Ashok Menon, Chairperson
1. The appellants challenge the order dated 24.07.2023 dismissing Appeal No. 09 of 2006 on the files of the Debts Recovery Tribunal, Pune (D.R.T.). The said Appeal No. 09 of 2006 was filed under Sec. 30 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (“RDDB & FI Act”, for short) challenging the orders passed by the Recovery Officer (R.O.) in Recovery Proceedings (RP) No. 209 of 2002.
2. The aforesaid Appeal No. 9 of 2006 was once dismissed vide order dated 26.07.2006. The Review application No. 8 of 2006 filed by the appellants was also dismissed on 05.04.2007. Challenging the dismissal, the appellants preferred Appeal No. 252 of 2007 before this Tribunal. That appeal was allowed on 01.07.2014 and Appeal No. 9 of 2006 was restored to the files of the D.R.T with a direction to dispose of the appeal afresh on two points:
1. Whether the amount has been filed by the appellants in time?
2. Whether the auction conducted by the Recovery officer is correct or not?
3. The two aspects above were to be considered by the D.R.T. on remand. The D.R.T. vide impugned judgment dated 24.07.2023 considered these two points and found it against the appellants. Resultantly, they are challenging the findings of the D.R.T. once again in appeal.
4. The appellants have filed the aforesaid four Interlocutory applications in this appeal, which I am going to consider now. In I.A. No. 197 of 2024, the appellants have incorporated ten further grounds in the appeal. The grounds are mainly regarding the challenges to the sale, fixing of the reserve price and valuation of the property, conversion of agricultural land into non-agricultural land, selling of agricultural land to non-agriculturist, non-service of the demand notice on the appellants and non-compliance of Rule 54 of the second schedule of the Income Tax Act, etc.
5. It is pertinent to note that, these are not taken as grounds in Appeal No. 9 of 2006 and therefore, it cannot be raised for the first time in the second appeal preferred before this Tribunal. Necessarily, the amendment application cannot be entertained and is, therefore dismissed.
6. The appellants have filed IA Nos 147 and 149 of 2024 for a stay of the proceedings before the R.O. as also preventing the creation of the third-party interest by the auction purchaser. And I.A. 196 of 2024 is for a stay of the impugned order of the Ld. P.O.
7. IA No. 148 of 2024 is for expediting the appeal given the circular issued by the Hon’ble High Court of Bombay on 03.08.2009 about expeditious disposal of cases concerning persons who are above the age of 60. At the outset, it is to be observed that this circular has no application to this Tribunal because the directions are given to the Benches of the Bombay High Court and the Courts subordinate to it. This Tribunal is not subordinate to the Hon’ble High Court of Bombay and hence, it does not apply. However, since the appeal has been heard on merits, it is being disposed of by this order. Interlocutory applications Nos. 147 and 149 of 2024 are not being considered given the disposal of this appeal itself on merits.
8. As already mentioned the earlier appeal was disposed of and remanded to the D.R.T. with specific intent and the D.R.T. was to consider only those two points for which it was remanded. All other considerations are extraneous.
9. On the first point, it was to be decided whether the payment made by the appellants by the consent terms filed before the D.R.T. on 18.06.2002 in O.A. No. 454 of 2001 was on time. The impugned order has observed that an OTS proposal of the appellants was accepted by the bank vide letter dated 07.06.2003 and accordingly, ₹24 lakhs was to be paid by the appellants. ₹3,40,000/- was paid during the pendency of the O.A. and a further sum of ₹50,000/- was paid on 18.08.2003. The RBI had issued guidelines on 29.01.2023 about the settlement/compromise of non-performing assets by defaulters. The last date of receipt of the application was fixed as 31.10.2003. According to the appellants, the date was extended up to 31.10.2004. However, there is no such proof of extension produced. The Hon’ble High Court of Bombay had in Sathe Biscuits and Chocolates Co. vs. Bank of Maharashtra 2004 (3) Bom. CRP 735 held that OTS does not apply to cases where a final order/ decree has already been passed. Hence, the acceptance of the OTS after disposal of the O.A. and issuance of the recovery certificate was a mistake. Even if the acceptance of OTS is taken to be valid, the appellants did not pay the amount before 31.10.2003. Hence, the D.R.T. was justified in concluding that the amounts were not paid on time.
10. The next point that requires determination is whether the act of the Recovery Officer in proceeding to auction the property was justified. The Recovery Officer had issued a demand notice for only the balance amount of ₹20,60,000/- and not the entire claim of ₹39,87,967.75. The appellant's case is that the bank had waived the default clause as per the consent terms. The reserve price was fixed following the valuation report and therefore, it cannot be said that there was any irregularity in conducting the auction.
11. A borrower who is aggrieved by the sale has to move an application under Sec. 60 of the Income Tax Act within 30 days to get the sale set aside. The borrower has also to deposit the amount contemplated under Sec. 60/61. Ext. 75 was filed beyond time and hence, barred by limitation.
12. The objection regarding the mortgaged property being agricultural land has not been established and therefore, the objection raised in that regard would also not lie.
The impugned order has considered all the aspects and I find no reason whatsoever to interfere with the order. The appeal is without merits and hence, dismissed. The interlocutory applications for the stay of proceedings being infructuous are dismissed.
