Dismissed

SBI & Anr. v. Abijith S.Nair & Anr.

DRAT12 Sept 2023REGULAR APPEAL/44/2019

Case brief

AI extract

What is this about?

The Debts Recovery Appellate Tribunal dismissed the bank's appeal against setting aside a sale notice for a vehicle due to non-compliance with SARFAESI Rules regarding the mandatory 30-day gap and specific format for movable property notices.

What did the court decide?

The appeal filed by the State Bank of India was dismissed, and all pending interim applications were closed without order as to costs.

SBI & Anr. versus Abijith S.Nair & Anr. — Banking and Recovery | DRAT (2023)

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RA (SA) 44/2019

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT CHENNAI

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Dated the 12^th of September, 2023

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PRESENT: Hon’ble Mr. Justice S. Ravi Kumar CHAIRPERSON

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RA (SA) 44/2019

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(SA 248/2016 on the file of DRT-I, Ernakulam)

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Between

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State Bank of India,

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Represented by its Chief Manager,

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Retail Assets Centralized Processing Centre, Venkarath Tower, Bypass Junction,

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Palarivattom, Ernakulam, Kochi – 682 024.

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The Authorised Officer, State Bank of India, Retail Assets Centralized Processing Centre, Venkarath Tower, Bypass Junction,

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Palarivattom, Ernakulam, Kochi – 682 024.

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…… Appellants

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AND

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Abijith S. Nair, Aged 28 years, S/o K.V. Sivan Kutty Nair, Siva Vilasam, V.J. Varghese Lane, Muthirapadom Thaikkattukara P.O., Aluva, Ernakulam – 683 106.

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Naushad P.A., Pulikkanathu House, 3/213, New Road, Fort Kochi – 682 001. …… Respondents Counsel for Appellant : Mr. M.L. Ganesh Counsel for R1 : Mr. Sam Arul Prasad

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RA (SA) 44/2019

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O R D E R

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This Appeal is against Order dated 25.08.2017 of

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DRT-I, Ernakulam, in SA 248/2016.

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Brief facts leading to this Appeal are as follows:-

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First Respondent herein filed above referred Securitisation Application challenging Sale Notice dated 13.06.2015 issued by Authorised Officer of Appellant Bank contending that, said Notice, which is contemplated under Rule 6(2) of the Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as the Rules) is not in compliance with said Rule. It is further contended that said Notice is completely against the provisions of Rules, and for that reasons alone, the Sale has to be set aside.

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RA (SA) 44/2019

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Bank resisted said Application contending, it followed

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the Rules, and objection of first Respondent herein is not tenable.

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On a consideration of contentions and rival contentions of both parties, Tribunal below held that Sale Notice dated 13.06.2015 is not in accordance with SARFAESI Rules, and allowed the Securitisation Application by setting aside Sale Notice and consequential Sale conducted in pursuance of said Sale Notice. Aggrieved by said Order, present Appeal is preferred.

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Heard Advocate for Appellant Bank.

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Advocate for Appellant Bank submitted that Order of Tribunal below is contrary to law and principles of natural justice. He submitted that Authorised Officer has legal right to sell the secured asset for realization of money due from first Respondent herein. He submitted, Authorised Officer issued Notice under Section 13(2) of SARFAESI Act, 2002,

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RA (SA) 44/2019

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and thereafter, took possession of secured asset as per orders of CJM, on 09.04.2015. He submitted that Authorised Officer conducted the Sale on 17.07.2015 and second Respondent herein became the highest bidder, who paid the Sale price of Rs.3.76 Lakhs. He submitted considering these aspects, the impugned Order may be set aside.

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No arguments are advanced on behalf of Respondent No. 1 in spite of giving reasonable opportunity.

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I have perused material papers and impugned Order dated 25.08.2017.

