Misc. Appeal No. 112 of 2013. Case: Kotak Mahindra Bank Ltd. Vs Navsynth Chemicals and Ors.. Mumbai DRAT DRAT (Mumbai Debt Recovery Appellate Tribunals)

Case NumberMisc. Appeal No. 112 of 2013
Party NameKotak Mahindra Bank Ltd. Vs Navsynth Chemicals and Ors.
CounselFor Appellant: Mr. Rohit Gupta and Mrs. Sanjana Ghogre, Advocates and For Respondents: None
JudgesRaj Mani Chauhan, J. (Chairperson)
IssueRecovery Of Debts Due To Banks And Financial Institutions Act, 1993 - Sections 1, 12, 13, 15, 19, 19(1), 19(2), 19(8), 20, 25, 26, 27, 28, 29, 3, 30, 30(1), 36, 36(2), 7, 8; Securitisation And Reconstruction Of Financial Assets And Enforcement Of Security Interest Act, 2002 - Sections 13(2), 13(4)
CitationI (2014) BC 68 (DRAT)
Judgement DateAugust 26, 2013
CourtMumbai DRAT DRAT (Mumbai Debt Recovery Appellate Tribunals)

Judgment:

Raj Mani Chauhan, J. (Chairperson)

1. This Appeal under Section 20 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred as "RDDBFI Act") has been directed by the appellant against the order dated 1st May, 2012 passed by Mr. K, Ghose, the learned Presiding Officer, (Learned P.O.) Debts Recovery Tribunal-I (DRT), Ahmedabad in Chamber Appeal No. 01/2012 (Kotak Mahindra Bank Ltd. v. Navsynth Chemicals) whereby the learned Presiding Officer has dismissed the aforesaid Chamber Appeal filed by the appellant. The relevant facts giving rise to the present appeal may be summarized as under:

The respondent No. 1, Navsynth Chemicals, a company incorporated under the Companies Act, 1956 had availed certain credit facilities sanctioned by the then State Bank of India (SBI). The rest respondents stood guarantors to the credit facilities availed by the borrower. The borrower committed default in repayment of the amount of credit facilities availed by it. Consequently, SBI had filed Original Application (O.A.) No. 65/2008 in DRT-I, Ahmedabad, against the borrowers and guarantors for recovery of its outstanding dues, which was allowed by the learned Presiding Officer, DRT vide judgment and order dated 5th February, 2003. The learned-Presiding Officer in pursuant to aforesaid judgment and order, issued Recovery Certificate on 6th February, 2003 which gave rise to Recovery Proceeding (R.P.) No. 1544/2003, The Recovery Officer during pending R.P., attached mortgaged property, being Flat No. 8, 3rd Floor, Haridarshan Apartment, Alkapuri, Baroda, on 6th August, 2003 (hereinafter referred as the said "Flat").

2. During pending R.P., the Certificate Holder (C.H. Bank) i.e. SBI assigned the debt of the borrower along with underlying securities in favour of Kotak Mahindra Bank Ltd., the appellant. The appellant on the basis of the assignment made by SBI, stepped into the shoes of SBI and was brought on record as C.H. Bank in the R.P. The Recovery Officer vide order dated 30th July, 2008 appointed Mr. Anand Sovani, the Deputy Manager of the C.H. Bank, as Receiver for taking over possession of the said flat, but unfortunately, Mr. Anand Sovani expired on 19th August, 2008. The Recovery Officer thereafter appointed one of the ex officio of the appellant Bank as Receiver to take over the possession of the said flat. But due to non-cooperation of the society and Police authorities, the Receiver, could not take over the possession of the said flat. The Recovery Officer thereafter appointed one Mr. Digvijaysingh Zala as a Court Officer to assist the Receiver to take over the possession of the said flat. The DRT Receiver thereafter took over physical possession of the said flat on 23rd April, 2011 in presence of the Court Officer.

3. The appellant in addition to the R.P., proceeded under SARFAESI Act against the borrowers to recover its outstanding dues. The Authorized Officer of the appellant on 11th August, 2011 issued demand notice under Section 13(2) of the SARFAESI Act to the borrower, CD., calling upon it to pay the outstanding dues.

4. Although the Recovery Officer during the pending R.P. had fixed 20th September, 2011 as the date of auction sale of the said flat, but on that date, no bidder turned up. Consequently, the auction failed. The Authorized Officer thereafter took over the symbolic possession of the said flat on 11th January, 2012 under Section 13(4) of the SARFAESI Act. The Authorized Officer however, could not take over the physical possession of the said flat, as the same was under physical possession of the DRT Receiver. The Authorized Officer on 13th January, 2010 moved M.A. (Ext. H/59) before the Recovery Officer to raise the attachment of the said flat and to direct the DRT Receiver to hand over the possession of the said flat to him. The Recovery Officer partly allowed his application and lifted the attachment from the said flat, but did not pass any order about his prayer, seeking for direction to the Court Receiver to hand over the possession of the said flat to him. The Authorized Officer thereafter brought this fact to the notice of the Recovery Officer on 27th February, 2012, The Recovery Officer thereafter allowed the...

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