State Bank Of India vs Neelkanth Star Multiple Network And Ors.

Ranjit Singh, J

Aggrieved against the order passed by the Tribunal below allowing the SA of the respondents herein with a direction to the Bank to restore possession of the secured assets to the respondents on the condition to deposit the balance amount by the respondents within 30 days, the Bank has filed the present appeal. The respondents herein had filed this SA to challenge the action initiated by the Bank under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, SARFAESI Act). The grounds raised in the SA were that the property mentioned in the notice under Section 13(2) of the SARFAESI Act and possession notice did not relate to the respondents. Plea further was that the possession notice dated 22nd May, 2009 had not been served upon the respondents in terms of Rules 8(1) and 8(2) of the Security Interest (Enforcement) Rules, 2002 (for short the Rules).

The appellant Bank had filed response pointing out that plot No. 217, Raura Sector-2, Bilaspur, Himachal Pradesh, measuring 169.13 sq. yards was mortgaged by Smt. Sita Devi respondent No. 5. As per the Bank, there was no difference in the description of the property in the notices under Sections 13(2) and 13(4) of the SARFAESI Act. The Bank had also pleaded that if the Bank had proceeded against the property which did not belong to the respondents, then they may not have any concern with he same.

While responding to the plea that the possession notice had not been served or delivered to the respondent, it was pleaded that even permission had been obtained under Section 14 of the SARFAESI Act to take possession of the property in question when respondent No. 5 had refused to accept possession notice or to deliver possession.

The Tribunal below has held that the publication of the notice in vernacular language in terms of Rule 8(2) of the said Rules was not on record. This view was formed on the ground that the publication made in Amar Ujala and Dainik Jagran was in English language but these newspapers are Hindi newspapers. Possession notice on this ground was held not sustainable.

Having so found, the Tribunal below had gone on to notice that the respondents had paid substantial amount after issuing notice under Section 13(2) of SARFAESI Act. The Tribunal directed the Bank to supply up-to-date statement of account to the respondents within 15 days. On receipt of the statement of account, the respondents were directed to deposit the balance outstanding amount within 30 days. If the respondents failed to comply with the direction to make payment, the Bank was given liberty to proceed for recovery of the amount in accordance with law. While issuing such direction, the Bank was directed to restore possession of the secured assets within 30 days.

While issuing notice, operation of that part of the order requiring the Bank to handover possession was stayed.

Mr. S.L. Gupta appearing for the appellant Bank states that the symbolic possession of the entire property is with the Bank, which is also in physical possession of this part of the property, The Tribunal below may have found that the possession notice was not sustainable but the effective direction by the Tribunal below was for the respondents to pay the balance amount on being so intimated to them by the Bank.

When this case came up for hearing before this Tribunal after completion of the pleadings, the Counsel for the respondents was asked if he was ready and prepared to make the payment of the balance amount. He agreed to pay but, at the same time pleaded that the Bank had not disclosed the outstanding amount to him. The Counsel for the Bank had countered this plea by pointing out that the balance amount was duly intimated to the respondents through statement of account.

In order to resolve the controversy, the Bank was directed to file an affidavit to disclose the balance amount due. The Bank has accordingly filed an affidavit of Mr. Suresh Kumar Negi, Chief Manager, State Bank of India, Main Market, Bilaspur. In this affidavit, the Chief Manager has stated that the statement of account was delivered as per the direction of the Tribunal to Shri Ajay Divedi, partner of the concern on 5th April, 2014 and receipt in this regard is annexed with the affidavit. This receipt shows that the total amount due as intimated is Rs. 47,53,927/-. The fact that this intimation has been given to the respondents is not disputed by their Counsel, but he would plead that the Bank must provide statement of account about the balance amount due.

I find that the respondents are just adopting dilatory tactics and are not serious or interested in discharging the liability of the outstanding amount which they were required to deposit within 30 days in terms of the order passed on 6th March, 2014. Even today during the course of hearing, opportunity was given to the Counsel for the respondents to deposit this payment within 30 days for which he initially pleaded for three months time but it was not found acceptable and conducive to the speedy recovery. Thereafter, the Counsel for the respondents pleaded for time to have instructions. While declining this prayer, the appeal was heard and is being disposed of. For the reasons as aforementioned, direction issued by the Tribunal below to the Bank to handover possession of the property within 30 days cannot be sustained unless the respondents pay the outstanding amount. It would not be fair to allow the borrower to take possession of the mortgage property back from the Bank. Accordingly, the direction issued by the Tribunal below requiring the Bank to handover possession to the respondents is set aside. The order passed by the Tribunal below allowing the SA with these conditions therefore cannot be sustained. The impugned order, therefore, is set aside, The Bank will be entitled to recover the outstanding amount in accordance with law.

The appeal is accordingly allowed.