ASSOCIATED TRADING CORP. PVT. LTD. Vs. STATE BANK OF INDIA
LAWS(MAD)-2019-9-486
HIGH COURT OF MADRAS
Decided on September 06,2019

Associated Trading Corp. Pvt. Ltd. Appellant
VERSUS
STATE BANK OF INDIA Respondents

JUDGEMENT

Vijaya K. Tahilramani, M. Duraiswamy, J. - (1.) The petitioner has filed the above Writ Petition to issue a Writ of Certiorari to call for the records on the file of the Debt Recovery Appellate Tribunal, Chennai in respect of the order dated 29.03.2019 in M.A. No. 90 of 2018 and to quash the same.
(2.) The brief facts necessary for the disposal of the Writ Petition are as follows:- (i) The 2nd respondent Company availed credit facilities from the 1st respondent-Bank. According to the petitioner, the 2nd respondent is under the control of the respondents 3 and 4 and was initially promoted by the father of the respondents 3 to 7. The respondents 5, 6 and 7 are not the Directors of the 2nd respondent Company. Similarly, the respondents 3 and 4 are not the Directors of the petitioner Company. The father of the respondents 3 to 7 promoted the 2nd respondent Company and had offered the property standing in the name of the petitioner Company situated at Alandur as security for repayment of the said loan. (ii) Since the 2nd respondent/borrower committed default in repaying the loan amount, the 1st respondent-Bank filed an Original Application in O.A. No. 11 of 2008 before the Debts Recovery Tribunal, Madurai wherein the petitioner was arrayed as the 4th defendant. The 1st respondent-Bank also issued a notice dated 13.05.2008 under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, which was also addressed to the petitioner. The petitioner sent a reply on 08.08.2008 to the said notice. Subsequently, the Bank took symbolic possession of the mortgaged property on 15.10.2008. (iii) The petitioner filed Securitization Appeal in S.A. No. 225 of 2008 before the Debts Recovery Tribunal, Madurai, challenging the possession notice dated 10.02.2011, issued under section 13(4) of the SARFAESI Act. (iv) The Debts Recovery Tribunal, Madurai, dismissed the Securitization Appeal and while dismissing the same, came to the conclusion that the petitioner Company can be represented only by the Directors, viz., respondents 5 to 7 and not by the respondents 3 and 4. Further, the Debts Recovery Tribunal observed that the respondents 3 and 4 are strangers to the Company. (v) According to the petitioner Company, it was only the respondents 3 and 4 who have signed every alleged extension of mortgage and the documents were not signed by the actual Directors, viz., respondents 5 to 7. The 7th respondent, without prejudice to his contentions, was willing to give Rs. 350.12 lakhs to settle the dues of the Bank and get the charge released on the Company's property as mortgage was not extended for enhanced credit facilities after 12.08.1984 and the total amount payable was only Rs. 350.12 lakhs even according to the Bank. (vi) As against the order passed by the Debts Recovery Tribunal, Madurai, an appeal was filed before the Debt Recovery Appellate Tribunal, Chennai and the said appeal was dismissed for want of pre-deposit. (vii) Subsequently, during the years 2004-17, the 1st respondent- Bank issued series of sale notices in respect of Alandur property of the petitioner. On 28.02.2017, the property was sold by the 1st respondent- Bank to M/s. Tripower Enterprises Private Limited for a sum of Rs. 60,25,00,000/-. (viii) The respondent-Bank issued the sale certificate dated 28.04.2017 and on 11.05.2017, filed a memo of part satisfaction in O.A. No. 11 of 2008 before the Debts Recovery Tribunal, Madurai. The original documents were filed as Exs.A110 to A114 in O.A. No. 11 of 2008. The 1st respondent-Bank sought for return of the original documents, by filing an application in I.A. No. 995 of 2017 in O.A. No. 11 of 2008. The petitioner Company filed their counter to the said application, opposing the return of the documents, stating that the documents should not be returned pending the final adjudication in O.A. No. 11 of 2008. (ix) By order dated 09.11.2018, the application filed by the Bank was dismissed by the Debts Recovery Tribunal, Madurai. Aggrieved over the said order of dismissal, the 1st respondent-Bank filed an appeal in M.A. No. 90 of 2018 before the Debt Recovery Appellate Tribunal, Chennai. The Appellate Tribunal, by order dated 29.03.2019, set aside the order of the Debts Recovery Tribunal, dated 09.11.2018, made in I.A.No.995 of 2017 and allowed the appeal. (x) Aggrieved over the order dated 29.03.2019, passed by the Debt Recovery Appellate Tribunal, Chennai the petitioner Company has filed the above Writ Petition.
(3.) It is pertinent to note that along with I.A. No. 995 of 2017, the 1st respondent-Bank also filed an application to delete the petitioner Company's Schedule 'B' property from the schedule of property by amending the relief sought for in the Original Application in O.A. No. 11 of 2008, for the reason that the schedule 'B' property has already been sold in the auction. However, no order has been passed in the said application.;


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