ORDER
M.C. Jain, J. (Chairperson)
1. The respondent Nos. 2 to 4 (M/s. Morion Chemicals Ltd., Mr. Jai Bhagwan Bansal and Mr. Sanjay Bansal respectively) in S.A. No. 3/2007 (pen ding before the Tribunal below) have filed this miscellaneous appeal against the order dated 23.5.2007 passed by the Tribunal below dismissing their IA No. 140/2007.
2.1 have heard Mr. Deepak Arora, learned Counsel for the appellants as well as Mr. Rajesh Rattan, learned Counsel for the respondent Bank.
3. The relevant facts may be stated briefly. The appellant No. 1 (M/s. Morion Chemicals Ltd.) is a company incorporated under the Companies Act. Appellant Nos. 2 and 3 (Mr. Bhagwan Bansal and Mr. Sanjay Bansal) are the Directors of the appellant No. 1 company. They are mortgagors also. Certain loan and credit facilities were sanctioned to the appellant No. 1 by the respondent-Bank Mr. Sunil Dutt Bansal, respondent No. 3 herein is also said to be the Director and mortgagor who allegedly committed certain financial irregularities including diversion of funds of the company. Mr. Achal Bansal and Mr. Yogesh Bansal, respondent Nos. 4 and 5 herein respectively were also guarantors/mortgagors for the loan and credit facilities granted to the appellant company. The respondent Bank herein declared the company’s account as NPA, allegedly illegally. The respondent Bank issued notice under Section 13(2) of the SRFAESI Act on 19.8.2006 to the concerned persons including the appellants. Possession notice in respect of the mortgaged properties was also issued by the Bank in newspapers dated 29.11.2006 under Section 13(4) of the SRFAESI Act in respect of the two mortgaged properties viz. land and building situated at B-4 and 5, Industrial Focal Point, Dera Bassi. Distt. Mohali (11002 sq. yds.) belonging to the borrower company and SCO No. 44, Sector 30-C, Chandigarh belonging to Mr. Achal Bansal and Mr. Yogesh Bansal, respondent Nos. 4 and 5 respectively. These two respondents namely Mr. Achal Bansal and Mr. Yogesh Bansal filed SA. No. 3/2007 before the Tribunal below objecting to the Bank’s proposed action under Section 13(4) of the SRFAESI Act in respect of their property detailed above. Through SA No. 3/2007, they challenged the Bank’s action in respect of their mortgaged property i.e. SCO No. 44, Sector 30-C, Chandigarh and prayed that the action be declared as null and void and illegal. They also prayed for restraining the Bank from taking any steps including by way of physical possession, sale etc. of the said property.
4. The appellants herein i.e. M/s. Morion Chemicals Ltd., Mr. Jai Bhagwan Bansal and Mr. Sanjay Bansal did not file any appeal/application before the Tribunal below under Section 17 of the SRFAESI Act within 45 days from the date of publication of notice of possession i.e. 29.11.2006. It appears that against the impugned order dated 23.5.2007, the borrower company/appellant No. 1 filed a C.W.P. No. 7618 of 2007 before the Hon’ble High Court of Punjab & Haryana. The copy of the final order in the said writ petition which is on record indicates that the writ petition was dismissed.
5. The appellants herein were impleaded as respondent Nos. 2 to 4 in the S A No. 3/2007 filed by Mr. Achal Bansal and Mr. Yogesh Bansal before the Tribunal below. The appellant/respondent Nos. 2 to 4 hit upon a novel idea of making IA No. 140/2007 before the tribunal below challenging the Bank’s action under Section 13(4) of SRFAESI Act regarding issuance of notices of taking possession of the mortgaged property of the company as detailed above and further action in consequence thereof.
6. The Tribunal below dismissed the said application by the impugned order saying that it was not understandable as to under what provision such an application could be filed seeking direction against the respondent Bank and that, too, without paying any Court fee. It was also observed that the relief prayed for on their behalf was time barred. The application was held to be not maintainable and was dismissed. Aggrieved, the appellants have preferred this appeal.
7. The argument of the learned Counsel for the appellants is that since they had been impleaded as respondent Nos. 2 to 4 in the SA filed by Mr. Achal Bansal and Mr. Yogesh Bansal, they had every right to challenge the Bank’s action under Section 13(4) of the SRFAESI Act in respect of the mortgaged property of the company and the application was very well maintainable.
8. On the other hand, the learned Counsel for the respondent Bank has contended that notices in respect of both the properties having been published by the Bank in newspapers, the appellants could avail of their remedy under Section 17 of the SRFAESI Act by making an application within the prescribed time before the Tribunal below on payment of requisite Court fee. They, according to him, could not stampede themselves in the SA filed by Mr. Achal Bansal and Mr. Yogesh Bansal who were the owners of the second property namely, SCO No. 44, Sector 30-C, Chandigarh to which also the possession notice dated 29.11.2006 related. He laid a pointed stress on this aspect of the matter that these two persons (Mr. Achal Bansal and Mr. Yogesh Bansal) had specifically challenged the Bank’s action only in respect of the property belonging to them, which, of course they alone could do.
