Dismissed

M/s Yes Vee Brothers & Ors. v. a.O., State Bank of India

DRAT9 Mar 2023REGULAR APPEAL/179/2018

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal dismissed an appeal challenging an order under the SARFAESI Act. The court held that the bank duly served all notices and provided evidence of service and publication, which the appellants failed to rebut. The tribunal was found to have correctly followed the law.

What did the court decide?

Appeal dismissed; both parties bear their own costs; all pending incidental applications closed.

M/s Yes Vee Brothers & Ors. versus a.O., State Bank of India — Banking and Recovery | DRAT (2023)

¶1

RA (SA) 179 / 2018

¶2

IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

¶3

Dated the 9^th day of March, 2023

¶4

PRESENT: HON'BLE MR. JUSTICE S.RAVI KUMAR

¶5

CHAIRPERSON

¶6

RA (SA) 179 / 2018

¶7

( S.A.272/2017 on the file of DRT-III, Chennai)

¶8

Between

¶9

M/s. Yes Vee Brothers, Rep. by its Partner Mrs. S. Vasantha, No.331, Women Industrial Park, SIDCO, Thirumullaivoyal, Chennai – 600 062.

¶10

Mrs. S. Vasantha,

¶11

No.5, Imayam Colony, IInd Street, Anna Nagar West Extension, Chennai – 600 101.

¶12

Mr. R. Selvaraj, S/o Mr. Ramaswamy, No.5, Imayam Colony, IInd Street, Anna Nagar West Extension, Chennai – 600 101.

¶13

Mr. Manohar Selvaraj, S/o Mr. R. Selvaraj, No.5, Imayam Colony, IInd Street, Anna Nagar West Extension, Chennai – 600 101.

¶14

…Appellants

¶15

And

¶16

The Authorised Officer, State Bank of India, SME Brach, Ambattur, Ambattur Industrial Estate, 86A & B, II Main Road, Chennai – 600 058.

¶17

...Respondent

¶18

Counsel for Appellants : Mr. K.A. Ramakrishnan Counsel for Respondent : M.L. Ganesh

RA (SA) 179 / 2018

ORDER

This Appeal is against Order dated 11.01.2018 of DRTIII, Chennai, in SA 272/2017.

¶23

Brief facts leading to this Appeal are as follows:-

¶24

Appellants filed SA 272/2017 challenging Possession

¶25

Notice dated 25.09.2017 and Sale Notice dated 04.10.2017 contending; Bank has not followed the provisions of SARFAESI Act, 2002; Authorised Officer failed to issue Possession Notice dated 25.09.2017 to all Appellants as required under Rule 8(2) of Security Interest (Enforcement) Rules, 2002 (hereinafter called as Rules, 2002); Authorised Officer has violated Rule 8(1) of Rules, 2002; Authorised Officer failed to serve Notices issued under Sections 13(2) and 13(4) of SARFAESI Act, 2002, on all Appellants as required under law; Authorised Officer failed to publish Possession Notice in two leading newspapers, thereby violated the Rules,

¶26

¶27

RA (SA) 179 / 2018

¶28

2002; Respondent Bank failed to register secured assets with Central Registry as required under Section 26D of SARFAESI Act, 2002; Respondent Bank issued impugned E-auction Sale Notice dated 04.10.2017 and failed to serve it on all Appellants thereby not followed the mandatory provisions of SARFAESI Act, 2002; As Respondent Bank violated mandatory provisions of Rule 8(1), 8(2), 8(5), 8(6) and 8(7) and Rule 9 of Rules, 2002, Possession Notice dated 25.09.2017 and Sale Notice dated 04.10.2017 are liable to be set aside.

¶29

Bank resisted Application contending ; Demand Notice and Possession Notice were duly served on all Appellants; Demand Notice is acknowledged on 03.05.2017; Bank served Possession Notice on all Appellants and also affixed, on 25.09.2017; Possession Notice was acknowledged on 29.09.2017; Possession Notice is published in Tamil and English Dailies on 27.09.2017; Sale Notice dated 04.10.2017 was issued and affixed on the same date, which was acknowledged by Appellants on 07.10.2017; Sale Notice is

¶30

¶31

RA (SA) 179 / 2018

¶32

published in Tamil and English Dailies on 08.10.2017; Valuation Report dated 03.08.2017 is taken into consideration for fixing reserve price; as regards registering of secured of assets with Central Registry, Section 26D of SARFAESI Act, 2002, is not notified as on that date, and thereby, the same is inapplicable to the case on hand; Pursuant to Sale Notice dated 04.10.2017, for item No.(3) one bidder participated, for item No.(2), one bidder participated and no bidder for item No.(1); Item No.(2) of Sale Notice was sold for Rs.53.40 Lakhs and item No.(3) for Rs.5.685 Crores in auction held on 10.11.2017; reserve price for item No.(2) was fixed as Rs.17.40 Lakhs and reserve price for item No.(3) was Rs.5.68 Crores; Bank strictly followed all the provisions of Act and Rules made there under, and that Application is devoid of merits.

¶33

On a consideration of contentions and rival contentions of both parties, Tribunal below held that Bank followed procedure while issuing impugned Possession Notice and Sale Notice, and there are no violation, holding so, dismissed the

¶34

¶35

RA (SA) 179 / 2018

¶36

Application. Aggrieved by the same, present Appeal is

¶37

preferred.

