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Judgment
A.S. Bopanna, J. - The petitioners are before this Court seeking to declare that respondent 1-Bank cannot enforce the order dated 13-10-2006 passed in O.A. No. 214 of 2004 by the Debt Recovery Tribunal, Bengaluru (''DRT'' for short) and the Recovery Certificate dated 15-11-2006 bearing DCF No. 3718 against the apartment situate in 3rd floor and the property bearing No. 25/5, 7th Main. 11th Cross, Malleswaram, Bengaluru.
The petitioners have purchased the petition subject property which is a flat situate in the 3rd floor of the property bearing No. 25/5, 7th Main, 11th Cross, Malleswaram, Bengaluru, from M/s. Sreenidhi Souharda Sahakari Niyamitha Bank and the vendors of the borrowers who had borrowed the amount from the said bank. The sale deed dated 30-8-2004 is in exercise of the right exercised by M/s. Sreenidhi Souharda Sahakari Niyamitha Bank under Sections 13 and 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The original owner of the property who had mortgaged the property in favour of M/s. Sreenidhi Souharda Sahakari Niyamitha Bank had also secured mortgage loans from Andhra Bank as well as the first respondent-bank herein. Though the loan had been advanced by the said banks also, ultimately it has resulted in a situation that the owner of the property viz., flat situate in the 3rd floor of the property bearing No. 25/5, 7th Main, 11th Cross, Malleswaram, had represented to the Andhra Bank as well as the first respondent-bank herein as if a different property was being mortgaged for the purpose of loan.
In that circumstance, when the amount remained unpaid to all the banks, as noticed, M/s. Sreenidhi Souharda Sahakari Niyamitha Bank who had advanced loan on 14-10-2001 being first of the transactions under which the loan was advanced had exercised their right on the property and ultimately under a sale deed dated 30-8-2004, the petitioners were put in possession.
In respect of the loan due to the Andhra Bank, they had filed a proceedings under the Recovery of Debts Due to Banks and Financial institutions Ad, 1993 (''RDDB Act'') before the DRT in O.A. No. 133 of 2006. In addition to the original borrowers, the vendors of the petitioners herein which included M/s. Sreenidhi Souharda Sahakari Niyamitha Bank were also impleaded as defendants in the said proceedings. The DRT after considering the rival contentions and on taking note of the right exercised under the SARF AESI Act by the vendors of the petitioners herein who were defendants 5 and 6 therein had issued a Recovery Certificate only to recover the amount due to them, but had dismissed the proceedings against defendants 5 and 6 therein who are the vendors of the petitioners herein whereby the right over the property in question to recover the amount was not accepted. In that light, the property in question was not available for the purpose of recovery though the said Andhra Bank was entitled to recover the amount as against defendants 1 to 4 therein in any other manner, in terms of the Recovery Certificate issued.
Respondent 1-Bank herein also had filed a claim petition under the RDDB Act in O.A. No. 214 of 2004 in respect of a loan advanced by them in the year 2002. Only two of the borrowers from respondent 1-Bank who were also the borrowers from the earlier two stated banks were defendants therein. They had been placed ex-parte in the said proceedings as they had not chosen to appear. As such, a Recovery Certificate including the right to recover from the mortgaged property was granted by the Recovery'' Officer dated 13-10-2005 since no contentions were available in defence. Pursuant to the same, respondent 1-bank has initiated the recovery proceedings by indicating the property which is a residential apartment and it is shown as a flat bearing No. 3-A constructed in the property bearing Municipal Corporation No. 25/5, 7th Main, 11th Cross Road, Malleswaram, Bengaluru-560 003. The petitioners are aggrieved by such action initiated in the recovery proceedings since according to the petitioners, the very property purchased by them under the sale deed at Annexure-C from another bank in exorcise of the power vested in it under SARF AESI Act is being brought to sale. It is in that circumstance, the petitioners are before this Court.
Having heard the learned Counsel for the parties, I have perused the petition papers.
