Dismissed

Rajesh J aeren v. Phoenix Arc Pvt. Ltd.

DRT20 Nov 2025SA/283/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal, Delhi, dismissed the applicant's application filed under Section 17 of the SARFAESI Act. It held that as a guarantor, the applicant lacked locus standi to challenge the sale of the borrower's property after the borrower had already litigated the matter unsuccessfully. The sale was upheld as complying with the law.

What did the court decide?

Application for revision and quashing of the auction sale dismissed on grounds of lack of locus standi for the guarantor.

Rajesh J aeren versus Phoenix Arc Pvt. Ltd. — Banking and Recovery | DRT (2025)

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Debts Recovery Tribunal-Il, Delhi

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SA No.283 ol2023

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RA,ESH J AEREN Vs PHOENIX ARC PVT LTD & ANR

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Reserved on: 24.10.2025 Pronounced on: 20.11.2025

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Present:

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Shri Rajinder Wali, counsel along with Ms. Reena Jain Malhotra, counsel for applicant. Shri Ashwani Kumar Mata, Sr. Advocate along with Shri Suresh Dutt Dobhal, Shri Shikhar Kumar and Shri lGran, counsels for respondent no. 1.

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Shri Sanjiv Kakra, Sr. Advocate along with Shri Raghav Sharma, Shri Jaskirat Pal Singh and Shri Akash Madan, counsels for respondent no. 3/auction^purchaser.

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This SA has been filed by the applicant against the respondent bank under Section 17(1) of the SARFEASI Act,2002 with the request that the action and measures iniUated by the respondent no.1 in respect of the property viz. land and building on land admeasuring 54903 Sq. Yards at Village Kadian and Phaguwall, N.H.-l, G.T. Road, Ludhiana Suruey no./Khasra no.6llL7-18, 61122, 61123, Khata no.39/4l, l3lL4, Jamabandi 2002-03 of Village Phaguwal and Khasra no.29 I I t8-L9-20-30 I I L6-17 -26-L8, 29 I I LL, 29 | I L2-30 I I L3- t4 -L5, Khata no. 1 06/ L26, L05 I L25 of Jamabandi 1999 of Village Kadian known as Festival City Mall, Ludhiana be declared illegal and arbitrary and quash the same.

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The brief facts of the application are that as per application, on 15.07.2005, M/s AVM Land Developers M Ltd (AVM) acquired a land parcel in Ludhiana, Punjab and the land got converted to commercial land use and M/s AVM tand Developers h/t Ltd entered into an agreement dated 15.07.2005 with AEZL. It is submitted that AEZL conceptualized a project for deyelopment of an integrated q]

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Mall in the name of "Festival City" on the above mentioned land for construction of the mall including mulUplexes with a minimum of 1500000 sq. ft. commercial building complex namely Festival City. Subsequently, M/s AVM Land Developers hlt Ltd was amalgamated with respondent no. 1. It is submifted that as per the case of respondent no.l, the subject securitisation measures are being taken by the respondent no.1 for alleged credit faciliUes detailed infra, which were granted by its predecessor in interest to the respondent no.2 and the applicant is alleged to be a guarantor to the said credit facilities. It is submitted at the time of availment and renewal of the said credit facilities, the applicant was induced into appending signatures on a plethora of printed and unfilled formab without being explained about the contents, intent and purport thereof. It is submitted that the officials of respondent no.1 and its predecessor in interest, even on being requested to fill up the blank fields appearing in the documents, did not fill them up, assuring the applicant that the purported execution of the documents is a mere formality. Thus, the applicant was made to mechanically append his signatures on various places where pencil 'x' marks had been made and that too without being afforded an opportunity to understand any of the formatted clauses and contents. It is submitted that the applicant was not explained the contents and purpose of the documents by the officials of respondent no.l and its predecessor in interest. Thus, the alleged loaning and security documents relied upon by the respondent no.1 are devoid of consensus ad idem and, hence, unenforceable and void. It is submitted that the same are replete with addition of handwritings of filling in dates and words and clearly causing material gltgations in the same. It is

SA NO. 283 of 2023

submitted that in 2006, a consortium of banks comprising of Allahabad Ban( Bank of Rajasthan and Indian &erseas Bank allegedly sanctioned credit facility for the project to the respondent no.2 for an amount of Rs.100 Crores. It is submitted that at the Ume of sanction of the alleged credit facilities on 31.07.2005, the banks also coerced the respondent no.2 to create a mortgage by deposit of deeds of the p@ect property, land, and building on land by mortgaging its stake i.e. 54o/o of the entire commercial land with superstructure standing therein at Village Kadian and Fuguwall, NH-1, Ludhiana as collateral security to the term loan. Thus, remaining 46%o of the enUre commercial land was available for sale. It is submitted that the credit facility given by the three consortium banks specifically sanctioned that the said three bank had permitted the respondent no. 2 to make sale to the extent of 4So/o and only the remaining 54o/o will be mortgaged. It is submitted that on 05.08.2006, a Tripartite Agreement was also enterd into between M/s AVM Land Developers h/t Ltd, the respondent no. 2 and Allahabad bank as the leader of the consortium. It is submitted that in 2009, on the request of the respondent no. 1, three consortium banks issued reschedulement sanction letters allowing respondent no.1 to sell 30o/o of the mortgaged propefi (in place of 460/o earlier), giving 12 months more for repayment etc. It is submitted that the respondent no.2 always adhered to the terms and conditions of the loaning documents. However, the account of the respondent no.2 was classified as NPA on 3I.12.2009 by the predecessor in interest of the respondent no.1, without giving any prior/advance notice which is in gross violation of the guidelines issued by the RBI. On 31.03.2010, the applicant received a demand notice under Section 13(2J-_of the SARFAESI Act, 2002,

SA NO. 283 of 2023

whereby an amount of Rs.67,87,t2,2L31- was claimed from the applicant and the respondent no.2. It is submitted that the reasons for the default for the applicant was the due to conspiracy, misdeeds and commercial gain to MONDON. It is submifted that the AEZPL and its^promoters entered into the Investment and Shareholders Agreement (SHA) dated 25.08.2008 with MONDON. In terms of the said Shareholders Agreement, AEZPL was to receive an amount of Rs.186 Crores from MONDON. After^joining the AEZPL board, MONDON stopped the^payment to ensure AEZPL Loan become NPA and MONDON hatdred a conspiracy to usurp the entire project for peanuts but did various regulatory violations including FEMA/PMLA apart from FDI and RBI violations in the process. It is submitted that Broad Terms of Understanding was signed by MONDON for PROJECT on 24.10.2007, at the same time ENERGEE was formed in India which did no business Ull it acquired 100o/o bank loan of ICICI in March 2011 and other 2 banks loan through PHOENIX ARC. It is submitted that key management^persons of MONDON and ENERGEE were same and ultimate beneficiary were also same. It is submitted that after signing the Shareholders Agreement on 25.08.2008, MONDON appointed 50o/o directors on the board of AEZPL. However, after sometime MONDON stopped (Last tranche of Rs.38.3 Cr.) further^payment to AEZPL due to which the loan become NPA and simultaneously hatched a conspiracy to usurp the entire PROJECT through illegal channels involving Phoenix ARC and Energee Reality Ventures hlt. Ltd. It is submitted that MONDON directors left the board of AEZPL immediately after taking the control of bank loan through ENERGEE and PHOENIX ARC and MONDON sent money to ENERGEE which ENERGEE used to utre o/o of bank loan of 1 s4

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bank and rest money was utilized to fund PHOENIX ARC to acquire bank loan of other 2 banks. For this^purpose, ENERGEE had opened a bank ac@unt with Kotak in March 2011. It is submitted that RTI reply of RBI revealed the discrepancy in reported use and actual use of funds by ENERGEE. More pafticularly, MONDON was to^pay approx. Rs.38.3 Crores to AEZPL towards the investment as^per the agreement but instead of^paying to AEZPL it started hatching conspiracy against AilPL. It is submitted that Mondon paid Rs.82.38 Cr. to ENERGEE HSBC Mumbai account no.030411029001. It is submitted that ENERGEE transferred Rs.82.67 Cr. from HSBC Mumbai to Kotak Mahindra Bank, Kalina Branch, Mumbai, Nc. No. 06312010000945 and the funds^parked with ENERGEE, Kotak Mahindra Bank ac@unt were either safety mechanism or guarantee provided and thus PHOENIX TRUST FY 11-6,^purchased 100o/o of AEZPL debt from Allahabad Bank and IOB. It is submitted that ENERGEE paid to different accounts for acquiring 100o/o of AFZPL debt ENERGEE paid Rs.25.27 Cr. (A/c. No. 06312010000946) to ICICI bank for^purchase of 100o/o debt of AilPL.It is submitted that the whole conspiracy is revealed through report of September 2010 consolidated financial statements of Jerusalem Economy Ltd. a parent company of MONDON (JEL) that they are holding negotiations on the project with ARC Company who purchase debt from local banK along with lien right on the project, bank have consented in principal and the same shall be financed by MONDON. After that ARC shall put its rights in the project on sale via tender subject to the rights of ENERGEE upon the compleUon of the tender PROJECT and believes that there is a significant chances exist that ENERGEE will win the ARC tender and become sole owner of the pCIdi It^js submitted that the said

SA NO. 283 of 2023

reports also stated that MONDON is considering alternate means of maintaining hold of the^pCIect and is conducting among other things advanced talks with the banks for this^purpose. Thereafter, the respondent also issued possession notice U/s 13(a) of the SARFAESI Act, 2002. In the meanwhile, Bank of Rajasthan had amalgamated with ICICI Bank and ICICI Bank assigned ib debVsecurity interest in favour of Energee Reality Ventures A/t. Ltd (ENERGEE) with effect from 31.03.2011. Further, Allahabad Bank and Indian Overseas bank assigned its security interest to respondent no.l on 05.04.2011. Thereafter, respondent no.1 agreed to transfer the Security interest^purchased from Allahabad Bank and Indian Overseas Bank to ENERGEE on 06.05.2011. Subsequently, respondent no.l claimed that it had cancelled the agreements with ENERGEE. Therefore, as on date, the debt of the Allahabad bank and Indian Overseas bank stands assigned to respondent no.1, while the debt of Bank of Rajasthan stands assigned to ENERGEE. However, the said assignments are not as per the procedure prescribed by law. It is submitted that in the meanwhile, the predecessor in interest of the respondent no.l had filed an OA before this Hon'ble Tribunal and the said O.A. was allowed on 02.09.2014 vide final order for an amount of Rs.55,96,31,7791- along with interest and the same culminated into issuance of R.C. No.319/2014. It is submitted that in the year 2016, the Hon'ble High Court of Delhi, vide order dated 18.03.2016, admitted a winding up petition filed against respondent no.2 and an Official Liquidator was appointed. It is submitted that on 03.12.2018, the Official Liquidator was directed to hand over possession of the security interest to the respondent no. 1. However, it was made clear that respondent no. will ply with Section 529 A

SA NO. 283 of 2023

of the Companies Act, 1956. It is submitted that as per the mandate of the final order dated 02.09.2014 as well as R.C. No.31912014, the alleged dues were to be recovered by sale of the subject properfy and hypothecated properties. However, in gross violation of the mandate thereof the respondent no.1 did not proceed against the subject property in the recovery^proceedings. It is submifted that the Official Liquidator of the respondent no.2 was, in the meanwhile, impleaded in the recovery proceedings and the Official Liquidator even filed a status report, wherein it requested the respondent no.1 not to proceed against the subject property as respondent no.l was putting the property to auction at as a dismissal low price. Reliance was also placed by respondent no.2 on communicaUon dated 04.07.20t6 issued by the respondent no.2 to the respondent no.1. It is submitted that the said status report of respondent no.2 and^prayers therein are unrebutted and uncontested by the respondent no.1. It is submitted that the orders^passed by the Ld. RO have been contemptuously disobeyed by the respondent no. 1 while proceeding against the subject property under SARFAESI Act. Vide order dated 05.L2.20t9, the Ld. RO directed the respondent no.1 to file on record the action taken by it under SARFAESI Act, 2002 and reasons for their failure. Further, the respondent no.1 was also directed to file valuation report of the subject property. However, in contemptuous disobedience of the directions, the respondent no.1 did not comply with the mandate of the said order. It is submitted that vide order dated 26.Lt.202L and 11.07.2022, the Ld. RO again directed respondent no.1to file valuation report of the subject property. However, the respondent no.1 did not comply with the mandate of the said orders again. The rory$rt no.1 put the subject

