Dismissed

Sri Venkatachalapathy Modern Rice Mills v. Idbi Bank Ltd.

DRT17 Apr 2023SA/141/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal, Chennai, dismissed the SARFAESI application challenging an E-auction notice. The court held the applicant could not prove procedural infirmities. The sale notice was declared infructuous due to insufficient interest from bidders.

What did the court decide?

SA dismissed; interim order vacated; Applicant's own pending applications closed.

Sri Venkatachalapathy Modern Rice Mills versus Idbi Bank Ltd. — Company and Corporate | DRT (2023)

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S.A.141 of 2023 17.04.2023

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IN THE DEBTS RECOVERY TRIBUNAL- III, CHENNAI

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Dated this the 17^th day of April, 2023

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

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SARFAESI APPLICATION No. 141 of 2023

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Sri Venkatachalapathy Modern Rice Mills, Rep. by its Partner B.Navakumar, Balakrishnan, Old T.N.Palayam Road, Abishegapakkam, Puducherry – 605 007. …. Applicant Vs. The Authorised Officer, IDBI Bank Limited, 115, Anna Salai, Saidapet, Chennai – 610 015. …. Respondent

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Counsels on record / appeared:

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Counsel for Applicant : M/s.P.Thiagarajan. Counsel for Respondent : M/s.Shivakumar & Suresh.

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ORDER

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This SA is filed challenging the E-Auction Sale Notice dated 03.02.2023 issued by respondent bank scheduling E-auction sale to 08.03.2023 for recovery of a sum of Rs.7,65,91,245.70p/-.

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Counter and typed set of documents filed on behalf of respondent bank. Copies served on the other side.

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Heard Ld. counsels appearing for both the parties.

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S.A.141 of 2023 17.04.2023

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It is the case of applicant that they had complied with the interim condition imposed by this Tribunal for payment of Rs.1,02,50,000/- which was the price for which the movables charged to SIDBI have been sold in favour of an auction purchaser on the date of sale being 08.03.2023. It is the further case of applicant that the machineries are worth more than Rs.2.5 crores, since they are all imported from Germany for high values and therefore the present sale by the respondent IDBI acting for and on behalf of SIDBI by bringing the entire property to sale, including the movables charged to SIDBI is highly wrongful and untenable under law. Ld.counsel submits that applicant is willing and ready to negotiate with respondent bank for an amicable settlement of his outstanding dues and had in fact extended an OTS proposal for Rs.5.5 crores by depositing an upfront amount of Rs.50 Lakhs in no lien account. However, since the proposal did not fructify within the specified time, applicant has requested for consideration of adjusting the said amount of Rs.50 Lakhs lying in the no lien account of IDBI bank be adjusted towards compliance of interim condition of this Tribunal. Ld.counsel for applicant had also submitted that a letter duly authorising the respondent bank to adjust the said amount of Rs. 50 Lakhs towards compliance has also been issued to respondent bank, which is acknowledged by respondent bank. It is also the case of applicant that they had approached respondent bank with a fresh proposal for settlement of the outstanding dues. Ld.counsel submitted that since applicant could not comply the interim condition within time as granted by this Tribunal,an IA seeking extension of time is also filed after serving notice on the other side. Ld.counsel also submitted that an application to implead SIDBI as a necessary party to this SA

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S.A.141 of 2023 17.04.2023

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proceedings, is also filed after serving notice on the other side and therefore prayed for appropriate orders in both the applications.

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Whereas Ld.counsel for respondent bank has submitted in detail that the present sale notice comprises of three schedule of properties, which included the movables and immovables and that there was a bid only for the movable machineries, while there are no bids for the immovable property. It is the case of respondent bank that the auction purchaser has bid for an amount of Rs.1,02,50,000/- for the movable machineries and had also deposited 25% of the bid amount. In view of the interim status quo order of this Tribunal and compliance of deposit of money by the applicant of the bid amount, respondent bank has not proceeded further in the matter.

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Ld.counsel submits that counter and typed set of documents evidencing their actions has been duly filed today after serving copy on the other side. Ld.counsel has demonstrated the actions of the respondent bank while issuing the impugned sale notice, which has become infructuous for want of bidders. Ld. counsel has submitted that a comprehensive sale notice including the machineries of the mortgaged rice mill have been scheduled for sale as a separate lot so as to derive the maximum benefit of bringing the properties to sale, however the attempts of the respondent bank failed for want of bidders. Ld. counsel for respondent bank submits that the amount recovered from the sale of movables are charged to SIDBI from whom necessary consent has been obtained by respondent bank even before bringing the movables for sale together with the immovables.

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S.A.141 of 2023 17.04.2023

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In the circumstances, since SIDBI is having the prior charge and respondent bank is only having second charge and as the value of the movables in terms of the contemplated sale notice has been discharged by applicant, it will be open for respondent bank and SIDBI to consider release of their charge over the movables or to take into consideration the amount recovered from the applicant towards their dues repayable. Submitting so, Ld.counsel prayed for appropriate orders in the sale notice since the very sale notice has become infructuous.

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In the circumstances, as applicant could not make out any tenable infirmities in the procedure adopted by the respondent bank while bringing the schedule mentioned mortgage and hypothecated properties to sale, there are no merits in the present SA and the same 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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Applicant will be at liberty to approach respondent bank as well as SIDBI for release of their charge, in view of their depositing the bid amount, in accordance to the rules of the secured creditors.

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With the above directions, this SA stands disposed.

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S.A.141 of 2023 17.04.2023

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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 17^th day of April, 2023)

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

Sri Venkatachalapathy Modern Rice Mills v. Idbi Bank Ltd.

Case brief

What is this about?

What did the court decide?

Sri Venkatachalapathy Modern Rice Mills v. Idbi Bank Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

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