Dismissed

Sivakumar R v. Kotak Mahindra Bank Limited

DRT6 Dec 2022SA/250/2022

Case brief

AI extract

What is this about?

The Applicant challenged a Sale Certificate issued by the Respondent Bank following a concluded public auction. The Tribunal held that challenging a concluded sale certificate is not a cause of action under Section 13 of the SARFAESI Act. As the Applicants failed to demonstrate any infirmities and did not redeem the property, the application was dismissed.

What did the court decide?

Sale Certificate dated 25.03.2022 stands confirmed; SA dismissed without costs; Rule refused.

Sivakumar R versus Kotak Mahindra Bank Limited — Banking and Recovery | DRT (2022)

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S.A. 250 of 2022 06.12.2022

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 6^th day of December, 2022

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

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SARFAESI APPLICATION No. 250 of 2022

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1. Mr.R.Sivakumar

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S/o.Muthusamy Rangasamy Plot No.252, Door No.252, Sharma Nagar Revenue S.No.766 (Part) Vyasarpadi, TNHB

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Chennai – 600 039

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2. Mrs.S.Karthigai Selvi

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W/o.Mr.R.Sivakumar Plot No.252, Door No.252, Sharma Nagar Revenue S.No.766 (Part) Vyasarpadi, TNHB

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Chennai – 600 039 ….Applicants

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Vs.

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1. The Authorised Officer

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Kotak Mahindra Bank Ltd No.185, 2^nd street Anna Salai Chennai – 600 006

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2. Mr.Siddik

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S/o.Mr.Abubacker No.3, Sivagami 2^nd Cross Street Lakshmiamman Nagar Erukkancherry Kodungaiyur Chennai – 600 118

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3. Mr.K.K.Thirumurugan

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S/o.K.K.Krishnan R/O 72/E-D4, Sunshine Apartment West Jones Road, Saidapet Chennai – 600 015 ….Respondents

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S.A. 250 of 2022 06.12.2022

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Counsels on record / appeared:

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Counsel for Applicants : M/s. T.Sundar Rajan, Sathish Kannan & Suyesh Palande Counsel for 1^st Respondent : M/s. T.Sai Krishnan, R.Saravanan & A.Adhi Chakravarthy 2^nd and 3^rd respondents remained silent.

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ORDER

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This SA is filed challenging the Sale Certificate dated 25.03.2022 issued by 1^st respondent bank in favour of 2^nd and 3^rd respondents, for recovery of a sum of Rs.47,57,581/-.

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Heard Ld.Counsel appearing for the 1^st respondent bank. No representation for applicants even during 2^nd round of call work. Ld.Counsel for 1^st respondent bank has submitted that applicants are not being represented from the last two to three adjournments and therefore this Tribunal has directed 1^st respondent bank to file its dates and events to establish its vires while issuing the impugned sale certificate dated 25.03.2022.

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Ld.Counsel for 1^st respondent bank submitted that consequent upon conclusion of sale of the mortgaged property, applicants had preferred the present SA challenging the issuance of sale certificate.

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It is the case of 1^st respondent bank that applicants had availed loan from their assignor M/s.Capital First Limited, formerly known as Future Capital Holdings Limited, during the year 2011, and that equitable mortgage is created over the schedule mentioned property for due discharge of loan funds. The loan account was declared as NPA on 31.07.2015 owing to default committed by borrowers. M/s. Capital First Limited

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has assigned the loan account together with the underlying securities, in favour of 1^st

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S.A. 250 of 2022 06.12.2022

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respondent bank herein, in December 2015 through a duly registered Assignment Deed, which fact was intimated to borrowers by way of notice in February 2016. As borrowers did not cause any repayments, legal notice was issued in July, recalling the loan amount availed, by demand notice under 13(2) on 01.08.2016. As 1^st respondent bank despite sending the notices through RPAD did not receive any acknowledgements, demand notice was issued by way of substituted service by causing paper publication on 05.10.2016. It is submitted that 1^st applicant had exercised their right to raising objections under Sec.13 (3a) of the SARFAESI act to the demand notice of 1^st respondent bank on 02.09.2016. 1^st respondent bank has caused its reply on 09.09.2016, to the objections purported to have been raised by 1^st applicant. Ld.Counsel for 1^st respondent bank submits that, as the default of borrowers continued, 1^st respondent bank had issued a possession notice on 28.12.2016 and also filed an application as contemplated under Sec.14 before the Ld.CMM, Egmore, whereunder the said Cr.M.P.No.3438 of 2019 was allowed on 19.09.2019. Subsequent to the same, 1^st respondent bank had issued 1^st sale notice on 18.10.2021, but however the same has become infructuous for want of bidders. Second sale notice was issued on 24.01.2022 fixing the sale to 18.02.2022. 2^nd and 3^rd respondents herein have been declared as highest bidders and on receipt of entire bid amount of Rs.45,25,000/-, sale certificate was duly issued on 25.03.2022. Ld.Counsel for 1^st respondent bank submits that applicants had also challenged the earlier sale notice issued in October 2021 in SA No.182/2021 before this Tribunal which came to be dismissed as there were no tenable infirmities in the procedure adopted by 1^st respondent bank. Subsequent to it, applicants preferred this present SA challenging the sale certificate dated 25.03.2022 suggesting

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S.A. 250 of 2022 06.12.2022

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therein that they shall deposit Rs.50,66,640/- to the credit of their loan account for redemption of their property as that was the amount outstanding and due to the 1^st respondent bank. However, applicants failed to do so and their Counsel has given up Vakalat since applicants were not inclined to either settle the matter or proceed further in accordance to law. Pursuant to the orders of the Ld.CMM, Egmore physical delivery of the property which was handed over to 1^st respondent bank / secured creditor, possession is delivered on 17.06.2022 to auction purchasers and thus concluded the entire process.

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Applicants were given substantial time to establish their bonafides since the challenge is to a concluded sale and consequential issuance of sale certificate, which in fact is not a cause of action and coming under the measures as contemplated under Sec.13 of the SARFAESI act for borrowers to raise any issue or to maintain the SA. The issuance of Sale certificate, consequent upon conclusion of sale is a consequential administrative act and does not come within the meaning of measure as contemplated under Sec.13 of the SARFAESI act. However, the present SA has been numbered at the instance of applicants to provide them an opportunity of redemption on payment of the entire debt due to 1^st respondent bank together with all expenses, charges and cost so as to exercise their right of redemption. Applicants miserably failed to exercise any such due diligence of causing payment and had only misled this Tribunal to believe their contentions. As 1^st respondent bank has demonstrated its actions through its counter and typed set of documents, there are no infirmities in the procedure adopted by 1^st respondent bank while issuing the impugned sale certificate.

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S.A. 250 of 2022 06.12.2022

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As applicants could not make out any infirmities, there is no merit in the present application and also as applicants could not uphold their promises of discharge of debt the present SA is devoid of merits and hence is liable to be dismissed.

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Accordingly SA stands dismissed, however without costs. Interim order, if any granted and subsisting till this day stands vacated and all other IAs, if any pending stand 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

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guidelines.

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(Dictated to Steno (DD), transcribed by her, corrected, signed and pronounced by me in Open Court, on this the 6^th day of December, 2022)

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

Sivakumar R v. Kotak Mahindra Bank Limited

Case brief

What is this about?

What did the court decide?

Sivakumar R v. Kotak Mahindra Bank Limited

Case brief

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What did the court decide?

What the court decided

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