Decided on February 10,2014

VEE ESS Jewellers Pvt. Ltd. Respondents


Ranjit Singh, J. - (1.) TWO securitization applications bearing Nos. 40/2010 titled as VEE ESS Jewellers (Pvt.) Ltd. vs. State Bank of India and 41/2010 titled as M/s Ashoka Woolen Mills vs. State Bank of India have been disposed of by a common order dated 30.5.2011 by DRT -II, Delhi. Two separate appeals (Nos. 311/2011 and 312/2011) are directed against this common order. The facts as noticed from Appeal No. 311/2010 would show that M/s VEE ESS Jewellers (Pvt.) Ltd., a partnership firm was granted credit facilities to the tune of Rs. 22.20 crores by the appellant bank on 14.2.2005. All the partners gave their personal guarantees and different properties were mortgaged equitably in favour of the bank for securing the repayment of the loan/ credit facilities. Anil Kumar Bagai and Anirodh Kumar Bagaj deposited title deeds of a commercial property at 6 -A, Chikambarpur Village, Pargana Loni Tehsil, District Ghaziabad, Uttar Pradesh, measuring 4800 sq. yds. for securing the loan.
(2.) ON 21.12.2006, credit limit was enhanced to Rs. 35 crores on request made by the respondent. Limit was further enhanced to Rs. 45 crores on 26.10.2007. The charges on the commercial property noted above were extended by the respective guarantors/ mortgagors/ owners from time to time for the enhanced loan/ credit facilities. Appellant firm availed the aforesaid facilities but neglected its repayment. The outstanding amount and the liability is even acknowledged in the balance sheet. The bank wrote various letters to the borrower/guarantors/mortgagors to regularize the account and to maintain the financial discipline, but still they failed to do so. On 28.8.2009, 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) was issued to the borrower, its guarantors and mortgagors. Still, they did not remit the outstanding amount. A sum of Rs. 58,56,05,224/ -, besides interest at contractual rate together with incidental expenses, costs, charges etc. was claimed in the notice under section 13(2) of the SARFAESI Act. The appellant filed a representation in response to the said notice dated 28.10.2009. This was received by the bank on 31.10.2009. The appellant bank immediately responded to the same on 4.11.2009 and thus on 25.01.2010, the bank was constrained to file O.A. titled as State Bank of India vs. VEE ESS Jewellers (P) Ltd. & Ors. for the recovery of Rs. 62,23,88,916.80 from the borrower/ guarantors/ mortgagors. In pursuance of the proceedings initiated under the SARFAESI Act, the appellant bank took physical possession of the secured assets. Respondents then filed S.A. No. 40/2010 and S.A. No. 41/2010 before the Tribunal below. Appellant bank filed reply along -with relevant documents. The Tribunal has disposed of these two S.As by the common order dated 30.5.2011 holding that the notices under sections 13(2) and 13(4) of the SARFAESI Act are valid, effective and enforceable, but, at the same time, has ordered that the possession of commercial property referred to above be restored to the Director Mr. Sanjeev Verma subject to filing undertaking as recorded in the impugned order. The bank accordingly has approached this Tribunal through these two appeals to challenge that part of the order whereby the possession of the commercial property bearing No. 6 -A, Chikambarpur Village, Pargana Loni Tehsil, District Ghaziabad, U.P. has been ordered to be restored to the Director as noticed. As per the appellant, this part of the order is neither justified in law nor in equity and accordingly would pray that the same be set aside/modified/quashed. It is specifically pleaded that the prayer in the present appeals is restricted only to that part of the order which contains direction against this property and not to any other part of the impugned order.
(3.) WHEN this appeal came up for hearing before this Tribunal, the contentions on the above lines, advanced by the counsel for the appellant, were noticed. This Tribunal, while issuing, notice, stayed the impugned order to the extent the possession of the property was handed over. As a result thereof, this property is still in possession of the bank.;

Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.