Sanjeev Kumar And Ors. vs State Bank Of India And Ors.

Ranjit Singh, J

The SA filed by the appellants was dismissed by the Tribunal below on 6th March, 2014. Aggrieved against the order passed by the Tribunal below, the appellants have filed the present appeal. The main grouse of the appellant is that the Tribunal below had not considered his pleas and submissions on the basis of material and evidence available on record. Notice in the appeal was accordingly issued.

While considering the waiver application filed by the appellant, it was noticed that the appellants had already deposited a sum of Rs. 10 lacs. Notice amount was Rs. 55 lacs approximately. Therefore, the appellant was directed to deposit another sum of Rs. 5 lacs and upon this deposit their dispossession from the property in question was stayed. Six weeks time was allowed to the appellants to make this deposit.

The appellants, however, could only deposit a sum of Rs. 4 lacs and that too not within the period of six weeks as was allowed. The appellants, however, prayed for extending the period of two weeks to make the deposit of balance amount of Rs. 1 lac. Two weeks time was thus allowed.

On the next date, the appellants came with a sum of Rs. 65,000/- and, thus, there was fault on their part to comply with the direction to deposit Rs. 5 lacs. Still, two weeks more time was allowed to the appellants to make up the remaining amount of Rs. 35,000/-. The appeal was to stand dismissed if this deposit was not made in time. The appellants, however, made this deposit and accordingly the Bank was directed to file reply.

The case was heard once the Bank had filed reply. Plea of the appellant was that the Bank had charged very high rate of interest more than what was agreed between the parties. The Counsel for the appellant statedly had carried out calculation of the interest on the basis of agreed terms. Copy of this calculation was supplied to the Counsel for the Bank. The Bank was given time to come out with the amount which, as per the Bank, was due,

On the next date, however, the Counsel for the appellants disclosed before the Tribunal below that the appellants had made an offer of Rs. 35 lacs to the Bank and thereafter would seek some concession in the rate of interest. The case was accordingly adjourned. The appellants, however, failed to make any further deposit. Instead, the Counsel prayed for two months time to make the deposit. The prayer of the Counsel to make this deposit in instalments was accepted and two weeks time was allowed to make a deposit of Rs. 10 lacs. The appellants however did not make any deposit.

The Counsel for the appellants came up with the plea that the appellants could not make this deposit which was on account of delayed release of their claim arising out of MACT. The Counsel assured the Tribunal that the amount was likely to be released very shortly and the appellant would make every endeavour to deposit the amount as was agreed. On this understanding the case was adjourned for today. Still, no deposit is made by the appellants.

The Counsel has pressed his plea, rather hard to seek another adjournment to deposit the amount. This plea is declined as more than sufficient opportunities have been allowed to the appellants to make the deposit as per his request. This concession has been allowed to the appellants even after hearing the submissions on merit. Since the appellants had failed to avail this opportunity, I am not inclined to further adjourn the case.

The Counsel for the parties are accordingly heard.

The Counsel for the appellants states that the Tribunal below has not considered the prayer of the appellants that the land mortgaged with the Bank was agricultural land and hence not amenable to the proceedings under the SARFAESI Act. The perusal of the impugned order, however, would show that the appellants had obtained this loan to build a house on the land which is claimed to be agricultural land. The Tribunal below has rightly observed that once house has been constructed on the land for which even the loan was obtained, the said land cannot be considered as agricultural land. Reference is made to the judgment in the case of Commissioner of Wealth Tax, Andhra Pradesh v. Officer-in-Charge (Court of Wards), Paigarh, 1976 (SLT Soft) 579 : 1977 SCR (I) 146, to observe that actual use of land is determining the factor for the purpose of seeking exemption. This submission of the appellants was accordingly rejected. Thus, the plea of the appellant that his submission in this regard has not been considered is ill-informed, The Tribunal below, in my view, has rightly considered this issue and has rightly held that the land in question cannot be treated as agricultural land.

The second submission made by the Counsel for the appellants is that the representation filed by the appellants in response to the notice under Section 13(2) of the SARFAESI Act was not considered/replied as required under Section 13(3 A) of the Act. Records show that notice under Section 13(2) was dated 27th August, 2011 and the appellants had filed representation on January 2, 2012. The Counsel would submit that without disposing of the representation, the respondent Bank obtained order from the District Magistrate for taking possession of the secured assets.

In response, the Counsel for the Bank would submit that by the time, the appellants filed their representation on January 2, 2012 by which date the Bank had already obtained order from the District Magistrate for taking possession of the property. The appellants were granted sixty days time in the notice under Section 13(2). Once no representation was received within sixty days, the Bank was at liberty and entitled to proceed further for taking action under the SARFAESI Act. Accordingly, the Bank had gone ahead to obtain possession of the property by getting order from the District Magistrate. The submission that the Bank had not decided the representation in this background is apparently misconceived and misplaced. I find no merit in any of the submissions made by the Counsel for the appellants.

The Counsel for the appellants has also pleaded that notice under Section 13(2) was defective and hence the entire proceedings initiated by the Bank under the SARFAESI Act would stand vitiated. The Counsel would submit that the Bank had filed four separate recovery suits whereas one application was filed before the Debts Recovery Tribunal at Chandigarh. Notice under Section 13(2) was challenged on this ground.

I do not see any infirmity on this count. Firstly, no such plea was raised before the Tribunal below and this plea is raised for the first time in the present appeal. I am, therefore, not inclined to go into the same. I even do not find any legal infirmity in the action taken by the Bank to issue this notice and to recover the amount outstanding against the appellants.

Reliance is placed on the judgment in the case of Harshad Chiman Lal Modi v. DLF Universal Ltd. & Another, VII (2005) SLT 240 : IV (2005) CLT 45 : (2005) 7 SCC 791. It does not seem to be applicable on any of the issues that have been raised before me by the Counsel for the appellants. This judgment obviously is not applicable to the facts situation in the present case at all. At this stage, the Counsel for the appellants again repeats his prayer and that too repeatedly for grant of time to make the payment. Since I have already rejected this request, it would not be appropriate to consider the same once the appeal has been heard on merits. The appeal is therefore dismissed. However, this order will not be a bar for the Bank to consider the plea of the appellants if they still are intending to discharge their liability or to make any deposit of the remaining amount.