Allowed

Roch John Bosco S v. The Chief Judicial Magistrate

DRT20 Nov 2024SA/359/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal set aside an auction sale and sale certificate issued under the SARFAESI Act due to procedural violations, including failure to provide adequate notice period and non-compliance with deposit rules. The order in favour of the auction purchaser was also quashed, directing refund and cancellation of registration.

What did the court decide?

Sale and Sale Certificate set aside; Bank directed to refund auction purchase consideration with interest; CJM order quashed; cancellation of registration ordered.

Roch John Bosco S versus The Chief Judicial Magistrate — Banking and Recovery | DRT (2024)

¶1

SA No.275/2022 & SA No.359/22

¶2

Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI

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DATED THIS 20^th DAY OF NOVEMBER, 2024

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PRESENT: SEEMA SINHA [PR. DISTRICT & SESSIONS JUDGE - Retd] PRESIDING OFFICER

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SA No. 275/2022 & Connected SA No. 359/22

¶7

1.	Roch John Bosco S, S/o. Sebastian, No. 2/154, Poondi Matha House, RC Street, Kaliakkavilai, Kanyakumari District.
2.	Jaseela R, W/o. Siras Japhar Khan Manzil, Near Stadium, Inchivilai, Parassala Post, Karode
3.	Maria Madhilenal, W/o. Jebastiyan, No. 2/154, Poondi Matha House, RC Street, Kaliakkavilai, Kanyakumari District. --- Applicants
	-Vs-
1.	The Authorized Officer, Canara Bank,
	Nagercoil Meenakshipuram Branch, Nagercoil,
	Kanyakumari District. --- 1^stDefendant Bank
2.	G. Rajesh Babu, S/o. P. Gunamony, No. 3/38, D Jerson, Pallichaa Vilagam, Nalloor, Marthandam Post,
	Kanyakumari District–629 165. --- 2^ndDefendant/Auction Purchaser

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Page 1 of 15

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SA No.275/2022 & SA No.359/22

¶10

Appearance of Advocates: Mr. M. Arun Murugan ---- Counsel for the Applicants Mr. C. Deepak ---- Counsel for the 1^st Defendant Bank No representation for the Auction Purchaser/2^nd Defendant

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SA No. 359/2022

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(Connected SA No. 275/22)

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Roch John Bosco S, S/o. Sebastian, No. 2/154, Poondi Matha House, RC Street, Kaliakkavilai, Kanyakumari District – 629 153.

¶14

DD Agency, Proprietor. S. Roch John Bosco, 2/86, Alsifa Complex, Kaliakkavilai, Kanyakumari District – 629 153.

¶15

Jaseela R, W/o. Siras Japhar Khan Manzil, Near Stadium, Inchivilai, Parassala Post, Karode, Kanyakumari District.

¶16

Maria Madhilenal, W/o. Jebastiyan, No. 2/154, Poondi Matha House, RC Street, Kaliakkavilai, Kanyakumari District – 629 153. --- Applicants -Vs-

¶17

The Chief Judicial Magistrate, Chief Judicial Magistrate Court, District Court Campus, Nagercoil, Kanyakumari District – 629 001.

¶18

Canara Bank, Represented by its Authorised Officer, Nagercoil Meenakshipuram Branch, Nagercoil, Kanyakumari District. --- 2^nd Defendant Bank

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Page 2 of 15

¶20

SA No.275/2022 & SA No.359/22

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G. Rajesh Babu, S/o. P. Gunamony, No. 3/38, D Jerson, Pallichaa Vilagam, Nalloor, Marthandam Post, Kanyakumari District–629 165. --- 3^rd Defendant/Auction Purchaser

¶22

Appearance of Advocates: Mr. M. Arun Murugan ---- Counsel for the Applicants Mr. C. Deepak ---- Counsel for the 2^nd Defendant Bank No representation for the Auction Purchaser/3^rd Defendant

¶23

These both SAs were heard together as both cases arise out of same cause of action in the presence of Counsels for the Applicants and the Defendant Bank and fixed for passing final order before me and upon hearing the arguments of the Counsels and having stood over for consideration till this day, this Tribunal delivered the following:

