Allowed

S Thangaprabhu v. Tamilnad Mercantile Bank Limited

DRT2 Sept 2024SA/316/2023

Case brief

AI extract

What is this about?

This SARFAESI application challenged a Chief Judicial Magistrate's order taking physical possession, sought to be set aside as illegal and contrary to the principle of 'Audi Alteram Partem' since it was passed during a stay period, allowing fresh recovery action only if properly initiated. The Debts Recovery Tribunal allowed the application. It held that the creditor must inform the Magistrate of

What did the court decide?

Impugned CJM order dated 18.10.2021 set aside; pending IAs closed; costs of CJM order excluded from loan account; bank directed to initiate fresh recovery action following proper procedure.

S Thangaprabhu versus Tamilnad Mercantile Bank Limited — Banking and Recovery | DRT (2024)

¶1

SA No.316/2023

¶2

FAIR ORDER

¶3

IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 2^nd DAY OF SEPTEMBER, 2024 PRESENT: SEEMA SINHA

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[PR. DISTRICT & SESSIONS JUDGE - Retd] PRESIDING OFFICER

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SA No. 316/2023

¶6

Between

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Mr. S. Thangaprabhu Prop. V.P.M. Sankar and Son (VPMS Gold Palace) No.739, Tenkasi Road, Rajapalayam-626 117.

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and also at

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VPMS Gold Palace, No.150A, Nethaji Road, Srivilliputhur-626 125.

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Mr. V.P.M. Sankaranarayanan, S/o V.P.Muthiah Pillai, No.90/7A, Idayapottal Main Road, Srivilliputhur-626 125. Virudhunagar District.

¶11

----- Applicants

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The Authorized Officer, Tamilnadu Mercantile Bank Ltd., Rajapalayam Branch, Aishwarya Complex, D.No.391, Tenkasi Road, Rajapalayam-626 117.

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Tamilnad Mercantile Bank Ltd., Rep. by its Branch Manager, Rajapalayam Branch, Aishwarya Complex,

¶15

¶16

SA No.316/2023

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D.No.391, Tenkasi Road,

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Rajapalayam-626 117.

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The Chief Judicial Magistrate Court, Virudhunagar District at Srivilliputhur.

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----- Defendants

¶21

Appearance of Advocates: M/s Vastlaw Associates ---- Counsel for the Applicants M/s ARM Ramesh ---- Counsel for the Defendants 1 & 2

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This SARFAESI Application was heard in the presence of Mr. Veerapandian M/s Vastlaw Associates, Counsel for the Applicants and Shri Sethuraman, Sr. Counsel appeared on behalf of Defendant Bank (D-1 & D-2) and fixed for passing final order before me and upon hearing the arguments of the Counsels and having stood over for consideration till this day, this Tribunal delivered the following:

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O R D E R

¶24

This application has been filed under Sec.17(1) of the SARFAESI Act 2002 by the Applicants praying to call for the records pertaining to order of the Chief Judicial Magistrate Court, Virudhunagar District at Srivilliputhur dated 18.10.2021 in Crl.M.P.No.39 of 2021 passed under section 14 of the SARFAESI Act and quash the same.

¶25

The brief averments of the Application filed by the Applicants are as follows:-

¶26

The 1st Applicant is the proprietor of M/s VPM Sankar and Son (VPMS Gold Palace). Applicants having Jewellery shop at Srivilliputhur and Rajapalayam. Applicants Srivilliputhur Jewellery shop availed the cash credit facilities from the 2nd defendant bank for the amount of Rs.4.50 crores in the year 2012 to 2017 and Rajapalayam Jewellery Shop availed the cash credit facilities from 2nd defendant bank for the amount of Rs.4 crores in the year 2012. For availing of the said credit

¶27

¶28

SA No.316/2023

¶29

facilities, the schedule mentioned properties were offered as collateral securities. At the time of loan sanctioning, 2nd defendant obtained the various signature from the applicants and other guarantors in blank papers and prefilled forms. It is not disclosed to the applicants at the time of every sanction.

