TaxTMI 
TaxTMI 
2017 (3) TMI 623
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....ge deed dated 19.07.2004 in favour of the Pondicherry State Co-operative Bank Ltd., Puducherry. Petitioner's father paid some amount to the respondent-Co-operative Bank and committed default in discharge of the said loan. 3. Material on record discloses that the 2nd respondent-Bank has issued two demand notices dated 10.10.2014 under Section 13(2) of the SARFAESI Act, 2002, demanding petitioner's father to pay Rs. 3,38,905/- and Rs. 12,68,657/- respectively. Subsequently, the respondent has also issued two possession notices both dated 09.12.2014 under Section 13(4) of SARFAESI Act, 2002 and intimated petitioner's father that two properties in Embalam Revenue Village (63) Re-Survey No.187/2, Cadastre No.461/17, Patta No.259 to the extent of 00.01.92 Hectares or 192 Sq. meter and Embalam Revenue village R.S.Nos.187/3, Cadastre No.461/17 Pt. Patta No.377 to the extent of 00.01.50 or 150 sq. meter, have been mortgaged. 4. The petitioner's father died on 29.10.2015. According to the petitioner, he was not aware of any of the proceedings initiated by the bank against his father, as mentioned above. He further submitted that he was not aware of the above mentioned mortg....
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..../3 to the extent of 00.3A.42C or 382 Sq.Mts. situate in Embalam Village, in favour of the respondent Co-operative Bank. 9. It is the further submission of the respondents that the petitioner's father paid only Rs. 10,763/- in respect of CCL Loan and did not pay the remaining outstanding dues and thus became a defaulter, in repayment of loans amount, as follows: Sl.No. Name of Loan Principal Interest Total 1. M.T.Loan Rs.6,75,000/- Rs.6,01,969/- Rs.12,76,969/- 2. CCL Rs.3,38,905/- Nil Rs.3,38,905/- For the past 10 years, the Bank is not able to recover the loan amount. The date of receipt of loan by the petitioner's father, was on 09.07.2004 and he did not come forward to pay the outstanding overdue loan amount, for over a decade. The respondents' Bank has allowed long time to settle the dues. According to the Bank, the attitude of the Petitioner's father showed that he had no intention to pay the balance outstanding amount. 10.The respondent bank was started in the year 30th October' 1958 and doing Banking Financial business. As per Section 2(c) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Int....
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....wer died on 29.10.2015 and that the petitioner was aware of the entire facts, on receipt of notice, dated 14.09.2016, issued by the Manager, under the provisions of SARFAESI Act, 2002. 14.The Bank has further submitted that the petitioner was taking action to put up a Flour Mill in the existing building. Possession notice, dated 09.12.2014, was served on the petitioner's father and that the said notice was also conspicuously affixed on the building with proper acknowledgement of two neighbours, as witnesses. When such notice was affixed on the building and served on the borrower, the petitioner cannot contend that he was not aware of the same, moreso, when at the time of issuing Section 13(4) notice, the petitioner was living with his father, as joint family. 15.The Bank has denied the contention that the petitioner has paid a sum of Rs. 7,94,650/- (Rupees Seven Lakh Ninety Four Thousand Six Hundred and Fifty Only) to the Bank. According to the Bank, the petitioner has paid Rs. 1,00,000/- (Rupees One Lakh Only) only, on 04.01.2016 and 04.03.2016 (Rupees Fifty Thousand Only, on each dates) respectively, after the death of his father, dated 29.10.2015. Action of the petitioner ....
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....onger res integra. After considering the statutory provisions of SARFAESI Act, 2002, Banking Regulations Act, 1949, decision of the Hon'ble Apex Court in Greater Bombay Co-operative Bank Ltd., v. United Yarn Tex (P) Ltd., reported in 2007 (6) SCC 236, a Hon'ble Division Bench of this Court in Raj Kumar Khemka v. Union of India reported in 2009 (1) CTC 657, at Paragraphs 14 to 25, held as follows: "14. Almost similar issue fell for consideration before the Supreme Court in the case of "Greater Bomay Coop. Bank Ltd." (supra) reported in 2007 (6) SCC 236, but that was a case in which action was taken by a Co-operative Bank under the provisions of the RDB Act and not under the provisions of the SARFAESI Act. However, while dealing with the matter, the Supreme Court discussed the relevant provisions of the Banking Regulation Act, 1949 (for short, 'the B.R. Act'), the SARFAESI Act, the RDB Act and other Acts. 15. Before discussing the observations and the findings of the Supreme Court in the said case of "Greater Bomay Coop. Bank Ltd." (2007(6)SCC 236), it is relevant to notice and quote certain provisions of the Banking Act and the SARFAESI Act, for comparison of the s....
