THE HONOURABLE MR.JUSTICE S.MANIKUMAR AND THE HONOURABLE MR.JUSTICE R.SURESH KUMAR C.R.P.(NPD).No.3780 of 2016 C.M.P.No.17594 of 2017 The Andhra Bank, Anna Nagar Branch, Rep., by its Authorised Officer .. Petitioner versus
1. M/s.Vantage Resorts & Clubs Pvt. Ltd., Rep., by its Managing Director, Mr.Senthilnathan, No.89, Santhome High Road, R.A.Puram, Chennai-28.
2. M/s.Skyscape Properties Pvt. Ltd., Rep., by Mr.Sarat Kakumanu, Managing Director, No.80, Santhome High Road, R.A.Puram, Chennai-28.
3. Mr.Sarath Kakumanu
4. Mrs.Sheela K. Sarath
5. Mr.T.S.Manpreet Chada
6. Mrs.Nisha Kakumanu Chada
7. Mrs.T.S.Shanthi
8. M/s.Vinplex India Pvt. Ltd., 1B, Gleneden Place, Old No.813, New No.310, P.H.Road, Kilpauk, Chennai 600 010. .. Respondent Civil Revision Petition, filed under Article 227 of the Constitution of India, against the order, dated 31.05.2017, in R.A.(S.A.)No.2 of 2016, on the file of the Debts Recovery Appellate Tribunal, Chennai.
For Petitioner : Mr.R.Gowthamanarayan For Respondents 1 to 4, 6 & 7 : Mr.M.Rajesh for Mr.GR.Lakshmanan For 8th Respondent : Mr.D.Gopinathan for Mr.P.B.Sampath Kumar J U D G M E N T (Judgement of this Court was made by S.MANIKUMAR, J.) Order impugned in this Civil Revision Petition is an order of dismissal, dated 31.05.2017, in R.A.(S.A.)No.2 of 2016, on the file of the Debts Recovery Appellate Tribunal, Chennai.
2. It is the case of the petitioner that M/s.Vantage Resorts & Clubs Pvt. Ltd., Chennai, 1st respondent herein, availed credit facilities from their Bank. As there was default in repayment, the account became Non Performing Asset and the Bank has invoked the provisions of the SARFAESI Act, 2002 and issued demand notice and subsequently, took possession of the property.
3. On 22.10.2012, the Bank has issued sale notice, fixing the date of auction, as 28.11.2012. Respondents 1 to 7 herein preferred an Application under Section 17 of the Act, in S.A.No.156 of 2012, on the file of Debt Recovery Tribunal-I, Chennai. Though several grounds have been raised in the application, respondents 1 to 7 have restricted their claim, only in respect of concession and time for settlement. Andhra Bank, Anna Nagar Branch, Chennai, petitioner herein, has offered to charge 1%, more than BPLR, on the amount claimed in Section 13(2) notice, provided the 1st respondent pays 1/3 of the amount immediately and the balance within 30 days. Before the Tribunal, the learned counsel, who appeared for the 1st respondent submitted that the 1st respondent would deposit a sum of Rs.1 Crore, within 30 days and the balance amount, as per the demand notice, under Section 13(2) of the SARFAESI Act, together with interest of BPLR plus 1%, on or before 28.02.2013. In view of the above, on 27.11.2012, the DRT-I, Chennai, has passed the following orders, "(a) That the proposed auction on 28.11.2012, the respondent bank may proceed with, receive bids and also declare the highest bidder, and receive the 25% amount prescribed, however not to confirm the sale. The 25% amount received from the auction purchaser may be kept in interest bearing account by the respondent bank till 28.02.2013.
(b) The applicant is directed to deposit with the respondent bank Rs.1 Crore within 30 days from today as agreed by the counsel for the applicant either by way of Demand Draft/pay order or cash as acceptable to the respondent bank. The balance amount from out of the amount demanded in the 13(2) Notice with interest charged at BPLR plus 1% and after giving due credits for the amounts already paid by the applicant as per the earlier directions plus this direction, the applicant is directed to pay on or before 28.02.2013 and if he applicant fails to deposit the same, on 01.03.2013 the respondent bank is entitled to confirm the same in favour of the highest bidder.
(c) No extension of time will be allowed to the applicant after 28.02.2013 and if the applicant fails to deposit Rs.1 Crore on or before 26.12.2012 with the respondent bank as directed herein above, the respondent bank is at liberty to confirm the sale on 27.12.2012.
The S.A is accordingly disposed off based on oral submission made by the counsel for the Applicant and the Respondent bank."
