R. Lakshmidevamma vs Authorized Officer Punjab National Bank

S. Abdul Nazeer, J.—In these cases, the petitioner has called in question the validity of the order at Annexure-F dated 11.11.2009 in IA-1436/2009 in IR-573/2008, whereby the application of the petitioner for refund of the amount in a sum of Rs. 7.5 lakhs with accrued interest thereon has been dismissed.

The fourth respondent had availed certain financial assistance from the Punjab National Bank and the second respondent was the guarantor for the loan transaction. The property in question was offered as security by the second respondent in favour of the bank.

The case of the petitioner is that she has an undivided share in the said property. When the property was brought to sale, she challenged the same by filing an appeal - IR-573/2008 before the Debt Recovery Tribunal (Karnataka) Bangalore. In the said case, an interim order at Annexure-B dated 27.06.2008 was passed staying all further proceedings such as taking physical possession of the property, conducting auction sale and confirmation of the sale insofar as her alleged half share in the property is concerned, until further orders. The petitioner was directed to deposit a sum of Rs. 7.5 lakhs on or before 29.08.2008, out of which, a sum of Rs. 2.50 lakhs was payable on or before 31.7.2008. The bank was directed to keep the amount under no lien account. In terms of the said order, the petitioner has deposited the amount of Rs. 7.5 lakhs with the first respondent/bank. The Tribunal dismissed the appeal on 06.11.2008. Thereafter, the petitioner filed an application IA. 1436/2009 seeking a direction to the first respondent/bank to refund the amount deposited by her in a sum of Rs. 7.5 lakhs with accrued interest thereon. As noticed above, the said application has been dismissed by the Debt Recovery Tribunal, Bangalore.

I have heard the learned counsel for the parties.

Sri. Vijay Shetty, learned counsel for the petitioner would contend that the petitioner is neither a borrower nor a guarantor to the loan transaction with the first respondent/bank. The second respondent had mortgaged the property in question with the bank in which she had 50% undivided share. Therefore, the petitioner filed an appeal challenging the sale notice before the DRT, Bangalore in IR-573/2008. Pursuant to the conditional order, she has deposited a sum of Rs. 7.5 lakhs. The DRT has dismissed the appeal. Therefore, she is entitled for refund of the amount of Rs. 7.5 lakhs deposited by her with accrued interest thereon.

Sri. Mohammad Ibrahim, learned counsel appearing for the first respondent/bank would contend that the amount has been appropriated pursuant to the order of the DRT. Therefore, question of its refund does not arise at this stage.

I have carefully considered the arguments of the learned counsel made at the bar and perused the materials placed on record.

The petitioner is admittedly neither a borrower nor a guarantor for the loan transaction with the first respondent/bank. She filed an appeal under Section 17(1) of the Securitization and Recovery of Financial Assets and Enforcement of Security Act, 2002, challenging the notice issued by the first respondent for sale of the property in question on the ground that she has 50% undivided share in the said property. The DRT granted an interim order in the following terms:--

"Pending disposal of the said application, the Hon''ble Presiding Officer of this Tribunal as ordered as follows:

"interim stay of all further proceedings such as taking physical possession, conducting auction sale, confirmation of the same etc., as far as the alleged half share of appellant in the schedule property until further orders. The appellant is directed to deposit a sum of Rs. 7.5 lakhs on or before 29.08.2008. Out of which, a sum of Rs. 2.50 lakhs is payable on or before 31.07.2008. Respondent is directed to keep the amount under no alien account. The respondents are directed to appear before the Tribunal on 31.07.2008." 9. The petitioner has deposited a sum of Rs. 7.5 lakhs with the first respondent in terms of the said order. Admittedly, the appeal filed by the petitioner was dismissed by the DRT as per the order at Annexure-C dated 06.11.2008. Therefore, the petitioner filed an application for refund of the amount. No doubt, the first respondent has appropriated the amount pursuant to the order of the DRT. But the question is whether the DRT is justified in permitting the first respondent/Bank to appropriate the amount.

As noticed above, the petitioner is neither a borrower nor a guarantor to the transaction. She is a third party insofar as the loan transaction is concerned. Therefore, question of appropriating the amount deposited by her pursuant to an interim order does not arise. I am of the view that the first respondent has to refund the amount with accrued interest thereon. The writ petitions are accordingly allowed. The order at Annexure-F dated 11.11.2009 in IA-1436/2009 in IR-573/2008 passed by the DRT, Bangalore, is hereby quashed. The application-IA-1436/2009 in IR No. 573/2008 is hereby allowed. I direct the first respondent/bank to refund a sum of Rs. 7.5 lakhs with interest at 9% p.a. from the date of its deposit to the petitioner within a period of six weeks from the date of receipt of copy of this order. No costs.