Poornima Sharad Halkarni vs CENTRAL BANK OF INDIA on 17 January 2022

JUDGMENT

1. This is an appeal under Section 30 of The Recovery Of Debts Due To Banks And Financial Institutions Act, 1993 (for short “the 1993 Act”).

2. The appellant nos.1 to 3 are the LR’s of certificate debtor no.2 who died on 10th September, 2014. Respondent no.1 is the secured creditor. Respondent no.2 is the auction purchaser.

3. The present appeal is filed by the appellants challenging the order dated 21st May, 2015 passed by the Ld. Recovery Officer-II, DRT, Aurangabad thereby confirming the sale of the property bearing Land Gut no.220, admeasuring 36 R situated at Kumbhephal, Tq. & Dist. Aurangabad of the appellant and issuing the sale certificate to respondent no.2.

4. Grounds on which the appeal is filed:

(i) The appellants were not served with the demand notice in RP no.54/2006

(ii) No court fees has been paid to the application dated 4th April, 2009 (Exhibit-24) filed by the respondent bank seeking attachment of landed property Respondent no.1.

(iii) On 21st December, 2009 reserve price of the properties has been fixed. No separate reserve price has been fixed for two different properties.

(iv) Notice for settling the sale proclamation dated 28th November, 2014 is not published in Form No.62 of the Regulations of Practice, 2010.

(v) The Recovery Officer has not provided the copy of the valuation report as per Regulation 62(2) of the Regulations of Practice, 2010.

(vi) On 18th May, 2015 the bank has informed that amount of Rs.76,50,000/- has been received but has not informed the date and mode of payment received from the auction purchaser.

(vii) The bank has issued auction sale notice on 24th February, 2014 and fixed the sale on 29th March, 2014 the reserve price of Rs.100 lacs is fixed. The auction sale is not materialized and within five days another auction sale notice published in Maharashtra Times on 6th April, 2014 and fixed the reserve price of Rs.75 lacs.

5. The respondent no.1 Central Bank of India has appeared and filed its reply vide Exhibit-12 and denied all the contentions of the appellants. Moreover, the respondent no.1 bank has filed written notes of arguments vide Exhibit-17.

(i) The bank has filed the Original Application no.120/2004 which was allowed vide judgment dated 7th September,2006 and accordingly Recovery Certificate no.54/2006 has been issued.

(ii) The appellants have never intimated to the bank or the Tribunal about the death of Certificate Debtor no.2 Sharad Halkarni. On submission of advocate of the appellant no.1 in writ petition the bank has brought on record the LR’s of late Sharad on record in all the proceedings.

(iii) The appellant no.1 is wife of late Sharad and was also party in O.A. as it was her duty to intimate the death of her husband to the Tribunal.

(iv) The purchaser has deposited the purchase money within the stipulated period and Recovery Officer as rightly passed an order on Exhibit-146 and confirmed the sale and issued the sale certificate on 21st May, 2015.

6. The respondent no.2 auction purchaser appeared and filed its reply vide Exhibit-14. Moreover, the respondent no.2 has filed his brief synopsis at Exhibit-31.

(i) The respondent no1. bank has issued e-auction notice on 1st March, 2015 and reserve price fixed at Rs.75,00,000/-. Respondent no.2 has deposited the EMD amount of Rs.8 lacs on 6th April, 2015.

(ii) As respondent no.2 has declared a highest bidder for Rs.76,50,000, respondent no.2 has deposited 25% amount an amount of Rs.12,00,000/- on 10th April, 2015 through RTGS.

(iii) The respondent no.2 has further deposited balance 75% amount i.e. an amount of Rs.56,50,000/- through RTGS on 24th April, 2015.

(iv) Respondent no.2 has paid an amount of Rs.76,510/- as a poundage fees vide Demand Draft no.006447 dated 5th May, 2015 and complied all the terms and conditions of the e-auction sale.

7. During the pendency of appeal respondent no.2 purchaser has filed Writ Petition no.2985/2018 before Hon’ble High Court of Bombay Bench at Aurangabad which was later on disposed of by order dated 21st March, 2018.

8. The main issue involved is that the Recovery Officer & Bank Officer has not taken care and have sold the property in the name of deceased without making/issuing notice to LRs representing the property.

9. It is not the case of respondent no.1 bank that they are not aware of death. They are aware of death & also of LRs. A question which Bank is unable to answer is as to how the service to deceased was done. Only reply is we have served, how is not known. Bank submits that the notice was affixed on property, Tribunal fails to understand as to how the dead person could be served even by Affixation or for that matter even by publication.

10. The counsel for respondent no.1 bank submits that poundage fee is deposited late and as such Auction purchaser is not entitled for refund.

11. The Bank is trying to justify a wrong committed by its officers instead of gracefully admit the fault. Ample opportunities were given for settlement and the Appellants were ready and willing to pay the OTS amount but for some adamant officer of the Bank, all sorts of excuses are made. It appears that the attitude of present officers is if any mistake is there, the earlier officer will face the heat and why should we take a decision. The litigation is carried out at the public expenses which cannot be permitted.

12. It is clear and admitted case that the sale proclamation was issued in the name of the deceased person and Auction was carried out in the name of deceased person. Even the sale certificate is depicting the property in the name of deceased person.

13. The Bank has miserably failed to show that notices were ever served by all modes. Because in case the notices were served by hand then at least then Bank would have realized its mistake. It appears that the Bank Officer has just done a formality and failed to bring to the notice of Recovery Officer that the property should be represented by LRs or any successor in interest.

14. This litigation would have ended long back if the Bank had taken a pragmatic and truthful approach. The counsel for Bank has vehemently argued in favour of bank but has failed to prove as to how the service to a dead person was made. Repeated questions of this Tribunal met dead end every time with AR of Bank saying we served.

15. During the pendency of the appeal the respondent no.2 auction purchaser has filed interlocutory application no. 115/2018 and prayed for refund the purchase amount of Rs.76,50,000/- with accrued interest.

16. In view of the observations made hereinabove, I pass the following order.

ORDER

(A) Appeal no.10/2015 stands allowed. (B) The respondent no.1 bank is hereby directed to refund the purchase amount deposited by the respondent no.2 i.e. Auction purchaser within 30 days along with interest @ 8% simple from the date of deposit till actual payment. IA 115/2018 stands allowed to above extent. (C) Bank is at liberty to do the settlement with Appellants if they desire to end the litigation as per the OTS policy of the Bank. (D) Cost quantified in the sum of Rs.10,000/- (Rupees Ten Thousand only) is imposed on the Authorised Officer of the respondent no.1 bank to be paid to the Debts Recovery Tribunal Bar Association Aurangabad within 30 days from the receipt of this order. (E) All interim orders stand vacated & all interlocutory applications stand disposed off accordingly. (F) File be consigned to record room.

(Vimal Gupta) Presiding Officer Debts Recovery Tribunal, Aurangabad