Dismissed

K Linkesh v. Tamilnad Mercantile Bank Limited

DRT17 Aug 2022SA/66/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal disposed of an applicant's SARFAESI application challenging a sale notice for non-appearing at auction. The court held the sale notice was valid, but the bid process having failed, the application became infructuous.

What did the court decide?

SARFAESI Application No.66 of 2022 was dismissed as the sale did not take place for want of bidders.

K Linkesh versus Tamilnad Mercantile Bank Limited — Banking and Recovery | DRT (2022)

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S.A. No.66 of 2022 17.08.2022

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 17^th day of August, 2022

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

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SARFAESI APPLICATION No. 66 of 2022

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K. Linkesh

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S/o.Kiberasampath No.31/36, Appadurai second Street Ayanavaram, Chennai - 600 023

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….Applicant

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Vs.

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The Branch Manager Tamilnad Mercantile Bank Ltd. Avadi branch Plot NO.7, G.D.Nadar Complex 60, Feet Road, TNHB Avadi Chennai – 600 054 ….Respondent

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Counsels appeared / on record:

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Counsel for Applicant : M/s.Prakash Goklaney Counsel for Respondent : M/s.K.N.Chinnakrishnan

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ORDER

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This SA is filed challenging the Sale Notice dated 19.01.2022 issued by respondent bank scheduling sale to 21.02.2022 for recovery of a sum of Rs.53,02,878.32p from applicant.

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Respondent bank entered appearance and file their counter and typed set of documents evidencing the action taken by them under the Act.

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S.A. No.66 of 2022 17.08.2022

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Heard Ld. counsels appearing for the respective parties. It is the case of applicant that he as proprietor of M/s KCP Industries had availed credit facilities to the tune of Rs.25 lakhs in the form of overdraft facility from respondent bank and offered his immovable property as security for due repayment of loan availed. Though applicant was regular in repayment of installments, due to financial crisis, he could not continue to remit EMIs, resulting in declaration of loan account as NPA by respondent bank. It is the case of applicant that no notice under Section 13(2) was received by applicant though respondent bank claims to have issued one on 16.02.2019 and served to applicant personally. It is the further case of applicant that possession notice dated 02.05.2019 was published in English and vernacular newspapers on 05.05.2019, which came to applicant’s notice only when physical possession of the property was taken by respondent bank. Subsequently, respondent bank had issued sale notice dated 19.01.2022 which is impugned in this SA scheduling sale to 21.02.2022 without following due process of law in fixing the reserve price.

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Whereas Ld. counsel for respondent bank submitted that availing of loan, execution of loan and security documents and default committed in repayment of dues are all admitted by applicant. Consequent upon default in repayment of installments, borrower’s loan account was classified as NPA on 31.01.2019 and issued demand notice dated 16.02.2019, which was duly acknowledged by borrower and guarantor son 23.02.2019 as evidenced from the acknowledgment cards produced along with typed set of documents. Despite receipt of demand notice, as applicant did not come forward to repay the dues within the statutory period, respondent bank took symbolic possession of the property on 02.05.2019 under Section 13(4) of the Act, which was

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S.A. No.66 of 2022 17.08.2022

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duly served to applicant and others, affixed and published in two newspapers on 05.05.2019 in compliance of mandatory provisions of the Act. It is further submitted that respondent bank issued first sale notice on 30.05.2019 scheduling sale to 15.07.2019, which did not materialize for want of bidders. Respondent bank obtained fresh valuation through its approved valuer on 03.01.2022 and issued 2^nd sale notice dated 19.01.2022 fixing auction on 21.02.2022 fixing the upset price at Rs.39 lakhs. The sale notice was duly served as evident from postal track report, affixed and published on 22.01.2022 in compliance of SARFAESI Act and Rules made thereunder.

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Ld. counsel for respondent submitted that there are no infirmities in the procedure adopted by the respondent while issuing the subject impugned sale notice and that the present SA is filed by applicant only to stall the recovery process initiated by the respondent.

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Both parties admit that sale did not take place on the scheduled date for want of bidders and hence the present SA has become infructuous.

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As there are no infirmities in the procedure adopted by the respondent bank while issuing the subject impugned sale notice, this SA is liable to be dismissed. 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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S.A. No.66 of 2022 17.08.2022

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With the above observations, 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 17^th day of August, 2022)

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

K Linkesh v. Tamilnad Mercantile Bank Limited

Case brief

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K Linkesh v. Tamilnad Mercantile Bank Limited

Case brief

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