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Judgment
THE APPELLATE TRIBUNAL:
Instant Appeal has been preferred against the judgement and order dated 21.04.2023 passed by Learned DRT Guwahati in S.A. 13 of 2020 Sri Ranjit Saha Vs Authorized Officer, Tripura Gramin Bank & Anr. , whereby Learned DRT dismissed the S.A. filed by the Applicant under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 Act (SARFAESI ACT) (hereinafter referred as to as the 'Act').
As per pleadings of the parties an application under Section 17 of the SARFAESI Act is filed by the Appellant claiming himself to be the borrower of the Respondent Bank for an amount of Rs. 30 lacs, drawn on 31.03.2015. His father namely Sri Bibhas Saha was the guarantor and the mortgagor of the secured assets. Account was classified as NPA on 29.12.2016 and demand notice under Section 13(2) of the Act was issued on 30.12.2016 demanding an amount of Rs. 29,10,716.00. An order of the District Magistrate under Section 14 of the Act was also obtained by the Secured Creditor on 17.01.2018 which was not in accordance with law as alleged. A subsequent order was also passed by the District Magistrate. The possession was taken over by the Bank on 11.12.2018 from the guarantor.
A Writ Petition No. 1242 of 2018 was filed by the Appellant before the Hon'ble High Court of Tripura and order dated 07.01.2019 was passed directing the Appellant to deposit an amount of Rs. 10.00 Lacs which was paid. On 05.08.2019 Hon'ble High Court of Tripura directed the Appellant to make full payment within two weeks and the Appellant also undertook to repay the balance amount within five months from 05.08.2019. Writ Petition was disposed of with a liberty to the Appellant to approach the DRT. Sale notice dated 20.02.2019 was issued by the Bank and the sale was conducted on 29.03.2019 wherein one Smt. Shilpi Roy Das was a successful bidder. Sale was challenged on the ground that it was conducted while Writ Petition was pending before the Hon'ble Tripura High Court. In the statement of account, the due amount was nil as on 05.12.2019. Challenge was mainly made on the ground of classification of NPA as illegal. No time was given to regularize the account as the notice under Section 13(2) of the Act,2002 was issued on the next day of the classification of account as NPA. Demand notice was not published in two newspapers. Details of the amount payable was not mentioned in the notice under Section 13(2) of the Act,2002.
Respondent Bank filed the response stating that the Appellant herein has no locus standi to file the application under Section 17 of the Act as he is the borrower while the mortgage property stands in the name of the mortgager Sri Bibhas Saha. Mortgage Property has already been sold. No representation against the notice under Section 13(2) was made. Notice under Section 13(4) was issued on 26.04.2018. Possession notice was issued on 11.12.2018 which was not challenged.
In the Writ Petition before the Hon'ble Tripura High Court vide order dated 07.01.2019 one week time was allowed to deposit Rs. 10.00 Lacs which was not complied and the sale notice was issued on 20.02.2019 which was duly published in the newspapers. Property was E-Auctioned in favour of the highest bidder who complied the provisions of Rule 9(3) and 9(4) of the Rules,2002 i.e. an amount of Rs.4,80,000.00 was deposited which is more than 25%.
75% of the remaining amount was also deposited by the Auction Purchaser. Hon'ble High Court of Tripura was informed that an amount of Rs. 14,62,023/- is due. Thereafter an amount of Rs. 3,20,000/- was deposited between 02.12.2019 and 05.12.2019 and an application for handing over the mortgage property to the mortgager was moved but since the amount was still due the same was not considered.
Learned DRT after considering the submission made by the Learned Counsel for the parties held that the auction of the secured assets was undertaken in accordance with law and dismissed the SARFEASI Application.
I have heard the Learned Counsel for the Appellant as well as Secured Creditor and the Auction Purchaser and perused the records.
Learned Counsel for the Appellant would submit that the Appellant is challenging the sale on the ground of violation of Rule 8(7)(b) and Rule 9(3) and 9(4) of the Security Interest (Enforcement) Rules, 2002. Learned Counsel would submit that the requirement of Rule 8(7) of the rules was not complied in the notice which vitiates the sale notice. Learned Counsel for the Appellant would further submit that no amount was due against the Appellants as per the statement of account dated 05.12.2019.
