HI -Tech Rubber Products vs IDBI BANK on 14 October 2021

ORDER

This petition is filed by the petitioner to add the petitioner – 3^rd party as 2^nd respondent in the matter MA.58 of 2019 in the interest of justice.

2. According to the case of the petitioner that 3^rd respondent – applicant bank filed the above OA for recovery of the amount due to the bank from 1^st and 2^nd respondent – borrowers; after the matter proceeded for some time finally it was settled under OTS amount of Rs.32,36,000/- and the Tribunal directed the respondent bank to deliver the original title deeds of the loan granted by 1^st respondent *Handwritten signature*

bank in view of full satisfaction of the debt as per the settlement on 20.3.2019. It is submitted that Tribunal issued a direction to the 1^st Respondent-Bank, to deliver the original Title Deeds of the 1st and 2nd Respondents-Borrowers, by way of Deposit of Title Deeds as a security for the loan granted by the 1 Respondent-Bank, in view of the Full Satisfaction of the debt as per the settlement on 20-03-2019. It is submitted that the 1^st and 2^nd Respondents-Borrowers, Hi-Tech Rubber Products, Reptd., by its Pro. Pilla Maheswara Rao, and the Proprietor, Sri. Pilla Maheswara Rao, have availed Term Loan to a tune of Rs.97,70,000/- for meeting the business requirements, from SIDBI, Visakhapatnam Branch on 07-08-2008, by executing all necessary loan documents in favour of SIDBI, Visakhapatnam; that prior to taking of loan from SIDBI, the 1st and 2nd Respondents-Borrowers have taken loan from the respondent-Banks to a tune of Rs.50,00,000/-, for their business, have deposited the original Title Deeds, as security for their loan availed from 1 Respondent Bank, and subsequently, 1 and 2 Respondents Borrowers have approached SIDBI, Visakhapatnam, with an Application, dated 30-05-2008, for financial assistance for doing/improving his business, by way of Term Loan from SIDBI Visakhapatnam, to a tune of Rs.97,70,000/- for meeting the business requirements; that at that time, since, the 3 Respondent-Bank, has already sanctioned loan to 1 and 2 Respondents, have written a letter dated to 3 Respondent-Bank, for ceding of 2^nd charge over the moveable/immovable properties of the 1 and 2 Respondents-

Borrowers, in their favour and in turn they will give 2nd Charge over the moveables and mortgage of immovable properties, wherein they have 1^st Charge, as they have availed the loan from SIDBI, Visakhapatnam, by Hypothecation/Deposit of original Title Deeds with them. It is submitted that on their consent, the SIDBI, Visakhapatnam, have sent a letter on January, 29, 2009, accepting for the creation of 2nd charge over the moveable and immovable properties in favour of IDBI, Visakhapatnam. Subsequent to the receipt of the said letter with regard to the 2 charge, the IDBI, Visakhapatnam, has sent a letter dated January, 31, 2009, referring the letter written by SIDBI, Visakhapatnam, dated 29-01-2009, accepting for the creation of 2^nd charge over the properties, i.e., moveable and immovable properties, with details of the properties, of the 1 and 2nd Respondents-Borrowers, held by them as security for their loan. It is submitted that subsequently, SIDBI, Visakhapatnam, assigned their loan by way of Regd. Agreement dated 18-01-2018, in favour of the Petitioner. As such, the Petitioner will have all the rights for collection of the loan amount from the 1^st and 2^nd Respondents-Borrowers. While the matters stood thus, the Petitioner has received a letter sent to SIDBI, Visakhapatnam, intimating that in the above OA, the Borrower, i.e., 1^st and 2^nd Respondents have settled their claim with the 3rd Respondent-Bank, under O.T.S., and have received the amount also from the 1 and 2nd Respondents, and in view of the orders of the DRT,

