Dismissed

Sri Haridas Ramesh and Others v. State Bank of India

DRT6 May 2024SA/348/2023

Case brief

AI extract

What is this about?

Applicants challenged a mortgage enforcement action including an e-Auction Notice and a commissioner-appointed possession order under SARFAESI. The Tribunal observed no procedural illegality in the auction or possession and dismissed the application.

What did the court decide?

Application u/s 17 of SARFAESI Act dismissed; sale notice, auction, and possession order confirmed. Interlocutory applications disposed of.

Sri Haridas Ramesh and Others versus State Bank of India — Consumer Protection | DRT (2024)

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IN THE DEBTS RECOVERYTRIBUNAL.I AT HYDERABAD

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DATED THIS THE 6TH DAY OF MAY, 2024

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PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER

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SA.No.3 4A/2023

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l.Haridass Ramesh, S/o S. Haridass, Aged about 57 years, Occ:business, Plot No. LOI6lA, Road No.46, Jubilee Hills, Hyderabad-sOO 033.

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Smt.Urvashi Ramesh, W/o Ramesh Haridass, Occ:busiess, Plot No. 1016l A, Road No.46, Jubilee Hills, Hyderabad-SOO 033

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M/s Nandini Industries India P.Ltd.(NIIPL), (formerly known as TSS Projects and Industries P.Ltd.), 7 -l-58, 3.d floor, Divya Shakti Complex, Ameerpet, Hyderabad-SOO 016 Rep. by its Managing Director Haridass Ramesh

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M ls Techtrans Construction India P. Ltd. (TCTPL) 7-i-58,3.d floor, Divya Shakti Complex, Ameerpet, Hyderabad-5O0 0 16 Rep. by its Chairman & Director Haridass Ramesh ..ApplicantS

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Versus

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State Bank of India, Stressed Assets Management branch, Secunderabad(4106) 5-9-76,2.d floor, Prabhat Towers, 'cr$ii\

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Opp. SBI Amaravathi LHO, /m 3flIr:,?.1ilffi?:L"Jl,:' inr--o--ffi

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Hydirabad-soo oor illi 'f, ii^lr, Rep. by its authorized Officer li';, ii_-2. Srividya Infrastructures Pvt. Ltd. ii ir,l, 1,11 1l-ll I l, 4b floor, Santosh Towerpo!.!^j... ,,i.1. Ayyappa Society, Madhapur,

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SA.No.i48/202j

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Hyderabad-50008 1 Rep. by its Director Smt. SushmasriBoppana

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..Respondents.

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Counsel for the Applicants Si Prem Kumar Pothina

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Counsel for ttrc Respondent No.l Si Allui Krishnam Raju. Counsel for Respondent No.2 Sn G. Dinesh Kumar

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-:ORDER:-

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This application is filed by the Applicants u/s.17 of the SARFAESI Act,2OO2, challenging the e Auction Sale Notice dt.22.O8.2O23 issued by the l"tRespondent Bank by fixing the auction of the application schedule properties on O4.1O.2O23 and also to set aside the order dt. 13.09.2023 passed by the Hon'ble XVII Addl. CMM, Nampally, Advocate Hyderabadin Crl.M.P.No.1889l23 appointing an Commissioner for taking physical possession of the schedule propertiesand to declare the same as void and illegal.

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The averments made in the application, in brief, are that:

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The Applicants No.1&2 availed housing loan to a tune of Rs.3,51,00,000/- and Applicant No.3 company initially availed a loan of Rs.9.50 crores and subsequently the said facility was enhanced from time to time to Rs.89.50 crores and Applicant No.4 company availed Adhoc Limit of Rs.S crores and BG limit of Rs.33.44 crores and thus the total loan facilities availed by the Applicants No.1 to 4 is Rs.131,45,00,0OO I - as on 17 .12.2023. The Applicants created mortgage in respect of the sc rties towards securitv for the above loanfacilities avai l"tRespondent Bank has classilied the loan "{'{ufrr. nts as NPA without followingthe guidelines of RBI ulars. The interest charged by the t"tRe#E ra.rr[ &t{UI" Z8i&"r.ff i

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SA.No.j48/2023

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The l"tRespondent Bank issued e Auction Sale Notice dt.22.O8.2O25 claiming an amount of Rs.4s7,22,44,23o.1o ps. relating to all the loans availed by the Applicants. The said Sale Notice was issued when the stay order passed in sA 279 122 filed, by the 4th Applicant, was in force.