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O R D E R

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1 . a. SA No. 275/2022: These Applications have been filed under Sec. 17(1) of the SARFAESI Act, 2002 by the Applicants praying that this Hon'ble Tribunal may be pleased to set aside the Auction Sale Notice dated 06.04.2022 fixing the auction sale on 25.04.2022 and declare the same as illegal and to set aside the Sale Certificate dated 07.07.2022 vide Doc. No. 1/2515/2022 issued by the 1^st Defendant in favour of 2^nd Defendant with respect to the 2^nd item of schedule mentioned property and declare the same as illegal. To declare the entire auction proceedings as illegal and violation of mandatory provisions of law and to restore the possession to the Applicants.

¶26

Further in

¶27

b. SA 359/2022: To set aside the order passed by the Ld. CJM, Nagercoil, Kanyakumari District in Crl.M.P.No. 7995 of 2022 dated 26.08.2022 in respect of the schedule of the property and quash the same as illegal.

¶28

2 . The brief averments of the Application filed by the Applicants are as follows:-

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Page 3 of 15

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SA No.275/2022 & SA No.359/22

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The Applicants submitted that the 1^st Applicants is the borrower and another Applicants is guarantor. The Applicants has borrowed the loan vide OCC limit A/c. No. 1112261010154 from the Defendant Bank for a sum of Rs. 1,00,00,000/- on 15.06.2019 by hypothecation of stocks and mortgaging the house property which stands in the name of 1^st and 3^rd Applicants. The Defendant Bank on verification of the securities sanctioned the same based on the viability of the retail business as MSME with respect to the distribution of footwear and chapels under the name of M/s. DD Agency. The 2^nd Applicant agreed to stand as a guarantor. The 1^st Applicant was regular in repayment till April 2020. As such he has settled most of the dues by carrying out his business. Due to market fluctuation, price rise and COVID-19 Pandemic, his business became hit and sustained huge loss. But Defendant Bank did not wait for those period and charged interest on interest and penal interest. However, the Applicants have paid Rs. 5 Lakhs during July 2020. Further, the Applicants have so far deposited several lakhs and the account is regular but instead of that, the Defendant Bank declared the account as NPA on 02.11.2020 during the Pandemic COVID19. And issued Demand Notice U/s. 13(2) on 27.04.2021 for a sum of Rs. 1,11,76,575/-. And, Possession Notice U/s. 13(4) also issued on 23.08.2021 for a sum of Rs. 1,15,40,076.62p. The Applicants made representation on 27.09.2021 and objected imposing of interest on interest, NPA and also requested for re-assess and restructure and waiver of interest during COVID-19 under RBI Circular. But, the Bank did not reply properly and not consider the Applicants's request and suddenly issued Auction Sale Notice dated 28.09.2021 scheduled to be held on 31.10.2021 for a sum of Rs. 97,10,723.62p. Challenging the above Sale Notice, the Applicants filed SA No. 487 of 2021 before this Hon'ble Tribunal which was dismissed as withdrawn. After that the Bank has issued 2^nd Sale Notice on 06.04.2022 scheduled to be held on 25.04.2022. The Applicants sent a representation on 29.04.2022 to the Defendant Bank to send the particulars of the auction, Auction Purchaser and measurement details of commercial building and its Valuation Report but so far there is no reply from the Bank.

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Page 4 of 15

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SA No.275/2022 & SA No.359/22

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It is further submitted that it is only due to the above said facts the Applicants were unable to generate profits to repay the loan amount to the Defendant Bank during COVID-19. The alleged non-payment of the dues with the Defendant Bank is neither willful nor wanton. But the Bank without giving any reasonable opportunity to the Applicants, imposed interest on interest and issued Auction Sale Notice, this act of the Defendant Bank is vindictive and arbitrary. It is prudent for the secured creditors to support the Applicants in its revival efforts so that interest of all concerned including those of the Defendants can be protected and promoted. Further, imposing interest on interest caused struggle to survive against harsh economic realities. Further, the details set out in the account statement are vague, indefinite which contains incorrect balance under the head "Outstanding" and various credits made by the Applicants are not shown in the account. Being aggrieved over the same, the Applicants filed this SA. Even, the Applicants had taken the DD for Rs. 10,00,000/- but the bank not accepted and proceeded further.