¶30

Further, applicants submitted that, Rs.3,87,30,105/- paid out of total outstanding amount of Rs.4.50 crores for Srivilliputhur Jewellery and Rs.4,51,71,024/- paid against the total sanctioned loan amount of Rs.4 crores for Rajapalayam Jewellery. Due to Covid-19 Pandemic lockdown announced by the Government, Applicant’s Jewellery shop was closed for business from March 2020 to August 2020. Afterwards the applicant’s business establishment was allowed to do business for 5 hours every day from September 2020 to December 2020. At that point of time the applicants could not revive their business owing to a lot of hurdles such as week end lock down, inter district restrictions, labour shortage etc., once again in the year 2021 lock down has been implemented from the month of February 2021 to May 2021.

¶31

During the said pandemic period, 1st defendant issued notice of demand dated 05.04.2021 demanding a sum of Rs.9,54,27,071.02/u/s.13(2) of SARFAESI Act. After receipt of the demand notice, applicants requested for one time settlement and requested not to proceed further under SARFAESI Act. Without considering the applicant’s request and without following the SARFAESI Rules issued possession notices dated 16.06.2021 and took symbolic possession of the properties at Virudhunagar District on 15.06.2021 and properties at Kanchipuram District and Thiruvallur District on 16.06.2021 u/s.13(4) of the Act.

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SA No.316/2023

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Further submitted that, during this situation, 1st defendant issued an Sale Notice dated 03.08.2021 fixing the Auction Sale on 08.09.2021 bringing one property alone for sale just to harass the applicants. Hence the applicants preferred a SARFAESI application under section 17(1) of the SARFAESI Act, challenging the Possession Notice dated 16.06.2021 and along with the subsequent Auction Sale Notice dated 03.08.2021 before this Hon’ble Tribunal vide S.A.No.357 of 2021 along with stay petition in I.A.No.1359 of 2021.

¶35

In the said SA No.357/2021, Hon’ble Tribunal granted the interim stay vide order dated 07.09.2021 and granted not to confirm the sale till 07.12.2021 with a condition that, applicants to pay a sum of Rs.4,02,00,000/- in three equated monthly installments.

¶36

Further, applicants preferred the Appeal against the DRT order dated 07.09.2021 before the Hon’ble DRAT Chennai vide AIR 17/2021 along with waiver petition in I.A.No.589 of 2021. The Hon’ble DRAT Chennai was pleased to grant an order of status quo and further directed the applicants to deposit a further sum of Rs.20,00,000/apart from the pre-deposit before the registry of DRAT Chennai in the waiver petition. The above condition was complied by the applicants and hence the above appeal was numbered as MA (SA) No.3 of 2022 and the order of status quo to be maintained by the parties was made absolute till the disposal of the above appeal.

¶37

It is submitted that the defendant bank has filed a Civil Revision Petition to direct the DRT to dispose the S.A.No.357 of 2021 as expeditiously before the Hon’ble Madurai Bench of Madras High Court vide CRP (MD) No.2257 of 2022 and Hon’ble Madurai Bench of Madras High Court had directed the Debts Recovery Tribunal, Madurai to dispose of S.A.No.357 of 2021 within a period of six months from the

¶38

¶39

SA No.316/2023

¶40

date of receipt of a copy of this order. Based on the order of the Hon’ble High Court, the Hon’ble DRAT disposed of the above appeal granting order of status quo till the disposal of S.A.No.357 of 2021 by DRT Madurai vide order dated 12.12.2022.

¶41

It is submitted that suppressing the order of the status quo granted by the Hon’ble DRAT on 05.10.2021 the 1st defendant obtained order under section 14 of the Act for taking physical possession of the properties at Virudhunagar District alone before the Chief Judicial Magistrate Court, Virudhunagar District at Srivilliputhur in Crl.M.P.No.39 of 2021. Further the 3^rd defendant herein in the said order dated 18.10.2021 was pleased to appoint an Advocate Thiru.S.P.Thilagarajan as Advocate Commissioner to take Physical Possession of the property and handover the same to the 1st defendant. Since the order of status quo granted by the Hon’ble DRAT was in force till the disposal of the SA, therefore, applicant could not challenge the above section 14 order. After dismissal of SA, the applicant challenged the above order of CJM before high court in WA No.17272/2023 and the high court directed applicant to approach DRT and granted status quo till 28.07.2023.

