Urban Co-Operative Bank Ltd vs Syndicate Bank Through Its Regional Manager & Others

Sudhanshu Dhulia, J

The petitioner before this Court is a bank, namely, Urban Co-operative Bank Ltd., which had extended the loan to the private respondent nos.4 & 5

and the property was mortgaged with the bank. Since the respondent nos.4 & 5 do not repay the loan, recovery proceedings were initiated against

them and it was found by the bank that the documents given to the bank regarding the mortgaged property are forged and fabricated documents.

The bank officials have also lodged the first information report, in which charge-sheet has already been filed. Meanwhile the bank official has come

to know that the same borrower i.e private respondent Nos.4 & 5 have also taken a loan from the Syndicate Bank/respondent no.1, where again they

have defaulted. The same property was mortgaged to Syndicate Bank, which is admitted by the bank. The first charge is created in favour of the

Syndicate Bank. The Syndicate Bank initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of

Security Interest Act, 2002 (from hereinafter referred to as the “Actâ€) for recovery of loan amount. Against which, the borrower approached the

Debts Recovery Tribunal, Dehradun and the auction was set aside vide order dated 27.08.2018. The Syndicate Bank has now approached the Debts

Recovery Appellate Tribunal at Allahabad, which has passed the following order on 16.10.2019:-

“Learned counsel for the appellant files reply to the application filed by the counsel for the intervener.

Heard the learned counsels for the parties on the application.

It appears that the applicant-Urban Co-operative Bank is claiming that the property in question was also mortgaged with the applicant-Bank, which

was subsequent to the mortgage created in favour of the appellant-Bank. The applicant-Bank was not a party in the proceedings before the Tribunal

below. The applicant has right to initiate independent proceeding against the appellants/respondents before the Tribunal below by filing the S.A. under

Section 17 of the SARFAESI Act, but he cannot be entertained directly at the appellate stage.

Accordingly, the application is disallowed. The applicant is free to take appropriate action before the proper forum.

Learned counsel for the respondents-Borrowers further seeks time to file reply.

Last opportunity is granted.

List this case on 11.12.2019 for filing reply.â€​

In the appeal filed by the Syndicate Bank, the petitioner moved an application for impleadment. The application has been rejected on ground that the

petitioner was never a party before the Debts Recovery Tribunal, Dehradun. Moreover as the petitioner has extended a loan on the same property

then they can very well initiate even fresh proceedings under the Act or can go to the Debts Recovery Tribunal.

Considering the facts and circumstances of the case, no interference is being called for in the matter, as the petitioner can always initiate an

independent proceeding under the Act against the borrower.

Consequently, the writ petition stands dismissed in limine.