Kerala High Court
Dillens.T.D vs The Authorised Officer, South Indian ... on 23 April, 2024
Author: N.Nagaresh
Bench: N.Nagaresh
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
TUESDAY, THE 23RD DAY OF APRIL 2024 / 3RD VAISAKHA, 1946
OP (DRT) NO. 123 OF 2024
AIR NO.158 OF 2024 OF DEBT RECOVERY APPELLATE
TRIBUNAL, CHENNAI
PETITIONERS/APPELLANTS:
1 DILLENS.T.D, AGED 42 YEARS
S/O.T.P.DAVIS, THATTIL CHEENIKKAL HOUSE,
NEAR R C CHURCH, NEDUMPUZHA.P.O.,
KOORKKANCHERRY, THRISSUR., PIN - 680007
2 SEMONA DILLENS, AGED 37 YEARS
W/O.DILLENS.T.D, THATTIL CHEENIKKAL HOUSE,
NEAR R C CHURCH, NEDUMPUZHA.P.O.,
KOORKKANCHERRY, THRISSUR., PIN - 680007
BY ADVS.
ZAKEER HUSSAIN
K.A.SANJEETHA
MOHAMMED ZAMAN
RESPONDENTS/RESPONDENTS:
1 THE AUTHORISED OFFICER,
SOUTH INDIAN BANK LTD
SIB HOUSE, T.B.ROAD, MISSION QUARTERS,
THRISSUR., PIN - 680001
2 SOUTH INDIAN BANK LTD
KOORKKANCHERY, THRISSUR.
REP. BY ITS BRANCH MANAGER., PIN - 680007
BY ADVS.
SRI.SUNIL SHANKAR A
SMT.VIDYA GANGADHARAN(K/000424/2020)
THIS OP (DEBT RECOVERY TRIBUNAL) HAVING COME UP FOR
ADMISSION ON 23.04.2024, ALONG WITH OP (DRT).147/2024,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
O.P.(DRT) Nos.123 & 147 of 2024
:2:
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
TUESDAY, THE 23RD DAY OF APRIL 2024 / 3RD VAISAKHA, 1946
OP (DRT) NO. 147 OF 2024
IA NO.108/2024 IN AIR NO.158 OF 2024 OF DEBT RECOVERY
APPELLATE TRIBUNAL, CHENNAI
PETITIONERS/APPELLANTS:
1 DILLENS.T.D
AGED 42 YEARS
S/O.T.P.DAVIS, THATTIL CHEENIKKAL HOUSE,
NEAR R C CHURCH, NEDUMPUZHA.P.O.,
KOORKKANCHERRY, THRISSUR., PIN - 680007
2 SEMONA DILLENS
AGED 37 YEARS
W/O.DILLENS.T.D, THATTIL CHEENIKKAL HOUSE,
NEAR R C CHURCH, NEDUMPUZHA.P.O.,
KOORKKANCHERRY, THRISSUR., PIN - 680007
BY ADVS.
ZAKEER HUSSAIN
K.A.SANJEETHA
MOHAMMED ZAMAN
RESPONDENTS/RESPONDENTS:
1 THE AUTHORISED OFFICER,
SOUTH INDIAN BANK LTD
SIB HOUSE, T.B.ROAD,
MISSION QUARTERS, THRISSUR.,
PIN - 680001
2 SOUTH INDIAN BANK LTD
KOORKKANCHERY, THRISSUR.
REP. BY ITS BRANCH MANAGER., PIN - 680007
O.P.(DRT) Nos.123 & 147 of 2024
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BY ADVS.
SRI.SUNIL SHANKAR A
SMT.VIDYA GANGADHARAN(K/000424/2020)
SRI.JERIN GEORGE(K/863/2023)
THIS OP (DEBT RECOVERY TRIBUNAL) HAVING COME UP FOR
ADMISSION ON 23.04.2024, ALONG WITH OP (DRT).123/2024,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
O.P.(DRT) Nos.123 & 147 of 2024
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N. NAGARESH, J.