Learned Counsel for the Appellants would further submit that compliance of Rule 9(3) was not made by the Auction Purchaser as the 25% of the amount was not deposited on the next day of the auction i.e., on 30.03.2019 while the auction was conducted on 29.03.2019. It is further submitted that even compliance of Rule 9(4) was not made as the remaining 75% amount was deposited on 12.04.2019 while there was no interim order staying the proceedings. First status-quo order was passed by the Hon'ble High Court on 10.12.2019.
Per contra Learned Counsel for the Respondent Bank would submit that the total amount due was not paid by the Appellants. Learned Counsel has placed reliance upon clause 3(4) of the RBI Circular DOR.STR.REC.4/21.04.048/2022-23 dated April 1,2022. It is submitted that despite depositing the amount of Rs. 3,20,000/- there was total due of Rs. 11,42,023.00 as per the statement dated 29.11.2019. Vide Letter dated 07.12.2019 mortgager Shri Bibhas Saha was intimated that an amount of Rs. 11,42,023/- is still pending as a updated interest including expenditure, legal charges etc. against the said loan.
Learned Counsel would further submit that no plea for violation of Rule 9(3) and 9(4) was taken by the Appellants in the SARFAESI Application filed under Section 17 of the Act. Hence, this issue could not be looked into in the appeal.
Learned Counsel would further submit that the Appellant has no locus standi to file the S.A. as he is the borrower and challenging the sale of mortgage property wherein mortgager and guarantor was his father who didn't file the application under Section 17 of the Act. Reliance is placed upon the Division Bench judgement of Hon’ble High Court of Telangana at Hyderabad Division Bench in M.S. Construction and Another Vs IDBI Bank and Another 2021 SCC OnLine TS 1492.
Learned Counsel would further submit that the order of the Hon’ble Tripura High Court dated 07.01.2019 was not complied by the Appellants, hence they are not entitled for any relief.
Learned Counsel for the Auction Purchaser has drawn my attention towards the order of Hon’ble Supreme Court in SLP No. 1017 of 2020 M/s. Ranajit Saha Vs Tripura Gramin Bank which was filed against the order dated 10.12.2019 wherein the SLP was dismissed with liberty to the Petitioner to approach DRT within 30 days. In the order dated 10.12.2019 Hon’ble High Court has given liberty to the Appellants to approach the DRT within 4 weeks. In the Interim order Hon’ble High Court has also recorded that an amount of Rs. 13,05,000.00 shall be deposited by the Appellants in pursuance of the order dated 05.08.2019. Learned Counsel for the Auction Purchaser would further submit that the S.A. was filed by Sri Ranajit Saha, borrower, only but the appeal is filed by three Appellants namely, Sri Ranajit Saha, Sri Bibhas Saha, Sri Lipon Chandra Saha even without taking any leave from the court. Further it is submitted that the appeal itself is bad for misjoinder of parties as Sri Bibhas Saha and Sri Lipon Chandra Saha were not applicants in the S.A. filed under Section 17 of the Act.
At the very outset it is to be observed that the appeal itself is bad from misjoinder of parties although when the issue of misjoinder was raised by the Learned counsel for the Auction Purchaser, Appellant Counsel prayed for deletion of the names of Sri Bibhas Saha and Sri Lipon Chandra Saha, but right from filing of the appeal till the arguments, no such prayer was made by the Appellants. Hence the appeal itself is misconceived and bad for misjoinder of parties. However, if we go through the memo of appeal along with the application under Section 17 of the Act, we found that Sri Bibhas Saha is the mortgager and is also father of Appellant No. 1 namely, Sri Ranajit Saha. It is further revealed from the records even before the Hon'ble High Court that Sri Bibhas Saha joined appellant Sri Ranajit Saha in filing the petitions but he didn't join the Appellant Sri Ranajit Saha in filling the application under Section 17 of the Act. Although an argument is placed by the Learned Counsel for the Bank that the application under Section 17 itself is not maintainable as the SARFEASI applicant Sri Ranajit Saha is a borrower who is challenging the sale of the mortgager i.e., Sri Bibhas Saha who is father of Sri Ranajit Saha. Learned Counsel has placed reliance upon the judgment of Hon'ble High Court of Telangana at Hyderabad M.S. Construction and Another Vs IDBI Bank Limited & Another (supra) but the same is not applicable in the facts of the present case. In that case the Hon'ble High Court in Para 6 held that since the owner of the property, who has offered the said property as guarantee for the loan availed by the petitioners, has not come forward to challenge the taking of physical possession of the property by the bank. The borrower has no locus standi to challenge the same. However, in the present case the challenge is made to the E-Auction sale. Section 2 (f) of the SARFAESI Act defines 'borrower' which includes a person who has given a guarantee or created any mortgage. In the present case since the challenge is made to the E Auction sale notice as well as the sale, the judgement relied upon by the Bank Counsel is not applicable. Securitisation Application under Section 17 filed by the borrower i.e., Sri Ranajit Saha is maintainable.
