Dismissed

Ms Adhikary Nursery and Ors. v. Indian Bank

DRT22 Apr 2024SA/926/2023

Case brief

AI extract

What is this about?

The Tribunal held that a Section 17 application under the SARFAESI Act is not maintainable when the underlying auction sale fails due to want of bidders, rendering the cause of action infructuous. Consequently, the associated Section 14 application was also dismissed as not maintainable.

What did the court decide?

The Section 17 application (I.A. 983 of 2024) and the Section 14 application (S.A. 936 of 2023) were dismissed as not maintainable.

Ms Adhikary Nursery and Ors. versus Indian Bank — Banking and Recovery | DRT (2024)

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BEFORE THE^{DEBTSRECOVERYTRIBUNAL-IIIKOLKATA}

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PRESENT:^{-SRl KAMAL DE'}

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PRESIDING OFFICER.

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S.A. No. 926^{OF 2023} DATE OF DELIVERY^{OF ORDER .22 04.2024}

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M/s. Adhikary^{Nursery, Prop.f4r'SutanuAdhikaryat Vill-Kanganberia,} Purba Santra Para,^{P.O. Kanqanberia, P.S. Bishnupur, DistrictSouth} 24 Parganas, Pin743503.

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Mr. Sutanu Adhikary at^{Vill-Kanganberia, PurbaSantra Para, P'O'} Kanganberia, P.S. Bishnupur,^{District South 24 Patganas, Piol43503'} PAN NO.AMCPA2343].

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Mrs. Madhumita Adhikary, wafe of^{Mr. SutanuAdhikaryresidingat Vill} Kanganberia, Purba Santra Para,^{P.O. Kanganberia,P.S Bishnupur,} District South 24 Parganas, Pin743503.^{PAN No.BKQPA1557F.}

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... APPiicants

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-Versus-

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lndian Bank, having zonal office at Kolkata South, 14, lndia Exchange Place, 3'd Floor, Kolkata-7OOOO 1.

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The Authorized Officer, Indian Bank, having zonal office at Kolkata South, 14, India Exchange Place,3'd Floor, Kolkata-7OOOO1.

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Defendants.

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Counsel for the Applicant: - Mr. Biswajit Mal Counsel for respondent F.I. Mr. Shav Mangal Singh

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JUDGEMENT

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The Sarfaesi Applicant has filed the present SA being No. S.A./926/2023 on 9th November, 2023 being aggrieved by and dissatisfied with the notice dated 05.01.2023 issued under Section 13(2), possession notice dated 22.05.2023 issued under Section 13(4), sale notice dated 11.10.2023 and its publication dated 14.10.2023 fixing sale of the secured property on 30.10.2023 issued by the respondent bank.

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S.A. 926 of 2023 along with I.A. 983 of 2024 wherein the Sarfaesi applicant has challenged the impugned order dated 15.O2.2O24 passed by the Learned District l.4agistrate, South 24 Parganas under Section 14 of the Sarfaesi Act, 2002 is taken up for hearing.

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Heard ld counsel for both parties. Considered.

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In filing LA. 936 of 2023 the S.A. applicant challenges the impugned order dated 15.O2.2024 passed by the Learned District Magistrate, South 24 Parganas under Section 14 of the SARFAESI Act, 2002.

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It is stated that the Ld DM has considered the claim of the respondent F.l. as claimed mentioned in the notice under Section 13(2) dated 05.01.2024.

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It is stated that the Ld DM has not furnished the total claim of the respondent F.l. as on the date of filing of the application under Section 14 of the Sarfaesi Act.

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It is also stated that in the impugned notice under Section 13(2) dated 5.7.2024 it was merely mentioned that the account has become irregular and the plea of the respondent F.L that the account has turned into NPA but it has not been substantiated by any statement of account.

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It is stated that the classification of the account as NPA is completely wrong and erToneous.

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It is also stated that the respondent F.l. did not affix any possession notice under Rule 8(1) in the conspicuous part of the secured asset.

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It is stated that the Ld DM has passed the order mechanically and the actual defaulted amount has not been disclosed in the impugned order,

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S.A. applicant has prayed for stay of operation of the impugned order dated 15.O2.2024 passed by the Ld DM, South 24 Parganas.

