Dismissed

Kash Ind Roller Flour Mill v. State Bank of India

DRT22 Aug 2023SA/183/2023

Case brief

AI extract

What is this about?

Allowed an amendment to disclose prior litigation but dismissed the SARFAESI appeal. The appellant challenged the auction sale, alleging fraud via a wrong date in the notice and undervaluation. The Tribunal held clerical errors do not vitiate proceedings and upheld the sale.

What did the court decide?

The Special Appeal No.183/2023 is dismissed dismissing the nullity regarding date errors in sale notice and valuations.

Kash Ind Roller Flour Mill versus State Bank of India — Arbitration | DRT (2023)

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SA No.18312023

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARII

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SA No.l83 of 2023 IWs Kash Ind Roller Flour Mills Versus State Bank of India

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22.08.2023 Item No.57

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Present:

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Sh. Sanjiv Gupta, Counsel for the Applicant.

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Sh. Devender Rattan, Counsel for respondent bank alongwith Shri Rajesh Malik, AGM Law, Shri Inderpreet Singh, Deputy Manager and Dilbag Reddy, Authorized Officer, State Bank of India. Sh. Pranav Kohli, Senior Advocate alongwith Sh.Arun Dev, applicant in IA No.77 012023.

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Heard on the application for amendment

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Heard on the application for amendment of SA No.l83/2023, filed by the applicant. It is alleged in the amendment application that inadvertently, applicant has not disclosed the earlier litigation, inter se the parties, before the Munsif Court; the Hon'ble J&K High Court and earlier SA No.11212022, which was dismissed by this Tribunal, in the present SA. Accordingly, applicant be allowed to amend the SA to incorporate the above facts.

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Mr.Devender Rattan, counsel for respondent bank has made a statement at the bar that he does not want to file any reply to the amendment application as well as amended SA. He further states that subject to all just grounds that may be available to the bank, the application may be allowed-. However, it be considered that applicant deliberately concealed these facts from this Tribunal.

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In view of the above, the application for amendment is hereby allowed, subject to all just grounds that may be available to the Amended SA is on the record.

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Page I of5

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SA No.1 83/2023

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Heard on amended SA No.183/2023

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In the SA, applicant has alleged that bank had issued sale notice for auction of the property on 20.06.2023.In the notice sent to him, the auction date was mentioned as 10.03.2023, whereas, the auction was fixed up for 20.06.2023.I1 is alleged that applicant got the property valued from its valuer on 04.06.2022, who assessed the value of the property at Rs.55,67,50,000/-. However, bank had fixed the reserve price of the secured assets at Rs.30.22 crores in respect of the immovable property. Though, applicant has alleged other facts, yet, they are not relevant. In fact, counsel for the applicant confined himself to the above two contentions.

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Bank, in its reply, has alleged that bank had issued auction notice on 26.05.2023 (Annexure R-5) wherein it had mentioned that the publication regarding the sale of the property would be issued on 03.06.2023 in the newspapers and the auction would be held on 20.06.2023.It is stated that on 03.06.2023 the bank sent letter/intimation to the applicant wherein inadvertently date of auction was wrongly mentioned as 10.03.2023 instead of 20.06.2023. However, in the email which was sent to the applicant, it was mentioned that the auction would be held on 20.06.2023.I1 is stated that bank has properly conducted the auction. Regarding the valuation, it is stated that the valuation produced by the applicant was not done by the approved valuer of the bank. The valuation report which has been produced by the applicant may have been prepared by the approved valuer of other bank. Arvinder At'wal, the valuer, is not the approved valuer of Bank of India. It is alleged that bank got the property valued from approved valuers. Out of three valuations obtained by the bank, bank fix the reserve price at highest valuation of Rs.30.22 crores. However,

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Page 2 of5

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SA No.18312023

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property was sold for Rs.30.24 crores. Accordingly,^{it is allegedthat there} is no merit in the^present SA^{andthe same be dismissed.}

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I have heard Mr.Sanjiv Gupta,^{counsel for the applicant and} Mr.Devender Rattan, counsel^{for the respondent bank.} 7. Mr.Gupta has submitted that^{bank has played fraud with the} applicant as in the notice^{issued by the bank, the date has been wrongly} mentioned as 10.03.2023. However,^{the property was sold on20.06.2023.} The notice was not given to^{the applicant. Further, the bankhad not got the} property valued properly. As^per the^{valuationpreparedby the applicant,} the value of the property^{is Rs.55,67,50,000/-.However,the bankhas sold} the property at athrowaway^{price of Rs.30.22 crores.Mr.Guptaarguedthat} in these circumstances, the auction^{be set aside.}

