Allowed

Sri. John David v. State Bank of India

Karnataka HC25 Feb 2020WP/1156/2020

Case brief

AI extract

What is this about?

Petitioners challenged a DRAT order requiring appeal fees under Rule 13(2). Court allowed petition, holding aggrieved non-borrowers fall under Rule 13(1)(d), setting aside impugned order.

What did the court decide?

Impugned order dated 20th December, 2019 set aside; fee paid accepted as just and proper; appeal to be heard on merits.

Sri. John David Vs State Bank of India — Banking and Recovery | Karnataka HC (2020)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 25^TH DAY OF FEBRUARY, 2020

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PRESENT

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THE HON’BLE MR. JUSTICE ARAVIND KUMAR

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AND

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THE HON’BLE MR. JUSTICE E.S.INDIRESH

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WRIT PETITION No.1156 OF 2020 (GM-DRT)

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BETWEEN:

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SRI. JOHN DAVID S/O LATE JOHNSON, AGED ABOUT 61 YEARS,

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SMT. SOMIA DAVID D/O JOHN DAVID, W/O BALARAJ, AGED ABOUT 31 YEARS,

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SRI. SANDEEP DAVID S/O JOHN DAVID, AGED ABOUT 30 YEARS, PETITIONER NOS.2 AND 3 ARE REPRESENTED BY THEIR POWER OF ATTORNEY HOLDER JOHN DAVID, I.E., PETITIONER NO.1 ALL ARE RESIDENTS OF NO.16/P25, KANNUR VILLAGE, BIDARAHALLI HOBLI, BENGALURU EAST TALUK.

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... PETITIONERS

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(BY SRI. VIJAY A.M., ADVOCATE)

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AND:

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STATE BANK OF INDIA REPRESENTED BY ITS AUTHROISED OFFICER, ASSET RECOVERY MANAGEMENT BRANCH, MYSURU BANK BUILDING, BKG COMPLEX, ‘A’ BLOCK, 2^ND FLOOR, AVENUE ROAD, BENGALURU – 560 009.

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GIRISHCHANDRA BOREGOWDA S/O B.GANGADHARAIAH, NO.39, SOBHA MALACHITE, JAKKUR PLANTATION, BENGALURU – 560 064.

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... RESPONDENTS

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(BY SRI.ALTAF HASAN, ADVOCATE FOR R1; PETITION AGAINST R2 IS DISMISSED V/O DATED 21.01.2020 )

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED ORDER PASSED BY THE DEBTS RECOVRY APPELLATE TRIBUNAL, CHENNAI DATED 20.12.2019 VIDE ANNEXURE – A AND FURTHER ORDER FOR THE REGUND OF A SUM Rs.50,000/-PAID BY THE PETITIONERS.

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THIS PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, ARAVIND KUMAR J., MADE THE FOLLOWING:

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O R D E R

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Heard Shri Vijay, learned counsel appearing for the petitioners and Shri Altaf Hasan, learned Counsel appearing for respondent No.1. Petition against respondent No.2 has been dismissed vide order dated 21^st January, 2020.

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The short issue which arises for our consideration in this petition: Whether petitioner is required to pay the fee under Rule 13 of Secured Interest Enforcement Rules, 2002 (for short ‘Rules’), namely as to whether petitioner would fall under Rule 13 (1)(a) or (b) or Rule 13 (1) (d) as claimed.

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Petitioners herein filed an application under Section 17(1) of the SARFAESI Act before the Debt Recovery Tribunal to set aside the possession notice dated 15^th March, 2019 issued by the first respondent-Bank. Said application was contested by the first respondent-Bank and tribunal after adjudicating the said application, by order dated 04^th October, 2019 (Annexure-A) dismissed the same. Being aggrieved by the same, an appeal came to be filed before the Debt Recovery Appellate Tribunal (for short ‘DRAT’) in No.AIR (SA) 350/2019. A fee of Rs.50,000/- was paid on the said appeal and a memo dated 20^th December, 2019 (Annexure E) was filed to accept the fee of Rs.50,000/- so paid under Rule 13(1)(d) of the Rules. However, tribunal by impugned order, held that the petitioners would be required to pay appellants’ fee under Rule 13(2)(i)(b) by arriving at a conclusion that

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appellants should be treated and presumed to be on par with the borrower. Hence, this writ petition.

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The said issue is no more res-integra in view of the judgment of the Co-ordinate Bench rendered on 18^th September, 2015 in Writ Petition No.39316 of 2015 whereunder similar contention raised came to be examined and it was held that Rules provide for different fees for making an application as well as filing an appeal by the borrower or the person other than the borrower. It was further held that a distinction is made between the ‘aggrieved party’ and ‘any person’ and held that fee payable by the aggrieved party other than the borrower would be under Rule 13(1)(c) and (d). It was further held that the ‘aggrieved party’ would fall within the mischief of 13(1)(e). It was further held that petitioner therein claimed the right over property by virtue of a decree for specific performance having been obtained and being aggrieved by the action for sale of the said property undertaken by the Tribunal, same was challenged. Hence, it was held that petitioner therein was neither a borrower nor a guarantor as the property brought to sale in a proceedings he was not a party and petitioner was

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aggrieved by the measures taken under Sub-section (4) of Section 13 of the SARFAESI Act by the secured creditor and as such the Appellate Tribunal held that clause (d) of Rule 13 (2) would be applicable.

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When we turn our attention to the facts on hand herein, the petitioners as the legal heirs of deceased Nalini David are claiming right over the subject property by virtue of decree passed in OS No.2929 of 2005 contending under the said judgment and decree they are entitled to one-third share in the property and during the pendency of the said suit, defendants had sold the property in question to one Sri.Arifullah Khan who, in turn, is said to have sold the same to the second respondent herein. Petitioners herein being neither a borrower nor a guarantor would not fall within Rule 13(1)(b) and being an aggrieved party would be entitled to prosecute the appeal by paying the court fee under Rule 13(1)(d) of the Rules. In that view of the matter, impugned order would not be sustainable.

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Hence, the following:

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O R D E R

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Writ petition is allowed.

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Order dated 20^th December, 2019 (Annexure-A) passed in AIR (SA) 350/2019 is set aside and it is held that court fee paid on the appeal as per memo dated 20^th December, 2019 (Annexure-E) is just and proper.

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Appellate Tribunal shall proceed to hear the appeal on merits by accepting above said memo.

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Sd/JUDGE

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Sd/JUDGE

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lnn

Sri. John David v. State Bank of India

Case brief

What is this about?

What did the court decide?

Sri. John David v. State Bank of India

Case brief

What is this about?

What did the court decide?

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