Dismissed

M/s.Chellammal Educational and Charitable Trust represented by its Managing Trustee Mr.v.Govindasamy v. City Union Bank Limited

DRT13 Sept 2022SA/264/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed an application challenging a re-tendered auction notice for a property sold due to want of bidders. The Tribunal held that no tenable infirmity was made out regarding the bank's procedure despite applicants' claims of financial distress and payment defaults.

What did the court decide?

SARFAESI Application No. 264 of 2022 stands dismissed without costs. Interim orders vacated.

M/s.Chellammal Educational and Charitable Trust represented by… — Banking and Recovery | DRT (2022)

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S.A. 264 of 2022 13.09.2022

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 13^th day of September, 2022

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

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SARFAESI APPLICATION No. 264 of 2022

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1. M/s. Chellammal Educational and Charitable Trust Rep. by its Managing Trustee Mr.V.Govindasamy No.129/11 Tanjore Road Keelapalur Ariyalur – 621 707 2. Mr.V.Govindasamy S/o. Mr.Varadharaj No.129, South Street Keelapalur Ariyalur – 621 707 ….Applicants

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Vs. City Union Bank Credit Recovery and Management Department “Narayana”, Administrative Office No.24-B, Gandhi Nagar Kumbakonam – 612 001 ….Respondent

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Counsels on record / appeared:

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Counsel for Applicants : M/s. Kaavya Silambanan Associates, K.Satish, Nithyavendhan Karunanidhi Counsel for Respondent : M/s. Subharanjani Ananth, S.Balasubramanian & R.Sowmya

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S.A. 264 of 2022 13.09.2022

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ORDER

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This SA is filed challenging the Re-Tender cum Auction Sale Notice dated 12.05.2022 issued by respondent bank scheduling sale to 02.06.2022 for recovery of a sum of Rs.8,40,29,873/-.

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Respondent bank 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 applicants that respondent bank has been initiating issuance of Sale Notice consecutively despite observing that there are no bidders for the property. Ld. Counsel for applicant submitted that they have been making payments regularly to the respondent bank but due to onset of Pandemic Covid-19 and consequent closure of Educational institutions during the national lockdown, applicants could not stick to their repayment schedule and only during the year 2021 students have started coming back to schools and were not regular in causing fee payments as most of the parents have lost their employment opportunities and so huge discounts in fee structure are thus contemplated, which is a situation where the applicants are helpless and had to forego major share of their income sources. Ld. Counsel further submitted that the meager fee received was spent for regular revenue expenditure like payment of salaries to the staff and other incidental expenses required for running the institution.

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Notwithstanding the above issues, applicants had deposited substantial amounts to the credit of their loan accounts, pursuant to the interim orders passed by this

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S.A. 264 of 2022 13.09.2022

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Tribunal in the earlier round of litigations. Ld. Counsel also has submitted that consequent issuance of sale notice frequently is one major factor which is impeding prospective purchaser for the property since they are all waiting for further reduction in the value of the building contrary to the valuation prevailing in the market in the nearby vicinity. Ld. Counsel submits that it is their endeavour to ensure that they cause the repayments to the respondent bank and seek regularisation of their loan account and then either to continue the same, if permitted by the respondent bank or in the alternative, approach yet another financial institution to meet their requirements. Ld. Counsel further prays time for prosecuting their settlement terms with the respondent.

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Whereas Ld. Counsel for respondent bank submitted that applicants are chronic defaulters with the respondent bank and despite promising to regularise their loan account by causing remittances, applicants are willfully not repaying the amounts and are diverting the funds for their benefits. It is not correct to say that no proper valuation of the property has been done and that the reserve price is being reduced on whimsical grounds. Ld. Counsel submits that respondent bank has been following all the procedures as warranted under law and has also demonstrated the actions taken by the respondent bank while issuing the impugned sale notice, which was found to be in accordance to law. Ld. Counsel submits that except for empty promises of causing remittances, applicants have been willfully evading payments and owing to their nonpayment in terms of their undertakings and promises from time to time, respondent bank is constrained to initiate SARFAESI measures to ensure recovery of their dues. Ld. Counsel further submits that despite their best efforts and putting a realistic reserve price, respondent bank is yet to identify any prospective purchaser for the property,

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S.A. 264 of 2022 13.09.2022

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owing to which the present sale notice has become infructuous for want of bidders. Ld. Counsel submits that applicants continued their default even after approaching this Tribunal and has not caused any payment till date even after issuance of the impugned sale notice. There are no merits in the present application of the applicant and is only filed to drag on the recovery process of respondent bank. Submitting so, Ld. Counsel prayed for an appropriate order.

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Both Ld. Counsels for the respective parties concede that no sale had taken place on the scheduled date for want of bidders and therefore the impugned sale notice has become infructuous.

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In the circumstances, as applicants could not make out any tenable infirmity calling for interference by this Tribunal in the procedure adopted by the respondent institution while issuing the impugned sale notice, there are no merits in the present SA and the same is liable to be dismissed.

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Accordingly, this 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 PS, transcribed by her, corrected, signed and pronounced by me in Open Court, on this the 13^th day of September, 2022)

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

M/s.Chellammal Educational and Charitable Trust represented by its Managing Trustee Mr.v.Govindasamy v. City Union Bank Limited

Case brief

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M/s.Chellammal Educational and Charitable Trust represented by its Managing Trustee Mr.v.Govindasamy v. City Union Bank Limited

Case brief

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