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DEBTS RECOVERY TRIBUNAL-COIMBATORE
Hon'ble Mr. Ashok C. Prakash, Presiding Officer
I.A. Nos. 4 and 43 of 2003
Decided on 18.3.2003
M. Balasubramaniam, B.Sc., B.L., Advocate
versus
State Bank of India & Ors.
The court emphasized the importance of following legal procedures for enforcement of security interest and upheld the rights of a bona fide purchaser for consideration.
Headnote:
Attachment - Dispute over Car Possession - Recovery of Debts Due to the Banks and Financial Institutions Act, Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 19(25) of the Recovery of Debts Due to the Banks and Financial Institutions Act, Sections 13(1) and (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
Fact of the Case:
The petitioner, a 3rd party to the main proceeding, sought the release of a car from the respondent Bank, which had taken possession of the car without any court order. The respondent Bank filed a counter-statement and a separate application for attachment of the car.
Finding of the Court:
The court found that the car was not hypothecated with the bank and that the petitioner was a bona fide purchaser for consideration. The court also noted that the bank failed to follow the procedures established under the law for enforcement of security interest.
Issues: Dispute over possession of the car, validity of the bank's possession without court order, and compliance with legal procedures for enforcement of security interest.
Ratio Decidendi: The court held that the petitioner, as a bona fide purchaser for consideration, had the rightful claim over the car and directed the respondent Bank to release the car without further delay. The court also emphasized the importance of following legal procedures for enforcement of security interest.
Final Decision: I.A. No. 4/2003 was allowed, directing the respondent Bank to release the car, while I.A. No. 43/2003 was ordered to be dismissed. Parties were left to bear their own costs.
Mr. Ashok C. Prakash, Presiding Officer : This common order of mine will dispose of both the I.A.s i.e. I.A. No. 4/2003 and I.A. 43/2003.
By this Interim Application No. 4/2003 (3.1.2003), the petitioner (Mr. M. Balasubramaniam, Advocate) who is a 3rd Party to the main proceeding has prayed for issuing a direction to the applicant Bank to release Maruti 800 car bearing Registration No. T.N. 01-5709 and to handover the key forthwith of the car to the petitioner. The petitioner, has solemnly affirmed that, the respondent No. 1, has instituted O.A. No. 220/02 for recovery of certain amount alleged to be due from the above defendants i.e. R-2 to 6.R-1 without any specific authority has gone to the extent of seizing the movable properties even not hypothecated to it, which were available at the place, where the defendants were running Automobile Service, which is rented premises, belonging to one Sri Govindraj. It has been further submitted by the petitioner, that D-2 , have sold the said car to him, for a sum of Rs. 30,000/- (Rupees thirty thousand only) on 8.3.2002. D-2, has already executed sale receipt, agreement delivery receipt, and Transfer Application (Xerox copies of the said documents are annexed herewith the application). As minor repairs to be carried out in the car, D-2 asked him to take the car after effecting necessary repair and as such, the petitioner have left the car in the 2nd defendant Automobile Service place hoping that he could take back the car within few days after repair had been attended to. D-2 had also promised that the petitioner could take the R.C. Book of the car along with the car after the repair work. When he visited the service place, after 10 days, he was shocked to learnt, that respondent No. 1 has taken over the possession of the premises, where the car was parked for repair. On enquiry he came to know, that respondent Bank has also taken possession of the car belonging to the petitioner which was left in the service-station for minor repair. In spite of his sincere and best efforts, he could not contact D-2 till date. The petitioner, has also submitted that R-1 has taken possession of the car without any order from any Court or from any appropriate forum. The petitioner, has further submitted, that even in the Schedule annexed to O.A., this car has not been included. Even the petitioner, has executed an Affidavit, when the respondent Bank agreed to release the said car, after realizing their mistake. Even then respondent-1 has failed to release the said car and backed out.
2. The respondent Bank, has submitted in Para 3 of their counter (dated 16.1.2003) that they are not aware of the alleged dealing with regard to the car bearing No. T.N. 01-5709, and answering respondent is any way concerned with the alleged sale between respondent 2 and the petitioner. Further R-1 has admitted taking over of the possession of the premises belonging to R-2 to 6, including the said car. They prepared inventory in the presence of an Advocate/Notary, including the said car. Further they have denied any transaction between the petitioner and R-2, and submitted that "Documentary Evidence" produced by the petitioner is only fabricated one. In Para 5, respondent No. 1, has also admitted, that though car is not hypothecated, since the respondent has taken possession, they have filed separate application for attachment of the car. The answering respondent, have further submitted, that they can release the car, to R-2, only if the claim is made by him. Finally R-1, have prayed for dismissing the petition with cost.
3. In view of the averments made in para 5 of their counter, respondent Bank, has filed I.A. No. 43 of 2003 praying therein for attachment of the said car. The petitioner has solemnly affirmed, that counter statement filed by the petitioner, in I.A. No. 4/2003 may be read as part and parcel of this Affidavit. The petitioner, has submitted that they have filed suit for recovery of Rs. 12,25,544/- fro