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SANO.283 of 2023 E

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property on auction on 20 occasions while reducing the reserve price of the subject property in gross violation of the mandate of Rule 8(5) of the Security Interest (Enforcement) Rules, 2002. It is submitted that before issuance of su@uent sale noUce(s), the respondent no.1 did not^procure a valuation repoft from an approved valuer as is mandatory under the Security Interest (Enforcement) Rules, 2002. It is submitted that the auction notice by PHOENIX ARC refer clause 20 which suffintiate the^{planning part} of report as "After that ARC shall put its rights in the PROJECT on sale via tender subject to the rights of ENERGEE upon the completion of the tender PROJECT and believes that there is a significant chances exist that ENERGEE will win the ARC tender and become sole owner of the PROJECT'. It is submitted that PHOENIX ARC is unable to auction the PROIECT 18 times, due to this whole conspiracy and ENERGEE specific clause. It is submitted that ENERGEE gave no objection to PHOENIX ARC to hold its share of the charge over the PROJECT. It is submitted that ENERGEE is a not an ARC company hence could not exercise SARFAESI rights. It is submitted that the MONDON and ENERGEE engineered the alienation of 100o/o of the said P@ect to itself and its nominees at a significant underualuation in connivance with PHOENIX ARC and PHOENX TRUST. So MONDON and ENERGEE cheated AEZPL Indian shareholders and investors by grabbing illegally their rights and privileges. It is submitted that ENERGEE has invested in asset reconstruction business without the necessary approvals and Asset Reonstruction Business is not^permitted without RBI registration under SARFAESI Act. Thuq ENERGEE has violated the registration requirement under SARFAESI Act as well. It l1sulmitted that by trying to

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SANO.283of2023 9

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take assignment from one of the lender banks ENERGEE has itself sought to engage in banking and/or financial business whereas it is liensed to conduct neither banking business nor non banking financial company (NBFC). It is submitted that the utilization of amount of Rs.82.47 Crores, although cloaked as FDI effectively is attempted to be treated as a loan from MONDON (foreign company) to ENERGEE (foreign owned India company). Accordingly, the end use and other restrictions under the External Commercial Borrowings (ECB) guidelines^get violated. It is submitted that all MONDON, ENERGEE and PHOENIX ARC and the lender banks have acted in connivance. It is submitted that this fraud has been done to ultimately make ENERGEE the sole owner of the said^project. For this, blatant violation of FEMA and other laws in India, either direcUy or indirectly, is being carried out by concerned parties to the fraud at relevant times. It^is submitted that the respondent no.1^put the^property in auction on 14.06.2023. The respondent no.l^miserably failed to mention the area of the^propefi in^question and sold the same under conspiracy to the single bidder. It^is submitted that the applicant, thereafter, many times requested the respondent no. 1 through e.mails to provide him the status of the auction sale and other details of the^proceedings but till date they failed to reply to the said mails. It is submitted that the respondent bank itself made statement regarding the area of the^propefi in question that 650lo area is of Phoenix ARC and 35olo is of ENERGEE before the Hon'ble Delhi High Court in various orders dated 05.09.2f & 13.11.19 and so on, that how the entire property in question can be^put to auction as per action notice dated 18.05.2023 and in case the property is sold in part than what is the area which is sold. It is submitted that the-respgldent no.1 is a tool at

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the hands of the MONDON, ENERGEE and^get involved in all the criminal conspiracy and this fact can also be corroborated with the various auction^notices published by the respondent no.1, as every time the notice had the different information about the^{lenders and} the propefi in^question. It is submitted^{that the illegal} and arbitrary reduction in^{reserve price is an admittedfact} and is also contained in^{submissions of the respondent} no.1 during hearing dated^{04.02.2022hfore the Ld. RO} wherein the respondent^{no.1 itself submitted that it has} reduced the reserve^price of^{the subject property} drastically from Rs.150^{Crore to Rs.35 Crore. Itis} submitted that the^{respondentno.1 is well aware of these} facts and is in^{hands in gloves with the MONDON,} ENERGEE and therefore,^{the applicant also filed a criminal} complaint against all^{of them' It is submittedthat the} subject^property is^{being slated for auction sales at} dismally low reserve^{price(s)is also substantiated by a} valuation report dated^{10.06.2023procuredby the} applicant ftom^{a government approvedvaluer, whereby} the value of the^{subject property is assessedas Rs'98'15} Crores. It is submitted^{that even on previous occasions} the banks have^{procured valuation reportsof the subject} properties which have demonstrate^{that the value of the} subject^{property has alwaysbeen in ex@ss of Rs'100} Crores. It is submitted^{that the respondentno.l last} issued a sale notice dated^{18.05.2023underRule 8(6),} whereby the subject^{property was put auction on} 14.06.2023 for a dismally^{low reserue price of merely} Rs.35 Crore. It is submitted^{that no noUce under Rule} 9(1) was issued by the^{respondent no.1 as mandatedby} law. In response thereof,^{vide letter dated 13.06.2023,} the applicant opposed^{the action of the respondentno'1} in putting the aforesaid^{proryrty to auctionunder} e^

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SARFAESI Act, 2002 at a dismally low reserve^price and also pointed out the brazen violation of the orderc passed by the Ld. RO. Fufther, vide emails dated 26.06.2023 and 30.06.2023, the applicant even inquired about the status of auction sale dated 14.06.2023, which even otherwise was the statutory and reciprocal obligation of the respondent no.1 to disclose. It is submitted that as and when the applicant did not receive a.ny response from the respondent no.2, .^{despite the above mentioned} communications, the applicant was constrained to approach the Ld. RO vide application datd 25.07.2023 and the Ld. RO, vide order dated 26.07.2023, also directed the respondent no.2 to file by 28.07.2023, on affidavit, the e-auction details dated 14.06.2023 so as to enable the applicant to take appropriate action under^law, including but not limited to filing of a securitization Application. However, again, in contempfuous disobedience of the orders^passed by the Ld. RO,^the respondent no.1 did not comply with the directions issued on 26.07.2023 despite reminders and notice(s) issued by the applicant in that regard. It is submitted that by^way of such act the respondent no.1 has not only committed contempt of the orders^passed by the Ld. RO and has rendered its officials liable to be^prosecuted and^punished U/s 10 & 12 of the Contempt of Courts Act, 1971 but at the same time, the respondent no. t has also affected the rights and remedies available to the applicant Uls 17 of the SARFAESI Act, 2002. It is submifted that. the impugned recovery actions and measures of the respondent no. 1 are violative of the provisions of SARFAESI Act, 2002 and Rules made thereunder. It is submitted that the action of the respondent no.1 under SARFAESI Act, 2002 are^{jurisdictionally} illegal as the same are being resorted to aftg thgissuance of a recovery

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SANO.283of2023 12

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certificate. It is submitted that no^{action/measure} ought to be taken by a creditor after^{the issuanceof a} recovery certificate. Thus, measures^{against the subject} property are liable to be set aside. It is submitted^{that the} action of the respondent^{no.l is even contrary to the} directions by the^{respondentno.2 and the impugned} measures are being^{conducted under SARFAESI Act, 2002} just to ensure that respondent no.1^{sells the subject} properfy behind the back of^{the respondent no'2, who} has already^{submitted before the Ld. RO that respondent} no.1 was^{putting the property to auction at as a dismissal} low^price(s) and^{has requested that the respondentno'l} ought not to^{proceedagainst the subject property'} Although, the^{said report and submissionsof respondent} no.2 have^{remainedunrebutted and uncontestedby the} respondent^{no.1, it is proceedingunder SARFAESIAct'} 2002 to sell^{the property behind the back of the} respondent no.2^{and the U. RO' It is submittedthat for} an auction^{sale underSARFAESIAEt', 2002, Rule 8(5)} mandates the^{Authorized Officerto obtain valuation of the} property from an^{approvedvaluer and in consultation with} thesecuredcreditor,fixthereservepriceoftheproperty before effecting^{sale of immovable property' Itis} submitted that^{respondent no.1 and its authorized officer} have violated^{the.mandateof Rule 8(5) of The Security} Interest^{(Enforcement)Rules,2002 and the authorized} officer has not^{obtainedvaluation report from an} approved valuer^{defined by Rule 2(d) of the Security} Interest^{(Enforcement) Rules, 2OO2' It is submitted that} theauthorizedofficerhasnotfixedthereservepricein consultation^{with the respondent no'1' Even otherwise'} assuming a^{valuaUonreport was obtained, the applicant} apprehends^{that the same was not procuredin proximity} to the date of^{the sale as the zupect properties are slated}

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SA NO. 283 of2023

for auction sale(s). It is submitted that just because previous auctions failed for want of bid, the secured credit cannot reduce the reserve price without^procuring a fresh valuation report by an approved valuer and if such an act is done then the same is illegal and violative of the Security Interest (Enforcement) Rules, 2W2. It is submitted that the applicant, in suppoft of the said proposition of law, places reliance upon the dictum of Fullerton India Credit Company Ltd. and Ors. Vs. Advance Surfactants India Ltd. and Ors. MANU/DD/00LL|202L.It is submitted that in absence of the compliance of the aforesaid inviolable^provision, the impugned auction^sale dated L4.06.2023 is^grossly illegal and void. It^is submitted that by virtue of^proviso to Rule 8(6) of the Security Interest^{(Enforcement)} Rules, 2002, a^{sale notice} drawn in Appendix IV-A is a notice^meant for^publication for inviting^{participation} of^public at large in the auction. Therefore, the impugned sale notice cannot be construed to be^pre-sale notice^predicated and^prescribed by^Rule 8(5) of the Security Interest^{(Enforcement)Rules, 2002.} It is submifted that the impugned sale notice^{issued under} Rule 8(6) of Security Interest^{(Enforcement)Rules,2002} has not been^published in any newspaper having^wide and comprehensive circulation in the^localities where the subject^properties are situated. Thus, the respondent^no.1 stands in gross violation of Rule 8(6) of the Security Interest (Enforcement) Rules, 2002. It is submitted that no notice under Rule 9(1) of the Security Interest (Enforcement) Ruleg 2002 has been issued by the respondent no.1, which in itself renders the auction sale dated 14.06.2023 as illegal and liable to be^quashed. It is submitted that the subject property has not been appropriately and correcdy described in the impugned sale notice as is mandated by nu!98(Z)(a) of the Rules. It

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is submitted that in the present case, the Authorized Officer of the Respondent has concealed the^pending litigaUons with respect to the alleged debt and the subject property, which render the auction sale dated 14.06.2023 being violative of the^prescription and mandate of^Rules 8(7) & 9(7) to 9(10) of the Security^Interest (Enforcement) Rules, 2002. It is submitted that sale under SARFAESI Act, 2002 cannot be made on "as^{is where is} and as is what is basis" as such stipulation^{would be} violative of the mandate of Rules 9(7) to^{9(10) of the} Security Interest^{(Enforcement) Rules, 2002. Itis} submitted that the impugned^{sale notice as well as} impugned auction sale is in fraud of^{the statueviz.} SARFAESI Act, 2002 as^{also the intending bidders. It is} submitted that the impugned^{statutory actjons and} measures of the respondent no.1^{are actuatedby mala} fide and ulterior motive to^{decimate usurpingthe property} of the respondent no.2. It^{is the case of the respondent} no.l that the liability of the applicant^{is joint and co-} extensive with that of the^{respondent no.2' Thus, the} illegal sale of the subject^{propertyby the respondent no.1} in a dismatly low reserve^price shall^{causegraveprejudice} to the applicant. It is submitted^{that the respondentno.1} and its authorized officer^{have violated the dictumof Ram} Kishun Vs. State of U.P.^{(2012)11 SCC 511. It is} submifted that when the action of^{the securedcreditor is} challenged under Section L7 of the^{SARFAESIAct, 2002,} the secured creditor is required to^{prove the compliance} of alt the mandatory^provisions of the^{Act and the Rules.} The applicant has relied upon the dictum of^{Kanika Swami} Vs. State of U.P. and Ors.^{MANU/UP/2703I2017.} It^is submitted that despite of mishandling of the^accountsof the applicant, the applicant offered to^{settlethe matter} under one time settlement to thgzespondent^{bank and}