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It is not in dispute that Sale dated 17.07.2015 is conducted in pursuance of Sale Notice dated 13.06.2015. First Respondent herein mainly contended that Notice dated 13.06.2015 is not in accordance with SARFAESI Rules, 2002. It is also not in dispute that secured asset is a movable property namely vehicle Volkswagen Vento bearing

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RA (SA) 44/2019

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Registration No. KL 41 G 935. For auction of movable assets, the Rule contemplated under Securitisation Rules is Rule 6(2) of Rules, 2002, and admittedly, the Notice dated 13.06.2015, referred to Rule 8(6) of Rules, 2002. This Rule 8(6) of Rules, 2002, is for Sale of immovable property. If the contents of Notice are satisfying with Notice contemplated under Rule 6(2) of Rules, 2002, then, the provision indicated, can be ignored. Rule 6(2) Notice has to be issued under Appendix II -A, which is as follows:

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“ [APPENDIX II-A]

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[Refer proviso to rule 6(2)]

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SALE NOTICE FOR SALE OF MOVABLE PROPERTIES

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E-Auction Sale Notice for Sale of Movable Assets under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 read with proviso to Rule 6(2) of the Security Interest (Enforcement) Rules, 2002.

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Notice is hereby given to the public in general and in particular to the Borrower (s) and Guarantor (s) that the below described movable property

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RA (SA) 44/2019

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hypothecated/pledged/charged to the Secured Creditor, the constructive/physical ---------------(whichever is applicable) possession of which has been taken by the Authorised Officer of ----------------------- Secured Officer, will be sold on "As is where is", "As is what is", and " Whatever there is" on ------------------------(mention date of the sale), for recovery of Rs.------------------ --------due to the ---------------------- Secured Creditor from -------- ------------------------------------------- (mention name of the Borrower (s)) and --------------------------- ------------------(mention name of the Guarantor (s)). The reserve price will be Rs----------------------- -------and the earnest money deposit will be Rs------------ -----------------. (Give short description of the movable property with known encumbrances, if any)

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For detailed terms and conditions of the sale, please refer to the link provided in ---------------------Secured Creditor's website i.e. www. (give details of website).

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Date: Authorised Officer Place:”

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Notice issued by Authorised Officer is extracted by Tribunal below. A reading of which indicate that Borrower is given 30 days time and cautioned that if the outstanding is

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RA (SA) 44/2019

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not cleared, Sale of asset will be carried out after expiry of 30 days from the said Notice. Admittedly, the Sale was held on 17.07.2015. From a reading of Notice dated 13.06.2015, after expiry of 30 days, i.e. after 13.07.2015, the Authorised Officer shall contemplate to sell secured asset under the provisions of the Act. As per Rule 8(6) of Rules, 2002, there shall be a gap of 30 days in between the Sale Notice and the Sale. Admittedly, the same is not complied, and Tribunal below, considered the Notice dated 13.06.2015 as a pre Sale Notice.

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From a reading of contents of Notice, I am of the view that Tribunal below is perfectly right in treating said Notice as a pre Sale Notice. As per Rules, 2002, the Sale Notice shall contain the date of Sale, time of Sale, place of Sale etc. But, Notice dated 13.06.2015, does not refer to any of these details. Considering these aspects and also relying on the judgements of Hon’ble Supreme Court and Hon’ble High Court of Mumbai, Tribunal below held that, Notice dated

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RA (SA) 44/2019

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13.06.2015 is not in accordance with Rules, and therefore, set aside the same and consequentially Sale held on

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17.07.2015. I do not find any wrong in the Order of Tribunal below.

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On a scrutiny of entire material, I am of the considered

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view that there are absolutely no grounds to interfere with the Order dated 25.08.2017 of DRT-I, Ernakulam and Appeal is devoid of merits.

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In the result : Appeal RA (SA) 44/2019 is dismissed. No

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order as to costs. All pending IAs, if any, stand closed.

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[Dictated to Athistamani, PS, transcribed by her, corrected, signed and pronounced by me in open court, this 12^th of September, 2023]

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[ Justice S. Ravi Kumar] CHAIRPERSON

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SBI & Anr. v. Abijith S.Nair & Anr.

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SBI & Anr. v. Abijith S.Nair & Anr.

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