Allowed

Venu Akula v. Kotak Mahindra Bank Limited

DRT11 Mar 2025SA/394/2023

Case brief

AI extract

What is this about?

The Tribunal allowed the securitisation application. It held that auctioning the entire property worth Rs.9 crores to recover only Rs.3.15 crores without selling only the divisible portion was illegal and void. The sale and consequent sale certificate were quashed, and possession was restored to the applicant.

What did the court decide?

The SA is allowed by quashing the auction sale, consequential sale confirmation and sale certificate. The 1st respondent bank is directed to refund the bid amount with interest, and the applicants are

Venu Akula versus Kotak Mahindra Bank Limited — Cheque Dishonour | DRT (2025)

¶1

rN THE D.Br-11F-g_ovERy TRTBUNAL _ rr AT HYDERABAD

¶2

DATED THIS THE 1lTH DAY OF MARCH, 2025

¶3

PRESENT: SH. RAMESHWAR_KOTHE, B.Com., L.LB. (Hons.), M.A. PRESIDING OFFICER

¶4

SECURITISATION APPLICATION No.394 OF 2O2g

¶5

Mr. Venu Akula Age 44, Occ:Business R/o Ftat No.618, Sundaram Buildinq Rama Raja Nagar, Suchit.u^{- - -"',} Ranga Reddy District_500067

¶6

Tunki Narender Rao S/o Late Bala Kistaiah Occ:Business, R/o H.No.5_64 ldu.i.rh^{Nagar, Lingampa[y} serrtrngampally, Hyderabad Telangana

¶7

Tunki Raghavender Rao S/o Narender Rao Occ:Business, R/o H.No.5_64 fdaph^{Nagar, Lingampaily} Serilingampally, Hyderabad Tela nga na

¶8

Prathima Akula

¶9

Plot No.107, Sundaram Building Rama Raju Nagar Near Spencer Super Market Suchitra Circle, euthubullapur Ranga Reddy-500055

¶10

Sriven Marketing

¶11

Rep by its Sole^proprietor Venu Akula Sy.No.692 & 693,^pari-1 Devarayamzal, Shamirpet Mandal Ranga Reddy District Telangana-500019

.......Applicants.

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SA No.394/2023

Versus

Kotak^{Mahindra Bank Limited} -' ;-; hv its Authorized officer jl'rrJ6t, lewel Pawani^Towers 'o"i' e"h;t;u" Road' somajiguda ftYderabad-^S00042

¶17

?. K. Rohit^ReddY '' i)" nurukrishna Reddy Io"O t'l'io"^{occ:not known} ii" viri"'r'rti'r6o'^{Palm Meadows} KomPallY,^HYderabad ....Res7ondents'

¶18

Counsel^{for the Applicants:' Mr''AlhyravKrishnatJppaluri} counset^{tor t'nesiliiii"ntBank : M1s''l"s' sujatha} : Mr'siddarth^Posuta counset^{ror 2nd} ^":;;:;;;;;

¶19

-:ORDER:-

¶20

The^{Applicantsfiled the presentSecuritisationApplication} uls.l1^{of the Securitization and Reconstructionof Financial Assets} and^{Enforcementof Security InterestAct' 2002(hereinafter referred} to as^{"SARFAESI Act 2x02")to set aside the possession notice dated} 09.08.2023,^{sale notice dated 16'08'2023' e-auctionsale held on} 20.L2.[O23pursuant^{to e-auction sale notice dated 18'11'2023 and} consequential^{sale certification dated 23'Ol'2024issuedin favour of} 2nd respondent^{and to restore possessionof the secured asset to} apPlicant.

