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Judgment
R. S. Kulhari, Chairperson
This appeal has been preferred by the appellant under section 20 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (in short "the RDDBFI Act") against the judgment dated 04.12.2015 passed by the DRT, Allahabad, whereby the original application filed by the respondent no. 1-Bank was allowed.
The brief facts of the matter are that the respondent No. 1-Bank granted a Term Loan of Rs. 19.44 lacs to the appellant for purchase of a Truck. In order to secure the loan, the appellant created an equitable mortgage over the immovable property belonging to him as well as to the respondents nos. 3 to 7 by depositing original title deed and hypothecated the Truck with the Bank. The borrower did not adhere to the terms of the loan, therefore, the account was classified as NPA and the respondent-Bank issued a demand notice dated 08.11.2010 to the appellant under section 13(2) of the SARFAESI Act, 2002 for a sum of Rs. 18,44,275.71. Since the appellant did not pay the amount as demanded, the respondent-Bank initiated the recovery proceedings by taking recourse to section 13(4) of the SARFAESI Act, 2002 and took the possession of the property on 21.02.2012.
The respondent-Bank published the sale notice dated 24.06.2016 in the newspapers on 29.06.2016 scheduling the auction of the property in question on 01.08.2016 and the property was sold for Rs. 47.92 lacs. The sale was confirmed and the sale certificate was issued in favour of the auction purchaser on 11.08.2016.
The appellant challenged the sale before the Tribuanl below by filing the securitization application, which was dismissed. Against the dismissal of S.A., the appellant filed the Appeal Sr. No. 320/2016, which was dismissed vide order dated 13.02.2018. The appellant filed a review application No. 53/2018 against the order dated 13.02.2018, which was also rejected vide order dated 24.06.2019.
Besides the SARFAESI proceedings, the respondent no. 1-Bank also filed an original application for recovery of Rs. 18,44,257.71 together with pendentelite and future interest @ 12.25% per annum with monthly rests from 01.11.2010, which was decreed in toto vide impugned order dated 04.12.2015. Hence the present appeal.
The learned counsel for the appellant submitted that the O.A. was filed beyond limitation period. No amount was mentioned in the alleged revival letter dated 05.03.2010. The Tribunal below has not considered the limitation aspect, therefore, the O.A. was liable to be dismissed on this ground. The learned counsel further submitted that the loan was secured by hypothecation of truck and no property was mortgaged against the said loan. The factum of execution of document was not mentioned in the revival letter dated 05.03.2010 and only three documents belonging to hypothecation as SME-1, 2 and 3 were stated therein. Had there been the document with regard to the equitable mortgage, the same would have also been mentioned in the revival letter. Since no such detail is there, hence the Bank has falsely created the documents with regard to the mortgage in their record.
The next contention was that the Bank has realized the loan amount by sale of the property in the SARFAESI proceedings, therefore, the Bank ought to have proceeded under section 13(10) of the SARFAESI Act and the O.A. should have been withdrawn, but the same was wrongly decided in favour of the Bank.
On the contrary, the learned counsel for the Bank submitted that the O.A. was filed within limitation on the basis of revival letter and part payment made by the borrower in the loan account. The appellant and the respondent nos. 3 to 7 and their deceased parent mortgaged the property with the Bank by delivering the original title deeds to secure the loan. The O.A. and the S.A. may be entertained simultaneously, hence the Tribunal below has rightly decreed the amount against all the defendants.
I have considered the rival contentions of the learned counsels for the parties and perused the record.
On the issue of limitation, the record reveals that the loan was sanctioned on 28.03.2007, the recall notice was sent on 03.11.2010 and the O.A. was filed 05.01.2011. The revival letter was taken on 05.03.2010 within three years. Although, the amount outstanding on that day was not mentioned in the revival letter, but it was with regard to the revival of the hypothecation agreements executed by the appellant- Rajendra Kumar Chaddha. Thus, the documents stood revived by way of this revival letter. The mortgage agreement is valid for a period of 12 years, therefore, no revival letter was required for mortgage agreement. After revival of the documents, the O.A. was within limitation.
It is also pertinent to mention here that the borrowers have been depositing the amount by cash or by transfer from time to time, last being Rs. 50,000/- on 30.03.2010, Rs. 37,000/- on 26.05.2010 and Rs. 10,000/- on 30.06.2010, which is evident from the statement of account filed by the Bank and these deposits were not disputed by the appellant. Therefore, there was regular part payment of the loan, hence the O.A. was otherwise within limitation on account of part payment. Hence, the O.A. was filed within limitation and was rightly entertained by the Tribunal below.
With regard to the equitable mortgage of immovable property, the security documents were executed by the borrower-Rajendra Kumar Chaddha and other seven defendants of the O.A. All the defendants of the O.A. have signed the loan agreement placed at page nos. 39 to 46 of the O.A. The primary security to the loan was hypothecation of truck and immovable property being house no. 3A/83, New Colony, Naini was mortgaged as collateral security. The mortgaged property was belonging to the defendant nos. 2 to 7 of the O.A. and all of them have signed the mortgage agreement. Further, all the defendants have signed the "letter of confirmation for creation of mortgage by depositing of title deeds" (SME-6 page no. 8 of reply) having confirmed the deposit of title deeds with the Bank against the term loan of Rs. 19.44 lacs granted to the appellant. The Bank has also recorded all these documents in their register as schedule 'B', wherein the hypothecation agreement, guarantee agreement as well as memorandum for creation of mortgage were mentioned at page no. 68 to 71. Thus, by no stretch of imagination, it can be gathered that the bank has falsely created any document with regard to creation of mortgage.
Moreover, the appellant or the defendants of the O.A. have not stated anywhere in pleading that how the original title deeds were deposited with the Bank, if these were not deposited against the Truck loan. The Bank may take collateral security to ensure the recovery of loan, so by taking additional security, no irregularity was committed in granting the loan.
The argument that the fact of creation of mortgaged deed was not mentioned in revival letter, is also of no avail, because as stated above the revival letter was only with regard to the hypothecation agreement executed by the borrower-Rajendra Kumar Chaddha and no revival of mortgage deed was required till completion of 12 years. Hence, there was no necessity to mention the factum of SME-5 in the revival letter dated 05.03.2010.
In so far as contention with regard to invocation of section 13(10) of the SARFAESI Act is concerned, suffice it to say that the proceedings of the O.A. and the S.A. are supplementary to each other. The Bank may proceed either under the SARFAESI Act or may file O.A. under RDB Act and also both the provisions may be invoked simultaneously. There is no bar in invoking both the proceedings at a time as laid down by the Hon'ble Supreme Court in M/s Transcore Vs. Union of India & Anr., AIR 2007 Supreme Court 712. Thus, there was no need to withdraw the O.A. after auction of property.
In view of the aforesaid, there is no infirmity in the impugned order and the appeal is devoid of merits. Accordingly, the same is dismissed with no order as to costs.
A copy of this judgment be sent to the parties as well as the DRT concerned and be also uploaded on the e-DRT portal.