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The housing loan account of the Applicants NO.1&2 was classified as NPA on 10.o7.2015. contrarily, the Respondent Bank in its communication dt.17.06.2021 stated that the Home loan account was classified as NPA on 31.05.2017 but possession Notice u/s 13(a) of the SARFAESI Act was issued by the Authorised officer of the Bank on 2r.o9.2or5 against the schedule property but no possession notice was issued after 3l.o1.2ol7. The Respondent Bank have also taken physical possession of the schedule propertiesthrough advocate commissioner without following the procedure laid down under the provisions of section 14 of the SARFAESI Act, 2OO2. Hence, the SA.

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The l"tRespondentBank filedtheir Reply statement denying all the adverse allegations made in the SA. The contentions of the

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l"tRespondent Bank are that, the Respondent Bank sanctioned Home loan of Rs.3.51 crores to the 1"t Applicant for the purpose of

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purchasing a Plot and to construct a residential house thereon.The Applicant No.1 purchased the plot with the said loan proceeds and it was mortgaged as a security and subsequently, the Applicant No.1 created mortgage byway of extensionfor the loan facilities availed by Applicants No.3&4. The Home loan account of Applicants No.1&2 was classified as NPA on 10.07.201s and demand notice dt.12.o7.2015 was issued u/s 13(2) of the Act and thereafter Possession Notice dt.21. issued against the schedule

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property. when therffi,gffiftUd{{fqqi,* issued Rule 8(6) notice in respect of the ""r",$ft;rffi, ;-riikl: o^:. of alction on 29.to.2o2O, the a,'pp'il.""t No-'i''fil.d sa "1bb7zo before the Honble DRT-tt, Hyderabad , ".,[ tna^{t'!"?& isA} .^" dismissed vide order dt.03.07.2023. The loan account of the Appiicant No.3 was classified

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' -:'.

SA.No.3a8/2023

asNPA on 3o.o3.2014 and demand notice dt.06.09.2014 was issued and thereafter the Bank issued Possession Notice dt.2g.o9.2o1s. challenging the said notice, the Applicant No.3 filed TSA No.44 L I lT before DRT-ll, Hyderabad and the said SA was also dismissed vide order dt.08.04.2019. The Appeal No.20/2022 preferred before the Hon'ble DRAT, Kolkata against the order dt.08.o4.2oLg liled by Applicant No.3 was also dismissed. Applicant No.4 filed rsA No.44ol2017 challenging the^possession Notice dt.29.o9.2015 in regard to the secured asset when the loanaccount of the Applicant No.4 was classified asNPA on 3o.o4.2o14 and possession notice dt.29.o9.2015 was issued by the Respondent Bank. The said TSA was also dismissed on o8.o4.2o19.The Appeal No.19/2022 preferred by the Applicant No.4 before Hon'ble DRAT , Kolkata challenging the said order dt.08.04.2019 was also dismissed.

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The issues which are raised or deemed to have raised or ought to have been raised in the said three SAs cannot be an issue in the present SA. The llndings in the three SAs arebinding on the Applicants and also the Respondent Bank. In the present SA, the Applicants can raise the issue only in respect of procedural irregularity, if &fly, in regard to impugned Auction Notice dt.22.O8.2023.