¶21

The facts^{of the case,} briefly,^{are that5th applicantis the main} the co-borrower^{cum guarantorsand} borrower,^{1't aPPlicant is} guarantors for the^{loan availedfrom the} applicants^{2, 3 and 4 are} applicant^{is an MSME plgprietary concern} respondent^{bank. The5th} ,r/)Y,s (:/)D

¶22

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SA No.394/2023

¶24

engaged in business of^{popcorn. It was regularly paying EMIs till} December, 2022 however,^{due to competitionand Covid-19} pandemic situation. Though it met the^{eligibility criteriaunderRBi} Circulars 1.0 and 2.0^{pertaining to restructuringof covid-19stress} related accounts without downgrading^{the asset classification, the} respondent bank failed to^{extend the benefit and dispose of the} applications dated 02.06.2027^{and 30.09.2021 within 30 daysas} stipulated in the RBI^{Circular2.0 dated 05.05.2021. The overdraft} account has been^{renewed from time to time from 2019 till date} despite business being hit^{by Covid-19. RBI in its Resolution} Framework Circulars^1.0 and^{2.0, vested discretion with the FIs in} decidinq the framework^{for eligibleMSMEsbut not to dismiss the} application of ellgible entities^{without application of mindThe} respondent bank in its^{reply dated 01.08.2023 to the objections} raised by the applicants to^{demand notice statedthat the request to} restrucLure the account^{was suitably repliedvis SMS. This replywas} without application of^{mind and againstthe provisionsunder} Sec.r3(3A) of the^{Act, 2002.}

¶25

The loan account^{has been illegally classifiedas NPAand} hence subsequent notices^{i.e., demandnotice,possessionnotice,} prior to sale notice are null and void.^{Further,the notice prior to} sale u/r B(6) does not^{indicate date of auction. The e-auction sale} notice dated 18.11.2023^{publishedon 1B'11.2023 was not affixed} as^per Rule B(7).^{Authorizedofflcerfailed to obtain correct valuation} and the reserve^price fixed^{is shabby and very low as comparedto} the market value which^{is not in consonance with Rule B(5)' The} outstanding amount as^{per auctionnotice is only around Rs'3'15} crores whereas the open^{plots which} were divisible, were Put^for

ffi"'e

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SA No.394l2023

sale together with a reserve price of Rs.9 crores and the same is illegal and against the judgment of Hon'ble Apex Court in Ambati Natasayya vs. lr. Subba Rao & anr [7990 AIR rr9J. However, the worth of property is Rs.15 crores in the market. Hence this SA to set aside all the measures taken by the respondent bank against the application sched ule^properties.

¶30

The 1st respondent bank filed reply and additional reply statem€nts. The submissions, inter alia, are that the applicant availed OD facility of Rs.1 crore and Emergency Credit Line Guarantee Scheme (ECLGS) of Rs.19.94 lakhs towards comprehensive package announced by the Central Government for MSMES in view of the economic distress caused due to Covid-19 pandemic. The loan facilities are secured by hypothecation of movable and mortgage of immovable properties. The borrower diverted the receivable to other accounts to default the bank. Only ln case both the borrower and the bank agreed for resolution proposal, the same has to be communicated withln 30 days so as to complete the restructure process within 90 days. Since the proposal of applicant was not in line with respondent bank's board policy, it was rejected. The applicant was not entitled to restructuring schemes as per RBI Circulars. The rejection of restructuring was communicated by Slvls.

¶31

Due to default in repayment, the account was classified as NPA as per RBI norms. The demand notice dated 25.10.2021 was issued as per RBI Master Circulars dated 07.04.2021 and 0t.10.2027. The possession notice was issued under Sec.13(4) on 09.08.2023 and the same was affixed on secured properties and

'/Xt,r"" //'-'\'v

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SA No.39412023

published in'Nava Telangana' and'Business Line'^Teluguand English dailies respectively on 10.08.2023.^{Rule B(6) notice dated} 16.08.2023 was issued for redemption of^{mortgagedproperty.Mere} non-mentioning of sale date, the^{noticecannot become invalid.}

¶36

The sale notice dated^{18.11.2023fixing auctionon} 20.t2.2023 was issued which was^received by^{the applicant' The} auction sale notice was^{published in'Nava Telangana'and Business} Line'Telugu and English newspapers on^{18.11.2023besides} affixture on secured assets.^{This Tribunal directedthe respondent} bank not to confirm the sale^{subjectto deposit of Rs.36.70 lakhs by} the applicant in three instalments,^{he failed to comply the sameand} hence as per liberty^granted in the order^{dated 20.12.2023, the} respondent bank^proceeded to confirm the^{sale and issue sale} certificate in favour of 2nd respondent-auction^{purchaser. However,} the right of redemption extlnguished with the^{publlcationof sale} notice. Valuatlon report was obtained as^{per Rules. The schedule} property is indivisible and hence respondent bank was^{forced to put} the whole property for sale. The respondent^{bank has rightly} followed the due^procedure as contemplated^{under the provisions of} the Act and Rules of 2002. Hence^{the SA is liable to be dismissed.}

