The release of one co-surety does not discharge the others; the creditor can recover from either the principal debtor or any surety, and the Debt Recovery Tribunal has limited powers to recall its orders.

ORDER :

Hemant Chandangoudar, J.

Petitioner No. 1, a partnership firm called M/s. SSA Constructions (the mortgagor-borrower), and Petitioner No. 2, its managing director and alleged surety, obtained various loan facilities from Respondent No. 1, the mortgagee creditor bank. They have filed this writ petition, challenging the dismissal of I.A. No. 674/2014 in O.A. No. 963/2011 by the Debt Recovery Tribunal (DRT), Bangalore, in an order dated 22.05.2015. In their application, the petitioners requested that the properties of Respondent Nos. 2 and 3 be included for issuing a recovery certificate under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDBFI Act).

2. Respondent No. 1 had approved credit facilities for the petitioners and M/s. SSA Constructions (Defendant No. 3 in O.A. 963/2011, not listed here). The properties of the petitioners, co-borrowers, and guarantors were offered as security for the repayment of these loans.

3. On 08.03.2007, the term loan limit was reduced from Rs. 200 lakhs to Rs. 60 lakhs, and the properties of Respondent Nos. 2 and 3, which the petitioners now want to include, were released.

4. After the borrower defaulted on the loan repayment, Respondent No. 1, Andhra Bank (the mortgagee creditor), filed O.A. No. 963/2011 (later renumbered as T.A. 598/2017) under Section 19 of the RDDBFI Act before the DRT, Bangalore, seeking a recovery certificate for the following:

1. An amount of INR 4,45,97,599/- against Petitioner No. 1 (Defendant No. 1 - borrower), Petitioner No. 2 (Defendant No. 4 - surety), and Respondent Nos. 2 and 3 (Defendants No. 14 and 15, respectively - co-sureties), among others (unarrayed herein).

2. An amount of INR 3,35,67,342/- against Defendant No. 2 (unarrayed debtor), Petitioner No. 2 (Defendant No. 4 - surety), and others (unarrayed herein).

3. An amount of INR 2,50,18,250/- against Defendant No. 3 (Shree Surya Constructions, unarrayed debtor), Petitioner No. 2 (Defendant No. 4 - surety), and Respondent Nos. 2 and 3 (Defendants No. 14 and 15, respectively - sureties), among others (unarrayed herein).

Thus, a total of INR 10,31,83,191/- is being claimed from Petitioner Nos. 1 and 2, along with other defendants (not listed here), including Respondent-defendant sureties Nos. 2 and 3, who had provided equitable mortgages to secure the petitioners’ and other borrowers' loans (also not listed here) through a Memorandum of Deposit of Title Deeds (RF255) and an Extension of Memorandum of Deposit of Title Deeds (RF255B). The case is still pending.

5. Petitioner Nos. 1 and 2 later filed I.A. No. 674/2013 on 08.02.2013, in O.A. No. 963/2011 under Section 22 and Section 19(25) of the RDDBFI Act, 1993, and Rule 18 of the related rules, requesting the inclusion of the following properties, which were left out of the Schedule of O.A. No. 963/2011 filed by the Respondent Bank:

1. Equitable mortgage of a residential property in Devanahalli, Bangalore, owned by D. Anusha Reddy, valued at Rs. 22.50 lakhs (urban property) – Respondent No. 3 / Defendant No. 15.

2. Equitable mortgage of wet agricultural property (1.3 acres in Yellayapalem, Kodavalur) and a 17-acre mango garden in Thimmanagari Palem, Gudur, owned by D. Venku Reddy, valued at Rs. 79.50 lakhs – Defendant No. 12, not listed here.

3. Equitable mortgage of 18 acres of wet agricultural land in Gogulapalli, Alur, Nellore, owned by D. Bujjamma, valued at Rs. 54.00 lakhs – Respondent No. 2 / Defendant No. 14.

6. On 09.12.2013, the DRT allowed I.A. No. 674/2013 while granting the respondent-bank the right to submit an additional written statement, if necessary. However, on 23.04.2014, the respondent-bank filed I.A. No. 3102/2014, seeking to recall the order, which was allowed vide order dated 12.01.2015.

7. The DRT re-examined I.A. No. 674/2013, and on the objections filed by the respondent-bank on 25.02.2015, wherein the respondent-Bank had explained why these properties were excluded from the Schedule of O.A. 963/2011,