Dismissed

Suseel v. Indian Bank

DRT4 Aug 2022SA/132/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the applicant to redeem the mortgaged property within four weeks or by 31.01.2023. While confirming the sale procedure followed by the bank, it permitted redemption subject to paying the full debt and interest to the auction bidder, allowing the bank to refund the 25% deposit to the bidder thereafter.

What did the court decide?

Applicant permitted to redeem mortgage by 31.01.2023 by paying full debt and 10% p.a. interest to auction bidder for the deposit period; bank to refund bidder dépôt thereafter.

Suseel versus Indian Bank — Execution and Attachment | DRT (2022)

SA No.132/2022

04.08.2022

IN THE DEBTS RECOVERY TRIBUNAL – III, CHENNAI

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Dated this the 04^th day of August, 2022

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Present: Shri Ganapathi K.R.K. Presiding Officer

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S.A. No. 132 of 2022

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Smt. S. Suseela, W/o N.S. Srinivasan, G-61/C, 12th Street, Anna Nagar East, Chennai – 600 102 ….Applicant

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The Authorised Officer, Indian Bank, Stressed Assets Management Branch, No.55, Ethiraj Salai, Wellington Estate, 2^nd Floor, Chennai – 600 008 ….Respondent

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Counsels on record / appeared:

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Counsel for Applicant : M/s RKM Suresh Counsel for Respondent : M/s. C. Ramaiah

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O R D E R

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This SA is filed challenging the Sale held on 14.03.2022 pursuant to Sale Notice dated 24.02.2022 issued by respondent bank, for recovery of a sum of Rs.5,45,92,940.61p

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Respondent bank, who was on caveat, had entered appearance and filed counter and typed set of documents evidencing the actions taken by them under the Act.

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Heard Ld. Counsels appearing for the respective parties. It is the case of applicant that she stood as guarantor / mortgagor to secure the credit facilities availed by the borrower M/s PNC Enterprises and offered her immovable property as security for due repayment of loan thus availed. It is the case of applicant that

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04.08.2022

though borrower was regular in repayment of installments, due to heavy business loss and financial crunch, borrower could not able to pay few installments resulting in initiation of recovery measures under SARFAESI Act by respondent bank. It is the case of applicant that respondent bank failed to serve mandatory demand notice and possession notice to all borrowers and guarantors before issuing the subject impugned sale notice and that there is no clear 15 days sale notice that is served upon them. It is further submitted that respondent bank failed to affix the sale notice and obtain proper valuation as prescribed under Rule 8(5) of SIE Rules, 2002, which clearly shows that the reserve price fixed by the respondent bank is much lower when compared to the market value of the said property.

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Whereas Ld. Counsel for respondent submitted that availing of credit facility, execution of loan and security documents and default thus committed are all admitted by applicant. Despite repeated requests, as applicant did not come forward to repay the dues, respondent had classified the loan account as NPA on 30.11.2018 and issued Demand Notice under Section 13(2) of SARFAESI Act dated 10.12.2018 claiming a sum of Rs.3,69,21,120/- due as on 09.12.2018 from applicant, which was received by applicant in person on 11.12.2018. As neither borrower nor applicant did not come forward to clear the dues even after expiry of statutory period, respondent issued Possession Notice under Section 13(4) of the Act dated 12.02.2019, which was duly served to applicant on 21.02.2019, affixed in the conspicuous place of the secured asset and published in two leading newspapers as warranted under law. Ld. Counsel for respondent submitted that even after issuance of possession notice, as they did not show any inclination to remit the outstanding dues, respondent bank issued Sale Notices dated 02.09.2021, 05.11.2021 and 07.12.2021 respectively, however all the aforesaid sale notices failed as no sale

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could take place on the scheduled date for want of bidders. It is submitted that applicant did not choose to challenge any of the above said sale notice, including the subject impugned sale notice and was only watching over the fence for the outcome of subject impugned sale notice and thereafter had preferred this SA challenging the sale held on 14.03.2022, only to stall the recovery process of respondent bank.

