Allowed

Ms Goldy Traders and Others v. Bank of India

DRT12 Jul 2023SA/88/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application seeking quashing of SARFAESI action and possession notice. The court held that the delay in filing was condonable and rule out standing for the possession notice service and publication on the record. Consequently, the SARFAESI action was quashed and the applicant relieved from interest liability. The case affirmed the principle that parties deriv

What did the court decide?

The SARFAESI action is quashed. The respondent bank shall not charge interest from the date of alleged constructive possession till the date of the order. All pending IA's are disposed of. The applica

Ms Goldy Traders and Others versus Bank of India — Banking and Recovery | DRT (2023)

DRT,PATNA

SA88of 2023 [J]

DEBTS RECOVERY TRIBUNAL PATNA

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Presiding Officer: Shri KaushalendraYadav

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SA- 88 of 2023

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1. MIs Goldy Traders, through its proprietor Sanjay Sah, R/o Village _ Jehanabad, P.S.- Kudra, Distt. - Kaimur.

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Sanjay Sah, 5/0 KamlaSah,R/o Village - Jehanabad,P.S.- Kudra, Distt. _ Kaimur.

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Sanju Devi, W/o SanjaySah,R/o Village - Jehanabad, P.S.- Kudra, Distt. _ Kaimur.

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.........Applicants

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Versus

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The Authorized Officer, Bank of India, Bhadaula Branch, Lalapur, Kudra, District - Kaimur at Bhabhua,Pin- 821106.

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The Zonal Manager, Zonal Office, Bank of India, Patna Zone, 1 st Floor, ChanakyaPalace,Patna,Pin- 800001.

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--respondents

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Present:

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For the Applicant : Sh.Alok Ranjan,Advocate For the respondents Bank : Sh.Amresh Kumar, Advocate

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Dated: 12.07.2023

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JUDGMENT

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Present application u/s 17 of SARFAESIAct has been filed with a prayer to quash entire SARFAESIaction taken against the properties of applicant alongwith the possessionnotice.

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During Pendencyof S.application the applicant has also filed IA 162/2023 was filed by the applicant with the prayer to condone the delay in filing of S. application. Further, IA 260/2023 has been filed by the applicant to restrain the bank from taking physicalpossessionof the property.

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The brief fact of the case is that the applicant no.l is a proprietorship firm. The applicant no.2 is its proprietor and applicant no. 3 is guarantor as well as mortgagor. The applicants availed Cash Credit Facility to the tune of Rs.12 lacs from the respondent bank. On default in repayment of the dues of the bank, the account of the applicant was declared as NPA on 24.05.2021.

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DRT,PATNA

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SA 88 of 2023 [J]

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Subsequently, the bank initiated SARFAESIAction against the borrower and issued demand notice u/s 13(2) dated 29.12.2021 calling upon the applicant to make the payment of Rs.13,86,681.37. Further the respondent bank took constructive possessionof the property on 11.01.2023 issuing notice u/s 13(4) of the SARFAESIAct. Aggrieved from the possessionnotice, this SAhas been filed by the applicant on 06.03.2023.

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On the point of limitation,. It is further submitted that the applicant hasfiled the present S.application on 27.02.2023 upon the web portal of this Tribunal but due to technical glitches, the required fees could not be deposited therefore, dairy number of present SAcould not be generated. However, the amount of Rs.6005/- was already deducted towards Court fee on 27.02.2023 from the account but the said payment was not displayed over the website. Therefore, the applicant contacted Bhart Kosh. Accordingly, the concerned authority of the Bharat Kosh has instructed us to wait for about 72 hours. Further, the amount was refunded by Bharat Koshafter 72 hours. Thereafter, the applicant again filed the present SAalongwith Court fee. The I.A.162/2023 has been filed explaining the delay in filing SA. It has been submitted that it is not willful latches or negligencetherefore, the same may be condoned.

