Mast Ram Atter vs Debt Recovery Tribunal Lko. Bench And ...
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Allahabad High Court

Mast Ram Atter vs Debt Recovery Tribunal Lko. Bench And ... on 27 May, 2024

Author: Rajan Roy

Bench: Rajan Roy

HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
 
 


?Neutral Citation No. - 2024:AHC-LKO:40361-DB
 
Court No. - 2
 

 
Case :- SPECIAL APPEAL No. - 86 of 2024
 

 
Appellant :- Mast Ram Atter
 
Respondent :- Debt Recovery Tribunal Lko. Bench And Others
 
Counsel for Appellant :- Sharad Pathak
 
Counsel for Respondent :- C.S.C.,Praveen Dwivedi,Vinay Shankar
 

 
Hon'ble Rajan Roy,J.
 

Hon'ble Om Prakash Shukla,J.

1. Heard.

2. On 17.05.2024 we have passed the following order :-

"1. Application along with affidavit filed on behalf of respondent no. 2 is taken on record.

2. Heard Shri Sharad Pathak, learned counsel for the parties and Shri Praveen Dwivedi, learned counsel for the respondent no. 2.

3. Let learned counsel for appellant file response to the affidavit filed today on behalf of the respondent no. 2.

4. The appellant or respondents, as the case may be, should also bring on record the notice dated 06.04.2016 which was subject matter of Securitization Application No. 652 of 2017 filed by M/s Gadeo Electronics. M/s Gadeo Electronics was initially the guarantor for the loan taken by M/s KMG A to Z Systems Pvt. Ltd. of which the appellant was a Director. K.M.G. A to Z Pvt. Ltd. was an opposite party in the said proceedings. It is contended by the Bank that the appellant herein was aware of those proceedings but has not disclosed it. This apart, the S.A. was filed after the title deeds deposited by the appellant relating to his flat as mentioned in the earlier orders consequent to the offer of replacement/ substitution of mortgage property and the letters issued in July, 2015. The said SA bearing No. 652 of 2017 was decided on 07.05.2022 with the observation/direction as under:

"In view of the above analysis of the case, this Tribunal is of the opinion that the respondent bank had no right to claim the property no. B-60, Sector-57, NOIDA of M/s Gadeo Electronics as mortgaged property on implementation of the substitution of two properties. Therefore, SARFAESI action initiated by the bank against the property no. B-60, Sector-57, NOIDA is illegal and is set aside. The Bank is directed to release the title deed of the property of the applicant. The respondent bank is free to recover its dues from the substituted properties of Mr. Attar Singh and Mr. S.K. Sharma as detailed in the demand notice dated 08.01.2016. The applicant firm had given corporate guarantee for the repayment of the entire sum due not to the extent of the value of the mortgaged property. Therefore, the corporate guarantee of partners of M/s Gadeo Electronics shall be the subject to the decision of the higher authorities of the Bank.

With the above observations, the S.A. filed by the application is disposed of.

Let the file be consigned to record."

5. This judgment has been challenged by the Bank before the DRT. The stand of the bank in S.A. No. 652 of 2017 as noticed in the aforesaid judgment was that substitution has not taken place as per law. There the Bank had opposed the release of mortgage property of M/s Gadeo Electronics.

6. The contention of the appellant's counsel is that it being the stand now they can not change their stand. Moreover, he has invited our attention to a notice issued by the Bank dated 01.05.2024, wherein they are showing the mortgage property of M/s Gadeo Electronics as a mortgage property for the loan extended to the Company which had substance with then being bound up. The said notice is at page 7 of the supplementary affidavit. The Bank has not filed any response to the same. Let it be done.

7. The moot point herein is as to whether the property of M/s Gadeo Electronics the original guarantor of the loan taken by M/s KMG A to Z Systems Pvt. Ltd. is still mortgaged with the Bank, although, there is an order in S.A. No. 652 of 2017 for releasing the title deeds which goes to show that it can not be treated as a mortgage property, but, then the same is dependent upon the implementation of the substituted properties which are of the appellant and there is nothing as of now to show that the said substituted mortgage has been implemented.

