KUMAR ENTERPRISES Vs. ARCI LTD.

JUDGEMENT

(1.) THIS appeal impugns the order dated 27th September, 2012 of D.R.T. -III, Delhi passed in S.A. No. 528/2012 titled as Kumar Enterprises v. Asset Reconstruction Company (India) Ltd., whereby the interim relief sought in the S.A. has been rejected. The circumstances of the case indicate that respondent No. 2 Bank had sanctioned an overdraft facility of Rs. 19 lacs to the appellants which was renewed for Rs. 10 lacs as overdraft and Rs. 9 lacs as demand loan. The facility was later enhanced and renewed as Cash Credit (Hypothecation) for Rs. 44 lacs in October, 2000 on mortgage of property bearing No. 1/641, Loni Road, Shahdara, Delhi by deposit of its original sale deed. As the loan account became out of order, the respondent No. 2 Bank classified it as Non -Performing Asset (N.P.A.) on 31st March, 2002 and filed O.A. No. 198/2002 before the D.R.T. -III for the recovery of Rs. 54,54,604.48 along with pendente lite and future interest. The D.R.T. directed the applicant Bank to maintain the status quo of the mortgaged property by order dated 25th April, 2013 and allowed to continue the order with the condition that the defendants would also not transfer or part with the possession of that property in any manner whatsoever, by order dated 30th May, 2003.

(2.) DURING the pendency of the O.A. the Bank also issued demand notice dated 31st January, 2003 under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, the SARFAESI Act) to the borrower/appellants claiming an amount of Rs. 57,51,365.48 within 60 days but the borrowers failed to pay the claimed amount. The Bank assigned the debt in question to respondent No. 1 Company, namely the Asset Reconstruction Company India Ltd. (A.R.C.I.L.), vide assignment deed dated 23rd June, 2008 A.R.C.I.L. approached the C.M.M. Delhi under Section 14 of the SARFAESI Act for obtaining the possession of the mortgaged property and the A.C.M.M., Delhi, vide order dated 14th September, 2012, appointed a Court Receiver for taking the physical possession of that property. The borrower/appellants thereafter filed S.A. No. 528/2012 before the Tribunal below challenging the actions of A.R.C.I.L. and also sought interim relief qua the possession intended to be taken by the Receiver. The Tribunal below, however, declined to grant the interim relief by the order impugned dated 27th September, 2012. The respondent No. 1 took over physical possession of the property in question through the Court Receiver. Feeling aggrieved with the order of the Tribunal below, the appellants have filed the instant appeal claiming the restoration of possession of the property in question as interim as well as final relief.

(3.) MS . Rungta, however, opposing the above contentions has submitted that the account in question was rightly classified as N.P.A. on 31st March, 2002, as it had remained out of order for more than 180 days on that date. She has further stressed that the Bank had never sanctioned any ad hoc limit of Rs. 4.4 lacs on 3rd October, 2001 as alleged by the appellants and this fact has specifically been denied in para. 5.9 (at page 199) of the reply to the appeal. She has also contended that after 22nd September, 2001, the balance in the account had always remained in excess of the sanctioned limit of Rs. 44 lacs and if on any day it had come down to less than Rs. 44 lacs due to deposits of amounts, it has again exceeded the limit on the very day on account of the withdrawal of amounts.