Dismissed

Smt Saraswathi Ram v. Punjab National Bank

Karnataka HC7 Aug 2024RFA/2098/2017

Case brief

AI extract

What is this about?

Defendants appealed against a money-recovery decree of Rs.9,23,604/- with interest, contending their secured property was sold at an inadequate price under SARFAESI. The High Court held the grievance lay before a different forum and upheld the trial court's appreciation of the dues, dismissing the appeal.

What the court decided

AI extract

Smt Saraswathi Ram Vs Punjab National Bank — Banking and Recovery | Karnataka HC (2024)

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1 - NC: 2024:KHC:31821 RFA No. 2098 of 2017

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 7^TH DAY OF AUGUST, 2024

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BEFORE

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THE HON'BLE MR JUSTICE V SRISHANANDA REGULAR FIRST APPEAL NO. 2098 OF 2017 (MON)

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BETWEEN:

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SMT. SARASWATHI RAM, W/O LATE B.S.J. RAM, AGED ABOUT 61 YEARS.

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SRI. SATHISH RAM, S/O LATE B.S.J. RAM, AGED ABOUT 40 YEARS, BOTH ARE RESIDING AT NO.99, GOVER ROAD, COX TOWN, BANGALORE - 560 005.

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…APPELLANTS

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(BY SRI. MURALI B.S, ADVOCATE) AND:

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Digitally signed by MALATESH K C Location: HIGH COURT OF KARNATAKA

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PUNJAB NATIONAL BANK, RMV EXTENSION BRANCH, NO.40, NEW BEL ROAD, BANGALORE - 560 054, REPRESENTED BY ITS CHIEF MANAGER.

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…RESPONDENT

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(BY SRI. F-VARIS ALI, ADVOCATE (ABSENT))

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THIS RFA IS FILED UNDER SEC.96 OF CPC., AGAINST THE JUDGMENT AND DECREE DATED 6.09.2017 PASSED IN OS NO.25991/2013 ON THE FILE OF THE XXVIII ADDL. CITY CIVIL AND SESSIONS JUDGE, MAYOHALL, BANGALORE, DECREEING THE SUIT FOR RECOVERY OF MONEY.

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THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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NC: 2024:KHC:31821 RFA No. 2098 of 2017

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CORAM: HON'BLE MR JUSTICE V SRISHANANDA

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ORAL JUDGMENT

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Heard Sri.Murali B. S., learned counsel for the

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appellants. None present on behalf of the respondent.

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Appellants are the defendants in

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O.S.No.25991/2013 who suffered the decree in a sum of Rs.9,23,604/- with interest at 9.25% p.a. with half yearly rests from the date of suit till its realization.

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Brief facts of the case which are utmost necessary for disposal of the appeal are as under:

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3.1. Admittedly, appellant No.1 is the borrower from the respondent – bank. Loan became Non Performing Assets. Therefore, bank proceeded against the security offered by the appellants and took action under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SERFAESI ACT) and sold the property.

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3 - NC: 2024:KHC:31821 RFA No. 2098 of 2017

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3.2. Even after appropriating the security, the

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defendants were due in a sum of Rs.9,23,604/- to the Bank as per the statement of account filed before the Trial Court vide Ex.P.17. Therefore, suit was filed recovery of money.

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The suit was contested by the defendants by filing written statement.

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After considering the oral and documentary evidence placed on record, the Trial Court decreed the suit of the plaintiff as aforesaid.

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Being aggrieved by the same, defendants are before this Court, in this appeal on following grounds:

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The impugned judgment and decree dated: 06-09-2017 passed by the Court below, is illegal, arbitrary, perverse, and hence unsustainable.

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The impugned judgment and decree is opposed to the facts and circumstances of the case along with the oral and documentary evidence on record, and hence unsustainable.

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The learned trial judge has failed to appreciate that the plaintiff bank, having already instituted alleged proceedings under

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NC: 2024:KHC:31821 RFA No. 2098 of 2017

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the SARFAESI ACT, so as to recover the alleged dues, on the allegation that the assets of the defendants had become NonPerforming Assets (NPA), way back in the year 2012 itself, had no authority in law to add interest on the alleged principle from the date of treating the assets as Non- Performing Assets, and hence the very claim made by the plaintiff bank allegedly in a sum of Rs. 9,23,604/- as on 28/6/2013, so as to institute the suit in question was illegal, illogical, arbitrary and biased. Hence, the impugned judgment and decree is unsustainable.

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The learned trial judge has failed to appreciate that the loan facility provided by the plaintiff to the first defendant being a housing loan and the value of the property being more than Rs. 12,00,000/- as on the alleged date of public auction on 13/8/2012, and hence the claim of the bank that it had realized only Rs. 4,61,000/- on 13/8/2012 was illegal and fraudulent, along with being collusive, as such the decree is illogical.

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The learned trial judge has failed to appreciate that the first defendant having secured appointment on compassionate grounds on the death of her husband in BSF, and being transferred out of Karnataka, was not served with proper notice under SARFAESI ACT, and hence the entire proceedings initiated by the bank seeking recovery was illegal and unilateral.

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Notwithstanding the fact that the first defendant could not produce documents relating to her transfer to a place out of Karnataka from her employer and she having suffered fracture in a road accident, which she intends to produce in this appeal by filing a separate application, the trial judge has filed

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5 - NC: 2024:KHC:31821 RFA No. 2098 of 2017

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to appreciate the legitimate contentions raised by the defendants.

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Viewed from any other angle, the impugned judgment and decree is illegal, arbitrary and opposed to the facts and circumstances of the case.

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Sri.Murali B. S., learned counsel reiterating the grounds urged in the appeal memorandum vehemently contended that the property which was given as security, was sold for a meager price by the bank resulting in great loss to the defendants/appellants and if the property was sold properly, there would not have been any outstanding amount in the loan account. As such decreeing the suit by the Trial Court is incorrect and sought for admitting the appeal for further consideration.

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Sri.F.Varis Ali, learned counsel for the

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respondent is absent.

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In the light of the arguments putforth on behalf of the appellants, this Court perused the material on record meticulously.

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6 - NC: 2024:KHC:31821 RFA No. 2098 of 2017

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On such perusal of the material on record, borrowing of the loan amount from the respondent bank by the appellants is not in dispute so also the account becoming a Non Performing Asset on account of default in repayment of the loan amount.

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Being the financial institution as defined under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, the bank proceeded to recover the money based on the security offered by the defendants.

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Necessary proceedings have been conducted in a proper manner is the finding recorded by the learned Judge in the First Appellate Court. It is the grievance of the appellants that property was sold for a song which is detrimental to the interest of the appellants.

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Admittedly, the forum lies elsewhere for reddressal of such grievance of the appellants.

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7 - NC: 2024:KHC:31821 RFA No. 2098 of 2017

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At any rate, even after giving reduction to the amount recovered by selling the property which was given as security under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, the statement of account depicted that appellants were due in a sum of Rs.9,23,604/-. The same has been rightly appreciated by learned Trial Judge while decreeing the suit.

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