9. On consideration of the matter, I find myself in agreement with the learned Counsel for the respondent Bank. Brief reasons would render the picture clear in the famous Mardia’s case, Mardia Chemicals Ltd. etc. v. UOI and Ors. etc. II (2004) BC 397 (SC) : 110 (2004) DLT 665 (SC) : 2004 (1) ISJ (Banking) 545, the judgment of the Hon’ble Supreme Court came on 29.11.2006. Through this decision, it was held that where a secured creditor has taken action under Sub-section (4) of Section 13 of the SRFAESI Act, the borrower could file appeal under Section 17 of the said Act within the limitation prescribed therefor. Obviously, the appellants herein did not avail of their remedy by filing an application/appeal under Section 17 of the said Act within the period of limitation on the publication of notices by the respondent Bank in newspaper dated 29.11.2006. In the SA No. 3/2007 filed by Mr. Achal Bansal and Mr. Yogesh Bansal, the appellants herein were impleaded as respondent Nos. 2 to 4 but the contest was only between Mr. Achal Bansal and Mr. Yogesh Bansal on the one hand and the Bank on the other. The reason is simple that these two persons had challenged the Bank’s action only in respect of their mortgaged property. For the purpose of that SA, the appellants herein were merely impleaded as proforma respondents. It was not open to them, in the garb of their character as respondents in that SA, to challenge the Bank’s action under Section 13(4) of the SRFAESI Act with regard to their mortgaged property. It is obvious that the appellants herein wanted to kill two birds with one stone in an indirect way by making a bizarre prayer through IA No. 140/2007. First, they wanted to get over the embargo of limitation. Second, they wanted to avoid the payment of requisite Court fee.
10. It may be pointed out that in exercise of powers conferred by Sub-section (1) and Clauses (b), (ba), (bb) and (be) of Sub-section (2) of Section 38 read with Sections 17,18 and Sub-sections (4), (10) and (12) of Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002), the Central Government has issued notification dated 2nd February, 2007 making rules to amend the Security Interest (Enforcement) Rules, 2002. They, inter alia, prescribe the fee structure for the applications and appeals under Section 17 and 18 of the SRFAESI Act. The newly added Rule 13 provides for fees for applications and appeals under Sections 17 and 18 of the Act as under:
(1) Every application under Sub-section (1) of Section 17 or an appeal of the Appellate Tribunal under Sub-section (1) of Section 18 shall be accompanied by a fee provided in the Sub-rule (2) and such fee may be remitted through a crossed demand draft drawn on a Bank or Indian Postal Order in favour of the Registrar of the Tribunal or the Court as the case may be, payable at the place where the Tribunal or the Court is situated.
(2) The amount of fee payable shall be as follows:
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No. Nature of Application Amount of fee payable
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1. Application to a Debt Recovery
Tribunal under Sub-section (1)
of Section 17 against any of
the measures referred to in
Sub-Section (4) of Section 13
(a) Where the applicant is a Rs. 500 for every Rs. 1 lakh or
borrower and the amount of part thereof.
debt due is less than Rs. 10
lacs
(b) Where the applicant is a Rs. 5000 + Rs. 250 for every
borrower and the amount of Rs. 1 lakh or part thereof in
debt due is Rs. 10 lacs and excess of Rs. 10 lacs subject
above to a maximum of Rs. 1,00,000.
(c) Where the applicant is an Rs. 125 for every Rupees one
aggrieved party other than the lakh or part thereof.
borrower and where the
amount of debt due is less than
Rs. 10 lacs
(d) Where the applicant is an Rs. 1250 + Rs. 125 for every
aggrieved party other than the Rs. 1 lakh or part thereof in
borrower and where the excess of Rs. 10 lacs subject
amount of debt due is Rs. 10 to a maximum of Rs. 50,000/-
lacs and above.
(e) Any other application by any Rs. 200/-
person
2. Appeal to the Appellate Same fees as provided at
Authority against any order Clauses (a) to (e) of serial
passed by the Debt Recovery number 1 of this Rule.
Tribunal under Section 17
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11. The appellants herein did not pay any Court fee. The Tribunal below was perfectly justified in holding that the application was not maintainable. The IA in question suffered from multiple defects. Really speaking, it was not maintainable at all. The relief was time-barred and the Court fee had also not been paid. The appellants herein, attempted a miracle in legal science. The ingenuity employed by them failed, as it was bound to. Incidentally, appellant Nos. 2 and 3 and respondent Nos. 3 to 5 herein are brothers. There is no material to test (and it is not necessary also to test) whether there is some discordance amongst the brothers or they are making a fictitious show to side-step the main issue, engaging and embroiling the Bank on sideways to gain time.
12. In view of above discussion, I find myself in complete agreement with the view taken by the Tribunal below. The present appeal has no merit. It is, accordingly, dismissed.
Copy of this order be supplied to the parties and another one sent to the tribunal below.