UCO BANK Vs. D.R.A.T. ETC.

JUDGEMENT

(1.) THIS petition seeks quashing of order dated 3.12.2007 (Annexure P -12) passed by the Debt Recovery Tribunal and affirmed by order dated 1.10.2008 (Annexure P -16) passed by the Debt Recovery Appellate Tribunal.

(2.) THE Petitioner -Bank had advanced a loan to Respondent -Company against mortgage of property. In addition, Respondents No. 1 C.W.P. No. 18298 of 2008 and 2, who are said to be nephews of one of the Directors of the Company, also stood guarantors for repayment of the loan and mortgaged their property. The Bank gave notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, "the SARFAESI Act"), to which objections were filed by the borrower, but rejecting the said objections, the Bank took over the symbolic possession of the properties not only of the borrower but also of the guarantors. The guarantors filed an appeal under Section 17(1) of the SARFAESI Act. The Tribunal declined the stay, against which C.W.P. No. 5356 of 2007 was filed in this Court wherein status quo was ordered vide order dated 5.4.2007. Stay was also sought by the Company and its Directors which was declined, against which C.W.P. No. 7618 of 2007 was dismissed by this Court and property of the Company was sold. The entire outstanding amount of the Bank was recovered, leaving some amount surplus. Writ petition filed by the guarantors i.e. C.W.P. No. 5356 of 2007 was dismissed as infructuous. The guarantors filed an application before the Tribunal for quashing the action of the Bank under the SARFAESI Act and vide order dated 7.11.2007, the said application was accepted.

(3.) IN paras 5 to 7 of the order of Debts Recovery Tribunal -I, Chandigarh dated 7.11.2007, it was observed: