Indiabulls Commercial Credit Ltd vs M/s D.B. Footwear And Another

R. D. Khare, Chairperson

The present appeal has been filed under section 18 of the SARFAESI Act, 2002 against the interlocutory order dated 15.06.2023 passed by the DRT, Allahabad in S.A. No. 961/2022, whereby the appellant-F.I. was restrained from taking physical possession of the property in question.

The brief facts of the case are that the respondent no. 1-borrower was granted financial assistance by the appellant-F.I. vide loan agreement dated 30.07.2017. In order to secure the said facility, the respondent No. 1 created an equitable mortgage over the property being Plot No. 5, Khet No. 68, Mauza Lashkarpur, Mughal Road, Agra with the Bank. The Borrower did not maintain the financial discipline, therefore, the account was classified as NPA on 20.01.2020 and demand notice dated 21.01.2020 was issued under section 13(2) of the SARFAESI Act for a sum of Rs. 1,81,50,099/-. Since the borrower did not pay any heed to the demand raised by the Bank, therefore, the possession notice dated 12.01.2022 was issued under section 13(4) of the SARFAESI Act. The said notice was also published in the Business Standard newspapers on 18.01.2022. Thereafter, the appellant-F.I. issued sale notice dated 28.11.2022 scheduling auction of the property in question on 23.12.2022.

The respondent-borrower challenged the entire proceedings of the appellant-F.I. by filing securitization application No. 961 of 2022 before the Tribunal below. Since the auction sale dated 23.12.2022 could not be materialized, therefore, another sale notice dated 08.05.2023 was issued and the property was sold and the sale was confirmed in favour of the successful bidder vide letter dated 31.05.2023. Thereafter, the appellant obtained an order from the ADM (F & R) on 20.09.2022. Pursuant to it, the state authority issued a notice dated 29.05.2023 for taking physical possession on 16.06.2023, against which the respondent-borrower moved an urgency application as well as stay application in the aforesaid S.A.

The Tribunal below vide order impugned dated 15.06.2023 restrained the appellant from taking the physical possession of the property in question on 16.06.2023 observing that there is discrepancy in serving the demand notice to the respondents-borrowers and the possession notice has not been published in two leading newspapers. Being aggrieved by the said order, the present appeal has been filed by the appellant-F.I.

Learned counsel for the appellant submitted that only the issue for consideration of this Court is, as to whether the publication of possession notice, which was published in the Hindi and English editions of Business Standard on 18.01.2022 are two separate publications as per requirement of Rule 8(2) of the Security Interest (Enforcement) Rules, 2002 or not?

Learned counsel for the appellant further submitted that the demand notice was sent to all the borrowers at the same address and Udaiveer, who was also relative of other respondents, had duly received the same on behalf of other persons, therefore, it cannot be said that the demand notice was not served in any manner. It was also contended that Udaiveer is father of the proprietor of the Firm. Thus, it was prayed that the order impugned with regard to the service of demand notice and publication of possession notice may be set aside to this extent and the case may be remanded back to the Tribunal below for deciding it a fresh.

Learned counsel for the respondent No.1-borrower submitted that perusal of order impugned shows that only question of paper publication is involved, but the Tribunal below has also recorded that the demand notices were sent to the S.A. applicants through courier and speed post, but the same were only served upon Udaiveer and not upon the other borrowers, therefore, the demand notice itself was not considered in consonance with the statutory provision of law and the other borrowers were not noticed. The learned counsel further contended that the said notice was sent only on three different addresses. It was, therefore, prayed that the order impugned does not call for any interference by this Tribunal and the appeal may be dismissed.

Having heard the learned counsels for the parties and considering the material available on record, there is no dispute with regard to the interim relief granted by the Tribunal below vide order impugned in favour of the respondents-borrowers. The main grievance of the appellant-F.I. is against is observations made by the Tribunal below with regard to the service of demand notice and publication of possession notice.

So far as the service of the demand notice upon the borrowers is concerned, it is to be seen that the demand notices were sent to the borrowers, who reside at 35/43-A or 35/43-B, which is evident from the demand notice dated 21.01.2020, which is at page no. 52 to 58 of the paper book. As such, all the borrowers reside at one place, but it is admitted position that the demand notice was received by Udaiveer on behalf of all the borrowers, which is clear from the tracking reports at page no. 60 to 75. Since the S.A. is still pending before the Tribunal below, therefore, it would not be appropriate to give any finding on the service of the said notice. It is also clear that the observation given by the Tribunal below on the service of the said notice is an interlocutory in nature and not final because if the Tribunal had considered the said finding as final, then the demand notice would have certainly been rescinded, but the Tribunal below did not do so, therefore, the observation made by the Tribunal below with regard to the service of demand notice is of no consequence.

So far as the publication of the possession notice in the Hindi and English Editions of the Business Standard is concerned, it is to be seen that the possession notice was issued on 12.01.2022 and the same was published in Business Standard Newspapers “English and Hindi Editions” on 18.01.2022. The Business Standard is the name of firm. A firm can do its any business from its own name. From the record, it is clear that the Business Standard is doing the business of publication of news in Hindi and English languages separately. The entity of both the newspapers is distinct and separate. If the notices were published in Hindi and English in one edition, the case would have been otherwise, but both the notices were published in Hindi edition and English edition of the Business Standard separately, therefore, it cannot be said that the notice were published in one newspaper, because the Business Standard Hindi edition and English edition are two different newspapers. Hence the observation of the Tribunal below that the Business Standard Newspaper Hindi and English editions are one newspaper, appears to be erroneous.

In view of the above, the order impugned with regard to service of demand notice and publication of possession notice is set aside and rest part of the order impugned regarding the interim relief is not being interfered with. The matter is remanded back to the Tribunal below for deciding it afresh in accordance with law most expeditiously without being influenced by the observations made herein above or in the order impugned.

A copy of this order be forwarded to the parties as well as to the DRT concerned and be also uploaded on the e-DRT portal.