Silver Polyplast Industires vs STATE BANK OF INDIA on 18 September 2021

JUDGMENT

1. This Misc. Application is filed by M/s. Silver Ployplast Industries, A Registered Partnership Firm, through its Partner, Shri Purshottam Sajan Patil under section 17(7) of the SARFAESI Act read with section 19(25) and section 22 of the Recovery of Debts and Bankruptcy Code, 1993 for restoration of Securitization Application No.61/2020 to its original file.

2. The applicant submits that the applicant is a registered partnership firm having four partners and the present application is filed by one of the partners who is authorized on behalf of the firm.

3. By order dated 04th March, 2021 this Tribunal has disposed of Securitization Application No.61/2020 as matter settled between the parties in One Time Settlement and not on merits.

4. The applicant further submits that as per the order dated 3rd November, 2020 the application for settlement was accepted by the respondent-bank under the scheme of NPA & AUCA (SBI OTS 2020) as per the terms and conditions stipulated therein. The One Time Settlement was arrived at Rs.1,75,75,020/- and the applicant has deposited 5% of the OTS amount i.e. Rs.8,80,000/- on 23rd November, 2020 the next installment i.e. 10% of the settlement amount i.e. Rs.17,57,502/- within one month and another 10% within 60 days from the date of sanction. The applicant submits that he has deposited Rs.35,15,004/- within 60 days of the OTS sanction and as such till 28th January, 2021 the applicant has deposited 25% of the OTS sanction amounting to Rs.43,94,600/-.

5. The applicant submits that he has made efforts to revive the business and arrange for funds to deposit the remaining amount of 75% but unfortunately he could not manage. The main reason shown by the applicant is that since March-2021 there was a second wave of Covid-19 which impacted the business severely and the entire nation had to be put under lockdown and this attributed to failure of applicant to deposit the remaining amount of OTS.

6. The applicant submits that he approached the respondent-bank after lockdown for extension of time to pay the remaining 75% of the OTS amount but the respondent-bank did not consider the said request and issued a letter dated 23rd July, 2021 informing the applicant that the applicant has failed to pay the OTS amount as per the terms and conditions of SBI Scheme 2020 and the applicant is liable to pay the entire outstanding dues plus applicable interest and charges without any waiver / concession.

7. The applicant further submitted that the respondent-bank is silent regarding the 25% of the amount already deposited and neither the bank is refunding the same nor it has adjusted in the loan account and the 25% amount deposited is kept in suspense account and without considering the said deposit, the bank is proceeding to recover entire dues.

8. The applicant submits that the respondent-bank issued a letter dated 10th August, 2021 informing him that the SBI OTS was the non-discretionary and non-discriminatory scheme in nature and hence no waiver or extension be granted in the scheme and the applicant is liable to pay the entire outstanding dues plus applicable interest and charges without any waiver / concession and bank will continue the recovery process.

9. The applicant further submits that on 21st August, 2021 the respondent-bank published e-auction notice dated 18th August, 2021 in “Times of India” Aurangabad edition informing the date of auction is 20th September, 2021. The respondent-bank has only put Plot Nos.4, 6 and 7 of Gut No.194/A-3 at Ganesh Nagar

Shahada and Plant and Machinery at Gut No.14/3 at Awage Mhasavad Road owned by applicant for auction. These are the same three plots for which the earlier auction was set-aside and the respondent-bank was directed to return the amount to the prospective purchasers.

10. It is submitted by the applicant that there are various incurable defects in the auction undertaken by the respondent-bank under the provisions of Securitization Act 2002. The demand notice itself is incorrect as far as the description of property is concerned for which the sale notice is published. As per the auction notice dated 21st August, 2021 the auction which was scheduled on 20th September, 2021 is for the plant and machinery also. The applicant submits that till filing of this M.A., the applicant is not received any 30 days clear notice under Rule 8(6) or Rule 6(2) of the Security Interest Rules 2002. The plant and machinery is put to auction for the first time and hence as per Rule 6(2) 30 days prior notice is mandatory and the previous auction has been set aside by this Tribunal hence as per Rule 8(6) thirty days clear notice is required.

