Back
IN THE HIGH COURT OF ORISSA, CUTTACK
Dr. S. Muralidhar, K.R. Mohapatra, JJ.
Bm, The Urban Co-operative Bank Ltd., Cuttack - Appellant
Versus
Registrar, Debts Recovery Tribunal & Anr. - Respondents
W. P. (C) No. 8100 of 2019
Decided On : 12-05-2021
SARFAESI Act - Recovery Proceedings - Section 13, Section 17 (1), Section 17 (7), Section 30 (1) of the SARFAESI Act - Summary of Acts and Sections: The court discussed the provisions of Section 13, Section 17 (1), Section 17 (7), and Section 30 (1) of the SARFAESI Act, and their applicability to the recovery proceedings. The court highlighted the limitations on the power of the Debts Recovery Tribunal (DRT) to condone the delay in filing an appeal under the SARFAESI Act and the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDB Act). The court emphasized the binding decision of the Supreme Court in International Asset Reconstruction Company of India Ld. v. Official Liquidator of Aldrich Pharmaceuticals Ltd. AIR 2017 SC 5013, which clarified the limitations on the DRT's power to condone delay in filing an appeal.
Fact of the Case:
The Urban Co-operative Bank Ltd., Cuttack filed a writ petition challenging the order passed by the Debts Recovery Tribunal, Cuttack in M.A. No.705 of 2019. The borrower had availed a cash credit limit from the bank, which turned into a Non Performing Asset (NPA). The bank initiated recovery proceedings under the SARFAESI Act, and the borrower, his spouse, and his mother made numerous attempts to stall the proceedings. The mother of the borrower approached the DRT with an appeal under Section 17 (1) of the SARFAESI Act, seeking condonation of delay, which was allowed by the DRT. The bank filed the writ petition challenging this order.
Finding of the Court:
The court found that the DRT erred in condoning the delay and allowing the appeal filed by the borrower's mother. The court set aside the order of the DRT and dismissed the appeal filed by the borrower's mother.
Issues: The key issues involved the borrower's attempts to stall the recovery proceedings, the DRT's power to condone delay in filing an appeal under the SARFAESI Act, and the applicability of the provisions of the RDB Act to the proceedings under the SARFAESI Act.
Ratio Decidendi: The court's decision was based on the limitations on the DRT's power to condone delay in filing an appeal under the SARFAESI Act, as clarified by the Supreme Court in International Asset Reconstruction Company of India Ld. v. Official Liquidator of Aldrich Pharmaceuticals Ltd. AIR 2017 SC 5013.
Final Decision: The writ petition was allowed, and the order of the DRT was set aside. The appeal filed by the borrower's mother before the DRT was dismissed. No order as to costs was issued.
ORDER
Dr. S. Muralidhar, CJ. - This matter is taken up by video conferencing mode, in the Vacation Court.
2. The Urban Co-operative Bank Ltd., Cuttack has filed this writ petition challenging the order dated 9th April, 2019 passed by the Debts Recovery Tribunal, Cuttack (DRT) in M.A. No.705 of 2019.
3. The background facts are that the Petitioner Bank is stated to be a "Primary Co-operative Society" registered under the Orissa Co-operative Societies Act, 1962, which carries on the business of banking.
4. It is stated that one Sri Rajesh Das, Proprietor of M/s. Shree Shree Shree Jagannath Udyog had availed a cash credit limit of Rs.7,00,000/- from the Petitioner Bank through its Link Road Branch on 20th March, 2001. The said borrower provided security and mortgaged the land of his mother Smt. Bimala Kumari Mohanty. The said property was appertaining Sabik Revenue Village : Kusunpur, Sabik Khata No.926, Sabik Plot No.2580, Area : Ac 0.012 decimals, Sabik Plot No.2575, Area : Ac 0.028 decimals corresponding to Hal Revenue Village : Cuttack Town, Unit No.35 (Jhanirimangala), Hal Khata No.995, Hal Plot No.1633/2069, Area: Ac 0.036 decimals (hereafter 'the property in question'). The parents of the borrower Sri Prasanna Kumar Das and Smt. Bimala Kumari Mohanty also stood as sureties for the credit facility.
5. The account turned into a Non Performing Asset (NPA) from 31st March, 2004 onwards. On 12th August, 2004 the authorized Officer of the Bank issued a demand notice under Section 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act) calling upon the borrower to deposit a sum of Rs. 9,94,731/- due as on 31st July, 2004. The borrower filed W.P.(C) No.11142 of 2004 before this Court. There was an interim stay granted by this Court on 14th March, 2011 against the impugned demand notice. Ultimately, on 14th March, 2011 the writ petition was disposed of by this Court by directing the borrower to file a representation before the Bank by 21st March, 2011 on which the Committee of Management would take a decision and that till then no coercive action would be taken against the borrower.
6. Separately, the borrower's wife Smt. Urbasi Das nee Behera filed a civil suit i.e. C.S.(III) No.63 of 2006 along with an injunction application i.e. I.A. No.238 of 2006 before the Civil Judge (Senior Division), 1st Court, Cuttack in connection with the same property in question to subvert the demand notice dated 12th August, 2004. However, the suit was dismissed for non- prosecution on 24th January, 2007.
7. On the borrower's representation, the Bank by letter dated 22nd July, 2011 advised him to make an One Time Settlement (OTS) application by the last date for that purpose i.e. 30th July, 2011. In the meantime, the borrower had made such application on 12th July, 2011.
8. While the above application was pending, the borrower filed a second writ petition i.e. W.P.(C) No.27316 of 2011 before this Court i.e. for a direction to the Bank to dispose of the OTS application. This Court disposed of the writ petition on 25th October, 2011 directing the Registrar of the Co-operative Societies (RCS) to consider the borrower's application under the OTS scheme and take a decision on or before 31st October, 2011.
9. The borrower then filed a third writ petition i.e. W.P.(C) No.3955 of 2012 on 1st March, 2012 resisting the recovery action. Meanwhile the RCS passed an order dated 12th March, 2012 holding that there is no bar to settle the loan account under the OTS Scheme.
10. The OTS application was rejected and the decision was communicated to the borrower by letter dated 3rd January, 2013. A fresh demand notice dated 16th January, 2013 was issued to the borrower to deposit Rs.35,36,111/- till the amount due as on 31st December, 2012.
11. The borrower then filed a fourth writ petition i.e. W.P.(C) No.1601 of 2013 challenging the above rejection of the OTS proposal. An interim order was passed by th
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