¶37

The 2nd respondent-auction^{purchaser filed reply statement} stating that the applicant lost the right of^{redemption available} under Sec.13(B) of the Act.^Due to^{non-complianceof conditional} order, the 1't respondent bank^{confirmed the sale and issuedthe} sale certificate in his favour. The bank^{has followed due procedure} of law. The applicant cannot be allowed to^{defeat the lawful claim of} the 1st respondent bank and financial^{loss to the 2nd respondent}

¶38

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SA No.394/2023

¶40

being bonafide auction purchaser. Hence SA is liable to be d ism issed .

¶41

8, Heard learned counsel appearing for the applicants, learned counsel for the 1st respondent bank and learned counsel for the 2nd respondent. Perused the written arguments filed on behalf of applicants as well as for respondents 1 and 2 and^perused the material brought on record.

¶42

It is contended by learned counsel for the applicants that the respondent bank has initiated the SARFAESI proceedings without considering the application to restructure the loan account in view of Covid-19^pandemic and without deciding the obligations. He relied on the^judgement of Hon'ble Calcutta High Court in Olive Tree Retail Private Limited and Another vs. South Indian Bank Limited and Another [2023 SCC online Cal 143] in support of his contention that the respondent bank should have considered the application for restructuring or waited for closu relsettling the account before initiating proceedings under the Act. He would further contend that the possession notice was not affixed as claimed by the respondent bank, A comparison of the photographs filed as proof of affixture of possession notice and photographs attached to valuation report would clearly establish the fact that the possession notice was affixed on some other property and not the secured asset.

¶43

He would also contend that the secured asset is a divisible property with separate Plot Nos.17, L8,21 and 22 demarcated by stones. Each plot is of 500 sq. yards and total value even as per respondent bank is Rs.9 crores. The l't respondent bank could have

OW*

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SA No.39412023

sold a portion of the^property to satisfy the^{outstandingdues} instead of auctioning the entire^{property.Learnedcounsel relied on} judgement of Hon'ble Supreme Court in:-

¶48

a. Ambati Narasayya vs. M. Subba^{Rao & Anr reported in 1990} AIR 119;

¶49

b. Chinnammal & 4 Ors. vs. P.^{Arumugham & An. Reported in} 1990 AIR 1828; and

¶50

c. Bhikchand S/o Dhondiram Mutha^{(Deceased)Through LRs vs.} Shamabai Dhanraj Gugale^{(Deceased)through LRs in Civil} Appeal No.5026 of 2023 decided^{on 14'05.2024.}

¶51

Learned counsel referred to the^{relevantparagraphsin the cited} j udgements as hereunder:-

¶52

1't cited judgment: "If the^property is large and^{the decree to} be satisfied is smatl, the Curt^{must bring only suchpartition of} the property, the^proceeds of^{which would be sufficientto} satisfy the claim of the decree^{holder. It is immaterial whether} the property is one or several,^{Even if the property is one, if a} separate^portion coutd be sold^{without violating any provision} of law only such^portion of the^{propertyshould be sold."}

¶53

2'd cited^{judgement:"No} man should suffer^{becauseof the} mistake of the Court. No^{man should suffer a wrong by} technical^procedure of irregularities.^{Rulesor proceduresare} the handmaids of iustice and^{not the mistressof the} iustice, Ex debito^justitiae, we must do iustice^{to him. If a manhas} been wroniged so long as it^{ties within the human machineryof} administration of^{justice that wrong must be remedied,"}

¶54

3'd cited judgment:

¶55

"23. In the^matter of^{Balakrishnanvs. NalaiyandiKonar} this Court observed thus:

