Jammu And Kashmir Bank Ltd. vs Saroj Kumari And Ors.

Ranjit Singh, J

These two appeals are preferred by appellant Jammu and Kashmir Bank Ltd. to challenge the common judgment dated 22.4.2015 passed by DRT-III, Delhi. Vide order impugned in the present appeals, the Tribunal below has interfered with the attachment order passed by the Recovery Officer (R.O.) to the extent of interest the borrower has in the property prior to which rights of respondents 1 and 2 had come into existence. In this manner, the Tribunal has allowed attachment to the extent of Rs. 2.85 lacs which was made by the borrower whereas remaining sum of Rs. 7.41 was found deposited by respondents 1 and 2. The Bank has been allowed to sell the property. Aggrieved against this order, the Bank has filed these two appeals.

M/s. Balaji Metal industries (respondent No. 3) had availed Term Loan facility of Rs. 45 lac from the appellant Bank on 19.10.2001. The borrower had also obtained bill discounting facility of Rs. 7 lac. Respondent No. 3 through its partner had executed several security documents in favour of the Bank. The facilities were duly disbursed in favour of the partnership concern. These facilities were enhanced from time to time and through letter 15.12.2003 Cash Credit facility for a sum of Rs. 70 lac stood sanctioned. In Appeal No. 202/2015, M/s. Jai Durga Metal Industries (respondent No. 3) had availed Cash Credit facility of Rs. 1.5 crore and Tern Loan facility of Rs. 2.4 crore after executing through its partners several security documents in favour of the appellant Bank. In both the cases, respondent No. 3 failed to maintain the accounts properly despite repeated requests. The said respondents did not regularize the account and the same was classified as NPA on 31.8.2004. To realize the amount, the Bank also initiated action under the SARFAESI Act and issued notice under Section 13(2) of the Act on 24.12.2004. This was followed by notice under Section 13(4) of the SARFAESI Act.

When the Bank official visited the factory of respondent No. 3, it was observed that the plant, machinery and stock had been disposed of without information and consent of the Bank. It appears that the factory was sold and after appropriation of sale proceeds the outstanding amount due towards the Bank was Rs. 54,37,165/- as on 10.7.2006, For recovery of this amount, the Bank filed an O.A. This was decreed and Recovery Certificate (R.C.) dated 21.12.2010 was issued for recovery of a sum of Rs. 31,81,550/- along with interest @ 10% p.a. As per the Bank, this order has not been challenged.

Pursuant to the recovery certificate, recovery proceedings commenced before the R.O., who attached immovable property bearing No. A-255, Sector-46, Noida (U.P.) belonging to CD-3 Mr. Sunil Kumar Dhoot. Respondent Nos. 1 and 2 filed objections against the order of attachment dated 26.9.2012. The R.O. dismissed these objections, against which respondent Nos. 1 and 2 preferred an appeal before the Tribunal below. The Tribunal has now passed the impugned order which is challenged by the Bank.

Respondents in their objections had pleaded that respondent No. 2 had entered into a registered agreement to sell with Mr. Sunil Kumar Dhoot (CD-3) and bought the property which was ordered to be attached. Registered GPA was executed in favour or respondent No. 1 on 3.1.2003. The sale consideration was Rs. 2.40 lac and an amount of Rs. 2.30 lac was aid to the CD-3 at the time of execution of agreement to sell. Possession of the property was handed over by CD-3 on 1.9.2003.

Respondent Nos. 1 and 2 had applied to the Noida Authorities for transfer permission on 7.7.2005. They were directed to obtain NOC from the appellant Bank. Complying with the direction issued by Allahabad High Court, the Noida Authorities had dismissed the representation of respondent Nos. 1 and 2 which was ordered to be dealt with by the Allahabad High Court.

The Tribunal below has considered the submissions made. The R.O. had disposed of the objections filed by respondent Nos. 1 and 2 by observing that no documents were filed by the objectors to show right, title and interest in the property. The property was found to be in possession of CD Mr. Sunil Kumar Dhoot. The Tribunal, after considering the submissions made before it, has found that Mr. Sunil Kumar Dhoot had enjoyed the facilities from the Bank in the year 2001/2003, but the property in question was never mortgaged with the Bank.

The plea of the Bank before the Tribunal below was that after availing loan, Mr. Sunil Kumar Dhoot had siphoned off the money and had invested some amount in purchasing the property in question from the Noida Authority. The Tribunal, after going through the sale deed executed in September 2003, found that the allottee Mr. Sunil Kumar Dhoot had deposited a sum of Rs. 2,85,780/- whereas the (balance consideration amount to tune of Rs. 7.41 lac was deposited by respondents 1 and 2. The Tribunal found that the legal position as per Section 53A of the Transfer of Property Act stands against respondents 1 and 2, as physical possession of the property was not handed over to them, but finding that they are senior citizens and had deposited their hard-earned money of Rs. 7.41 lac with Noida Authorities, the Tribunal has shown some sympathetic consideration. The attachment of the property was ordered presuming that the entire amount was deposited by Mr. Sunil Kumar Dhoot whereas he was found to have deposited only a sum of Rs. 2.85 lac.

The Tribunal is justified in observing that Mr. Sunil Kumar had taken huge loan from the Bank by furnishing sufficient security towards loan and in that background he had only deposited a sum of Rs. 2.85 lac for this property. The Tribunal accordingly directed that the attachment order passed by the R.O. would be to the extent of interest in the property of the borrower as rights of respondent Nos. 1 and 2 have come into existence when they deposited the remaining amount. The rights of the Bank would only be to the extent of Rs. 2.85 lac. The Tribunal otherwise had allowed the R.O. to put the property to sale in accordance with law and distribute the proceeds on proportionate basis between the appellant Bank and respondent Nos. 1 and 2 as per the ratio of their respective shares. I find that the Tribunal below has passed a fair order in equity which has not closed the right of the Bank to recover its amount. If a senior citizen with all innocence has been trapped in purchasing a property which was not subject to any mortgage and is sought to be attached subsequently to the said purchase, it may sound fair to protect the rights of such a person. The order sounds good in equity, especial so, when it is not a property mortgaged with the Bank to secure the loan. I am, therefore, not inclined to interfere with the impugned order and would dismiss the appeals in limine.