S SHAALINI Vs. DEBT RECOVERY TRIBUNAL

JUDGEMENT

(1.) THE petitioner, one of the Director and shareholder of Merit Resorts Pvt. Ltd. , (hereinafter referred to as 'company') has preferred the writ petition against the order dated 3rd Oct. , 2007, passed by the Debts Recovery Tribunal " I, Chennai (hereinafter referred to as 'drt') and order dated 18th July, 2008, passed by Debts Recovery Appellate Tribunal, Chennai (hereinafter referred to as 'appellate Tribunal' ). The DRT, while dismissed the appeal u/s 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests Act, 2002 (hereinafter referred to as 'sarfaesi Act'), the Appellate Tribunal affirmed the same giving rise to the present writ petition.

(2.) THE petitioner is one of the founder Director of M/s. Merit Resorts Pvt. , Ltd. , a company incorporated under the Companies Act. The said company obtained loan from Canara Bank, Chennai (hereinafter referred to as 'bank') and having failed to pay the same, the Bank took steps u/s 13 (2) followed by Section 13 (4) of the SARFAESI Act against the company. The company filed an appeal before the DRT in S. A. No. 27/06 challenging the notice u/s 13 (2), which was dismissed as premature, followed by a subsequent appeal for action u/s 13 (4) in s. A. No. 109/06, in which a conditional order passed by DRT, but having not complied, the appeal was dismissed. The petitioner, thereafter, filed an appeal u/s 17 in S. A. No. 2602/07 before the DRT showing herself as one of the Director and shareholder of the company. She also claims to be one of the Trustees of M/s. Merit International Education Foundation, a trust registered under the Indian Trusts Act (hereinafter referred to as 'trust' ). The petitioner challenged the notice on the ground that the property brought on sale belongs to the Trust. Further ground taken was that the petitioner was not served with notice u/s 13 (2) nor u/s 13 (4) of the SARFAESI Act. It was argued on behalf of the petitioner that there was no forged mortgage in respect of the schedule property at Ooty created in favour of the Bank as the company has not deposited any of the title deeds in respect of the said property of which possession taken by the Bank. It was also brought to the notice of the DRT that the Bank filed complaint against the petitioner and others, including Bank officials that the loan documents were forged, in view of which CBI initiated investigation and, therefore, the Bank, ought to have awaited for the outcome of the investigation. It was also contended on behalf of the petitioner before the Tribunals that the schedule property brought for sale is an education institution and more than 150 students, teaching and non-teaching staff were involved and that the pettioner did not sign any documents nor guaranteed about repayment of loan by the company. The measures taken by the Bank are not valid in law and, hence, liable to be set aside.

(3.) THE DRT, while dismissed the appeal u/s 17 on merit, also held that the petitioner being not a person aggrieved, application u/s 17 was not maintainable. Similar view was expressed by the Appellate Tribunal.