Sant Ram Yadav & Anr. vs Punjab National Bank & Anr.

Heard the learned counsels for the parties.

Learned counsel for the appellant submits that the Appeal Dy. No. 37/2022 filed by the appellants was allowed by this Tribunal vide judgment and order dated 19.07.2023 quashing the possession notice dated 26.10.2017 and its all subsequent actions of the Bank with certain directions. It is further contended that despite direction of this Appellate Tribunal, the respondent-bank has never returned the auction amount to the auction purchaser along with interest as awarded by this Appellate Tribunal. It is also contended that the respondent-Bank had sent a letter dated 19.08.2023 to the appellants demanding a sum of Rs.51,84,958/- towards Overdraft Account No. 5269009900000329 and Rs.26,79,371.67 against a Car loan, which is not part of the present proceedings. It is further contended that the respondent-Bank is only entitled for charging the interest from the appellants @8% p.a. simple after adjusting the auction amount in the account in question from 14.09.2018, because after appropriating the auction amount in the said loan account, there was no amount due for recovery against the appellants, but instead of it, the Bank has demanded the amount with the contractual rate of interest from the date of issuance of demand notice till the date of its demand pursuant to the judgment and order dated 19.07.2023, which cannot be done by the Bank.

Learned counsel further submits that physical possession of the property in question was taken on 15.12.2021 pursuant to the order passed by the District Magistrate u/s 14 of the SARFAESI Act and the same was handed over to the auction purchaser. It is further contended that since the auction purchaser is enjoying/utilizing the property in question, therefore, neither the Bank nor the appellants is liable to pay any interest to the auction purchaser as awarded by this Appellate Tribunal from the date of possession. It is also contended that the appellants had submitted a representation dated 15.10.2023 before the respondent-Bank by mentioning the discrepancies in calculation of outstanding dues along with his willingness to pay Rs.39,69,678/-, but the Bank did not consider the same in its right perspective and was adamant on the outstanding amount as calculated by the Bank, which is contrary to the direction given by this Appellate Tribunal vide judgment and order dated 29.07.2023 and ultimately, the respondent-Bank issued a fresh possession notice dated 23.11.2023 u/s 13(4) of the SARFAESI Act while physical possession of the property in question is still with the auction purchaser. It is thus contended that the appellants intend to liquidate the legitimate dues of the Bank to save their property, which is mortgaged towards the overdraft facility. It is, therefore, prayed as under:-

It appears that on behalf of the respondent-Bank Shri Maneesh Mehrotra, Advocate has appeared, but despite giving several opportunities, he has not filed any reply to the said Misc. Application and ultimately, the right of the respondent-Bank to file the reply stood closed by this Tribunal vide order dated 16.10.2024. However, learned counsel submits that pursuant to the order passed by this Appellate Tribunal, the respondent-Bank had given the calculation of outstanding amount payable by the appellants to the Bank vide letter dated 19.08.2023, but the appellants have not paid even a single penny. It is further contended that there is also a Car loan of the appellants, therefore, the respondent-Bank has rightly demanded the amount against the said car loan along with the amount demanded towards the OD account. It is further contended that from the amount realized from the auction sale of the property in question, the car loan account was also closed, therefore, the contention of the appellants that the Bank cannot ask for the amount of car loan along with the demand of OD account is incorrect. It is, therefore, prayed that the Mis. Application filed by the appellant may be dismissed with costs.

Considered the arguments and perused the record.

It appears that the demand notice dated 03.07.2017 was issued by the Bank for a sum of Rs.27,62,944.51 as on 30.06.2017 and the property in question was sold for Rs.42.82 lacs in the auction dated 19.06.2018. As per the statement of account for the period from 30.08.2014 to 16.08.2014 issued by the Bank placed at page no. 26 of the Misc. Application filed by the appellant, 25% of the bid amount including the EMD was deposited in the loan account on 19.06.2018 and the remaining 75% was deposited in the OD account on 13.09.2018. After appropriation of the said amount, the credit balance in the OD account was Rs.14,90,495.87, thus the total outstanding amount pertaining to the account in question stood satisfied from the auction sale amount and there was nothing due as on 14.09.2018 and the said statement of account shows the credit balance of Rs.14,90,495.87. As such the Over Draft Account of the appellants was closed on the said date, but despite it, the respondent-Bank had given a calculation sheet for the period from 31.12.2017 to 31.07.2023 for a sum of Rs.51,84,958/- by charging the rate of interest @ 12.15% with monthly rests vide letter dated 19.08.2023 pursuant to the order dated 19.07.2023 passed by this Appellate Tribunal in Appeal Dy. No. 37/2022. Now, it is to be seen, as to whether the said statement of account issued by the respondent-Bank is in accordance with the judgment passed by this Tribunal on 19.07.2023 or not?

