SYNDICATE BANK Vs. BASALINGAPPA

JUDGEMENT

(1.) IN this case, petitioner has challenged the order passed by the Debt Recovery Tribunal, Bangalore, (Tribunal' for short) dated 22-12-2006 in ASANo. 35/2005 directing redelivery ofpossession of the property in question which was proceeded against by the petitioner through its authorised officer under the provisions of the securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ('the Act' for short ).

(2.) BRIEF facts of the case are as under: petitioner is a nationalised bank ('bank' for short ). The Head office of the Bank is situated at Manipal. The Bank has a branch at dandeli in Uttara Kannada District. The respondent and two others had availed financial accommodation of over-draft facility from the bank and secured the said loan by creating unregistered equitable mortgage of the land and the commercial building bearing plot Nos. 62 and 63 situated in Ward No. I-A, CMC, 200 acres layout. J. N. Road, Dandeli, belonging to the respondent. The borrowers fell into arrears and both the loan accounts of M/s Nandi Agencies and M/s sriram Agencies which were proprietary concerns belonging to the respondent and two others were rendered non-performance assets as on 20-8-2004. The Bank proceeded against the respondent under the provisions of Section 13 of the Act and issued notices to the respondent and other two borrowers through its authorised officer. Neither the respondent nor the other borrowers complied with the demand made in the said notices nor did they file any objections to the said notices. Thereafter, the Bank issued possession notice to the borrowers, the authorised officer of the Bank took actual possession of the secured assets on 30-11 -2004 and got published the possession notice in the newspapers having wide circulation. The authorised officer of the Bank issued sale notice on 14-3-2005 proposing to sell the security. At this stage, the respondent preferred an appeal under sec. 17 (1) of the Act and assailed the sale notice dated 14-3-2005 and prayed for an interim order seeking stay of further proceedings pursuant to the sale notice. In the appeal, the Tribunal directed the respondent to deposit a sum of Rs. 3 lakhs and directed stay of the sale proposed by the authorised officer of the Bank. The Bank filed objections to the application as also to the appeal. On 1-12-2006, the respondent filed another interlocutory application under Sec. 22 (2) (h) of the Recovery of Debts Due to the Banks and Financial institutions Act, 1993 ('drtact' for short) seeking redelivery of the possession of the property in question pending disposal of the appeal. The reasons assigned for redelivery of possession is that the Bank had appointed a security guard to preserve and protect the property in question by paying a salary of Rs. 4,800/- per month and the said amount is likely to be debited to the loan account of the respondent and hence, possession of the property be redelivered. The Bank opposed the application by filing objections. The Tribunal allowed the said application and directed redelivery of possession of the property in favour of the respondent. The Bank has called in question the said order in this Writ Petition.

(3.) I have heard Sri K. Radhesh Prabhu, Learned Counsel appearing for the Bank and Sri V. R. Kulkarni, Learned Counel for the respondent.