A Division Bench of the Gauhati High Court Chief Justice Sudhanshu Dhulia and Manash Ranjan Pathak, J. in the case of Kakoti Engineering Works and Another v. Punjab National Bank and Others, REED 2021 Gau 03244, held that in view of the Hon’ble Supreme Court decision in Agarwal Tracom Private Limited v. Punjab National Bank and Others, REED 2017 SC 11201, any person including the borrower has a remedy under section 17 of the SARFAESI Act, 2002 to file an appeal before the Debts Recovery Tribunal (DRT) against the measures taken by the secured creditor under section 13(4) of SARFAESI Act in relation to secured assets of the borrower. In the present case, the Petitioners were borrowers who failed to pay the loan taken from the Punjab National Bank (Respondent/secured creditor), and hence, their account was declared as a Non-Performing Asset. Thereafter, the Respondent initiated proceedings under the SARFAESI Act. Aggrieved thereof, the Petitioners approached the Gauhati High Court for a suitable direction.
Meanwhile, the property which was mortgaged with the Respondent was placed for auction. Initially, there was no auction purchaser, and therefore in exercise of its power under rule 8(5) of the Security Interest (Enforcement) Rules, 2002 (Rules of 2002) efforts were made to dispose of the property through ‘private treaty’ as provided under rule 8(d)(5) of the Rules of 2002. There was an offer from one M/s Vishal Car World Pvt. Ltd. which agreed to purchase the said mortgaged property of the Respondent with an amount of Rs.2,10,11,000/-, which was Rs.11,000/- more than the minimum reserved price. Before concluding the bid, this information was given to the Petitioner/borrower as mandated by rule 9(1) of the Rules of 2002. It was under these circumstances when, having knowledge of this offer, the Petitioner came up with another buyer who was willing to pay more than one lakh more for the property. The Gau HC initially passed an interim order on 21 February 2021 directing the Petitioners to deposit this money from this new buyer within a week to the Respondent and the matter was fixed for hearing in March 2021.
On the next date of hearing, the Respondent informed the court that the Petitioners did not deposit the requisite amount, and hence, the Gau HC disposed of the present writ petition, with liberty to the Petitioners to approach the DRT under section 17 of the SARFAESI Act. Further, the Respondent was directed to consider claims made by another M/s Ramlal Durgadutt Motors Pvt. Ltd. with that of M/s Vishal Car World Pvt. Ltd and decide in terms of the SARFAESI Act and the rules framed therein in its best interest.
Furthermore, the Gauhati High Court clarified that in light of the Hon’ble Supreme Court ruling in Agarwal Tracom Private Limited v. Punjab National Bank and Others, REED 2017 SC 11201, any party including the Petitioner/borrower aggrieved by the measures taken by Respondent under Section 13(4) in relation to secured assets of the borrower would always be at liberty to approach the DRT under section 17 of the SARFAESI Act.