Case Law Details
Perfect Foundation & Construction Company Vs Saraswat Co-operative Bank Ltd (DRAT Mumbai)
DRAT Allahabad held that initiation of proceeding under SARFAESI Act for the same debt due after rejection of claim under Co-operative Societies Act is not justifiable. Accordingly, the present appeal is allowed.
Facts- This appeal is filed under section 18 of the SARFAESI Act, 2002. The main ground taken by the Appellants in the TSA is that the very initiation of proceedings under the SARFAESI Act, issuance of Demand Notice followed by other measures are clearly barred under the law of limitation. Respondents filed Recovery Application in RA No.3441/2004 before Learned Assistant Registrar under Section 101 of the Maharashtra Co-operative Societies Act, 1960 for recovery of a sum of 83,36,854.66p against the Applicants in TSA, for the alleged loan facility granted by the Respondents. The Learned Assistant Registrar rejected the claim of the Respondents vide its order dated 21.02.2007 stating that Loan Demand Application was dated 18.10.1999 and the Loan Sanctioned Letter was dated 08.06.1999 and doubted the very loan transaction. Respondents initiated proceedings before the Divisional Joint Registrar against the order passed by the Assistant Registrar in Revision Petition No.193/2007, which had been dismissed for non-prosecution. Other ground is that when competent Forum had rejected the claim on the basis of loan transaction, for the same loan transaction, proceedings under SARFAESI Act, cannot be initiated. Demand Notice has no details about the classification of loan account as NPA and the mandatory provisions of SARFAESI Act had not been complied with.
Conclusion- In re Ace Media Advertisers Pvt. Ltd and others Vs. Bank of Baroda and others and Jasmin K. Vs. State Bank of India and others, it is settled that determination of debt in adjudicatory process overrides the determination in non adjudicatory process and that if the claim made before the Civil Court fails, there cannot be any proceedings under the SARFAESI Act for the same claim.
Held that Respondents filed Recovery Application in RA No.3441/2004 before the Learned Assistant Registrar of Co-operative Societies and Learned Assistant Registrar for the reasons recorded in the order held that claim cannot be entertained and rejected the Application. Revision Application in RA 193/2007 filed before Divisional Joint Registrar was also dismissed for non prosecution. Thereafter, that was not taken to next level of litigation by the Respondents. Therefore, adjudicatory process of determination of debt due to Respondents was decided against the Respondents. When that be the case, this Tribunal is in agreement with the submission of Learned Counsel for Appellants that Respondents cannot proceed against the Appellants under the SARFAESI Act, 2002, for the same debt due.
FULL TEXT OF THE ORDER OF DRAT MUMBAI
1. Aggrieved against the order dated 14.05.2024 passed in TSA No.566/2016 by Learned Presiding Officer, DRT-II, Mumbai, this Appeal is filed under Section 18 of the SARFAESI Act, 2002.
2. Appellants filed TSA No.566/2016 to set aside the symbolic possession dated 14.12.2010; to set aside the notice issued by the Learned Assistant Registrar dated. 10.10.2011 and for other relief.
3.The main ground taken by the Appellants in the TSA is that the very initiation of proceedings under the SARFAESI Act, issuance of Demand Notice followed by other measures are clearly barred under the law of limitation. Respondents filed Recovery Application in RA No.3441/2004 before Learned Assistant Registrar under Section 101 of the Maharashtra Co-operative Societies Act, 1960 for recovery of a sum of 83,36,854.66p against the Applicants in TSA, for the alleged loan facility granted by the Respondents. The Learned Assistant Registrar rejected the claim of the Respondents vide its order dated 21.02.2007 stating that Loan Demand Application was dated 18.10.1999 and the Loan Sanctioned Letter was dated 08.06.1999 and doubted the very loan transaction. Respondents initiated proceedings before the
Divisional Joint Registrar against the order passed by the Assistant Registrar in Revision Petition No.193/2007, which had been dismissed for non-prosecution. Other ground is that when competent Forum had rejected the claim on the basis of loan transaction, for the same loan transaction, proceedings under SARFAESI Act, cannot be initiated. Demand Notice has no details about the classification of loan account as NPA and the mandatory provisions of SARFAESI Act had not been complied with.
