TMI Blog2019 (8) TMI 903X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Tribunal (DRAT) could be adjusted towards the amount due to the concerned bank and whether the concerned bank had a lien over the money so deposited - Going by the law laid down by this Court in Axis Bank3 the secured creditor would be entitled to proceed only against the secured assets mentioned in the notice under Section 13(2) of the SARFAESI Act. In that case, the deposit was made to maintain an appeal before the DRAT and it was specifically held that the amount representing such deposit was neither a secured asset nor a secured debt which could be proceeded against and that the appellant before DRAT was entitled to refund of the amount so deposited. The submission that the bank had general lien over such deposit in terms of Section 171 of the Contract Act, 1872 was rejected as the money was not with the bank but with the DRAT - In the instant case also, the money was expressly to be treated to be with the Registry of the High Court. The appellants are entitled to withdraw the sum deposited by them in terms of said order dated 11.10.2017. Their entitlement having been established, the claim of the appellants cannot be negated by any direction that the mone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .08.2017 (ii) Sale Notice dated 29.03.2017 and (iii) Order dated 06.10.2017 passed by the Tribunal refusing to grant interim relief. 5. The matter came up for preliminary hearing before the High Court on 11.10.2017 and the Counsel for the appellants submitted that in order to establish their bona fides, the appellants were willing and ready to deposit a sum of ₹ 140 crores with the Bank. The submission was recorded and directions were issued by the High Court as under: Mr. B.C. Negi, learned Senior Advocate, states that without prejudice to the respective rights and contentions of the parties and subject to the outcome of the writ petition, pursuant to petitioners request (Annexure P-18), which is pending consideration with the lead Consortium Bank, in order to establish their bona fides, petitioners are ready and willing to deposit a sum of ₹ 140 crores with the lead Consortium Bank (Punjab National Bank) in the following manner:- (i) ₹ 3 crores already deposited along with communication, dated 7th October, 2017 (Annexure P-18); (ii) ₹ 15 crores on or before 16th October, 2017; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of by this Court as under: Heard learned counsel for the parties. Delay condoned. Leave granted. The respondent is a debtor to the tune of ₹ 325,00,00,000/- (Rupees Three hundred Twenty Five crores only) and above. The Bank has rejected a One Time Settlement proposal to settle for a figure of ₹ 150,00,000/- (Rupees one hundred Fifty crores only), of which the debtor has deposited only ₹ 40,00,00,000/- (Rupees Forty crores only) till date. Meanwhile, an auction of the mortgaged property has already taken place, but, as no interim relief was granted by the Debt Recovery Tribunal by its order dated 06.10.2017, Respondent No.5, who is the highest bidder, has paid 25% of the bid amount, after which sale confirmation has taken place by a letter dated 07.10.2017. We may hasten to add that on 18.10.2017, a cheque for the balance of 75% was furnished by respondent No.5, but not encashed, and this was done again on 17.03.2018. In a recent judgment delivered by one of us in Authorised Officer, State Bank of Travancore and Anr. Vs. Mathew K.C. (2018) 3 SCC 85, we have cautioned against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rayer made by the bank, on the other hand, deserves to be accepted in part to the extent that let the amount of ₹ 40 crores lying deposited with the bank without any lien be deposited with DRT, who in turn is directed to keep the same in a Nationalized Bank to fetch maximum rate of interest. The amount shall remain in FDRs till the decision of the suit filed by the lead Bank (Punjab National Bank). In case the suit is decreed and the decretal amount is more than ₹ 40.00 crores or the interest accrued thereupon, the DRT is directed to transfer the said amount in favour of the Punjab National Bank for adjustment towards loan liability. In the event of dismissal of the suit, the borrower/guarantors shall be at liberty to seek refund of the said amount from the DRT. 9. While challenging the aforesaid view taken by the High Court, Mr. P.S. Patwalia, learned Senior Advocate for the appellants submitted that the deposit of ₹ 40 crores with the Registry of the High Court in terms of the order dated 11.10.2017 was only to establish the bona fides of the appellants in support of the offer made by them. Once the Writ Petition itself was held not to be ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recovering his secured debt by taking action against the secured assets, in case the borrower fails to discharge his liability in full within the period specified in the notice issued under Section 13(2) of the Act. It is the mandate of Section 13(3) of the Act that the notice issued under Section 13(2) should contain details of the amount payable by the borrower and also the secured assets intended to be enforced by the secured creditor in the event of non-payment of the dues as per Section 13(2) notice. Thus, the secured creditor is entitled to proceed only against the secured assets mentioned in the notice under Section 13(2). However, in terms of Section 13(11) of the Act, the secured creditor is also free to proceed first against the guarantors or sell the pledged assets. To quote: 13. (11) Without prejudice to the rights conferred on the secured creditor under or by this section, the secured creditor shall be entitled to proceed against the guarantors or sell the pledged assets without first taking any of the measures specified in clauses (a) to (d) of sub-section (4) in relation to the secured assets under this Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal. It is not a bailment with the bank as provided under Section 148 of the 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. 11. In the present case the deposit of ₹ 40 crores in terms of the order of the High Court on 11.10.2017 was only to show the bona fides of the appellants when a revised offer was made by them. The deposit was not towards satisfaction of the debt in question and that is precisely why the High Court had directed that the deposit would be treated to be a deposit in the Registry of the High Court. Going by the law laid down by this Court in Axis Bank3 the secured creditor would be entitled to proceed only against the secured assets mentioned in the notice under Section 13(2) of the SARFAESI Act. In that case, the deposit was made to maintain an appeal before the DRAT and it was specifically held that the amount representing such deposit was neither a secured asset nor a secured debt which could be proceeded against and that the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
