BANK OF INDIA AND ORS. Vs. MANISH SHARMA

JUDGEMENT

(1.) THIS writ petition under Article 227 of the Constitution of India has been filed by the creditor -Bank against the borrower -respondent, who is proprietor of a private hospital. In this writ petition, challenge has been made to the order dated 4.4.2013 passed by the Debts Recovery Appellate Tribunal (DRAT), Allahabad, in Modf./Review Sr. No. 158/2013 arising from Appeal No. R -12/11. A prayer has also been made for a direction to the effect that the petitioner Bank is entitled to realize the entire outstanding dues from the respondent by sale of the mortgaged property in the case of failure on the part of the respondent to deposit the same.

(2.) A plethora of facts have been pleaded for and against the petitioner; however, the facts necessary for disposal of the petition lie in a narrow compass. The petitioner Bank initiated action for realization of outstanding dues against the respondent under the provisions of Secularization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to in this judgment as "the Act"). By order dated 6.1.2012 (Annexure -P/3), the learned DRAT, Allahabad, in Appeal No. R -12/2011 directed the respondent to pay an amount of Rs. 65,00,000/ - in 15 equal instalments, with the first instalment falling due on 15.2.2012 and subsequent instalments on the 15th of each successive month. It was further clarified that in case the respondent failed to deposit any of the instalments, the petitioner Bank would be free to proceed with the auction of the property and recover the complete original amount as per the agreement. Since this order was passed in the absence of a representative of the petitioner Bank, it was allowed liberty to apply for review of the order, in case it had any objection. Utilizing the liberty so granted, the petitioner Bank moved an application for review, which was decided by order dated 28.2.2012 (Annexure -P/4), whereby the Bank was allowed to charge interest @ 10% per annum on the amount of Rs. 65,00,000/ -. The respondent failed to comply with the aforesaid orders dated 6.1.2012 and 28.2.2012. Consequently, after a series of correspondence between the parties, finally, the Bank set up auction sale of the mortgaged property for 10.4.2013. The petitioner again approached the DRAT, Allahabad for reviewing order dated 6.1.2012, who yet again reviewed/modified that order, by impugned order dated 4.4.2013 (Annexure P -11) granting liberty to the respondent to deposit Rs. 20,00,000/ - on the date of the auction and deposit further instalments as falling due. It was directed that in case the respondent failed to deposit Rs. 20,00,000/ - on the date of auction, the petitioner Bank would be free to confirm the auction.

(3.) ON the other hand, learned Counsel for the respondent has submitted that due to financial difficulties he was unable to fully comply with the conditions of order dated 6.1.2012, as modified by order dated 28.2.2012; however, a substantial amount was deposited by the respondent with the petitioner Bank. It has also been contended that the petitioner Bank had refused to accept the amount tendered by the respondent. It has also been submitted that the petitioner Bank is not interested in realizing its legitimate dues but is only interested in auctioning away highly valued property of the respondent at a throw away price to its "yes man". Learned Counsel for the respondent has also pointed out certain infirmities in the process of auction and inviting attention of this Court to the judgment passed by the Supreme Court in the case of Sardar Associates and Others v. Punjab & Sind Bank and Others, : VI (2009) SLT 473 : 111 (2009) BC 705 (SC) : III (2009) CLT 186 (SC) : (2009) 8 SCC 257, has stated that the petitioner Bank is not observing the guidelines issued by the Reserve Bank of India. With regard to the sustainability of an order for review. It has been contended that the impugned order merely extended the duration for repayment of dues and, therefore, did not amount to a review of an earlier order.