Allowed

Navaneetha Krishnan v. Union Bank of India

DRT24 Apr 2024SA/179/2023

Case brief

AI extract

What is this about?

In a SARFAESI application challenging a sale notice, the Tribunal held that the respondent bank failed to prove compliance of service procedures. The sale became infructuous due to interim orders. The application was allowed, and the bank was directed to recover the 25% refund amount plus interest from the borrower.

What did the court decide?

SA allowed without costs; bank permitted to return 25% amount plus interest and debit same to borrower's loan account; interim order vacated; liberty granted to bank to proceed if default continues.

Navaneetha Krishnan versus Union Bank of India — Banking and Recovery | DRT (2024)

SA No. 179 of 2023

24.04.2024

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 24^th day of April, 2024

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

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SARFAESI APPLICATION No. 179 of 2023

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Navaneetha Krishnan, S/o. Shankar, Vijasanthi Towers, 6^th Block, 5E, 88 Arcot Road, Vadapalani, Chennai – 600 026.

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Presently residing at: Plot No. 5, Sabari Nagar Extn iv, Mugalivakkam, Chennai – 600 125.

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...Applicant

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-Vs-

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The Authorized Officer, Union Bank Of India, Asset Recovery Branch, Elcanso Building, No. 9, Casa Major Road, Egmore, Chennai – 600 008. …Respondent

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Counsels on record / appeared:

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Counsel for Applicant : M/s. J. Prince Counsel for Respondent : M/s. E. Maharajan ORDER

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This SA is filed by applicant challenging the sale notice dated 24.02.2023 for

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recovery of a sum of Rs. 49,59,491/-.

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Heard the Ld. Counsels appearing for both the parties.

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It is the case of applicant that they have not been served with the demand notice

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in a manner know to law and there after respondent bank had only caused paper publication of the demand notice but did not cause affixture thereby violating the provisions of law. It is the further case of applicant, that the respondent bank had

SA No. 179 of 2023

24.04.2024

followed the procedure while issuing the possession notice, but again violated the provisions of law while issuing the impugned sale notice.

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Ld. Counsel for applicant submits that impugned sale notice was not served on the borrowers and that they have laid the present challenge on seeing the paper publication, caused by the respondent scheduling sale to 28.03.2023. Ld. Counsel submits that applicant had deposited first limb of 10% payment of interim condition imposed by this tribunal on 28.03.2023 itself by way of demand draft to the credit of his loan account, despite which respondent bank had proceeded with the conduct of sale on 28.03.2023. It is the further case of applicant that they had complied with the second limb of the interim condition imposed by this tribunal and thus stay came into force.

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Ld. Counsel submits that despite applicant’s best endeavours, they were not able to report on any negotiated settlement with the respondent bank due to paucity of funds. Ld. Counsel admits that after compliance of the interim condition applicant could not make any further payments and therefore prayed for appropriate orders.

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Whereas, Respondent bank had put up appearance and filed their counter and typed set of documents evidencing their actions after serving copies on the other side. Ld. Counsel for respondent bank submits that the covers containing the demand notice had returned as unclaimed which concludes that service is deemed to have been caused on the addressees and the paper publication of the demand notice was only an abundant caution to intimate the general public along with the applicant herein. Ld. Counsel submits that respondent bank has complied all the provisions as warranted under the act while issuing the

SA No. 179 of 2023

24.04.2024

possession notice. It is further submitted that the postal receipts as well as the acknowledgement or returned covers could not be located with regard to the impugned sale notice while compliance of the affixture and paper publication are duly filed in the typed set of documents to evidence the respondent bank’s actions while issuing the impugned sale notice. Ld. Counsel supported by the Law Officer of the respondent bank submitted that although there was an auction purchaser, in whose favour sale is concluded, only 25% of the bid amount has been deposited while the remaining 75% could not be deposited owing to the interim orders of this tribunal. In other words, it is submitted that the impugned sale notice has become infructuous since the sale could not be proceeded further. Ld. Counsel also submitted that no further recovery was made owing to the pendency of the present SA and therefore prayed for appropriate orders.

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From the foregone submissions of both the parties, and the documents filed on behalf of the respective parties, it is evident that respondent bank could not furnish documents evidencing service of the impugned sale notice on the borrowers while the borrowers are continuing their default contrary to the representations before the bench for any negotiated settlement. Applicant bank had established its procedure as warranted under law upto the stage of possession notice, through its typed set of documents.

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Both parties admit that sale could not be proceeded further in view of the interim orders of this tribunal.

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In the result, as respondent bank could not establish their procedure as warranted under law and even otherwise since the sale could not be proceeded

SA No. 179 of 2023

24.04.2024

further, the impugned sale notice has become infructuous along with the present challenge, to the same.

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Ld. Counsel for respondent prayed that since the bank will be liable to refund the 25% amount to the auction purchaser together with interest the same may be permitted to be recovered from the borrower since he has frustrated the sale notice and has not also complied with his undertaking for a negotiated settlement.

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In the circumstances, Respondent bank is permitted to return the 25% amount together with applicable bank rate of interest and shall debit the interest paid to the auction purchaser, to the borrowers loan account.

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Consequently, SA stands allowed, however without costs.

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Interim order if any granted and subsisting till this day stands vacated and all other IA’s if any pending stands 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 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 Stenographer, transcribed by her, corrected, signed and pronounced by me in Open Court, on this the 24^th day of April, 2024)

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Sd/(GANAPATHI K.R.K)

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PRESIDING OFFICER

Navaneetha Krishnan v. Union Bank of India

Case brief

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Navaneetha Krishnan v. Union Bank of India

Case brief

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