Bank borrowers suffer on DRT-1 or DRAT orders
M/S Shreya Developwell Pvt Ltd (here after called Builder) entered into a Tripartite Agreement with IDBI and borrowers who wanted to book flats in the construction project of the builder.
The IDBI released 90% of the loan to the builder to construct flats for the borrowers without realizing the outcome if the builder do not construct the flat. It so happened that the Builder could not build in the required time and the Bank filed OA (Original Application) before DRT-1 at New Delhi for recovery of loaned amount along with interest and penalties. After long trial the Presiding Officer of DRT-1 gave a speaking order saying that, since the money has been directly credited to the Bank account of the Builder, the builder has to pay back the amount along with interest. It also made the borrowers a party and thier CIBIL record was made Defaulter of the Bank loans after the verdict.
The RO (Recovery Officer) of DRT-1, started recovery proceedings and found that the Bank has not taken equitable mortgage of any property. Only one of the building out of many buildings being constructed was almost complete and could be sold. But only 4 borrowers had their flats in that building. To pressurize the Builder to pay early, the Recovery Officer instead of ordering auction of 4 flats, ordered to auction entire building called Jasmine-III. The builder filed an appeal before the Presiding Officer but the appeal was dismissed. Then the builder filed 2nd Appeal before the DRAT, but 2nd Appeal was also dismissed. Then the builder filed a Writ Petition before High Court of Delhi challenging legality of the Orders of the DRAT, the Presiding Officer and also the Recovery Officer. Mr. Raminder Singh Sahota represented some of the borrowers and mediation was also held, wherein the Bank and the Builder had almost agreed to terms to repay the loan in equal installments of 1 year.
The writ petition was heard by 3 benches and all the 3 benches had differently dealt the writ petition. The first bench tried to recover the loans of not only the borrowers of IDBI but also other Banks like ING Vyasya Bank etc. and therefore appointed a amicus to help the Court. After lot of hearings the petition was shifted to be heard by another bench, which said, they will try mediation method to clear the IDBI loan initially and will deal with other banks later. When the mediation was at last stage and wanted only 1 more date the petition was shifted to be heard by another bench, which said that, they have thoroughly gone through the writ petition and orders of DRAT, PO DRT-1 and RO DRT-1 and find that the orders are totally wrong in auctioning entire Jasmine-III building because more than half of the flats belong to those who have not taken loan from IDBI and only for few borrowers, entire building should not auctioned putting the non concerned borrowers to hardship. The writ petition was allowed and orders of all other courts were set aside directing the RO of DRT-1 to give fresh orders.
On close evaluation of the foregoing, it may be seen that, the entire time of the borrowers was wasted before the Presiding Officer, the Recovery Officer and also the DRAT besides the High Court for no fault of the borrowers as the last para of the Orders of the High Court says
“The attachment of the building popularly known as Jasmine-III being constructed by M/S Shreya Developers Pvt Ltd is accordingly set aside with clarification that the Respondent No.1 (the IDBI) Bank would be entitled to file a fresh application by way of execution praying for attachment of the specific flats concerning such persons against who it has a decree.”
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