11. The applicant submits that the partners of the firm have received notice dated 18th August, 2021 which was sent through post on 21st August, 2021 and was delivered on 23rd August, 2021 and if it is computed thirty days’ time period from 23rd August, 2021 lapses on 22nd September, 2021 and hence the auction scheduled on 20th September, 2021 does not complete thirty days clear notice.

12. The applicant relies on the Judgment of the Hon’ble Supreme Court in the matter of Mathew Varghese Vs. M. Amritha Kumar reported in (2014)5 SCC 610. The Hon’ble Supreme Court acknowledged the constitutional right to hold property and that this right could not be deprived in a manner which was contrary to the procedure established by law (Article 300A of the Constitution of India). The Hon’ble Supreme Court further observed that a secured creditor was like a trustee of the secured asset and could not deal with the security in a whimsical or arbitrary manner. Section 13(8) of SARFAESI Act was provided to protect interest of borrowers and it was important to balance the right of borrowers and credits. The Supreme Court further observed that Rule 8 and Rule 9 of the Rules had twin objectives. A. Provide 30 days clear notice to the borrower regarding the date and time of the proposed sale or transfer. This is to provide the borrower adequate opportunity to take all steps to repay his dues prior to such sale. B. Inform the intending purchaser of the nature of the property, extent of liability, floor price and other encumbrances.

13. The applicant submits that there is no clear thirty days’ notice and if the alleged Rule 8(6) notice dated 18th August, 2021 which was served upon the partner of the applicant firm on 23rd August, 2021 then the same is not in consonance with section 13(8). The alleged Rule 8(6) notice is silent regarding the said calculations and the aspect of total dues outstanding as on the date of issuance / publication of the said notice dated 18th August, 2021.

14. The applicant submits that that on earlier occasion the respondent- bank had listed Plot Nos.4, 6 and 7 separately with separate reserve price and there were three different prospective bidders who participated in the auction process and deposited 25% of the bid amount. It is also submitted by the applicant that on this occasion the respondent-bank clubbed all the three plots together and also clubbed the reserve price for all three plots. The area which is mentioned in the 13(2) Notice is different for these three plots and the area which is mentioned in the auction notice is different.

15. The applicant prayed for allowing this Miscellaneous Application

No.20/2021 under section 17(7) of the SARFAESI Act read with section 19(25) and section 22 of the Recovery of Debts and Bankruptcy Code 1993 and restoration of Securitization Application No.61/2020 to its original file and made a request to decide the same on merits

16. The respondent-bank has filed Reply / Written Arguments (Exhibit-05) and submits that the applicant has enclosed only one order dated 4th March,2021 passed in Securitization Application No.61/2020 and has contended that it was disposed off in view of the settlement. The applicants had moved the Securitisation Application and Interlocutory Applications for urgent orders on 29th September, 2020. This Tribunal called upon the applicants to participate in the auction sale dated 30th September, 2020 and submit their bid and expressed necessary orders regarding it will be passed, however the applicants expressed their inability and intimated willingness to settle the matter and ready to make the payment.

17. The respondent bank submits that the applicants contended that they are eligible for benefits of SBI OTS 2020 scheme and if the benefits of scheme are provided they will get huge concessions.

The applicants also contended that they were ready to pay Rs.1.48 Crores within 30 days from the date of sanction of OTS.

18. The respondent bank submits that vide order dated 11th November, 2020, the applicants were directed to deposit Rs.35 Lakhs by 30th November, 2020 for which bids were received of three plots in the E-auction sale after purchasers were intimated of pendency of Securitisation Application. The applicants neither complied the directions nor deposited Rs.35 Lakhs and did not enter into consent terms in the Original Application though it was a condition while accepting the SBI OTS -2020 that applicants will have to enter in the OTS. Vide order dated 28th January, 2021 this Tribunal had set aside the sale of secured assets and directed to return the bid amount alongwith accrued interest to the highest bidders. The Securitisation Application was not disposed off on the ground of settlement but it was disposed off after the sale which had taken place after intimating bidders about the pendency of S.A.

19. The respondent bank submits that it has issued E-auction sale notice on 18th August, 2021 for the sale of movable and immovable secured assets which were not subject matter of the earlier e-auction notice dated 12th September, 2020. The e-auction sale notice dated 12th September, 2020 which was subject matter of main S.A. and the e-auction sale notice dated 18th August, 2021 are totally different. If the applicants are aggrieved by the e- auction sale notice dated 18th August, 2021 they ought to have filed new Securitisation Application.