¶42

Hence, the Applicant prefers the present application under Section 17(1) of the SARFAESI Act, challenging the Order of the Chief Judicial Magistrate Court, Virudhunagar District at Srivilliputhur ie., 3rd defendant dated 18.10.2021 in Crl.M.P.No.39 of 2021 before this Tribunal with the following grounds:

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(i) The order under section 14 dated 18.10.2021 in Crl.M.P.No.39 of 2021 obtained by the 1st defendant from Chief Judicial Magistrate Court, Virudhunagar District at Srivilliputhur and the entire measures initiated under the SARFAESI Act by the

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¶45

SA No.316/2023

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1st defendant is arbitrary in nature, illegal, contrary to law, want for weight of evidence etc., and thus liable to be set aside. (ii) The 1st defendant herein has filed the application under section 14 of the Act before the 3rd defendant and the 3rd defendant without ascertaining all the facts and verifying all the documents passed the impugned order directing the Advocate Commissioner to take Physical possession is illegal.

¶47

(iii) The Chief Judicial Magistrate Court, Virudhunagar District at Srivilliputhur cannot pass the impugned order since the application filed under section 14 of the SARFAESI Act by the 1st defendant is not supported by an affidavit signed by the Authorized Officer of the 1st defendant as laid down by the Hon’ble Madurai Bench of Madras High Court in W.P.(MD) No.12789 of 2016 in United Bank of India – Vs – District Collector, Madurai.

¶48

(iv) The Chief Judicial Magistrate Court, Virudhunagar District at Srivilliputhur has passed the impugned order without any application of mind and without considering the directions laid down by the Hon’ble High Court. The Chief Judicial Magistrate Court, Virudhunagar District at Srivilliputhur failed to verify and note down the features and nature of the property to be physically taken.

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(v) The impugned order has been passed beyond the period of 30 days from the date of application as contemplated under the Act.

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(vi) The impugned order has been passed when the order of status quo granted by the Hon’ble DRAT Chennai was in force and hence the order has to be set aside on this ground itself.

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(vii) The 2nd defendant bank has not mentioned the correct updated outstanding amount in the section 14 application after

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SA No.316/2023

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deducting the amount paid by the applicants by way of pre deposit made in the waiver petition.

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(viii) The 2nd defendant bank has not followed the rules and procedures and the directions of the Hon’ble High Court while obtaining orders under section 14 of the Act.

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(ix) The Chief Judicial Magistrate, Madurai District has passed the impugned order without hearing the applicant’s objections, which is against principles of natural justice and against principles of ‘Audi Alteram Partem’.

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(x) The impugned order has been passed when the OTS proposal is pending with the defendant bank.

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(xi) The 2nd defendant bank failed to publish the possession notice in 2 leading newspapers within the statutory period and failed to affix the same on the schedule property and failed to serve the same to all the parties concerned through electronic modes as per the rules.

¶59

(xii) It is submitted that at that time of loan sanction the Defendant Bank has obtained various signatures from the applicant in bank papers and prefilled forms and hence, the defendants seek to exercise right over a property in respect of which there is no proper mortgage.

¶60

(xiii) The applicant submits that the defendants have failed to register the alleged transaction registered with the Central Registry as per section 20 of the SARFAESI Act.

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(xiv) The 1st defendant has obtained orders under section 14 without considering the impact and the loss caused by the spread of Covid-19 pandemic and the continuous lock down throughout the country announced by the Government authorities.

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SA No.316/2023

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In view of the aforesaid facts, Applicants prayed for the following reliefs:

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i) To call for the records pertaining to the initiation of proceedings under the Securitization and Reconstruction of the Financial Assets and Enforcement of Security Interest Act, 2002 ending up with order of the Chief Judicial Magistrate Court, Virudhunagar District at Srivilliputhur dated 18.10.2021 in Crl.M.P.No.39 of 2021 passed under section 14 of the SARFAESI Act in favour of the 1st Defendant and against the applicants and the schedule of properties on the file of the 2nd defendant bank and quash the same.