¶35

It is further submitted that the Applicants also challenged the Auction Sale Notice before the Hon'ble High Court of Madras (Madurai Bench) in W.P.(MD) No. 13954/2022 and on 29.06.2022 as per the directions of the Hon'ble Court, the 1^st Defendant served the copies of the auction purchaser details and sale confirmation letter. Pending Writ Petition, the 1^st Defendant issued the Sale Certificate in favour of the 2^nd Defendant. The Applicants immediately filed another Writ Petition in W.P.(MD) No. 17525/2022 on 02.08.2022 challenging the Sale Certificate. Since, the Auction Purchaser did not deposit 25% within time and the 1^st Defendant Bank violated Rule 9(3) of the Rules, the Hon'ble High Court granted stay with condition to deposit Rs. 10,00,000/- and the same has been complied. In the meantime, when the stay order was in force, the 1^st Defendant obtained the order of Ld. CJM and challenging the same, the Applicants filed SA No. 359/2022 and this Hon'ble Tribunal granted stay with the condition to deposit Rs. 30 Lakhs in two installments and the same has been complied. Thereafter, both

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Page 5 of 15

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SA No.275/2022 & SA No.359/22

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the SA's were jointly posted for hearing. And, the Auction Purchaser has been impleaded in both the SA's as per the orders of this Hon'ble Tribunal.

¶39

It is further submitted that in the meantime, finally when the Writ came up for hearing, the Hon'ble High Court considering the fact that the Applicants complied with the conditions of the Court, disposed off the Writ Petition directing the Writ Petitioner to approach DRT to obtain further Orders within a period of 4 weeks from the date of receipt of the copy of this order. Till such time the interim order dated 04.08.2022 granted shall be in force.

¶40

It is further submitted that the Auction Purchaser did not deposited the 25% of the amount in time as mandated under law and has deposited after 3 days from the date of auction on 28.04.2022 and the whole auction is illegal and void only to favour the Auction Purchaser. The correspondence between the 1^st and 2^nd Defendant dated 25.04.2022 and 28.04.2022 will show that the amount of 25% has been received by the 1^st Defendant only on 28.04.2022.

¶41

Main Grounds:

¶42

The arbitrary action of the Defendant Bank in issuing Demand Notice, Possession Notice and Auction Sale Notice and declaring the account as NPA on 02.11.2020 during Pandemic COVID-19, is unfair being violative of Articles 14, 19(1) and 21 of the Constitution of India.

¶43

The Defendant Bank did not paste the Auction Sale Notice on the conspicuous part of the property.

¶44

The Bank failed to disclose the actual measurement of the building and sold the property to his known person in a fraudulent and collusive manner and violated Rule 8(7) Security Interest (Enforcement) Rules 2002.

¶45

The Bank failed to mention the details of the property in the Possession Notice and squarely violated the provisions of law.

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Page 6 of 15

¶47

SA No.275/2022 & SA No.359/22

¶48

The Defendant Bank failed to publish the Auction Sale Notice in a Dinamani vernacular paper which not having sufficient circulation in the area and squarely violated Rule 8(2) & (6) of Security Interest (Enforcement) Rules 2002.

¶49

The Bank failed to obtain valuation from the approved valuer and did not consult secured creditor while fixing reserve price.

¶50

The Defendant issued the present Auction Sale Notice when the account is regular which is totally arbitrary.

¶51

The Bank failed to mention the goods and stocks available in the firm and its valuation which is hypothecated with the bank.

¶52

The Bank's impugned notice is violative of rule 3(4) and Rule 8(2) of the Security Interest (Enforcement) Rules 2002 and is no notice worth its name.

¶53

The 1^st Defendant Bank has withdrawn their earlier Auction Sale Notice as wrongly issued. Therefore the Authorised Officer did not issued the present auction Sale Notice giving clear 30 days as contemplated under the Rule 8(6) & 9(1) & (4) & (5).

¶54

The sole purchaser has only deposited Rs. 10000 above the reserve price and the Defendants have violated Rule 9(2) of Security Interest (Enforcement) Rules 2002.

¶55

The Description of property is not properly mentioned in the Auction Sale Notice which is violation of Rule 8(7).