4. Learned Presiding Officer, DRT-11, Mumbai, on considering the materials produced and the rival submissions of Learned Counsel for parties, dismissed the TSA, thus this Appeal.
5. Learned Counsel for the Appellants submitted that Respondents had also initiated a Criminal Complaint against the husband of the second Appellant in CC No.43/2003 and CC No.79/2003 in connection with dishonor of Cheques under Section 138 of N.I. Act. These cases ended in conviction in the Trial Court and that was upheld by Sessions Court. In the Criminal Revision Petition filed before the Hon’ble High Court of Bombay, there had been a settlement in respect of the transaction only in connection with the Cheques dishonor cases. There was no settlement in respect of the loan transaction. Learned Presiding Officer, on the basis of the conviction in the Criminal Cases and that it had not been pleaded in the SARFAESI Application, dismissed the TSA, without considering the main issue as to whether SA proceedings are legally maintainable at all, in view of the rejection of Respondents’ claim before the competent Forum.
6. It is submitted further that Section 13(2) Demand Notice has no mention of the Authorised Officer, there is no segregation of principal amount and interest due, and the objections sent to Section 13(2) Notice was not properly considered by the Respondents. Respondents have not filed any reply to the Securitization. Application but only filed reply in the Application filed to condone the delay. Reply does not deal with the loan transaction and other aspects raised in the TSA. He reiterated that Criminal Revision Application Nos.390/2007 and 391/ 2007 were disposed of in terms of consent terms raised for settling the transaction under Section 138 of N.I. Act alone. In the said circumstances, Learned Counsel for the Appellants submitted that order of Learned Presiding Officer, DRT-II, Mumbai passed in TSA N o . 556 / 2016 has to be set aside and the Appeal be allowed.
7. In reply, Learned Counsel for the Respondents submitted that it is not disputed by the Appellants that Appellants availed loan and defaulted in paying the loan due. After merger of erstwhile lender viz., South Indian Co-op. Bank Limited, Mathunga with the Saraswat Co-operative Bank Ltd, Maharashtra Co-operative Societies Act, 1960, will not apply to this case and only Multi State Co-operative Act, 2002 will alone apply. Therefore, Appellants should not have proceeded under Maharashtra Co-operative Act, 1960. Against the orders passed in Recovery Application, Revision Petition was filed before Divisional Joint Registrar. Though it is claimed that this Review Application was dismissed for non prosecution on 07.12.2015, Appellants had made an attempt to settle the loan on 13.11.2020_ It shows that Appellants admit that there is still due towards the loan and that was the reason why Appellants made efforts to settle the loan amount with the Respondents. On 28.09.2018, Appellants sought time to explore the possibility of settlement, On 12.01.2024, it was represented that case was settled for a sum of Rs.20.00 Lakhs, and therefore, a prayer was made for withdrawal of SA. Through a letter dated 28.09.2019, there was a proposal for settlement. These letters reiterate that borrowal of loan, creation of mortgage are all admitted. Therefore, it is not open to Appellants now to contend that Respondents cannot proceed with the SARFAESI measures.
8. In reply, Learned Counsel for the Appellants submitted that letter dated 28.09.2018 was addressed ‘without prejudice’ to the rights of the Appellants. It does not mean that Appellants admitted the Cash Credit Loan Account. What was sought to be settled was only the dispute with regard to dishonor of Cheques and proceedings initiated under Section 138 of N.I. Act. Aforesaid letter was written by the son and not by the father, who issued the Cheque. Why the Bank came forward to settle the loan for a sum of Rs.20.00 Lakhs when the loan amount claimed was Rs.1,36,14,136/-? Consent terms before the Horible High Court of Bombay also makes it clear that only Section 138 proceedings was settled. There was no acceptance of liability after dismissal of the claim application before the appropriate forum.