20. The respondent bank submits that the applicants are avoiding to pay court fees required for filing of new S.A. Moreover, the applicants have received the benefits of SBI OTS 2020 scheme due to the orders passed in the Securitisation Application. The applicants through represented of depositing the said OTS amount within 30 days initially, did not deposit it and committed defaults even in payment of OTS amount. The applicants did not enter in the consent terms through forwarded well in advance and from time to time. The respondent bank further submits that both the e- auction sale notices are totally different. Therefore, the Miscellaneous Application is not tenable and is liable to be rejected.

21. The respondent-bank in addition to this say / reply submitted para- wise reply and denied all the contentions of the applicants.

22. The application for settlement under SBI OTS 2020 was accepted by the bank for Rs.1,75,75,020/- and the applicant was intimated to deposit the OTS amount as per the time schedule in the letter dated 23rd November, 2020. The applicants committed defaults in payment of OTs amount in second consecutive year. The applicant was provided 08 months’ time period to pay the balance 70% amount. The payments made towards SBI OTS 2020 are appropriated in the loan account and its benefit is provided to the applicant. The applicant had sought six months further time to pay the balance 75% OTS amount.

23. The bank specifically intimated by letter dated 10th August, 2021 that the SBI OTS 2020 Scheme is non-discretionary and non- discriminatory. Thus, the scheme being applicable for all customers of SBI, any deviation in the scheme was not permissible and the scheme as it is to be implemented and accordingly it is intimated to the applicant. As the OTS has failed due to non- paying approach of the applicant, the respondent was left with no alternative than to intimate applicant to pay it dues. The bank has appropriated entire 25% amount deposited by the applicant in the loan account and has provided benefit of deposit to the applicant.

24. The e-auction sale notice is published in Indian Express and Daily “Punyanagari” News Papers Nandurbar Edition. The contentions that E-auction sale notice is published in Indian Express News Paper is incorrect. The month of August 2021 is being of 31 days, the e-auction sale notice is rightly published in two newspapers and it provides 30 days time period from the date of publication i.e. 21st August, 2021.

25. The respondent bank submits that the securitization action is correctly taken by following due procedure. The e-auction sale notice was also put on the board of the immovable property and the said board was fixed in the immovable property and the notices were also served by RPAD.

26. The applicant is well aware of dues of respondent and despite of providing all opportunities and even benefits of OTS, he is not paying the dues and therefore the respondent had to initiate the measures as per Securitisation Act, 2002 for recovery of dues of respondent which are public dues.

27. The applicant is trying to avoid payment of court fees, which is the revenue of government. The applicant is entitled for interim reliefs is also false and incorrect. The applicant admittedly is defaulter. The applicant was issued demand notice on 11th April, 2016 under Section 13(2) of the Securitisation Act, 2002, since then five and more years have completed, despite the same the respondent could not receive its dues. The dues with the applicant are more than Rs.2.93 Crores and future interest, cost, expenses from 12th April, 2016 onwards until realization of entire amount. The dues are increasing day by day, whereas the secured assets may be failing short for recovery of huge dues of respondent.

28. The respondent bank submits that securitisation application No.61/2020 has already been disposed of and the only course and remedy with the applicant is that they have to file afresh Securitisation Application.

29. Heard both the counsels at length and I have perused all the documents placed on record. The order dated 4th March, 2021 clearly shows that the settlement has been arrived between the parties and the bank has given time to deposit the OTS amount. It is admitted by both the parties the amount of OTS not deposited by the applicant in time and the applicant has requested for extension of time for deposit the same which was rejected by the bank as the said OTS scheme does not permits.

30. As the settlement fails on the part of the applicant moreover, the bank does not want to extent the time to deposit the OTS amount. The applicant has every right to protect his property and for that I am of the view that the original securitisation application is to be heard and decide on merit. In view of the above, I pass the following order through Video Conference:

ORDER

1. Miscellaneous Application No.20/2021 is allowed with no order as to costs.

2. The Securitisation Application No.61/2020 is hereby restored to its original position.

(Vimal Gupta) Presiding Officer Debts Recovery Tribunal, Aurangabad.