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The Auction Sale Notice dt.22.O8.2O23 issued by the l"tRespondent Bank was served on theApplicants by Regd. Post and the said notice was published in Sakshi Telugu and The Hindu English daily newspapers dt.30.08.2023 and also affixed on the schedule property. The reserve price of the schedule property was fixed basing on the approved valuer's report dt.3 reserve price is fixed at Rs.25.77 crores in the,-:;'it-Ar ice dt.22.O8.2O23 and /,,'.,>.. auction was cond u.t {q;oo. to.Efi i"%"S""t of the schedule property and Respondent No.p [ecam.rr.r,rh. highest bidder and they itir.r.*rtpr Sale Certificate remitted the entire bid 'ii"r;i.

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SA.No.348/202j

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dt.3o.1o.2o23 was issued by the Bank in favour of the Respondent No.2 and the same was registered before the Sub-registrar, Banjara Hills. Thereafter, an Advocated commissioner was appointed vide order dt.09.1O.2O23 in Cr1.M.P.No.l889l23 by the Honble XVII Addl. CMM, Hyderabad in Section 14 application filed by the Respondent Bank and the advocate commissioner has taken physical possession of the schedule propert5r on 27.IO.2O23 and handed over the same to the Authorised officer of the lst Respondent Bank. The lstRespondent Bank conducted auction of the schedule property as per the procedure stipulated under law and the auction purchaser paid the entire sale consideration within the time frame and the movable items which were available in the premises of the SA schedule property are collected by the watchman of the schedule premises.

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The interest rates chargeable in the loan accountsof the Applicants varies periodically basing on bank rate lixed by the bank and in consonance with RBI directions issued from time to time in addition to the terms and conditions stipulated by the Respondent bank in their sanction letter and theloan documents. Accordingly, Respondent Bank prayed for the dismissal of the SA.

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Respondent No.2, auction purchaser llled their Reply contending that in the auction conducted by the 1st Respondent Bank in respect of the schedule property in pursuance of the Sale Notice dt.22.O8.2O23, the 2'd Respondent participated in the auction and became highest bidder and they paid the entire sale consideration and obtained sale certificate from the 1st Respondent Bank and physigal possession of .: the schedule propergr wa o the 2.d Respondent and \ 2nd Respondent is a '- 'i"" ' iil't rs.pnaq,. a"I \tr,e^{schedule property} having paid the entire'salE conside*filtion of'&.\ $,s^{oz crores.} 0 6 ltAy )n?t \i \3t \

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SA,No,348/2023

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Heard Ld. Counsel for the Applicants, Ld. Counsel for the lstRespondent Bank and 2nd Respondent.

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Now, the points that arise lor consideration are-

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il Whether the Applicants haue established ang ualid ground for setting aside tLrc e Auction sale Notice dt.28.09.2023, issued by the T"tRespondent Bank and also the auction conducted on 04.10.2023 in respect of the schedule propertg?

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iil whetLrcr the Applicants are entitled to claim relief for setting aside the order dt.O9.10.2023 passed bg tlrc Hon'ble XWI Addl. CMM, Hyderabad for appointment of aduocate commissioner for taking physicalpossesslon of the schedule property?

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iiil To what relieft

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Potnts No.(i) & (ii):-

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1 1. During the course of arguments, Ld. Counsel for the Applicants and Ld. Counsel for the lstRespondent Bank reiterated their respective versions as stated supra.