9. In support of his submissions, he pressed into service the following decisions.
a) Decision of Debts Recovery Appellate Tribunal – Delhi in re, PNB Housing Finance Ltd. Vs. M.C. Gupta reported in 2016 PGLS (DRAT. Del) 17.
b) Decision of Hon’ble High Court of Gujarat at Ahmedabad in re Punjab National Bank Vs. Mithilanchal reported in MANU/ GJ/ 1069/ 2020.
c) Decision of Hon ble High Court Gujarat at Bombay in re, Sataswat Co.op. Bank Ltd. Vs. National Flank Industries Ltd. & Others reported in Writ Petition No.24/ 2024.
d)Decision of Hon’ble Allahabad High Court in re Ace Media Advertisers Pvt. Ltd & Others Vs. Bank of Baroda and others reported in (2009) (2) D.R.T.C.323 (All.).
e) Decision of Hon’ble Supreme Court of India in re, Authorised Officer, State Bank of India Vs. Mathew K.C. in Civil Appeal No.1281/2018 (arising out of SLP(C) No.24610/2015).
f) Decision of Hon’ble Supreme Court of India in re, Transcore Vs. Union of India and another in Appeal (Civil) No.3228/2006 reported in (2008) 1 See 125.
g)Decision of Hon’ble Supreme Court of India in re ARCE Polimerys Pvt. Ltd. Vs. Alphine Pharmaceuticals Ltd and others reported in Civil Appeal No. 7372/ 2021 (arising out of SLP (Civil) No.5051/ 2020).
h)Decision of Hon’ble Supreme Court of India in re Kanniyalal Lalchand Sanhdev & Others Vs. State of Maharashtra and others reported in 2011 AIR (SCW) 1794.
i) Decision of Hon’ble High Court of Kerala at Ernakulam in re K Vs. State Bank of India in WP(C) No.1.1797/2018.
10. In reply to this reply, Learned. Counsel for Respondents submitted that it is not the case of settlement of the dishonoured Cheques alone, but, there was an admission of liability. ‘No Due Certificate’ and original documents were to be given only on settling the account. He pressed into service the decision of Hon’ble Supreme Court of India in re, ITC Limited Vs. Blue Coast Hotels Ltd., reported in AIR 2018 SCC 3063, as to what is the meaning of “without prejudice”.
11. I have considered the rival submissions and perused the records.
12. Filing of claim application before Assistant Registrar under Section 101 of the Maharashtra Co-operative Societies Act, 1960 is not in disputed by the Respondents. Translated version of Marathi Order in English is produced at pages 57 to 68 of the typed set of papers filed by the Appellants. It can be seen from this Order that the South Indian Co-operative Bank Limited, Matunga, which was later merged with The Saraswat Co-operative Bank Ltd.’ filed an Application No.3441/2004 for recovery of money from M/s Perfect Foundation 84 Construction Company, a proprietary concern of Shri Nawaz Ali Choundhari (now deceased) and 4 others. Respondent Bank filed before the Assistant Registrar, Maharashtra Co-operative Societies, true copies of the following documents;
a) demand application.
b) Resolution passed by Board of Directors of the Bank on 18.5.2004.
c) Notice sent to opponents by registered post on 5.5.2004.
d) Extract of Account No.688 of the appellants.
e) Promissory Note dated. 17.12.1989.
13. Appellants herein took the defence that they had never applied for loan for Rs.70.00 Lakhs and there is no question of sanctioning of loan amount for Rs.35.00 Lakhs. Certain other grounds had also been taken regarding execution of documents. Learned Assistant Registrar, on going through the documents, allegations made against each other, found that the South Indian Co-operative Bank is not entitled to recover the amount and rejected the claim. The reasons are, as follows:
’01) The opponents have not agreed to the claim amount as shown in the dispute application.