¶56

Schedule of Property

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Details of Properties:

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Item No.1: Name of the title Holder 1: Smt. Maria Madhilenal & Mr. Roch John Bosco S. All the parts and Parcel of Property and structures situated at Kanyakumari District, Vilavancode Taluk, Kaliyakkavilai Village R.S. No. 231/7B, 231/8 (Old S.R.No. 3702) Residential building, measuring 6.5 cents and the same situated in the following four boundaries. Boundaries:

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Page 7 of 15

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SA No.275/2022 & SA No.359/22

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East : Road West : Buildings belonging to Mrs. Rajamma South : Buildings belonging to Mr. Sebastian North : Land proceeding to Cementery

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Item No.2: Name of the title Holder 2: Mr. Roch John Bosco S. All the parts and Parcel of Property and structures situated at Kanyakumari District, Vilavancode Taluk, Kaliyakkavilai Village R.S. No. 231/14 (Old S.R.No. 3715/4) Commercial building, measuring 2.00 cents and the same situated in the following four boundaries.

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Boundaries:

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East : Lane West : Property of Mrs. Savarimuthal micellal South : Property of Mr. Antony kochappavu North : Property of Mr. Fareed ganaprakasam

¶65

The Applicants have submitted the following List of documents in support of their claim in the SA, which are as follows:

¶66

S.No.	Date	Particulars
1.	27.04.2021	Demand Notice
2.	23.08.2021	Possession Notice
3.	14.09.2021 & 21.09.2021	Deposit of Rs. 20,00,000/-
4.	27.09.2021	Representation of Applicants
5.	28.09.2021	Auction Sale Notice
6.	29.10.2021	Order/Proceedings in SA 487/2021 on the file of this Hon'ble Tribunal
7.	06.04.2022	Auction Sale Notice(Sale on 25.04.2022)
8.	07.04.2022	Paper Publication in Dinamani Paper
9.	29.04.2022	Representation sent to the Defendant Bank
10.	30.05.2022	Demand Draft DD No.501603 for Rs. 10,00,000/-
11.	23.06.2022	Valuation Report
12.	28.04.2022	Sale Confirmation Letter
13.	29.06.2022	Writ Petition W.P.(MD) No. 13954/22 on the file of Hon'ble High Court Madurai Bench

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Page 8 of 15

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SA No.275/2022 & SA No.359/22

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14.	07.07.2022	Sale Certificate registered byAO of bank
15.	02.08.2022	Writ Petition W.P.(MD) No. 17525/22 on the file of Hon'bleHighCourtMadurai Bench
16.	04.08.2022	Stay Order granted by Hon'ble High Court in M.P.No. 12753/2022 in W.P.(MD) No. 17525/22
17.	10.08.2022	Covering letter for deposit of Rs. 10,00,000/- in non lien account of bank
18.	11.08.2022	Proof ofpayment filed before Hon'ble High Court
19.	06.10.2022	Order of CJM in Crl.M.P.No.7995/22 obtained by the Bank
20.	28.10.2022	Stay order passed by this Hon'ble Tribunal in SA No. 359/22
21.		Proof of payment of Rs. 30,00,000/- (Condition Complied)
22.	16.02.2023	Final Order in W.P.(MD) Nos. 13954 and 17525 of 2022issued by theHon'bleHighCourt

¶70

3 . On the other hand, the Counsel for the Defendant Bank appeared before this Tribunal and filed Vakalat and Reply Statement in which he has submitted that the Applicants is a borrower and has availed various loan facilities in the name and style of M/s. DD Agencies with the Respondent Bank. The Bank has denied all the allegations raised in the Application which is false and misconceived and the Petitioner is put to strict proof of the same and further submitted that though the Applicants has availed the loan in the year 2019, the Petitioner has not repaid the loan as per the terms from the year 2019 itself and the loan was declared as NPA on 02.11.2020 and the Bank has issued a Demand Notice U/s. 13(2) of SARFAESI Act on 27.04.2021 and the Applicants has not replied to the said notice and the same was deemed to be accepted by the Petitioner and the Applicants has admitted that he has received the Demand Notice and a symbolic possession was taken by the Respondent on 23.08.2021.

