Dimple N. Hemani vs State Bank Of India And Ors

A. Arumughaswamy, J

The appellant is the daughter and claims to be one of the Legal Heirs of the late Shri Jasavantrai P. Mehta, original defendant No. 4 who was joined in his capacity as the Guarantor in the Original Application (Original Application) 69 of 2001 filed by the respondent No. 1 (State Bank of India) in the Debts Recovery Tribunal (DRT) No. II Ahmedabad, for recovery of its dues against the borrower i.e. the respondent No. 2 herein (Global Ship Trade Pvt. Ltd.). Shri Jasavantrai P. Mehta, original defendant No. 4 died in the year 25th May, 2005 leaving behind the appellant, the respondent No. 3 Shri Sandip Jasavantrai Mehta and the respondent No. 5 Smt. Arunaben Jasavantrai Mehta as his legal heirs. The Recovery Officer, DRT, Ahmedabad by issuing notice dated 20th February, 2013 for bringing legal heirs of the said deceased on record and the said application for bringing legal heirs of the said deceased was served upon the appellant on 26th September, 2013. These legal heirs were impleaded in the Recovery Proceeding of the Original Application which was filed by the SBI. The SBI has filed the Original Application for recovery of an amount of Rs. 4,25,87,582.18 from the borrowers which was allowed by the learned Presiding Officer, DRT, vide judgment and order dated 31st July, 2003 has allowed the O.A. for Rs. 4,25,87,582.18 together with costs and interest @ 12% per annum from the date of filing the application till realization. The learned Presiding Officer also observed that the respondents were given one month time to settle the claim of the Bank, failing which the Bank might proceed to sell the movables assets and mortgaged properties and other immovable properties of the respondents and adjust the sale proceeds towards the amount due. From the perusal of the aforesaid judgment it is seen that none has been represented for the respondents but only Vakalatnama alone has been filed, hence ex parte order was passed by the DRT. Later on 29th March, 2006 SBI has assigned the debt along with the underlying securities to Kotak Mahindra Bank Ltd. The three dates are important and they are: the Original Application has been filed on 12th February, 2001 and on 31st July, 2003 it has been allowed. The defendant No. 4 reported to be dead on 25th May, 2005. Thereafter the assignee has issued notice to implead the legal heirs on 20th August, 2013 and the legal heirs has contested the matter before the DRT by saying that the Bank has committed fraud since the deceased's father was already discharged as guarantor on 9th September, 1997 by replacing a new guarantor Shri Vimal Tamboli. Paragraph (c) of the letter dated 9th September, 1997 from Chief Manager, State Bank of India, Diwanpara Road Branch, Bhavnagar addressed to Global Shiptrades Pvt. Ltd. reads as under:

"(c) As requested by the Company to release the Guarantee of Shri J.P. Mehta by replacing a new guarantor Shri Vimal Tamboli, the liabilities of all the guarantors except Shri J.P. Mehta will continue under the existing documents. The Company will have to arrange for execution of documents for the enhanced limits accordingly."

On that basis the appellant had filed application as the Chief Manager has already discharged the deceased person as guarantor and subsequent guarantor has been substituted in place of the deceased person. Hence, the appellant has prayed that the ex parte order has to be set aside. The application has been filed by one of the legal heirs of the deceased.

The contention of the appellant is that the deceased himself has been discharged as guarantor in the year 1997 and the Bank on 9th September, 1997 has issued letter to this effect which has been signed by the Chief Manager of the Bank on the same date. Therefore, the Banker has committed a fraud in the year 2001 i.e. by filing aforesaid Original Application on 12th February, 2001 and it has to be dealt with by the Criminal Court after amendment of Section 30. The learned Counsel prayed that the matter has to be referred to the Additional Chief Metropolitan Magistrate and this Appeal/Original Application has to be kept in abeyance till finding of the aforesaid Court has been given. The learned Counsel submitted that this Tribunal has noticed irregularities committed by the Bank and, therefore, vide order dated 23rd November, 2015 ordered for appearance of the AGM of the Bank before this Tribunal on the next date. Today Shri Subrata Roy, Chief Manager, P.F. No. 4079841 of the SBI of Diwanpara Road Branch, Bhavnagar, for explaining the issues involved in the matter.