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SA NO. 283 of2023

various communietions in this regard were also exchanged but the respondent bank remained rigid^and inflexible and did not accept the OTS^proposal of^the applicant. Accordingly, it is^{prayedto allow the present} application,^quash and set-aside the^{impugned sale notice} dated 18.05.2023 and^{quash and set-asidethe impugned} auction sale dated 14.06.2023^{with respect to the} property in question. Also^quash and set aside^the impugned demand notice dated^{31.03.2010issued by} respondent no. 1 under Section^{13(2) of the SARFAESI} Act, 2002 and^quash and set^{aside the impugned} possession notice issued by respondent^{no. 1 under} Section 13(4) of the^{SARFAESIAct, 2002 and allow the} present SA. The Ld. Counsel for the^{applicant has relied} upon the^{judgementsi.e. JalgaonJanta SahakariBank} Ltd. and another^{Vs. Join Commissioner of Sales Tax and} another 2022SCC^{Online llom t767, Nani GopalPaul Vs'} T. Prasad Singh &Anr.^{(1995) 3 SCC 579, Ram Kishun Vs'} State of U.P. & Ors.^{(2012) 11 SCC 511, Sri. Sai} Annadhatha Polymers and^{another Vs. The Canara Bank} rep. by its Branch^{Manager, Madanapalle 2018SCC} OnLine Hyd 178,^{M/s Slrytone Electricals(India)Limited} Vs Canara Bank & Ors^{CWP No.12301of 2020,Union} Bank of India & Anr.^{Vs. DilshadElahi Misc.Appeal} no.3412023^passed by^{Hontle DRAT Kolkata, Gulshan Rai} Jain II Vs. Debt^{Recovery AppellateTribunal Allahabad} 2011 SCC OnUne All 1571,^{Crlir LLP Vs. Bafna Motors} (Mumbai) & Ors 2008 9 SCC 299, HajiAbdul^{GhaniV. The} Central Bank of India^{MNU/AP|O}9L|11LZ, M/s' Pandiyas} Vs. The Assistant General^{ManagerMANUffN/08LzlZ0lL,} Mathew Varghese Vs.^{M.Amritha &Ors'} MANU/SC/01L412014, J.^{Rajiv Subramaniam& Anr. Vs.} M/s Pandiyas & Ors.^{C.A. no. 3855 of 2014, Rajesh Gems} & Jewels h/t Ltd^{Vs. India Ov;rseas Bank 2017 SCC} E/

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Online Del 10679, Parwati Devi and Ors. Vs. State^Bank of Patiala & Ors CWP no.324 of 2011, M/s Ram^Murty Pyara Lal & Ors Vs Central Bank of India^WP(C)NO. L3t5212009 & 53t7120L0, S. Shanmuganthan^{Vs. The} Authorized Officer, Indian Overseas^Bank MANU/IN/1402120L7, Mr. K. C.^{Ninan Vs Kerala State} Electricity Board⁽²⁰²³⁾ 14^{SCC 431 & Ors, Mandava} Krishan Chaitnya^Vs UCO^{Bank Asset ManagementBranch} 2018 SCC online Hyd.196,^{S.K' Bakshi Vs PNB & Ors 2022} SCC online J&K 1075,^{Ramkrishun Vs State of U'P. WA no.} 25818/2008, Swastik^{Agency and Others Vs State of India} AIR (2009) SCC Online^{Ori 3 AIR 2009 Ori 147, Celir LLP} Vs. Bafna Motors^{(Mumbai)h/t.Ltd. CA no'5542-} 554312023, CEUR^{LLP Vs Mr. SumatiPrasadBafna} MANU/SC/13+312024,^{Venshiv Pharma Chem (P) Ltd' &} ors Vs state^{Bank of India MANU/AP/0138/2018, Alpine} Pharmaceutical tut^{Ltd. Vs AndhraBank & Ors. IV(2020)} BC 112^(DB) Cfehn.),^{Chowdhary Ventures tuL Ltd' Vs} Indiabulls Housing^{Finance Ltd. DRAT,DethiAppeal} no.38712023, United^{Bank of India Vs Satyawati Tondon} & Ors dated^{26.07.20L0, Lachhman Dass Vs Jagat Ram &} Ors. Appeal(CiviD^{59a712002and PatliputraConcrete Vs'} The State of Jharkhand^{in Court of Jharkhand at Ranchi,} WP(C) no.5184 of^2024.

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The respondent^{no.UPhoenix ARC h/t. Ltd. has filed} reply to the SA. In the^{reply it is submitted that in the} proceedings under Section^L7 of^{SARFAESI Act, 2002,the} U. Debts Recovery^{Tribunal is onlyrequired to look into} the measures^{takenunder Section13(a) of SARFAESIAct,} 2002 and to analyse^{as to whether the required procedure} has been followed or^{not. However, the S.A. applicant has} brought in the facts,^{allegations and contentionsbeyond} the scope of^{proceedings under Section 17 of SARFAESI} Act 2002. Accordingly,^{the-prgentSA is liable to be} g.\

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SA NO. 283 of2023

¶62

dismissed. It is submitted that the SA was amended to bring in the false and frivolous aontentions regarding alleged connivance between MONDON Investment^Limited and Energee Realty Ventures Private^{Limitedwith Phoenix} ARC. It is submitted that neither MONDON^{nor Energee} Realty are parties in the^{present proceedings and} therefore, on this^ground also the^{presentSA is liable to} be dismissed. It is submitted^{that vide order dated} 02.09.2024^passed in SA^{No. 62} of^{2010 tided as M/s} Aerens Entertainment Zone Private^{Limited vs Phoenix} ARC Private Limited & Ors. and^{in OA No. 249 of 20tL} titled as Phoenix ARC^{Private Limited vs M/s Aerens} Entertainment Zone^{PrivateLimited & Anr. passed by this} Hontle Tribunal, all the^{contentions raised by the S.A.} applicant in the amended^{SA were dulyheard and finally} decided in the eadier^{proceedingwhere PhoenixARC,S.A.} applicant as well as^{Energee Realty were parties'} Admittedly, aforemenuoned^{order dated 02'09.2014,has} attained finality long^{back' On this ground also the} present SA is liable to be dismissed' It^{is submitted that} the S.A. applicant was^{not only the shareholderand} director of the^{borrowercompany/M/sAerens} Entertainment Zone^{Private Limited (respondent no.2) but} also a pafi defendant^{in O.A. No. 249 of 2011 impleaded} as a^guarantor. It is^{submitted that the allegationsand} contentions raised in the^{amended SA have alreadybeen} rejected, inter-alia, by this^{Honble Tribunal itself, vide} common final order dated 02.09'2014,^{passed,inter alia,} in SA No. 62 of 2010 and^{OA No. 249 of 2011. Therefore,} on this count alone, the^{present SA is liable to be} dismissed. It is submitted that^{the S.A. applicant is neither} mortgagor nor owner of the^{mortgaged propefi but a} guarantor to the loans availed by rqspondent^no.2/Aerens Entertainment Zone^Private ,t2rd.It^{is submitted that} sr,

SA NO. 283 of2023

neither the principal borrower nor the mortgagor has challenged the auction vide which the mortgaged property was sold by Phoenix ARC under the^provisions of SARFAESI Act, 2002. Therefore, the^{presentSA is liable to} be dismissed. It is submitted that^{the owner of the} mortgaged^property and mortgagor^{i.e. respondent} no.2/Aerens Entertainment Zone^{Private Limited had} raised the similar contentions^{many times and failedin ib} attempt. It is submitted that^{all the contenuons raised in} the SA have been^{heard and decidedby this Hontle} Tribunal on^passing of final^{order dated 02.09.2014,vide} which this Hontle Tribunal^{had, inter alia,dismissedS.A.} No. 62 of 2010 and allowed^{OA No. 249 of 2011. It is} submitted that the^{appealsfiled by respondentno.Zll{.ls} Aerens Entertainment^{Zone Private Limited,against} aforemenUoned^{final order dated 02.09.20L4 have also} already been dismissed^{by the HontleDRAT.Further, the} Hontle High C.ourt^{has also dismissed the writ petition in} respect of the^{same long back' Therefore, S.A. applicant} cannot be allowed^{to raisethe same issuesagain in the} present proceedings and therefore,^{the presentSA is} liable to be dismissed.^{It is submifted that before issuance} of sale notice dated^{18.05.2023, the mortgaged property} was put on^{publicauction on nineteen(19) ocCasionsand} no protest under^{Section L7 of SARFAESIAct, 2002,was} put forward by anyone including^{the S.A' applicant and} the aforesaid^{public auctions failed only for want of} buyers at a higher^{reserve price. Accordingly,it is also not} open to the S.A.^{applicantto challengeand process or} action leading to^{sale of mortgaged property.Accordingly,} the present SA is^{liable to be dismissed. It is submitted} that in the^year 2006,^{consortium of AllahabadBank,} Indian OverseuiDank and^{Bank of Rajasthan(later on} merged with ICIC bank)^{had sanctioneddifferentcredit}

9"\

SANO.283 of2023 19

Mls Aerens

facilities to respondent no.z I Mls Aerens Entertainment Zone Private Limited^(borrower) to the extent of Rs.100 Crores i.e. Rs.35 Crores from^Allahabad banlt Rs.30 Crores from Indlan Overseas bank and^Rs.35 crores from Bank of Rajasthan^{(later on merged with} ICCI bank). In order to secure the aforementioned^credit facilities, equitable mortgage by^{depositof title deeds of} the mortgaged^property i.e. land^{and buildingon land} admeasuring 54903 square^{yards, situated at Village} Kadian and Faguwall, NH-l,^{G.T. Road, Ludhiana, Punjab,} along with land and^{structure,etc., was created in favour} of the aforementioned^{lenders. It is submitted that deed} of^{guarantee/s were also executed by S.A. applicant} /^Mr. Rajesh Aeren to^{secure the aforementioned loans/credit} faciliUes. It is submitted^{that on 26-Lt.2009, a windingup} petition bearing company^{petition no.482 of 2009 was} filed by one Mr. S.S.^{Marwah against respondent no.2/M/s} Aerens Entertainment^{Zone Private Limited beforethe} Hontle High Court of^{Delhi. It is submittedthat on} account of default^{committedin repaymentof outstanding} dues by the borrowers,^{the ac@unt of the borrowers} slipped into the category^{of NPA on 31.12.2009. It is} submitted that on 31.03.2010,^{recovery action under the} provisions of SARFAESI M,2002^{was initiated and in this} regard, Allahabad bank^{issued a demandnotice under} Section 13(2) of SARFAESI^{Ac/.., 2002,thereby demanded} a sum of Rs.67,87,L3,2131'^{ftom the bonower' It is} submitted that on 01.07.2010,^{further actionunder} Section 13(a) of SARFAESI^{Act, 2002 was taken by the} secured creditors and^{thereby,symbolicpossessionof the} mortgaged^property was^{taken. This led to iniUationof} several litigations by borrower,^{S.A' applican(Mr.Rajesh} Aeren and certain third^{parties, challengingthe action/s} iniuated under the^{provisionsof SAIFAESIAc-, 2002, for} ./ 1

¶71

SANO.283of2023 20

¶72

recovery of outstanding dues of the secured creditors. Thereafter, in the^year 2010, respondent no.2 / M/s Aerens Entertainment Zone Private Limited filed SA bearing no. 62 of 2010, before this Hon'ble^Tribunal, against the recovery action/s^initiated by^secured creditors under the^provisions of^{SARFAESIAct, 2002.It is} submitted that the contentions taken^{in S.A. No' 62 of} 2010 and the contentionsfacts which^{wereinsertedby} amendment application bearing^{LA. No' t453 of 2024,} filed in present^proceedings, are^{identical. It is submitted} that on 05.04.2011,^{Allahabad Bank and Indian Overseas} Bank executed separate^{assignment deeds for assigning} the NPA/loan accounts of^{borrower/M/s Aerens} Enterbinment Zone h/t.Ltd.^{(respondent no.2) along with} all its rights, title, benefits^{and interestin the financing} documents, all agreements,^{deeds and documentsrelated} thereto and all collateral^{and underlyingsecurity interest} and/or^pledges created^{to secure and/or guarantee issued} in respect of the term^{loans in favour of Phoenix ARC'} Consequently,^{Phoenix ARC steppedinto the shoes of} Allahabad Bank and Indian^{Overseas Bankand also took} symbolic^possession of the^{mortgaged property and the} charge of Phoenix ARC on^{the enUre mortgaged property} is also registered with the^{Registrar of companies. It is} submitted that on 18.08.2011,^{Phoenix ARC proceeded} under the^provisions of^{Recovery & BankruptcyAct, 1993} and filed Original^{application bearing OA no'249 of 2011,} for recovery of a sum of^{Rs.56,96,31,7791-as on} 3L.O7.2Olt, along with^{interest, etc', against borrower} company/Aerens Entertainment^{Zone Private Limitedand} S.A. applicant^{(Mr. RajeshAeren) and Phoenix ARC had} also sought for attachmenVsale of^{mortgagedproperty} situated in Ludhiana for^{recoveryof the outstandingdues} of Phoenix ARC i.e. towards^{the dues payableby the}

