Atul Kumar Goel and Others vs DEBT Recovery Appellate Tribunal, Delhi and Others

A.K. Sikri, C.J.—Present writ petition is filed against the order dated 27.10.2009 passed by the learned Debt Recovery Tribunal, Delhi, vide which the petitioners are directed to deposit 50% of the amount mentioned in the notice issued-by the bank u/s 13(2) of the SARFAESI Act, minus the future interest and pendente lite interest or costs of the case. The petitioners had sought review of this order and the review petition has also been dismissed by the Tribunal vide order dated 12.9.2012. That order is also assailed in the present writ petition.

To recapitulate the facts, one R.P. Goel, predecessor-in-interest of the petitioners herein, had furnished a guarantee against the loans which were advanced by the respondent bank to the firm known as "Aggarwal Food Product" (hereinafter referred to as the ''principal debtor''). It appears that the principal debtor did not make payment of the outstanding amounts and for this reason, the respondent bank invoked the provisions of Section 13(2) of the SARFAESI Act, by serving notice upon the guarantor for sale of the mortgaged property. By the time, this notice was issued, R.P. Goel, had passed away and, therefore, notice was served upon his widow Shail Bala and others, who had inherited the property in question. Shail Bala also died during the pendency of these proceedings and the petitioners are the legal heirs of R.P. Goel and Shail Bala.

On receipt of notice u/s 13(2) of the SARFAESI Act, objections were filed thereto stating that the property in question in respect of which notice has been issued, is not one which has been mortgaged with the respondent bank. The petitioners approached the Debt Recovery Tribunal against the aforesaid action on this ground. In the meantime, possession of the property had been taken and it was even put to auction. The amount mentioned in the notice u/s 13(4) of the Act, as outstanding was Rs. 43,04,804/-. The property was auctioned for Rs. 1,41,21,000/-. Interim orders were initially passed staying the confirmation of sale. It is not necessary to take note of various precedents which inured there from. Suffice it to mention that the matter had come up to this Court and the position which prevails today is that a direction is given to the bank that during the pendency of the proceedings, it will not confirm the sale.

The Debt Recovery Tribunal, has ultimately passed the order dated 05.8.2009 dismissing the objections. The petitioners preferred an appeal against that before the Debt Recovery Appellate Tribunal. In the said appeal, the petitioners also made an application seeking waiver of pre deposit amount which is required u/s 18 of the SARFAESI Act. It is this prayer which has been rejected by the learned DRAT vide his order dated 27.10.2009 and the revision has also been dismissed on 12.9.2012.

As pointed out above, it is not in dispute that R.P. Goel had mortgaged some property in favour of the bank as a guarantor but the contentions is that notice u/s 13(2) of the Act which has been issued pertains to some other property. In the application seeking waiver, the petitioners had supported the application raising the contentions, namely the property which is sold is not the one which has been mortgaged. On that basis, it was argued that no notice u/s 13(2) of the Act, could have been issued; and (ii) since the bank has already sold the property for a sum of Rs. 1,41,21,000/- which amount is lying with the bank, the petitioners should not be called upon to deposit 50% of the amount covered by notice u/s 13(2) of the SARFAESI Act, which would be property approximately Rs. 20,00,000/-. That amount is much less than the amount of Rs. 1,41,20,000/- realized by the bank with the sale of the property of the petitioners.

In the impugned order dated 27.10.2009 passed by the DRAT, there is no discussion on the first aspect. Insofar as the second contention of the petitioners is concerned, the same is rejected on the ground that on the one hand, the petitioners submit that the property in question is not the property which is the subject matter of mortgage and, therefore, could not have been sold and on the other hand, they are free to take benefit in respect of the amount realized against sale of the same property.

It would be pertinent to mention at this stage that in the review petition filed by the petitioners herein, the Tribunal had passed the order dated 03.2.2010, directing the revenue officer to investigate the matter and send his report. This was necessitated because of the dispute in respect of old khasra numbers and new khasra numbers which were assigned to the land in question. The verification was done by the S.D.M. and report dated 26.2.2010 was also submitted. However, we find that while rejecting the review application, this aspect was not adverted to by the learned DRAT. We would, in order to fairness, record the submission of the learned counsel for the respondent bank as well that the report is not taken on record and the bank is yet to be given an opportunity to file objections thereto. That matter would be considered at the stage of final hearing when the DRAT would examine as to whether any credence is to be given to the said report or not and as to whether any further discussion on this aspect what impresses this Court is that a sum of Rs. 1,41,21,000/- has already been realized by the banks with the sale of the property belonging to the petitioners. The petitioners are in appeal and they want their appeal to be heard on merits. No doubt, for the hearing of this appeal as per the proviso to Section 18 of the SARFAESI Act, as per Section 56 of the Act the amount as demanded in the notice u/s 13(2) of the Act, has to be deposited. However, these provisions also authorize the DRAT to reduce the said amount to 25%. When a sum of Rs. 1,41,21,000/- against the amount of Rs. 40,00,000/-demanded in notice u/s 13(2) of the said Act, is lying with the bank, according to the order, that itself should be a sufficient ground to soften the rigor of this proviso in the present case. It would be pertinent to note that if ultimately, the petitioners loose in their appeal, the effect thereof would be that the sale which has already been held shall be confirmed and that even after appropriating the amount which is due to the respondent bank, the substantial amount would be paid to the petitioners. On the other hand, if the petitioners succeed in their appeal, the entire auction of the sale of the property in question would be invalidated. In either case, there does not seem to be any cogent amount to direct the petitioners to deposit 50% of the amount mentioned in the notice to enable them to get their appeal heard on merits. On this ground alone, we modify the order passed by the DRAT and direct the petitioners to deposit 25% of the amount i.e. Rs. 43,04,804/- which shall be deposited within one month and under no circumstances, this period shall be extended.

If the amount is deposited, the DRAT shall hear the appeal on merits and dispose of the same within two months thereafter.

This petition is disposed of accordingly.