¶56

"9, The provision contains some significant^{words,They are} "necessary to satisfy the decree". use^{of the said expression} clearly indicates the^{tegislativeintent that no sale can be} atlowed beyond the decretal^{amount mentioned in thesale} proclamation. (See Takkaseela Pedda Subba^{Reddiv. Puiari} Padmavathamma [(1977) 3^{SCC337: AIR1977SC 1789]') In} all execution^{proceedings,the court has to first decidewhether} it is necessary to bring the^{entire propertyto sale or such} portion 'If thereof as may seem necessary to^{satisfythe decree'} the^property is large and^{the decreeto be satisfied is small} the court must bring only^{such portion of the property,the} proceeds of which would be sufficieA^to satisfY^{the claim of} 0w*

¶57

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SA No.394/2023

¶59

the decree-holder. It is immaterial whether the^propeftY is one or several. Even if the property is one, if a separate^portion could be sold without violating any^provision of law only such portion of the property should be sold. This is not just a discretion, but an obligation imposed on the court. The sale held without examining this aspect and not in conformity with this mandatory requirement would be illegal and without jurisdiction. (See Ambati Narasayya v. M. Subba Rao [1989 Supp (2) SCC 6931.) The duty cast upon the court to sell only such property or portion thereof as is necessary to satisfy the decree is a mandate of the legislature which cannot be ignored, Similar view has been expressed in S. Mariyappa v. siddappa t(200s) 10 SCC 2351.

¶60

Learned counsel also contended that the authorized officer without application of mind brought the entire property for sale and sold for Rs,9.02 crores for recovery of Rs.3.2 crores which is against the law laid down in the above cited^judgments. The property was sold with enhancement of just Rs.2 lakhs which shows collusion of respondents t and 2. Collusion is further proved by the act of respondent bank in non-affixture of notices on the secured assets, With the above contentions, learned counsel sought to set aside the possession notice dated 09.08.2023 and consequent sale, sale confirmation and sale certificate and order restoration of schedule property to applicant.

¶61

On contrary, learned counsel for the 1st respondent bank while reiterating the version as in the reply and additional reply statements would submit that ECLGS loan was sanctioned due to Covid-19 pandemic only. The applicant failed to repay the first loan and also committed default in servicing the interest of second and therefore, loan account had to be declared as NPA on 30,04.2023 as per RBI guidelines. Restructuring of OD account could be done only by converting into term loan or short term loan only if the entity was in a position to run tl"/w:;*

¶62

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SA No.394/2023

¶64

entirely in the discretion of^{the financial institutionto consider} restructuring of loan accounts.^{The RBI Circularswere valid only} upto 31.12.2020 and 30.09'2021.^{However,the applicant was not} entitled for restructuring^{facility. There is no instruction in the RBI} Circular to intimate the^{borrowereven if proposal is not in line} with Board's^pollcy. On one^{hand the appllcantadmit that the} business was drastically hit^{by Covid-19 pandemic and on the} other hand submit that^{they were regular inpaymenttill} December, 2022. She^{would state that the judgementof Hon'ble} Calcutta High Court^{is not applicableto the caseof applicants'}

¶65

Learned counsel^{wouldfurther submit that the possession} notice dated 09.08.2023^{was issued and publishedon} 10.08,2023. It was affixed^{on a tub placed in the securedasset} which could have been^{moved subsequently being a movableitem} and thus it does mean^{that affixturewas not done' Learned} counsel would submit that^{the right of redemptionto the applicant} extinguished on 77.t7.2023^{with the publicationof auction notice} as per amended^provision of^{Sec.13(B) of the Act. She would rely} on^judgement of^{Hon'ble Supreme Court in cELrRLLP vs' BAFNA} MoTORs (MUMBAI) PVT LIMITED^{& OTHERSin Civil Appeal} No.5542-5543 of 2o23 decided^{on 27.o9.2023with specific} reference to^para 105(iii)^{whichreads as hereunder:}

¶66

"iii) In accordance with the unamended^{Section13(8)of the} siarefst Act, the right^{of the borrower to redeem the secured} asset was avaitable till^{the sate or transfer of suchsecured} asset. In other words, the^{borrower'srightof redemptiondid} not stand terminated^{on the date of the auction sale of the} secured asset itself and^{remained alive till the transferwas} completed in favour of the^{auction purchaser, by registrationof} the sale certificate and^{delivery of possession of the secured} asset. However, the amended^{provisionsof Section13(8) of the} SARFAESI Act, make it ctear^{that the right-of the borrower to} Y)5\'.

