Allowed

Ramesh Thakur v. Bank of Baroda

DRT3 Feb 2025SA/16/2022

Case brief

AI extract

What is this about?

In Securities Appeal SA No.16/2022, Debts Recovery Tribunal-I Chandigarh set aside a property auction ordered by Bank of Baroda. The court found multiple violations: no personal notice served, insufficient 25% deposit by the purchaser, and less than 15 days public notice. Sale set aside with refund directions.

What did the court decide?

Sale set aside; bank directed to refund sale consideration with 6% interest, cancel sale certificate, and restore possession to bank for re-auction.

Ramesh Thakur versus Bank of Baroda — Banking and Recovery | DRT (2025)

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SA No.16/2022

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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SA/16/2022 RAMESH THAKUR

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BANK OF BARODA AND ANR.

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03.02.2025

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Item No.40

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Present: Sh. KD Ray, Counsel for the Applicant along with Sh. Ramesh Thakur/applicant in person.

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Sh. PK Rohilla, Counsel for respondent No.1/bank. Ms. Anupama Sharma, Counsel for respondent No.2/auction purchaser.

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Ramesh Thakur (Applicant) has filed this Securitization Application under Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), against The Chief Manger Bank of Baroda and another (Respondents).

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Admittedly, on 15.04.2014, Bank of Baroda had sanctioned a Term Loan of Rs.17.00 Lacs to the applicant. To secure the same, applicant had created security interest in respect of flat situated at Shimla, in favor of the bank. Applicant did not make the repayment of the installments regularly. Accordingly, on 31.03.2021 bank declared the account as NPA. On 02.04.2021 bank issued the notice under Section 13(2). Still the payment was not made. On 09.06.2021, bank took the physical possession of the property. Bank put up the property for auction on two occasions. However, there was no bidder. Ultimately, the bank issued the sale notice on 09.12.2021 fixing up the property for auction on 23.02.2021. The reserve price of the property was fixed for Rs.15,97,300/-. Respondent No.2 was the highest bidder for Rs.16,07,300/-. On 18.01.2022 applicant filed the present SA challenging the auction.

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In the SA, the case of the applicant is that he was never served with the personal notice of sale. His case is also that the bank did not give 15 days notice

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SA No.16/2022

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for the auction as the notice was issued on 09.12.2021 and the sale was fixed up for 23.12.2021.

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Respondent bank and auction purchaser have filed replies to the SA.

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It is admitted by the counsel for the bank that applicant was not served with any personal notice for the auction fixed up for 23.12.2021. It is also admitted by him that the auction purchaser did not deposit 25 percent of the total sale consideration on 24.12.2021. It is also admitted by the counsel for the bank that the notice was published on 09.12.2021 and the auction was fixed for 23.12.2021 and thus there was no 15 days notice in publication. Ms. Anupama Sharma, counsel for the auction purchaser has placed reliance upon the judgment of Hon’ble Supreme Court of India in the matter of Celir LLP Vs. Mr. Sumati Prasad Bafna and Ors, and submitted that the auction purchaser has deposited whole of the sale consideration and is in possession of the property for more than last two years. She submits that the sale should not be set aside as the auction purchaser would suffer irreparable loss.

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Though, there is no denying the fact that the Hon’ble Supreme Court in Celir LLP (supra) has held that the confirmed auction should not be set aside, yet, the fact remains that in this case there are multiple violations by the bank. First of all, no sale notice was issued and served by the bank on the applicant. Secondly, the auction purchaser does not deposit 25% of the sale consideration on the next day of the auction. Thirdly, the bank did not give public notice of 15 days for the auction. In these circumstances, I am of the considered view that the sale by the bank cannot be sustained. The same is hereby set aside. Bank is directed to refund the total sale consideration to the auction purchaser with interest @ 6% per annum from the date of deposit, till the date of payment. The auction purchaser would return all the documents given by the bank to her. The bank would cancel the sale certificate, if registered. Bank would also pay cost of Rs.25.000/- to the auction purchaser. The auction purchaser would restore the possession to the bank, which will be free to auction the same again as per law. In view of the above, the present

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SA No.16/2022

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SA stands disposed of . All the pending IAs, if any are also stand disposed off accordingly. Registrar is directed to send a copy of this order to all the parties, as per rule.

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File be consigned to record room after due compliance.

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(A S Narang) Presiding Officer DRT-I, Chandigarh

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Pronounced in open court Dated; 03.02.2025 PANKAJ

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Ramesh Thakur v. Bank of Baroda

Case brief

What is this about?

What did the court decide?

Ramesh Thakur v. Bank of Baroda

Case brief

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