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Judgment
R. D. Khare, Chairperson
The present appeal has been filed U/s 18 of the SARFAESI Act against the judgment dated 25/02/2022 passed by DRT Lucknow, whereby, the S.A No. 170/2017 filed by the appellants was dismissed.
The brief facts of the present case are that Appellant No. 1 is a company, which was granted certain credit facilities through its directors. In order to secure the said loan, the appellants no 2 to 6 stood as personal guarantors and the appellants No. 7 to 9 are the corporate guarantors as well as they also created equitable mortgage over their properties by depositing the title deeds with the respondent bank. The borrowers did not maintain the financial discipline, therefore, the account was classified as NPA on 30/06/2016 and the demand notice dated 07.09.2016 was issued U/S 13(2) of the SARFAESI Act for a sum of Rs. 3,94,53,149.20. Since the borrowers did not repay any amount against the said demand, therefore, the symbolic possession of the properties was taken by taking recourse to section 13(4) of the SARFAESI Act.
It appears that the appellants/borrowers challenged the demand notice and the possession notice by filing S.A No. 170/2017 before the Tribunal below. During the pendency of the said S.A., the respondent-bank issued auction sale notice dated 24/11/2021 scheduling the auction on 17/12/2021 and the property was sold. The appellant challenged the said notice by filing an amendment application no. 1591/2021 before the Tribunal.
The Tribunal below vide impugned order dated 25/02/2022 dismissed the S.A filed by the appellants holding that no date of demand notice or possession notice has been mentioned in relief clause, thus the relief claimed is not specific, hence the applicants are not entitled for any relief as prayed in the S.A. With regard to the amendment application, it has been held that the same was never pressed by the applicants, therefore, the same cannot be taken into consideration.
. Being aggrieved by the said order the present appeal has been filed by the appellants.
Learned counsel for the appellants submitted that the impugned order dated 25/02/2022 passed by the Tribunal below in S.A No. 170/2017 is arbitrary and patently illegal, as the same is based on three grounds. Firstly, the learned counsel has referred to para 6 of the impugned order, wherein recital has been made regarding prayer clause of the S.A stating that imprecise prayer has been made to quash the demand notice and possession notice, as it is not clear as to which demand notice and possession notice the applicants want to get quashed as no date of demand notice or possession notice has been mentioned. Further, in the said paragraph, it has also been recorded that the applicants have also prayed to quash the entire proceedings initiated under the SARFAESI Act, but have not specified as to which proceedings be quashed and in view of the aforesaid, it was ordered that the applicants are not entitled for any relief and S.A is liable to be dismissed on this ground alone.
It was contended by the learned counsel for the appellant that mere non mentioning the of the date of the notice U/S 13(2) and 13(4) of the SARFAESI Act in the prayer clause does not entitle the Tribunal below to hold that prayer made by the applicants is imprecise and cannot be considered, hence S.A is rendered to be dismissed. As such the order impugned passed by the Tribunal below in this regard is bad in law.
Secondly, the learned counsel has referred to para 9 of the impugned order and has argued that the respondent bank has not decided the objection dated 03/11/2016 submitted by the appellants within 15 days from the date of receipt of the same, whereas the said objection was decided by the bank vide letter dated 22/11/2016, which is beyond 15 days.
Lastly, it was contended that the appellants had moved an I.A No. 1591/2021 for amending the S.A. to challenge the E-auction notice dated 24/11/2021 fixing the date of auction on 17/12/2021 and when the same was pressed, the Tribunal below had stated that the same shall be considered at the time of final hearing. But in para 10 of the impugned order, it has been recorded that the said amendment application was never pressed by the applicants, therefore, the same cannot be considered, whereas the said application ought to have been disposed off first before proceeding with the matter, hence the impugned order with regard to it is also not sustainable.
Learned counsel for the appellant has also canvassed that the respondent bank has not complied with the order dated 29/09/2018 passed by the A.D.M., Gautam Budh Nagar. In this regard, the learned counsel has drawn attention of this Tribunal to annexure 10 at page no. 171 of the paper book. Vide the said order, the respondent bank and police authority were expected that prior to getting the premises in question vacated, a minimum 48 hours written notice or maximum for a week had to be given to the appellant so that the appellants could shift their household articles at the safe place, but the respondent-Bank did not do so and the possession of the premises was taken on 08/01/2022 without giving any prior notice to the appellant for vacating the premises in question, therefore, the action of the respondent-Bank is in clear violation of the order dated 29/09/2018 passed by the A.D.M., Gautambudh Nagar.
Learned counsel for the respondent-bank submitted that the entire procedures as prescribed under the Act and the Rules made their under have been followed by the Bank and there is no illegality in the action of the bank, therefore, the Tribunal below has rightly dismissed the S.A. of the appellants and passed the impugned order, hence the appeal filed by the appellant deserves dismissal with heavy cost.