¶67

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SA No.39412023

¶69

redeem the secured asset stands extinguished thereunder on the very date of publication of the notice for public auction under Rule 9(1) of the Rules of 2002. In effect, the right of redemption available to the borrower under the present statutory regime is drastically curtailed and would be available only till the date of publication of the notice under Rule 9(1) of the Rules of 2002 and not till the completion of the sale or transfer of the secured asset in favour of the auction purchaser."

¶70

Learned counsel would also submit that the amendment petition pertaining to auction notice was not filed within 45 days and challenge against auction notice is liable to be rejected as time barred. The possession notice was issued on 09,08.2023 and auction notice on 18.11.2023. Despite ample time and opportunity without approaching the respondent bank with choosing to exercise right of redemption the applicant is attempting to shift the blame.

¶71

Learned counsel would also submit that the property is indivisible compelling the respondent bank to auction the entire property. Now, the third party rights have been created subsequent to the applicant's failure to comply the conditional order passed by this Tribunal. The respondent bank also filed seeking direction to applicant to provide account details for transferring the balance sale consideration. She said, at this belated stage, the applicants are estopped from objecting to the auction in the light of judgment of Hon'ble Supreme Court in Contempt Petition (C) Nos.758-759 of 2024 decided on 73.72.2024 in Civil Appeal Nos.5542-5543 of 2023 between Celir LLP vs. Sumati Prasad Bafna with specific reference to para 218 of the cited^judgment which reads as hereunder :/N/ ' ,/ -/<. -. ^^l, t_2. \.)

¶72

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¶73

SA No.394/2023

¶74

"218. Any sale by auction or^{other public procurement} methods once already confirmed^{or concluded ought not to be} set-aside or interfered with^{lightly except on grounds that} 90^to the core of such sale^{process, suchas either beingcollusive,} fraudulent or vitiated by inadequate^{pricing or underbidding'} Mere irregularity or deviation^{from a rule which does not have} any fundamental^procedural error^{does not take away the} foundation of authority for^{such proceeding. In such cases,} courts in^particular should^{be mindful to refrain entertaining} any^ground for challenging^{an auction which eithercouldhave} be'ei taken earlier before the^{sale was conductedand} confirmed or where no substantial^{injury has been caused on} account of such irregularitY.

¶75

L7. Learned counsel for the^{respondent bank sought for} dismissal of the SA with^{costs stating that the respondent bank} has followed the due^{procedure contemplatedin the Act,2002} and Rules thereunder.

¶76

Learned counsel for the^{2nd respondentreiteratedthe} averments of the reply statement^{and would contendthat he is a} bonafide^purchaser of^{the SA schedule propertyin the auction} conducted by the respondent^{bank on 20.12.2023 for a valuable} sale consideration^{pursuant to auction noticepublishedin} 'Business Line' and 'Nava Telangana'.^{Sale was confirmedin his} favour and sale certificate^{was also registered vide} Doc.No.965/2024 dated 23.0I.2024^{and actualpossessionof the} property has also been handed over.^{Learned counsel also relied} on^judgement in CELIR^{LLP case (supra) and judgements of} Hon'ble Supreme Court^{in Surinder Pal Singh vs' Viiaya Bank and} Others t2O23 SCC OnLine^{SC 14021; Sadashiv PrasadSingh vs'} Harendar Singh and^others te0$)^{5 SCC 5741 and Shakeena} and Another vs. Bank of^{India and Others} teo2l)^{72 SCC 7671} with regard to his contention^{that since the^gpplicants failed to} /M>q (/ -tv

¶77

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¶78

SA No.39412023

¶79

exercise the right of redemption interference on the of equity not permissible and that applicants are not entitled to any relief particularly when sale was registered and actual possession was also registered. As per learned counsel, the SA is filed only to defraud the lawful claim of the respondent bank and cause financial loss to the auction purchaser. With these submissions, learned counsel sought for dismissal of the SA with exemplary costs.