Mr. Vivek Sawant, the learned Counsel appears for the respondent No. 1. The learned Counsel contended that in the Original Application proceedings before the DRT the summons were duly served to Jasavantrai P. Mehta, Jasavantrai P. Mehta filed VP of his Counsel. However, failed to file any Written Statement or Counter Affidavit in the Original Application. Contention that he was released from the guarantee was not raised by Jasavantrai P. Mehta despite opportunity in the Original Application in the Recovery Proceedings, Jasavantrai P. Mehta was served with demand notice, however, he did not appear and did not contend that he was released from the guarantee. In the circumstances the Legal Heirs of the Jasavantrai P. Mehta were stopped from raising the said contention since Jasavantrai P. Mehta himself not contested the matter. Further the judgment dated 31st July, 2003 passed in the Original Application No. 69 of 2001 was not an ex parte order. Jasavantrai P. Mehta had appeared and filed VP through his Counsel. As such an application for setting aside the ex parte order was not maintainable and the learned Presiding Officer had rightly passed the impugned order dated 20th February, 2014 in M.A. No. 57 of 2013. Accordingly the above styled Appeal was liable to be dismissed. Further State Bank of India has assigned the account of Global Shiptrades Pvt. Ltd. in favour of Kotak Mahindra Bank Ltd. in the year 2006. In the circumstances State Bank of India would need time to check the veracity of sanction letter dated 9th September, 1997 relied upon by the appellant. In the Assignment Deed Schedule B to the Agreement (copy of which has been annexed at page 202) the new guarantors names have been mentioned and not the name of the appellant's deceased father.

The learned Counsel for the respondent No. 1-A i.e. Kotak Mahindra Bank Ltd. also contended that the impugned order of the Original Application cannot be said to be ex parte. Further he argued that the transactions have taken place when the respondent No. 1-A was not concerned and he has been involved in the transaction after 29th June, 2006 i.e. after execution of the Assignment Deed.

While considering all these objections prima facie it appears that only engaging the lawyer for contesting the matter and due to his absence or non-filing of the Written Statement/Counter Affidavit cannot be called as ex parte matter. From reading of the order it seems that no issues have been discussed by the DRT and the no compliance of Original Documents and Claim Affidavit has been filed by the respondents. Unfortunately the respondent No. 5 died in the year 2005.

In this background if we visualize the matter that as rightly contended by the learned Counsel for the appellant that the Banker has issued letter relieving the deceased as the guarantor on 9th September, 1997 and the Original Application has been filed on 12th February, 2001. Of course the assignment had taken place on 29th June, 2006 i.e. after the death of the respondent No. 4. But still at the time of assignment the guarantors' names have been mentioned in the assignment deed and it has only four names which are other than the deceased. It is clear that the SBI has not filed the Original Application on good faith of bona fide undertaking, therefore, the Bank could not be protected under Section 32 of the RDDBFI Act. Section 30 of the SARFAESI Act also empowers this Tribunal to take cognizance of the offence committed. The offence is committed in the year 1997 and prior to amendment in the year 2004. Since the Bank has filed the Original Application not with the bona fide intention it will be seen from the Assignment Deed under such circumstances I am of view that fraud as alleged by the appellant has been established before this Tribunal and the matter has to be scrutinized only by the Criminal Court of not less that the rank of Chief Metropolitan Magistrate or First Class Magistrate or the Chief Metropolitan Magistrate. Under such circumstances both the parties have to file affidavit for committing a fraud and Section 340 i.e. perjury before the Court. But as per Section 30 this Tribunal has no powers of the Civil Court, therefore, this Tribunal is referring the matter to the Chief Metropolitan Magistrate directing the appellant if so pleased to file complaint under Section 200 of Cr.P.C. before the C.M.M. or the local Police Station. If he chooses the liberty is granted to present the complaint against the person who has discharged the respondent No. 4 in the year 1997 and the person who has filed the Original Application both of them must be figured as the first person and directed to secure him as per the procedure known to law even if he has superannuated from the service of the State Bank of India. It is seen that Tushar K. Buch, the then Chief Manager of the State Bank of India, Diwanpara Branch, Bhavnagar, has filed the Original Application, therefore, he has to be figured as the first man in the criminal proceeding and the present Chief Manager, Shri Subrata Roy, also has to be interrogated after securing him. Discharging the guarantor on 9th September, 1997 by replacing a new guarantor, then filing the Original Application on 12th February, 2001 by the Bank including the name of the above deceased guarantor and thereafter assigning the debt in favour of the Kotak Mahindra Bank Ltd. on 29th June, 2006 all these things have to be deprecated. Therefore, criminal investigation has been ordered against the concerned Branch Managers who has filed the aforesaid Original Application. In view of above, the Appeal has to be kept pending and their action is not under bona fide intention.

ORDER

In view of above, the Appeal has kept pending. No proceeding in this matter could be conducted since the assignor Bank himself has no legal right to proceed against the appellant. Hence, it is awaited for the Criminal Court finding.