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Judgment
Ranjit Singh, J
Aggrieved against the order passed by the Tribunal below dismissing the S.A. filed by the appellants, they have filed the present appeal. The impugned order dismissing the S.A. passed on 17.4.2015 is second round of litigation initiated by the appellants who had earlier filed S.A. No. 190/2011 which was got dismissed as withdrawn on 2.12.2011. The Tribunal, while dismissing the S.A., has raised question about the maintainability of the present S.A. being barred by res judicata. Having so observed, the Tribunal has not dismissed the present S.A. on this ground, but has considered the pleas on merit while passing the impugned order.
This is a case where the appellant No. 1 is a partnership concern and had enjoyed credit facilities of Rs. 56 lac which were enhanced to Rs. 1.30 crore with (CC (Hyp) of Rs. 85 lac, SME Credit Facility of Rs. 15 lac, SEM Car Loan of Rs. 10 lac and Term Loan of Rs. 20 lac. It is also noticed that this was further enhanced to Rs. 1.98 crore.
When the appellants were unable to maintaining financial discipline, the Bank had issued notice under Section 13(2) of the SARFAESI Act sometime in October 2010 demanding a sum of Rs. 1,95,27,960.58. Immediately after receipt of notice, the appellants decided to dispose of residential house and also sought permission from the Bank for sale of property mentioned at Sl. No. 1 of the notice under Section 13(2) of the SARFAESI Act. Though the appellants had submitted their reply while responding to the notice under Section 13(2) of the Act, but the Bank failed to deal with the same and issue notice under Section 13(4) of the Act on 28.2.2011 The appellants sent a reminder to the Bank for not replying to the objection filed by the appellants under Section 13(3A) of the Act. As can be made out from the proceedings, one of the properties mortgaged was sold and the sale was intimated to the Bank. Perhaps this sale was effected on the property being released by the Bank. As per the appellants, the entire sale consideration of Rs. 1.13 crore was deposited with the Bank. The outstanding balance thus was reduced to Rs. 82,27,960/-. The appellants claim to have approached the Bank seeking certain clarification. The Bank forcibly entered into factory premises and took over the possession of the same.
Aggrieved against the action of the Bank, the appellants filed an S.A. The appellants also challenged the sale notice of the property. The Bank has filed its response to the S.A. raising a plea of S.A. being barred by time. It is urged that the possession was taken on 24.8.2011 whereas the S.A. was filed on 9.4.2012, with delay of 228 days.
The Tribunal below has also taken note of the fact that the appellants had earlier filed S.A. No. 190/2011 on the same cause of action. This S.A. had been got dismissed as withdrawn on 2.12.2011 with certain direction to the appellants for deposit of amount within a stipulated period. The copy of the order dated 2.12.2011 is on record. The Counsel for the appellants had offered to deposit Rs. 25 lac on or before the time and date of auction with further prayer to deposit Rs. 25 lac within three months and, thereafter, subject to restoration of possession of the property, the balance outstanding amount was to be deposited within six months from the date of the order. It was prayed that the S.A. filed may be dismissed as withdrawn.
The Tribunal below, in order to facilitate recovery, directed that on deposit of Rs. 25 lac on or before the time and date of auction, the auction would not be carried out by the respondent-Bank and on payment of another Rs. 25 lac within three months, the respondent-Bank would restore the possession of the property in question to the appellants who were then to deposit the remaining amount within six months.
The appellants had deposited the initial amount of Rs. 25 lac, but, thereafter, did not comply with the requirement of further deposit as undertaken by them. They, thus, succeeded in stalling the auction which was fixed. Later, the appellants filed an M.A. in this S.A., which they withdrew, and subsequently filed the present S.A. to challenge the notice for sale, etc.
The Counsel for the appellants would explain that the appellants had moved the M.A. for seeking revival of the S.A. on the ground that they had never made submission to withdraw the same. During the pendency of this application, the present S.A. No. 98/2012 came to be filed and hence the M.A. was rendered infructuous. Accordingly, the Counsel would contend that the present S.A. cannot be taken to be barred by the principle of res judicata.
During the course of hearing of the present S.A. the Tribunal below directed the Bank to first recover the amount from the sale of the movable assets and that the Bank could, thereafter, go for the other secured assets. Aggrieved against this order, the appellant had approached the High Court where the High Court directed the appellants to clear all the dues within 2 to 6 months. The appellants were also directed to deposit Rs. 25 lac, but they failed to do so. The High Court accordingly withdrew the interim order earlier passed. Thus, it is clear that the appellants despite grant of various opportunities have not been able to make payment of the dues and, in fact, have been abusing the process of the Tribunal and the Court, to delay the recovery.
The conduct of the appellants before this Tribunal has been similar. When this appeal came up for hearing on 22.7.2015, the appellants sought time to make deposit of Rs. 40 lac. On request, the case was adjourned to 24.7.2015. The Counsel again requested for further time and the case was adjourned to 26.8.2015. Still, the appellants did not bring the promised amount of Rs. 40 lac. The Counsel prayed for two more weeks time to do the needful. This Tribunal did not feel inclined to grant further time but, still, in the interest of justice, one week more time was allowed for making the deposit, observing that to be the last opportunity. Still, the Counsel for the appellants came up with the prayer for four weeks more time to make arrangement. This Tribunal had allowed this prayer as well.
Today, the Counsel is having cheque for a sum of Rs. 25 lac, which is dated 16.10.2015. The Counsel submits that the cheque be accepted and the appellants would ensure that it is honoured when presented after October 16, 2015. The Counsel states that if the cheque is dishonoured, then appropriate legal action can be initiated against the appellants. It is thus clear that the appellants, despite opportunity, have not been able to make arrangement to pay the amount. This has been the conduct of the appellants throughout. At various stages, they have succeeded in stalling the Bank to recover the amount, by making misleading statement. In the year 2012, the appellants had made a statement before the High Court to deposit Rs. 25 lac and even after expiry of three years they could tender only a cheque of Rs. 25 lacs which is post-dated. The appellants, obviously, are not interested in making payment and are only interested in delaying the recovery pending for quite some time now.
The main stress of the Counsel for the appellants to press this appeal now is only that the appellants are interested in discharging the liability standing against them. This is only expressed in words but has not been followed by any concrete action. This has been the conduct of the appellants, as has been noticed, for all this while. Accordingly, I am not inclined to consider this request and to pend this appeal further.
There is no worthwhile submission made by the Counsel for the appellants otherwise to challenge the impugned order. The plea that appellants have been able to pay some amount would be, to an extent, misleading as this amount was paid only when one mortgaged properties was released and was permitted to be sold. Obviously, the appellants are either not having resource to make this payment or not interested in discharging the liability. The appellants have been able to mislead various fora by expressing their intention to discharge the liability, which now needs to be checked. I find no merit in any of the pleas raised by the appellants. The present appeal is accordingly dismissed. The Bank would be at liberty to proceed in this case in accordance with law to recover its dues. The office objection regarding non-filing of application to seek wavier of pre-deposit need not to be dropped as the Bank was able to recover a sum of Rs. 1.13 crore from the sale of the mortgaged property. Since the appellants have been heard on merit, the delay of 59 days in filing the appeal shall be deemed to have been condoned.