Securitisation Application No. 25 of 2005. Case: Akola Oil Industries Ltd. Vs State Bank of India. Nagpur Debt Recovery Tribunals
| Case Number | Securitisation Application No. 25 of 2005 |
| Counsel | For Appellant: Wandile, Adv. and For Respondents: Anil Kumar, Adv. |
| Judges | Shrikant G. Kulkarni, Presiding Officer |
| Issue | Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Sections 13(2), 13(4) and 17; Companies Act, 1956 - Sections 125, 529 and 529A; Limitation Act, 1963 - Sections 5 and 14 |
| Citation | III (2006) BC 237 |
| Judgement Date | February 03, 2006 |
| Court | Nagpur Debt Recovery Tribunals |
Judgment:
Shrikant G. Kulkarni, Presiding Officer
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If applications under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act ( SARFAESI Act for short) were to be captioned than numbered, then "icing a stale cake" would be a proper caption for the present application.
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The applicant who is an Official Liquidator has challenged the action taken by the opponent under Section 13(4) of SARFAESI Act in respect of the mortgaged property namely Survey No. 61, Mouza Umari, Ward No. 9, Akola (disputed property for short), mainly on the ground that sale of 7 acres and 9 gunthas out of the said land is illegal as the said area was not mortgaged and, therefore, did not form security to proceed against. It is the case of the applicant that after his appointment as Official Liquidator in winding up proceedings he realized that only 11 acres and 11 gunthas of the land mentioned above was mortgaged with the opponent. The opponent, however, sold the disputed property comprising 18 acres 20 gunthas of the said land illegally. The Official Liquidator has given the chequered history of the litigations which went on between the parties upto the High Court (which can be referred to in sequel). According to the applicant, the movables which were sold did not form part of the immovable property and plant and machinery was illegally sold as immovable property. The plant and machinery were never given as security to the opponent and opponent acted high-handedly in disposing of the property. The sheet anchor of the applicant's case is that the charge in respect of 7 acres and 9 gunthas was not registered under Section 125 of the Companies Act.
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The contentions raised by the applicant are retaliated by the opponent vide say at Exhibit 5 inter alia contending that the application is not within limitation. The opponent took possession under Section 13(4) of SARFAESI Act on 8th April, 2005 and the application in question filed beyond the period of limitation i.e. after 45 days. According to the opponent, the scope of the present application is extremely limited. 18 acres and 20 gunthas of the disputed land was mortgaged with the opponent and the same was sold by auction. So far as movable property is concerned, the opponent has excluded certain items mentioned in para 5.2(b) of the reply, though those items fell within the term 'secured asset'. The opponent, therefore, prays for dismissal of the appeal.
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I have heard Smt. Wandile, the learned Counsel appearing on behalf of the applicant and Mr. Anil Kumar, the learned Counsel appearing on behalf of the opponent in extenso.
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Before going to the point in controversy, it is necessary to have a bird's eye-view of the litigation ensued between the parties on which the parties are ad idem. The matter was pending before BIFR and then in the AIFR from 1992 to 2001. Winding-up petition was filed against the company in which Official Liquidator came to be appointed. The opponent prayed for leave of the Company Court to proceed under the SARFAESI Act. The leave was granted and notice under Section 13(2) of SARFAESI Act was issued on 8th January, 2004 and notice under Section 13(4) was issued on 8th April, 2004. On 1st...
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