¶71

It is further submitted that the Applicants has filed various petitions before the Hon'ble High Court and DRT, Madurai. The Petitioner has filed SA No. 487 of 2021 before this Tribunal and the same was dismissed as withdrawn. The Applicants is filing one case in DRT and another case in Hon'ble High Court of Madras (Madurai Bench) and the Petitioner is engaging in forum shopping and on the same ground it deserves to be dismissed. The Applicants is not repaying the loan amount and using one reason or other to stall the recovery proceedings. Further, the property was sold and registered and the Petitioner is not able to take the Physical Possession and hand over the property to the Auction Purchaser. The Applicants has not properly served the interest so the loan was declared as NPA. Further, the Property was sold to the 3^rd Defendant after complying

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Page 9 of 15

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SA No.275/2022 & SA No.359/22

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due process under SARFAESI Act. The Bank has followed the SARFAESI Act scrupulously.

¶75

It is further submitted that the Defendant Bank has issued the Demand Notice on 27.04.2021 and the same has been duly served upon but the Applicants have not replied to the said notice. Therefore, symbolic possession was taken by the Defendant Bank on 23.08.2021 and the same was duly served upon and further the Possession Notice was published in "The Indian Express" on 26.08.2021 in English daily and in "Dinamani" in Tamil Daily on 26.08.2021 and the same was affixed in the conspicuous part of the property. The Description of property is clearly mentioned in the possession and Sale Notice. The Bank further submitted that they have taken valuation before the Sale. The Paper Publication is made in Dhinamani which is having wide circulation. The Applicants did not repay the loan amount from 2019 and merely paying after declaring the account as NPA will not save the Applicants.

¶76

It is further submitted that the action initiated under SARFAESI Act against the Applicants herein by the Defendant Bank is within the purview of the said Act. The Applicants have not challenged or highlighted any valid violation committed by the Defendant Bank and it is worthwhile to mention that the Applicants has accepted that he had received the Demand Notice, Possession Notice and Sale Notices. Hence, there is no merit in this Application.

¶77

Therefore, it is prayed that this Hon'ble Tribunal may be pleased to dismiss the above SARFAESI Application with exemplary costs and thus render justice. The Defendant Bank has not filed any typed set of papers to prove their allegations.

¶78

4. ON THE BASIS OF ABOVE PLEADINGS THE POINT WHICH ARISES FOR CONSIDERATION IS:-

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WHETHER THE APPLICANTS ARE ENTITLED TO GET THE RELIEFS AS PRAYED FOR?

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5 . Having heard the parties and after going through the entire documents available on records, and also after considering the arguments by both the Counsels, I find that it is admitted fact that the Applicants have taken loan from the Defendant Bank but the Defendant Bank has submitted

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Page 10 of 15

¶82

SA No.275/2022 & SA No.359/22

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that since the Applicants have failed to repay the loan amount as per the terms from the year 2019 the loan account became NPA on 02.11.2020 and thereafter the Bank has issued Demand Notice u/s. 13(2) of the SARFAESI Act on 17.04.2021 and thereafter he has also issued symbolic Possession Notice on 23.08.21.

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On the other hand, the Applicants have submitted that they diligently fulfilled all repayment obligations according to the scheduled time line until April 2020. But, unfortunately, due to Covid-19 Pandemic there was national lockdown since from March 23^rd which significantly impact the business. According challenging circumstances, and despite the hardship the Applicants paid Rs. 5.00 Lakhs in the month of July 2020, which shows their earnest effort to meet their financial responsibilities.

¶85

On the other hand, the Defendant Bank has submitted that since the Applicants have failed to pay the loan amount after issuance of Possession Notice sold the property and also registered the same. But he was not able to take the Physical Possession and to handover the property to the Auction Purchaser. The Defendant Bank has denied all the allegations leveled by the Applicants. The Applicants have filed this SA challenging the Sale Notice mainly on the ground that in spite of the payment of the money the Defendant Bank issued Auction Sale Notice and as such the Applicants have filed this SA. And, the Applicants have also filed Writ Petition in W.P. (MD) No. 13954/22 challenging the auction Sale Notice. It is also submitted that after issuance of the notice in the said Writ Petition, the Applicants were directed to implead the Auction Purchaser and Affidavit of service filed before the Hon'ble High Court of Madras (Madurai Bench) on 04.08.2022, but during this period, the authorized officer issued Sale Certificate and furnished the same before the Hon'ble High Court of Madras (Madurai Bench). I find that the Applicants have also filed another Writ Petition vide WP (MD) No. 17525 of 2022 before the Hon'ble High Court, challenging the Sale confirmation letter and Sale Certificate. Upon hearing the said Writ Petition, the Hon'ble High Court recording the violation committed by the

