Appeal No. 151 of 2014. Case: Panwar Steel Ltd. and Ors. Vs Indian Overseas Bank and Ors.. High Court of Bombay (India)
| Case Number | Appeal No. 151 of 2014 |
| Counsel | For Appellant: Vinita Sasidharan, Advocate and For Respondents: C.S. Pasricha, Advocate |
| Judges | Ranjit Singh, J. (Chairperson) |
| Issue | Securitisation And Reconstruction Of Financial Assets And Enforcement Of Security Interest Act, 2002 - Sections 13(1), 13(2), 13(4), 13(8), 14, 29, 37 |
| Citation | 2015 (IV) BC 1 (DRAT) |
| Judgement Date | March 18, 2015 |
| Court | High Court of Bombay (India) |
Judgment:
Ranjit Singh, J. (Chairperson)
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The S.A. filed by the appellant has been dismissed by the Tribunal on 16.12.2013. Aggrieved against the order passed by the Tribunal below the appellant has filed the present appeal. The appellants had impugned the action of the respondent Indian Overseas Bank under the provisions of the SARFAESI Act. Appellant M/s. Panwar Steel Ltd. had availed loan facilities to the tune of Rs. 300 lacs on 24.6.2004. This was enhanced to Rs. 350 lac on 7.8.2004. The appellant company had also obtained a term loan of Rs. 740 lac from Haryana State Industrial and Infrastructure Development Corporation Ltd. (HSIIDC). It is stated that the Haryana State Pollution Control Board closed down the operations of the company on 3.1.2006. HSIIDC being a secured creditor took possession of the secured assets of the company which was Plot No. 78, Sector No. 21, Huda Industrial Area, Bhiwani, Haryana. The possession of the plot was taken along with the raw material, finished and semifinished goods on which the respondent Bank had first charge.
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As per the appellants, the company informed the Bank about the action taken by the Haryana State Pollution Control Board as well as HSIIDC, still, the Bank did not take any action to secure the raw material and other movables over which it had the first charge.
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HSIIDC sold the unit of the appellant along with the raw material finished and semi-finished goods for a sum of Rs. 537 lac. The Bank, on the other hand, issued a demand notice under Section 13(2) of the SARFAESI Act on 1.3.2007 claiming an amount of Rs. 3,88,79,001/- along with interest thereon. This was followed by notice dated 24.9.2007 under Section 13(4) of the Act for taking possession of the residential Plot Nos. 407, 408 and 409, Scheme 8A, Vikas Nagar, Bhiwani. This possession notice was published in the newspaper. 'The Tribune' after expiry of two months which, as per the appellants, would be against the explicit mandate of the Rule 8(2) of the Security Interest (Enforcement) Rules, 2002 (for short, the Rules).
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The respondent Bank, thereafter, published a sale notice on 4.3.2008 in 'The Tribune' and 'Dainik Bhaskar' and bids were called for on or before 11.4.2008. No bids, however, were received. The Bank, therefore, again issued sale notice dated 9.8.2008 which was published in the newspaper paper on 11.8.2008. The bids were called for on or before 16.9.2008. During this time, the appellants claim to have approached the Bank with bona fide intent for settling the dues and thus entered into one-time settlement (OTS) with the respondent Bank for a sum of Rs. 165 lac. It is stated that a sum of Rs. 20 lac was lying in no-lien account which was to be appropriated. The appellants state to have paid Rs. 60 lac towards this OTS though this payment was made with some delay.
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On 17.5.2011, the appellants sought permission from the respondent Bank for selling one of the mortgaged...
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