LAWS(TLNG)-2019-8-11

HARITA INDUSTRIES Vs. CENTRAL BANK OF INDIA

Decided On August 02, 2019
Harita Industries Appellant
V/S
CENTRAL BANK OF INDIA Respondents

JUDGEMENT

(1.) The first petitioner is a proprietary concern and the second petitioner is its proprietress. They are before this Court assailing the order dated 04.02.2019 passed by the Debts Recovery Tribunal-II, Hyderabad, dismissing Securitisation Application No.3 of 2019 filed by them under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for brevity, 'the SARFAESI Act').

(2.) M/S. Sree Santosh Industries, Hyderabad, a registered partnership firm, the second respondent herein, availed cash credit facilities to the tune of Rs.1,00,00,000/- and a term loan of Rs.1,40,00,000/- from the Central Bank of India, Hyderabad (hereinafter, 'the bank'). M/s. Hari Wood Industries, the third respondent partnership firm, and its two partners, C.Naga Mohan and S.Venkataramana, the fourth and fifth respondents, stood as guarantors. They created a mortgage over the property, being the premises at Plot No.4D, Phase I, IDA, Cherlapally, Ranga Reddy District, belonging to the third respondent firm, in this regard. The first petitioner proprietary concern claims to be a lessee of part of the premises of the said secured asset. It claimed leasehold rights under unregistered lease deed dated 26.03.2016. According to the petitioners, after obtaining the said premises on lease, they made considerable investment by raising structures, installing plant and machinery, etc. Thereafter, they came to know that the property was mortgaged with the bank. While so, M/s.Hari Wood Industries, the third respondent firm, and its partners, the fourth and fifth respondents, executed agreement of sale dated 28.06.2017 in their favour in relation to 1500 square yards of the property. While so, upon default in the loan repayment by the second respondent firm, the bank initiated proceedings under the SARFAESI Act against the property to realize its dues. The bank issued demand notice dated 01.06.2018 under Section 13(2) of the SARFAESI Act. Thereafter, the third, fourth and fifth respondents executed another agreement of sale on 17.09.2018 in favour of the first petitioner proprietary concern in relation to the property in its entirety. The bank secured order dated 24.10.2018 in Crl.M.P.No.722 of 2018 from the learned Chief Metropolitan Magistrate, Cyberabad, under Section 14 of the SARFAESI Act, and took physical possession of the secured asset. S.A.No.3 of 2019 was filed by the petitioners assailing the action of the bank in taking physical possession of the secured asset through the Advocate Commissioner. The Tribunal framed the following points for adjudication:

(3.) Holding against the petitioners on the first point, the Tribunal noted that even as per their own case, only a paltry amount of Rs.35,00,000/- was paid to the vendors out of a total sale consideration of Rs.2.50 Crore and therefore, they could not claim any title or right in the property pursuant to agreement of sales, which were admittedly executed after the mortgage. The Tribunal further noted that the bank had taken physical possession of the secured asset strictly in accordance with the provisions of the SARFAESI Act. The securitization application was accordingly dismissed.