AI Drafter 
TaxTMI 
TaxTMI 
2007 (5) TMI 644
X X X X Extracts X X X X
X X X X Extracts X X X X
....ot Nos. 62 and 63 situated in Ward No. I-A, CMC, 200 acres layout. J.N. Road, Dandeli, belonging to the respondent. The borrowers fell into arrears and both the loan accounts of M/s Nandi Agencies and M/s Sriram Agencies which were proprietary concerns belonging to the respondent and two others were rendered non-performance assets as on 20.8.2004. The Bank proceeded against the respondent under the provisions of Section 13 of the Act and issued notices to the respondent and other two borrowers through its authorised officer. Neither the respondent nor the other borrowers complied with the demand made in the said notices nor did they file any objections to the said notices. Thereafter, the Bank issued possession notice to the borrowers. The authorised officer of the Bank took actual possession of the secured assets on 30.11.2004 and got published the possession notice in the newspapers having wide circulation. The authorised officer of the Bank issued sale notice on 14.3.2005 proposing to sell the security. At this stage, the respondent preferred an appeal under Section 17(1) of the Act and assailed the sale notice dated 14.3.2005 and prayed for an interim order seeking stay of furt....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Rules made thereunder, then only the Tribunal can restore possession of such secured asset to the borrower. It is further contended that though detailed objection was filed by the Bank to the application, the Tribunal has not considered the same and has not passed a speaking order. It is further contended that having regard to Section 13(7) of the Act read with Rule 8(4) of the Security Interest (Enforcement) Rules, 2002 ('the Rules' for short), which are express provisions enabled the authorised officer of the Bank to engage a security personnel to guard the property in question and to recover the expenses incurred in that connection from the respondent. It is further contended that the statutory provisions incorporated in the Act and the Rules could not be diluted by the Tribunal on any ground much less on the ground that such expenses will be a burden to the respondent. Thus, the impugned order is violative of the aforesaid provisions of the Act and the Rules. 5. On the other hand, learned Counsel for the respondent has argued that the impugned order is appealable under Section 18 of the Act to the Appellate Tribunal. Therefore, the writ petition is liable to be di....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n is that the respondent has given an offer for onetime settlement as suggested by the manager of the Bank. It has been further contended that the Bank has appointed a guard for security of the assets by paying monthly salary of Rs. 4,800/-. The monthly salary at a small place like Dandeli is very high and the Bank is debiting these expenses to the loan account, which is again a burden on him. The Bank has filed its detailed objections as per Annexure 'J'. The Tribunal has passed an order on 22.12.2006 directing redelivery of secured assets to the respondent till the disposal of the appeal. It is clear from the impugned order that the Tribunal has not considered the objections filed by the Bank. The impugned order was passed only on the basis of the contentions urged in the application filed by the respondent. 8. Let me first deal with the submission of the learned Counsel for the respondent with regard to the availability of alternative remedy. It is true that the order impugned is appealable under Section 18 of the Act. As noticed above, the Bank has filed its detailed objections to the application seeking redelivery of the property in question. The Tribunal has not co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tition cannot be dismissed on the ground of availability of alternative remedy. 11. Now let me consider as to whether the Tribunal has jurisdiction to direct the Bank to redeliver possession of the property in question to the respondent during the pendency of the appeal? 12. Sub-section (4) of Section 13 of the Act states that in case the borrower fails to discharge his liability in full within the period specified in Sub-section (2), the secured creditor may take recourse to one or more of the measures enumerated in the said section to recover his secured debt. 13. Section 17 of the Act provides an opportunity to any person aggrieved by any of the measures referred to in Sub-section (4) of Section 13 of the Act taken by the secured creditor or his authorised officer. The Apex Court in the case of Mardia Chemicals Limited v. Union of India has held that the proceedings under Section 17 of the Act are not appellate proceedings. It is an initial action, which is brought before the forum as prescribed under the Act raising grievance against the action or measures taken by one of the parties to the contract. It is the stage of initial proceedings like filing a suit in Civil Co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(51 of 1993) and the rules made thereunder. 17. In order to give a proper construction to the above provision, the object of the Act has to be kept in mind. While considering the validity of the Act, the Hon'ble Supreme Court in Mardia Chemical's Case (supra) has discussed in detail the object of the Act. It has been observed that considering the fact that there was a blockade of large sums of amount of the financial institutions creating circumstances which retard the economic progress followed by a large number of other consequential ill-effects, the DRT Act was brought into force, which did not bring the desired results. It was felt that in the present day global economy, it may be difficult to stick to old and conventional method of financing and recovery of dues. Therefore, the Act was brought into force with a view to evolve means for faster recovery of the debts. 18. The expression "as far as may be" employed in the said provision assumes importance. The said expression means in deciding any question relating to procedure not specifically provided in the Act, the Tribunal as far as may be guided by the provisions of DRT Act and the Rules made thereunder. This d....