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ii) To regularize the loan account of the applicants. iii) To pay the costs of the proceedings.

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Schedule of Properties:

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Item No. 1

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In Virudhunagar District, Virudhunagar Registration Dirstrict, Srivilliputhur Sub Registration District, Srivilliputhur Municipal Town, Periyakadai Bazaar, Town Survey Ward No. 1, Old R.S. Nos.148, 148A, 149,150 & 151, New T.S. Nos. 1841, 1842,1843 & 1844 together with Building in Old Door No. 40, New Door Nos. 40/1, 40/2, 40/1850 & 150 in Nethaji Road situated within the following boundaries.

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North: Shop owned by thangamudiya Pillai in T.S. NO. 1840 East: Lane in T.S. No. 1845

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South: North Car Street in T.S. No. 1931

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West: Nethaji Road in T.S. No. 1832

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The measurement are on East – West 41.25 feet on both sides, North – South 36 feet on both sides. The total extent is 1485 sq. ft., together

¶74

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SA No.316/2023

¶76

with building constructed there at to the extent of 6954.60 sq. ft. electric connection, all rights, amenities and affixtures etc., standing in the name of Mr. V. P. M. Sankaranarayanan.

¶77

Item No. 2:

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In Virudhunagar District, Virudhunagar Registration Dirstrict, Srivilliputhur Sub Registration District, Srivilliputhur Municipal Town, Periyakadai Bazaar, Town Survey Ward No. 1, T.S. NO. 1957 together with building constructed in Door No. 24 to the extent of 1004.24 Sq. ft. situated within the following boundaries.

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North: Shop owned by Palaniselvi in T.S. NO. 1958 & common wall

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East: Shop owned by Andalammal in T.S. NO. 1960 South: Shop owned By Bathirakaliammal Temple in T.S. No. 1956 & common wall

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West: Periyakadai Street in T.S. No. 1932

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The measurement are on East – West 29 feet on both sides, North – South 10.25 feet on both sides. The total extent is 297.25 sq. ft., together with building , electric connection, all rights, amenities and affixtures etc., electric service Connection No. 93, now door no. 2, standing in the name of Mr. V.P. Sankaranarayanan.

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Item No. 3:

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In Virudhunagar District, Virudhunagar Registration Dirstrict, Srivilliputhur Sub Registration District, Srivilliputhur Municipal Town, North Srivilliputhur Village, Koonangulam North Street, Now Koolangulam Eastern North Street, Municipal ward no. 13, Town Survey Ward No. 4, T. S. No. 355, Eastern side southern portion together with building in Door Nos. 38 &38A southern side Old Door Nos. 38 & 39 situated within the following boundaries.

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SA No.316/2023

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North: Land and building of Prabhu in the eastern side northern portion of land in T.S. No. 355 East: Pathway in the eastern side of land in T.S. No. 365 South: Koonangulam North Street in T.S. No. 346 West: House of S.A. Ramaiah in the western portion of land in T.S. No. 355 & common wall.

¶88

The measurement are on East – West 20 feet on both sides, North – south 42 feet on both sides. The total extent is 840 sq. ft., together with building , electric connection No. 686/10, all rights, amenities and affixtures , pathway to the extent of 65.625 Sq. Ft. etc.

¶89

(B) In Virudhunagar District, Virudhunagar Registration Dirstrict, Srivilliputhur Sub Registration District, Srivilliputhur Municipal Town, North Srivilliputhur Village, Koonangulam North Street, Now Koonangulam Eastern North Street, Municipal ward no. 13, Town Survey Ward No. 4, TS No. 355, Eastern side northern portion together with building in Door Nos. 38 &38A Northern side Old Door Nos. 38 & 39 at present Door No. 38 situated within the following boundaries

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North: Ganapathy Theatre Compound Wall East: Pathway in the eastern side of land in T.S. No. 365 South: House of Palaniselvi in T.S. No. 355 West: House of S.A. Ramaiah in the western portion of land in T.S. No. 355 & common wall