Main challenge to the sale has been raised by the Appellant Counsel on the ground of violation of Rule 9(3) and 9(4) of the Rules,2002. Learned Counsel has placed reliance upon the judgement DRAT Kolkata in Misc. Appeal 34 of 2024 Gopal Roy Vs Punjab National Bank decided on 12.08.2024. And Appeal No. 08 of 2025 M/s. Muneru Industries Private Limited Vs M/s. Apsara Constructions decided on 14.01.2026. Learned Counsel would submit that there was a violation of Rule 9(3) and 9(4), accordingly the sale itself is vitiated.
Per Contra Learned Counsel for the Bank would submit that no such plea is taken by the Appellant in the Application under Section 17 of the Act. Hence, at this stage they cannot be permitted to raise a new plea which is not a part of the pleadings.
I have given careful consideration of the pleadings filed by the parties before the DRT. No plea for violations of Rules 9(3) and 9(4) of the Rules,2002 was taken by the Appellant in the application under Section 17 of the Act. At this stage Learned Counsel for the Appellant would submit that it was a legal plea which can be raised at any stage of the proceedings. No doubt, a legal plea can be raised at any stage of the proceedings but the issue of violation of Rule 9(3) and 9(4) of the Rules,2002 is not a pure question of law rather it is a mix question of law and facts. Firstly, facts have to be gone through as to whether amount was deposited within a stipulated time or not. Thereafter issue of violation of Rule 9(3) and 9(4) of the Rules,2002 would arise. Hence it was not a pure question of law which can be raised at any stage of proceedings.
In Bachhaj Nahar Vs Nilima Mandal & Another [(2008) 17 SCC 491] it was held in paragraphs 12 and 13 that:
'12. The object and purpose of pleadings and issues is to ensure that the litigants come to trial with issues clearly defined and to prevent cases being expanded or grounds being shifted during trial. Its object is also to ensure that each side is fully alive to the questions that are likely to be raised or considered so that they may have an opportunity of placing the relevant evidence appropriate to the issues before the court for its consideration. This court has repeatedly held that the pleadings are meant to give to each side intimation of the case of the other so that it may be met, to enable courts to determine what is really at issue between the parties and to prevent any deviation from the course which litigation on particular causes must take.
13.The object of issues is to identify from the pleadings the questions or points required to be decided by the courts so as to enable parties to let in to seek a particular relief, are mot found in the plaint, the court cannot focus the attention of the parties, or its own attention on that claim or relief, by framing an appropriate issue. As a result, the defendant does not get an opportunity to place the facts and contentions necessary to repudiate or challenge such a claim or relief. Therefore, the court cannot, on finding that the plaintiff has not made out the case put forth by him, grant some other relief. The question before a court is not whether there is some material on the basis of which some relief can be granted. When there is no prayer for a particular relief and no pleadings to support such a relief, and when the defendant has no opportunity to resist or oppose such a relief, and when the defendant has no opportunity to resist or oppose such a relief, if the court considers and grants such a relief, it will lead to miscarriage of justice. Thus, it is said that no amount of evidence, on a plea that is not put forward in the pleadings, can be looked into to grant any relief."
Further, in a recent judgment of the Hon'ble Supreme Court in Manjusha & Others Vs United India Assurance Company Limited & Another (Special Leave Petition (C) No. 5885 of 2019) [2025 SCC OnLine SC 1512]. Hon'ble Apex Court held that pleadings and proof of such pleadings; by valid evidence led, is the crux and core of any adjudicatory process. Trite is the principle that there can be no proof offered without specific pleadings.
