INDIAN OVERSEAS BANK Vs. JAGMOHAN KEJRIWAL
DEBTS RECOVERY APPELLATE TRIBUNAL
INDIAN OVERSEAS BANK
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Ranjit Singh, J. -
(1.) THIS order will dispose of appeals, Appeal No. 239/2012 and Inward No. 382/2012, as a common order is under challenge in both these appeals. Facts have been taken from Appeal No. 239/2012.
(2.) CHALLENGE in both the cases is to an order dated 29.5.2012 passed by DRT -I, Chandigarh. The appellant bank had advanced certain loan facilities to the respondents. The respondents defaulted in repayment and so the appellant bank initiated actions under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, the SARFAESI Act). A demand notice under section 13(4) of the Act was issued on 2.11.2011. On receipt of the notice, the respondents submitted their reply through communication dated 29.12.2011. The respondents pleaded that the land mortgaged was an agricultural land as there was no building or structure built on that piece of the land which had been mortgaged. The respondents also disputed the description of the property which, according to them, was not correct. In support of the plea that the land in question was not a commercial and it is stated that the land was purely an agricultural land used for cultivation of crops. Reference is made to the khasra khatauni obtained from the revenue record to show that the property is described as agricultural property where two types of crops were grown. Plea further was that protection under section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short, the SICA) shall continue to remain and the respondent being one of the guarantors the appellant bank shall not have any right to claim the property of the respondent. The appellant bank has highlighted that the amount due was over RS. 108 crores which according to the respondents was highly exorbitant and it was neither due nor payable. It is also urged that the order rejecting the plea raised in the reply to the notice would show the non -application of mind, which, as per the law laid down by various courts, is an essential requirement under the statute. The order passed is termed as illegal and unfair as it passed without considering the nature of the property.
(3.) CONSIDERING the rival submissions made by the parties before it, the Tribunal formulated the following questions which, according to it, required determination:
(i) Whether the representation of the applicant was disposed of by a speaking reply in terms of section 13(3A) of SARFAESI Act?
(ii) Whether the property in question is agricultural land?
(iii) Whether there is a violation of Rule 8(2) of the Security Interest (Enforcement) Rules, 2002?
(iv) Whether there was any bar on respondent bank to invoke the provisions of SARFAESI Act because of pendency of reference before BIFRF under Section 15(1) of Sick Industries Companies (Special Provisions) Act, 1985 (for Short SICA)?.
The Tribunal has dealt with the above noticed objection one by one. The first issue was regarding the plea of the respondent that the appellant did not dispose of their representation by a speaking order in terms of section 13(3A) of the Act, After noticing various judgments relied upon by the respective parties, the Tribunal below has held as under on this issue:
In my considered view, reply of the respondent bank as aforesaid to the representation is not in proper compliance of provision of Section 13(3A) of SARFAESI Act and Rule 3A(b) of the Rules, 2002 the law laid down by the Hon'ble Supreme Court as well as various Hon'ble High Courts as cited above is quite clear that disposal of all objections without proper application of mind and reasons is not a valid compliance.
Except for that is mentioned above, nothing else is found recorded in the impugned order by the Tribunal. As to how the reply showed non application of mind is not elaborated in any manner.;
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