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As per the record, it is clear that on earlier occasion, the Applicant No.4 filed TSA 44O l2Ol7 challenging the Possession Notice dt.29.05.2015 issued by the lst Respondent Bank and the same was dismissed by the Hon'ble DRT-ll, Hyderabad vide order

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dt.08.04.20L9. Challenging the said order, the Applicant No.4 preferred an appeal before Hon'ble DRAT, Kolkata and the said appeal was also dismissed vide order dt.30.03.2o23. The Applicant No.1 herein filed SA 16012020 challenging the Rule 8(6) notice dt.17.09.2O2O and the said by the Hon'ble DRT-ll, Hyderabad vide order drfs$if2U2&slltfifs\another SA 44 | / 2OL7 was filed by the Applicaidt No.S tigei" .@*tng the Possession r\oflce ot.ze.ue Notice dt.2s.os .2 uL301s p:r:* flt 6e-f,ore BY l hli y "Idery$e ra Dagliancl badii, and the same was also dismissed vide orddr:dt.08.04.2o$iLlhe said order became linal i.:;.. , 11

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SA.No.348/202j

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as the appeal preferred by the Applicant No.3 herein before Hon'ble DRAT, Kolkata was also dismissed. There is also no dispute regarding the fact that the Applicant No.3 filed SA 279122 before DRT-I, Hyderabad whereas Applicant No.4 filed 5A.278122 before DRT-I, Hyderabad and interim stay was granted by this Tribunal in respect of the schedule properties in the above SAs and the said SAs are pending for adjudication, so the contention of the Applicants that the when the stay order is in force, the 1"t Respondent Bank has conducted auction of the schedule property is not correct since the subject property for which Auction Notice dt.22.O8.2023 was issued is not one of the schedule properties in SA 278 &279122.

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The previous SAs filed by the Applicants herein which are referred supra,were already dismissed. DRT-ll, Hyderabad passed elaborate orders andin the said orders, Ld.Presiding Officer has considered the various issues raised by the Applicants herein which are again raised in the present SA.

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Suffice it, the validity or otherwise of the steps initiated by the l"tRespondent Bank for conducting auction of the schedule property and for taking physical possession of the schedule property through AdvocateCommissioner is to be determined in the present SA.

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As per the material documents liled by the l"tRespondent Bank, it is clear that the Bank has issued e Auction Sale Notice dt.22.O8.2O23 in respect of the schedule property byfixing the reserve price as per the valuation report given by the approved valuer of the l"tRespondent Bank. Tll lc Notice dt.22.O8.2023 was dulyreceived by all tbdAqmt$ff-a\qris also published in Telugu and English daily "{$fuo... ffiL. ""?&"poni.e was also affixed on the schedule propertfias oj.l:9ir,---.,h. p..$tographs filed by the l"tRespondent""n[,^{0 6 tt11'} 202{ .:ii

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',}t:\

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SA.No,348/2023

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In the auction conducted on O4.1O.2O23 by the l"t Respondent Bank, 2"d Respondent became successful bidder for a sale consideration of Rs.35.07 crores and they paid the entire bid amount and Sale Certificate was also issued by the 1st Respondent Bank and the same was registered by the SRO, Banjara Hills, Hyderabad. Thereafter physical possession of the schedule property was delivered to the auction purchaser by taking over the possession of the same through advocate commissioner appointed by the orders of Ld. XVII Addl.CMM, Nampally, Hyderabad in Crl.M.P.No.1889l23. So as^per the material documents filed by the lst Respondent Bank, it is clear that the l.tRespondent Bank has scrupulously followed the^procedure laid down under the SARFAESI Act and the Rules, 2OO2,ⁱⁿ conducting auction of the schedule property and in issuing^sale certificate in favour of Respondent No.2, auction^{purchaserand also} in taking the physical possession of the schedule^property through Advocate commissioner and in handing over the same to the 2"dRespondent.

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So, I see noirregularly or illegality in the auctionconducted^{by the} l"tRespondent Bank in respect of the schedule^{propertypursuantto} the e Auction Sale Notice dt.22.O8-2O23 and also in^handingover the physical possession of the schedule^property to the^auction purchaser. The Applicants have failed to establish any^{ground for} setting aside the proceedings initiated by the^{l"tRespondentBank} under the SARFAESI Act against the schedule^{property so, the present} SA filed by the Applicants is liable to be^q!Up4ig{ ir-.€^{Accordingly,these} icants .\ and in favour of the