'Bank Has Symbolic Possession Of Mortgaged Properties': Gujarat High Court Refuses To Cancel 2016 Bail Order For Non-Repayment 10 Cr Loan

Justice Vipul Pancholi noted that an FIR had been filed against Respondent No. 2 alleging that the Accused had obtained a loan of INR 10,00,00,000 and on the date of filing of FIR, an amount of INR 8,42,93,640 was outstanding. It was contested by the Respondent that an undertaking had been given in the court for selling certain properties for the purpose of repayment basis which the Sessions Court had granted anticipatory bail on certain terms. This order of the Court had already been executed and therefore, the application ought to be rejected.

It was also averred that the investigation had been completed and chargesheet had already been filed. The Supplementary Charge-Sheet was pending before the Additional Chief Judicial Magistrate. A further contention was that a final order would be passed by the Arbitrator, the sale consideration of the properties would be paid to the Applicant-Bank. Therefore, the Applicant-Bank had 'symbolic possession' over the properties by initiating proceedings under SARFAESI Act.

Taking into account these contentions, the High Court noted that the Respondent-Accused had been released after the 2016 order and therefore, the impugned order had been 'implemented, executed and exhausted.' As regards the undertaking for the sale of properties by the Applicant-Bank, the High Court opined that the Respondent had not undertaken to pay any particular amount within any stipulated period. Justice Pancholi held:

"Here, it is pertinent to note that applicant Bank has already initiated the proceedings under the SARFAESI Act and the symbolic possession of certain units / properties has already been given to the applicant-Bank, long back. However, during the pendency of the present proceedings, i.e. for the period of almost six years, the applicant-Bank has not proceeded further in that regard. Thus, in view of the fact that the applicant-Bank has already initiated the appropriate proceedings, the concerned Court shall pass appropriate orders, after considering the facts and the material placed before it."

Accordingly, the Bench dismissed the application.

Case Title: NASIK MERCHANTS' CO-OPERATIVE BANK LTD. V/s STATE OF GUJARAT & 1 other(s)

Case No.: R/CR.MA/33603/2016

Citation: 2022 LiveLaw (Guj) 259

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