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Respondent F.l. has filed affidavit in opposition. It is stated that the respondent F.l. has filed application under Section 14 of the Sarfaesi Act before the Ld DM along with 9-points affidavit and check list and the Ld DM on being satisfied with the affidavit filed by the Authorized Officer of the respondent F,I. has passed the impugned order dated f5.O2.2O24.

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It is also stated that the step of Dlvl is ministerial while disposing the application under Section 14 of the Sarfaesi Act, no element of quasi judicial or application of mind is required.

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It is denied that the possession notice has not been affixed or published by the respondent F.L as alleged by the S.A. applicant and the photographs have also been annexed to the affidavit in opposition. It is stated that the respondent F.I. has duly affixed and published in terms of the provisions of the Sarfaesi Act.

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Ld counsel for respondent F.I. has also raised the question of maintainability of S.A.

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It is also stated that the impugned auction sale notice dated 11.10.2023 and its publication made on 14.70.2023 with e-auction sale date of 30.10.2023 failed for want of bid and no sale took place on 30.10.2023 for want of bidder.

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It is stated that Section 17 application was filed with sole cause of action over the sale notice dated 11.10.2023 with publication dated 14.10.2023 and as the sale faited, the S.A. has no cause of action to file the instant I.A. and the I.A. has become infructuous.

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¶35

Respondent F.I. has^prayed for dismissal of S.A. as well as

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I.A.

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I have travelled over the materials on record as well as the averments in the S.A. It appears that the respondent F.1. has filed 9- clauses affidavit before the Ld DI4 and the Ld DN4 on being satisfied with the affidavit under Section 14(1)(b) of the Sarfaesi Act has passed the order.

¶38

Hon'ble Supreme Court in Standard Chartered Bank Vs. V. Noble Kumar has been pleased to hold the 9 sub-clauses of the proviso which are required to be furnished in the affidavit filed by the secured creditor as follows:- (i) there was a loan transaction under which a borrower is liable to repay the loan amount with lnteresU (ii) there is a security interest created in a secured asset belonging to the borrower; (iii) that the borrower committed default in the repayment; (iv) that a notice contemplated under Section 13(2) was in fact issued; (v) in spite of such a notice, the borrower did not make the repayment, (vi) the objections of the borrower had in fact been considered and rejected; (vii) the reasons for such rejection had been communicated to the borrower etc.

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There is nothing in the solemn order of the Supreme Court that the affidavit duly affirmed by the authorized officer of the secured creditor shall contain a declaration about the claim of the respondent bank as on the date of filing of the application under Section 14 of the Sarfaesi Act. Section 14 does not contemplate the following:-

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(i) Any notice to be given to either borrower or a third party.

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(ii) Borrower or a third party to file any reply to the application

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(iii) Borrower/third party to be heard

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(iv) Adjudication as to the legality or validity of the mort

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(v) Adjudication as to the quantum of the debt claimed by the secured creditor

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(vi) Adjudication of any issues as such limitation etc.

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Case citation - (2022) ibclaw.in 193 HC in appeal no.Wp No.9749 of 2021 in High Court of Bombay judgment date 03ljal2022 is relied upon.

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Moreover, Bank is not supposed to regularize the account after classification of any loan account as NPA. As per Section 13(4) of the Sarfaesi Act, if the borrower fails to discharge the liability in fu within the period as specified in the demand notice, bank can take possession of the property. It is obligatory on the part of the borrower to pay the entire amount specified in the demand notice for reg ularizing the loan account.

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It appears^{that the Ld DM has complied with the statutory} provisio; Jenvisaged^{under Section 14 of the Sarfaesi Act and being} satisfiedwiththeg.pointsaffidavithaspassedtheimpugnedorder. Moreover,^{proceedingsunder Section 14 of the SarfaesiAct} are^{ministerialin nature and do not require adjudicationon the facts'} Prima^{facie the impugnedorder dated 15'o2'2024passed by} the Ld^{DM, South 24 Parganasdoes not suffer from any gross infirmityor} irreeularity.^{section 14 doesnot involve anv} ".ojio'-ti:"j]^.1:::"tt'^"" element^{of quasi judicial function or application} " rn'"0-': f:::]::-O Perused^{two photographs showingaffixationof possessionnotice} ontheconspicuouspartofthemortgagedpropertyandcopiesof newspaper^{publication showing publication of possession.noticein two} leading^{newspapersand markedas Annexure "8" and "C" collectivelyin} the Affidavit^{in Oppositionso it is not true that the possession noticehas} notbeenaffixedforpublishedbytherespondentF.l.aSallegedbythe S.A. aPPlicant'

