Partly allowed

M s Rida Estates Private Limited v. Icici Bank Limited

DRT14 Feb 2023SA/502/2022

Case brief

AI extract

What is this about?

The Tribunal denied the applicant's request to pause the sale of mortgaged property already sold to an auction purchaser. It allowed the bank to enforce the sale but offered the applicant one last chance to negotiate a settlement before the purchase could be finalized on March 3, 2023.

What did the court decide?

Sale not to be concluded in favour of auction purchaser until 03.03.2023; applicant given final opportunity to negotiate settlement and extinguish debt including compensation to purchaser.

M s Rida Estates Private Limited versus Icici Bank Limited — Company and Corporate | DRT (2023)

SA No.502/2022

14.02.2023

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 14^th day of February, 2023

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

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SARFAESI APPLICATION No. 502 of 2022

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M/s Rida Estates Private Limited

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Rep. by its Director Mr. Saleem Sherrif No.37/21, Yellappa Chetty Layout Skylark Chambers, Ulsoor Road Bangalore, Karnataka – 560 042 ….Applicant

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Vs.

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The Authorised Officer

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ICICI Bank Limited No.1, Cenotaph Road CRFG Dept., Teynampet Chennai – 600 018 ….Respondent

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Counsels on record / appeared:

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Counsel for Applicants : M/s. M. Soban. Counsel for Respondent : M/s. Shivakumar and Suresh Counsel for petitioner in IA No.1611/22 : Sh. K.J. Parthasarathy (Auction purchaser)

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ORDER

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This SA is filed challenging the Sale Notice dated 02.11.2022 issued by respondent bank scheduling sale to 08.12.2022 for recovery of a sum of Rs.46,56,65,825/-

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Counsel for applicant, counsel for first respondent bank and counsel for second respondent are present. Heard Ld. counsels appearing for the respective parties.

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It is the case of applicants that they intended to bring in, their purchaser for a sum of Rs.41 crores and pay the same to the credit of their loan account by or before

SA No.502/2022

14.02.2023

21.02.2023 in terms of their E-mail furnished along with memo. Copy is served on the other side.

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Several rounds of negotiations were facilitated by this Tribunal to arrive at any settlement between the parties. However, respondent bank was not willing to accept the conditional offer being made by applicants herein.

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Ld. counsel for respondent bank has filed counter and typed set of documents evidencing their actions, copy of which are served on the applicants.

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Both parties admit that there are no infirmities in the procedure adopted by the respondent bank while issuing the impugned sale notice, except for the fact that the sale notice contain an amount due as of the year 2019 and not due as on the date of issuance of the sale notice. However, Ld. counsel for respondent bank stated that the amount due is mentioned as payable together with subsequent interest, charges and expenses, which includes the amount recoverable from the borrowers.

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Ld. counsel for auction purchaser reiterates that auction purchaser is ready and willing to deposit the entire amount immediately since the amount is lying with yet another bank and is ready to transfer the same to the first respondent bank account in compliance of his bid amount.

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All parties agree that recovery of money is the major issue and that auction purchaser has only time upto 07.03.2023 for causing the payment in terms of the bid and sale confirmation letter issued in his favour.

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Ld. counsel for respondent bank submitted that the legal position after confirmation of sale is only to extinguish the debt and cannot be for accepting any

SA No.502/2022

14.02.2023

amount, even though higher than the auction bid with an underlying condition to release title deeds on causing such deposit, as it is not a concession available to the applicants. It is submitted that, in case applicants intended to retain the property or redeem their mortgage, the only option available to them will be to extinguish the debt and also compensate the auction purchaser who has made deposit of the initial 25% of the amount and kept funds ready for the remaining 75%. There is no explanation from the applicants as to why the alleged financier, if insisting for delivery of title deeds has not participated in the proposed auction and is now coming up with payment of Rs.41 crores for release of the mortgage by respondent bank. During the course of the day, respondent bank had filed their objection memo to the memo filed by applicants along with E-mail communication from applicant.

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From the foregone submissions of all the parties, it is evident that applicants intend to enter into a negotiated settlement with the respondent bank and discharge their debt, but, however are unable to do so and had now come up with bringing a financier for Rs.41 crores together with an underlying condition of release of mortgage over the schedule mentioned property. Whereas it is the express case of respondent that they had already conducted a valid sale and that the property is sold to the auction purchaser, who has deposited the part of the bid amount and is ready to remit balance amount also, since the balance amount is lying with a bank to be transferred to respondent bank. Applicants could not make out any tenable infirmities in the procedure adopted by the respondent bank while issuing the impugned sale notice as well as on the conclusion of the sale in favour of the auction purchaser. Both parties also admit that 07.03.2023 is the last date in accordance to law for the auction purchaser to cause deposit of bid amount and establish his claim for the property.

SA No.502/2022

14.02.2023

In the circumstances, respondent bank will be entitled to receive the balance money from the auction purchaser but however shall not conclude the sale in favour of the auction purchaser till 03.03.2023.

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Meanwhile, applicant is offered yet another opportunity to negotiate with respondent bank for settlement in full by making payments by or before the said date and extinguish their debt including the compensation to the auction purchaser, the charges, expenses and costs incurred by respondent bank for bringing the property to sale, failing which respondent bank will be entitled to proceed further in accordance to law by executing a sale certificate on receipt of their bid amount and compliance of other formalities in accordance to law, beyond 03.03.2023.

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Interim order, if any granted and subsisting till this day stands vacated and all

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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 14^th day of February, 2023)

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Sd/-

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(GANAPATHI K.R.K) PRESIDING OFFICER

M s Rida Estates Private Limited v. Icici Bank Limited

Case brief

What is this about?

What did the court decide?

M s Rida Estates Private Limited v. Icici Bank Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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