No doubt, the Appeal Dy. No. 37/2022 filed by the appellants was allowed by this Tribunal vide judgment and order dated 19.07.2023. The relevant operative portions of the said judgment are as under:-

While going through the above order/direction, it is found that this Tribunal has only directed the respondent-Bank to provide the statement of account to the appellants showing the total outstanding amount payable within 15 days from today. Thus there was no direction for the Bank to charge the contractual rate of interest from the date of NPA till the date of full and final payment is made. However, the Bank can charge the contractual rate of interest from the date of NPA till the total outstanding amount is paid, but the facts and circumstances of the present case is different. Admittedly, the Bank has realized the amount from the auction sale of the property in question more than the amount outstanding in the loan account, therefore, the Over Draft Account of the appellants was closed on 13.09.2018 as soon as the entire sale consideration was received by the Bank. If the account of the appellants was closed on 13.09.2018, then there was no occasion for the Bank to charge the contractual rate of interest from the date of NPA till the date of providing the calculation to the appellants pursuant to the judgment of this Appellate Tribunal.

Admittedly, the auction sale has been set aside by this Tribunal and the respondent-Bank has been directed to return the auction amount to the auction purchaser along with interest @ 8% p.a. simple. As such the auction amount along with the said interest is required for the Bank to pay the auction purchaser. Thus the bank was required to calculate the interest as awarded by this Tribunal on the amount, which was adjusted in the OD Account of the appellants from 14.09.2018 onwards, but instead of it, the Bank has charged the contractual rate of interest beyond the said date, which prima facie appears to be unreasonable and unjustified on part of the Bank, because at present, the amount, which is needed to the Bank, is the amount, which is payable to the auction purchaser, therefore, the calculation given by the Bank to the appellants vide letter dated 19.08.2023 is not correct and is not in accordance with the judgment dated 19.07.2023.

In view of the above, it is made clear that the Bank shall calculate the amount along with contractual rate of interest for the period from the date of NPA till the date of closure of the Over Draft Account of the appellants i.e. up to 13.09.2018 and thereafter, the Bank shall charge the interest as awarded by this Tribunal on the auction amount, which was only appropriated in the Overdraft Account of the appellants and not in the Car Loan Account, for the period from 14.09.2018 till the date of full and final payment is made. It is further made clear that on the remaining auction amount, the Bank itself shall bear the interest as awarded by this Tribunal on the auction amount for the reason that the said Car Loan was not made part of the present proceeding by the Bank while issuing the demand notice in respect of Overdraft Account as mentioned above and if the same was not part of the present proceedings, the Bank should not have appropriated the auction amount in the said Car Loan Account. It is also made clear that the amount deposited by the appellants after issuance of the demand notice dated 03.07.2017 shall also be considered by the bank while calculating the amount as directed above.

However, the respondent-Bank is directed to calculate the amount as directed above and provide the same to the appellants for payment subject to the final outcome of the writ petition filed by the auction purchaser before the Hon'ble High Court, Allahabad, Bench at Lucknow.

So far as the contention of the appellants that the auction purchaser is not liable to be paid the interest on the ground that she is enjoying the property in question, is concerned, this Tribunal has already granted the interest @8% per annum simple on the auction amount while passing the judgment in the main appeal, which cannot be reviewed/modified at this stage, therefore, the said contention of the appellants is not tenable.

So far as the another loan account of the appellant i.e Car loan is concerned, the same is not a part of the present proceedings, therefore, the respondent-Bank cannot be permitted to raise any demand towards the Car Loan along with the demand of the present case. However, the Bank is free to proceed for its recovery towards the Car loan account of the appellants separately in accordance with the law.

In the above terms, the Misc. Application filed by the applicants stands disposed off with no order as to costs.