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O.P.(DRT) Nos.123 and 147 of 2024
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Dated this the 23rd day of April, 2024
JUDGMENT
~~~~~~~~~ The petitioners, who are husband and wife, availed financial facilities from the South Indian Bank Limited. In OP(DRT) No.123/2024, the petitioners seek to set aside Ext.P16 order of the Debts Recovery Appellate Tribunal, Chennai in waiver application IA No.108/2024 in AIR (SA) No.158/2024. In OP(DRT) No.147/2024, the petitioners seek to set aside Ext.P4 order of the Debts Recovery Appellate Tribunal, Chennai in IA No.211/2024 in IA No.108/2024.
2. The pleadings in the OP(DRT) would indicate that the petitioners had availed substantial amount as financial advance/loan and failed to maintain the loan account. The petitioners failed to maintain the loan account to the O.P.(DRT) Nos.123 & 147 of 2024 :5: satisfaction of the Bank. The Bank therefore initiated coercive proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The petitioners thereupon filed SA No.303/2021 before the Debts Recovery Tribunal-II, Ernakulam. In the meanwhile, the Bank obtained Ext.P2 order from the Chief Judicial Magistrate's Court, Thrissur under Section 14 of the SARFAESI Act whereby the Chief Judicial Magistrate's Court appointed an Advocate Commissioner to take physical possession of the property mortgaged by the petitioners. The petitioners filed Ext.P3 IA No.1503/2022 in SA No.303/2021 seeking to stay Section 14 proceedings.
3. The Debts Recovery Tribunal directed the petitioners to deposit an amount of ₹150 lakhs and directed the Bank to defer dispossession as per Ext.P4 order dated 06.07.2022. The Debts Recovery Tribunal-II heard the stay petition again on 11.01.2024 and dismissed the same as per Ext.P8 order. The petitioners filed Ext.P9 appeal before the O.P.(DRT) Nos.123 & 147 of 2024 :6: Debts Recovery Appellate Tribunal, Chennai. The petitioners also filed a stay petition along with the appeal. The petitioners also filed Ext.P11 waiver application IA No.108/2024. As the DRAT did not take up the waiver application, the petitioners filed IA No.109/2024 seeking to take up Ext.P11 waiver application on an urgent basis.
4. The DRAT allowed IA No.109/2024 and took up IA No.108/2024 for hearing on 08.03.2024. In IA No.108/2024, the DRAT ordered to make a deposit of ₹2,34,63,756/- on or before 22.03.2024 as per Ext.P16 order dated 08.03.2024. In Ext.P16 order, the DRAT made it clear that on the failure to deposit the amount before the stipulated date, the appeal will stand rejected.
5. The petitioner states that while passing Ext,P16 order, the DRAT, Chennai did not consider the fact that the Bank had already appropriated more than 50% of the amount demanded in Ext.P1 demand notice. Therefore, the direction to remit a sum of ₹2,34,63,756/- is highly arbitrary and unsustainable.
O.P.(DRT) Nos.123 & 147 of 2024 :7:
6. While OP(DRT) No.123/2024 was pending, the petitioners filed IA No.211/2024 before the DRAT to enlarge the time for pre-deposit. The said IA was dismissed as per Ext.P4 order dated 26.03.2024. Hence, the petitioners have filed OP(DRT) No.147/2024 seeking to set aside Ext.P4 order of the DRAT in IA No.211/2024.
7. The Standing Counsel entered appearance on behalf of the Bank and resisted the OP(DRT), filing counter affidavit. On behalf of the Bank, the Standing Counsel submitted that Ext.P1 demand notice dated 31.05.2021 was issued to the petitioners seeking payment of the outstanding amount of ₹6,08,57,404.08 together with future interest. The petitioners submitted objection. The objection was disposed of by the Bank. As the petitioners failed to discharge the liability, the Bank issued possession notice dated 02.11.2021.
8. Subsequently, the Bank initiated Section 14 proceedings and the Advocate Commissioner issued notice dated 16.03.2022 to the petitioners seeking vacant O.P.(DRT) Nos.123 & 147 of 2024 :8: possession of the secured assets. The Bank filed OA No.673/2023 before the Debts Recovery Tribunal-II, Ernakulam for recovery of ₹4,49,29,314.80 together with interest from 03.11.2023.
