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To counter their objections, Ld. Counsel for the Respondent strongly contended that as SA No. 295/2020 has already been disposed so as of now, considering the principal of res judicata. Learned Counsel further argued that all the notices were issued by the bank are as per prescribed rules and guidelines so any of the actions is not illegal and so SA filed by SA applicant is required to be quashed and set aside. It was also argued by Ld. Counsel for the Applicant that as of now SA applicant cannot raised any issue because all the objections taken by SA applicant have already been considered and were decided in SA no. 295/2022. Based on these objections, Ld. Counsel for the bank prayed to dismiss the SA with heavy cost.

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Heard arguments and perused the record.

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It‟s a fact that SA no. 295/2020 was filed by same applicants challenging all the actions and SA applicants gave proposal to deposit the outstanding amount in Para 5.13 of the said SA. All objections were taken by SA applicants in SA no. 295/2020 and finally the SA was

SA 50/2023

dismissed because SA applicant failed to deposit any of the amount as per proposal given in Para 5.13 of the said SA. For ready reference, following para‟s of order dated 23.03.2022, are reproduced here as under:-

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13. So, from the above said facts, it is clear that the SA was filed and para 13 was about willingness to deposit the entire amount till 30.06.2021 but no amount was deposited and Respondent Bank again gave an opportunity, by giving a proposal of OTS on 25.01.2022, but the Applicant failed to avail this opportunity and so it is clear, that since, 08.12.2020 and till the date of final argument, SA, Applicant simply dragged the matter.

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14.So, am of the considered view, that any ground taken by the SA Applicant is not required to be considered in the light of detailed reply filed by the Respondent Bank and so SA is dismissed with no cost. Copy of the order be given free to the parties concerned. File be placed before the Registrar for compliance. After compliance file be consigned to record .

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So far as, the issue of details of outstanding amount, is involved, as per Demand Notice dated 14.01.2022, the account was classified as NPA on 10.01.2020 and amount as outstanding as 10.01.2020, in Schedule „A‟ is mentioned which is Rs. 1,24,64,092/- against e-DFs and Rs. 1,70,39,095/- against e-DFs drop line overdraft and this amount includes interest as on date of NPA but it is challenged in PAra5.8 to the SA, that the outstanding amount do not have All the details as defined under the provisions, as contained under Section 13(3) of the Act of 2002 and as per guidelines, issued by Hon‟ble Gujarat High Court, in the matter of Punjab National Bank V/s Mithilanchal Industries Pvt. Ltd.

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In reply to this para at page no. 6, the grounds taken by the bank is very interesting because to counter this objection, the Respondent bank says that the SA applicants having net banking and having full knowledge of the loan accounts, so meaning thereby if as per bank, if a borrower

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6 SA 50/2023

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wants to get the details of outstanding amount, he is supposed to get there details through net banking because bank is not required to follow the provisions of SARFAESI Act and direction of higher Courts. Further, with a view to assist this Tribunal, the bank failed to file detailed statement of account along with the reply and so also this Tribunal is not in position to decide the quantum of outstanding amount on the date of NPA and so, SA applicant has also not been informed about detailed outstanding amount, through Demand Notice dated 14.01.2020, so in my considered opinion the respondent bank failed to comply with the provisions as contained under Section 13 (3A) of the SARFAESI Act of 2002 and also failed to follow, the directions issued by Hon‟ble Gujrat High Court, in the matter of Punjab National Bank Vs M/s Mithilanchal Industries Pvt..

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Accordingly, Demand Notice dated 14.01.2020 and all further action taken by respondent bank stands quashed and set aside.

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The respondent bank is at liberty to take actions afresh as per provisions as contained in the SARFAESI Act of 2002.

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Vivek Saxena Presiding Officer DRT, Jaipur

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Ms Umed Fashion v. State Bank of India

Case brief

What is this about?

What did the court decide?

Ms Umed Fashion v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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