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Luxco Electronics and ors. Vs. Corporation Bank - Court Judgment

LegalCrystal Citation
CourtDRAT Allahabad
Decided On
Judge
Reported inI(2008)BC93
AppellantLuxco Electronics and ors.
RespondentCorporation Bank
Excerpt:
.....the original deed of title and the last question is; whether the appellant can be taken to be a wilful defaulter in connection with the loan advanced to him and the proposal for settlement submitted by the appellant could be rejected for his being wilful defaulter. the above contentions are opposed from the side of the respondent bank on the ground that the properties, against which proceedings for recovery were taken up by the bank, were only mortgaged by depositing the certified copy of the deed on the pretext that the appellant had lost the original title deed. the other argument is that no objection to the notice issued under section 13(2) of the aforesaid act was ever filed for its disposal as required under the law. it is also submitted on behalf of the bank that the appellant.....
Judgment:
1. This appeal has been preferred against an order dated 16.4.2007 passed by the DRT, Allahabad vacating the stay order passed by it on 3.1.2007 for the maintenance of status quo of the property said to have been mortgaged. Also while passing the impugned order, the DRT had directed appellant to deposit one lac more and by means of an application dated 29.1.2007 moved by the appellants had requested for keeping the condition of deposit of amount of Rs. 1.00 lac more in abeyance, but it was also turned down.

2. The short questions, which arise out of the impugned order in this appeal are: whether the objection said to have been preferred to the notice issued under Section 13(2) of the Securitization and Reconstruction of the Financial Assets and Enforcement of the Security Interest Act, 2002 was disposed of before taking up proceedings for the recovery of the amount under the aforesaid enactment, second question, which has been raised, is whether the property said to have been mortgaged was actually mortgaged in accordance with provisions of law by depositing the original Deed of Title and the last question is; whether the appellant can be taken to be a wilful defaulter in connection with the loan advanced to him and the proposal for settlement submitted by the appellant could be rejected for his being wilful defaulter. The above contentions are opposed from the side of the respondent Bank on the ground that the properties, against which proceedings for recovery were taken up by the Bank, were only mortgaged by depositing the certified copy of the deed on the pretext that the appellant had lost the original Title Deed. The other argument is that no objection to the notice issued under Section 13(2) of the aforesaid Act was ever filed for its disposal as required under the law. It is also submitted on behalf of the Bank that the appellant is wilful defaulter, therefore, his proposal of one time settlement has not been rightly considered.

3. After hearing the Counsel for both the parties, when we go through the record, we find that along with rejoinder there is photocopy of the receipt of the Courier filed on behalf of the appellant along with copy of the objection dated 30.3.2006 with seal of the Bank of 5.4.2006. The above courier-receipt shows that the objection was sent by means of courier service and it was received there on 4.4.2006. In view of these materials, which remain uncontroverted, it is undoubtedly established that the objection to the notice under Section 13(2) of the Act was actually filed by the appellant and as per the judgment of the Hon'ble Apex Court reported as Mardia Chemicals Limited v. Union of India , the disposal of objection to the notice issued under Section 13(2) of the Act and the communication of its disposal is necessary before any further action for recovery. Therefore, in the instant case when it is established that the objection was filed, the respondent Bank is duty bound to dispose it of and Bank can proceed only after disposal of this objection and this disposal has to be communicated to the appellant. The Tribunal is not in position to accept the argument advanced from the side of the Bank that the above courier receipt and objection affixed seal of the Bank are fake documents manufactured for the purposes of this case. So far as the question of mortgage of the property by the appellant is concerned, on the counter to the memo of appeal we have photocopy of affidavit of S.C. Gupta, a partner of the appellant firm filed as C.A. No. 2 by Bank mentioning therein the circumstances, under which, for want of original Title Deed, which were somewhere lost, certified copy of the Sale Deed as C.A. No. 4 available on the record was handed over to the Bank at the time of mortgage. Therefore, in view of the above documents, it is not acceptable that the property in question was never mortgaged by depositing the Title Deed. The last question with regard to wilful defaulter is to be decided in the light of circular as C.A. No. 1 filed in the case on behalf of the respondent Bank and keeping the contents of the above circular, the Bank has to dispose of the question of wilful defaulter giving suitable reasons for treating the appellant as wilful defaulter in the instant case.

4. The result of above discussion is that the impugned judgment of the Tribunal has to be set aside with direction to the respondent Bank to dispose of the objection, copy of which if not available with Bank may be provided by the appellant within seven days from today to the notice issued under Section 13(2) of the Act within a reasonable time preferably within 45 days from the date of receipt of this order and thereafter to proceed in accordance with law.

5. Appeal is hereby allowed. Impugned judgment and order dated 16.4.2007 passed by the Tribunal is set aside with direction to the respondent Bank to dispose of the objection of the appellant as observed in the body of this judgment by this Tribunal. No order as to costs. A copy of this judgment be sent to the parties as well as to the DRT concerned along with original records, if summoned earlier.


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