w w w . L a w y e r S e r v i c e s . i n

Ramjan Jute Bag and Others. V/S Oriental Bank of Commerce and Others.

Company & Directors' Information:- INDIA E-COMMERCE LIMITED [Active] CIN = L99999MH1968PLC014091

Company & Directors' Information:- THE JUTE CORPORATION OF INDIA LIMITED [Active] CIN = U17232WB1971GOI027958

Company & Directors' Information:- S M JUTE PRIVATE LIMITED [Active] CIN = U17232WB2005PTC102039

Company & Directors' Information:- S H COMMERCE PRIVATE LIMITED [Active] CIN = U51109WB2008PTC121420

Company & Directors' Information:- A. M. COMMERCE PRIVATE LIMITED [Active] CIN = U51909WB2011PTC168744

Company & Directors' Information:- E Z I BAG LIMITED [Strike Off] CIN = U74999DL1992PLC049019

Company & Directors' Information:- G S JUTE PRIVATE LIMITED [Active] CIN = U17119WB1997PTC082830

Company & Directors' Information:- G S E-COMMERCE PRIVATE LIMITED [Active] CIN = U52100KA2013PTC067567

Company & Directors' Information:- V K COMMERCE PVT LTD [Amalgamated] CIN = U51109WB1984PTC037122

Company & Directors' Information:- P. R. COMMERCE PRIVATE LIMITED [Active] CIN = U51909WB2008PTC122333

Company & Directors' Information:- M & P E. COMMERCE PRIVATE LIMITED [Active] CIN = U74300DL1999PTC099198

Company & Directors' Information:- R S COMMERCE PVT LTD [Converted to LLP] CIN = U51909WB1995PTC074372

Company & Directors' Information:- P S COMMERCE PRIVATE LIMITED [Active] CIN = U51909WB1997PTC084487

Company & Directors' Information:- T S R I COMMERCE PRIVATE LIMITED [Strike Off] CIN = U65910TG1999PTC032173

Company & Directors' Information:- AND E-COMMERCE PRIVATE LIMITED [Active] CIN = U74120AP2015PTC096206

Company & Directors' Information:- D B S COMMERCE PRIVATE LIMITED [Active] CIN = U52190MH2009PTC190773

Company & Directors' Information:- M K B JUTE PVT LTD [Strike Off] CIN = U17232WB2006PTC109492

Company & Directors' Information:- A P COMMERCE LIMITED [Strike Off] CIN = U51909WB1981PLC033798

Company & Directors' Information:- B. G. E-COMMERCE PRIVATE LIMITED [Active] CIN = U52500UP2021PTC157159

Company & Directors' Information:- THE BANK OF COMMERCE LTD [Strike Off] CIN = U65923WB1929PLC006511

Company & Directors' Information:- K P INDIA COMMERCE PRIVATE LIMITED [Strike Off] CIN = U51909AS2001PTC006701

Company & Directors' Information:- Y S E-COMMERCE PRIVATE LIMITED [Active] CIN = U72200MH2000PTC126344

Company & Directors' Information:- B AND D E-COMMERCE PRIVATE LIMITED [Strike Off] CIN = U74999HP2015PTC000945

Company & Directors' Information:- I P E-COMMERCE PRIVATE LIMITED [Active] CIN = U52399CH2012PTC033585

Company & Directors' Information:- ORIENTAL COMMERCE PVT LTD [Strike Off] CIN = U15209WB1996PTC079017

Company & Directors' Information:- BANK OF COMMERCE LIMITED [Dissolved] CIN = U65110KL1901PLC000124

Company & Directors' Information:- ORIENTAL BANK OF INDIA LIMITED [Dissolved] CIN = U65191KL1920PLC000830

Company & Directors' Information:- ORIENTAL BANK LIMITED [Dissolved] CIN = U65191KL1929PLC000832

Company & Directors' Information:- BANK OF COMMERCE LTD. [Dissolved] CIN = U99999MH1921PTC000917

Company & Directors' Information:- ORIENTAL BANK OF COMMERCE LIMITED [Active] CIN = U65191DL1901PLC002036

    S.A. No. 218 of 2017

    Decided On, 03 January 2020

    At, Debts Recovery Tribunal Kolkata


    For Petitioner: Urmi Roy Chowdhury And For Respondents: Debasish Chakraborty

Judgment Text

1. This SA has been filed on 18.8.2017 by the applicants challenging the possession notice dated 04.07.2017 issued under Section 13(4) of the SARFAESI Act being illegal and void and have prayed for quashing of the same.

2. Applicant No. 1, M/s. Ramjan Jute Bag is a Partnership firm represented by its proprietor, applicant No. 2, Sk. Ramjan. Applicant Nos. 3 and 4 are brothers of applicant No. 2 and applicant No. 5 is the father of applicants 2 to 4. They reside in the same residence.

