Allowed

K kovalane v. Indian Overseas Bank

DRT13 Apr 2023SA/204/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the applicant's Sale Application challenging a bank's sale notice for property auction. The court quashed the notice because the bank failed to serve it at least 15 days before the auction date, violating statutory procedure. The sale stand allowed but without costs, permitting the bank to retry if procedural defaults are cured.

What did the court decide?

Sale Application allowed; sale notice vacated; bank permitted to proceed further if borrowers remain in default and mortgage validity is established.

K kovalane versus Indian Overseas Bank — Banking and Recovery | DRT (2023)

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S.A. 204 of 2022 13.04.2023

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 13^th day of April, 2023

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

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SARFAESI APPLICATION No. 204 of 2022

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K.Kovalane

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S/o. Late Kandibane 151, Ground Floor Bahoor Road Mangalam Post Villianur Uruvaiyar Pondicherry – 605 110 ….Applicant

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Vs.

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1. The Authorised Officer

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Indian Overseas Bank Reddiyarpalyam Branch No.106, Villianur Main Road Reddiyarpalayam Puducherry – 605 010

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2. P.Mohan

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H.No.26, Mangalam Main Road Uruvaiyar Pondicerry – 605 110

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3. K.Palani

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H.No.10, Bahour Road Uruvaiyar Pondicerry – 605 110 ….Respondents

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Counsels on record / appeared:

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Counsel for Applicant : M/s. R.Nandhakumar & S.Balaji Counsel for Respondent bank : M/s. Ananda Gomathy & R.Roshan

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S.A. 204 of 2022 13.04.2023

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ORDER

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This SA is filed challenging the Sale Notice dated 11.04.2022 issued by respondent Bank scheduling sale to 27.04.2022, for recovery of a sum of Rs.74,20,696/-.

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Respondent bank entered appearance and filed their 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.

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It is the case of the applicant that he is a 3^rd party to the proceedings and that he has no dues payable to the respondent bank or recoverable by the respondent bank from him as he has no privity of contract. It is his further contention that he is a 1/8^th shareholder in the mortgage property which is a joint holding and that no sale could take place without his express consent in the matter and since he has no intention to dispose off his schedule of property he laid the present challenge to the contemplated sale scheduled to 27.04.2022 issued by the respondent bank for recovery of a sum of Rs.74,20,696/-. It is the further case of applicant that the property is mortgaged by his father who is only a joint holder of the property along with him and his other brothers and sisters. It is the further case of applicant that without the consent and permission of the other shareholders, the purported mortgage being claimed by respondent bank is not valid and tenable under law and hence the actions of the respondent bank is liable to be set aside. Ld.Counsel for applicant also submits that respondent bank has not followed the procedure as warranted under law and that there is no 15 days notice also

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S.A. 204 of 2022 13.04.2023

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that is served upon either the borrower or the guarantors and therefore had violated the provisions of law.

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Whereas Ld.Counsel for respondent bank had filed their counter and typed set of documents evidencing their actions. Ld. Counsel for respondent bank had demonstrated their actions through their typed set of documents. On perusal of the same it is observed that the impugned sale notice dated 11.04.2022 could be served only on 16.04.2022 while the sale is scheduled to 27.04.2022 which concludes that there is no 15 days time between the service of sale notice and the date of auction. Respondent bank despite taking several adjournments to confirm that the sale notice has been served in a proper manner as warranted under the act could not furnish the same. Hence the contention of applicant, although a 3^rd party herein, that the respondent bank has not followed the procedure as warranted under law while issuing the impugned sale notice, notwithstanding his contention with regard to invalid mortgage also, are sufficient grounds to allow this SA.

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In the result, as respondent bank could not establish its wires as warranted under law while issuing the impugned sale notice, the present SA is liable to be allowed and accordingly, SA stands allowed however without costs. Respondent bank will be at liberty to proceed further in accordance to law if the default of the borrowers continues and if they are able to establish contrary to the contentions of applicant herein with regard to the validity of their subsisting mortgage.

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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. 204 of 2022 13.04.2023

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With the above directions, 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 Stenographer (DD), transcribed by her, corrected, signed and processed through e-drt, on this the 13^th day of April, 2023)

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Sd/-

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(GANAPATHI K.R.K) PRESIDING OFFICER

K kovalane v. Indian Overseas Bank

Case brief

What is this about?

What did the court decide?

K kovalane v. Indian Overseas Bank

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

Case details

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