Standard Chartered Bank vs Dharminder Bhohi & Ors

4. The facts which are essential to be stated are that the appellant-bank sanctioned home loan of Rs.12.00 lacs to the respondent No. 1 on 17.5.1999 payable in equal monthly instalments and in lieu of that the borrower mortgaged the property which was purchased from the developer, the respondent No. 2 herein. Since the respondent No. 1 failed to pay the instalments, the loan account was declared as “non performing asset” in terms of the NPA guidelines issued by the Reserve Bank of India. On 28.12.20012 the appellant-bank issued a notice 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 respondent No. 1 directing him to pay the amount due as on 27.12.2002. Since the respondent No. 1 did not make any payment till 27.11.2004, the Tehsildar, Gurgaon took possession of the mortgaged property as per the order of the District Magistrate and handed over the same to the appellant-bank. On 10.3.2005 the appellant- bank in order to sell the said property published possession-cum-sale notice in the leading newspapers stating the terms and conditions of the public auction. In response to the said notice the respondent No. 3 submitted its bid form dated 10.3.2005 for purchasing the said property by way of auction. The said action was challenged by filing an application under Section 17(1) read with Section 19 of the SARFAESI Act before the Debt Recovery Tribunal (DRT). The application was presented on 15.3.2005 before the DRT II, Delhi and the concerned Presiding Officer declined to pass any order and sought appropriate directions from the Debt Recovery Appellate Tribunal (DRAT) for transfer of the said application to some other DRT. As no order was passed by the DRAT, the matter was again placed before the DRT II on 25.10.2005 and on that day the DRT was informed that the bank had already taken over possession of the property in question and put the same into auction for sale. The borrower preferred a writ petition before the High Court on 17.5.2005 and the High Court directed the borrower to deposit certain amount with the bank and further directed status quo, as regards the property, to be maintained. Eventually, the High Court vide order dated 25.7.2005 only directed the DRT to dispose of the appeal within two months. While finally disposing of the writ petition the High Court opined that though no order was passed by the DRT as the Presiding Officer was awaiting orders from the appellate forum, the bank ought not have decided to sell the property to render the appeal of the borrower to become infructuous and tried to non-suit him.

5. Be it noted, the DRAT vide its order dated 3.6.2005 transferred the case to another Debt Recovery Tribunal. As the property was sold in auction, the auction purchaser, the third respondent herein, filed an application for impleadment which was allowed. Before the DRT her stand was that she had deposited the entire amount of Rs.25.60 lacs with the bank and if the borrower was still interested to retain his property, he had to purchase it from her. The DRT by its order dated 25.10.2005 adverted to the facts, assertions made in the application filed by the borrower, reply filed by the bank and appreciating the evidence on record came to hold that there was no infirmity in the Statement of Accounts of the bank and thereafter taking into consideration the facts and circumstances granted 15 days time to the borrower to pay the entire amount to the bank and the developer, M/s. Unitech, and Rs.1.00 lac as compensation to the auction purchaser. Thereafter, the DRT directed as follows: -

6. The borrower instead of complying with the said order, preferred appeal No. 267 of 2005 before the DRAT which, on 14.11.2005, admitted the appeal and passed the following interim order: -

The auction purchaser, the third respondent herein, did not file an appeal before the DRAT but on 25.1.2006 filed an application under Section 151 of the Code of Civil Procedure. The DRAT took up the application on 7.9.2007 and observed that as the purchaser had already been impleaded as a party to the appeal, she would have the right to address the Court and, accordingly disposed of the application. As the factual narration would reveal the appeal was adjourned from time to time and, eventually on 20.5.2010, the DRAT passed the following order: -

31. As we have directed for deletion for the same reasons we also set aside the judgment of the High Court whereby it has declined to interfere with the grant of liberty by the DRAT. This being the only prayer by Mr. Jain, it is answered in the affirmative in his favour by stating that such grant of liberty was not within the domain of the tribunal regard being had to its limited jurisdiction under such special legislation and further, especially, when the bank was not a party to the compromise.

33. Resultantly, the appeal is allowed to the extent indicated hereinabove. In the facts and circumstances of the case there shall be no order as to costs.

September 13, 2013.