02) The applicant bank submitted the documents along with the dispute application as proofs and it seems that:- (a) demand application dated 18.10.1999 made by the opponent No.1 —company for loan amount of Rs.70,00,000/ -; b) loan sanctioned by the bank on 8.6.999 for Rs.35,00,000,/ – (c) promissory note dated 18.11.1999 for Rs.35,00„000/- (d) agreement & continuing security letter on Rs. 500/ – adhesive stamp on (dated 17.12.1999) for Rs.35, 00, 000/ -.
On going through the above documents and papers; figures shown in the account statement as proof; there is no relevancy.
03) Loan demand application dated 18.10.1999 and loan sanctioned letter on 6.1999; how is it possible i.e., beyond imagination.
04) The applicant bank enclosed account statement along with dispute application and it seems from the account statement that on 2.2.1999, debit balance is shown as Zero (00). Afterwards, i.e., from 2.2.1999 to 7.3.2002; there was no transaction and suddenly on 8-3.2002, in the said account, an amount of Rs.63,75,306.66 has been debited. It means, there is no relation with loan sanction of Rs_35,00,000/-.
05) The copy of the papers demanded by the Opponents were not produced by the applicant-bank and also not produced before this authority.
06) Therefore, the claim made by the applicant bank in the dispute application is not trustworthy.
07) After taking into consideration of the above all issues No.1 to 6 ; it is not proper to issue Recovery Certificate and hence, I pass the following order.
ORDER
As per Maharashtra Co-operative Societies Act, 1960 under Section 101; power is given to me to pass this order; therefore, I Rajendra Veer, Assistant Registrar of Co-operative Societies (on deputation) order that the Recovery Certificate against the Opponent No.1 to 5 required by the South Indian Co-op. Bank Limited, who is member of The Brihan Allumbai Urban Co-operative Banks Association Limited, Mumbai is rejected on the reasons stated in paragraphs 1 to 6 above”
14. Against this order, Respondents filed a Revision Application before the Divisional Joint Registrar, Co-operative Societies. This Revision Application in RA 193/2007 was dismissed for non-prosecution. Proceedings before the RA 193/2007 Registrar and Divisional Joint Registrar, in Recovery Application No.3441/2004 and Revision Application 193/2007 respectively, are not disputed by the Respondents. Against these orders passed, there was no further legal proceedings initiated by the Respondents.
15. After dismissal of the Revision Application No . 193/2007, Respondents issued a Demand Notice dated 05.08.2010, claiming a sum of Rs. 1,36,14,136,41p including of interest as on 3 1 .0 7.20 10. Admittedly, there are no details given as regards the date of classification of account as NPA in the Demand Notice. Objection was given by the Appellants to the Demand Notice on 04.09.2010 disputing the claim and highlighting the defects in the notice. In the reply to this objection sent by the Bank on 21.09.2010, it was informed that against the dismissal of RA 3441/2004, proceedings before the Divisional Joint Registrar was initiated in RA 193/2007. It is now made clear that the said Revision Application was dismissed for non-prosecution.
16. Now, the point for consideration that arises in this case is, Whether on the dismissal of the claim application filed before Authorities under the Co-operative Societies Act, can the Respondents proceed under the SARFAESI Act for the same loan transaction ?
17. Learned Counsel for the Respondents relied largely on the consent terms filed in CRA 391/2007 before Hon’ble High Court of Bombay and the submissions made before DRT-II, Mumbai during the course of hearing on 03.11.2020, wherein advocate Mr. Vivek Phadke submitted that, “other applicants are negotiating with the defendant bank to settle the matter amicably.” Submissions on 12.01.2024 reads thus, “Mr. Noronha submits that parties have entered into a settlement for Rs.20.00 Lakhs out of which the applicant has paid Rs.5.00 Lakhs. Mr. Noronha requests the Tribunal to defer the hearing and seeks adjournment to take steps to withdraw the Transferred Securitization Application on the next date”. Letter written by Usman Ali Chaudhary dated 28.9.2018, is also relied to state that the contents of this letter would mean admission of liability. Whether the terms of consent terms filed in CRA before Hon’ble High Court of Bombay and the letter sent by Usman Ali Chaudhary amounts to admission of liability, is essentially required to be considered for resolving the issue.
