Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Union Bank of India Versus Ashok Saxena

2016 (12) TMI 1561 - MADHYA PRADESH HIGH COURT

Recovery of the debt - jurisdiction of the Recovery Officer - recovery of the amount by execution of the certificate - Held that:- It is not the intendment of the Act that while the basic liability of the defendant is to be decided by the Tribunal under Section 17, the Banks/Financial institutions should go to the Civil Court or the Company court or some other authority outside the Act for the actual realisation of the amount. The certificate granted under Section 19(22) has, in our opinion, to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

contention of the learned Senior Counsel for the appellants that the Bank has a lien over the surplus amount of ₹ 29,80,150.80/-. The writ court has rightly directed the appellant - Bank to refund the amount to the respondent No.1 along with interest. No case to interfere with the order dated 27/07/2016, passed by the learned writ court, as prayed is made out. - Also gone through the application for contempt filed by the respondent No.1 for drawing contempt proceedings against the off .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

le, Abhinav P. Dhanodkar (Learned Counsel) For the Respondents : Abhishek Tugnawat, Learned Counsel ORDER They are heard. By this writ appeal, the appellants - Banks are praying for setting aside of order dated 27/07/2016, passed in W.P. No.4969/2012 whereby the learned writ court directed the appellants to refund the amount of ₹ 29,80,150.80/- to the respondents alongwith interest at the same rate which the Bank is charging from its borrowers and the interest shall be paid from the date t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Security Interest Act, 2002 (in short .... "the SARFAESI Act") and, therefore, the auction took place on 11/02/2010 and the property of the respondent No.1 (guarantor) was sold by the appellants - Bank for a sum of ₹ 82,21,551/-. The total outstanding dues in respect of M/s Mayunk Industries were ₹ 52,30,101/-. An appeal was preferred before the DRT and the same was dismissed on 30/09/2011. 3. The grievance of the respondent No.1 before the writ court that his property was .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t of surplus amount, the stand of the Bank is that the respondent No.1 is proprietor of M/s Anita Steel Wire Works and in the account of M/s. Anita Steel Wire Works there are outstanding dues to the tune of ₹ 26,48,571/- and the surplus amount which was received by selling the property of respondent No.1 has been adjusted in respect of outstanding dues of M/s. Anita Steel Wire Works. 5. The stand of the Bank that they are having general lien on the surplus amount and, therefore, they have .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

re was a separate contract between the Bank and M/s. Mayunk Industries and the respondent No.1 was guarantor in respect of loan granted M/s. Mayunk Industries. There were two separate account altogether and by no stretch of imagination, the surplus amount by taking the shelter of Section 171 of the Indian Contract could have been appropriated with the outstanding amount of M/s. Anita Steel Wire Works and directed the Bank to refund the amount in question along with interest. 7. Learned Senior Co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n Contract Act, 1872 and Section 2(7) of the Sale of Goods Act, 1930 and submitted that the surplus amount cannot be appropriated. Section 171 of the Indian Contract Act and Section 2(7) of The Sales of Goods Act, 1930 reads as under :- Section 171 of the Indian Contract Act: 171. General lien of bankers, factors, wharfingers, attorneys and policy-brokers.- Bankers, factors, wharfingers, attorneys of a High Court and policy-brokers may, in the absence of a contract to the contrary, retain as a s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

evered before sale or under the contract of sale; 9. Learned counsel for the respondent No.1 also submitted that as per Section 171 of the Indian Contract Act, 1872, in mercantile system the Bank has a general lien over all forms of securities in respect of goods bailed to them. He submitted that as per Sub-section 7 of Section 2, the actionable claims and the surplus amount are not goods within the meaning of Section 2(7) of the Sale of Goods Act, 1930 and Section 171 of the Indian Contract Act .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Act, 1986, The Motor Vehicles Act, 1988, etc. However, unlike those statutes, the purpose of the SARFAESI Act is different, it is meant only for speedy recovery of the dues, and the scheme under Section 13(4) of the Act, permits the secured creditor to proceed only against the secured assets. Of course, the secured creditor is free to proceed against the guarantors and the pledged assets, notwithstanding the steps under Section 13(4) and without first exhausting the recovery as against secured .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ecured assets. The partial deposit before the DRAT as a pre-condition for considering the appeal on merits in terms of Section 18 of the Act, is not a secured asset. It is not a secured debt either, since the borrower or the aggrieved person has not created any security interest on such pre- deposit in favour of the secured creditor. If that be so, on disposal of the appeal, either on merits or on withdrawal, or on being rendered infructuous, in case, the appellant makes a prayer for refund of t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

forcement) Rules, 2002, or if there be any attachment in any other proceedings known to law. 23. We are also unable to agree with the contention that the Bank has a lien on the pre- deposit made under Section 18 of the SARFAESI Act in terms of Section 171 of The Indian Contract Act, 1872. Section 171 of The Indian Contract Act, 1872 on general lien, is in a different context: "171. General lien of bankers, factors, wharfingers, attorneys and policy- brokers.- Bankers, factors, wharfingers, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

-deposit made by a borrower for the purpose of entertaining the appeal under Section 18 of the Act is not with the bank but with the Tribunal. It is not a bailment with the bank as provided under Section 148 of The Indian Contract Act, 1872. Conceptually, it should be an argument available to the depositor, since the goods bailed are to be returned or otherwise disposed of, after the purpose is accomplished as per the directions of the bailor. 10. The Apex Court in the case of Allahabad Bank vs .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version