Allowed

T Pugazhenthy v. Canara Bank

DRT21 Jun 2023SA/40/2022

Case brief

AI extract

What is this about?

This Debt Recovery Tribunal set aside an impugned sale under the SARFAESI Act due to a drastic and unexplained reduction in property valuation. The court directed the applicants to deposit a specified amount and granted liberty for further settlement.

What did the court decide?

Sale held on 30.11.2021 set aside; sale certificate cancelled; applicants directed to deposit Rs. 5 Lakhs; liberty granted for negotiation.

T Pugazhenthy versus Canara Bank — Banking and Recovery | DRT (2023)

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S.A.40 of 2022 21.06.2023

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 21^th day of June, 2023

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

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SARFAESI APPLICATION No. 40 of 2022

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1.	Mr.T.Pugazhenthy, S/o.V.Thirugnanam, No.4/157, North Street, Vayalur Village, Kunnam Taluk, Perambalur – 621 716.
2.	Mr.V.Thirugnanam S/o.Vadivel,
	No.4/157, North Street, Vayalur Village, Kunnam Taluk,
	Perambalur – 621 716. ….Applicants
	Vs.
1.	The Authorised Officer, Canara Bank, Agaramsigoor Branch, Arivagam Building, Ariyalur Road, Perambalur – 621 108.
2.	Mr.P.Sellammal, W/o.Palanimuthu,
	No.4/157, North Street, Vayalur Village, Kunnam Taluk,
	Perambalur – 621 716. ….Respondent Counsels on record / appeared:
	Counsel for Applicant : M/s.T.Seenivasan.
	Counsel for Respondent : M/s.M.Muthukumaran.

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S.A.40 of 2022 21.06.2023

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ORDER

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This SA is filed challenging the Sale Notice dated 29.10.2021 issued by respondent bank scheduling sale to 30.11.2021 for recovery of a sum of Rs.12,07,172.96p.

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2. Heard Ld. Counsels appearing for both the parties.

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It is the case of applicants that the property has been grossly undervalued and

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that the respondent bank officials are in collusion with the Auction purchaser, thereby reducing the value of the property by more than 60%. Ld. Counsel for applicants has demonstrated that the valuation of the property was at Rs.12 Lakhs and odd, while considering the loan in the year 2012, while the same was valued only at Rs.4.5 lakhs in 2022, when the sale is contemplated. Ld. Counsel submits that the borrowers are ready and willing to remit the reserve price fixed at Rs.4.6 Lakhs to be paid to the respondent, but however respondent bank did not accept the demand drafts and proceeded further with the impugned sale. Ld. Counsel submits that even today they are ready and willing to enter into any negotiated settlement with respondent bank and to establish their bonafides, they are ready to deposit Rs.5 Lakhs to the credit of their loan account by or before 30.06.2023.

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Whereas Ld. Counsel for respondent bank had filed their counter and typed set of documents evidencing their actions. Ld. Counsel submitted that there are no infirmities in the procedure adopted by the respondent bank while issuing the impugned sale notice and that the sale is also concluded in favour of Auction purchaser, who has remitted the entire amount. Ld. Counsel submits that however possession is yet to be

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S.A.40 of 2022 21.06.2023

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obtained from applicants and bank could not proceed further owing to the pendency of the present SA.

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Ld. Counsel for respondent bank submits that the valuer did not explain as to why the land value was considered at Rs.550 per sq.ft at the time of sanctioning of the loan, while it was only considered at Rs.44 per sq.ft while valuing the same property in the year 2022. Since the valuer has furnished a valuation of Rs.4.5 Lakhs only, respondent bank has fixed the reserve price at Rs.4.6 lakhs and since there was a bidder for the same, property was contemplated to be sold, as the bid amount was received from the Auction purchaser.

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From the foregone submissions, it is evident that there is no plausible reason that has been given by the valuer while giving the valuation, which has reduced the value of the property by more than 60% and it is strange that even the land is also valued substantially low, which is definitely a detriment to applicants herein. Notwithstanding the actions of the respondent bank, applicants are ready and willing to discharge their Educational Loan and to prove their bonafides are willing to deposit Rs.5 Lakhs to the credit of borrower’s loan account and enter into any negotiated settlement with the respondent bank for the balance amount. Since, respondent bank could not establish the low valuation fixed while bringing the property to sale, their actions, bringing the property to sale are hereby set aside.

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In the result, sale held on 30.11.2021 is hereby set aside. Consequently, sale certificate registered also stands cancelled. Applicant is directed to deposit Rs.5 Lakhs to the credit of their loan account by or before 30.06.2023 and also the interest to the

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S.A.40 of 2022 21.06.2023

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Auction purchaser at the rate of 10% per annum (simple), from the date of deposit till 30.06.2023.

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Parties will be at liberty to enter into any negotiated settlement, failing which liberty be with respondent bank to proceed further in accordance to law.

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Accordingly 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.

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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 21^st day of June, 2023)

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Sd/-

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(GANAPATHI K.R.K) PRESIDING OFFICER

T Pugazhenthy v. Canara Bank

Case brief

What is this about?

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T Pugazhenthy v. Canara Bank

Case brief

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