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.... dated 28.1.2003)." There is a distinction in the definition of the 'bank' as shown in the RDB Act and the SARFAESI Act. While the first four clauses of the definition of the 'bank' i.e. (i) a banking company, (ii) a corresponding new bank, (iii) State Bank of India and (iv) a subsidiary bank, are common in both the RDB Act and the SARFAESI Act, under Section 2(c)(v) of the SARFAESI Act, the Central Government had been empowered to notify such other Bank for the purposes of the Act, and those provisions are absent in the RDB Act. 18. We have taken into consideration the aforesaid provisions as in the case of "Greater Bombay Coop. Bank Ltd." (2007(6)SCC 236) (supra), while deciding the question of the applicability of the provisions of the RDB Act in regard to the Co-operative Societies, though the Supreme Court has not decided the question of the applicability of the provisions of the SARFAESI Act in regard to the Co-operative Societies/Banks, it discussed the relevant provisions of the B.R. Act vis-a-vis SARFAESI Act. 19. The relevant provisions of Section 5(cci) and 5(ccv) of the B.R. Act, as also the Notification contained in S.O.No.105(E), dated 28.1.2003 iss....
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....the transaction of banking business. 40. The modifications given in clause (a) of Section 56 are apparently suitable to make the regulatory machinery provided by the BR Act to apply to cooperative banks also in the process of bringing the cooperative banks under the discipline of Reserve Bank of India and other authorities. A cooperative bank shall be construed as a banking company in terms of Section 56 of the Act. This is because the various provisions for regulating the banking companies were to be made applicable to cooperative banks also. Accordingly, Section 56 brought cooperative banks within the machinery of the BR Act but did not amend or expand the meaning of "banking company" under Section 5(c). On a plain reading of every clause of Section 56 of the BR Act, it becomes clear that what is contained therein is only for the purpose of application of provisions that regulate banking companies to cooperative societies. According to the expression "cooperative societies" used in Section 56 means a "cooperative society", the primary object or principal business of which is the transaction of banking business. In other words, first it is a cooperative society, but carrying on ....
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....n Section 5(c) would read thus: "cooperative bank" means any company, which transacts the business of banking in India; thirdly, Section 56(c) does define "cooperative bank" separately by expressly deleting/inserting clause (cci) in Section 5. Parliament in its wisdom had not altered or modified the definition of "banking company" in Section 5(c) of the BR Act by Act 23 of 1965. 43. As noticed above, "cooperative bank" was separately defined by the newly inserted clause (cci) and "primary cooperative bank" was similarly separately defined by clause (ccv). The meaning of "banking company" must, therefore, necessarily be strictly confined to the words used in Section 5(c) of the BR Act. If the intention of Parliament was to define the "cooperative bank" as "banking company", it would have been the easiest way for Parliament to say that "banking company" shall mean "banking company" as defined in Section 5(c) and shall include "cooperative bank" and "primary cooperative bank" as inserted in clauses (cci) and (ccv) in Section 5 of Act 23 of 1965. 20. From the aforesaid findings of the Supreme Court (at paragraph 40), it will be evident that the modifications given in Clause (a) of Se....
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....witness. Letter, dated 08.03.2002, is extracted hereunder: 21.Same is the case in letter of the borrower, dated 06.01.2015, submitted to the Manager, Puducherry Co-operative Bank Ltd., Puducherry, in which, the petitioner has signed as a witness and the same is extracted: 22.When the petitioner has signed as a witnesss, to the letters, dated 08.03.2002 and 06.01.2015, respectively, submitted by the borrower/his father, it is not open to him to contend that he was not aware of the loan transaction. It is the considered view of this Court that having full knowledge of the loan availed by his father, steps taken by the secured creditor, the petitioner has suppressed the above facts, in the supporting affidavit and feigned ignorance of the same. At this juncture, this Court deems it fit to consider a decision in Arunima Baruah v. Union of India reported in 2007 (6) SCC 120, wherein, the Hon'ble Supreme Court held as follows: "12. .......It is also trite that a person invoking the discretionary jurisdiction of the court cannot be allowed to approach it with a pair of dirty hands. But even if the said dirt is removed and the hands become clean, whether the relief would still be de....
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....raud or misrepresentation, or where the plaintiff sought to enforce a security improperly obtained, or where he claimed a remedy for a breach of trust which he had himself procured and whereby he had obtained money. Later it was said that the plaintiff in equity must come with perfect propriety of conduct, or with clean hands. In application of the principle a person will not be allowed to assert his title to property which he has dealt with so as to defeat his creditors or evade tax, for he may not maintain an action by setting up his own fraudulent design. The maxim does not, however, mean that equity strikes at depravity in a general way; the cleanliness required is to be judged in relation to the relief sought, and the conduct complained of must have an immediate and necessary relation to the equity sued for; it must be depravity in a legal as well as in a moral sense. Thus, fraud on the part of a minor deprives him of his right to equitable relief notwithstanding his disability. Where the transaction is itself unlawful it is not necessary to have recourse to this principle. In equity, just as at law, no suit lies in general in respect of an illegal transaction, but this is o....