¶73

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SANO.283of2023 2l

¶75

borrowers in respect of loans^granted by Allahabad Bank and Indian Overseas Bank which was assigned to Phoenix ARC. On 02.09.20t4, this Hontle Tribunal has passed final order and dismissed the SA no.62l2010, SA no.63/2010, SA no. 67120L0 and allowed the^OA no.249l20LL and upheld the full mortgagee^{rights of} Phoenix ARC on the entire mortgaged^property. It^is submitted that S.A. applicant was a^{party in} both^afore mentioned SA no.62l2010 and OAno.249!2011'^{In SA no'} 53/2010 Mr. Rajesh Aeren and^{M/s EnergeeRealty} Venture h .Ltd. were^parties. In^{SA no.67120t0Mls} Aerens Entertainment Zone^{was also} a^{pafi. Itis} submitted that^perusal of the^{order dated 02.09-20L4} clearly demonstrate that^{(i)respondent no'2/Aerens} Entertainment Zone fut.Ltd.(principal .^{borrower and} mortgagor/owner of the mortgaged^{property), (ii) Mr.} Rajesh Aeren^{(Director/shareholderand SA applicantin} the present SA) and^{(iii) M/s Energee RealtyVenture} M.Ltd. were^parties to the^{proceedings which were} heard and decided by this^{Ld. Tribunal vide order dated} 02.09.2014 by way of a^{detailedreasoned orderwhich} has attained finality. It^{is submittedthat against the final} order dated 02.09.20t4, two^{appealswere filed by} respondent no.2/Aerens Entertainment^{Zone h/t.Ltd.} before the Hontle DRAT and^{HontleDRATvide order} datd 22.04.2015^{has dismissed both the appeals' It is} submitted that the Hontle^{HighC.ourt of Delhi has also} dismissed the writ^{petition filed by the Aerens} Entertainment Zone against the^{order of Hontle DRAT. It} is submifted that the borrower^{companyand its director} and shareholder Mr.^{RajeshAeren/ S.A. applicant had} been repeatedly objecting to the^{sale of the mortgaged} property by raising same contentions repeatedly. It^is submitted that the mortgaged,proryfrV^{was allowed to be}

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SANO.283of2023 22

¶78

sold by the Honble DRAT also. It is submitted that certain parties tried to block the process of sale of the mortgaged property by issuing advertisements and the same was brought to the notice of the Hontle DRAT and vide order dated 18.05.2015 passed in appeal No. 394 of 2014, titled as "Anjali Leasing Limited vs M/s Aerens Entertainment Zone Private Limited & Ors." a show cause notice was issued against the parties for blocking the process of sale. Thereafter, vide order dated 18.03.2015, passed in the Company PeUUon bearing Co. P. No. 482of 2009, tiUed as S.S. Marwah vs M/s Aerens Entertainment Zone Private Limited, the Hontle High Court of Delhi admitted the winding up petition of borrower company i.e. M/s Aerens Entertainment Zone Private Limited. Consequently, Official Liquidator attached to Hontle High Court of Delhi was appointed as Official Liquidator of the borrower company. It is submitted that in the liquidation proceedings of respondent no.2lMls Aerens Entertainment Zone Private Umited before the Hontle High Court of Delhi, Phoenix ARC opted to remain outside the winding up process and called upon the Official Liquidator not to interfere with the right/s of the secured creditor against which action/s under SARFAESI Act, 2002, were already taken. However, the Official Liquidator chose to take over the physical^possession of mortgaged property. Since, the statutory rights of secured creditor (Phoenix ARC) were being violated by the Official Liquidator, Phoenix ARC was constrained to file an application bearing C.A. No. 2597 20L6, before the Hontle High Court of Delhi for a direction to the Official Liquidator to not interfere with the rights of secured creditor and to hand over the possession of the mortgaged property to Phoenix ARC. On 03.12.2018 and the Honble High Court of Delhi came to the conclusion

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SANO.283of2023 23

¶81

that Official Liquidator does not have any right to keep^possession of moftgaged property and directed the Official Liquidator to hand over the possession of the moftgaged property immediately to Phoenix ARC. Accordingly, the Official Liquidator handed over possession of the mortgaged property to Phoenix ARC and Phoenix ARC continued with the recovery^process under the^provisions of SARFAESI P(L, 2002, for recovery of the outstanding dues in respect of loans^granted by Allahabad Bank and Indian Overseas Bank which were assigned to Phoenix ARC. It is submitted that Phoenix ARC continued with the recovery^process initiated under the provisions of SARFAESI Act, 2002 and issued various sale notices for sale of the mortgaged propefi in Ludhiana by conducting public auctions under SARFAESI Ad., 2002, for recovery of outstanding amounb due and payable by borrowers. It is submitted that the mortgaged property was put on public auction on various occasions and repeated notices were issued to borrowers thereby, reminding the borrowers of the defaults committed in the repayment of the outstanding dues and requiring the borrowers to pay the outstanding dues failing which the mortgaged property was to be sold. However, despite numerous opportunities, the borrowers did not pay the outstanding dues. It is submitted that post sale of the mortgaged property, the Hontle High Court of Delhi vide order dated 12.09.2023 also granted an oppoftunity to S.A. applicant to bring a better buyer within six weeks, which was never done by the S.A. applicant. It is submifted that after dismissal of all the objections raised by the borrowers, by this Ld. Tribunal vide order dated 02.09.2014, no SA was preferred by the borrowers objecting to the auction of mortgaged property under SARFAESI Ac-, 2002 and_lh1lorrowers accepted the 9;

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SANO.283of2023 24

¶83

measure of sale taken by secured creditor/Phoenix ARC unconditionally. It is submitbd that in the twentieth (20th) public auction held on 14.06.2023, under the provisions of SARFAESI Act, 2002, the mortgaged property was successfully sold for a sum of Rs.35.10 Crores to successful auction purchaser/respondent no.3/M/s Zatex Valley h/t. Ltd. It is submitted that after receiving the entire auction money, the sale deed/s were executed in favour of successful auction purchaser and the same were also duly registered with the concerned authority/Registrar and the physical possesiion of the mortgaged property has also been handed over to respondent no.3/M/s Zatex Valley Private Limited. It is submitted that the process of sale of the mortgaged property and issuance of sale notice was conducted/initiated by following the process under the SARFAESI Ac.,2002 and also by getting the due valuation done as required. However, for concluding the^public auction of the mortgaged^property, Phoenix ARC had once again got the mortgaged property valued by obtaining the valuation repoft dated 08.12.2022, from Mr. Om Prakash Verma who was also the approved valuer as defined under Section 2(d) of SARFAESI Act, 2002, having Registration No. Cat-I/638/Vol-Illl3l2020-202t, registered under Section 34AB of Wealth Tax Act, 1957. As reflected in the valuaUon report dated 08.12.2022, the distress value of the mortgaged^property, inter alia, on account of^previous sale attempts and multiple^pending litigations was assessed as Rs.34,20,00,000/-. Thereafter, following the^provisions of SARFAESI Act, 2002, Phoenix ARC issued sale notice dated 18.05.2023, for^public auction of the mortgaged^propety to be conducted on t4.06.2023 and the reserve^price was fixed at Rs.35 Crores. It is submitted that the.salelotice was also^duly

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6j\

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SANO.283 of2023 25

¶86

sent to S.A. applicant and respondent no.2 on 18.05.2023. The sale notice dated 18.05.2023 was also duly published on 18.05.2023, in two leading newspapers including one in vernacular language Rozana Spokesman & Business Standard having wide circulation in the locality as required under SARFAESI Act, 2002. It is submitted that the sale notice dated 18.05.2023, was also duly affixed at a conspicuous^place of the mortgaged^property. In the 20s public auction held on 14.05.2023, the mortgaged property was successfully sold for a sum of Rs.35.10 Crores to the successful auction^purchaser/ respondent no.3. After receiving the entire auction money, the sale deed/s were executed in favour of the succersful auction^purchaser and the same were also duly registered with the concerned authority/Registrar. The physical possess:on of the mortgaged property has also been handed ov€r to the respondent no.3. It is submitted that for concluding the public auction of the mortgaged prope@, Phoenix ARC had once again got the mortgaged property valued by obtaining the valuation report dated 08.t2.2022 from Mr. Om Prakash Verma, approved valuer and in the valuation report dated O8.L2.2O22the distress value of the rnortgaged property, inter alia, on account of previous sale attempts and multiple pending litigations was assessed as Rs.34.20 Crores and the reserve^price was fixed at Rs.35 Crores. Thereafter, belatedly, on 07.08.2023, the aforesaid sale conducted by Phoenix ARC under the provisions of SARFAESI Act, 2002, was challenged by the S.A. applicant by filing the^present time barred Securitisation Application before this Ld. Tribunal. It is submitted that the S.A. applicant uras not only aware of all the facts, circumstances, litigations and^judicial orders leading to the 20th^public auction which resulted into successful sale of moftgag_ed property but was also d

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SANO.283of2023 26

¶88

part of various such litigations and knowing all these facts and taking a conscious decision, Mr. Rajesh Aeren proceeded to file the present SA. It is submitted that the Hontle High C-ourt of Delhi vide order dated t2.09.2023 has granted an opportunity to the applicant to bring a better^purchaser before the Honble High Court within six weeks, however, the same was not done by the applicant. In April,2024 the applicant has filed an amendment application IA no.t45312024 seeking amendment of the SA and vide order dated 25.10.2024 this Ld.Tribunal was^pleased to allow the amendment application. The respondent has filed appeal no.34312024 against the order dated 25.10.2024 before the Hontle DRAT, Delhi and the Honble DRAT, Delhi was pleased to issue notice in the said appeal vide order dated 03.t2.2024.It is submitted $at the present SA is barred by limitation as the same has not been filed within the statutory time period of 45 days from the date of sale notice dated 18.05.2023. It is submitted that the period of 45 days expired on 02.07.2024. However, the present SA was filed much after expiry of 45 days i.e. on 31.07.2023. It is submitted that the limitation for filing of SA commences from the date of issuance/publication of sale notice and not from the date of public auction and S.A. applicant has wrongly attempted to calculate the limitation period from the date of public auction i.e. on t4.06.2023 and not from the date of sale notice dated 18.05.2023. Therefore, the present SA has been filed much beyond the period of limitation. Therefore, the present SA is liable to be dismissed. It is submitted that applicant has duly availed and enjoyed the credit faciliUes taken from the Lender Banks. It is submitted that applicant, after being completely satisfied with the loan/credit facility agreeDenlq, has duly signed and gI

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verified the complete and valid loan documents. It is submitted that applicant has raised baseless and frivolous contentions in order to mislead this Hontle Tribunal to avoid the liability of repayment of remaining outstanding dues of the seured creditors/creditors and to create hindrance in the recovery proceedings initiated by Phoenix ARC for recovery of its legitmate huge outstanding dues. It is submitted that in any case, the liability to pay the outstanding dues of Phoenix ARC, validity of all the loan documents, mortgage on the entire mortgaged property as well as the validity of the action/s under SARFAESI Act, 2002, taken by secured creditor/Phoenix ARC, have been adjudicated upon and duly upheld in favour of the secured creditor/s / Phoenix ARC, inter alia, vide order dated 02.09.20L4^passed by this Ld. Tribunal in S.A. No. 62 of 2010 and in O.A. No. 249 of 2011, which has attained finality. Therefore, S.A. applicant is debarred from raising the same issues again in the present SA. It is submitted that the moftgagee rights of Phoenix ARC have been upheld by various judicial forums including the Hontle Apex Court. It is submitted that on account of valid and legally enforceable assignment by Allahabad Bank and Indian Overseas Bank in favour of Phoenix ARC, Phoenix ARC at all relevant times remained fully competent to recover the entire outstanding dues in respect of the loans granted by Allahabad Bank and Indian Overseas Bank to the borrowers and there has never been transfer of the rights of Phoenix ARC in favour of any other entity. It is further submitted that the Honble Supreme Court in Transcore vs Union of India & Anr [(2008) 1 SCC 125], which has held that there is no bar on a secured creditor to simultaneously pursue remedies provided under the RDB Act, 1993 and the SARFAESI PqJ.., 2OOL.It is submifted gA

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that the remedies under RDB Act, 1993 and the SARFAESI Ad.,2002, are omplementary to each other. It is submitted that the SA applicant is neither owner of the mortgaged property nor the mortgagor. The^purpose of Rule 8(6) of Security Interest Enforcement Rules, 2002 is to provide an opportunity to the owner of the^property to redeem the property by paying the entire outstanding dues. The owner of the^property i.e. Aerens Entertainment Zone h/t.Ltd. has never raised any such plea or opposed any public auction as all the contentions raised by mortgagor were rejected by this Hontle Tribunal vide order dated 02.09.2014. It is submifted that the redemption oppoftuniUes were available on multiple occasions. However, knowingly and consciously, no attempt was ever made to redeem the moftgaged property by paying the outstanding dues. It is submitted that after^passing of the final order dated 02.09.20t4 by this Ld. Tribunal and before issuance of sale noUce dated 18.05.2023, the mortgaged property was put on^public auction on 19 occasions but none of the nineteen^public auctions were objected by the anyone including the SA applicant and no one opted to o(ercise the right of redemption. It is submitted that even after successful sale of the mortgaged property and even after appropriation of the sale proeeds, the huge amounts are due and payable by the borrower including SA applicant being a guarantor to Phoenix ARC. It is submitted that Phoenix ARC has duly complied with the provisions of SARFAESI Ac., 2002, along with Security Interest (Enforcement) Rules, 2002, inter alia, including Rule 8(5) of the said Rules in effectuating public auction of the mortgaged property. It is submitted that during the hearing dated 04.02.2022, the Counsel for Phoenix ARC had simply apprised the Ld. RO that_thq mortgaged property had sf,.