18. A reading of the consent terms filed in RA(C) 391/2007 on the file of Hon’ble High Court of Bombay shows that one Navafe-Ali H Choudhary and South Indian Co-operative Bank Ltd. and another, filed this consent terms. As per this consent terms, in respect of Cheque dishonour case in CC No.43/2003 and CC No.79/2003 compensation of Rs.31.00 Lakhs in respect of Cheque for Rs.30.00 Lakhs and compensation of Rs.26.00 Lakhs in respect of Cheque for Rs.25.00 Lakhs was ordered.
18.1 It was recorded that, a sum of Rs.16.00 Lakhs was deposited on various dates. In addition, a sum of Rs.1.00 Lakh and Rs.4.00 Lakhs were deposited when the settlement was going on. On considering the request for settlement, Bank accepted to withdraw the compliant on payment of Rs.45.00 Lakhs. There is specific mention in paragraph (vi) that, “settlement was only with reference to cheque dishonour case and not regarding the account of the appellants.” Again in the last but one paragraph, it was stated that, “the complainant agrees to clear the amount and also compound the offence on receipt of the entire amount in these cases only.” Thus, the settlement was restricted only in respect of Cheque dishonour cases and not in respect of the loan account of the Appellants.
19. Letter dated 28.09.2018 written by Shri Nawaz Ali Chauclhary’s son lisman Ali Chaudhary reads that, it was written `without prejudice”. It is stated in this letter that “his father Shri Nawaz Ali Chaudhary obtained loan during his life time and that he wanted to settle the account, but due to his ill health, he could not do that. As his .son, he has the pious obligation to fulfill his wish and prayed for settling the loan account of his father for a sum of Rs. 15.00 lakhs with a request to issue `no objection certificate’ and return the original documents. He enclosed a Cheque for Rs.2.00 lakhs towards this amount.” It appears that Bank had accepted this proposal and approved settlement for Rs.20.00 Lakhs. This was communicated to Mr. T.1 small Ali Chaudhary on 18.01.2021. Thereafter, since Rs.20.00 Lakhs was not paid fully, OTS Offer was withdrawn by letter dated 03.03.2020. Section 13(2) Demand Notice was issued on 05.08.2010 claiming a sum of Rs.1,36,14,136.41p with future interest at 14.5% p.a. from 01.08.2010 with incidental expenses, costs, etc. in January, 2021 Bank accepted the settlement proposal for settling the loan for Rs.20.00 Lakhs. How this huge haircut was given? This huge haircut supports with the submission of Learned Counsel for Appellants that Respondents had no legal right to proceed under SARFAESI Act after the rejection of the claim before the Registrars, Co-operative Societies, and that is the reason why they wanted to claim as much money as possible. Letter addressed by Usman Ali Chaudhary was on the basis of his pious obligation to settle his father’s loan account and receive the original documents and NOC.
20. In the case referred by Learned. Counsel for Respondents supra, i.e., in re, ITC Limited Vs. Blue Coast Hotels Ltd. reported in AIR 2018 SCC 3063 ‘without prejudice’ letter was given by the borrower. That is not the case here. Here, borrower’s son had given “without prejudice’ letter and that will not empower the Bank to make a claim on the basis of this letter that it amounts to admission of debt.
21. From the decision relied on by the Appellants in re, Saraswat Cooperative Bank Ltd. Vs. National Flank Industries Ltd. & others in Writ Petition No.24/2024 on the file of Hon’ble High Court of Bombay decided on 15.09.2025, it is recorded that “principal amount and interest applied to the principal amount should be specifically given as required under Section 13(3) of SARFAESI Act”. Admittedly in this case, there is no bifurcation of principal amount and the interest claimed on it.
