MANU/DK/0077/2022

Equivalent Citation: I(2023)BC105

BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL

KOLKATA

Appeal Dy. No. 513 of 2021

Decided On: 23.09.2022

Appellants: Punjab National Bank and Ors.

Vs.
Respondent: Avijit Mukherjee

Hon'ble Judges/Coram:
Anil Kumar Srivastava, J. (Chairperson)

Counsels:
For Appellant/Petitioner/Plaintiff: S. Pal Chowdhury and Samapti Roy, Learned Counsels

Case Category:
MERCANTILE LAWS, COMMERCIAL TRANSACTIONS INCLUDING BANKING - MATTERS
RELATING TO SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND
REINFORCEMENT OF SECURITY INTEREST ACT, 2002

JUDGMENT

Anil Kumar Srivastava, J. (Chairperson)

1. Instant appeal has been filed against the impugned order dated 12.08.2021 passed by

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the learned DRT-3, Kolkata in I.A. 1333 of 2020 arising out of S.A. No. 274 of 2019
whereby learned DRT has allowed the interim application.

2. As per pleadings of the party Term Loan of Rs. 14.11 lakh was availed by the respondent
(who is SARFAESI applicant before the DRT) from the appellant bank. The loan account
became NPA on 31.12.2015. SARFAESI proceedings were initiated by issuing demand
notice dated 01.01.2016 claiming dues of Rs. 10,51,768/-. Possession notice was issued
on 05.03.2018. Sale notice was issued on 18.06.2019. E-auction was conducted
successful and sale certificate was issued on 19.11.2019 in favour of highest bidder,
Joydeep Roy Chowdhury. Interim application was filed by the SARFAESI applicant with the
prayer for quashing the sale notice dated 18.06.2019 and further prayer for direction to
disclose the details of e-auction held on 26.07.2019. After hearing the learned counsel for
the parties learned DRT issued flowing directions:

(i) Respondent bank is directed to serve details of auction purchaser once again to
the applicant within seven days from the date of receipt of this order.

(ii) Respondent bank is also directed to furnish details of auction sale process by
way of affidavit within seven days from the date of receipt of this order.

(iii) Applicant is directed to impleade the auction purchaser as party respondent

within seven days from the date of receipt of details of auction purchaser. Registry
is directed to assist the applicant in impleading auction purchaser as soon as he
filed petition for amendment.

(iv) Respondent bank is further directed to intimate upto date outstanding dues
including other charges which are required u/s. 13(8) for redemption of the
property.

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 (v) Auction purchaser, if impleaded by the applicant, is directed to file affidavit in
opposition, if he so like, within seven days from the date of receipt of the S.A.

3. Feeling aggrieved appellant bank has preferred this appeal.

4. It appears from record that learned counsel for the appellants has duly served notice of
appeal upon the respondent, however, none has appeared on behalf of the respondent.

5. Learned counsel for the appellant submits that main grievance of the appellant bank is
regarding right to redemption of the respondent as provided u/s. 13(8) of the SARFAESI Act.
It is submitted that the direction issued by the learned DRT regarding intimation of upto date
outstanding dues including other charges for the purpose of granting redemption of secured
asset u/s. 13(8) of the Act is against the law.

6 . Section 13(8) of the SARFAESI Act as amended with effect from 01.09.2016 is
reproduced as under:

"If the dues of the secured creditor together with all costs, charges and expenses
incurred by him are tendered to the secured creditor at any time before the date
fixed for sale or transfer, the secured asset shall not be sold or transferred by the
secured creditor, and no further step shall be taken by him for transfer or sale of
that secured asset."

Aforesaid provision of the Act specifically states that the borrower has to tender an amount
of dues together with all costs, charges and expenses incurred by the secured creditor
before the date of publication of notice for public auction or inviting quotation or tender or
public or private treaty for transfer by way of lease, assignment or sale of the secured
asset.

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7. In Shakeena Vs. Bank Of India And Ors. reported in MANU/SC/1119/2019 it was held by
the Hon'ble Supreme Court that:

"Further, the amended Section 13(8) of the 2002 Act which has come into force
w.e.f. 1st September, 2016, will now stare at the face of the appellants. As per the
amended provision, stringent condition has been stipulated that the tender of dues
to the secured creditor together with all costs, charges and expenses incurred by
him shall be at any time before the "date of publication of notice" for public auction
or inviting quotations or tender from public or private deed for transfer by way of
lease assessment or sale of the secured assets. That event happened before the
institution of the subject writ petitions by the appellants."

8. It appears that learned DRT was pursuaded to pass the impugned order on the ground
that another order was passed on 30.09.2019 to the effect that auction sale is subject to
outcome of the SARFAESI application. In the order dated 30.09.2019 nowhere any
embargo was imposed upon the appellant bank either not to confirm the auction sale or not
to issue sale certificate. As far as issue of validity of sale is concerned there is no doubt
that it would be subject to the final outcome of the SARFAESI application, but at the same
time, as far as right to redemption of the borrower is concerned, it is to be governed in
accordance with the amended provision of Section 13(8) of the Act. Hence, law laid down
by the Hon'ble Supreme Court in the Shakeena case (supra) is applicable since there is
nothing on record to show that the SARFAESI applicant had tendered total dues along with
cost, charges and expenses incurred by the secured creditor before the date of publication
of notice of public auction. Hence, the right available u/s. 13(8) has already extinguished.
Accordingly, there was no requirement for directing the bank to intimate the upto date
outstanding dues for redemption of secured asset. The direction given by learned DRT is

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against the law and is liable to be set aside.

9. However, as far as details of auction purchaser to implead him as necessary party in the
SARFAESI application are concerned since right has been accrued in favour of the auction
purchaser, he is a necessary party and he should be impleaded in the SARFAESI
application. Auction purchaser also have right to contest the proceeding before the
concerned DRT.

10. Accordingly, I am of the view that appeal is liable to be partly allowed.

ORDER

11. Appeal is partly allowed. Direction issued by the learned DRT to the appellant bank to
intimate the outstanding dues including other charges for redemption of secured asset u/s.
13(8) is hereby set aside. However, SARFAESI applicant should take necessary step for
impleadment of auction purchaser as opposite party in the SARFAESI application who shall
have right to contest the proceeding before the DRT.

No order as to costs.

File be consigned to record room.

Copy of the order be supplied to the appellant and the respondents and a copy be also
forwarded to the concerned DRT.

Copy of the judgment/Final Order be uploaded in the Tribunal's website.

Order dictated, signed and pronounced by me in the open Court on this the 23rd day of
September, 2022.

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