At the outset, it is to be noticed that in a normal circumstance, when the recovery proceedings under the proceedings initiated by the DRT is an issue for consideration, an appropriate proceedings will have to be initiated. However, what is necessary to be noticed in the instant case is that the petitioners though are making out a grievance with regard to the recovery proceedings initiated by the respondents herein and the Recovery Certificate dated 13-10-2005 issued in O.A. No. 214 of 2004, are in fact before this Court asserting a right which had become absolute in favour of the petitioners based on the sale deed dated 30-8-2004 executed in exercise of the right under SARF AESI Act by another bank. In that light, essentially what requires consideration herein is with regard to the manner in which the proceedings in DCP No. 3718 is taking shape if such recovery proceedings is initiated in respect of the very property purchased by the petitioners under the sale deed dated 30-8-2004 (Armexure-C) to the petition. In this regard, though the petitioners have the opportunity of filing an objection statement in DCP No. 3718 in O.A. No. 214 of 2004, these aspects of the matter require clarification by this Court and in that light, a direction is required to be issued to the Recovery'' Officer.
Taking into consideration all these aspects of the matter, as noticed, the property which is purchased by the petitioners in a process known to law was also considered by the DRT in O.A. No. 133 of 2006 and the sale as made by M/s. Sreenidhi Souharda Sahakari Niyamitha Bank has been accepted by the DRT and the claim of the respondent 1 herein is a claim which is of the similar nature.
Therefore in respect of the same property, if respondent 1 is laying claim, certainly such claim would not be sustainable at this juncture. It is no doubt true that as contended by the learned Counsel for respondent 1-bank, the property viz., the flat though indicated as No. 302 in the sale deed dated 30-8-2004, the recovery proceedings under DCP No. 3718 in O.A. No. 214 of 2004 refers to the specification of property as the residential apartment bearing No. 3-A. However, the fact that in both the documents, the residential apartment referred to is situate in the Municipal Corporation No. 25/5, 7th Main, 11th Cross, Malleswaram, Bengaluru-560 003 cannot be in dispute.
Therefore, ultimately'' it boils down to the issue as to whether the original borrower from all these three banks had more than one flat in the 3rd floor of the said building and whether it is a different property that had been mortgaged in favour of respondent 1. As evident, insofar as the consideration that was made by the DRT, when the Andhra Bank had filed the claim petition in O.A. No. 133 of 2006, the property was not found to be a different one from the property which has been purchased by the petitioners.
If that be the position, in any event, in respect of the property that is purchased by the petitioners under the sale deed dated 30-8-2004 through its description is required to be protected in favour of the petitioners even if the number is differently mentioned. Therefore, irrespective of the specification indicated in the proclamation of the sale issued in DCP No. 3718 in O.A. No. 214 of 2004, the Recovery Officer would be entitled to proceed against the mortgaged property only if there is one more flat other than the flat which is sold under the sale deed dated 30-8-2004 which is stated to be in possession of the petitioners. In any event, the property which is purchased by the petitioners cannot be made the subject-matter of sale under the said proceedings and the proceedings for recovery will be only if any other property of the borrower is identified.
Therefore, though the order dated 30-10-2006 and the Recovery Certificate dated 15-11-2006 as at Annexures-E and F does not call for being set aside in the instant proceedings, it is clarified that the Recovery Certificate shall remain valid against the respondents therein i.e., the borrowers from respondent 1-Bank for the purpose of recovery of the amount for which a certificate has been issued, from any other property other than the property that is described in the sale deed dated 30-8-2004 as at Annexure-C to the petition.
To ensure that the property which the petitioners have purchased does not become the subject-matter of the proceedings before the Recovery Officer in DCP No. 3718 in O.A. No. 214 of 2004, the petitioners are granted the liberty of filing objections to the said proceedings and bring these aspects to the notice of the Recovery Officer. The same shall be kept in view in the background of this order and appropriate orders be passed by the Recovery Officer.
In terms of the above, the petition stands disposed of.