3. The main business of the firm is trading in potato. For development of the business they approached the respondent bank for cash credit overdraft facility limit of Rs. 5 lacs in the name of applicant No. 2 which was sanctioned in January 2013. Applicant Nos. 3 to 5 were guarantors for the said loan. For the purpose of security for the loan, applicant No. 2 mortgaged immovable property as detailed in page 10 of the SA vide paras 6.4 & 6.5. The business of the applicants was running well and for further progress of the trading business, they sought for raising the cash credit limit upto 75 lacs which the respondent bank granted in 2014 for which additional security was created by way of fresh mortgage of Bastu land at Plot No. 588, LR Khatian No. 206, Mouza Chaitanyapur, PS Sonamukhi, Dist. Bankura, measuring about 91 satak in the name of applicant No. 5 valued at Rs. 55.78 lacs.

4. According to the applicants, they have been discharging their liability and paying the interest regularly in the loan account and there was no default as would be evident from the statement of account annexed. But the problem started after September 2016 because of demonetization by the Central Government most of stock of potato could not be sold which placed the applicants in a situation that they could not clear the dues which remained outstanding with the respondent bank. The applicants approached the respondent bank and explained their difficulty and prayed for time to clear the dues. However, according to the applicants, the respondent bank did not pay any heed and issued demand notice u/s. 13(2) of the Sarfaesi Act on 5.4.2017 demanding Rs. 83,51,220,25 p (annexure-D). Subsequently, possession notice dated 4.7.2017 was issued u/s. 13(4) of the Sarfaesi Act taking symbolic possession of the mortgaged bastu property which is the residential home of the applicants. Being aggrieved, the applicants have filed this SA praying for setting aside the possession notice as arbitrary, void and illegal.

5. The respondent bank has filed an affidavit-in-opposition in which they have more or less admitted the facts stated by the applicants. It is stated that the applicants were granted cash credit facility initially for Rs. 50 lac which was subsequently enhanced to Rs. 75 lacs. But the applicants failed to repay the loan and therefore, the respondent bank initiated SARFAESI measures and issued demand notice u/s. 13(2) notice on 5.4.2017 demanding Rs. 83,51,220,25 p. But the applicants did not take any step to repay the loan neither they submitted any representation. Therefore, the respondent bank issued possession notice on 4.7.2017. The respondents submit that they have acted in accordance with rules and published the possession notice in two newspaper as required under Rule 8(1) and 8(2) of Security Interest (Enforcement)Rules. Therefore, this Tribunal should not intervene in the matter.

6. I have heard the ld. Counsel for the parties and have perused the documents.

7. During pendency of the SA, the applicants have filed an IA being IA 583 of 2019 challenging a sale notice dated 26.07.2019 published in the newspaper by which the sale was fixed on 6.9.2019. When the IA was heard on 28.11.2019, it was informed by the ld. Counsel for the respondent bank that the said sale did not take place for want of bidders. Thus the sale notice became infructuous and accordingly I.A., being I.A. 583 of 2019, is disposed of as infructuous.

8. It is contended by the ld. Counsel for the applicants that the respondent bank only took symbolic possession and not actual possession, therefore, they could not sale the property. However, this Tribunal is of the opinion that even after taking symbolic possession, there is no bar in selling the immovable property if any buyer is there. Be that as it may, since the sale did not take place, I need not discuss on this issue.

9. The fact remains that the applicants for the purpose of running their potato trading business approached the respondent bank for cash credit facility of Rs. 50 lacs which was sanctioned vide sanction letter dt. 8.1.2013. This amount was subsequently enhanced to Rs. 75 lacs in 2014. Against this loan, the applicants mortgaged land and building including their residential home and also personal guarantee of the applicants 2 to 5. Initially their business was running well but it is their specific case that due to demonetization by the Central Govt. in 2016, their business ran into trouble and they were facing loss as a reason of which they could not repay the loan.

10. The fact, however, remains that the applicants having obtained loan facility from the respondent bank failed to repay the same in time for whatever reasons for which action has been taken by the respondent bank resorted to Sarfaesi Act and issued demand notice u/s. 13(2), still no step was taken by the applicants. Thereafter, possession notice was issued in July 2017. As already stated above sale notice was issued in July 2019 i.e. two years thereafter. During these two years also, the applicants did not take any step to repay the loan and sat tightly without showing any interest or even trying to redeem the property. That money that is lent to the applicants or to any other borrowers is public money and the bank as custodian of public money is duty bound to recover the same so that it does not become bad debt. Therefore, the action taken by the respondent bank in adopting measures under the Sarfaesi Act cannot be faulted. They have followed the rules and procedures and hence, I do not find any infirmity or illegality in the actions taken by the respondent bank.

11. In view of the above, the application has no merit and it deserves to be dismissed. However, if the applicants so desire, they may approach the respondent bank for settlement by offering 25% of the demanded amount in 13(2) notice as upfront mon

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ey within 15 days from the date of this order along with a compromise proposal. If approached, the respondent bank shall consider the proposal in terms of their recovery policy guidelines and settle the matter. If, however, no settlement is reached, the respondent bank will be at liberty to proceed in accordance with law. 12. The S.A., being S.A. 218 of 2017, stands disposed of accordingly without any order as to costs. Accordingly, all pending I.A.s, if any, stand disposed of. Copy of the Order be uploaded in the Tribunal's Website. File be consigned to Record room. Order pronounced by me in the open Tribunal on this the 3rd day of January, 2020.