Mohamed Ibrahim and anr. Vs. Abdul Azeez, Represented by His Power Agent, M. Mohamed Jaffar - Court Judgment

Excerpt:
- securitisation & reconstruction of financial assets & enforcement of security interest act, 2002 [c.a. no. 54/2002]section 17; power of tribunal to impose condition relating to deposit for grant of stay of auction held, there is no specific provision made under section 17 of securitisation act or under any other provisions of the said act empowering the tribunal to pass any interim order. but under sub-section (12) of section 19 of the recovery of debts due to banks and financial institutions act, 1993, the tribunal has been empowered to pass various interim orders. if sub-section (7) of section 17 of securitisation act is read along with sub-section (12) of section 19 of recovery of debts due to bank is and financial institutions act, it would be clear that the tribunal also has jurisdiction to pass interim orders under section 17 of the securitisation act in appropriate cases. the tribunal is empowered to grant interim stay subject to such conditions as may be deemed proper including condition of deposit. even under section 69 of the transfer of property act, the only remedy of the borrower whose mortgage has invoked section 69 of the transfer of property act, is to file a civil suit and in such suit the court has power to grant injunction and to impose condition for the grant thereof--section 17; [a.p. shah c.j., f.m. ibrahim kalifulla & v. ramasubramanian, jj] proceedings under section 17 power of the tribunal to pass any interim order held, once the possession of the secured asset is taken, there would be no occasion for the tribunal to order redelivery of possession till final determination of the issue. in other words, it is only when the tribunal comes to the conclusion that any of the measures, referred to in section 13 (4) taken by the secured creditor are not in accordance with the provisions of the act and the rules made thereunder, then only the tribunal can restore possession of such secured assets to the borrower. by virtue of sub-section (7) of section 17 of the securitisation act read with section 19 (12) of the recovery of debts due to banks and financial institutions act the tribunal undoubtedly possess ancillary power to pass interim orders subject to the conditions as it may deems fit and proper to impose, but it does not in any way override the special provisions contained in section 17(3) of the securitisation act. the statutory scheme of the securitisation act is such that the borrower could take recourse to application under section 17 only if one or other measure is taken by the secured creditor, and the tribunal can restore the status quo ante only if it comes to the conclusion that any of the measure taken by the secured creditor is not in accordance with the provisions of the act. the scheme cannot be bypassed by issuing a mandatory order for redelivery of the possession before conclusion of the proceedings under section 17--sections 17, 13 (4); [a.p.shah, c.j., f.m. ibrahim kalifulia &v. ramasubramanian, jj] scope of enquiry under section 17 held, the main purpose of the securitisation act, and in particular section 13 thereof, is to enable and empower the secured creditors to take possession of their securities and to deal with them without the intervention of the court. therefore, in an application under section 17, the tribunal is concerned only with the validity of the acts of the secured creditor in taking possession of the securities and dealing with the same under section 13. all such grounds, which would render the action of the bank/financial institution illegal, can be raised before the tribunal in the proceedings under section 17. it is for the tribunal to decide in each case whether the action of the bank was in accordance with the provisions of the act and legally sustainable. however, while considering the question of validity of the action of the bank, it is not necessary for the tribunal to adjudicate the exact amount due to the secured creditors. in other words, the purpose of an application under section 17 is not the determination of the quantum of claim per se as the tribunal is concerned with the issue of the validity of the measures taken by the banks/financial institutions under section 13(4)--sections 17(4), 13(4) ; [a.p. shan c.j.,f.m.ibrahim kalifulla & v. ramasubramanian, jj] appeal right of bank held, the right of the bank is not automatically suspended upon filing of an appeal by borrower under section 17 of the securitisation act and the bank as secured creditor can proceed to auction secured asset where no stay is granted by the tribunal. there is nothing in section 17 of the securitisation act which would indicate that the legislature intended that there would be automatic stay of recovery proceedings by bank under section 13(4) on filing an appeal by borrower under section 17. use of the expressions if and then under section 17 would not mean that the bank can take one or more measures laid down under section 13(4) only if the tribunal declares that the action taken already is in accordance with the provisions of the securitisation act and the rules made thereunder. use of the word if does not connote a condition precedent. it is a recognised rule of interpretation of statutes that expressions used therein should ordinarily be understood in a sense in which they harmonized with the object of the statute and which effectuate the object of the legislature. the provisions of section 17 must, therefore, receive such construction at the hands of the court as would advance the object and at any event not thwart it. in other words, the principle of purposive interpretation should be applied while construing the said provisions. the securitisation act is enacted to provide a speedy and summary remedy for recovery of thousands of crores which were due to the banks and financial institutions. s. natarajan, j.1. this revision has been preferred by the defendants in o.s. no. 82 of 1975 on the file of the courts of the subordinate judge, nagapattinam. that suit was an under-chapter suit and has been filed by the respondent on the foot that he had obtained an assignment of the suit promissory note from the original promisee.2. the petitioners herein filed an application under order 37, rule 2, civil procedure code, praying for unconditional leave to defend the suit. the subordinate judge declined to grant unconditional leave and granted them conditional leave by calling upon the petitioners to deposit one-half of the suit amount before entering defence. 'it is to challenge the correctness of that order the petitioners have come forward with this revision.3. mr. sridevan, the learned counsel for the petitioners states that the subordinate judge has found that there is a triable issue in the suit and having rendered such a finding, the learned judge ought not to have imposed conditions on the petitioners.. in support of this contention, he relies upon the decisions in ms. baba industries v. mehta traders : air1978mad146 . and raghwaveera sons v. mrs. padmavathi : air1978mad81 . what has been held in both those cases is that if the court is satisfied that the defence of the defendant is acceptable though prima facie or that the defence raises a triable issue or that the contentions, raised by the defendant can only be determined after due trial of the case, then in, such circumstances, the court ought not to impose & condition in the matter of the payment of the plaint amount sought for by the plaintiff into court as security before the grant of such leave.4. mr. ananthakrishnan nair, the learned counsel for the respondent submits that in this case, the court below has not found the existence of any triable issue in favour of the petitioners as contended by them. he points out that the primary contention put forward by the petitioners in the application was that the suit should have been filed within six months from the date of the cause of action and that not having been done, the suit was not maintainable. this contention has been repelled by the subordinate judge for there was no trace of material to even remotely sustain this plea. the other ground put forward by the petitioners was that they are agriculturists and, therefore, they are entitled to claim benefits under ordinance viii of 1975. it is only with reference to this plea, the subordinate judge has observed that since the plaintiff refutes the contention of the petitioners that they are agriculturists, the question of determining the status of the petitioners as agriculturists will have to wait the trial of the suit, but that will not entitle the petitioners to ask for unconditional leave to defend the suit. inasmuch as the petitieners had not disputed or denied the execution of the promissory note, the subordinate judge has directed the petitioners to deposit one-half of the suit claim before entering defence in the suit.5. on a consideration of the matter, the contention of the petitioners that the subordinate judge has found that their claim raised a triable issue for consideration in the suit cannot be sustained. the plea regarding the status of the petitioners as agriculturists will entitle them only to certain benefits in the matter of scaling down of interest etc. it will not impinge upon their liability to pay the amount claimed under the suit promissory note, especially when the petitioners have not denied their liability under the promissory note. such being the case, it is futile for the petitioners to say that they have raised a triable issue in the case and in view of the acceptance of their stand by the court below, they should not have been called upon to deposit one-half of the suit amount as a condition precedent. in that view of the matter, the order of the court below can well be sustained. the revision will, therefore, stand dismissed. no costs.6. the petitioners are given two months' time from today to deposit the amount directed by the lower court to be deposited.