Bikram Chandra Das vs STATE BANK OF INDIA on 6 January 2021

O R D E R

This appeal impugns the order in S.A No. 45 of 2017 dated 20.07.2020 passed by the Learned Presiding Officer, DRT, Cuttack.

The facts of this case may be stated in brief as follows: -

The appellant originally availed a Housing Loan from the Respondent No. 1 Bank for a sum of Rs.2,00,000/- (Rupees Two lakhs) on 31.03.2003 on the condition of repayment of the loan in 60 equal monthly instalments. The appellant created an equitable mortgage of his immovable property in Balmundinagar, Cuttack. Subsequently the appellant applied for a fresh loan of Rs.50,000/- (Rupees Fifty Thousands only) and the same was also sanctioned. The appellant had executed the necessary documents to secure the aforestated loans. Later the appellant had become irregular in the repayment of the dues to the Bank and therefore, the Bank was compelled to proceed under the Provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the ‘SARFAESI Act’) and in spite of the same the appellant failed to repay the same and the Authorized Officer of the Respondent No.1Bank took physical possession of the property and at this point of time the appellant had cooperated with the Authorized Officer in the process of taking of physical possession of the secured asset. Prior to taking of physical possession by the Authorized Officer, the appellant had approached the Hon’ble High Court at Orissa in WP (C) No. 11352 of 2015 and as per the direction of the Hon’ble High Court the appellant deposited a sum of Rs.50,000/- and made a proposal to the Bank for a settlement and the Bank did not accept the said proposal as according to the bank the offer of the appellant was too low. Later the property of the appellant was sold as per the provisions of SARFAESI Act to RespondentNo.3. In the meanwhile, it was learnt that the appellant had also stood as a guarantor for a loan availed by one Pioneer Sales Agency and Marketing

Associates, for a sum of Rs.28,00,000.00 (Rupees Twenty-Eight lakhs) from the State Bank of Hyderabad and to secure the same he had mortgaged the very same. Property that he had mortgaged to the Respondent No.1Bank i.e., State bank of India for his housing loan. While so the State Bank of Hyderabad came to be merged with the State Bank of India and therefore, the liability of the appellant got increased to Rs.42,39,321/- as on 28.07.2017.Thereafter the DRT, Cuttack by its order dated 12.01.2018 directed the appellant to deposit a sum of Rs.51,14,104.10 in the Respondent No.1 Bank and ordered that after the deposit of the said amount by the appellant the would be entitled to repossess the property in question which had already been sold by the Authorized Officer of the Respondent No.1 Bank. The appellant failed to deposit the said sum and filed an appeal before this Tribunal and this Tribunal passed an order in the said appeal wherein it directed the DRT, Cuttack to dispose of the SA within a period of three months. It is seen that the learned Presiding Officer, DRT, Cuttack gave one more opportunity to the appellant granting him two months’ time from 20.07.2020 to clear the dues of the respondent No.1 Bank and had also ordered that after making the payment of the said sum, the appellant would be entitled to repossess the property already sold to the third respondent who would then be returned the money that he had paid in the auction for the purchase of the property along with the interest therefor. The appellant being aggrieved by the order passed in S.A No. 45 of 2017 has now preferred this appeal.

Heard the learned counsel for both sides. The points that arise for consideration in this appeal may be stated as follows: -

1. Whether the Authorized Officer has followed the procedure laid down in the SARFAESI Act for recovery of the dues?

2. Whether the Tribunal below can direct the appellant to deposit into the bank his total liability after the auction sale has been conducted and further order the Auction Purchaser to redeliver the possession of the property back to the appellant on his repayment of the dues to the bank?

3. If so, to what relief, is the appellant entitled to? Point No.1.

A reading of the impugned order reveals that the appellant had cooperated with the Authorized Officer at the time when physical possession was taken and it is also seen that the authorized officer has adhered to the provisions of the SARFAESI Act and has also followed the Rules made there under in the proceedings taken up by him to recover public money and therefore this point is answered in favour of the bank and against the appellant. Point No.2.

It is seen that the Tribunal below by its order dated 12.01.2018 in I.A No.1199 of 2017 directed the appellant to deposit a sum of Rs.51,14,104.10 into the Respondent Bank and that upon such deposit the appellant would be entitled to a repossession of the property which had already been sold under the provisions of the SARFEASI Act. It is seen that as against this order the appellant had earlier approached this Tribunal by way of an appeal and this Tribunal had disposed of the appeal by the issuance of a direction to the DRT, Cuttack to dispose of the S.A within a period of three months. However, it is seen that the appellant did not deposit the said sum of Rs,51,14,104.10 into the Respondent Bank as ordered by the tribunal below and notwithstanding the same the learned Presiding Officer, DRT, Cuttack granted a further time of two months from 20.07.2020 to the appellant to deposit the said sum into the respondent bank and the auction Purchaser was directed to redeliver possession of the property to the appellant in the event of payment being made to the bank by the appellant. The appellant did not make the payment. Section 13(8) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 reads as follows: -. “ Where the amount of dues of the secured creditor together with all costs, charges and expenses incurred by him is tendered to the secured creditor at any time before the date of publication of notice for public auction or inviting quotations or tender from public or private treaty for transfer by way of lease, assignment or sale of the secured assets,—

(i) The secured assets shall not be transferred by way of lease assignment or sale by the secured creditor;

(ii) In case, any step has been taken by the secured creditor for transfer by way of lease or assignment or sale of the assets before tendering of such amount under this sub-section, no further step shall be taken by such secured creditor for transfer by way of lease or assignment or sale of such secured assets.” A reading of Section 13(8) of the SARFAESI Act reveals that the secured creditor would not be able to take further steps, in the event the borrower deposits with the secured creditor all dues along with all costs, charges and expenses incurred by it before the date of publication of the notice for the public auction or inviting quotations and tenders from the public or private treaty.

It is seen that borrower can exercise his right to redeem the property only as set out in Section 13(8) of the SARFAESI Act and not after the sale notice and therefore, in this case it can been seen that the borrower had already lost his right to redeem the property. The property has been sold and the borrower cannot claim the property now under Section 13(8) of the SARFAESI Act and the learned Presiding Officer would not have any power over and above the Section 13(8) of the said Act and such being the case, the point for consideration has to be answered in the negative and against the appellant.

Accordingly, this point is answered against the appellant.

Point No.3.

Point No. 1 and 2have been answered against the appellant and therefore, the appellant is not entitled to any relief.

Point nos. 1, 2 and 3 have been answered against the appellant and therefore, this appeal warrants only a dismissal.

In the result, the appeal is dismissed. The order passed by the Learned Presiding Officer, DRT Cuttack in SA 45 of 2020 dated 20.7.2020 is hereby set aside. No costs.

Copy of the judgment be supplied to the parties through their respective Ld. Council and also be uploaded in the website of this Tribunal.

File be consigned to record room. (Dictated to the Stenographer, transcribed by him, corrected, signed and pronounced by me on this the 6th day of January 2021).

Sd/= (Dr. T. Ravi Shankar) Chairperson