1. This appeal has been preferred under section 18 of the Securitization and Reconstruction of Financial Assets and Enforcement of the Security Interest Act, 2002 (hereinafter referred to as “The SARFAESI Act”) against the interim order dated 19.11.2020 passed by the Presiding Officer, DRT, Lucknow in S.A. No. 358 of 2018 filed by the respondents, wherein the appellant-Bank is directed to file the authority letter on affidavit by the next date.
2. The relevant facts of the case are, that the respondent no. 1 was granted certain credit facilities by the appellant–Bank through its Directors respondents no. 2 & 3. As the borrowers could not maintain the financial dispute in terms of the loan agreement, the account was declared as NPA on 29.10.2014 and the demand notice dated 24.09.2015 under section 13(2) of the SARFAESI Act was issued for a sum of Rs. 10,17,52,115.95. The borrowers submitted the representation dated 26.11.2015 under section 13(3-A) of the SARFAESI Act. The appellant-Bank took the symbolic possession of the property by issuing possession notice dated 28.12.2015 under section 13(4) of the said Act and the same was published in the newspapers on 31.12.2015.
3. The respondents filed a securitization application challenging the demand notice, possession notice and the notice dated 21.07.2018 issued by the DM for physical possession. The case was taken up by the Tribunal below on 31.08.2018 and an interim order was passed, which was challenged by the appellant by filing the Appeal Dy. No. 267 of 2020 before this Tribunal. The said appeal was decided by this Tribunal vide order dated 21.09.2020 directing the Tribunal below to decide the S.A. as early as possible preferably within three months from the date of receipt of the order. The order dated 21.09.2020 passed by this Tribunal was challenged by the respondents by filing the Writ Petition No. 19067 of 2020 before the Hon’ble High Court, which was dismissed vide order dated 03.11.2020.
4. Thereafter, the securitization application of the respondents was listed before the Tribunal below on 05.11.2020 and the following orders were passed:
“The counsel for the applicant stated that the writ petition was disposed of. The Hon’ble High Court had not touched the merits of the case and directed this Tribunal to decide the matter within 03 months. He seeks time to file power of attorney.
List the case on 19.11.2020 for filing power of attorney and final hearing.”
5. The Tribunal below vide impugned order dated 19.12.2020 directed the bank to file the authority letter on affidavit by the next date fixed. Being aggrieved by the said order, the present appeal has been filed by the appellant-Bank.
6. Learned counsel for the appellant submitted that the authorized officer of the Bank has filed a copy of the authority before the Tribunal below, who had signed the vakalatnama on behalf of the Bank, yet the Tribunal below has directed the authorized officer to file affidavit, which was not required at all, therefore, the order directing the Bank to file authority letter on affidavit is erroneous. Learned counsel further submitted that the objection filed by the same authorized officer has been taken on record and no objection whatsoever with regard to the authority has been raised by the opposite party i.e. SAapplicant and such type of affidavit is required only in support of the documents or the pleadings. Thus, the order impugned be set aside to the limited extent, whereby the Bank was directed to file affidavit. To substantiate the argument, the learned counsel has referred a judgment passed by the Hon’ble Supreme Court in Civil Appeal No. 11884 of 1996-United Bank of India Vs. Naresh Kumar & Ors., decided on 18.09.1996, wherein it has been held that the suit should not be rejected on the technical ground that the letter of authority was defective.
7. On the other hand, the learned counsel for the respondents-borrowers submitted that the appeal is misconceived, as the Tribunal below has not directed the Bank to file affidavit for authority letter, but it has directed to file affidavit in support of the documents and objections filed by the authorized officer. If the authority letter is defective, then the matter cannot be heard. However, he concedes that the affidavit is not required in support of the vakalatnama signed by the authorized officer on behalf of the Bank. In support of his contention, the learned counsel has referred a judgment passed by the Hon’ble Supreme Court in Civil Appeal No. 2014 of 2011-State Bank of Travancore Vs. Kingston computers (I) P. Ltd., decided on 22.02.2011.
8. Having heard the learned counsels for the parties and considering the material available on record, it is undisputed that the appellant-Bank, who is respondent before the DRT in the S.A., had filed objections in the year 2018, which were taken on record. The latest proceedings were conducted in furtherance of the order passed by this Tribunal on21.09.2020 for expeditious disposal of the S.A.
9. It is also a matter of record that on 5.11.2020 the counsel for the applicant i.e. counsel for the Bank sought time to file power of attorney and on that day, no direction was given for filing any document or affidavit. The appellant has filed a copy of the authority letter along with memo of appeal showing that the resolution with regard to authorization of Shri Suyash Naaraayan was sent to the Tribunal below through e-mail. There is no evidence on record that any other document was sent to the Tribunal by e-mail or was physically filed between 5.11.2020 to 19.11.2020. Thus there is no question of filing of any document, which requires support of any affidavit. The order impugned also does not disclose such type of fact that the Bank had filed any additional document. As such it appears that the counsel for the respondent has attempted to develop his case to show that the Tribunal below has directed to file affidavit in support of the document or objections, which were filed earlier. For the convenience, the direction given by the Tribunal below is reproduced as sunder:
The respondent-Bank is directed to file the authority letter on affidavit by the next date fixed.”
10. The observation/direction made above indicates that the Tribunal below has directed the counsel for the Bank to file affidavit with regard to authority letter and not for any other purpose. It is worthwhile to mention that the affidavit is required in support of the pleadings and the documents and the Bank or the Company cannot be compelled to file affidavit with regard to the authority given to the authorized officer to sign the pleadings or the vakalatnama. The resolution passed by the Board of Governance/competent authority is sufficient in this regard. However, the Bank may authorize any of its officer to represent the case. Furthermore, the authority so given may be doubted only in case any opposite party raises any objection. In the instant case, no objection whatsoever has been raised on behalf of the SA-applicants, therefore, there was no occasion before the Tribunal below to direct the authorized officer to file affidavit in support of the authority. The resolution authorizing the officer has already been placed on record, which is not subject matter of scrutiny in this appeal.
11. I respectfully agree with the principles laid down by the Hon’ble supreme Court in the cases referred from both the sides, but the principle laid down in State Bank of Travancore Vs. Kingston computers (I) P. Ltd. (Supra) is not applicable in the present matter, because the Bank has filed the resol
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ution passed in favour of the authorized officer. Further, the courts are also expected not to be hyper technical on the issuance of such authority, unless these are opposed by the other parties and the suit or the application should not be rejected on the technical ground as laid down by the Hon’ble Supreme Court in United Bank of India Vs. Naresh Kumar(Supra). 12. In view of the above, the appeal is allowed and impugned order is set aside to the extent, whereby the Tribunal below has directed the Bank to submit the authority letter on affidavit. No order as to costs. The Tribunal below is also expected to decide the S.A. as expeditiously as possible in view of the order dated 21.09.2020 passed by this Tribunal. 13. A copy of this order be sent to the parties as well as the DRT concerned and be also uploaded on the e- DRT portal.