¶80

Now the points that arise for adjudication are: -

¶81

i) Whether the Applicants made out any valid ground for quashing the measures initiated by the l't respondent bank against the SA schedule property including the auction proceedings dated 20.12.2023 pursuant to auction sale notice dated 18.11,2023 under the provisions of Securitisation

¶82

Act?

¶83

ii) To what relieP

¶84

The primary contention of the applicants is that the respondent bank failed to implement RBI Circulars 1.0 and 2.0 pertaining to resolution frame work pertaining to Covid-19 stress related accounts. As per respondent bank, the applicants were sanctioned ECLGS of Rs.19.94 lakhs and that applicants' request for restructuring was rejected as not eligible. Vide letter dated 01.08.2023 towards reply to the objections raised by the applicants to demand notice, the respondent bank's advocate clearly informed that the restructuring of loan was not considered as the borrower committed irregularity in repayment and default in churning the OD account and that the Resolution Framework ffi*

¶85

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¶86

SA No.39412023

¶87

2.0 was not applicable to the OD^{accounts.The applicantsare} neither denying availment of^{ECLGS facility nor committing} default. Under such^{circumstances, Ido not find merit in the} contention of applicants that^{the respondent bank did not consider} their case for restructuring.^{Regarding communicationof} rejection, the applicants could^{not provideparticular clause in the} Circular about time fixed for^{communicating rejection of} proposals. However, it is observed that the^{respondent bank got} issued the reply to the objections^{within time stipulatedunder} Sec.13(3A) of the Act,^2002.

¶88

2L. The next contention of^{applicantsis that the possession} notice was not affixed as^{per Rule B(1) of the Security Interest} (Enforcement) Rules,2002. According to^{them, the proofis} insufficient. After^perusal of^{proof of affixture, I do find this} contention as very trivial for the^{reason that the schedule} properties are open lands and therefore the^{notice was pasted on} a big tub lying in the^{plot. I do not want to see this issue in a} hyper-technical manner.

¶89

With regard to argument of^{learned counsel for respondent} bank that the amendment^{pertaining e-auction sale notice is out} of limitation, this Tribunal^{allowed the amendmentpetitionon the} ground of continuous cause of action' It^{appearsthe saidorder} has not been challenged.^{Hence the limitation cannot be a} question now.

¶90

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SA No.39412023

¶92

As far as contention on non-affixture of e-auction sale notice, the respondent bank placed proof of affixture and hence it is construed that Rule B(7) has been followed.

¶93

The respondent bank obtained a valuation report on 06.05.2023 and auction notice issued on 18.11.2023. There is a gap of six months. Be that as it may. It is manifest from the valuation report that each sq. yard rate is Rs.45,000/-, total extent of four plots is 2000 sq. yards and total market value of four flats assessed to be Rs.9 crores and the same was kept as reserve price. As per the e-auction sale notice is dated 18.LL.2023, the outstanding amount is Rs.3,15,31,929l- in respect of four loan accounts i.e., OD and ECLGS accounts which are subject loans of this SA and SA 395/2023 where secured assets are common. Thus, it is very clear that for recovery of around Rs.3.15 crores, the entire property worth of Rs.9 crores was put to sale. As per valuation report obtained by the bank itself, the property is divisible by metes and bounds as plot Nos.17, 1B and 21 (Part) admeasuring 1215 sq. yards as one item and Plot Nos.21(Part) and 22 admeasuring 785 sq. yards as another item. Same description of property was also given in the e-auction sale notice. There is a feeble submission by the respondent bank that the property is not divisible and this submission is not acceptable in view of the facts borne out of the own record of the 1st respondent bank. The learned counsel for applicants vehemently relied on judgment in Ambati Narasayya (supra) supporting his contention that the respondent bank should have sold only part of the property. The Hon,ble Apex Court in the cited judgment hetd that:-rfi\2._l / 'tx"

