JUDGEMENT
S.N.H. Zaidi, J. (Chairperson) -
(1.)THE instant Appeal has been directed against the order dated 30th July, 2010, passed by the Presiding Officer of DRT -III, Delhi, whereby S.A. No. 233/2010 has been disposed of with the direction to the applicant/borrower to pay Rs. 23,32,074/ - along with simple interest @ 10% per annum upon Rs. 25,87,074/ - w.e.f. 1st July, 2009 till the full realization, in twelve equal monthly instalments. The facts of the case indicate that on execution of loan documents and creation of equitable mortgage of a property in favour of the appellant -Bank, a Cash Credit Hypothecation facility of Rs. 25 lacs was sanctioned by the Bank to the respondent for the expansion of his business. As per the terms and conditions of the sanction, the said loan was to be repaid with interest @ 12.25% per annum. The respondent however, failed to maintain the financial discipline and defaulted in making repayment of the monthly instalments. As a consequence of the default, the said loan account was classified as Non Performing Asset (NPA) on 31st March, 2009 with an outstanding amount of Rs. 25,99,157/ -, including interest up to 28th February, 2009. A demand notice dated 22nd July, 2009 under Section 13(2) of the SARFAESI Act, 2002, hereinafter referred to as the said Act, was also issued claiming an amount of Rs. 26,11,291/ - including interest up to 15th May, 2009. The notice was duly served upon the respondent, but since he failed to comply with or reply to that notice, the Bank initiated process for obtaining the possession of the secured asset and filed an application under Section 14 of the said Act before the CMM, Delhi. The ACMM, Delhi allowed that application on 6th May, 2010 and appointed Mr. B.P. Pancholi, the Authorized Officer of the appellant -Bank, as the Court Receiver with direction to take possession of the secured asset. The Receiver issued notice dated 18th May, 2010 for taking possession, which was duly served upon the respondent. The respondent, however, filed the application under Section 17(1) of the said Act (S.A. No. 233/2010) before the DRT -III, Delhi challenging the action of the Bank and sought interim protection qua his dispossession. The DRT, vide order dated 14th June, 2010, granted interim protection to the borrower/respondent on the condition of payment of Rs. 2 lacs on or before the next date of hearing, i.e., 25th June, 2010, which was not fully complied with by the respondent and only Rs. 50,000/ - were deposited. The learned Tribunal, disposed of the said S.A., vide impugned order dated 30th July, 2010, as stated above. Feeling aggrieved with that order, the Bank has filed the instant Appeal.
(2.)MR . Rajeev Aggarwal appearing for the Bank contended that the respondent in his S.A. had not disputed the outstanding NPA amount or the rate of interest, but the DRT arbitrarily reduced the NPA figure from Rs. 25,99,157/ - to Rs. 25,87,074/ - and though it had held that the applicant/respondent was liable to pay the re -assessed NPA amount, it again arbitrarily reduced the rate of interest from 12.25% per annum to 10% per annum on reducing balance basis. He also contended that the DRT had committed error in granting concessions in the rate of interest and payment period and in not allowing the cost of legal proceeding without assigning any reason.
Mr. Aggarwal further contended that the DRT did not consider the conduct of the applicant/respondent that he had not complied with the condition of the interim order dated 14th June, 2010 and failed to deposit the entire ordered amount According to him, if the impugned order is allowed to sustain, the Bank would incur a direct loss of approximately Rs. 3,84,104/ - which the Bank would not be able to recover despite having sufficient security to recover the entire outstanding dues.
(3.)THE appellant's Counsel also pointed out that the DRT has not given any finding qua the issue whether or not the Bank had acted in accordance with the provisions of the said Act or the rules made thereunder while taking the measures under Section 13(4) of the said Act. It was also pointed out by him that the DRT, in exercise of the power under Section 17 of the said Act, was not required to determine the amount of debt due on the borrower, which had already been crystallized by the Bank vide its demand notice issued under Section 13(2) of the said Act, but the learned Presiding Officer of the DRT, without arriving at any conclusion about the legality of the measures taken by the Bank, arbitrarily reduced the amount of debt due, as indicated above, without assigning any reason.