Visakhapatnam, they have to return the original title deeds, deposited with them as a security, and if they i.e., SIDBI, Visakhapatnam, have no objection, they will handover the Title Deeds to the 1 and 2nd Respondents. It is submitted that SIDBI, Visakhapatnam, forwarded the said letter to the Petitioner, in view of the Assignment of the loan of the 1 and 2nd Respondents, in favour of the Petitioner. It is submitted that immediately after receipt of the said letter, have written a letter to 3 Respondent-Bank, about the Assignment of the loan, and the 2^nd charge created in favour of SIDBI, Visakhapatnam, by IDBI, Visakhapatnam, and requested them to deliver the original Title Deeds, to the Petitioner, as they became the 1^st charge holder over the properties, as the 1^st charge was discharged. For the said letter, the 3rd Respondent-Bank, sent a copy of the letter written by 1 Respondent-Borrower for handing of the original title deeds, in view of the discharge of the loan under O.T.S., along with Photostat Copy of the free copy of the orders in O.A. No.356/2014, dated 20-03-2019, with a covering letter dated April, 3, 2019, enclosing a copy of the letter addressed to 1^st Respondent-Borrower, about the charge, in favour of ISARC Mumbai, and to contact the Petitioner in this regard. It is submitted that subsequently, as 3^rd Respondent-Bank, has not returned the original title deeds to the 1 and 2 Respondents, they have filed the above Petition, for contempt against the 3rd Respondent-Bank, for disobedience of the orders of the Tribunal, dated 20 March,

2019. It is submitted that, the Petitioner being the assignor of SIDBI, Visakhapatam, in whose favour 2^nd charge was created over the properties of the 1 and 2^nd Respondents, has right to recover the loan amount from the 1 and 2^nd Respondents-Borrowers, on the basis of the charge created over them, in favour of SIDBI, Visakhapatnam, our assignor. Unless, they are impleaded as a necessary party in the above petition for contempt, to put forth their claim, before the Tribunal, with regard to the properties, the Petitioner will be put to serious loss, further submit that they have already filed an OA for recovery of total amount of Rs.4,26,46,688/-, due from the 1^st and 2^nd Respondents-Borrowers. Therefore, prayed that the Tribunal may please to add the Petitioner-3^rd Party, India SME Asset Reconstruction Company Ltd., incorporated under Companies Act, 1956, and Registered as a Securitisation and Reconstruction Company pursuant to Section 3 of SARFAESI ACT, 2002, having it's Regd. Office at 1004, 10 Floor, Naman Centre, Plot No.C-31, G-Block, Bandra Kurla Complex, Bandra (East) Mumbai-400 051, Maharashtra, as 2 Respondent, in the above matter in the interests of justice, as otherwise, the Petitioner will be put to serious loss and hardship.

3. The respondent No.1 and 2 filed counter denying the averments made in the petition and further stated that all the material allegations made in the affidavit and the petition are not true valid and tenable and such of those allegations not expressly traversed herein shall not be deemed to have be admitted but the petitioner is put to strict proof of the same. The above petition is not maintainable either under law or on the set of facts narrated in the affidavit. The Respondent submits that the SIDBI (3rd Party/Petitioner ISARC) sanctioned loan for an amount of Rs.97.70 Lakhs to the Respondent but the Applicant Bank released only Rs.92 Lakhs due to the incomplete loan disbursement the Respondent sustained huge loss due to wrong commitment with their respective customers and huge loss has been sustained to the Respondent. The Respondent further submits that Applicant Bank (IDBI) and SIDBI both are colluded with each other and filed these kind of petition to cause loss to the Respondent and the Respondent approached the Applicant Bank and SIDBI for One Time Settled they didn't even consider their requests and have not given any opportunity to the Respondent. The Respondent further submit that inspite of hectic efforts made by the Respondent the Applicant Bank sanctioned OTS facility for Rs.32,36,000/- vide letter dated: 11.10.2018 vide Reference No.CIN:L65190NH2004G01148838 vide Offer Letter for OTS-Saral Karj Bhugtan Yojna-2018-19 there was no such mention in that letter regarding the second charge and the Applicant Bank intentionally avoided to mentioned by the Respondent with a fond hope paid an amount of Rs.32,36,000/- to the Applicant Bank but the Applicant Bank while receiving the amount and did not made any mention regarding the 2nd charge. The Respondent further submitted that Not Press

Memo filed by the Applicant Bank even though not mentioned the 2nd charge in that memo also. Now recently while releasing the Respondent's original documents and intentionally adding the 3rd Party to cause loss to the Respondent. The Respondent by taken the hand loans from friends and relatives for high interest to clear the OTS amount basing on the Applicant Bank's OTS Terms and conditions but the Respondent efforts was became futile. Day to day the friends and relatives are putting pressure to clear the borrowed amount and making pressure against the Respondent and the Applicant Bank and 3rd Party never heed the words of the Respondent. The Respondent submits that the (SIDBI)/3rd Party and Applicant Bank was colluded together and without proper intimation to the Respondent, the Applicant Bank along with (SIDBI)/3rd Party exchanged the concerned letters by causing loss to the Respondent and not giving the property documents to the Respondent even though the appropriate Tribunal order dated: 20.03.2019 and the Applicant Bank and 3rd Party intentionally avoiding and not heeding the Tribunal order without any manner. The Respondent submit that the 3rd Party intentionally putting hectic efforts to grab the property of the Respondent and unnecessarily interfering to the property of the Respondent even though they are having sufficient properties to their securities. The Respondent further submit that the Petitioner/3rd Party filed some of the document nos. 1, 2 and 4 are created only for the purpose of filing of this petition to cause loss to the Respondent. The Respondent further submits that there is no necessity to add the Petitioner/3rd Party as a party to the present proceedings and the O.A.356/2014 was closed on 20.03.2019. But now the Petitioner/3rd Party filing these kind of petition to cause loss and trouble to the Respondent only to harass them. The Respondent therefore pray that the Tribunal may kindly dismiss the petition with exemplary costs and order the Applicant Bank to issue the Original Documents to the Respondent, as otherwise the Respondent will suffer irreparable loss and hardship.

4. Counter filed on behalf of the respondent No.3 – applicant bank denying the averments made in the petition and further stated that All the material allegation mentioned in the petition and its accompanied affidavit filed by the petitioner / proposed party are all not true and correct and hence denied by this Respondent /Applicant Bank and the petitioner is put to strict proof of the same. The above petition is not maintainable under law and hence liable to be dismissed in limi-ne. There are no bonafides in filling above petition . All the material allegation mention in Para 4 & 5 of the affidavit filed by the petitioner are not aware by this Respondent /Applicant Bank and hence the petitioner is put to strict proof of the same. All the material allegation mention in Para 6 of the affidavit filed by the petitioner are not aware by this Respondent/Applicant Bank and hence the petitioner is put to strict proof of the same. It is submitted that the respondent bank filed the above OA

