ESSIX BIOSCIENCES LTD. Vs. UCO BANK

JUDGEMENT

(1.) THESE appeals have been directed against the order dated 15.12.2011 passed by the Presiding Officer of DRT -I, Chandigarh in S.A. No. 31/2000 - M/s. Morian Chemicals Ltd. and Ors. v. UCO Bank and Ors., whereby the demand notice dated 19.8.2006, sale notice dated 20.9.2007 and the auction sale of property bearing No. B -4 and 5, Industrial Focal Point, Dera Bassi, Mohali in favour of M/s. Essix Biosciences Ltd. have been set aside and the auction purchaser has been directed to hand over the possession of the said property to the applicants and the Bank has been directed to refund the sale consideration amounting to Rs. 485.42 lacs to the auction purchaser with interest @ 10% per annum from the date of payment and a Court Receiver has been appointed to take possession of the properties from the auction purchaser. The facts giving rise to these appeals, in brief, are that on 22.8.2005, UCO Bank had granted certain credit facilities to M/s. Morian Chemicals of which Sunil Dutt Bansal, Jai Bhaghwan Bansal and Sanjay Bansal were the Directors. The factory premises of the borrower company situated at B -4 and 5, Industrial Focal Point, Dera Bassi, Mohali (for short, the Dera Bassi property) was equitably mortgaged with the Bank by Jai Bhagwan Bansal and Sanjay Bansal and they also stood as guarantors whereas Achal Bansal and Yogesh Bansal also standing as guarantors provided collateral security by creating equitable mortgage of their property bearing No. SCO 44, Sector 30 -C, Chandigarh in favour of the Bank. When the loan account became irregular and Sunil Dutt Bansal opened current accounts in the name of the company with State Bank of Patiala and Vijaya Bank and the guarantors Achal and Yogesh Bansal revoked their guarantee, the account in question was classified by the Bank as Non Performing Asset (NPA) on 30.6.2006 and a demand notice dated 19.8.2006, under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, the Act) was issued claiming an amount of Rs. 3,52,62,965.60 within 60 days to which the borrower/mortgagors filed representations/objections, which were also replied to by the Bank.

(2.) WHEN the borrowers failed to repay the claimed amount within the stipulated period, the Bank issued possession notice on 29.11.2006 find took the symbolic possession of the secured assets under Section 13(4) of the Act. The guarantors Achal and Yogesh Bansal thereupon filed an application under Section 17 of the Act (SA No. 3/2007) challenging the action of the Bank taken qua their Chandigarh property. However, on refusal of the interim relief claimed by them in the SA, a Writ Petition (CWP No. 5356/2007) was filed by the said guarantors before the Punjab and Haryana High Court, wherein an interim stay was granted in respect of their property.

(3.) THE Bank, in the meantime, had taken the physical possession over the Dera Bassi property on 24.8.2007 and after due publication of the sale notice dated 20.9.2007 in the newspapers put that property to auction sale with a reserve price of Rs. 405.42 lacs for 22.10.2007. The auction took place as per schedule and the property was purchased by M/s. Essix Biosciences Ltd. for a sale price of Rs. 486 lacs and on deposit of the entire sale consideration on that very day, the sale was confirmed in its favour and possession thereof was handed over to it on 22.10.2007 itself.