IN THE HIGH COURT OF KARNATAKA AT BENGALURU ON THE 8TH DAY OF NOVEMBER 2019 BEFORE THE HON'BLE MR. JUSTICE RAVI MALIMATH AND THE HON'BLE MR. JUSTICE ASHOK S. KINAGI WRIT PETITION NO. 52007 OF 2017 (GM-DRT) BETWEEN:
KARNATAKA RAJYA KAIGARIKA SAHAKARI BANK NIYAMITHA NO.1485, BULL TEMPLE ROAD, BASAVANAGUDI, BENGALURU-560 004.
(BY SRI. SAILESH S K, ADVOCATE) AND:
N. S. SHASHIKUMAR SON OF LATE R. NARASIMHA MURTHY MAJOR NO.234, R.T.STREET BENGALURU-560 053.
…..PETITIONER …RESPONDENT (BY SRI. A SRIRAM BABU, ADVOCATE - ABSENT) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER PARTIALLY ALLOWING THE APPEAL AGAINST THE PETITIONER AS PER ANNEXURE-A BEARING No. RA(SA)-22/2017 DATED 05.09.2018.
THIS WRIT PETITION COMING ON FOR HEARING THIS DAY, ASHOK S. KINAGI J., MADE THE FOLLOWING:
ORDER The petitioner-Bank has filed the present writ petition praying to quash the order dated 05.09.2017, passed in RA(SA)-22/2017 by the Debt Recovery Appellate Tribunal at Chennai, vide Annexure-A.
2. Brief facts of the case are as under:
The respondent had availed trade loan of Rs.8,00,000/- from the petitioner-Bank on 10.08.1999. The respondent agreed for payment of interest on the above said loan amount. The respondent offered immovable property bearing No.179/8, 15th Main Road, 4th T Block, Jayanagar, Bangalore-560041, as a security towards repayment of the said loan amount. Since the respondent did not pay the loan regularly, loan account became NPA account. Hence, petitioner issued a demand notice under Section 13(2) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (‘the SARFAESI Act’ for short) on 04.07.2003, calling upon the respondent to repay the loan amount of Rs.10,20,780/-. The respondent, neither replied to the said notice nor repaid the amount. Petitioner issued a possession notice under Section 13(4) of SARFAESI Act on 07.10.2003, taking notional possession. The petitioner, to secure the actual possession from the respondent, moved petition before the jurisdictional Magistrate with a prayer to get the actual vacant possession of the secured asset/schedule property. The same came to be registered as Criminal Miscellaneous.No.322 of 2004. Learned Magistrate allowed the petition and directed the petitioner to take delivery of vacant possession of the secured asset. When the petitioner attempted to take vacant possession, the respondent offered to repay the loan amount and he tendered a sum of Rs.14,31,000/-, as full and final settlement of loan account. The petitioner found that it had recovered excess amount of Rs.4,500/-, and on the very same day, the petitioner repaid the said amount to the respondent.
The respondent approached the Debt Recovery Tribunal (‘DRT’ for short), Bangalore, in ASA No.98 of 2004, alleging that the petitioner collected excess amount from the respondent and sought for a direction that the petitioner should repay the entire sum of Rs.14,31,000/-. That on 01.09.2006, the DRT appointed an advocate as a Court Commissioner to inspect the records and documents and to submit a report. As per the directions of the DRT, the Court Commissioner filed a report on 07.12.2006. The DRT, based on the report of the Court Commissioner, passed an order directing the petitioner to pay a sum of Rs.10,00,000/- to the respondent along with cost of Rs.5,000/-, vide order dated 21.05.2009.
The petitioner aggrieved by the order dated 21.05.2009, passed in ASA No.98/2004 by the DRT, Bangalore, filed an appeal before the Debt Recovery Appellate Tribunal at Chennai (‘Appellate Tribunal’ for short), which is registered as RA(SA)-22/2017. The Appellate Tribunal, after re-appreciation of the entire material on record, allowed the appeal in part and directed the petitioner to pay compensation of Rs.2,00,000/- within a period of 6 weeks to the respondent, as the bank has not maintained the written records of realization of surplus amount as well as refund amount of the surplus amount. The petitioner aggrieved by the order of the DRT and order of the Appellate Tribunal, has filed the present petition.
3. Heard arguments of the learned counsel for the petitioner.
4. That in the year 1999, respondent availed a trade loan from the petitioner-bank. The respondent did not repay the amount. The petitioner initiated proceedings under the SARFAESI Act. Learned Magistrate passed an order directing the petitioner to take possession of the secured asset. Meanwhile, the petitioner approached the respondent to repay the loan amount and accordingly he tendered a sum of Rs.14,31,000/- to the petitioner. The petitioner having found that the respondent has paid excess amount of Rs.4,500/-, on the same day repaid the excess amount deposited by the respondent. In what circumstance the petitioner-Bank had realized more amount than the required amount and how the surplus amount was refunded without documentary proof, is a serious matter.
5. The petitioner-bank being a financial institution and dealing with public money, should take due care in maintaining the records and must be more transparent. In the present case, petitioner has failed to maintain the records. The action of the petitioner in not maintaining the records, amounts to negligence. The Appellate Tribunal, considering the negligence of the petitioner, has awarded compensation of Rs.2,00,000/- to be paid by the petitioner to the respondent. The Appellate Tribunal by modifying the order of the DRT, has rightly awarded the said compensation for not maintaining proper records, as the petitioner being a financial institution is legally bound to maintain the records.
Hence, we do not find any grounds to interfere with the impugned order.
6. Accordingly, we proceed to pass the following:
Order The writ petition is dismissed.
Sd/- JUDGE Sd/- JUDGE RD