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356/14 for recover of the loan amount due from the defendant and also by sale of mortgaged property by following the procedure under the act While the matter was pending before the Tribunal, after bank evidence is completed, the above matter was settled under OTS scheme for Rs:32,36,000/- and that the defendant paid the amount memo is filed by the applicant bank and the memo was recorded and the accordingly matter was closed. The court was pleased to pass necessary orders dated 20-03-2019 as "In view of the memo filed by applicant bank and the defendants, Full satisfaction for an amount of Rs.32,36,000/- is recorded and the respondent bank may return the original documents, if any to the defendants. Accordingly this O.A. No.356/2014 stands closed / disposed of as not pressed as prayed for. It is submitted that the schedule mentioned property was under second charge with SIDBI, Seethammadhara, Visakhapatnam as the defendant also available loan on several properties including the schedule mentioned property. Hence the schedule property herein was under second charge with SIDBI Visakhapatnam, but second charge was not created under execution of Memorandum of Entry [MOE] in the books of respondent bank. The said second charge was only based on exchange of letters by the applicant bank and with SIDBI. The bank is not aware whether SIDBI Visakhapatnam has created any charge under the schedule mentioned property. While the matter stood thus the SIDBI Visakhapatnam has transferred takeover the account completely with India SME Asset Reconstruction Company Limited [ISARC), Mumbai. The petitioner / defendant herein suppressed the above said facts before the court relating to 2nd charge with SIDBI and presently ISARC. It is further submitted that as court in the second part of the order dated 20-03-2019 clearly mentioned "The respondent bank may return the original documents to the defendants if any the defendants" The court in its order also given discretion to the applicant bank by stating that the respondent bank may return the documents if any. It is submitted that the petitioner suppressing the above said facts, demanding return of documents by way of threatening the bank by misleading the order passed by this court. This respondent bank never violated the orders passed by this court at any time and also got respect for law. The respondent bank also advised the defendant to bring NOC from SIDBI and / or ISARC related to the return of the documents. But the defendant did not bring any NOC from them. On the contrary the petitioner filed the above petition suppressing the above facts in the above MA. The petitioner SIDBI and defendant herein also did not presently ISARC as necessary parties to the petition. Under the above said circumstances the bank is not aware for correct step to be taken to return the documents or not and hence submitted the facts of the case to the court for passing necessary orders as detailed in the counter file by the Applicant bank in M.A.58/19. Accordingly the respondent bank always obeys the orders passed by the court. The petitioner /proposed party as no right to claim return off original documents from the respondent / applicant bank unless there is orders from the court as the petitioner proposed party is not necessary party are defendant in OA filed by the applicant bank. The proposed party also filed OA.552/19 on the file of this Court against the petitioner defendant herein for recovery of the loan amount due from them and said the OA is pending before the Tribunal and hence the proposed party herein and applicant therein have to file an application in the said OA seeking direction from the Tribunal for not to return the documents which are with the applicant IDBI Bank till the OA.552/19 is disposed of. The mere filing of this application by the proposed party in this MA is not maintainable under law and hence the implied petition for the proposed third party to be added in the above MA.58/19 is not maintainable under law and hence liable to be dismissed. Hence the implead petition filed by the proposed party for adding him as necessary party in M.A.58/19 is not maintainable under law and hence liable to be dismissed.

5. Heard both the Ld. Counsel and perused the petition and counter averments of R1 and R2 and also R3. As can be seen from the record that an MA.No.58/2019 is filed by the defendants - 1^st and 2^nd respondent to order against the applicant bank by contemning the order of the Tribunal dt.23.3.2019 and whereas this implead petition is concerned, it is filed by the third party - India SME Asset Reconstruction Company Limited, Mumbai to 6 8.5

implead them as party to the above MA. It has been stated that the proposed party also filed OA.552/19 against the defendant herein for recovery of the loan amount due from them and said the OA is pending before the Tribunal and hence the proposed party herein and applicant therein have to file an application in the said OA seeking direction from the Tribunal for not to return of the documents and the mere filing of this application by the proposed party in this MA is not maintainable under law as the prayer of the MA.No.58/2019 to order against the applicant bank by contemning the order of the Tribunal dt.23.3.2019 and the present petitioner is nowhere connected with the said MA proceedings and therefore the implead petition for the proposed third party to be added in the above MA.58/19 is not maintainable under law and is liable to be dismissed. And also there is no necessity to add the Petitioner/3rd Party as a party to the present proceedings and the O.A.356/2014 was closed on 20.03.2019 by recording full satisfaction and therefore the implead petition filed by the proposed party for adding him as necessary party in MA.58/19 is not maintainable under law and is liable to be dismissed.

6. In the result, this IA.1319/2019 is dismissed, however without costs.

[Typed to the dictation, corrected and pronounced by me in the open court on this 14^th day of October, 2021]

PRESIDING OFFICER DEBTS RECOVERY TRIBUNAL VISAKHAPATNAM