Sbp Rubbers Pvt. Ltd. And Ors. vs Punjab & Sind Bank And Ors.

S.N.H. Zaidi, J

This application has been filed by the respondent Bank seeking direction for the sale of property bearing No. C-300, Sector-10, Noida, U.P. through Court's auctioneer and for permission to auction the other property bearing Shop No. F-8, Pushpa Chamber-1, Shopping Complex, Opposite to Plot No. 33/22, Punjabi Bagh (West), New Delhi. The appellants have filed reply dated 16.8.2011 opposing the said application.

I have heard Mr. Satvinder Singh, learned Counsel for respondent/applicant and Mr. G.S. Aggarwal, learned Counsel for the appellant/non-applicant on the application.

The circumstances of the case indicate that the respondent Bank had filed two applications under Section 19 of the RDDBFI Act, namely, T.A. No. 81/2002 against one M/s. Vinay Rubbers and Others and T.A. No. 286/2002 against the appellants for the recovery of certain amounts. During the pendency of those applications the Bank took measures under Section 13(4) of the SARFAESI Act after issuing demand notices under Section 13(2) of the said Act and claiming Rs. 1,79,08,287/- from M/s. Vinay Rubbers and Rs. 91,52,198/- from the appellants. The appellants and M/s. Vinay Rubbers, both challenged the actions of the Bank by filing applications under Section 17 of the SARFAESI Act (S.A. Nos. 124/2008 and 125/2008). The learned Tribunal below disposed of both the applications filed by the Bank under the RDDBFI Act as well as the applications filed by the appellants and M/s. Vinay Rubbers under the SARFAESI Act by a common judgment and order dated 19.3.2008 and determining the amount of debt due in respect of both the loan accounts to Rs. 55 lacs and ordered for the payment of the said amount with interest within the given time. It was also directed that in case of default, the RC for the recovery of the entire determined amount along with contractual rate of interest shall be issued. The appellants and M/s. Vinay Rubbers filed an application (R.A. No. 19/2008) on 17.7.2009 for the review of the said order, but the Tribunal below dismissed the review application on 31.12.2010, The appellant has assailed the order dated 31.12.2010 as well as the earlier order dated 19.3.2008 by filing the instant appeal. The appellants also filed application for waiver of the deposit required to be made under Section 21 of the RDDBFI Act and this Tribunal, vide order dated 14.2.2011, directed the appellants to deposit 50% of the amount claimed through the demand notices issued under Section 13(2) of the SARFAESI Act for the entertainment of appeal. This Tribunal, vide order dated 1.3.2011, directed the respondent Bank to sell property bearing No. C-300, Sector-10, Noida as per the agreement of the parties.

The respondent Bank has filed the instant application stating that it had tried to sell the Noida property by conducting auction on 9.5.2011 but the auction had failed. It has also been pointed out that the appellants had also not brought any buyer and as such it is not possible for the Bank to sell the property and prays that the said property be got sold by Court's auctioneer. It has also been stated that the Bank had received an offer to purchase the Punjabi Bagh property for Rs. 6 lacs, which is its realizable value as against its fair market value of Rs. 8 lacs.

In its reply, the appellants have stated that they be permitted to sell Noida property and they would deposit the amount required for the entertainment of the appeal out of its sale proceeds, otherwise the property be sold through Court's auctioneer with a reserve price of Rs. 50 lacs which, according to them, was the current market value of the said property and the Court's auctioneer be directed to deposit the determined amount with the respondent Bank. They have also said that Punjabi Bagh property was not required to be sold.

The contention of Mr. Singh is that the appellant had agreed for the sale of Noida property, which is reflected from the order dated 1.3.2011, but since the property could not be sold by the Bank due to failure of the auction as no bid was received, therefore, the Bank be either permitted to sell that property again or it be sold through the Court's auctioneer. In this regard, Mr. Aggarwal has contended that the appellant had consented for the sale of Noida property as it was directed to deposit certain amount, vide order dated 14.2.2011, for the entertainment of the appeal but the said consent has rendered otiose once the order dated 14.2.2011 had, in fact, been recalled/modified by the order dated 15.5.2012 of this Tribunal and thus in the changed circumstances the said property could not be allowed to be sold on the basis of the consent order dated 1.3.2011.

I have considered the submissions of the parties' Counsel. The Tribunal below while disposing of T.A. No. 286/2002, by the order impugned, had directed the defendant/appellants to pay the determined amount within the given period with the condition that in case of default a recovery certificate (RC) for the recovery of the entire determined amount along with contractual rate of interest shall be issued. It is an admitted fact that the appellant/non-applicants had not paid any amount in pursuance of the said order dated 19.3.2008. The necessary consequence thereof would be that the RC should have accordingly been issued. If the same has been issued, it is for the Recovery Officer of the DRT concerned to proceed in accordance with law to recover the RC amount. In view of this I do not see any good reason to make any order for the sale of the mortgaged properties in exercise of the appellate jurisdiction under Section 20 of the RDDBFI Act during the pendency of this appeal. Since there appears to be no restraint order qua the order impugned, therefore, the Bank may proceed to recover its dues in accordance with law and as such the instant application being devoid of any force is liable to be dismissed. The application is accordingly dismissed. List the matter on 27.2.2013 for further proceedings.