Bank Of Baroda vs M/s Mayarani Logistics Hub & Ors.

Learned counsel for the appellant submitted that a short question involved in the present case is that cost of Rs. 3.50 lacs has been imposed by the Tribunal below vide order impugned upon the appellant-Bank inspite of withdrawing all the proceedings initiated under the SARFAESI Act. It was, therefore, prayed that the said cost may be waived.

Learned counsel for the respondents submitted that the proceedings initiated by the Bank were in gross violation of the provisions of the Act and Rules made thereunder, therefore, the aforesaid cost was rightly imposed by the Tribunal below vide order impugned upon the appellant-Bank. It was, therefore, prayed that the order impugned to this extent does not call for any interference by this Appellate Tribunal and the appeal deserves dismissal with heavy costs.

Considered the arguments and perused the record.

The present appeal has been filed by the appellant-Bank against the impugned order dated 23.06.2023, whereby the S.A. No. 318/2021 filed by the respondent-borrower has been disposed off by the Tribunal below imposing the cost of Rs.3.50 lacs upon the Bank.

Admittedly, there is no bar for the bank to withdraw its notices, if the same are found to be defective. In the present case, the S.A. was filed by the borrower challenging the demand notice, possession notice, order dated 21.03.2022 passed by the District Magistrate as well as the auction sale notice dated 10.07.2022 before the Tribunal below and the same was contested by the Bank by filing its objection. At this stage, the appellant-bank came to know about its defective proceedings and withdrew its demand notice and possession notice, which were under challenge of the aforesaid S.A. The admitted fact is that pursuant to the order of the District Magistrate, the physical possession of the property in question was taken and the same remained under possession of the Bank for more than one year. However, the said proceedings were withdrawn by the Bank on its fault and carelessness, but the respondents-borrowers had to definitely incur the amount on the said faulty proceedings by way of paying court fee as well as the fee of advocate and also the miscellaneous expenses while filing the said S.A. It is also to be noted that withdrawal of the proceedings does not mean that the Bank would not take fresh steps for its recovery, because there is no bar to proceed afresh. If the Bank proceeds afresh for its recovery, the borrower would again have to challenge the same and has also to again incur the money, therefore, they deserve some compensation. However, the cost imposed by the Tribunal below upon the Bank prima facie appears to be on higher side, therefore, it would be appropriate that the same may be reduced to some extent. Accordingly, the cost of Rs.3.50 lacs as imposed by the Tribunal below upon the appellant-Bank is reduced to Rs.2.00 lac.

In view of the above, the order impugned is modified to the extent of imposing the cost of Rs.2.00 lac instead of Rs.3.50 lacs upon the Bank and the appeal is disposed off accordingly.