EASUN HOLDINGS PRIVATE LIMITED Vs. STANDARD CHARTERED BANK

JUDGEMENT

(1.) Assailing the orders dated 13.06.2019 and 16.07.2019 rendered by the Debts Recovery Appellate Tribunal, Chennai in AIR (SA) No.179 of 2019, the petitioner company had filed these two Writ Petitions.

(2.) The facts of the case as projected by the petitioner are that the petitioner is a Private Limited Company which had availed financial facilities from the respondent Bank and since the latter insisted for a collateral security, the agricultural property belonging to the former was accepted by the latter respondent Bank and the same was mortgaged. However, the respondent Bank had taken the blank signatures of the petitioner in different blank documents and also on an affidavit which stated that the property was not purchased for agricultural purposes nor intended to be used for the same. The respondent Bank proceeded against the petitioner under Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 ( hereinafter, in short called as 'SARFAESI Act') for recovery of the loans. There were standing crops in the land and the plea that the SARFAESI Act does not apply to agricultural property was raised by the petitioner company at the first instance itself, with the bank, at the time of the receipt of the possession notice dated 15.10.2018. Aggrieved over the elusive reply from the Bank, the petitioner filed SA.No.348 of 2018 before Debts Recovery Tribunal-III, Chennai seeking relief by way of praying for setting aside the possession notice dated 12.10.2018. Debts Recovery Tribunal-III taking cue from the Supreme Court ruling in ITC Limited vs. Blue Coast Hotels Limited and Others reported in (2018) 15 Supreme Court Cases 99 concluded in its order dated 01.05.2019 that at the time of creating mortgage, the petitioner had filed an affidavit to the effect that the property though agricultural in nature was acquired for non-agricultural purpose and never been put for agricultural use nor intended to be put to use for agriculture. The Debts Recovery Tribunal had also pointed out that the Registration Department had classified the property as Residential Special Type I and consequently dismissed the SA.No.348 of 2018. The order also referred to the photographs adduced by the petitioner to substantiate that there were standing crops on the said land and observed that the banana plantation was found only in a part of the land and it does not conclusively establish the agricultural nature of the land. The petitioner company appealed in the Debts Recovery Appellate Tribunal, Chennai in AIR (SA) No.179 of 2019 against the order of the Debts Recovery Tribunal-III, Chennai dated 01.05.2019. As the sum due to the respondent Bank was to the tune of Rs.54.18 crores as on 30.04.2018 with future interests, the petitioner was directed to comply with the predeposit of Rs.20 crores in two instalments of Rs.10 crores each, one immediate and the other within four weeks of the order which was dated 13.06.2019. The petitioner filed a review petition (IA.No.661 of 2019) on the said order which was dismissed on 16.07.2019. Hence, the two writ petitions challenging the two orders of Debts Recovery Appellate Tribunal, Chennai.

(3.) The bone of contention in this case is the nature of property. Mr.Elambharathi, learned Senior Counsel for the petitioner would contend that the secured asset is only an agricultural land and that merely because the petitioner company were made to sign an affidavit cum indemnity, it cannot alter the nature of the property. His specific contention is that the petitioner's signature was obtained by the bank in some blank papers along with other forms, at the time of creating the mortgage.