¶38

3. Heard both sides.

¶39

Advocate for Appellants submitted that Order dated 11.01.2018 is without observing irregularities committed by Authorised Officer of Respondent Bank while invoking provisions of SARFAESI Act, 2002. He submitted Appellant Nos. 2 to 4, are partners of Appellant No.1 Firm, and Possession Notice is not served on Appellant Nos.2 to 4. He further submitted that Bank issued Possession Notice dated 28.07.2017, but without withdrawing the same, Authorised Officer issued Possession Notice dated 25.09.2017. He further submitted four item of properties are given as security, and out of them, first item is sold by Appellants themselves, and deposited proceeds into Bank, whereas, Bank sold item Nos.(2) and (3) in the sale conducted on 10.11.2017, and item No.(4) is not sold. He further submitted that Tribunal below failed to examine grounds (c), (f), (h), (i),

¶40

¶41

RA (SA) 179 / 2018

¶42

(k), (l) and (n) of Securitisation Application, therefore, Order of Tribunal below is liable to be set aside.

¶43

Advocate for Bank submitted that Bank followed all the provisions of SARFAESI Act, 2002, and when it is specifically pleaded that Possession Notice and Sale Notice are served on all Appellants by giving dates of service, there is no rejoinder from Appellants disputing the same. He further submitted that Bank originally issued Possession Notice on 28.07.2017, and withdrawn the same due to inadvertent mistake crept in it. Appellants, who filed Securitisation Application, challenging that Possession Notice, have not further prosecuted that Application. He further submitted Section 26D of SARFAESI Act, 2002, came into force in February, 2020, and as all proceedings in this case are much prior to that date, therefore, said provision has no application. He further submitted that Tribunal below gave ample opportunity to Appellants to redeem the properties, which is evident from its Order dated 14.12.2017, and as Appellants failed to utilize said opportunity, SA finally disposed of on

¶44

¶45

RA (SA) 179 / 2018

¶46

11.01.2018. There are absolutely no grounds to interfere with the Order of Tribunal below.

¶47

I have perused material papers and impugned Order dated 11.01.2018. Main ground on which Appellants challenged Possession Notice and Sale Notice is that there is

¶48

no service on all Appellants, but Bank in its Counter specifically pleaded that both Notices are served on all Appellants, and contended that Possession Notice was acknowledged on 29.09.2017, whereas Sale Notice was acknowledged on 07.10.2017, when such a specific plea is taken and Bank produced typed set of documents evidencing its actions, Appellants failed to rebut them. As rightly pointed out by Advocate for Bank, when Bank produced documents showing compliance of Rules, it is for Appellants to rebut them, and without producing any evidence, it is not open to Appellants to contend that Rules are not followed.

¶49

One of the contention of Appellants is that Possession

¶50

Notice and Sale Notice are not published in newspapers.

¶51

¶52

RA (SA) 179 / 2018

¶53

Bank in its Counter specifically pleaded that Possession Notice is published in Tamil and English Dailies on 27.09.2017, whereas Sale Notice is published in Tamil and English Dailies on 08.10.2017, this fact is also not disputed by Appellants by filing any rejoinder or producing any documents rebutting said statement of Bank, therefore, contention of Appellants that Bank has not published Possession Notice and Sale Notice, cannot be accepted and Tribunal below rightly rejected these grounds.

¶54

8. Advocate for Appellants submitted that Bank issued

¶55

Possession Notice dated 25.09.2017 without withdrawing earlier Notice dated 28.07.2017. In the Counter, it is specifically stated, Bank has withdrawn earlier Notice dated 28.07.2017, as there was inadvertent mistake crept in it. Even otherwise, Appellants failed to show any statutory provision which mandates withdrawal of earlier Notice before issuing second Notice. So, viewed either way, this objection is not tenable.

¶56

¶57

RA (SA) 179 / 2018

¶58

Advocate for Appellants contended that Tribunal below

¶59

failed to examine grounds (c), (f), (h), (i), (k), (l) and (n) of Securitisation Application. I have perused these grounds. They are in respect of non service of Possession Notice, non service of Sale Notice, non publication of Possession Notice, non publication of Sale Notice and not following Section 26 (D) of SARFAESI Act, 2002. No doubt, Tribunal below did not specifically deal with each ground separately, but arrived at a correct decision. As already referred to above, specific dates are given in respect of service and publication of Possession Notice and Sale Notice. With regard to Section 26(D) of SARFAESI Act, 2002, this provision was not in force

¶60

at that point of time, as it is notified in February, 2020. Therefore, argument of Advocate for Appellants is not tenable.

¶61

Though, Advocate for Appellants contended that

¶62

property was sold for lesser price, same cannot be taken into consideration, as Appellants have not challenged Sale dated 10.11.2017 in SA 272/2017. Tribunal below, by considering typed set of documents produced on behalf of Respondent

¶63

¶64

RA (SA) 179 / 2018

¶65

Bank, held that Bank followed mandatory provisions while issuing Possession Notice and Sale Notice. I do not find any wrong in the Order of Tribunal below.

¶66

For these reasons, I am of the considered view that there are no grounds to interfere with Order dated 11.01.2018 and Appeal is devoid of merits.

¶67

In the result: Appeal RA (SA) 179 / 2018 is dismissed. Both parties shall bear their own costs. All pending IAs, if any, stand closed.

¶68

[Dictated to Athistamani, PS transcribed by her, corrected, signed and pronounced by me in open court, this 9^th of March, 2023]

¶69

[Justice S. Ravi Kumar] CHAIRPERSON

¶70

M/s Yes Vee Brothers & Ors. v. a.O., State Bank of India

Case brief

What is this about?

What did the court decide?

M/s Yes Vee Brothers & Ors. v. a.O., State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

All orders in this case

Similar cases

S R Raja versus Indian Bank and Ors.

M s Arcil versus M s M v R Industry Ltd. amp Ors.

M s Arcil versus M s Indeco Builders Pvt. Ltd.

Tamilnad Mercantile Bank Limited versus Ms Anitha Devi

Ms Ganekar And Co. versus Canara Bank

V Kamalakannan versus State Bank of India