Learned counsel for the respondent-auction purchaser submitted that the present appeal is not maintainable in view of the fact that in para 10 of the impugned order, it has been recorded that I.A No. 1591/2021 for amendment to challenge the e-auction notice dated 24/11/2021 was not pressed before the Tribunal below, therefore, the same cannot be challenged at this stage. The second objection is that the sale cannot be challenged before this appellate Tribunal for which the appellants have remedy to move before the Tribunal below. Hence, the impugned order is legal and does not warrant any interference of this court.
Heard the learned counsels for the parties and perused the materials available on record.
The main controversy in the present case is that the Tribunal below has not considered the facts as raised in the S.A. in right perspective, whereas the respondent-Bank has violated the section 13(3-A), Rule 8(1) and 8(2) of the Security Interest (Enforcement) Rules, 2002.
So far as non mentioning of the dates of demand notice and possession notice in relief clause of the S.A. is concerned, the page no. 49 of the Memo of Appeal, which is index of the S.A., is relevant. At Sl. No. 6 of the said index, the date of demand notice is mentioned as 07/09/2016. The copy of the said demand notice has been appended as annexure no. 3 and annexed from page no. 42 to 52 of the S.A., which is clearly indicative of its date. It appears that against the said demand notice, the objection/representation dated 03/11/2016 was sent by the borrowers to the respondent bank through speed post on 04/11/2016 (copy of the same has been appended as annexure A/4 from page no. 53 to 60 of the S.A.), which was disposed off by the respondent bank vide letter dated 22/11/2016. As such the same was decided by the Bank beyond of 15 days, which violates section 13(3-A) of the SARFAESI Act. Copy of the said reply has been appended as annexure 5 and placed from page no. 61 to 63 of the S.A. But the Tribunal below has not given any finding in this regard.
With regard to the possession notice, the Tribunal below has observed that the possession notice issued u/s 13(4) of the SARFAESI Act, as mentioned by the applicants, does not indicate any date thereof and the same was sent to the appellants and the same was affixed and also published in two newspapers and copy of the said notice has been annexed as annexure 6 and placed at page no. 64 of the S.A., which is indicative of its date.
Perusal of page no. 71 of the Memo of Appeal, which is relief clause of the S.A., shows that the entire proceedings initiated by the respondent bank under the SARFAESI Act was sought to be quashed and the Bank was requested to be restrained from taking any further steps persuant to notices u/s 13(2) and 13(4) and demand notice and possession notice were also sought to be quashed. In view of this, it can be inferred that learned advocate who had drafted the S.A had not drafted the relief clause with caution and failed to mention the dates of notices u/s 13(2) and 13(4) of the SARFAESI Act and as per law laid down by the Hon’ble Apex Court and also in various pronouncements of the Hon’ble High Courts, a litigant should not be made to suffer for any fault of the lawyer. In the present case, the said notices, which were appended with the S.A filed before the Tribunal below, were only under challenge and not any other notices. Therefore, in my opinion the Tribunal below ought to have considered as to whether absolute imprecise prayer was made by the applicants or not with regard to the demand notice and possession notice.
Perusal of para 9 of the impugned order shows that objection to the demand notice u/s 13(3-A) of the SARFAESI Act was to be decided by the respondent bank within 15 days but the same was not decided within the said period, but the Tribunal below has not given any finding in this regard, therefore, the same also needs reconsideration by the Tribunal below.
So far as the e-auction sale notice is concerned, an amendment application no. 1591/21 was filed by the appellants before the Tribunal below to challenge the e-auction notice dated 24/11/2021 scheduling the auction on 17/12/2021, but the Tribunal below has not considered the same stating that the same was never pressed by the appellants. In this regard, it is stated that if any application is filed by any party before Court or Tribunal, the same should either be allowed or be rejected before proceeding to decide the matter finally and in case of non-pressing, the same should be recorded in writing at the very first instance, but there is nothing on record, which may show that the appellants have not pressed the said application at the time of its filing. Hence, the matter requires to be remanded back to the Tribunal below for its consideration.
The contention of the learned counsel for the appellant that the respondent bank has not complied with the order dated 29/09/2018, whereby it was directed that a minimum 48 hours or maximum for a week time be given to the appellants for taking possession of the property in question so that they may remove their assets from the premises in question is correct, but no such averments have been pleaded before the Tribunal below. However, the same is contended in para 5.49 of the memo of appeal filed before this Appellate Tribunal. Hence, the appellants are at liberty to raise the same before the Tribunal below, which shall be dealt with in accordance with law.
In view of the above, this Tribunal is of the opinion that it is a fit case for remand to the Tribunal below. Accordingly, the order impugned is set aside. Consequently, the appeal is allowed and the case is remanded back to the Tribunal below for deciding it afresh in accordance with law without being influenced by the observations made hereinabove after affording proper opportunity of hearing to the parties concerned most expeditiously.