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Page 11 of 15

¶87

SA No.275/2022 & SA No.359/22

¶88

Bank that "upon prima facie evidence of a violation of section 9(3) of the Security Interest (Enforcement) Rules, by the Bank, granted a stay of all proceedings" with direction to the Applicants to make a payment of Rs. 10 Lakhs in a no lien account. As, it appears from perusal of judgement available at page no. 133 of Comprehensive Common typed set pages. I also find that in compliance of the Hon'ble High Court's Order, the Applicants have paid the amount of Rs. 10 Lakhs as directed by the Hon'ble High Court, proof of payment is available (at page nos. 135, 136 & 137 of Comprehensive Common typed set pages filed by the Applicants), which was also acknowledged by the Bank.

¶89

It is also submitted by the Applicants that in spite of the Hon'ble High Court's Order of Stay, the Defendant Bank obtained an Order from the Ld. CJM for taking the Physical Possession of the property on 06.10.2022 which clearly contravenes the Orders of the Hon'ble High Court. I also find that the Applicants have again filed SA No. 359/22 before this Tribunal challenging the Ld. CJM Order, in which the Applicants have been granted conditional order and they have also complied the said Conditional Order which is seen from perusal of proof of payment available at Additional Typed set dated 06.12.2022 filed by the Applicants, which was also acknowledged by the Defendant Bank.

¶90

I also find that the Applicants have challenged the Sale Notice on the ground that auction Sale Notice was not issued in the leading two Newspapers one in English and one in Vernacular language within 30 days. Further, no clear 30 days Sale Notice was issued. On the other hand, the Defendant Bank has simply denied the allegation of the Applicant but he has not filed any document to show that the Sale Notice was properly issued to all the borrowers/guarantors according to the SARFAESI Rules & Act.

¶91

Further, Rule 9(3) of Security Interest (Enforcement) Rules 2002 clearly says that

¶92

Page 12 of 15

¶93

SA No.275/2022 & SA No.359/22

¶94

" On every sale of immovable property, the purchaser shall immediately, i.e. on the same day or not later than next working day, as the case may be, pay a deposit of twenty five percent of the amount of the sale price, which is inclusive of earnest money deposited, if any, to the authorized officer conducting the sale and in default of such deposit, the property shall be sold again"

¶95

In this case, auction held on 25.04.2022 and the Bank has issued Sale confirmation letter on 28.04.2022. I also perused the Sale confirmation letter which is available at the type set filed by the Applicant at page no.49 and I find that the Bank has issued Sale Confirmation letter on 28.04.2022, in which the bank has mentioned that the Auction Purchaser has remitted 25% of the bid amount but he has not mentioned the date of payment of 25% of Sale amount. So, it is not clear whether the Auction Purchaser has paid the 25% of amount on time. However, the Bank has also not filed any document showing the details of payment schedule made by the Auction Purchaser. So, this fact has not been proved by the Defendant Bank by filing substantive piece of evidence.

¶96

I also find that the Bank has issued first Sale Notice dated 28.09.2021 fixing the auction on 30.10.2021. Challenging the above Sale Notice, the Applicant filed SA No. 487 of 2021 before this Hon'ble Tribunal. But the SA got withdrawn since the Defendant Bank has withdrawn their auction Sale Notice as it was wrongly issued. Thereafter, the Bank has issued the impugned Sale Notice on 06.04.2022 scheduled to be held on 25.04.2022 . From perusal of this Sale Notice which is available at page nos. 24-30 of Comprehensive Common Typed set pages filed by the Applicants. I find that the Bank has issued the impugned Sale Notice by not giving 30 days time as contemplated under the Rule 8(6) & 9(1) of Security Interest (Enforcement) Rules 2002. Because this Sale Notice amounts to be the 1^st Sale Notice as earlier was withdrawn by the Defendant Bank. Further, the Bank has also failed to file the documents, such as AD Cards, Paper Publication Copies and affixture of Sale Notice on the conspicuous part of the property, etc. as required under the provision of SARFAESI Acts & Rules. The Bank has failed to submit the Valuation Report to prove that they have properly