4. It is the further case of the petitioner-Bank that as the 1st respondent failed to pay Rs.1 Crore, on or before 26.12.2012, the Bank confirmed the sale on 27.12.2012, as permitted in the above order. After confirmation, sale certificate was also issued on 31.12.2012. Subsequently, respondents 1 to 7 herein, filed another application in S.A.No.5 of 2013, to set aside the abovesaid sale. The Debt Recovery Tribunal - I, Chennai, vide order, dated 08.12.2015, set aside the sale. The said order was challenged before the Debts Recovery Appellate Tribunal, Chennai, in R.A.No.2 of 2016. Considering the facts and circumstances of the case, the Debts Recovery Appellate Tribunal, Chennai, vide order, dated 31.05.2017, dismissed the appeal, as hereunder:
"5. On careful perusal of submissions of the Counsel of rival parties and considering the pleadings, it becomes clear that Appellant failed to pay Rs.1 Crore on or before 26.12.2012 and Bank confirmed the sale on 27.12.2012, i.e. on the next date itself. But it is also true that PO (Presiding Officer) of DRT had extended the time of payment of Rs.1 Crore to be made by the borrower upto 4.1.2013. On 5.1.2013, borrower approached the Bank along with Draft of Rs.1 Crore. In such a situation, it can easily be inferred that though the order dated 27.11.2012 passed by the PO (Presiding Officer) of DRT in S.A.No.156/2012 was not complied with by the borrower in its strict sense, but he made all attempts to approach the DRT and succeed for extension of time and ultimately made the deposit of Rs.1 Crore on 5.1.2013. In such a situation, confirmation of sale by Bank on 27.12.2012 was unwarranted. Rather, such confirmation should have been avoided at least for few days. It is-true that Bank has appropriated the amount received by the auction purchaser, but at face value, it appears that there had been some conditional stay issued by way of extension of time to the Respondent borrower.
6. Hence, order of confirmation of sale renders unsustainable. Bank has been rightly directed to return the money of auction purchaser along with Bank's rate of interest. In impugned order, PO (Presiding Officer) of DRT has dealt with the facts of the case in right perspective and has reached to the correct conclusion."
5. Aggrieved by the same, the petitioner-Bank has preferred this civil revision petition, on the following grounds, "(i) The Appellate Tribunal ought to have seen that the Mortgagor, namely, the 2nd respondent has not challenged the sale. The order, dated 27.11.2012, made in S.A.No.156 of 2012, was not complied with and as a consequence, the sale was conducted. The Appellate Tribunal ought to have seen that DRT has permitted the Bank to confirm the sale on 27.12.2012, if the respondent failed to pay the sum of Rs.1 Crore on or before 26.12.2012. Admittedly the respondent did not pay the amount of Rs.1 Crore, till 26.12.2012 and hence the bank confirmed the sale on 27.12.2012. The confirmation of Sale on 27.12.2012 by the bank was in accordance with the terms of the order dated 27.11.2012.
(ii) The Appellate Tribunal ought to have considered that events happened subsequently, will not change the status of the sale, its legality, which was already completed.
(iii) The Appellate Tribunal has erred in holding that the Presiding Officer of DRT had also extended the time of payment of Rs.1 Crore to be made by the borrower up to 4.1.2013. The Appellate Tribunal seriously erred in making the above finding without any evidence in this regard.
(iv) The Appellate Tribunal ought to have seen that no order of extension was made before 27.12.2012 and hence the Bank had no other option except to confirm the sale on 27.12.2012 as permitted in the earlier order. Even in the letter dated 05.01.2013 enclosing the Pay Order, the respondent has not referred to any order of extension. The Appellate Tribunal erred in holding that:
"In such a situation it can easily be inferred that though the order dated 27.11.2012 passed by the Po of DRT in S.A.No.156/2012 was not complied with by the borrower in its strict sense, but he made all attempts to approach the DRT and succeed for extension of time and ultimately made the deposit of Rs.1 Crore on 05.01.2013. In such a situation confirmation of sale by the Bank on 27.12.2012 was unwarranted. Rather such confirmation should have been avoided at least for few days."
(v) The Bank was under duty to act as per the terms of the order and had to confirm the sale on 27.12.2012, since there was no payment till 26.12.2012, particularly, when no order was passed till 27.12.2012 extending time for payment. When the confirmation was made, as per the order, dated 27.12.2012, any order extending time passed subsequently will be of no consequence and cannot vitiate the action already taken pay the Bank, viz., confirmation of sale. The Appellate Tribunal has erred in holding that:
"It is true that the Bank has appropriated the amount received by the Auction Purchaser, but at face value, it appears that there had been some conditional stay issued by way of extension of time to the Respondent Borrower. "
(vi) The Appellate Tribunal ought to have verified the facts and called for the records, before passing the order. There was no conditional stay, issued by way of extension of time. The Appellate Tribunal ought to have seen that the Mortgagor of the property has not challenged the sale and they have not taken part in the proceedings, though they are one of the respondents in the proceedings.
Heard the learned counsel appearing for the parties and perused the materials available on record.
6. Time for payment of Rs.1 Crore, has been extended upto 04.01.2013. The said order has not been challenged. As per the order of the Tribunal, the borrower has remitted the amount and the same has been received. There is no material to indicate that such amount has been received, without prejudice to the rights of the Bank, towards discharge of loan amount.
7. In view of the above, the Civil Revision Petition is dismissed. No costs. Consequently, connected Miscellaneous Petition is also closed.
skm To The Debts Recovery Appellate Tribunal, Chennai.
(S.M.K., J.) (R.S.K., J.) 08.11.2017 S.MANIKUMAR, J.
AND R.SURESH KUMAR, J.
skm C.R.P.(NPD).No.3780 of 2017 08.11.2017