¶91

The measurement are on East – West 25 feet on the north 24 feet on the South, North – south 94 feet on both sides. The total extent is 2303 sq. ft., together with building , electric connection, all rights, amenities and affixtures , pathway to the extent of 65.625 Sq. Ft. etc., standing in the name of Mrs. S. Palaniselvi and Mr. S. Thangaprabhu

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Item No.4:

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In Virudhunagar District, Virudhunagar Registration District, Srivilliputhur Sub Registration Municipal Town, Municipal Ward

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SA No.316/2023

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No.11, Town Survey Ward No.1, TS No.1834 together with building in Old Door No.69/169, New Door No.142 in Nethaji Road situated within the following boundaries.

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North: Common wall in TS No.1833 & shop of SA Ramaiah East: Property of Subramaniapillai in TS No.1845 South: Common wall in TS No.1835 & shop of Arunagiri Nadar West: Nethaji Road in TS No.1832

¶98

The measurements are on East-West including wall 45 feet on both sides, North-South 18 feet on both sides. The total extent is 810 sq.ft. together with building to the extent of 2135.64 sq.ft. electric connection, all rights, amenities and affixtures etc., standing in the name of Mrs. S. Palaniselvi.

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Typed Set of Papers filed by the Applicant

¶100

Sl.No.	Date	Description of Documents
1.	02.12.2014	Sanction Letter
2.	13.06.2019	Sanction Letter
3.	26.03.2021	Recall Notice
4.	05.04.2021	Demand Notice u/s. 13(2)
5.	14.06.2021	Letter by the 1st applicant
6.	16.06.2021	Possession Notice u/s. 13(4)
7.	21.06.2021	Possession Notice Publication in Business Line Daily
8.	22.06.2021	Corrigendum issued by 1st defendant
9.	06.07.2021	Letter by the 1st applicant to the defendants
10.	08.07.2021	Reply by the 1st defendant
11.	03.08.2021	Auction Sale notice
12.	07.09.2021	Order of this Hon’ble Tribunal in I.A. No. 1359 of 2021 in S.A. No. 357 of 2021
13.	05.10.2021	Proceedings order of Hon’ble DRAT, Chennai in AIR No.173 of2021
14.	18.10.2021	Impugned Order in Chief Judicial Court, Virudhunagar District at Srivilliputtur in Crl. M.P.No. 39 of2021

¶101

¶102

SA No.316/2023

¶103

15.	04.04.2022	Proceedings order of Hon’ble DRAT, Chennai in AIR No.173 of2021
16.	03.06.2022	Proceedings order of Hon’ble DRAT, Chennai in MA(SA) No. 3 of 2022
17.	02.12.2022	Order of the Hon’ble Madurai Bench of Madras HighCourtinCRP(MD)No. 2257of2022
18.	12.12.2022	Final Order of Hon’ble DRAT, Chennai IN MA(SA)No. 3 of2022
19.	23.06.2023	Final Order of this Hon’ble Tribunal in S.A. No. 357of2021
20.	21.07.2023	Proceedings in Chief Judicial Court , Virudhunagar District at Srivilliputtur in Crl. M.P. No. 39 of 2021
21.	18.07.2023	Order of Hon’ble Madurai Bench of Madras High Court in WP(MD)No. 17272/2022
22.	08.01.2020	Order passed by this Hon’ble Tribunal in SA No.409 of 2019
23.	16.02.2023	Judgement of Hon’ble Madurai Bench of Madras High Court in WP(MD)No.3178/2023
24.	25.07.2023	Judgement of Hon’ble Madurai Bench of Madras High Court in WP (MD) No.17859/2023
25.	17.05.2024	Order passed by this Hon’ble Tribunal in SA No.704/2023

¶104

On the other hand, the defendant Bank appeared and filed their Reply Statement /Written Arguments along with type set of paper.