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been put on public auction several times under the provisions of SARFAESI Act, 2002. However, due to multiple frivolous litigations initiated by applicant and at the behest of the applicant by several third^parties that it had created a negative publicity for the mortgaged property due to which the public auctions failed due to want of bidders. Therefore, the reserve price kept on reducing by following the due process of law for effectuating every subsequent public auction. It is submifted that the valuation of the secured asset/mortgaged property has no relevance with the market value of the propefi. It is submitted that the valuation of a property is only done for the^purpose of fixation of the reserve price in order to disable the auctioneer to sell the^property for an amount lesser than reserve price. It is submitted that the terms'valuation of property' and 'reserye price' are two different terms, which are not synonymous to each other. It is submitted that the valuation of property is intrinsic worth of the propefl, whereas, the reserve price is the minimum selling price of the property and that the propefi can only be sold at a^price, which is equal to higher than the reserue price. However, the actual value of the^property will only be decided by the buyer and nobody else. It is submitted that either S.A. applicant or anybody else could never arrange a buyer who was ready to pay a higher price than the price at which property was sold. It is submitted that Phoenix has duly complied with the provisions of SARFAESI Act, 2002, along with Security Interest (Enforcement) Rules. It is submitted that 20th Sale Notice dated 18.05.2023 issued by Phoenix ARC for conducting^public auction on 14.06.2023 was duly sent to applicant and to respondent no.2/Aerens Entertainment Zone hrt Ltd on 18.05.2023. It is submitted that the sale g/

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notice dated 18.05.2023 was also duly published on 18.05.2023, in two leading newspapers including one in vernacular language (Rozana Spokesman & Business Standard) having wide circulation in the locality as per Security Interest (Enforcement) Rules, 2002. Therefore, the requirement of Rule 9(1) of said rules was duly fulfilled as much more than 15 days notice was given. It is submitted that in any ctse, both the statutes provide for holding of public auction and in case of any grievance would have invoked the provisions of SARFAESI Act, 2002. It is submitted that in compliance of order dated 26.07.2023, Phoenix ARC had duly filed an affidavit vide which Phoenix ARC had duly apprised the Ld. RO of the outcome of public auction dated t4.06.2023. It is submitted that the public auction dated 14.06.2023 was successful and that the subject property has been duly sold for a sum of Rs.35.10 crores to successful auction purchaser/M/s Zatex Valley Private Limited. Consequently, Phoenix ARC has issued sale ceftificate to M/s Zatex Valley Private Limited and also the sale deeds have been registered in the name of M/s Zatex Valley Private Umited. Therefore, the process of public auction of the subject property stands completed. It is submitted that Phoenix ARC has taken allthe measures under SARFAESI A.r,t, 2002, strictly as per law and has also conducted the public auction dated 14.06.2023, by duly following the due^process of law and the provisions of SARFAESI Act, 2002, along with Security Interest (Enforcement) Rules, 2002. It is submitted that the mortgagd property consists of an incomplete dilapidated structure of a proposed mall, whose construction had stopped years before 2010. It is submitted that the public auction was conducted by following the process contemplated under the provisions of SARFAESI Act, ?002 and the publication Ll'

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as well as affixation of the sale notice was also duly done as required under law. All the notices were duly issued and^published. It is submitted that the description of mortgaged^property is accurate and complete. It^is submifted that Phoenix ARC has duly mentioned the details of^pending litigations known to the^{Phoenix ARC in} the sale notice dated 18.05.2023. It is submitted that the public auction dated L4.06.2023, conducted under SARFAESI Ad., 2002, is^perfectly valid and^conductedas per law. It is submitted that the case law being cited by the S.A. applicant does not support the^{case of the S.A. It} is submitted that the S.A. applicant has^{raised multiple} false and frivolous^grounds in the^{SA apart from} amending the SA to add many^{more false, frivolous and} unsustainable^grounds. It is submitted that^{it is settled} position of law that there is no inherent right of OTS. Accordingly, it has been^prayed that^{the presentSA may} be dismissed with costs. The^Ld. Sr'^Advocatefor respondent no.1 has relied upon^{the judgementsH.} Anjanappa & Ors Vs. A. Prabhakar & Ors [(2025)^SCC Online SC 1831, Shobha Suresh^{Jumani Vs Appellate} Tribunal, Forfeited Property & Anr. [(2001)^{5 SCC 755],} S.P. Gupta Vs. Union of India & Anr [1981^(Supp)SCC 871, Adi Pherozshah Gandhi^{Vs H.M. Seeruai, Advocate} General [1970 (2) SCC 484], Dilboo^{(Dead)by LR's & Ors} Vs Smt. Dhanr{i .(Dead) & Ors⁽²⁰⁰⁰⁾ 7^{SCC 7021,} Bhanu Kumar Jain Vs Archana Kumar &^{Anr[ (2005) 1} SCC 787), Daryao & Ors. Vs State of U.P. & Ors [(1961) SCC Online SC 211, M/s ABS Wheels h/t. Ltd^{Vs Union} Bank of India, DRT Pune[SA no.7812020),^{S Karthik & Ors} Vs N. Subash Chand Jain & Ors[(2002) 10 SCC^641], Sanjay Sharma Vs Kotak Mahindra Bank Limited &^Ors l(2024)^{SCC OnlineSC 45891,PhoenixARC Private} Limited Vs Ishan Systems l_ryat9 Limited [(2012)^SCC

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SANO.283of2023 32

¶103

Online DRAT 151, Sur{ Lamps & Industries h/t Ltd Vs State of Haryana[(20L2) I SCC 656]; Shakeel Ahmed Vs Syed Akhlaq Hussain[(2023) SCC Online SC 1526] and M.Rajendran & Ors. Vs. M/s KPK Oils and Proteins India h^.Ltd. and Ors. (2025) SCC online SC 2036.

¶104

The respondent no.3/auction purchaser has filed reply to the SA. It is submitted that the subject property was put to auction publicized in two leading newspapers being Business Standard (English Edition) and Rozana Spokesman (Punjabi Edition). The respondent no. 3 participated and placed its bid in the e.auction held on L4.06.2023 at the reserue price. It is submitted that sale conformation was issued in favour of the respondent no. 3 on 15.06.2023 pursuant to which and on payment of entire bid amount, sale certificate was issued in favour of respondent no. 3 on 07.09.2023. It is submitted that registered sale deed(s) of the subject property were also executed between the respondent no. 3 and Phoenix ARC/respondent no. 1 on 11.09.2023 itself. SubsequenUy, in order to develop the subject property, a loan to the tune of Rs.20 Crores was taken ftom HDFC Bank by creating a charge against the subject property on L2.09.2023. It is submitted that the applicant has resofted to concoct facts and raise meriUess averments against the auction sale dated t4.06.2023 with an ulterior moUve to reagitate issues that have been long settled by this Honble Tribunal as well as Hontle DRAT and the Hontle High Court of Delhi. It is submitted that the contentions raised by the applicant are rather rehashed versions of all the averments that applicant and its connected entities have time and again raised before various forums but to no avail. It is submitted that all the contentions raised in the SA have been heard and decided by this Hontle Tribunal vif,e. raf order dated 02.09.20t4, g)

¶105

¶106

SANO.283 of2023

¶107

vide which this Honble Tribunal had dismissed S.A. No. 62 of 2010 and allowed OA No. 249 of 2011. It is submitted that the appeals filed by respondent no.2l{ls Aerens Entertainment Zone Private Limited, against final order dated 02.09.20L4 have also already been dismissed by the Hontle DRAT. Fufther, the Hontle High Couft has also dismissed the writ^petiUon in respect of the same long back. Therefore, S.A. applicant cannot be allowed to raise the same issues again in the present^proceedings and therefore, the^present SA is liable to be dismissed. The Ld. Sr. Mvocate for respondent no. 3 has relied upon the^judgements i.e. Celir LLP vs. Bafna^Motors (Mumbai) h^. Ltd. and Ors. l(2024) 2 SCC 11, Valji Khimji and Company vs. fficial Liquidator of Hindustan^Nitro Product (Gujarat) Ltd. and Ors and K. Kumara Gupta vs. Sri Markendaya and Sri Omkareswara Swamy Temple & Ors. [(2022) 5 SCC 710]. It is submitted that from the admitted^position of facts as well as the law as^{laid down} by the Honble Supreme C.ourt of India, applicant^{has lost} the right to rcdeem the moftgage way back on 01.10.2014, when the first sale auction notice was published by the secured creditor M/s Phoenix ARC. It is submitted that as^per the amended Section 13(8) of the SARFAESI Act, applicant ceased to have any right to redeem the mortgage on^publication of first sale auction notice under Rule 9(1) of the Security Interest (Enforcement) Rules, 2002. It is submitted that the applicant was only the Director of the^principal borrower, being the Company M/s Aerens Enterbinment Zone Ltd., which is at present under liquidation. It is admitted position of fact that fficial Liquidator Ull date has not challenged any of the^proceedings conducted under the SARFAESI Act. It is submitted that sale certificate was duly issued in favour of the fgqpondent no.3 /successful

SANO.283 of2023

auction purchaser way back on 07.09.2023 and registered sale deed(s) were executed on 12.09.2023. It is submitted that respondent no.3 has also taken due possession of the subject property and are maintaining the same with complete and effective control. Hence, the present SA is liable to be rejected. It is submitted that the subject^property was attempted to be auctioned at^a reserve price of Rs.33.59 crores on three different occasions from t7.07.2017^(13th auction) till^16.08.2019 (15th auction). Thereafter, the subject^property was then again auctioned at the reserue^price of^{Rs.35crores on 5} different occasions from 06.12.2021^{(16$ auction)till} 18.05.2023 (20th auction). However, the applicant^has not raised any objection to the earlier 19 auctions.^The applicanfs apparent waiver of his^{rights in the previous} 19 auctions clearly establish the intent of the^applicant was never to redeem the mortgage but^{ensurethat the} subject^property remains litigious in^perpetuity. It^is submifted that the^present application is^completely infructuous as against the concerned^{property,even} before the^present application was^{filed before this} Hontle Tribunal, a charge had already been created^by the successful auction^purchaser/ respondent^{no.3. In} order to develop the^property legally acquired in^the auction, after successfully^getting the sale^certificate, respondent no. 3 raised Rs.20 Crores^for redevelopmen{repair works and against the^samedebt, subject property has already been mortgaged to the HDFC Bank. It is submitted that the said fact is very^much in the^public domain as the same can be^verified from the Registrar of Company^profile of the respondent^no.3 company/successful auction^purchaser. Hence, it can be indubitably concluded at this stage that the applicant has unavailingly sought to invoke !p Jimited^jurisdiction of

q'.

