Appeal No. 433 of 2015. Case: Ashok Gupta and Ors. Vs Corporation Bank and Ors.. Delhi DRAT DRAT (Delhi Debt Recovery Appellate Tribunals)

Case NumberAppeal No. 433 of 2015
CounselFor Appellant: Pallav Saxena and Sumit Pargal, Advocates and For Respondents: Ajant Kumar, Advocate
JudgesRanjit Singh, J. (Chairperson)
IssueIndian Contract Act, 1872 - Sections 171, 172, 176; Securitisation And Reconstruction Of Financial Assets And Enforcement Of Security Interest Act, 2002 - Sections 13(2), 13(4), 17, 18, 2(1)(f), 31(a)
Judgement DateFebruary 26, 2016
CourtDelhi DRAT DRAT (Delhi Debt Recovery Appellate Tribunals)


Ranjit Singh, J. (Chairperson)

  1. Appellant M/s. Ashok Gupta & Sons is an HUF which has filed this appeal to impugn the order dated 6.5.2015 passed by the Tribunal below dismissing the S.A. filed by them. Appellant No. 6 is a minor and appeal on her behalf is filed through her father, namely, Mr. Shailesh Gupta. Some of the FDRs in question are for the benefit of this minor, which had been given as margin money for issuing Bank guarantees in favour of M/s. J.P. Associates Ltd. Appellants 7 to 11 are individuals. The FDRs in question listed in detail in the appeal belonged to them, which were given by them as margin money for issuing Bank guarantees to M/s. J.P. Associates Ltd. Respondent No. 1 Corporation Bank along with other consortium members had sanctioned various credit facilities to M/s. Harish Chandra (I) Ltd. (respondent No. 2) at different times starting from the year 2010. Respondent No. 2 is engaged in construction work. The said, respondent No. 2 had obtained certain orders from M/s. J.P. Associates Ltd. Since the consortium member Banks did not increase the limit nor did they release the Bank guarantees to be furnished to M/s. J.P. Associates Ltd., the appellants pledged their various FDRs as margin for keeping a limited lien in respect of the Bank guarantees issued in favour of M/s. J.P. Associates Ltd. All the Bank guarantees issued in favour of M/s. J.P. Associates Ltd. against which these FDRs were pledged were released, but the respondent Bank did not release the FDRs in question to the appellants and detained them illegally without any authority of law in spite of repeated requests. It is alleged that respondent Bank had even encashed some of the FDRs illegally and misappropriated the amount received, without any consent or intimation to the appellants.

  2. On 8.9.2012, appellants served a legal notice upon respondent No. 1 Bank. Appellants would also urge that they came to know from the pledge memos of their respective FDRs that respondent No. 1 Bank had fabricated the documents, as in some documents the date mentioned against the purported signatures of Bank manager were found pre-dated to pledge of FDRs in question and there were no signatures of the Bank manager on some other purported pledge memos.

  3. On 21.2.2013, the Bank issued notice under Section 13(2) of the SARFAESI Act calling upon respondents 2 to 9 to pay a sum of Rs. 4,61,59,78,192.85. The appellants would submit that the respondents did not ever create any security interest in these FDRs in question in favour of respondent No. 1 Bank for recovery of any amount due from respondent No. 2. Appellants would also allege that respondent No. 1 Bank had no authority to create any security interest in respect of these FDRs belonging to the appellants.

  4. Respondents 2 to 9 raised various objections including the one that FDRs in question were given as margin for issuing Bank guarantees to M/s. J.P. Associates Ltd., which have been released and, therefore, the respondent Bank and the consortium members had no lien in respect of the said FDRs. The appellants accordingly would plead that the FDRs could not be taken as security interest to proceed under the SARFAESI Act. Pleading that the action of the respondent Bank in treating the FDRs in question as security towards the recovery of outstanding dues of respondent No. 2 is illegal, the appellants filed S.A. before the Tribunal below. In the meantime, the appellants had also obtained certain documents under the RTI Act, which included Memorandum of Charge/Lien in respect of these FDRs in question. It is urged that these documents would show that the respondent Bank had manipulated the date of pledge and its validity by overwriting on the original dates put after the signatures.

  5. The Tribunal has, however, dismissed this S.A. and aggrieved against the same the appellants have filed the present appeal.

  6. The Counsel for the appellants would heavily rely upon the interpolation and overwriting on the pledge documents to bring home his point that the dates were so overwritten to create a pledge of these FDRs. The Bank accordingly was directed to bring the original FDRs listed in Annexure-C to the notice under Section 13(2) of the SARFAESI Act. The original FDRs were produced by the Bank. There was no interpolation or overwriting on the FDRs in question. However, in the document Memorandum of Charge/Lien over deposits of third party available on record, figure '11' was written over figure '8' in the figure depicting year 2008 which was endorsed with initial. This was found in the original document as well...

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