22. In re, Ace Media Advertisers Pvt. Ltd. & Others Vs. Bank of Baroda and others reported in 2009 (2) D.R.T.C. 323(A11), the decision of Hon’ble Supreme Court of India in re Transcore Vs. Union of India reported in AIR 2007 SC 712, is extracted. Main ratio laid down in the Transcore case is as follows:
“i) NPA Act proceeds on the basis that the liability of the borrower has crystalised and that his account is classified as NPA.
ii) There is no scope of any dispute regarding the liability.
iii) Section .73(2) deals with enforcement of security interest, therefore, the remedies of enforcement of security interest under the NPA Act and the RDDBFI Act are complementary to each other.
iv) There is no inherent or implied inconsistency between these two remedies under the two different Acts.
v) Therefore, the doctrine of election has no application in this case.
vi) The bank/ Financial Institution is not only free to move under the IVPA Act with. or without the leave of DRT, but having invoked the NPA Act, liberty is given statutorily to the secured creditors (banks/ FIs) to move DRT under the RDDBFI Act once again for recovery of the balance in cases where the action taken under Section 13(4) of the. NPA act does not result in frill liquidation of recovery of debts due to secured creditors. “
22.1 In paragraph 10 of this decision, it is observed that determination of a claim under a non-adjudicatory process, cannot override the determined amount of adjudicatory process i.e., decree/order of DIRT.
23. In re, Jasmin K. Vs. State Bank of India and others, Hon’ble High Court of Kerala in WP (C) No.11797/2018 decided on 11.04.2024 held that “the word debt is defined as one that is legally recoverable”
23.1 When civil remedy is invoked before the Civil Court and Civil Court found that there is no debt to be recovered by the creditor against the borrower, it was held that Bank cannot proceed u.nd.er the SARFAESI Act. Relevant paragraphs are extracted hereunder.
“18. No one can dispute the above proposition raised by the learned Senior Counsel. In fact, the court is in f-ull agreement with the proposition raised by the (earned Senior Counsel for the respondent Bank. It may be incidentally noted that in Transcore Vs Union of India 12008(1) SCC 1251, the Apex Court has held that the Securitisation Act is supplemental to the Recovery of Debts Due to Banks and Financial Institution Act, 1993. Applying the aforesaid principles, it may be possible to conclude that filing of civil suit is supplement to the right under Section 13(2) of the Securitisation Act. But, the question before this Court is once a civil remedy is invoked and the civil court has found that there is no debt to be recovered by the creditor against the borrower, can, the creditor proceed under the Securitisation Act independently de hors the dismissal of the suit.
19. As explained above, the Parliament has chosen consciously to define the word ‘debt” as one legally recoverable. Can it be said that despite the dismissal of the suit, C.S. No 418 of 2021, filed by the Bank, there exist a “debt” which is legally recoverable one. The answer to be given must be in negative against the respondent Bank and in the affirmative in favour of the petitioner.
20. The reasoning of this Court is based upon the welt-defined basic principles governing the interpretation of statute. When the plain and ordinary meaning is given to the definition, of “debt” under Section 2(g) of the Recovery of Debts and Bankruptcy Act, 1993, it leaves no doubt on one’s mind that it includes the amount so ordered by any civil court and should be legally recoverable one.
21. Viewed in another _perspective, the court must necessarily hold that the stand taken by the respondent Bank is not only irrational but contrary to the statue. It clearly depicts the mind of a creditor, where it does not want to respect the judgment of the civil court on the finding that no amount is liable to be recovered from the petitioner must be respected by the parties and proceed under the Securitisation Act which cannot be acceded to.
