Appeal No. 255 of 2015. Case: State Bank of India Vs Om Prakash and Ors.. Delhi DRAT DRAT (Delhi Debt Recovery Appellate Tribunals)
| Case Number | Appeal No. 255 of 2015 |
| Counsel | For Appellant: Bheem Sain Jain representing Sanjeev Kakra, Advocate and For Respondents: Praveen Rawal, Advocate |
| Judges | Ranjit Singh, J. (Chairperson) |
| Issue | Securitisation And Reconstruction Of Financial Assets And Enforcement Of Security Interest Act, 2002 - Sections 13, 13(2), 13(3), 13(4), 2, 2(1)(f), 2(1)(zb), 2(f), 31 |
| Judgement Date | March 23, 2016 |
| Court | Delhi DRAT DRAT (Delhi Debt Recovery Appellate Tribunals) |
Judgment:
Ranjit Singh, J. (Chairperson)
1. While allowing the S.A. filed by the respondent, the Tribunal below has directed the Bank to return a sum of Rs. 18,26,000/- with interest @ 8% per annum to the auction purchaser, who had purchased the property, and to take back the title deeds as well as possession of the secured asset from the auction purchaser. The respondent No. 1 is also directed to return the excess amount received by him from the appellant Bank. The Bank is held entitled to recover its dues in accordance with law pursuant to the demand notice dated 11th February, 2010. While allowing S.A., the Tribunal has held that the sale notice dated 27th February, 2011 and second sale notice dated 30th December, 2011 was not issued to the guarantor who would fall within the definition of 'borrower'. Aggrieved against this order passed by the Tribunal below, the Bank has filed the present Appeal.
2. In this case, the property of the respondent who is borrower was put to sale by way of auction pursuant to the possession notice dated 11th February, 2011 and sale notice dated 27th February, 2011. This S.A. filed by respondent was dismissed by the Tribunal below on 30th March, 2012, respondent had impugned this order by filing Appeal No. 388/2013. This Tribunal found that the order passed by the Tribunal below was bereft of reasons and accordingly remanded the case back to the Tribunal below for passing fresh order giving reasons. On remand, the present impugned order has now been passed allowing the S.A.
3. The respondent had assailed the possession notice and the sale, notice on various grounds. Plea was that demand notice did not contain details of the amount, and that the Bank had taken forcible possession without any notice. Allegations were that the Bank did not publish the possession notice in two leading newspapers as required by the Rules. The respondent had further alleged that no proper procedure prescribed under the relevant law was followed by the Bank and the measures taken by the bank were illegal, arbitrary and contrary to the provisions of the SARFAESI Act.
4. The facts on record would show that no bid was received pursuant to the sale notice dated 27th February, 2011. The Bank thereafter conducted a fresh auction on 31st January, 2012 after issuing fresh notice on 28th December, 2011. As per the respondent No. 1, the Bank had not followed the provisions of Rule 8(6) of the Security Interest (Enforcement) Rules by serving notice on him at the new address which was in the knowledge of the Bank. It is alleged that the Bank had already taken physical possession of the secured asset on 11th February, 2011 and, hence, serving of notice at the said address could not be taken as proper service in eyes of law.
5. In its response, the Bank would plead that the demand notice dated 11th February, 2010 was issued to the respondent borrower at the address mentioned in the S.A. The amount recoverable from the respondent was also mentioned and clearly stated in the notice. As per the Bank, it had given details of the amount due in the demand notice. The Bank would further point out that before taking physical possession of the secured asset on 11th February, 2011 the Bank had issued prepossession notice dated 13th December, 2010, demanding possession of the secured asset on or before 24th December, 2011, failing which the possession of the secured asset was to be taken at the risk, cost and responsibility of the respondent No. 1. As per the Bank, the family members of the respondent No. 1 did not open the door and copy of the pre-possession notice was dropped inside the gate of the house on 28th December, 2010 and also affixed on the outer part of the secured asset as well. The possession notice was also duly published in two daily newspapers, one in 'Daily News' and the other in 'Punjab Kesari' on 15th February, 2011. The Bank accordingly would plead that the requirement of Rule 8(2) of the Rules was fully complied with. As per the Bank, respondent had duly received the possession notice dated 11th February, 2011 and this would be evident from the letter written by the respondent for restoring the possession with the promise to pay the dues of the Bank in instalments. The Bank would accordingly plead that it had acted in prescribed manner in taking possession of the secured asset. Accordingly, the Bank had pleaded for dismissal of the S.A.
6. The factual position which would emerge from the pleadings is that the auction sale could not be concluded pursuant to the sale notice dated 27th February, 2011, as no bids were received. The respondent No. 1 would allege that for conducting fresh auction the Bank did not follow the provisions of Rule 8(6) of the Rules, as the sale notice was not served on the borrower/guarantor. The respondent No. 1 would urge that the sale notice was not served at the new address which was in the knowledge of the Bank, since it had already taken physical possession of the secured asset. The appellant Bank would respond to this plea by pointing out that the sale notice was issued to the respondent No. 1 at the address as mentioned in the S.A. The Bank had taken a stand that the respondent No. 1 had even mentioned the same address in the amended cause title filed on 10th June, 2015. The Bank has alleged that the respondent No. 1 had received copy of the sale notice dated 30th December, 2011 but refused to acknowledge the receipt thereof when the sale notice was pasted on the secured asset. The sale notice dated 30th December, 2011 was also published in two newspapers to comply with the requirement of Rule 8(6) of the Rules.
7. The Tribunal has found that although the demand notice dated 11th February, 2010 was issued to both the borrowers, i.e., applicant as well as guarantor, but the Bank had not adduced any documentary evidence about service of possession notice on all the borrowers, which included guarantor as...
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