¶50

S.A^{applicantin the S A926 of 2023 has statedreqardlng} limitation^{which is reproducedhereinbelow:-}

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"By issuing^{sale notice dated 11 10 2023 and publishingthe sale} notice on^{74,1O'2OZ3under Securitizationand Reconstructionof Financial} Assets and^{Enforcementof SecurityInterest Act' 2002 (hereinafter} referredtoastheSARFAESIAct)readwiththeSecUritylnterest (enfo."rn"nt)^{Rules (hereinafter referred to as the SARFAESI Rules)' the} defendant^{No.2put the secured asset for an e-auction to be conductedon} 30.10'2023.^{Though,in the instant proceedings,the applicantiS} challenging^{the jurisdiction of the defendantsto proceedunderthe} provisions of^{SARFAESI Act in respectof the causeof actionarises from} thesaidpublicationofthesalenotice'however'theapplicantisalso challenging^{the maintainabilityof the purported notice dated 05 01 2023} under^{section 13(2),possessionnoticedated 22'052Oz3' Nevertheless'} since^{the impugned sale notice dated 11 10 2023 and publicationof sale} notice for^{e-auctionis publishedon 14 10 2023 the limitation for the} instant application^{as envisaged underSection 17(1) of the SARFAESIAct} within 45^{days from the stepstaken seems to be under Section 13(4) of} the SARFAESI^{Act The instant applicationis filed withinthe period of} limitation^"

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So it is^{apparent that S A applicant has filed the instantS A'} over the^{issues of sale not'ce dated11 10 2023 and publicationof sale} notice dated^{f4.7O 2023 w'th a-auction sale date of 30 10 2023 It is} given to understand^{beforethis Tribunalby the Ld counselfor respondent} F.l. that the^{impugned order dated30 10 2023 has failed for want of} bidder. ln^{fact,no saletookplace on 30 10 2023'consequently 1A 983} of 2024 f,as^{becomeinfructuous}

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In column^{7 under the} heading,^{"Causeof action","it is stated} 11.10.2023 issued^{one sale notice and} that the^{defendant authoritY on}

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published the sale notice dated 14.10.2023 in regard to the secured asset under Section 13(4) of the SARFAESI Act, 2OO2 read with Rute 8(6) of the Security Interest (Enforcement) Rules, 2002.,'

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It appears that S.A. applicant has not turned up before this Tribunal as against the possession notice issued under Section 13(4) of the SARFAESI Act. Moreover, the notice under Section 13(4) was issued on 22.O5.2023. It shows that the S.A. applicant did not turn up before this Tribunal within the statutory period of limitation as against the notace under Section 13(4) of the SARFAESI Act dated 22.05.2023.

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This Tribunal is constrained to hold that the instant I.A. being LA. 983 of 2024 is not maintainable as the S.A. itself is not maintainable as the sale notice dated 11.10.2023 and publication of sale notjce dated 14.10.2023 have become infructuous for want of bidder.

¶58

It appears that S.A. as filed by the S.A. applicant on the sale notice dated 11.10.2023 is not maintainable as the sale has already failed for want of bidder. I.A. accordingly is not maintainable in law.

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The Sarfaesi applicant has not also filed any separate S.A. challenging the impugned order of the Ld DM, South 24 parganas dated t5.O2.2O24 passed under Section 14 of the Sarfaesi Act, 2002. Hence,

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Ordered

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Sarfaesi application being S.A. 936 ot 2023 is dismissed on contest, being not maintainable along with I.A. 936 of 2024. pending I.As, if any are also dismissed.

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Copy of the ludgment/Final Order be upload in the Tribunal,s website. File is consigned to the Record Room after observing all formalities.

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(Dictated to steno, transcribed by him, corrected, signed

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and pronounced by me in the open Court on this 22'd Day of April, 2024)

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( KAMAL DE ) PRESIDING OFFICER,

Ms Adhikary Nursery and Ors. v. Indian Bank

Case brief

What is this about?

What did the court decide?

Ms Adhikary Nursery and Ors. v. Indian Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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