Dismissed

Aruna Constructions v. Indian Overseas Bank

DRT10 Aug 2023SA/67/2023

Case brief

AI extract

What is this about?

This Debts Recovery Tribunal dismissed the SARFAESI application challenging an E-Auction Sale Notice. The applicants alleged non-registration of mortgage with CERSAI and low valuation. The Tribunal found the applicants failed to establish any procedural infirmity in the bank's actions and the sale was already concluded.

What did the court decide?

The SARFAESI Application was dismissed without costs; all interim orders stood vacated and pending applications were closed.

Aruna Constructions versus Indian Overseas Bank — Banking and Recovery | DRT (2023)

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S.A.67 of 2023 10.08.2023

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 10^th day of August, 2023

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

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SARFAESI APPLICATION No. 67 of 2023

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M/s.Aruna Constructions,

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Rep. by its Partners,

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Empee Towers, No.59,

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Harris Road,

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Pudupet, Chennai – 600 002.

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Mrs.A.K.Aruna, No.346, Pantheon Road, Egmore, Chennai – 600 008.

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Mrs.M.P.Purushothaman, No.346, Pantheon Road, Egmore, Chennai – 600 008.

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Mr.Sheeju Purushothaman, No.346, Pantheon Road, Egmore, Chennai – 600 008.

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Mrs.Sheena Purushothaman, No.346, Pantheon Road, Egmore, Chennai – 600 008.

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Mr.Shaji Purushothaman, No.346, Pantheon Road, Egmore, Chennai – 600 008.

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Mrs.Nisha Purushothaman, No.346, Pantheon Road, Egmore, Chennai – 600 008.

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M/s.Empee International Hotels & Resorts Limited, Empee Towers, No.59, Harris Road, Pudupet, Chennai – 600 002. ….Applicants

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Vs.

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S.A.67 of 2023 10.08.2023

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The Indian Overseas Bank, Asset Recovery Management Branch, Third Floor, Central Office, Annexe Building, No.763, Anna Salai, Chennai – 600 002. ….Respondent

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Counsels on record / appeared:

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Counsel for Applicant : M/s.L.Thiyagaiya, G.Desingu. Counsel for Respondent : M/s.Ananda Gomathy.

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ORDER

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This SA is filed challenging the E-Auction Sale Notice dated 21.01.2023 issued

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by respondent bank, scheduling sale to 10.02.2023, for recovery of a sum of Rs.28,24,35,322/-.

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Heard Ld. Counsels appearing for respective parties.

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This matter is adjourned from time to time, at the request of Ld. Counsel for applicants on the surmise that applicants intend to redeem the mortgage even after conclusion of the sale, by negotiating with the auction purchaser and therefore several adjournments have been taken in the name of settlement. However, nothing seems to have happened, and since the matter is posted peremptorily to today, Ld. Counsel for applicant had submitted that respondent bank had not registered the mortgage with CERSAI and therefore there is violation of Section 26D of the Act. It is also the case of applicants that valuation of the property is grossly low and therefore selling it away to the auction purchaser at that price is not in accordance to law. Ld. Counsel further submits that applicant has made every endeavour to negotiate with respondent bank for an amicable settlement but somehow respondent bank has not conceded to the

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S.A.67 of 2023 10.08.2023

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requests of applicant wilfully and therefore denied any proposals for settlement. It is also the case of applicants that they intend to redeem their mortgage, if further more time is granted. Except for the above contentions, applicants have not made out any other infirmities in the procedure adopted by the respondent bank while issuing the impugned sale notice.

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Whereas Ld. Counsel for respondent bank has filed their counter and typed set of documents evidencing their actions. Copies of the same are served on the Ld. Counsel for applicant. Ld. Counsel for respondent bank has demonstrated the actions of the respondent bank through their typed set of documents evidencing compliance of all the provisions of law, while issuing the impugned sale notice and submitted that there are no infirmities in the procedure adopted by the respondent bank and therefore the challenge has become infructuous. Ld. Counsel further submits that applicants are extended several opportunities, believing their promise, which only later turned out to be absolute false. Ld. Counsel also submitted that, even after the conclusion of sale, applicants have taken several adjournments only on the premise of negotiating with the auction purchaser and respondent bank, however did not do anything in furtherance to their undertakings before this Tribunal. It is submitted that sale is concluded in favour of auction purchaser, who has deposited the entire sale bid amount viz., 25% of the amount of 11.02.2023 and balance 75% of the amount on 30.03.2023 and sale certificate is also duly issued to auction purchaser.

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Today Ld. Counsel for respondent bank has filed a memo submitting therein that the property is registered with CERSAI as early as of 2014 and therefore the

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S.A.67 of 2023 10.08.2023

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contentions of applicants that Section 26D is applicable and that owing to this violation, SARFAESI actions of respondent bank shall not survive, is not tenable. Ld. Counsel further submitted that this is not the first sale notice and that there were earlier sale notices, under which applicants have been challenging the same and the valuation of the property is accordingly obtained and considered by the Committee of Creditors, by fixing the reserve price before bringing the property to sale. It is also not the case of applicant that he had any purchaser for better price and if at all, if there are any, who can pay a better price, it is not explained as to why so many sale notices have to be issued despite which, they did not participate in the sale auction conducted by the respondent bank. It therefore remains to be only a usual contention, after the conclusion of sale that the value of the property is higher than what was bid for. Ld. Counsel further submitted that respondent bank has followed all the procedures as warranted under law and that there are no infirmities that calls for interference by this Tribunal.

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

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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 observations, this SA stands disposed.

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S.A.67 of 2023 10.08.2023

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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 10^th day of August, 2023)

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Sd/-

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(GANAPATHI K.R.K) PRESIDING OFFICER

Aruna Constructions v. Indian Overseas Bank

Case brief

What is this about?

What did the court decide?

Aruna Constructions v. Indian Overseas Bank

Case brief

What is this about?

What did the court decide?

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