Review Petition No. 78 of 2015 in Writ Petition No. 6778 of 2014. Case: M/s. MRB Roadconst Pvt. Ltd. Vs Rupee Co-op. Bank Ltd.. High Court of Bombay (India)

Case NumberReview Petition No. 78 of 2015 in Writ Petition No. 6778 of 2014
CounselFor Appellant: Mr. M.K. Shah, Adv. and For Respondents: Mr. Pratap Patil, Adv.
JudgesV. M. Kanade & B. P. Colabawalla, JJ.
IssueSecuritisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Sections 13(4), 18; Maharashtra Cooperative Societies Act, 1960 - Section 101; Recovery of Debts Due to Banks and Financial Institutions Act, 1993
Judgement DateFebruary 05, 2016
CourtHigh Court of Bombay (India)


B. P. Colabawalla, J.

  1. This Review Petition seeks review of the order dated 10th June, 2015 passed by us in the above Writ Petition. On the date when the order under review was passed, none appeared on behalf of the Petitioner. We had perused the order passed by this Court on 21st July, 2014 when this Court had granted time to the Petitioner to deposit the amount of Rs.20,00,000/- in the Debt Recovery Appellate Tribunal (for short, the "DRAT"), Mumbai until further orders. The appeal filed by the Petitioner before the DRAT was still pending. In this view of the matter, we had extended the time granted by the DRAT for a further period of four weeks with a direction that if the said amount of Rs.20,00,000/- was not deposited in the aforesaid time, the appeal filed before the DRAT, Mumbai would stand dismissed. With this direction, the Writ Petition was disposed of. Thereafter, the learned counsel for the Petitioner appeared before us and submitted that this order may be reviewed as he was not heard before passing the said order. Since this order was passed in the morning session, we had stated that the Petitioner was at liberty to apply for review of this order by filing an appropriate application. It is in this light that the Review Petition has been filed before us.

  2. Since the grievance of the Petitioner is that he was not heard before passing the order dated 10th June, 2015 and the issues raised by the Petitioner have not been dealt with by us in the said order, we have heard Mr. Shah, the learned counsel for the Petitioner, at length to examine whether the order dated 10th June, 2015 is required to be reviewed by us.

  3. The learned counsel appearing on behalf of the Review Petitioner submitted that the order dated 30th June, 2014 passed by the DRAT, Mumbai in Miscellaneous Application No.237 of 2010 in Appeal No.197 of 2010 was perverse and illegal as it was contrary to the mandate of section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, the "SARFAESI Act"). We must mention here that the above referred Miscellaneous Application was a waiver application filed by the Petitioner seeking full waiver of deposit. By its order dated 30th June 2014, the DRAT, after hearing the parties, directed the Petitioner to deposit a sum of Rs.20,00,000/- with the Registrar of the DRAT within a period of eight weeks in two equal installments. It was further directed that if the aforesaid deposit was not made, the appeal would stand dismissed. It is the correctness of this order that has really been put in issue before us.

  4. Before we deal with the contentions raised by the Petitioner, it would be appropriate to briefly narrate the facts. In the year 2003, the Petitioner -- Company had availed of a cash credit facility from the Respondent -- Bank to the tune of Rs.75,00,000/- vide Cash Credit Account No.147. The aforesaid facility was secured by mortgage of immovable as well as hypothecation of movable property. The immovable properties mortgaged was land admeasuring about 32.5R, situated at Survey No.65, Hissa No.5 (old Survey No.829, Hiss No.5) and land admeasuring of 1H and 57.7R situated at Chovishwadi, Taluka Haveli, District Pune (hereinafter referred to as the "mortgaged properties").

  5. Admittedly, the Petitioner defaulted in repayment and therefore the Respondent -- Bank obtained a Recovery Certificate against the Petitioner under section 101 of the Maharashtra Cooperative Societies Act, 1960. Thereafter in the year 2006, the said Cash Credit Account was transferred to a separate ledger maintained by the Bank for defaulted accounts in which a decree / recovery certificate had been obtained.

  6. The Petitioner admittedly did not make any payment to satisfy the recovery certificate issued against it. As on 31st July, 2007 the total outstanding amount due to the Respondent -- Bank was Rs.96,14,085.61. In this view of the matter, the Respondent -- Bank initiated proceedings under the provisions of the SARFAESI Act by issuing a notice under section 13(2) thereof on 14th August, 2007. In the said notice the Petitioner was called upon to pay the said sum of Rs.96,14,085.61 (as on 31st July, 2007) together with interest thereon within 60 days of receipt of the said notice failing which the Respondent -- Bank would proceed to take measures under section 13(4) of the SARFAESI Act. As the Petitioner did not comply with the requisitions contained in the section 13(2) notice, the Respondent -- Bank proceeded to take possession of the mortgaged properties on 15th February, 2008 under section 13(4) of the SARFAESI Act. Being aggrieved by this action of the Respondent -- Bank, the Petitioner filed Securitisation Application No.28 of 2008 under section 17 before the Debt Recovery Tribunal (for short, the "DRT"), Pune raising several grounds therein. To the aforesaid Securitisation Application, the Respondent -- Bank also filed its affidavit in reply inter alia contending that there was no merit in the Securitisation Application and that the same ought to be dismissed. After hearing the parties, the DRT, Pune, by its detailed reasoned order dated 13th January, 2010 dismissed the Securitisation Application filed by the Petitioner.

  7. Being aggrieved by this order of the DRT, Pune, the Petitioner filed an appeal under section 18 of the SARFAESI Act before the DRAT, Mumbai in around 4th March, 2010. Along with the said appeal, the Petitioner also filed a Misc Application for waiver of deposit as contemplated under the 2nd and 3rd provisos to section 18 and sought a full waiver of deposit. It was the contention of the Petitioner that there was no amount determined by the DRT, Pune under section 17 and therefore according to the Petitioner, nothing was due from it as required under section 18 of the SARFAESI Act. In these circumstances, the Petitioner sought a full waiver of deposit. The relevant averments in the said waiver application read as under:-

    "That appellant has filed the present appeal challenging the order of the DRT, Pune, dismissing securitization application of the appellant. Therefore, in fact there is no any necessity to deposit any amount as required by law. As there is no any amount determined under sec.17 by DRT there cannot be said any dues. Therefore the said condition of deposit of amount is required to be waived."

  8. After hearing the Petitioner as well as the Respondent -- Bank, the DRAT, Mumbai passed its order dated 30th June, 2014 wherein, after giving credit of the amounts already deposited by the Petitioner with the Respondent -- Bank, the DRAT directed the Petitioner to deposit a sum of Rs.20,00,000/- within a period of eight weeks in two equal installments, failing which the appeal of the Petitioner would stand dismissed.

  9. For the sake of completeness, it would not be out of place to mention that after the issuance of the notice dated 14th August, 2007 under section 13(2) of the SARFAESI Act, no payments were made by the Petitioner till 28th February, 2012. The outstanding dues of the Respondent -- Bank as on 29th February, 2012 was to the tune of Rs.1,65,36,770.61. The Petitioner had deposits with the Respondent -- Bank of Rs.5,29,441/- which were forfeited by it on the said date and credit for the same was given to the Petitioner. Thereafter, one of the guarantors to the transaction (Mr K.P. Malkani) sold one of the mortgaged...

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