Rita Devi Sadh vs Indian Overseas Bank And Ors.

S.N.H. Zaidi, J

Mr. Malhotra points out that he will file his Vakalatnama during the course of the day. Heard parties' Counsel on application No. 623/2012 filed by the appellant seeking waiver/reduction of the amount of pre-deposit required for the entertainment of the accompanying appeal.

Mr. Malhotra points out that the appellant had filed the application under Section 17 of the SARFAESI Act (S.A. No. 36/2012) before the Tribunal below assailing the measures of the Bank taken under the said Act. He further points out that during the hearing of that application on 19.6.2012 the Bank's Counsel had stated that the Bank was withdrawing the sale notice dated 17.5.2012 and in view of that the Tribunal below had dismissed the S.A. He further points out that but subsequent thereto the Bank had issued another sale notice dated 7.7.2012 on the basis of earlier notice dated 30.1.2012, which was published in two newspapers, namely, 'Veer Arjun' and 'Mint' on 3.2.2012 though the publication of the notice in those newspapers was found to be not in accordance with the relevant rules by the DRT. Mr. Malhotra submits that the appellant then approached the DRT by filing M.A. No. 88/2012 for the restoration of her earlier S.A., but the learned Tribunal below dismissed that application by the order impugned. According to him, once the respondent-Bank had withdrawn the possession/sale notices and the S.A. was dismissed on the basis thereof, the Bank could not have taken further action in pursuance of those notices, but the learned Tribunal did not consider this aspect and dismissed the restoration application.

Mr. Malhotra further contends that as per the demand notice dated 13.9.2011 issued under Section 13(2) of the SARFAESI Act an amount of Rs. 3,93,77,778/- was claimed by the respondent-Bank, but subsequent thereto the Bank has received an amount of Rs. 2.71 crore from ECGC, the respondent No. 2, which is more than 50% of the claimed amount and since the said amount is in deposit with the Bank, the appellant, in view of the aforesaid circumstances, be not asked to deposit any further amount for the entertainment of this appeal.

Mr. Khanna, however, points out that the auction scheduled for 11.8.2012 in pursuance of the sale notice dated 7.7.2012 has already failed as no bid was received. He also submits that the respondent-Bank cannot, as per the terms of ECGC agreement, appropriate the amount received from that Corporation and the said amount is to be returned to it after the recovery of the amount; for which the said Corporation had stood the guarantee. He also submits that so long as the secured asset is in possession of the appellant it cannot fetch any buyer and that is why the auction failed and now the respondent-Bank has approached the CMM under Section 14 of the SARFAESI Act for taking physical possession of the secured asset. He points out that the learned ACMM has appointed a Court Receiver, who has already issued notice to the borrower/mortgagor for the said purpose.

Considering the submissions of the parties, I am of the view that looking to the circumstances of the case, as Rs. 2.71 crore is in deposit with the respondent Bank and the instant appeal relates to an order declining to restore the S.A., the appellant is not required to deposit any amount for the entertainment of this appeal. The application stands disposed of accordingly.

The appeal is accordingly entertained. Let it be registered.

Also heard on appeal. Mr. Malhotra submits that the alleged fresh action under Section 14 of the SARFAESI Act has been taken by the Bank during the pendency of this appeal. He, however, submits that since the Bank's Counsel has stated that the Bank is not proceeding on the basis of the earlier possession/sale notice, therefore, if the appellant will have any grievance qua the action taken afresh by the Bank, it will seek its legal remedy and this matter may be disposed of accordingly.

Mr. Khanna points out that while dismissing the S.A. on 19.6.2012 the Tribunal below has already given liberty to the appellant to approach it if she is aggrieved by any action of the Bank, at appropriate time. Considering the submissions of the parties' Counsel and looking to the circumstances of the case, I am of the view that the Tribunal below was right in finally disposing of the earlier S.A. on the basis of the withdrawal of the possession/sale notice issued by the Bank and since the Bank is taking fresh measures, therefore, without entering into the merits, the appeal is disposed of with the observation that if the appellant is aggrieved with any measure taken by the respondent-Bank under Section 13(4) of the SARFAESI Act, she may take recourse to the legal remedy available to her in accordance with law.

Copy of this order be furnished to the parties as per law and be also sent to the DRT concerned.