Sarva Haryana Gramin Bank vs Rajvir Singh

The appellant Bank has filed this appeal against the following order passed by the DRT on 25.07.2017 in respondent's S.A. No.88/2017 under Section 17(1) of the SARFAESI Act:-

"Applicant is present in person and has shown his aadhar card as a proof of identity bearing no. 809353458236.

Counsel for the applicant on instructions from the applicant who is present in court in person states that he is ready to settle the matter on the amount mentioned in notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 but seeks some time to make the payment and he does not wish to enter into the merits of the case and does not disputing the measures adopted by the bank. The amount due as per notice is RS. 8,16,102.00 as on 01.01.2016.

The applicant further states that he would clear the entire amount by 20.12.2017 along with base rate of interest simple, but prays that he be given some time to do so.

To show his bana fide the applicant states that he will be depositing Rs.2.00 lakhs on or before 28.09.2017 and the balance amount along with interest on or before 20.12.2017.

In view of the statement made by the applicant, the applicant is directed to pay Rs. 8,16,102.00 as per notice with base rate of interest simple on reducing balance from 01.01.2016, to be paid with the final amount on or before 201.12.2017.

Counsel for the respondent states that the above said amount is due from 01.03.2013 and the interest component has not been added in that amount.

However, possession notice clearly shows that the amount of Rs. 8.16.102.00 is due as on 31.12.2015 together with interest from 01.03.2013.

As such, it cannot be presumed that the interest from 01.03.2013 to 31.12.2015 has not been added to this amount, since, this amount is the as is also mentioned in the notice under Section13 (2) of the Act.

Status quo regarding the property be maintained till 28.09.2017.

In case the applicant does not make the payment of Rs. 2.00 lac on or before 28.09.2017 the status quo shall stand automatically vacated and the applicant shall hand over the free and vacant possession of the property to the respondent bank on the next day of default i.e. on 29.09.2017. However, if the applicant makes the payment of Rs. 2.00 lacs on 01 before 28.09.2017 the status quo shall automatically extended till 20.12.2017.

In case the applicant does not make the balance payment at the base rate of interest on or before 20.12.2017 the status quo shall stand automatically vacated and the applicant shall hand over the free and vacant possession of the property to the respondent bank on the next day of default i.e. on 21.12.2017 and the bank would be free to proceed in the matter in accordance with law.

No further orders are called for in this application. No order as to costs.

SA is Disposed off."

The respondent had challenged the measures taken by the appellant Bank as a secured creditor in respect of the property mortgaged by him in its favour to secure the repayment of the loan taken by him. However, after filing the S.A., the respondent expressed his desire to settle the matter with the appellant Bank and abandoned the grounds of challenge raised in the S.A. against the demand notice under Section 13(2) of the SARFAESI Act and agreed to pay the demanded amount but had sought some time to clear the Bank's entire dues. Then the DRT gave the reliefs sought for by the security applicant even though he had not made any such prayer in the S.A. The DRT has also tinkered with the rate of interest which the borrower himself had agreed to pay while requesting the Bank to sanction loan of Rs.9,60,000/- in the year 2010.

The learned counsel for the appellant was right in submitting that the DRT ought to have dismissed the S.A. the moment the respondent abandoned his grounds of challenge instead of granting reliefs which had not even been prayed for by the respondent in his S.A.

The reliefs prayed for in the S.A. are as under:-

"1. That the in view of the submissions made in the foregoing paragraphs and their ramifications, it is most respectfully prayed that in the interest of justice and equity the application of the petitioner may kindly be accepted and entertained and action of the respondents no.1 and 2 to take the physical possession of the mortgaged property on 31.01.2017 and to further public auction the property be set aside and further respondent no.1 and 2 be directed to first consider the offer/OTS given by the principal borrower before taking any action against him. It is further prayed that the whole action taken till date by the respondent bank under Section 13 (4) of the SARFAESI Act against the petitioner be set aside.

In case the respondents by using unlawful means and adopting illegal procedure succeed to take the physical possession of the movable property of the applicant or able to put the property in public auction or the respondents able to auction the property then the whole action of the bank should be set aside.

It is further respectfully prayed that the necessary order and direction be passed against the respondents to settle the dispute by enter into the one time settlement by following the guidelines issued by the Reserve Bank of India in this context and applicable laws. And thereafter make the property free from any lien, charge, mortgage or encumbrances etc.

Any other relief which this Hon'ble Court may deem fit may also be granted."

There was no prayer for adjudication of the debt or reduction in the rate of interest.

There was no representation on behalf of the respondent on two dates fixed for arguments. So, only counsel for the Bank was heard. He had filed written arguments also.

The impugned order of the DRT thus cannot be sustained. It is accordingly set aside and consequently the S.A. of the respondent will now stand rejected. DRT record be sent back with a copy of this order.