ISHRAT ENTERPRISES PVT LTD Vs. PUNJAB AND SIND BANK
DEBTS RECOVERY APPELLATE TRIBUNAL
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(1.) THE appeal has been directed by the appellants against the order dated 9.11.2006 passed by the Tribunal below allowing the LA. 105/2006 made by the respondent-Bank herein (applicant in O.A.) to vacate the stay order dated 17.1.2005 restraining it from proceeding further under the SRFAESI Act. THE Bank has been given liberty to proceed in accordance with the provisions of the SRFAESI Act and the Rules made thereunder.
(2.) I have heard Mr. Arvind Kashyap, learned Counsel for the appellants as also Mr. I.P. Singh, learned Counsel for the respondent-Bank. A little discussion is necessary for clarity.
The appellant No. 1-Company availed of certain loan and credit facilities from the respondent-Bank. Fiscal discipline as to repayment was not maintained and the accounts of the Company were declared NPA. The Bank proceeded against the Company under the SRFAESI Act on 13.9.2002 by issuing notice under Section 13(2) of the Act. The respondent-Bank also filed O.A. 44/2003 (New No. 619/2006), wherein the company also filed a counter claim. On 17.1.2005, the Company made an application for restraining the Bank from taking any steps under the SRFAESI Act on the ground, that the O.A. was pending. The Tribunal below passed the following order:
In view of the decision of Hon'ble DRAT, Delhi in miscellaneous appeal No. 72/2003 (In OA 55/2003, Chandigarh) dated 23.12.2004 and also in view of the amendment in the ordinance 2004, the applicant Bank will have to seek permission of the DRT for withdrawing the O.A. and it is only after the withdrawal is permitted, the Bank or financial institution can take further action in any manner under the Securitisation Act.
Non-applicant Bank can not proceed simultaneously in the O.A. as well as under Securitisation Act. Counsel for the non-applicant Bank seeks time to seek instructions from the Bank in this regard. Allowed.
Fix 3.3.2005 for hearing, till the disposal of the application, the non-applicant Bank is restrained from taking any further action under the Securitisation Act subject to the condition that defendants will not create any 3rd party interest in the property.
(3.) THEN, by I.A. 105/2006, the Bank applied for vacation of the said stay order dated 17.1.2005. It was submitted on behalf of the Bank that the Hon'ble Punjab and Haryana High Court had held vide judgment dated 8.12.2005 in Kalyani Sales v. UOI I (2006) BC 1 : 2006 Vol. 1 ISJ Banking 1, that Bank could not proceed simultaneously under SRFAESI Act, 2002 as well as RDDBFI Act, 1993. It was further submitted that the said judgment was challenged before the Hon'ble Supreme Court by way of filing the SLP 908/2006 and the Hon'ble Supreme Court had stayed the operation of the impugned order so far as it related to an application pending before the introduction of proviso to Section 19 of the RDDBFI Act, 1993 and that in view of further order of the Hon'ble Apex Court the Bank could proceed simultaneously under both the Acts.
On consideration of the matter, I am of the clear view that the appeal has no merit and is liable to be dismissed. I should make my meaning clear by a short discussion.;
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