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TMI Blog2005 (8) TMI 722X X X X Extracts X X X X X X X X Extracts X X X X ..... O.A. No. 254 of 2001 that he has no obligation to pay any amount to the respondent. This contention is based on the assumption that there are no signatures of the bank officials on the guarantee deed and as such there was no contract between the respondent bank and the petitioner No. 1 and consequently no liability can be fastened on him. An order came to be passed on 2-4-2004. On this contention raised by the petitioners which is dated 2-4-2004 the matter was adjourned to 16-4-2004. When the matter was pending before the D.R.T. and though according to the petitioner there were serious disputes in the matter of recovery of the alleged dues towards repayment of the alleged loan to petitioner No. 2, the respondent bank issued notice under Section 13(2) of the Securitisation Act dated 21-7-2004. By the notice the petitioners were called upon to pay an amount of ₹ 9,42,421/- plus interest @ 16.50% w.e.f. 1-4-1995 within a period of 60 days from the date of receipt of the notice failing which the respondent bank threatened to take action under Section 13(4) of the Securitisation Act. The petitioners on receipt of notice dated 21-7-2005 replied to the same by the reply dated 1-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrived at by the D.R.T. are totally incorrect and unsustainable in law. It is also submitted that the learned Presiding Officer erred in law that the dispute as to signatures on the guarantee deed not have bearing on the action taken by the respondent bank under the provisions of the Securitisation Act, as the transaction and the claim was in dispute. The learned Tribunal erred in holding that the controversy in the Original Application had no bearing in relation to the action initiated by the respondent bank under the Act. On that count also it is the contention of the petitioners that the order of the learned Single Judge ought to be set aside. The proceedings, under the Securitisation Act it is submitted, were beyond the prescribed period of limitation and will not have been instituted bearing Section 36 in mind. No reply has been filed on behalf of the respondent bank but the reply was filed to the appeal preferred under Section 17 of the Securitisation Act, before D.R.T. It is the submission of the respondent that considering Section 35 of the Securitisation Act, the provisions of the Securitisation Act override the provisions of any other laws to the extent it will be inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction is based on the guarantee, which deed was not signed by the respondent bank there was no liability of the petitioner No. 1 and consequently no relief could have been sought against petitioner No. 1 in respect of the mortgaged property and as such the proceedings are without jurisdiction and c) The claim under the Securitisation Act considering Section 36 had to be made within the period of limitation prescribed under the Limitation Act. In the instant case the claim being for money are barred under the provisions of the Limitation Act. 7. We may first deal with the second and third contentions. In so far as second contention is concerned, no doubt it was in issue in the proceedings under O.A. No. 254 of 2001. That also could have been considered in the appeal filed under the provisions of the Securitisation Act. Even otherwise the petitioners do not deny that they had signed the bank guarantee. The only contention is that the respondent bank had not signed the bank guarantee. Once the guarantee was signed by the petitioners and handed over to the respondent bank and based on which moneys were released, mere non-signing by the bank cannot result in holding that there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being in force or in any instrument having effect by virtue of any law other than the Act. Sub-section (2) provides that the provisions of the Act and the Rules made thereunder shall be in addition to, and not in derogation of the various acts as set out therein. This section had come up for consideration before the Apex Court in (Allahabad Bank v. Canara Bank) . The issue there was, whether the provisions of the Companies Act, 1956 override the provisions of R.D.B. Act. The Apex Court has held after considering the various provisions including Section 34, that the R.D.B. Act overrides the provisions of the Companies Act, 1956. We may then consider the provisions of the Securitisation Act, Section 13(10) reads as under : Where dues of the secured creditor are not fully satisfied with the sale proceeds of the secured assets, the secured creditor may file an application in the form and manner as may be prescribed to the Debts Recovery Tribunal having jurisdiction or a Competent Court, as the case may be, for recovery of the balance amount from the borrower. Section 36 of the said Act sets out that: No secured creditor shall be entitled to take all or any of the measures ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Secured asset means, the property in which the security interest is created. The recovery therefore, is not by intervention of a Court and/or Tribunal. The contention urged on behalf of the petitioners by the learned Counsel is that this may result in two conflicting orders and consequently the decree obtained under the R.D.B. Act or in case any order is passed in appeal under Section 17 of the Securitisation Act would not be executable. We are afraid, it would not be possible to accept that contention. If the issue has been answered either under the provisions of R.D.B. Act in proceedings taken under that Act or in appeal preferred by the borrower under Section 17 of the Securitisation Act the issue will no longer be open between the same parties in respect of the same subject-matter as the Doctrine of Estoppel will arise and/or the principle of resjudicata. Therefore, in our opinion, the contention as urged on behalf of the learned Counsel is devoid of merits. The learned Counsel for the petitioner placed reliance on the judgment of the Apex Court in Unique Butyle Tube Industries (P) Ltd. v. U.P. State Financial Corporation and Ors. , to contend that considering the ratio of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uently. It cannot be possible to hold that the Securitisation Act whose very aim and object is speedy recovery on account of inability of financial institution to make recoveries under the R.D.B. Act should be frustrated. We may note that this was so noted by the Apex Court in (Mardia Chemicals and Ors. v. Union of India and Ors.) . We may gainfully refer to relevant portion of paragraph 34, which reads as under : Considering all these circumstances, the Recovery of Debts Due to Banks and Financial Institutions Act was enacted in 1993 but as the figures show it also did not bring the desired results. Though it is submitted on behalf of the petitioners that it so happened due to inaction on the part of the Governments in creating Debts Recovery Tribunals and appointing Presiding Officers, for a long time. Even after leaving that margin, it is to be noted that things in the spheres concerned are desired to move faster. In the present day global economy it may be difficult to stick to old and conventional methods of financing and recovery of dues. Hence, in our view, it cannot be said that a step taken towards securitisation of the debts and to evolve means for faster recovery of N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 13(2) was issued before that. Action under Section 13(4) was taken on 10-11-2004 including possession. That would be a day earlier to the proviso coming into force. There can be two arguments. One that before the proviso came into force it was permissible to move under both the Acts and secondly because of the proviso a party has to elect his remedy. On the facts of the present case considering the date when the proceedings were initiated under the R.D.B. Act and notice and possession taken under the Securitisation Act the proviso would not apply. Assuming for a moment that the proviso applies, does the proviso lead to the inference that a creditor has to elect to move either under one of the two Acts. As noted earlier, the action under Section 13 is without intervention of the courts. Considering Section 37 r/w 35 it is open to a secured creditor to move under the Securitisation Act and there is no bar. Under the Securitisation Act the secured creditor will not be moving a Court for relief and no adjudicating process is involved. In so far as R.D.B. Act is concerned, it is a Tribunal on which certain powers under the Code of Civil Procedure have been conferred. If the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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