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Per contr{, Ir[r.Devender Rattan,^{counsel for the respondent bank} has argued that applicant has^{concealed the facts from this Tribunal.} Applicant had eaflier filed SA^{No.ll2l2\22,which was dismissedby this} Tribunal, vide orper dated 04.07.2022He further argued that bank^issued notice to the applicant on^26.05.2023 (Annexure R-5) informing it that auction notice vfould be^{published on 03.06.2023for the auction on} 20.06.2023. The hotice was duly^{served upon the applicant.On 03.06.2023,} the bank again s{nt I letter/intimation^{to the applicantthat auction would be} held on 20.06.20P3. However,^{in the letter the date of auction was wrongly} mentioned u, tOlOf .Z023 instead of^{20.06 .2023.However, in the email it} was duly informed that the auction^{wouldbe held on20.06.2023. Applican} was not misled b! *y fact. Applicant^{wants to take undue advantageof th} clerical error in t[re intimation^{notice dated 03.06.2023 of the bank. Further,} the bank had^got the properfy valued from three valuers.^The highest valuation given by the valuer was taken as reserve^{price and the} property

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Page 3 of5

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SA No.18312023

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was auctioned at the said price. Mr.Devender Rattan submitted^{that there is} no merit in the present SA and the same be^dismissed.

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I have considered the rival contentions.

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I would come to the impugned^{SA a little later. Some background} facts be given first. Earlier,^{applicant had filedSA No.1l2l2022,whetein it} had challenged the notice^{issuedunder Sectionsl3(2) and 13(4) and other} SARFAESI^{proceedings.However,vide order dated 04.07 -2022, the said} SA was dismissed by^{this Tribunal,on merits. The bank had issuedauction} notice on 26.05.2023^{to the applicant stating that the property would be} auctioned on^{20.06.2023andnotice would be published in the newspapers} on 03.06.2023.^{Accordingly, on 03.06.2023 bank again sent an email to the} applicant intimating^{that the propertywould be sold on 20.06.2023. The} auction took^{place on20.06.2023andthe sole bidder gave bid of Rs.30.24} crores for the^{immovable property.Admittedly, it was not the first sale but} fifth attempt by the^{bankto sell the property and as per law only15 days'} notice was required^{to be given.}

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I 1. As far^{as the intimation notice is concerned, the date was wrongly} mentioned^{as 10.03.2023 instead of 20.06.2023,Hon',b1e supremecourt in} Iv{/s L & T Housing^{FinanceLimited versus }ws TrishulDevelopers and} another has held^{that SARFAESI proceedings cannotbe set asideon the} ground of some error^{here or there. In the case of L & T, notice had been} given to the borrower^{on Some wrong letter pad of the creditor.}

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As far^{as valuationis concerned,admittedly, the valuation which has} been produced^{by the applicant is not from the approvedvaluer of the bank'} As per bank, it^{had got the property valuedfromthree valuers approved by} it. The reserye^{price was fixed at the highest valuation given by the} approved valuer.^{The bankhadgiven notice to the applicant.Applicant} sufficient time^{to redeem its property.However, it did not come forward}

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Page 4 of5

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SA No.18312023

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deposit the amount due from him.^{As far as the auction is concerned,the} successful bidder has already^{deposited25% of the bid amount and bank} has granted time to the auction^{purchaser till 15.09.2023 to make the} payment. As per Act, bank can^{grant 90 days'time to the auctionpurchaser} to make the payment.^{Today, Mr. Devender Rattan has accepted the draft of} Rs.22,37,76,000/-, on^{behalfof the bank, as balance sale consideration,} from the successful^bidder.

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After having^{considered all the aspects of the case, I am of the} considered view^{that there is no merit in the presentSA and the sameis}

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hereby dismissed.

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IA No.770 of²⁰²³

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Mr.Pranav^{Kohli, counsel for the IA applicanthas madea statement}

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at the bar that^{he does not press the present application'Accordingly' all}

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other pending^{IAs, if any, are also disposed of'}

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File be consigned^{to record room after due}

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'-I, Chandigarh

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Pronounced^{in oPen court} Manoj122.08.2023

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Page 5 of5

Kash Ind Roller Flour Mill v. State Bank of India

Case brief

What is this about?

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Kash Ind Roller Flour Mill v. State Bank of India

Case brief

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What did the court decide?

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