(M/s Krishna Oils Extractions Limited & Ors Vs. Bank of India & Anr.)

Indore, dated:09.01.2018 Parties through their counsel.

The petitioners before this Court have filed this present petition being aggrieved by the order dated 10.08.2016 passed by the District Magistrate, Rajgarh in Case No.22/B-

121/2015-16.

The facts of the case reveal that the aforesaid order was passed by the District Magistrate in exercise of powers conferred under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'the Act, 2002') and thereafter, the petitioner has preferred an appeal before the Debts Recovery Tribunal. The appeal of the petitioner has been disposed of by the Debts Recovery Tribunal vide an order dated 27.04.2017 holding that such an appeal is not maintainable as the possession has not been lost under Section 14 of the Act.

Another aspect of the case is that after an appeal was preferred i.e. securitization application No.131/16, an order of the status-quo was also granted in favour of the petitioner initially and later on, the appeal was dismissed as not maintainable.

Shri Dhanodkar, learned counsel for the respondent/Bank has drawn attention of this Court towards the order dated 04.12.2017 passed by the Coordinate Bench of this Court in W.P. No.19425/2017 holding the appeal to be maintainable, in similar circumstances, even if possession has not been taken by the Bank. Paragraph Nos.3 to 12 of the aforesaid order read as under:-

“3. Since the petitioners / firm have committed default in payment of outstanding amount to the Bank, therefore, the Bank has initiated the proceedings as available under section 13(2) of the SARFAESI Act, 2002. The respondent no. 2 has issued notice dated 22/01/2016 under section 13(2) of the SARFAESI Act, 2002 claiming entire outstanding dues of Rs. 4 Crores plus interest from the petitioners. The petitioners did not exercise their rights as available under section 13 of the SARFAESI Act, 2002 by submitting the response to the notice then, the Bank had no option but to issue notice for possession. Thereafter, the Bank took paper possession / symbolic possession of the factory premises under section 13(4) of the SARFAESI Act, 2002. The petitioners filed Secularization Appeal no. 127/2016 before the Debt Recovery Tribunal, Jabalpur. By order dated 03/11/2016, the DRT has dismissed the appeal as no one appeared on behalf of the petitioners.

4. According to the petitioners, they made efforts to negotiate with the Bank for regularization NPA Account by submitting revival plans to run the Industry of PVC Pipes. The said application was considered by the Bank and the petitioners were permitted to deposit certain amount in the Bank account, so that the account can come out from NPA category. Shri Vivek Dalal, learned counsel for the petitioner submits that as on today, the petitioners have deposited almost Rs. 50 lacs ( approx) in NPA Account and they have intension to repay the entire loan amount to the Bank.

5. The Bank has filed an application under section 13(4) of the SARFAESI Act, 2002 before the Additional District Magistrate seeking assistance to take possession of the secured assets. The Additional District Magistrate issued notice to the petitioners. In response to the notice, only once, Advocate appeared on behalf of the petitioners and informed to the Authority that the talks in respect of the compromise are going on. Thereafter, they did not appear and they were proceeded ex-parte. Vide order dated 23/10/2017 learned Additional District Magistrate has passed the order by permitting the Executing Magistrate to provide assistance to the Bank by taking over the possession of the secured assets.

6. Being aggrieved by the order dated 23/10/2017, the petitioners have preferred the present petition before this Court.

7. Shri Abhinav Dhanodkar, learned counsel appearing on advance notice on behalf of the respondent no. 3 has raised preliminary objection tha