22. The reasoning of this Court is perhaps strengthened by the indisputable fact that issuance of demand notice under Section 13(2) is based on the original contract between. the parties and further that the same contract was subjected to adjudication by the civil court and once an adjudication by the civil court has taken place ending in dismissal of the suit finding that there is no debt due from her, necessarily, it has to be held that the secured creditor is disentitled from proceeding further with measures under the Securitisation Act, since there is no legally recoverable debt.”
24. From the aforesaid decisions, especially decision in re Saraswat Cooperative Bank National Flank Industries Ltd. and others, referred supra, it is mandatory to give details of principal and interest claimed in the Demand Notice. From the decision in re Ace Media Advertisers Pvt. Ltd and others Vs. Bank of Baroda and others and Jasmin K. Vs. State Bank of India and others, it is settled that determination of debt in adjudicatory process overrides the determination in non adjudicatory process and that if the claim made before the Civil Court fails, there cannot be any proceedings under the SARFAESI Act for the same claim.
25. This is what had happened in this case. Respondents filed Recovery Application in RA No.3441/2004 before the Learned Assistant Registrar of Co-operative Societies and Learned Assistant Registrar for the reasons recorded in the order held that claim cannot be entertained and rejected the Application. Revision Application in RA 193/2007 filed before Divisional Joint Registrar was also dismissed for non prosecution. Thereafter, that was not taken to next level of litigation by the Respondents. Therefore, adjudicatory process of determination of debt due to Respondents was decided against the Respondents. When that be the case, this Tribunal is in agreement with the submission of Learned Counsel for Appellants that Respondents cannot proceed against the Appellants under the SARFAESI Act, 2002, for the same debt due.
26. It is seen from the decision rendered by Hon’ble High Court of Bombay in re, the Abhyudaya Co-operative Bank Ltd. Vs. State of Maharashtra and others in Writ Petition No.2618/2008 on 04.04.2009 that Hon’ble High Court answered the question that, “whether either the MCS Act or the Multi-State Act either expressly or by necessary intendment make Section 154 of the MCS Act inapplicable quo proceedings instituted by societies which were subsequently converted into Multi-State Cooperative Societies?. The answer given was `no’. Therefore, there was strong indication that the legislature did not intend affecting pending proceedings upon conversion of a society into a multi state cooperative society.” Therefore, this Tribunal finds that submission of Learned Counsel for the Respondent Bank that on introduction of Multi State Cooperative Societies Act, proceedings under Maharashtra Cooperative Societies Act, 1960 cannot be continued, is untenable.
27. In view of the discussions held above, this Tribunal finds that the Respondents filed Recovery Application in RA No.3441/2004 before Learned Assistant Registrar and it was dismissed. The Revision Petition No. 193/2007 before the Divisional Joint Registrar filed against the order passed in Recovery Application in No.3441/2004, was also dismissed. Thus, this Tribunal, relying on the ratio laid down in the decision in Ace Media Advertisers Pvt. Ltd & Others Vs. Bank of Baroda, that determination of debt in adjudicatory process overrides the determination in non – adjudicatory process and that if the claim made before the Civil Court fails, there cannot be any proceedings under the SARFAESI Act for the same claim, is of the view that TSA No. 566/2016 filed by Appellants challenging the SAR.FAESI measures has to be necessarily be allowed by allowing this Appeal. That apart, in Sectionl3(2) Demand Notice, there is no segregation of the principal and interest due, which is required to be given as found in the decision of Sataswat Co.op. Bank Ltd. Vs. National Flank Industries Ltd. & Others.
28. In fine, this Appeal is allowed. Consequently, the order passed by Learned Presiding Officer, DRT-II, Mumbai, in TSA No. 566/2016 is set aside. TSA No. 566/2016 is allowed. Both the parties shall bear their own costs. All pending IAs, if any, stand closed.
(Dictated to PS (SPI)/Athistarnani, PS, transcribed by them, corrected, signed and pronounced by me in open court, this 6-h Day of January, 2026)
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