¶105

The defendant Bank has submitted that:

¶106

a) The Loan account fell into Non Performing Assets on 23.03.2021

¶107

b) The demand notice dated 05.04.2021 was issued followed by issuance of Possession notice dated 15.06.2021 & 16.06.2021 and sale notice dated 03.08.2021

¶108

c) Applicants filed S.A.No.357/2021 challenging the possession notice dated 15.06.2021 & 16.06.2021 & sale notice dated 03.08.2021. This Hon’ble Tribunal was passed the conditional stay order directing the applicants to pay a sum of Rs.4,02,00,000/- in three equated monthly installments. Instead of complying with the said conditional order, the applicants filed

¶109

¶110

SA No.316/2023

¶111

appeal in AIR No.173/2021 with waiver petition which appeal has since been dismissed.

¶112

d) In the mean time the bank preferred revision before the Hon’ble High Court in C.R.P. (MD) No.2257/2022 and got direction for disposal of the S.A.No.357/2021 within stipulated time. This Hon’ble Tribunal dismissed S.A.No.357/2021 on merits by its order dated 23.06.2023 and clearly upheld the validity of the SARFAESI proceedings of the bank.

¶113

Further, defendant bank has submitted that, in the above said circumstance challenging the proceedings dated 18.10.2021 of 3rd defendant under sec.14 of SARFAESI Act so belatedly after lapse of more than 21 months with no valid ground what so ever cannot be sustained. Further, submitted that the applicants have been all along aware of the pendency of the proceedings under Sec.14 of SARFAESI Act and they never choose to challenge the same all these 21 months. As setout above there were other proceedings that stalled effective action for takeover of physical possession in pursuance of the proceedings dated 18.10.2021 of the 3rd defendant. As the applicants failed in the other proceedings (particularly the dismissal of S.A.No.357/2021 by order dated 23.06.2023) that led the way for takeover of physical possession, they have now very belatedly now filed the above S.A.No.316/2023 to challenge the lawful proceedings of CJM/3rd respondent herein. It is an abuse of process of law.

¶114

Further, defendant bank submitted that, the applicants would allege that the respondent bank suppressed the status quo order dated 05.10.2021 of Hon’ble DRAT and obtained impugned order dated 18.10.2021, which is incorrect, false and untenable. It is pertinent that Hon’ble DRAT by its proceeding dated 03.06.2022 aptly

¶115

¶116

SA No.316/2023

¶117

clarified the scope extent and limits of its own status quo order in clear terms as follows:

¶118

“Status quo order is only for the parties to be maintain not for Tribunal below to stall the proceedings” vide page 65 of the type set of the applicants. It may be thus the status quo order can stall the proceedings before DRT nor shall the proceedings before CJM. However as the hands of the bank is tied by the order, the bank could not executed the order dated 18.10.2021 of 3rd respondent and the bank is advisedly waited for the termination of the status quo order that was occasioned on 23.06.2023, when DRT, dismissed the main appeal itself in S.A.No.357/2021. The applicants aware of the same and they have chosen to challenge the proceedings belatedly, more so when there is no valid ground of attack on the impugned proceedings”.

¶119

It is well established law that proceedings of CJM under Sec.14 of the SARFAESI Act cannot at all be challenged, if only classification of NPA status and issuance of the demand notice under Sec.13(2) of the SARFAESI Act are in order. In the instant case this Hon’ble Tribunal has upheld not only NPA classification but has also upheld the validity of demand notice dated 05.04.2021 & possession notice dated 15.06.2021 & 16.06.2021 as it dismissed S.A.No.357/2021 by its order well considered order dated 23.06.2023.

¶120

Therefore it is prayed that this Hon’ble Tribunal may be pleased to dismiss the stay petition with cost and thus render justice.

