Allowed

M s Sri Bhavani Traders v. Canara Bank

DRT13 Feb 2023SA/340/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the SARFAESI application after setting aside the impugned sale notice because the bank failed to prove compliance with statutory requirements for affixture and acknowledgment of service.

What did the court decide?

Sale notice dated 24.06.2022 set aside; SA allowed without costs; interim orders vacated.

M s Sri Bhavani Traders versus Canara Bank — Banking and Recovery | DRT (2023)

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S.A. 340 of 2022 13.02.2023

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 13^th day of February, 2023

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

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SARFAESI APPLICATION No. 340 of 2022

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1. M/s.Sri Bhavani Traders

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No.941, TVS Colony 54^th Street, Anna Nagar West Extn Chennai – 600 101

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2. Mrs.Bhavani

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No.941, TVS Colony 54^th Street, Anna Nagar West Extn Chennai – 600 101 ….Applicants

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Vs.

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The Authorised Officer / Assistant General Manager Canara Bank Chennai Mount road Branch #787 Royala Towers Annasalai Chennai – 600 002 ….Respondent

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Counsels on record / appeared:

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Counsel for Applicants : M/s. J.Gowrisankar, M.Saravanakumar & A.Lakshminarayanan Counsel for Respondent : M/s. M.Gopi

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ORDER

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This SA is filed challenging the E-Auction Sale Notice dated 24.06.2022 issued

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by respondent bank scheduling sale to 27.07.2022 for recovery of a sum of Rs.3,56,00,000/-

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S.A. 340 of 2022 13.02.2023

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This matter is coming up today for enquiry and final disposal, as applicants had not established any bonafides while laying challenge to the impugned sale notice. Mr.Narendran, Representative counsel, represented that they might be granted time for adding the Auction purchaser when the Ld.Counsel for the respondent bank submitted that, no sale had taken place on the scheduled date for want of bidders and that the sale notice impugned has become infructuous. Representative counsel for applicant had sought time for his senior to represent the matter. Despite passing over, only representative counsel is present.

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Heard Ld. Counsel appearing for the respondent bank.

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It is the case of 1^st applicant, an MSME company engaged in Garments business, represented by its proprietor, 2^nd applicant, had availed credit facility from respondent bank. It is submitted that applicants had supplied finished garments to one of its customers and the said customer del ayed their payment, due to which applicants committed default in repaying their instalments. It is further submitted that applicants sent a detailed representation to respondent bank for restructuring their loan account. However, without considering the same, respondent bank classified the loan account of applicants as NPA and issued demand notice, which is not served upon 2^nd applicant herein and the amount demanded is grossly inflated and without any basis or justification. It is submitted that respondent bank proceeded further and issued possession notice followed by the impugned sale notice dated 24.06.2022 and the same was not published in leading newspapers.

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S.A. 340 of 2022 13.02.2023

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Whereas Ld. Counsel for respondent bank submitted that applicants availed various credit facilities to the tune of Rs.3,03,59,485/- for improvement of the business during the year 2018. It is submitted that applicants committed default in repayment of their dues. Despite repeated requests, as applicants did not come forward to repay their loan dues, respondent bank had classified the loan accounts as NPA on 29.06.2021. Respondent bank issued Demand Notice under Section 13(2) of SARFAESI Act dated 22.07.2021 which was received by the borrowers on 28.07.2021. As applicants / borrowers did not come forward to clear the dues even after expiry of statutory period, respondent bank issued Possession Notice dated 11.10.2021 claiming a sum of Rs.3,09,87,145/- which was affixed in the conspicuous place of the secured assets and published on 16.10.2021 in two leading newspapers (The Times of India and Dinakaran) as warranted under law.

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It is submitted that respondent bank had obtained a valuation report from a registered valuer on 20.11.2021 in compliance of SIE rules. It is further submitted that respondent bank issued a sale notice on 24.06.2022 fixing the sale on 27.07.2022, claiming a sum of Rs.3,56,00,000/-, which was duly served and acknowledged by applicants on 25.06.2022. The said sale notice was published in two leading newspapers (The New Indian Express and Dinakaran) on 26.06.2022 as warranted under law. Ld.Counsel admits that photographs of affixture of the impugned sale notice is misplaced in the bank and hence could not be filed into the Tribunal.

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From the foregone submissions, it is evident that respondent bank could not furnish acknowledgements of service of possession notice to applicants and had also

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S.A. 340 of 2022 13.02.2023

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admitted that the photographs of affixture of the impugned sale notice is not available with the respondent bank. Since, respondent bank could not establish its procedure as warranted under law while issuing the impugned sale notice dated 24.06.2022 under challenge in this SA, the same is hereby set aside.

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Consequently, SA stands allowed, however without costs. Interim order, if any granted and subsisting till this day stands vacated and all other IAs, if any pending stand closed. Liberty be with respondent bank to proceed further in accordance to law if the default of the borrower continues.

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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 guidelines.

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(Dictated to Stenographer (DD), transcribed by her, corrected, signed and pronounced by me in Open Court, on this the 13^th day of February 2023)

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Sd/-

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(GANAPATHI K.R.K) PRESIDING OFFICER

M s Sri Bhavani Traders v. Canara Bank

Case brief

What is this about?

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M s Sri Bhavani Traders v. Canara Bank

Case brief

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What did the court decide?

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