MIR AZMAT ALI S/O MIR AKBAR ALI vs ASSET RECONSTRUCTION CO (INDIA) LIMITED (ARMS) on 4 February 2021

JUDGMENT

1. This Misc. Application has been filed for direction to the respondent nos.1 & 2 to pay the interest of the amount deposited by them under an auction. The auction of the property was advertised on 30th January, 2011 and auction was conducted on 4th March, 2011. An amount of EMD of Rs.90,000/- was deposited on 3rd March, 2011 and another sum of Rs.1,92,500/- was deposited on 18th March, 2011. Thereafter the litigation was there and after final disposal of the writ petition balance 75 % amount of Rs.9,47,500/- was paid on 23rd March, 2013, thus total Rs 12,30,000/-.

The sale was cancelled by my predecessor by order dated 14th September, 2015 who ordered as under: The respondent no 3 shall be entitled for refund of the amount deposited by it with Respondent no 1. It nowhere specify or order for refund but only says “entitled for refund”.

The learned counsel for the applicant argued that his application cannot be treated as review of that order and he is entitled for the entire amount along with the interest on the said amount. The learned counsel for the respondent no.1 has vehemently opposed the prayers of the applicant saying that as per section 5(A)(2) the limitation for filing review application is from the date of the order and said date expired on 30th October, 2015 and the application has been filed on 22nd February, 2016.

The learned counsel for the applicant submitted that he was under impression that the money will be refunded with the interest but he received back only Rs.12,30,000/- on 11th February, 2016 vide Demand Draft dated 28th January, 2016. All this time the money was with the respondent. He submits that even if it is taken as review application, the cause of action starts only from the 11th February, 2016 when for first time he came to know about the amount.

The learned counsel for the respondent no.1 submits that without any application there can’t be any condonation of delay more so under section 5(A) no condonation of the delay can be permitted.

In my opinion any application filed under RDB Act (RDDBFI Act) the Tribunal have got ample power to condone the delay. Now it is to be seen that this is a really an application for review of the order and if the parties asking the interest that is a separate cause of action or not.

In the opinion of the Tribunal the cause of action for asking for the interest has arisen only on 11th February, 2016 and the present Misc. Application moved on 22nd February, 2016 will be well within limitation even if it is for demanding the interest on the amount. In the public action the borrowers,

[APK] (MA No.04/2016) Page 4 of 5 guarantors, mortgagors may opt all sort of submissions and try to delay the auction process in which the innocent buyers/purchasers suffer. If such things continue then there will be no bidders for the properties in public auction. This is one of the cases, where the borrower made various adventures and ultimately succeed in obtaining the order dated 14th September, 2015 for setting aside the sale but never complied with the orders of this Tribunal. The Writ Petition before Hon’ble High Court was withdrawn on the undertaking that all dues will be cleared by 29.06.2012 but not done. Again, as directed by this Tribunal to clear the dues within 60 days but not complied. The Respondent FI should have come back to the Tribunal and intimated noncompliance and could have sought recall of orders of cancellation of sale.

Generally, in the auction notices under securitization there is a clause that no interest shall be paid on the EMD for the intervening period. But in this case the entire sale consideration was paid. Even presuming that no interest is payable on Rs.2,82,500/- which was deposited till 18th March, 2011 but it will be till full consideration was paid.

The efforts were made to reconcile between the applicant and the respondents however, the respondents have categorically denied that they will not pay any interest because the amount was kept in current account but no statement of account is filed to show that. The respondents have kept that amount with them. it was their duty in view of the litigation to keep the amount under fixed deposit which is done by all the financial institutions and public sector banks. It is observed in orders dated 07.01.2021 as under:

In this context it was observed that amount of Rs.4.5 Lacs was deposited by the SA applicant and which was ordered to be given to the Respondent-ARC retail loan portfolio 001 B-Trust and as such total amount of Rs.5,08,762/- was given to them by DRT. It is very clear that the said amount was paid with the interest amounting to Rs. 58,762/-. It is really not acceptable that ARC take money from DRT with interest and refuses to give interest to Auction purchaser.

In view of this, I hold that the applicant shall be entitled for interest on amount of Rs.12,30,000/- from 23rd September, 2013 till 11th February, 2016 when the applicant received the Demand Draft. The learned counsel for the applicant requests a time frame to set for the payment of this interest which is opposed by the learned counsel for the respondent no.1 saying that they have to be given time till appeal period.

In view of the observations hereinabove, the Misc. Application filed by the applicant deserves to be granted. Hence, I pass the following order:

ORDER

(A) Misc. Application No.04/2016 is allowed. (B) The respondent FI is directed to pay to the applicant the interest @ 9% simple on amount of Rs.12,30,000/- from 23rd September, 2013 till 11th February, 2016 when the applicant received the Demand Draft within two months from the date of this order. (C) The respondent FI is directed to pay interest amount within two months from the date of this order.

(Vimal Gupta) Presiding Officer Debts Recovery Tribunal, Aurangabad