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Ld. Counsel for respondent bank submitted that sale was held on 14.03.2022 and the property was sold for Rs.2,50,50,000/- and that highest bidder had already remitted 25% of the bid amount / sale consideration and vide his letter dated 29.03.2022 had requested for extension of time, which is being accepted by respondent bank in accordance to law. It is submitted that there are no infirmities in the procedure adopted by the respondent while initiating measures under Act and prayed for passing necessary orders.

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Ld. Counsel for applicant vide their memo dated 24.03.2022 had submitted that applicant is willing to pay a sum of Rs.76 lakhs within three days from the date of order and the balance sum of Rs.89,75,000/- within 15 days thereafter. It is the case of applicant that when respondent bank can extend time for auction purchaser, the same time may be extended to the applicant, who is ready and willing to redeem the property by causing payments in terms of her undertaking memo.

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On perusal of the records, it is evident that applicant had exhibited her readiness to remit the outstanding dues towards closure of loan account, however did not report on any further payments. Whereas, respondent bank admitted to receipt of 25% of the bid amount from the auction bidder but could not proceed further in view of pendency of SA before this Tribunal. Ld. Counsel for applicant submitted that applicant is relying on the judgment of the Hon’ble High Court of

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Madras wherein it is held that single bidder is no bidder and to be treated only as a participant, who has contemplated to purchase the property at reserve price and that a sale concluded there upon for the reserve price cannot sustain under law. It is also strongly contested that applicant was not served with 15 days clear sale notice.

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Per contra, respondent bank had established that sale notice is duly served upon applicant on 26.02.2022 scheduling sale to 14.03.2022 as can be evidenced from the acknowledgment card filed along with typed set of documents and reiterate their contention that provisions of the Act do not restrain or restrict the secured creditor from confirming the sale in favour of a bidder who is willing to purchase the property at reserve price or any other higher amount. Ld. Counsel for respondent bank also reiterated that no sale can be held for any price below the reserve price only and the Act is very clear about it that sale can be concluded at the reserve price for the bidder, who has bid the amount.

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From the respective submissions of both parties, it is evident that respondent bank had followed the procedure as warranted under law while applicant’s contention that sale of the secured asset is concluded for a very low price at Rs.2,50,50,000/- for recovery of a sum of Rs.5,45,92,940/- is grossly damaging their living itself, as the property is a residential dwelling unit.

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In the circumstances, as applicant had expressed their willingness to redeem the property, applicant is permitted to do so within four weeks from the date of receipt of this order and in any case not later than 31.01.2023 as detailed below.

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In the event, as applicant intend to redeem the mortgage in terms of their undertaking memo, applicant will be

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(i) liable for the entire debt due to respondent bank or for any other amount as can be mutually acceptable on negotiation between parties;

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(ii) liable for interest to the auction bidder (over the 25% of the bid amount remitted) at the rate of 10% p.a. (simple) from the date of deposit till the date of actual repayment.

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(iii) On applicant complying with (i) above, first respondent bank is permitted to refund 25% amount to the auction bidder together with interest. Interest is recoverable from applicant as stated in (ii) above.

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(iv) All the above actions to be completed by both parties by or before 31.01.2023 and in the event of applicant not exercising their right of redemption by discharging the entire debt due to respondent bank by the said date, respondent bank is permitted to confirm the sale in favour of auction bidder by receiving the balance sale consideration and proceeding further in accordance to law.

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Interim stay, if any granted and subsisting till this day stands vacated. All other interlocutory applications, pending if any stands closed.

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With the above directions, this SA stands disposed.

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A copy of the order be communicated to the parties concerned as per extant guidelines.

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(Dictated to PS, transcribed by her, corrected, signed and pronounced by me in Open Court, on this the 04^th day of August, 2022)

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Sd/- (GANAPATHI K.R.K) PRESIDING OFFICER

Suseel v. Indian Bank

Case brief

What is this about?

What did the court decide?

Suseel v. Indian Bank

Case brief

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