2016 (12) TMI 1147

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.... repay the loan amounts, the bank has initiated arbitration proceedings. After hearing both sides, the Arbitrator/Deputy Registrar/Divisional Co-Operative Officer, Hyderabad has passed his award, dated 25.8.2010, in  A.R.C.No.12 of 2010. The said award was questioned by the  petitioners before the Co-Operative Tribunal at Hyderabad, vide C.T.A.No.27 of 2012. By order, dated 11.6.2015, the said award was set aside by the Tribunal inter alia with the following observations:             We have verified the Statement of Accounts and it is evident that though the loan account is in the name of Hyline Restaurant, the amounts actually were transferred to A/c No.CA71 and monthly cre....

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....ns of the Co-Operative Tribunal (reproduced above), a serious doubt about the liability of the petitioners is arising and that, instead of inviting a finding on the aspects raised by the Tribunal from the arbitrator, respondent Nos.1 and 4 shied away from participating in the arbitration proceedings and initiated the measures under the SARFAESI Act. He has further argued that when the arbitration proceedings are pending, it is not permissible for respondent Nos.1 and 4 to initiate measures under the SARFAESI Act for recovery of the alleged debt. In support of this plea, the learned counsel for the petitioners has placed before the Court order, dated 10.3.2015, of the Supreme Court in Civil Appeal Nos.2874-75 of 2015 (V.Krishnaswamy  an....

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....om the loan account of Hyline Restaurant to the loan A/c No.CA71 standing in the name of respondent Nos.2 and 3 in  this Writ Petition. The Tribunal further observed that this aspect was not examined by the Arbitrator.             Even if certain views were expressed by the Tribunal on the above noted aspect, which was directed to be examined, while remanding the case to the Arbitrator, in our opinion, the same would not deter respondent Nos.1 and 4 from initiating the measures under the SARFAESI Act.               It is not the pleaded case of either party that the proceedings under the SARFAESI Act are based on the awa....

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....ted above, the NPA Act is an additional remedy to the DRT Act. Together they constitute one remedy and, therefore, the doctrine of election does not apply. Even according to Snell's Equity (Thirty-first Edition, page 119), the doctrine of election of remedies is applicable only when there are two or more co-existent remedies available to the litigants at the time of election which are repugnant and inconsistent. In any event, there is no repugnancy nor inconsistency between the two  remedies, therefore, the doctrine of election has no application.             In paragraph-66 the Supreme Court held as under: We have already analysed the scheme of both the  Acts. Basically,....

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....bsp;      In the light of the reasoning assigned in the afore extracted paragraphs, the Supreme Court held that withdrawal of an O.A. already filed by the secured creditor for recovery of the debts under the Recovery of debts due to Banks and Financial Institutions Act is not a pre-condition for taking recourse to SARFAESI Act.                In our opinion, the judgment in Transcore (1 supra) fully supports the plea of respondent Nos.1 and 4 that mere pendency  of the arbitration proceedings would not disentitle the said respondents from recovering the amounts due under the  SARFAESI Act.         &nb....