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On the point of merit it is submitted by the applicant that without prior notice to the applicants, the respondent bank declared the account as NPA on 24.05.2021 which was revealed to the applicants through the Demand Notice dated 29.12.2021 received on 04.01.2022. After receipt of demand notice, the applicants submitted its representation dated 08.03.2022 u/s 13(3-A) but the respondent bank without disposing of the said representation issued possessionnotice which was published in the newspaper on 13.01.2023. The possession notice was not served to the applicants. The possession notice was published in only one newspaper Prabhat Khabar.

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On the contrary, Id. Counselof the respondent bank submits that on default in repayment, the account of the applicants was declared as NPA. Thereafter, the respondent bank initiated SARFAESIAction against borrowers by issuing demand notice dated 29.12.2021 which was served upon the applicants as also admitted by the applicants but the applicants failed to file reply of demand notice within 60 daysfrom the date of issuanceof notice. Thereafter, the respondent bank proceeded further and issued possession notice which

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DRT,PATNA

SA 88 of 2023 [J]

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was pasted on the secured assets. The possessionnotice was also published in Prabhat Khabar and The Hindu on 13.01.2023. The mortgaged property was also registered in CERSAIunder reference no. 200078308416.

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I have heard Ld.Counselfor the parties and gone through the record.

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It has been alleged that without disposing of the representation dated 08.03.2022 filed u/s 13(3A) against the demand notice, the respondent bank issued possessionnotice. It is also alleged that the possessionnotice was not served to the applicants and published in one newspaper only.

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On perusal of records it appears that the demand notice was received by the applicant on 04.01.2022 as admitted in its SARFAESIApplication. On receipt of demand notice, the applicant submitted its representation dated 08.03.2022 which was dispatched on 11.03.2022. The postal receipt is annexed with the SARFAESIApplication. Hence,the representation was filed after a stipulated period as prescribed under Act. Therefore, the question of disposal of representation does not arise. So far as possession notice is concerned, the respondent bank failed to file proof of service of possession notice upon the applicants. The respondent bank also failed to file proof of affixation of possession notice over the secured assets. The copy of its publication annexed with CA as Annexure - B series, page 8-9 does not indicate the name of the newspaper or date of publication. However, the applicant has annexed the copy of the paper publication of possessionnotice which indicates that the possessionnotice was published in Prabhat Khabar on 13.01.2022.

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Considering the fact that the applicant has uploaded the application on portal well within the limitation and fee deposited was refunded, the explanation appears to be reasonable. As such the delay if any is liable to be condoned.

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In view of the above discussion the service or delivery of possession notice and its affixation as well as publications as required under the Act and Rules does not stand proved. These laches on the part of respondent Bank and the infirmities discussedabove make the SARFAESIaction bad in the eye of law. As the infirmities are on the part of the respondents, the applicant should not be made to suffer the burden of paying interest from the date of

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DRT,PATNA

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SA 88 of 2023 [J]

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alleged constructive possession till the date of this order. The respondent should not be permitted to earn or to take benefit out of their own wrongs. Accordingly, the application deservesto be allowed with cost.

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ORDER

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The application under Section 17 of the SARFAESIAct (S.A.88/2023) is allowed with costs. The SARFAESIaction under challenge is quashed. The respondent shall not charge the interest from 11.01.2023 (the date of alleged constructive possession)till the date of this order. All pending lAs, if any in the matter shall stand disposed of.

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[KaushalendraYadav]

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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 this ~ 12TH Dayof July, 2022.

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-/ ,..A" 'Y:>

[Kausha lendraYadav]

Presiding Officer

Debts Recovery Tribunal, Patna

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DEBTS RECOVERY TRIBUNAL, PATNA

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SI. No.	Date of Order or Proceedings	Order with the signature of the Court	Office action taken with date
		SA88 of 2023
	12.07.2023	Judgment/Order written on separate sheets, pronounced in the open Court and kept on the case file. PreSidi~Officer

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Ms Goldy Traders and Others v. Bank of India

Case brief

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Ms Goldy Traders and Others v. Bank of India

Case brief

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