Misc. Appeal No. 238 of 2009. Case: Cham Trading Organisation and Others Vs Authorised Officer and Chief Manager, Bank of Baroda. Mumbai DRAT DRAT (Mumbai Debt Recovery Appellate Tribunals)

Case NumberMisc. Appeal No. 238 of 2009
Party NameCham Trading Organisation and Others Vs Authorised Officer and Chief Manager, Bank of Baroda
CounselHitesh N. Dave, Nalini Lodha
JudgesAllah Raham (Chairperson)
IssueSecuritisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 13(2)
Citation2009 (2) DRTC 677
Judgement DateOctober 12, 2009
CourtMumbai DRAT DRAT (Mumbai Debt Recovery Appellate Tribunals)

Judgment:

Allah Raham (Chairperson)

  1. This appeal is directed against the order dated 9th September, 2009 passed by the learned Presiding Officer, D.R.T. II, Ahmedabad, in Appeal No. 11/2008 whereby appellants' prayer for interim relief was rejected.

  2. It appears that the appellants were granted credit facilities by the respondent bank. Their accounts were declared Non Performing Assets (N.P.A.). Notice under Sec. 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short the SRFAESI Act) was issued to the appellants on 28th September, 2006 claiming a sum of Rs. 13,26,82,660.40 as on 10th September, 2006. The appellants replied notice on 25th November, 2006. The Respondent- bank considered the reply and admitted that the amount claimed in the notice was without giving a credit of Rs. 2,01,90,000/ -. The amount claimed in notice under Sec. 13 (2) was revised to Rs. 10,05,64,407.40. Communication was sent to the appellants on 3rd December, 2006. The notice under Rule 8 (1) of the Security Interest (Enforcement) Rules, 2002 (for short the Rules) was sent to appellants on 20th December, 2007 thereby taking symbolic possession of the secured assets.

  3. Aggrieved against the aforesaid order the appellants files Securitisation Application No. 11/2008 and prayed for issuance of interim order to grant status quo in respect of securitisation action and stay of operation and maintenance of the notice and other actions taken under the SRFAESI Act.

  4. The appellants challenged the action taken under the SRFAESI Act and claimed that there is no compliance of Rule 3-A (b) of the Rules. Hence, the entire action taken subsequent thereto is not in accordance with the law. Prayer for quashment of notice dated 28th September, 2006 has also been sought.

  5. The respondent-bank defended its action of sending notice under Sec. 13 (2) of the SRFAESI Act and replied to the representation dated 3rd December, 2006 finally giving notice dated 20th December, 2007. It has been stated that/ the action of the respondent-bank is legal and valid.

  6. The Tribunal below heard the learned counsel for the parties and came to the conclusion that admittedly, the amount deposited Rs. 2.01 crores was not reflected in the demand notice. However, the respondent- bank has corrected the said mistake in its reply, after considering the representation of the applicants. Therefore, the contention that there can be no...

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