Dismissed

M s Hotel R E Grand Pvt. Limited v. Indian Overseas Bank

DRT21 Sept 2023SA/489/2022

Case brief

AI extract

What is this about?

In this SARFAESI application, the applicant challenged a sale notice issued by the bank, alleging undervaluation of the property and improper procedure. The Tribunal held that the applicant failed to demonstrate any procedural infirmities, treating the valuation and issuance as lawful despite the claim of a throw-away price.

What did the court decide?

Sale notice dismissed without costs; interim orders (if any) vacated; pending IAs closed.

M s Hotel R E Grand Pvt. Limited versus Indian Overseas Bank — Banking and Recovery | DRT (2023)

SA No. 489 of 2022

21.09.2023

IN THE DEBTS RECOVERY TRIBUNAL- III, CHENNAI

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Dated this the 21^st day of September, 2023

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

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SARFAESI APPLICATION No. 489 of 2022

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M/s. Hotel R E Grand Pvt Limited,

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Rep by its Director Mr. R.Ekambaram & Mrs. E.Manjula, No.9, Arcot Street, T Nagar, Chennai – 600 017.

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…. Applicant

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Vs.

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The Authorised Officer, Indian Overseas Bank, Asset Recovery Management Branch, Third Floor, Annexe Building, Central Officer, 763, Annai Salai, Chennai – 600 002. …. Respondent

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Counsels on record / appeared:

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Counsel for Applicant : M/s. D. Durairaj Counsel for Respondent : M/s. M. L. Ganesh

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ORDER

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This SA is filed challenging the Sale Notice dated 12.10.2022 scheduling sale to 31.10.2022 issued by respondent bank for recovery of a sum of Rs.25,34,12,251.85p from applicants.

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Heard Ld.counsel appearing for applicant and representative counsel for

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respondent bank, supported by the Chief Manager of respondent bank.

SA No. 489 of 2022

21.09.2023

It is the case of applicant that the valuation of the property is grossly low and has been reduced by a little over 50% of the original valuation made by the respondent bank. It is the further case of applicant that they had invested their own funds to a tune of Rs.15 crores, while the loan value itself is around Rs.20 crores thereby making the property value a little to Rs.40 crores. It is submitted that the premises is a nine floored hotel building for which a completion certificate is also obtained and is almost ready for usage. It is the further case of applicant that they were willing to negotiate with respondent bank and was also ready for discharge of their debt, but however could not do so due to paucity of funds. Ld.Counsel for applicant submitted that respondent bank with an intention to cause loss to applicant herein, has been continuously reducing the valuation of the property and has brought it for sale at a throw away price, owing to which the property has been sold at 50% of its original value. Ld.Counsel also submits that respondent bank is expected to act as the trustee of the property in the position of a mortgagee, but however appears to have not done so. It is also submitted that when the building is made ready with great efforts and is about to be earning revenues for applicant to enable them discharge their debt, respondent bank as secured creditor has taken hasty steps and brought the property for sale. Ld.Counsel submits that the affixture of the sale notice is not clear from the photographs furnished by the respondent bank in its typed set of documents and so applicant is disputing the same. It is also further argued that if the property been properly valued and actual market value realized, atleast the debt to the respondent bank would have been fully discharged by the sale of property, whereas by selling it at half the price, borrowers are over-burdened with the discharge of the remaining debt to the respondent bank. Submitting so, Ld.Counsel prayed for appropriate orders.

SA No. 489 of 2022

21.09.2023

Whereas representative counsel for respondent bank submitted that this is the 10^th consecutive sale notice that is being issued and respondent bank has obtained valuation in the year December 2021 and based on the said valuation, the reserve price has been fixed by the credit committee of respondent bank. It is also submitted that applicants had not approached this Tribunal with clean hands and had only approached after the conclusion of sale. Even after their knowledge that sale is concluded and sale certificate is also duly issued, applicant did not take any steps for redeeming the property but is only continuously making empty promises of settlement. Ld.Counsel has demonstrated the actions of the respondent bank while issuing the impugned sale notice which were found to be in accordance to law. It is submitted that with great difficulty, respondent bank would recover the money by sale of the property, since borrowers had challenged every sale notice and created hurdles and impediments for recovery of the moneys advanced. It is further submitted that borrowers had never paid any money but were only making empty promises of payment as they were cash strapped since long and is unable to generate any funds either for running the hotel by completing it or discharging the debt to the respondent bank. Ld.Counsel further submitted that even after approaching this Tribunal, applicant continued their default and could not make any repayments towards discharge of his debt.

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In the circumstances, as applicant could not make out any infirmities in the procedure adopted by the respondent bank while issuing the impugned sale notice dated 12.10.2022 scheduling sale to 31.10.2022, there are no tenable merits in the present SA and the same is liable to be dismissed.

SA No. 489 of 2022

21.09.2023

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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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 Steno (DD), transcribed by her, corrected, signed and pronounced by me in Open Court, on this the 21^st day of September, 2023)

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Sd/-

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(GANAPATHI K.R.K) PRESIDING OFFICER

M s Hotel R E Grand Pvt. Limited v. Indian Overseas Bank

Case brief

What is this about?

What did the court decide?

M s Hotel R E Grand Pvt. Limited v. Indian Overseas Bank

Case brief

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What did the court decide?

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