Tride International (P) Ltd. And Ors. vs Bank Of Baroda And Ors.

Ranjit Singh, J

The Bank had issued notice under Section 13(2) of the SARFAESI Act to the appellant herein for recovery of Rs. 4.65 crores. The appellant herein impugned the action initiated by the Bank under the SARFAESI Act by filing SA before the Tribunal below. During the pendency of the SA, the appellant moved IA No. 496 of 2014 praying for direction to the respondent-Bank to maintain status quo of the property bearing Nos. 311 and 312, Block E, Pocket-16, Sector 8, Rohini, Delhi. The said application was rejected by the Tribunal below by imposing costs of Rs. 10,000/-. Aggrieved against this order, the present appeal is filed. The appeal is accompanied by an application (IA No. 807 of 2014) to seek waiver of the requirement of pre-deposit. The Counsel for the appellant would submit that the property under charge with the Bank has been sold for a sum of Rs. 3.50 crores, which fact is not in dispute. The Counsel for the appellant further submits that a sum of Rs. 28 lacs has been deposited by the appellant as well and, thus, against the notice amount of Rs. 4.65 crores, an amount of Rs. 3.78 crores has been realized by the Bank.

The Counsel appearing for the Bank has not disputed the amount realized/deposited as noted above. The Counsel for the appellant would submit that this would suffice requirement of pre-deposit and so the appeal be heard on merits.

This prayer, however, is strenuously opposed by the Counsel for the Bank who would submit that an amount of Rs. 3.50 crores realized from the sale of the property which ought not to be taken as an amount deposited by the appellant. As per the Counsel, this amount cannot be taken into account to consider the requirement of pre-deposit. The Counsel for the Bank would submit that prior to the sale of the property the Bank had security in the form of this property to realize this amount. Once the property has been sold, the security is lost. Full amount of the Bank has not been realized even after sale of the property and even after considering the deposit made by the appellant. The Counsel states that even after taking note of the deposit made by the appellant, a substantial amount is still due from the appellant as the Bank has filed an OA claiming over Rs. 5 crores. The Counsel for the Bank accordingly would submit that the appellant at least is required to make a deposit of 50% of the remaining which is yet to be realized.

Once the property which was taken as security has been sold and the amount realized therefrom has been credited in the loan account of the appellant, it would be highly unfair, unreasonable and unjust not to take this amount at least for the purpose of pre-deposit which is required to be made to maintain the present appeal directed against the order passed by the Tribunal below declining the interim prayer. The submissions made by the Counsel for the respondent-Bank that the appellant in such circumstances will have to make a deposit of 50% of the remaining amount which is yet to be recovered after sale of the property is a submission made ignoring the fact that the amount realized is from a sale of property of the appellant. The respondent-Bank has accepted this property as security sale of which has not been able to satisfy the loan amount fully. The responsibility for accepting security which has led to part realization would be of the person who advanced loan by accepting this property as security. If the security is accepted as mortgage, which is not equal to the amount of loan advanced, the respondent-Bank will have to find how it was done and pin down the person who has accepted this property as security.

I would, therefore, deem it appropriate to direct the Bank to hold an inquiry in this regard as to who was the person responsible for accepting security from which the Bank has not been able to realize the full amount advanced to the appellant and to submit the inquiry report for perusal of this Tribunal even if this appeal is being disposed of.

Otherwise, I am satisfied that the appellant has fully satisfied the requirement of pre-deposit to maintain the appeal. The waiver application (IA No. 807 of 2014) is accordingly disposed of by directing that the appellant need not make any further deposit to maintain the appeal.

Let the appeal be numbered and on having been numbered as Appeal No. 97 of 2015, it is taken up for hearing today itself with the concurrence of the Counsel for the parties.

The grievance of the appellant is only against the order whereby his interim prayer for staying further action under the SARFAESI Act or for sale of the property was declined. Once the property has already been sold, and as stated by appellant, possession has also been handed over to the auction purchaser and sale certificate issued, nothing would survive in the present appeal.

The Counsel for the appellant makes a grievance that the auction purchaser is in the process of demolishing the property. The appellant would be at liberty to take any appropriate action in this regard in the SA pending before the Tribunal below. The present appeal is rendered infructuous and is disposed of as such. The order in regard to costs is modified to hold that the same be deposited in the account of DRT Bar Association, Delhi.