8. As from the notice of the bank Annexure No. SA-1 to the supplementary affidavit of the appellant, M/s Gadeo Electronics is still being shown as guarantor, therefore, the Bank's own conduct shows that it is treating M/s Gadeo Electronics' property as the one which is mortgaged and the property of the appellant offered for substitution has not been implemented as yet and mere deposit of title deeds in these of circumstances will be of no consequence in view of the stand of the Bank itself, as, apparently, both the properties can not be treated as mortgaged nor both the persons can be treated as guarantors.

9. Moreover, the Bank has challenged the order passed in S.A. No. 652 of 2017 but there is no stay therein. In these circumstances, a jurisdictional issue has arisen. If the property offered by the appellant is not mortgaged as yet and implementation of the substituted property has not been carried out and the Bank itself is treating the property of M/s Gadeo Electronics as mortgaged, then, how the property of the appellant is being put to auction and in that event the very basis for the proceedings before the DRT as far as the appellant's property is concerned and for an order under Section 14, may be non existent, but, we do not record any conclusive opinion in this regard at this stage and leave it for the parties to exchange affidavits, as, there is an order of DRT in SA No. 652 of 2017 dated 07.05.2022 as quoted above which may work against the petitioner, but he says that though a party in the said proceedings, he was not heard, yet the question is why he has not challenged the said order. These are issues which go to the root of the matter which have to be considered by this Court.

10. Moreover, we also find that the auction purchaser has deposited only 25% of the bid money, the remaining is to be deposited till 26.06.2024.

11. List/ put up on 27.05.2024 as fresh."

3. Learned Counsel for the petitioner says that the petitioner - Mast Ram Atter was not a party in Securitization Application No.652 of 2016. Be that as it may, from the operative portion of the order which we have quoted in our order dated 17.05.2024, we find that the Tribunal rightly or wrongly has specifically observed that the respondent-Bank is free to recover its dues from the substituted properties of Mast Ram Atter (appellant herein) and Mr. S.K. Sharma as detailed in the demand notice dated 08.01.2016. If Mast Ram Atter was not a party in S.A. No.652 of 2016 and there is a provision for review, he can always seek review of the said order. Considering the fact that the judgment dated 07.05.2022 passed bearing S.A. No.652 of 2016 has already been challenged in appeal by the Bank (incorrectly mentioned as 2017 in our order dated 17.05.2024) if so advised, he can also challenge the same by way of appeal.

4. We have also been informed that on 20.05.2024 itself the appellant before us has already handed over secured asset to the Bank.

5. The only reason we were proceeding in the matter is the contention of the petitioner's Counsel that in fact from the conduct of the Bank itself, the property offered for mortgage was not in fact mortgaged and the same was never complete. However, in view of the order dated 07.05.2022 passed in S.A. No.652 of 2016 which we have quoted above there would be a requirement for the appellant herein either to seek a review of the same or challenge it in appeal. The possession of the secured asset already having been handed over to the Bank, it is now also open for the appellant to challenge the order impugned before the Writ Court before the Appellate Tribunal for the reason that there are some mixed questions of fact and law involved herein.

6. Learned Counsel for the appellant says that the appellant does not have the resources to make the statutory deposit of 25% of the due amount before the Appellate Tribunal, however, the Counsel for the Bank says that this cannot be a ground for not relegating the matter to the Appellate Tribunal certainly not at this stage.

7. It is open to the appellant herein to raise the ground that in fact the equitable mortgage in respect of the property of the appellant which was offered did not fructify in a complete mortgage. He relies upon the judgment of Apex Court in the case of United Bank of India Ltd. Vs. Messrs Lekharam Sonaram and Co. and others, reported in AIR 1965 SC 1591.

8. In view of the observations made hereinabove, we see no reason to interfere with the impugned judgment.

9. Disposed of.

(Om Prakash Shukla, J.) (Rajan Roy, J.)

Order Date :- 27.5.2024

Anand Sri./-