SA NO. 283 of2023

this Hontle Tribunal under Section t7 of the SARFAESI Act 2002 even though relevant measures taken by respondent no. 1 / M/s Phoenix ARC tut. Ltd under Section 13 of the SARFAESI Act have attained^judicial finality. It is submitted that respondent no.3 is a successfu! auction purchaser who acquired the subject property after successfully bidding process in the auction dated 14.06.2023.It is submitted that not only the entire amount to the tune of Rs.35.10 Crores has been duly paid by the respondent no.3 /successful auction purchaser but also the sale certificate dated 07.09.2023 has been issued in its favour. It is submitted that auction sale notice was duly^publicized !n two leading newspaper of the region being, Business Standard (English Edition) dated 18.05.2023 and Rozana Spokesman (Punjabi Edition) dated 18.05.2023. It is submitted that respondent no.3 was made aware of the auction of the subject property from the aforementioned publications. It is submitted that the derription oJ the subject property in the auction sale notice dated 18.05.2023 is identical what was identified by this Hontle Tribunal vide its final order dated 02.09.2014.It is submitted that the merit of the pending litigations as on 18.05.2023 as highlighted by respondent no. 1/ M/s Phoenix ARC had to be determined in their respective forums, the pending litigations were duly highlighted in the auction sale noUce. It is submitted that till date the applicant has claimed no fraud on part of either the respondents and hence, substantiates no ground necessary for seeking quashing of auction sale. Accordingly, it is prayed that the present SA may be dismissed. The Ld. Sr. Advocate for respondent no.3 has relied upon the judgements Ayaaub Khan Noorkhan Pathan Vs. State of Maharashtra and Ors (2013) 4 SCC 465, Ravi Yashwant Bhoir Vs. District Collector, Raigad

SANO.283 of 2023

and Ors (2012) 4 SCC 407, Bhikhabhai Chanabhai Gajera Vs Semrala Gopalak Vividh Karyakari Sahakari Mandali Limited MANU/GI/124712020, Tirupati Building and Offices h/t Ltd. Vs Reserve Bank of India 2019 SCC Online Del 8990, Bacha F Guzdar Vs Commissioner of Income Tax, Bombay (1954) 2 SCC 563, Celir LLP Vs Mr. Sumati Prasad Bafna & Ors 2024 SCC Online SC 3727, Prince Corrugated Packaging Vs Andhra Bank 2019 SCC Online TS 1657, M.S. Constructions and another Vs IDBI Bank Limited and another 2021 SCC OnLine TS 1492, Shobha Suresh Jumani Vs Appellate Tribunal, Fortified Property & Anr (2001) 5 Supreme Court Cases 755, ARCE Polymers M. Ltd. Vs Alphine Pharmaceuticals M. Ltd. & Ors (2022) 2 Supreme Court Cases 221, Bishudeo Narain and Another Vs Seogeni Rai and Another 1951 Supreme Court Cases 47, Sarv Hitkari Educational Society, lGpurthala Vs Punjab National Bank & Another Finalorder dated 19.06.2020 in OllP 764912020 passed by the Hontle Punjab and Haryana High Couft, Chandigarh, M/s ABS Wheels h/t. Ltd. VS Union Bank of India and Ors judgment dated 12.03.2021 passed in SA no.78l2020 by the Ld. DRT, Pune, Sukhwant Singh Babbar and Anr Vs. The State of Madhya Pradesh and Ors Judgment dated M.04.2024 Writ Petition no.L956212023, Valji Khimji & Company Vs Official Liquidator of Hindustan Nitro Product (Gujarat) Limited & Ors (2008) 9 SCC 299, Celir LLP Vs Bafna Motors (Mumbai) h/t. Ltd. & Ors (2024) 2 SCC 1, Ramjas Foundation & Anr. Vs Union of India & Ors (2010) 14 SCC 38, Hindustan Agencies Vs Tarak Nath Das Appeal no.26 of 2020 (DRAT Kolkata), Arce Polymers tut. Ltd. V/s Alphine Pharmaceuticals tuL Ltd. & OT. QO22) 2 SCC 221, S. Karthik & Ors V/s N. Subhash Chand Jain & Ors (2022) 10 SCC 641, Oswal Fats & Oils Ltd. Vs Additional Commissioner (Administration)r_pareilly Division, Bareilly

SA NO. 283 of2023

& Ors (2010) 4 SCC 728, United India Assurance Co. Ltd. Vs Rajendra Singh & Ors. (2000) 3 SCC 581, State of A.P. & Anr Vs T. Suryachandra Rao (2005) 6 SCC 149, Dwarika Prasad V. State of U.P. (2018) 5 SCC 491, K.D. Sharma V. Steel Authority of India Ltd. & Ors (2008) 12 SCC 481, G. Vikam Kumar Vs. State of Bank of Hyderabad & Ors 2023 SCC Online SC 549, Neelima Bagaria V. Govt. (NCT of Delhi) 2011 SCC Online Del 3319, Rajesh Sumant Shah V. Punjab National Bank 2019 SCC OnLine Guj 3366, Sri Surya TransporG V. Reserve Bank of India 2016 SCC OnLine Mad 5810, S.V. Developers V. State Bank of India, Rep. by its Branch Manager.& Anr 2022 SCC Online TS 1357 and Bombay Mercantile Cooperative Bank Umited through its Authorised Signatory V. U.P. Gun House & Ors (2024) 3 scc 517.

¶124

All parties have filed their evidence. All parties have also filed their written arguments.

¶125

Heard the Ld. Counsel for applicant Ld. Sr. Advocate for respondent no.1 and the Ld. Sr. Advocate for respondent no.3 and also perused the record.

¶126

The preliminary objection has been raised by the Ld. Sr. Advocate for the auction purchaser and the Ld.Sr. Advocate for respondent FI is that the applicant Rajesh J.Aeren is not an aggrieved person as pef Section 17 of the SARFAESI Act. Therefore, thq applicant has no locus standi to file the present SA application and therefore, the same cannot be entertained and is liable to be dismissed on this sole ground alone. On the other hand the Ld. counsel for the applicant has submifted that the applicant is the guarantor of the loan in the present matter and the property of the borrower has been sold on a throw away

SA NO. 283 of2023

price and therefore, the applicant has every right to challenge the sale conducted by the repondent FI. It is submitted that the applicant is covered under the definition of the borrower and therefore, has locus to challenge the sale conducted by the respondent FI even though the property belongs to the borrower and not the personal property of the applicant guarantor. It is submitted that in the^phrase aggrieved^person used under Section 17 of the SARFAESI Act, the applicant can file the application under Section 17 of the SARFAESI Act if the rights of the applicant are affected. It is submitted that if the property has been sold at a throw away^price, the liability of the^guarantor will increase and therefore, it^will be deemed that the legal rights of the^{guarantorhas been} infringed and the applicant may be deemed to be^an aggrieved^person under Section 17 of the^SARFAESIAct and therefore, has full right to challenge the^{action taken} by the respondent FI under the^provisions of^the SARFAESI Act. It is further submitted that the^respondent FI and the auction^purchaser is relying on the^various judgements which are not related with the provisions contained under Section t7 of the SARFAESI Act^{and the} definition of the aggrieved^personin the Section^{17 of the} SARFAESI Act. It is, therefore, clear that^these judgements are not applicable in the present circumstances of the case and the^judgements relied by the applicant are applicable. In this regard I^have considered the contention of both the^parties and^perused the record. From^perusal of the file it is clear that in the present matter the applicant is the guarantor of the loan. The respondent FI has^proceeded against the^propefi of the borrower who has taken loan i.e. M/s Aerens Entertainment Zone Pvt.Ltd. and has failed to maintain the financial discipline and therefore, the respondent FI

¶131

¶132

SANO.283of2023 39

¶133

has proceeded to take action under the^provisions of the SARFAESI Act and subsequently sold the^property in the 206 auction to the auction^purchaser. M/s Aerens Entertainment Zone h/t. Ltd. has filed the SA no.6212010 against the SARFAESI action taken by the respondent FI which was dismissed by the DRT-II Delhi. It is also clear that the properfy of the^guarantor is not being^proceeded by the respondent FI for recovery of the loan due^from the borrower. Now the^question is whether the^guarantor can file an application under Section 17 of the SARFAESI Act if the action against the^propefi of the borrower^is being taken under Section 13 of the SARFAESI^{Act. In this} regard I have perused the^provisions contained^under Section 17 of the SARFAESI Act. The^provision of^Section 17 of the SARFAESI Act is reproduced as below:" 17. [Apph:cation against measures to r&over ecutd debb|. - (1) Any ptwn (including bonower), aggrieved byanyof the measufies referrd to^{in sub-} sxtion (4) of wtion 13 taken by the seurd^qditor or his authorizd officer under this Chapter, [may make^an applicatbn along with such fe, as^{may be presciM,J to} the Debb Ruovery Tribunal hauing^juridiction in the matter within furty-five days from the date on which such measures had fun taken."

¶134

From perusal of the above^provision it is clear that any person aggrieved by any measures referred toⁱⁿ Section 13(4) may file an application under Section t7 of the SARFAESI Act for setting aside the action taken by the secured creditor. In the^provision it has been specifically mentioned that any person includes the borrower. Therefore, it is clear that the borrower has always a right to file an application under Section t7 of the SARFAESI

).\ '

SANO.283 of2023

Act for setting aside an action taken under Section 13 of the SARFAESI Act. Apart from borrower, any other person who is aggrieved by the action taken by the secured creditor has also a right to^file an^application under Section L7 of the SARFAESI Act.^{Therefore, the} right of the borrower is absolute^{and the third personhas} to show that he is aggrieved by^{the action taken by the} secured creditor. Now we^{have to see as to who is a} borrower. The Section ?(f) ofthe^{SARFAESI Act define the} term borrower which^{is reproduced as below:-}

¶139

"2(f) "borrower means [any^{person whq or a poold} investment vehicle as defind^{in claus(da) of wtion 2} of the uritie Contrab^{(Rqulation) Ad, 1956 (42 of} 1956) which,J has.Mn^{granted financial assisbnceby} any bank or financial^{instittttion or who has given any} guarante or cratd any^{mortgage or pldgeas wuriU} for the financial asistance^{grantd by any bank or} financial institution [and^{includes a} Frson^{whq or a} pootd nvstment vehicle which,l^{becomes furrower of a} [asret^{rtronstructioncompanyJconsquenturyn} acquisition by it of^{any righ9 or interestof any funk or} financial inrtitution^{in relation b such financial assisbnce} [or^{who has raidfunds through issue of debt} wuritiesJ'

¶140

From^{perusalof the above definitionit is clear that} the guarantor is also^{included in the definiUon of the} borrower and the^{guarantor shallalso be deemed to be} borrower for^{purposes of the action takenby the bank} under Section¹³ of^{the SARFAESIAct and for filing the} application under Section^{L7 of the SARFAESIAct.} Therefore, it is clear that^{the guarantormay file an} application under^{Section t7 of the SARFAESIAct against} the action taken by the^{secued creditor. But in the} o,

¶141

SA NO. 283 of2023

¶142

¶143

present Glse the situation is quite peculiar. In the present case the secured creditor has proceeded against the property of the borrower and the borrower has filed SA no. 62,63,66 of 2002 against the action taken by the secured creditor before the DRT-II, Delhi. From perusal of the^judgement passed in the matter SA no. 6212o10 Mls Aerens Entertainment Zone M.Ltd. Vs. Pheonix ARC h/t.Ltd. and Ors. it is clear that the borrower company has filed an SA against the action taken by the secured creditor as a borrower and has made the Dr. Rajesh Aeren as respondent no.3 and the M/s ICICI Bank was made respondent no.2. It is also clear from the record that Mr. Rajesh Aeren was the director of the borrower company and the SA has been filed by the company. The SA has been dismi*sed by this Tribunal vide order dated 02.09.2014. The respondent FI has also filed OA no. 249120LL against the applicant which was also allowed by the same order. The borrower M/s Aerens Entertainment Zone M.Ltd. filed appeal against the order^passed by the Ld. DRT and the same was dismissed by the Honble DRAT vide order dated 22.04.20L5 because the applicant has failed to deposit the pre deposit. The borrower M/s Aerens Entertainment filed a Writ Petition no. WP(C)346U2015 M/s Aerens Enteftainment Zone M.Ltd. Vs. Pheonix ARC tut.Ltd. and the Writ Petition was dismissed bV thg Hontle Delhi High Court vide order dated 13.04.2015. Therefore, it is clear that the borrower has challenged the action taken by the respondent FI and the same has been dismissed by the DRT and the appeal against the same was dismissed by the Hontle DRAT and the Writ PeUtion was also dismissed by the Honble Delhi High Court. Mr. Rajesh Aeren has not preferred any SA against the action taken by the respondent FI as the property of the guarantor i.e. Rajesh Aeren has not been eA.