¶97

Page 13 of 15

¶98

SA No.275/2022 & SA No.359/22

¶99

valued the property as stipulated in Law. As such, the Bank has failed to follow the SARFAESI Act & Rules.

¶100

Moreover, the Applicants have complied with this Tribunal's conditional order and paid Rs. 30 Lakhs and also they have complied the Hon'ble High Court's conditional Order and paid Rs. 20 Lakhs.

¶101

In view of the above facts and discussion made above, I find that the Bank has proceeded under the SARFAESI Act and rules for recovery of money from the Applicants while stay granted by the Hon'ble High Court was in operation which amounts to violation of the Court's Order and secondly they have not followed the procedure as mentioned in the SARFAESI Act & Rules. Moreover, the Defendant Bank has failed to file the Typed set of Papers to rebut the allegations of the Applicant. Therefore, this Tribunal holds that this case is maintainable and the Applicants are entitled to get the reliefs as prayed for in both SA No. 275/22 & SA No. 359/22 .

¶102

In the result,

¶103

SA No.275/2022:

¶104

(a) SA No.275/2022 is allowed as prayed for. Sale held on 25.04.2022 in pursuance to the sale notice dated 06.04.2022 is not in accordance with law as there is violation, the sale is hereby set aside by this Tribunal.

¶105

(b) The 1^st Defendant Bank is directed to refund the entire sale consideration amount paid by the Auction purchaser along with 4% of interest to the Auction purchaser from the date of deposit of money till the refund.

¶106

(c) The Applicant shall make the payment of the amount incurred by the Auction Purchaser towards the Stamp duty and Registration charges.

¶107

(d) The Applicant is also directed to pay the interest at the rate of 4% of the sale price to the Bank from the date of payment of Sale price by the Auction Purchaser till the date of refund to the Auction Purchaser by the Bank.

¶108

Page 14 of 15

¶109

SA No.275/2022 & SA No.359/22

¶110

(e) Sale Certificate dated 07.07.2022 vide Doc.No.1/2515/2022 issued by the 1^st Defendant Bank in favour of 2^nd Defendant is not in accordance with law as there is violation in following the proceedings under the SARFAESI Act and rules as such the Sale Certificate is hereby set aside.

¶111

SA No. 359/2022:

¶112

(f) SA No. 359/2022 is allowed as prayed for. The Order passed by the Ld. CJM, Nagercoil, Kanyakumari District in Crl.M.P.No. 7995 of 2022 dated 26.08.2022 is hereby set aside.

¶113

(g) All the expenditures incurred in issuance of Impugned Order passed by the Ld. CJM, Nagercoil, Kanyakumari District in Crl.M.P.No. 7995 of 2022 dated 26.08.2022 & Possession Notice dated 23.08.2021 & Sale Notice dated 06.04.2022 shall not be included to the loan account of the Applicants.

¶114

(h) The Defendant Bank is at liberty to initiate fresh action, against the Applicants, towards recovery of loan dues after adjustment of Rs. 50,00,000/- (Rupees Fifty Lakhs only) paid by the Applicants in compliance of the conditional orders passed by the Hon'ble High Court & this Tribunal in accordance with law.

¶115

(i) The Registry is directed to inform the concerned Sub-Registrar, Marthandam about this order so as to cancel the registration of the Sale Certificate dated 07.07.2022 vide Doc.No.1/2515/2022.

¶116

Consequently, all pending IAs (if any) are also disposed of.

¶117

Dictated to PA (DK), taken down, transcribed, typed by her, corrected and pronounced by me in the Open Court in this the 20^th November, 2024.

sd/-

(SEEMA SINHA)

PRESIDING OFFICER

Dictated & Corrected by me sd/-