¶94

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SA No.394/2023

¶96

"It is of importance to note from this^provision that in all execution proceedings, the Court has to first decide whether it is necessary to bring the entire attached property to sale or such^partition thereof as may seem necessa ry to satisfy the decree. If the property is large and the decree to be satisfied is small, the Curt must bring only such partition of the property, the proceeds of which would be sufficient to satisfy the claim of the decree holder. It is immaterial whether the property is one or several, Even if the property is one, if a separate portion could be sold without violating any provision of law only such portion of the property should be sold. This, in our opinion, is not^just a discretion, but an obligation imposed oo the Court. Care must be taken to^put only such portion of the property to sale the consideration of which is sufficient to meet the claim in the execution petition. The sale held without examining this aspect and not in conformity with this requirement would be illegal and without ju risdiction..,.,.,"

¶97

(emphasis subplied)

¶98

It is discernible fact that the action of the lst respondent bank In auctioning the entire property worth of Rs.9 crores^for recovery of around Rs.3.15 crores is not only against the^principle laid down in the^judgement but also against the Constitutional Right to property and Principles of Natural lustice. Such sale, conducted by the 1st respondent bank on 20.12.2023 is, therefore, liable to be set aside as illegal.

¶99

As far as the argument of respondents 1 and 2 on the^point of right of redemption and interference of court once^sale proceedings were finalized, relying on judgements of BAFNA Motors and Contempt Petition in Sumati Prasad Bafna cases (supra) is concerned, the Hon'ble Ape4..,'Court made it clear in Contempt Petitions that:, ffi* ,..

¶100

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SA No.394/2023

¶102

"Any sale by auction or other public^procurement methods once already confirmed or concluded ought not to be setaside or interfered with lightly except on^grounds that^go to the core of such sale^process, such as either being collusive, fraudulent or vitiated by inadequate pricing or underbidding. Mere irregularity or deviation from a^rule which does not have any fundamental^procedural error does not take away the foundation of authority for such proceeding. In such cases, courts in particular should be mindful to refrain entertaining any ground for challenging an auction which either could have been taken earlier before the sale was conducted and confirmed or where no substantial injury has been caused on account of such irreg u la ritY. (em phasis su^pplied )

¶103

In the case on hand, as observed supra, there is arbitrariness on the part of the authorized officer and illegality in bringing entire property to sale though only a^part would have been sufficient to satisfy the claim, and where collusiveness cannot also be ruled out. interference of this Tribunal is^quite warranted even if the sale proceedings have been completed. As far as right of redemption is concerned, the issue of right of redemption is not raised by applicant.

¶104

In view of the above discussion, I have no hesitation to find that the applicants have made out valid grounds to quash the auction sale conducted on 20.12.2023 pursuant to e-auction sale notice dated 18.11.2023 in respect of the SA schedule properties and consequential sale confirmation and sale certificate issued in favour of the 2nd respondent and physical possession.

¶105

Point No.^(ii):

¶106

In the result, SA is allowed by quashing the auction sale conducted on 20.t2.2023 pursuant to e-auction sale notice dated

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SA No.39412023

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18.11.2023 in respect of the SA schedule^properties and consequential sale confirmation and sale certificate dated 23.0L.2024 vide Doc.No.965/2024 issued in favour of the^2nd respondent.

¶111

The 1st respondent bank is directed to^{refundthe bid amounts} deposited by the 2nd respondent with^interest @60lo^{p.a. simple from} the respective of dates of deposits till^payment.

¶112

The applicant is entitled for the^{physicalpossessionof the SA} sched u le properties.

¶113

Consequently, Interlocutory^{Applications pendingif any, shall} sta nd closed.

¶114

No order as to costs.

¶115

Communicate a copy of this order^{to the parties concerned} and upload in the official^website.

¶116

(Typed to my dictotion by the PS, corrected, signed^{ondpronouncedby me in the open} court on this the 77th doy of^Morch,2025).

¶117

ESHWAR KOTHE) PRESIDING OFFICER

Venu Akula v. Kotak Mahindra Bank Limited

Case brief

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Venu Akula v. Kotak Mahindra Bank Limited

Case brief

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