¶144

SA NO. 283 of2023 42

¶145

procedd under provisions of the SARFAESI Act. Therefore, it was proper for the borrower M/s Aerens Entertainment Zone h/t.Ltd. to file the SA against the action taken by the respondent FI. The contentions of the borrower has been considered by the competent authorities and the same was dismissed upto to^Hontle High Court. Now Mr. Rajesh Aeren has filed the^present SA as a^guarantor and is claiminq that^{the action takenby} the respondent FI is bad in law on the^{ground mentioned} in the SA. It is an admitted fact that^{the respondent FI is} not going to^proceed against the^{property of the} guarantor Shri Rajesh Aeren. Therefore, it is clear $at^the respondent FI has not^proceeded against^{Mr' Rajesh} Aeren, therefore, the^{question is whetherMr. Rajesh} Aeren, as a guarantor can again^{challengethe same} action which has been^{challenged by the bonower in the} SA filed by the borrower.^{The contention of the Ld. Sr.} Advocate of the respondent^{FI and the Sr. Advocate of} the respondent auction^{purchaser is that the respondent} FI has not^proceeded against the^{property of the} guarantor/Shri Rajesh Aeren and thelefore, Shri^Rajesh Aeren has no authority to^{file the independentSA in} which the^properfy of the^{borrower M/s Aerens} Entertainment Zone h/t.Ltd.^{has been proceeded.The} Ld. Sr. Advocate for the^{respondentFI and the Ld' Sr.} Advocate of the auction^{purchaserhas relied upon the} following^{judgements:-PrinceCorr,ugatedPackaging Vs} Andhra Bank 2019 SCC OnLine^{TS 1657,M.S.} Constructions and ancther^{Vs IDBI Bank Limitedand} another 2021 SCC OnLine TS^{1492, ShobhaSuresh} Jumani Vs Appellate Tribunal,'Fortified^{Propefi & Anr} (2001) 5 Supreme Court Cases 755, Ayaaub^Khan Noorkhan Pathan Vs. State of^{Maharashtraand Ors} (2013) 4 SCC 465, Ravi Yashwant Bhoir^{Vs. District} ,;'

¶146

SANO.283of2023 43

¶147

Coltector, Raigad and Ors (20t2) 4 SCC 407, Bhikhabhai Chanabhai Gajera Vs Semrala Gopalak Vividh Karyakari Sahakari Mandali Limited MANU/GJ/1247 I 2020, Tirupati Building and ffices h/t Ltd Vs Reserve Bbnk of India 2019 SCC Online Del 8990 and H. Anjanappa & Ors Vs. A. Prabhakar & Ors [(2025) SCC OnLine SC 183]. I have perused these^judgements. From^perusal of these judgements it is clear that in these judgements the Hontle Supreme Court has decided as to the^person who may be called to be an aggrieved^person. In^H. Anjanappa & Ors Vs. A. Prabhakar & Ors [(2025) SCC OnLine SC 1831 the Hontle Supreme Court in^{para no.32} has referred the^{judgementpassed} by the ,on51s^Apex Court in Baldev Singh Vs. Surender^{Mohan Sharma and} has held that an aggrieved^person is"a^peren aggrbved to file an appeal must be one whos right^t's atrutd^by reaen of the^judgement and dure nught to^be impugned." In para no.35 it has again been^menUoned that "ffe expression Frson aggievd^{does not include a} rerwn^{who suffersfrom a psychological or an imaglinary} rryury, a Frson aggrievd must, therefore, n*nrily b one who right or interest has been afuer*ly affxtd or leopardizd." The Hontle Supreme C.ourt in^Shobha Suresh Jumani Vs Appellate Tribunal,^{FortifiedPropefi &} Anr (2001) 5 Supreme Court Cases 755 in^{para no.5 has} held that "but the words^person aggrievd do^{not rally} mean a man who is diappointd of a benefit whbh^might have receivd if some other order had ben^made.A retson^{aggn?vdmust be a man who has sufferd a lqal} grieuane, a man against wlnm a dsision has ben pronouncd which has wrongfully deprivd him of something or wrongfully refud him nmething,^or wrongfully affsd his trtle to emething." The^Honble Supreme Court in^para- _19.9 again observed that E"\

¶148

SANO.283 of2023 44

¶149

"acording to BlackS Law Dictionary aggrbvd party refers to a Hrty whos retena[ pauniary or prurefty rEht have ben adverrely affutd by another percons action or by a Courfs dsre or^judgement - also term pa@ aggn?vd, prson aggrievd." Again the Hontle Supreme Court in Gajraj Singh and Ors. Vs. State of UP and Ors. (2001) 5 SCC^page 762 has observed in^para no.14 that " traditional rule in rqard to locus standi is that judicr?l rdress b auailable only to a perwn who has sufferd a lqal injury by uiolation of his lqal right or lqally protxtd inter*t by tmpugnd actrbn of the state or a publrt authority or any other person or who is ltkely to suffer a lqal injury by rcason of threatend uiolation of his lqal njght or lqally protafu interest by any such petsn." Therefore, the contention of the Ld. Sr. Advocate of the respondent FI and the Ld. Sr. Advocate of the auction^purchaser is that Shri Rajesh Aeren who is the guarantor of the loan will not suffer any injury if the property of the borrower company M/s Aerens Entertainment Zone M.Ltd. has been^proceeded under the provisions of the SARFAESI Act and therefore, Shri Rajesh Aeren has no authority as a guarantor to file the present SA. On the other hand the Ld. counsel for the applicant has submitted that Shri Rajesh Aeren will suffer a great injury if the property is sold on a throw away price. The Ld. counsel of the applicant has submitted that if the property of the borrower is sold at a less price, the guarantor has to pay the rest of the liability and therefore, it will be deemed that the guarantor has suffered an injury. It is further submitted that the definitions given of the aggrieved person does not relate to the definition of the aggrieved person given in the Section 17 of the SARFAESI Act and the definition of the aggrieved person has been defined by the Hontle

¶150

€A

¶151

SA NO. 283 of2023 4s

¶152

Supreme Couft in respect of the different Acts in which the Hontle Supreme Court is considering the aspect of aggrieved^person. Therefore, these case laws cannot be applied in the^present case and as^per definition of the borrower the applicant can be deemed to be an aggrieved person and has locus to file the present SA. I have considered the contentions of both the^parties. From perusal of the judgements passed by the Honble Supreme Couft and the definition of the borrower^given in Section 2(f) of the SARFAESI Act, it is clear that the person who wants to claim a remedy must have suffered a loss or whose legal rights might have been infringed. In the present mafter the respondent FI has^proceeded against the property of the borrower M/s Aerens Entertainment Zone h/t.Ltd. and has not^proceeded against the^property of Mr. Rajesh Aeren who is^guarantor of the loan and therefore, it cannot be said that the right of Mr.Rajesh Aeren has been infringed or Mr. Rajesh Aeren is likely to suffer any loss if he is not^permitted to file the^present SA. Here it is also a fact that the borrower M/s Aerens Entertainment Zone h/t.Ltd. has availed his right to file the SA no.62l2010 and has also made Shri Rajesh Aeren one of the respondent and the SA of the borrower has been dismissed. Therefore, Shri Rajesh Aeren cannot be^permifted to raise the same^plea again on behalf of the borrower and cannot be^permifted to say that if the^property of the borrower is sold, he will suffer a great injury. The liability of the borrower and guarantor is coexisted and once the borrower has availed the opportunity to challenge the SARFAESI action, the guarantor cannot be deemed to be an aggrieved person and cannot be^permifted to raise the same^plea again and challenge the same action. It is also clear that the borrower company has gone qnder liquidation and the €^

¶153

¶154

SA NO. 283 of2023

¶155

Resolution Professional has been appointed by the Hontle High Court and therefore, the Resolution Professional has a right to challenge the further action taken by the secured creditor and therefore, it cannot be said that the borrower cannot challenge action taken by the secured creditor. In such circumstances the^guarantor Shri Rajesh Aeren cannot challenge and has no locus to challenge the action taken by the respondent FI against the propefi of the borrower which is under liquidation. I am not convinced with the argumenb of the Ld. counsel of the applicant that if the^price fetched in the sale of the property is quite low, the guarantor has to pay more amount and therefore, he may be deemed to be an aggrieved person. Such remoteness of the damages cannot be deemed to be a valid ground to give the applicant a locus to file the^present SA when the action taken by the respondent FI has already been challenged by the borrower. Here it is also clear that Shri Rajesh Aeren was the director of the borrower company and he has challenged the action as a borrower company and now he is challenging independently as a guarantor, therefore, this Tribunal is of the view that Mr. Rajesh Aeren has no locus to file the^present SA and is not an aggrieved person and cannot be permitted to file the present SA merely because the borrower includes guarantor. On the basis of above discussion this Tribunal is of the view that the applicant has no locus to file the present SA and the present SA is liable to be dismissed on this sole ground.

¶156

Though the SA may be dismissed on the sole ground that the applicant has no locus to file the present SA, even then the Tribunal is going to consider the other grt"'

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SANO.283of2023 47

¶158

grounds taken by the applicant so that the contentions of the applicant may also be considered on merit.

¶159

The first contention on the merit of the SA is that there is non compliance of Rule 8(4) and Rule 8(5) of the SARFAEI Rules. It is also claimed that the respondent FI has failed to comply the Rule 8(6), 8(7) and 9(1) of the SARFAESI Rules. It is also claimed that the respondent FI has failed to comply the Rule 9 (9) and Rule 9(10) of the SARFAESI Rules. It is also claimed that there is misdescription of the subject property in the e.auction noUce and therefore, there is clear violation of Rule 8(7) of the SARFAESI Rules. On the other hand the Ld.Sr. Advocate for respondent FI and the Ld. Sr. Advocate for the auction^purchaser has submitted that once the sale has been completed, the same cannot be set aside on the ground of any minor discrepancies or non compliance of any Rule. It is submitted that the Honble Supreme Coutt in CEUR LLP Vs Mr. Sumati Prasad Bafna MANU/SC/134312024 has held that once the auction has been conducted and the sale certificate has been issued, the same cannot be set aside unless there are serious flaws in the mnduct of the .auction such as fraud and collusion or other grave irregularities. It is submitted that even if there is any minor discrepancy in the description of the property or in the details of the encumbrances in the sale notice, the sale cannot be set aside. In this regard I have perused the^judgement passed by the Honble Supreme Court in the above mentioned case. In this regard the para no. 216 & 219 are reproduced as below:-

¶160

" 216. [,/nlg there are -qme ren'ous flaws in the anduct of the auction as for l4ample perpetution of a Y cI

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SANO.283of2023 48

¶162

fraud/cottusioy graie hrqularities thai got to the root of such an atrction, courb mui ordinarity refnin from sefting them aside keping in mind the domino effqt such an order would have. Given the facb notd above, we shall refnin from cancelling the sle or dularing the hle M as void. InsteaQ, it is demd appropriate to fulance the quitiu by dirxting the Auctrbn Purcha*r to pay an additional amount in respat of the subjrtproryrU'."

¶163

In the pre*nt lis, apart from the want of sbtutory notice period, no other challenge has fun laid to the I auction procdings on the ground of rt being either collustue, fraudulent or uitrbtd by inadquate pricing or underbidding, thus, the auction cannot be sid to suffer from any fundamenbl ptocdural enor, and as such dos not warrant the interference of this Coutt, prticularly when the pla *ught to fu nid to challenge the sme could have fun raid earfiEr."

