The court established that compliance with pre-deposit requirements is mandatory for challenging sales under the Recovery of Debts Due to Banks and Financial Institutions Act and related rules.

JUDGMENT :

D. K. Singh, J.

Heard Mr Dinesh R Shenoy, learned Counsel for the petitioner and Mr V V Sidharthan, learned Senior Advocate; Mr Saji P Joseph and Mr Vipin D G learned Counsel for the respondents.

2. These two OP (DRTs) have been filed by one Dr Mathew Antony arising out of the proceedings under the provisions of the SARFAESI Act and the Rules made thereunder and the Orders passed by the Debts Recovery Tribunal and the Debts Recovery Appellate Tribunal.

2.1 In OP(DRT) No.64/2018, the challenge is to Ext.P8 order dated 15.12.2017, whereby the Debts Recovery Appellate Tribunal dismissed the appeal on the ground of non-compliance with the directions dated 15.11.2017 for making a pre-deposit of Rs.50 lakhs in two instalments. The Tribunal dismissed the appeal as the petitioner herein and appellant before the Tribunal did not comply with the order of pre-deposit.

2.2 In OP (DRT) No.88/2017, the challenge is to the order dated 12.07.2017 passed by the Debts Recovery Tribunal-2, Ernakulam, and the order dated 12.04.2016 passed by the Recovery Officer in I.A. No.700/2010 in DRC No.1503/OBC/EKM in O.A. No.71/2002. The challenge also concerns the order/certificate issued by the Recovery Officer after the sale of the secured asset was completed.

2.3 The facts are common in both the O.P.(DRT), except for some minor differences.

O.P. (DRT) No.64/2018

3. According to the petitioner, he is a Doctor by profession and served abroad in Libya from 1996 to 2004. In 2005 he moved to Saudi Arabia. M/s Amrok Shipping Private Limited had applied for a business loan from the respondent Bank and offered the properties of Mr George Antony, Mr Alex Antony, Mr Jacob Antony and the petitioner. These four persons are brothers. On 09.10.1997, Mr Alex Antony and the petitioner deposited their title deeds to create an equitable mortgage in favour of the Bank and they also executed a memorandum of deposit of the title deed and vide letter dated 07.05.1997 they executed a letter confirming deposit of title deeds. The properties mortgaged to the Bank by Mr Alex Antony, and the petitioner comprised 2.448 hectares (2.70 hectares as per Encumbrance Certificate and Valuation Report) in Resurvey No.325/5, Block No.14 (Old Sy. No.1/1A) and 2.62 hectares in Resurvey No.325/4, Block No.14 (Old Sy. No.1/1A) of Kanjirappilly Village and sub-district in Kottayam District. These properties had come to the share of Mr Alex Antony and the petitioner as per Partition Deed No.1869/1988 of the SRO Kanjirappally. The said partition deed was executed between the legal heirs of the late Antony, the father of the petitioner and other brothers.

3.1 According to the petitioner, when the petitioner was abroad the property documents were taken from the petitioner's wife, who had a restricted Power of Attorney for the creation of a mortgage over the petitioner's properties without his knowledge and consent. A power of attorney in favour of his wife did not contain any power to mortgage the properties, and no concurrence was taken from the petitioner either before or after the alleged creation of the mortgage.

4. The Bank filed O.A. No.71/2002 before the Debts Recovery Tribunal Ernakulam under Section 19(1) of the Recovery of Debts Due to Banks and Financial Institutions Act 1993 for recovery of a sum of Rs.1,31,47,825.53 with interest at the rate of 17% per annum from the defendants in the Original Petition including the M/s Amrok Shipping Private Limited and the petitioner who was arrayed as the 5th defendant in the Original Petition.

4.1 The defendants entered appearance on 03.05.2002 and sought adjournment from time to time to file a written statement. But a written statement was never filed even after a lapse of more than 22 months. The said O.A. was decreed on 19.03.2004 for Rs.1,19,22,838.53 with interest thereon at the rate of 13% per annum from 22.01.2002 to the date 19.03.2004 and after the decree at the rate of 12% per annum till realisation with appropriate costs fr