9. When the petitioners approached the Appellate Tribunal, the Appellate Tribunal passed Ext.P16 order directing to deposit ₹2,34,63,756/- on or before 22.03.2024. The respondents state that as on 25.03.2024, an amount of ₹4,72,55,664.85 is due from the petitioners. In view of the second proviso to Section 18 of the SARFAESI Act, no appeal can be entertained unless the borrower has deposited with the Appellate Tribunal 50% of the amount of debt due from the borrower. The Appellate Tribunal has correctly exercised its discretion in not granting any waiver. The original petitions are therefore liable to be dismissed.
10. I have heard the counsel for the petitioners and learned Standing Counsel representing the respondents.
11. The challenge in OP(DRT) No.123/2024 is on Ext.P16 order of the Debts Recovery Appellate Tribunal, O.P.(DRT) Nos.123 & 147 of 2024 :9: Chennai in waiver application IA No.108/2024 in AIR(SA) No.158/2024 filed by the petitioners. The petitioners also seek to direct the DRAT to consider and pass orders on Ext.P9 appeal on merits, without insisting on any deposit under Section 18(1) of the SARFAESI Act. In OP(DRT) No.147/2024, the petitioners seek to set aside Ext.P4 order of the DRAT in IA No.211/2024. IA No.211/2024 was filed seeking to enlarge the time for making pre-deposit.
12. As per Section 18(1) of the SARFAESI Act dealing with the appeal to the DRAT, no appeal shall be entertained unless the borrower has deposited with the Appellate Tribunal 50% of the amount of debt due from him, as claimed by the secured creditors or determined by the Debts Recovery Tribunal, whichever is less. The Appellate Tribunal has been granted discretion to reduce the amount to not less than 25% of debt.
13. The Bank has initiated securitisation measures as per Ext.P1 demand notice dated 31.05.2021 for a sum of ₹6,08,57,404.08. After deducting payments made by the O.P.(DRT) Nos.123 & 147 of 2024 : 10 : petitioners, the claim of the Bank is ₹4,69,27,512/-. Therefore, the Tribunal, by Ext.P16 order, ordered the petitioners to deposit 50% of ₹4,69,27,512/- which comes to ₹2,34,63,756/- within a period of two weeks from 08.03.2024, the date of Ext.P16 order. The petitioners therefore ought to have paid the said amount on or before 22.03.2024.
14. The contention of the petitioners is that they have made substantial remittances and the Bank has appropriated a total amount of ₹3,11,59,093.83 from the account of the father of the 2nd petitioner and credited the same towards the loan account of the petitioners. The DRAT has found that after deducting all payments, the claim of the Bank is ₹4,69,27,512/-. Therefore, I do not find any illegality in Ext.P16 proceedings requiring interference by this Court under Article 227 of the Constitution of India. OP(DRT) No.123/2024 is therefore liable to be dismissed.
15. The prayer in OP(DRT) No.147/2024 is to enlarge the time granted by the DRAT by four weeks. Taking into consideration the facts of the case and pendency of O.P.(DRT) Nos.123 & 147 of 2024 : 11 : OP(DRT) No.123/2024, I am of the view that interest of justice demands that the petitioners shall be granted a reasonable time to pay the pre-deposit so that the DRAT can consider the appeal filed by the petitioners on merits.
OP(DRT) No.123/2024 is therefore dismissed. OP(DRT) No.147/2024 is disposed of setting aside Ext.P4 order of the Debts Recovery Appellate Tribunal, Chennai in IA No.211/2024 in IA No.108/2024 in AIR No.158/2024. The petitioners are granted two weeks time from today to make the pre-deposit. On the petitioners making the payment as directed above, the Debts Recovery Appellate Tribunal, Chennai shall restore the appeal to file and hear the matter on merits.
Sd/-
N. NAGARESH, JUDGE aks/18.04.2024 O.P.(DRT) Nos.123 & 147 of 2024 : 12 : APPENDIX OF OP (DRT) 123/2024 PETITIONERS' EXHIBITS Exhibit.P1 TRUE COPY OF THE DEMAND NOTICE DATED 31/05/2021 ISSUED BY THE 1ST RESPONDENT.
Exhibit.P2 TRUE COPY OF THE ORDER DATED 17/05/2022 IN CRL.M.P.NO.1833/2022 OF THE CHIEF JUDICIAL MAGISTRATE COURT, THRISSUR.