¶164

From perusal of the above^judgement it is clear that once the sale has been confirmed, the same cannot be set aside unless there is a fact that the sale has been conducted by collusion or is fraudulent. The other conditions under which the sale may be set aside is of inadequate pricing and underbidding. The Ld. counsel of the applicant has relied upon the^{judgement passed} by the Honble Supreme Court in Ram Kishun Vs. State of U.P. (2012) 11 SCC 511, Swastik Agency and Others Vs State of India AIR (2009) SCC Online Ori 3 AIR 2009 Ori 147, Celir LLP Vs. Bafna Motors (Mumbai) h/t.Ltd. CA no.5542-554312023, Venshiv Pharma Chem (P) Ltd. & Ors Vs State Bank of India MANUlAPl0t38l2018, Alpine Pharmaceutical tut Ltd. Vs Andhra Bank & Ors. fV(2020)

¶165

9.\

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SANO.283of2023 49

¶167

BC 112 (DB) (Telan.), M/s Pochir{u Industries Ltd. Vs. PNB, Air 2019 Hydrabad page 61, Sri. Sai Annadhatha Polymers and another Vs. The Canara Bank rep. by its Branch Manager, Madanapalle 2018 SCC OnUne Hyd 778, Haji Abdul Ghani V. The Central Bank of India MNU/AP/009L12012, M/s. Pandiyas Vs. The Assistant General Manager MANU/[N/08 L2l20Lt, Mathew Varghese Vs. M. Amritha & Ors. MANU/SC/0114120L4, J. Rajiv Subramaniam & Anr. Vs. M/s Pandiyas & Ors. C.A. no. 3865 of 2014, Chowdhary Ventures tut. Ltd. Vs Indiabulls Housing Finance Ltd. DRAT, Delhi Appeal no.38712023, Rajesh Gems & Jewels h/t Ltd Vs. India Overseas Bank 2017 SCC Online Del 10679, M/s Ram Murty foara Lal & Ors Vs Central Bank of India WP(C)NO. 13152/2009 & 53L7120L0 and has submitted that if there is any violation of any mandatory .^provision of the SARFAESI ACt/SARFAESI Rules, the action taken by the secured creditor is liable to be set aside. I have^perused the judgements filed by Ld. counsels of both the parties. The Hontle Sugreme Court in Sumati Prasad Bafna case has specifically held that that once the sale has been concluded, the sale cannot be set aside on the^ground that the^provisions of certain rules has not been complied with. In that case in the th auction there was no evidence that the notice under Rule 8(6) has been serued upon the borrower. The Honble Supreme Court has held that even if notice urider Rule 8(6) of the SARFAESI Rules has not been served upon the borrower, the sale cannot be set aside on this sole ground. Therefore, this Tribunal is of the view that in view of the above^judgement even if there is minor contradiction or there _ is minor misdescription of the propefi, the sale cannot be set aside. The Hontle Supreme Court again in M. Rajendran and Ors. Vs. M/s KPK Oil and Proteins India tut. Ltd. and q\

¶168

¶169

SANO.283 of2023

¶170

Ors. has categorically held that there iS no need of giving two separate notices under Rule 8(6) and 9(1) of the SARFAESI Rules and if the notice under Rule 8(6) and 9(1) has been given simulbneously, there is no illegality in the action taken by the respondent bank. Therefore, on the basis of the^judgements passed by the Honble Supreme Court this Tribunal is of the view that the contention of the applicant has no force.

¶171

L2. The next contention of the Ld. counsel for the applicant is that the respondent. FI has no authority to sale the entire^property as the share of the propefi has been transferred to the Energy Ventures h/t.Ltd. which is not a secured creditor and therefore, the Energy Ventures M.Ltd. has no authority to^proceed under the^provisions of the SARFAESI Act. It is turther submitted that the respondent FI cannot proceed against the shares transferred to the Energy Ventures M.Ltd. and therefore, the action taken by the respondent FI to the extent of the share of the Energy Ventures h/t.Ltd. is invalid. On the other hand the Ld.Sr. Advocate for respondent FI and Ld. Sr. Advocate for auction purchaser has. submitted that such defense of the applicant has already been considered by thp Tribunal in the SA no. 6212010 and therefore, the same contention cannot be raised agaln in the present SA. It is submitted that once an issue has been decided by the competent forum, the same cannot be raised again and the^judgement passed by the DRT shall act as res-judicata and therefore, this Tribunal has no authority to go into these issues again and decide the same. On the other hand the Ld. counsel for the applicant has submitted that the applicant .has not raised such issues before this.Tribunal and therefore,.he is entitled to raise these issues which goes tg the root of the legality of

SA NO. 283 of2023^'

the action and therefore, the same can'be agitatd by the applicant. In this regard I have perused the judgement passed by this Tribunal in SA no.6212010. From^perusal of the above^judgement it, is clear that this issue has already been decided by this Tribunal in that SA and the OA filed by the respondent FI, therefore, the same cannot be agitated again and the finding^given by the Tribunal in the SA no.6212010 and OA no.249l20ll shall be binding and act as res-judicata. Therefore, the contention of the applicant cannot be enteftained.

¶176

The Ld. counsel of the applicant vehemently argued that the property has been scld at .a throw away^price. It is submitted that the value of the^property was^{more than} Rs.200 Crores and the same has been sold for an amount of Rs.35 Crores. It is submitted that in the first^auction the value of the property was ascertained as^Rs.160 Crores and subsequently it was reduced to^Rs.35Crores without any valid ground a$ perefore, the valuation done by the valuer is against the^{prescribed normsand} therefore, there is gross under valuaUon of the^property and the sale can be set aside on this^ground. It^is submitted that as^{per judgementpassed} by the Honble Supreme Court in Sumati Prasad Bafna, the sale can be set aside if there is undervaluation or underbidding. It^is submitted that the present case is the case where the respondent FI has grossly undervalued the^property and sold the propery at a throw away^price, On the^other hand the H. Sr. Advocate for the respondent FI and the Ld.Sr. Advocate for auction^purchaser has submitted that the property has been sold after^{getting proper} valuation from the Government approved valuer and therefore, it cannot be said that the^property has beer! sold at a throw away^price. It is submitted tbl$he applicant has failed to 4'

¶177

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SA NO. 283 of 2023

¶179

challenge the 19 auctions and therefore, he cannot be permitted to challenge the validity of 19 auctions that has failed and cannot challenge the valuation fixed upto 19 auction. It is submitted that the applicant has challenged only 20s auction, therefore, he cannot be^permitted to challenge the^previous action of the respondent FI. It^is further submitted that the applicant has himself^published a notice in the newspaper that the stay order is on the subject propefi, though there was no stay order^passed by any Court and therefore, has manipulated the fact^and due to this act of the applicant the valuation of^the property has been grossly depreciated. It is submitted that the applicant has filed a number of cases in^respect of the subject^property and therefore, the^valuation of^the property has been depreciated and no one could come to purchase the property as he was under threat that the property may not be handed over to the auction purchaser due to continuous frivolous litigation filed by the applicant. It is further submitted that the^applicant has himself submitted before the Honble^High Court that he has a^purchaser who can^purchase the^propefi for more amount than Rs.35.10 Crores and therefore,^the Hontle Delhi High Court has^permitted the applicant^to bring the buyer but the applicant has failed to bring^a buyer which shows that the^property does not^{have any} value more than Rs.35 Crores. In this regard I^{have gone} through the valuation report filed by the Government valuer. From^perusal of the valuation report it is clear that the Ld. Government Valuer has arrived the^valuation of the Mall and has noted that as^per DRT order^Appeal no.L72l20t2 is pending. There are orders of the Hontle Delhi High Court and appeal no.10/2019, application L8455120L9, 3726212019, 37487 l2OL9, 3986ts.6/.l20t9 are^pending and multiple claims of various^portions of^Mall

¶180

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¶181

SANO.283 of2023 53

¶182

are pending in liugation and therefore, flxed the valuation of the piopefi as Rs.34.20 Crores. There is no claim of the applicant that such litigation is not^pending. From perusal of the enUre record it is clear that a number of litigations are^pending in relation of the subject property both by the secured creditors and the buyers who has purchased the propefi not mortgaged with the respondent FL Therefore, it is clear that there was no possibility of number of buyers to participate in such a property which is under heavy litigation and therefore, the ground referred by the Government valuer appears to be genuine. In such circumstances this Tribunal is of the view that the reasons^given by the Government^{valuer for} reduction of the value of the^property is^genuine and^is liable to be accepted and there is no illegality in^accepting the same. It is also clear that the applicant has^himself wrongly issued a notice in the newspaper that there^is stay on the sale of the^property, though there^{was no} stay from any competent court which shows that^the entire intention of the applicant^was to^{make the people} away from^{participating} in the^proposed auction fixed^by the secured creditor. From^perusal of the order^passedby the Hontle Delhi High Court in CO Appl.114/2021^{and CO} Appl. 29L7 120L6, 3t9612016, 31398 120L6, 320012016, Lt8l20L7, t19120t7, t20120L7, L2212017, L23120L7, 1552120L7, 924120t9 on 12.09.2023 it is clear that the ex- management of the borrower company challenged the 18h auction before the Hontle Delhi High C.ourt and has submitted that the respondent FI is auctioning the property and on 14s June,2023 a bid of Rs.35.10 Crores which is the highest bid has been received. The Hontle Delhi High Court has considered the submission made by the Ld. counsel and directed if the ay-management has any^grievance in rspxt of_the amount for whbh^the land

9-\

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SA NO. 283 of2023

is being auctiond, the ey-management is fre to bring a purchaer beforc the @uft within six wek, who would be willing to pay a higher amount If a^purchaser is founQ then appliation may be mod. If not, the bid would have to go through. Therefore, it is clear that the ex-management of the borrower company^{has made a} submission before the Hontle Delhi^{High Court that he} has a purchaser who can^purchase the^{property at a} higher amount. The Honble Delhi High^{Couft has given} the^permission to the^{ex-management of the companyto} bring the buyer for higher^{amount.From perusal of the} record it is clear that Shri Sukhdev^{Singh Chadha has} written a letter on 16.10.2023^{in which he has written} that .I would tike to^{expressmy interst in aquiringthe} property you have mentiond. While I anticipate^{that my} offer wilt exd the curent^{bidding amotnt, I will be in a} position to provide a spaific amount^once I^{had the} opportunity to^uisit the^{property in quxtion.Shri Sudhir} Singhi, Director has written^{a letter to Hontle High Court} on 21.10.2023 in^{which he has wi'itten that "rye wouldlike} to confirm our wiltingn*s to^{offerRs.38.75Crora, which} exceds the audon^{price (enclod the companyb} financial as on 31il March,2023)^{for your rady referene.} However, we m16t emphasis^{that we rquire an} opportunity to inspxt^{the site thomughly before finaliing} any agr@ment" From^{pelusal ofthe above} correspondence it is clear^{that two persons have shown} their interest in^{purchasing the property but has not} turned up finally for the^{purchase of the property.Shri} Sudhir Singhi^has offered^{the purchase price of Rs.38.75} Crores. Therefore,. it^{is clear} that^{the applicanthimself} brought some^{purchasers who shown} .^{his interestin} property and valued the^property around^{Rs'38.75Crores.} Therefore, as^per own admipign-of^{the applicant in the}

q,r

SA NO. 283 of2023

Honble Delhi High Court the valuation of the propefi was not worth of Rs.160 Crores as claimed by the applicant. He has himself brought the^purchasers who valued the properfi not more than Rs.38.75 Crores. Despite this they have not tumed up and had made their offer subject to the condiUon that they want to inspect the propefi and^perhaps after inspection of the^property they have declined to^purchase the^property. Therefore, they have not shown interest in the^pu.rchasing the property and has pt filed any application for purchase of the propefi before the Hontle Delhi High Court as^per order of the Honble Delhi High Court. Therefore, the contention of the applicant that the valuation of the property is more than Rs.200 Crores or more than Rs.160 Crores is not supported by the submission made by^the applicant himself before the Hontle^{Delhi High Court and} the offer made by the^purchaser brought by the^applicant himself. Therefore, this Tribunal is of the constant^view that the valuation of the^property has not been^wrongly fixed and there is no apparent error on which basis it^may be said that the property has a valuation of more^thqn Rs.160 Crores. Therefore, this Tribunal is of the^view that there is no evidence on record that^propefi has been undervalued or there is under valuation. Therefore, the contention of the applicant that there is non compliance of Rule 8(5) of the SARFAESI Rules has no force.

¶192

The next coritention of the applicant is that there must be a gap of 30 flays between the issuance of the notice under Rule 8(5) of the SARFAESI Rules and 9(1) of the SARFAESI Rules as^pqr mandate^given by the Honble Supreme Court in the Celir LLP Vs. Bafna Motors. But the contention of the applicant has no force. The Honble Supreme Court has recen!!V_1._je M.Rajendran and Ors.

¶193

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SANO.283of2023 56

¶195

Vs. M/s KPK Oil and Proteins India tut.Ltd.and Ors. has categorically held that the Courts below has misread and misinterpreted the^judgement passed by the Hontle Apex Court in Celir LLP Vs. Baha Motors case and has held that there is no necessity of 30 days^gap between the issuance of the notice under Rule 8(6) and 9(1) of the SARFAESI Rules. In view of the above judgement, this Tribunal is of the view that the Honble Supreme Court has himself clarified the^posiUon, therefore, the contention of the applicant has no force.

¶196

On the basis of above discussion, the SA no.283/2023^is liable to be dismissed.

¶197

ORDER

¶198

SA no.283/2023 stands dismissed.

¶199

File be consigned to record.

¶200

Date : 20.11.2025

¶201

( s'x (SUSHIL KUMAR RASTOGI) PRESIDING OFFICER DRT-II, Delhi