¶121

Typeset of papers filed by the Defendant Bank:

¶122

S.No.	Date	Documents particulars
1.	23.06.2023	Final Order passed in the SA No.357/2021
		p[assed by this Tribunal

¶123

¶124

SA No.316/2023

¶125

2.	18.08.2021	Affidavit submitted before learned	CJM,
		Srivilliputhur in Cr.MP No.39 of 2021
3.	18.08.2021	Application filed under Section 14 o	f the
		SARFAESI Act submitted before learned	CJM,
		Srivilliputhur in Cr.MP No.39 of 2021
4.	18.07.2023	Order passed in WP (MD) No.17272/2023	before
		Hon’ble Madurai Bench of Madras High Cou	rt

¶126

In support of the claim, Defendant Bank has produced the following citations:

¶127

Harshad Govardhan Sondagar Vs Internal Assets Reconstruction Co., Ltd., and others - Supreme Court Crl Appeal No.1666/2012

¶128

CDJ 2024 SC 288 Pathapati Subba Reddy (Died) by Lrs & others Vs The special duty collector (LA)

¶129

4. On the basis of the above pleadings, the following issues have been framed:

¶130

(i) Whether actions initiated by the Defendant Bank in respect of the schedule mentioned properties under the SARFAESI Act are illegal, void and contrary to the settle principle of Law?

¶131

(ii) Whether the applicant is entitled for relief as claimed for?

¶132

Having heard the parties and after going through the documents filed by the Applicant as well as the Defendant Bank, I find the following:

¶133

Main ground of the Applicants are, Section 14 orders obtained when there was an order of Status Quo: I find that, the possession notice dated 16.06.2021 and auction sale notice dated 03.08.2021

¶134

¶135

SA No.316/2023

¶136

was challenged in S.A.No.357 of 2021 in which stay was granted by this Hon’ble Tribunal on 07.09.2021. Subsequently, applicants approached the Hon’ble DRAT, Chennai and obtained the order of status quo on 05.10.2021. But the bank has obtained the impugned order from CJM, on 18.10.2021 when the order of stay and order of status quo was in force. But, Defendant Bank has informed that, the Crl MP No.39/2021 affidavit filed before CJM Court under Section 14 of the Act is on 18.08.2021, i.e, nearly two months before the order passed before the order passed by the Hon’ble CJM. But, Petitioner informed that, the above Crl.M.P.No.39 of 2021 came up for arguments on 11.10.2021 before the Learned CJM, but the bank had failed to inform the order of stay and status quo. Moreover, I find that, bank itself admitted that, the bank could not execute the order dated 18.10.2021 passed by 3rd respondent and bank is advisedly to waited for the termination of status quo order that occasioned on 23.06.2023, when DRT, Madurai dismissed the main appeal itself in SA No.357/2021. Hence, I find that, impugned order dated 18.10.2021 passed by the CJM court is during pendency of the status quo order.

¶137

Hence, I come to the conclusion that, it is the duty of the bank to inform the Learned CJM about the stay order passed by Hon’ble Appellate Tribunal before obtaining the order under Section 14 application. Further, I am of the view that, the borrower cannot be harassed by multiple proceedings.

¶138

In view of the foregoing reasons, issue numbers 1 and 2 are decided in favour of the Applicants. Hence, Tribunal holds that this case is maintainable and the Applicants are entitled to get the reliefs.

SA No.316/2023

In result,

(a) SA No.316/2023 is Allowed as prayed for. Impugned order passed by the Hon’ble CJM Court, Virudhunar District at Srivilliputhur dated 18.10.2021 in Crl.MP No.39 of 2021 is hereby setaside and all the pending IAs are also closed.

¶143

(b) The cost and expenditure incurred in obtaining the CJM order shall not included in loan account of the Applicants.

¶144

(c) Defendant Bank is directed to initiate fresh action for recovery of outstanding dues and advised to follow the procedure properly and to adhere the findings of this Tribunal.

¶145

(Dictated to Assistant, taken down, transcribed, typed by him, corrected and pronounced by me in the Open Court in this the 2^nd September, 2024).

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Sd/-

¶147

(SEEMA SINHA) PRESIDING OFFICER

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S Thangaprabhu v. Tamilnad Mercantile Bank Limited

Case brief

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S Thangaprabhu v. Tamilnad Mercantile Bank Limited

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M S Mas Steel Trading Company versus Equitas Small Finance Bank Limited

S Shivakkumar versus Indian Bank

A Ramamoorthy versus Uco Bank