In view of the law laid by the Hon'ble Apex Court, when a fact is not pleaded, it cannot be proved. Hence, the issue of violation of Rule 9(3), 9(4) and 8(7)(b) of the Rules, 2002, since it has not been pleaded by the Appellants in the Application under Section 17 of the Act, cannot be now raised by the Appellants and cannot be adjudicated.
In the Writ Petition No. 1242 of 2018, Hon’ble High Court at Tripura vide order dated 07.01.2019 directed the Appellant to deposit an amount of Rs. 10.00 Lakhs within a week. Vide order dated 05.08.2019, the Hon’ble High Court allowed five months’ time to repay the loan amount with a further direction to deposit Rs. 2,00,000.00 within a period of two weeks. Learned Counsel for the Appellant would submit that in view of the statement of account on 05.12.2019 the balance account of the Appellant was shown as nil which proves that Appellant has already made the payments. Hence, there were no dues against the Appellants. However, Learned Counsel for the Respondent bank would submit that an amount of Rs. 11,42,000.00 was due against the Appellant, which was recorded in the order of the Hon’ble High Court dated 10.12.2019 in WP(c) No. 1242 of 2018. However, the Hon’ble High Court has given the liberty to the Appellant to file an application under Section 17 of the Act before the DRT which order was challenged before the Hon’ble Supreme Court in SLP No. 1017 of 2020. SLP was dismissed on 20.01.2020. Learned Counsel for the Respondent Bank would submit that in the statement of account dated 05.12.2019 although the balance was shown as nil but it was in view of the RBI Circular No. DOR.STR.REC.4/21.04.048/2022-23 dated 01.04.2023 Clause 3.4 which reads as under
“On an account turning NPA, banks should reverse the interest already charged and not collected by debiting profit and loss account and stop further application of interest. However, banks may continue to record such accrued interest in a Memorandum account in their books. For the purpose of computing Gross Advances, interest recorded in the Memorandum account should not be taken into account. In Girish Chandra Tiwari Vs UCO Bank 2014 SCC OnLine Allahabad 9134: (2015) 1 BC 157 (DB): AIR 2015 (NOC 428) 158 : (2015) 1 Allahabad LJ 503 : (2014) 125 RD 288 Division Bench of the Hon'ble High Court of Allahabad considering the aforesaid clause held that
"From a perusal of the aforesaid provision, it is clear that charging of interest on an asset declared at NPA does not cease rather, for the convenience of the bank and particularly for the accounting purposed the amount of interest due in the loan account declared NPA, is not shown in the loan account and details thereof are to be maintained in a separate account. Since the interest accrued to the bank is treated as income for the bank, therefore, after the loan is declared as NPA, the recovery of interest is not likely to take place, as such the amount of interest due is not reflected in the loan account. The interest in the loan account nevertheless remains payable under the loan agreement and the circulars of the Reserve Bank of India, and the bank would be clearly entitled to realise the interest from the borrower once the loan account is regularized".
The account of the Appellant was classified as NPA thereafter it was shown nil on 05.12.2019. In view of the circular referred above since the recovery of interest is not likely to take place as such the amount of interest due is not reflected in the loan account. Interest in the loan account nevertheless remains payable under the loan agreement and the circulars of the Reserve Bank of India and the bank would be entitled to realise the interest from the borrower once the account is regularized. Hence, the Appellant cannot take any advantage of the entry dated 05.12.2019. Even in the Writ Petition No. 1242 of 2018 before the Hon'ble High Court of Tripura, it was submitted by the Bank Counsel that an amount of Rs. 11,42,000.00 was due which was adjudicated by the DRT and rightly adjudicated by the DRT.
On the basis of the discussions made above we are of the considered view that the Learned DRT has rightly arrived at its findings. No interference is called for in the impugned judgment. Appeal lacks merit and is liable to be dismissed.
O R D E R
Appeal is dismissed. Impugned Judgement and order dated 21.04.2023 passed by Learned DRT Guwahati in S.A. No. 13 of 2020 is confirmed.
File be consigned to Record room.
Copy of the Judgment/Final Order be uploaded in the Tribunal's Website.
Order signed, dated and pronounced in open Court.
Learned Counsel for the Appellant prays for stay of the judgement. Having considered the submissions and the record, I do not find any ground to stay the operation of the order.