Exhibit.P3 TRUE COPY OF THE STAY PETITION IA NO.1503/2022 IN SA NO.303/2021 DATED 01/07/2022 FILED BY THE PETITIONERS BEFORE THE DRT-II, ERNAKULAM.
Exhibit.P4 TRUE COPY OF THE PROCEEDINGS/ORDER DATED 06/07/2022 IN SA NO.303/2021 OF THE DRT-II, ERNAKULAM .
Exhibit.P5 TRUE COPY OF THE COMMUNICATION DATED
26/07/2022 ISSUED BY THE 2ND
RESPONDENT BANK REGARDING THE
REMITTANCE OF RS.17,47,062.83 TOWARDS THE PETITIONERS LOAN ACCOUNT.
Exhibit.P6 TRUE COPY OF THE COMMUNICATION DATED
27/07/2022 ISSUED BY THE 2ND
RESPONDENT REGARDING THE REMITTANCE OF RS.2,94,12,031/- TOWARDS THE PETITIONERS LOAN ACCOUNT.
Exhibit.P7 TRUE COPY OF THE JUDGMENT DATED 19/12/2023 IN OP(DRT) NO.349/2022.
Exhibit.P8 TRUE COPY OF THE ORDER/PROCEEDING DATED 11/01/2024 IN I.A.NO.1503/2022 IN S.A. NO.303/2021 OF DRT-II, ERNAKULAM.
Exhibit.P9 TRUE COPY OF THE APPEAL AIR (SA) NO.158/2024 DATED 27/01/2024 FILED BY THE PETITIONERS BEFORE THE DRAT, CHENNAI (WITHOUT ANNEXURES).
Exhibit.P10 TRUE COPY OF THE STAY PETITION DATED
27/01/2024 IN AIR (SA)NO.158/2024
FILED BY THE PETITIONERS BEFORE THE
DRAT, CHENNAI.
O.P.(DRT) Nos.123 & 147 of 2024
: 13 :
Exhibit.P11 TRUE COPY OF THE WAIVER APPLICATION
I.A. NO. 108/2024 IN AIR(SA)
NO.158/2024 DATED 27/01/2024 FILED BY THE PETITIONERS BEFORE THE DRAT, CHENNAI.
Exhibit.P12 TRUE COPY OF THE URGENT APPLICATION IA NO.109/2024 IN AIR (SA) NO.158/2024 DATED 27/01/2024 FILED BY THE PETITIONERS BEFORE THE DRAT, CHENNAI. Exhibit.P13 TRUE COPY OF THE NOTICE DATED 09/02/2024 ISSUED BY THE ADVOCATE COMMISSIONER IN CMP NO.1833/2022 OF THE CHIEF JUDICIAL MAGISTRATE COURT, THRISSUR.
Exhibit.P14 TRUE COPY OF THE JUDGMENT DATED 28/02/2024 IN OP(DRT) NO.94/2024.
Exhibit.P15 TRUE COPY OF THE COUNTER IN IA
NO.108/2024 IN APPEAL AIR (SA)
NO.158/2024 OF THE DRAT, CHENNAI.
Exhibit.P16 TRUE COPY OF THE ORDER DATED
08/03/2024 IN I.A.NO.108/2014 IN
AIR(SA)NO.158/2024 OF THE DRAT,
CHENNAI.
O.P.(DRT) Nos.123 & 147 of 2024
: 14 :
APPENDIX OF OP (DRT) 147/2024
PETITIONERS' EXHIBITS
Exhibit.P1 TRUE COPY OF THE WAIVER APPLICATION
I.A. NO. 108/2024 IN AIR NO.158/2024 DATED 27/01/2024 FILED BY THE PETITIONERS BEFORE THE DRAT, CHENNAI.
Exhibit.P2 TRUE COPY OF THE ORDER DATED
08/03/2024 IN I.A.NO.109/2024 IN
I.A.NO.108/2024 IN AIR NO. 158/2024 OF THE DRAT, CHENNAI.
Exhibit.P3 TRUE COPY OF THE IA NO.211/2024 IN
I.A.NO.108/2024 IN APPEAL AIR
NO.158/2024 DATED 22/03/2024.
Exhibit.P4 TRUE COPY OF THE ORDER DATED
26/03/2024 IN IA NO.211/2024 IN
I.A.NO.108/2024 IN AIR NO.158/2024 OF DRAT, CHENNAI.