Dismissed

Mr Munindra Kumar K M v. Karnataka Bank Limited

DRT21 Feb 2025SA/75/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed two securitization applications challenging an auction sale and sale certificate by Karnataka Bank Limited. The applicants alleged procedural lapses including non-service of notices, under-valuation, and violation of High Court orders. The Tribunal rejected these allegations as unsubstantiated and held that the sale complied with the SARFAESI Act.

What did the court decide?

Applications filed by the applicants challenging the auction and sale certificate were dismissed. Interim orders were vacated.

Mr Munindra Kumar K M versus Karnataka Bank Limited — Banking and Recovery | DRT (2025)

¶1

IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this the 21^st Day of February, 2025

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Present: Sri. T.Rajesh Hon’ble Presiding Officer

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COMMON ORDER IN SA.No.18/2024

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& SA. No. 75/2024

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SA.No.18/2024

¶7

BETWEEN:

¶8

Mr. Munindra Kumar K.M. S/o. Late Munirajappa, Aged 39 years, R/A.No. 486/16, Sy.No. 29, Ward 129, Kalena Agrahara, BBMP, Begur, Sub-Division, Bengaluru- 560076. …APPLICANT

¶9

AND

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Karnataka Bank Limited, Asset Recovery Management Branch, First Floor, FKCCI Building, Kempegowda Road, Bengaluru, Represented by its Authorized Officer.

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Fast Ark Private Ltd, 48, Ist Floor, 4^th Block, 4^th Stage, 80 Feet Road, Agrahara, Dasarahalli, Bengaluru. …RESPONDENTS

¶12

Counsels on record/appeared for:

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Applicant : Sri. V.Mohan Respondent No. 1 : Sri. A. Ganesh Respondent No. 2 : Sri. N.M.Gufran

¶14

SA.No.75/2024

¶15

BETWEEN:

¶16

Mr. Munindra Kumar K.M.

¶17

SA18 /2024 & 75/2024

¶18

¶19

S/o. Late. Munirajappa, R/A. No. 486/16, Sy.No. 29, Ward 129, Kalena Agrahara, BBMP, Begur, Sub-Division, Bengaluru- 560076.

¶20

Mrs. Krishnamma, W/o. Late. Munirajappa, R/A.No. 486/16, Sy.No. 29, Ward 129, Kalena Agrahara, BBMP, Begur.

¶21

Mrs. Sujatha M, W/o. Mr. K. Ramesh E14, near Yellamma Temple, Hommadevanahalli, Gottigere, Bangalore- 560 083.

¶22

Mrs. Vasantha M W/o. Mr. N.V. Ramu, Kalena Agrahara, Opposite to Government School, SOS Post, Bannerghatta Road, Bengaluru- 560078.

¶23

…APPLICANTS

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AND

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Karnataka Bank Limited, Asset Recovery Management Branch, First Floor, FKCCI Building, Kempegowda Road, Bengaluru, Represented by its Authorized Officer, Mr. Shivkumar K.

¶26

Mrs. Sumitra Mariyappa, Fast ARKPvt. Ltd. No: 48, 1^st Floor, 4^th Block, 4^th Stage, 80 feet Ring Road, Agara Dasarahalli, Basveshwaranagar Bangalore- 560 079.

¶27

…RESPONDENTS

¶28

Counsels on record/appeared for:

¶29

Applicant : Sri. V.Mohan Respondent No. 1 : Sri. A. Ganesh Respondent No. 2 : Sri. N.M.Gufran

¶30

SA18 /2024 & 75/2024

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¶32

COMMON ORDER IN SA.No.18/2024 & SA. No. 75/2024

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This Securitization Application, in short S.A is filed

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under sub section [1] of S.17 of the Securitization And Reconstruction of Financial Asset and Enforcement of Security Interest Act, 2002, herein after referred to as “SARFEASI Act” or “The ACT”. The auction sale conducted by the secured creditor on 30.12.2023 and the consequential Sale Certificate dated 01.02.2024 issued by the secured creditor is under challenge in these Securitization Applications (SA).

¶35

Since the issue involved and to be gone into in both the cases are one and the same, that too arising out of same proceedings, the same are considered and disposed of together.

¶36

The applicant availed the Term Loan for Rs. 30,00,000/- (Rupees Thirty Lakh Only) from the respondent bank is impugning the measures contending that respondent failed to follow the procedure as contemplated under the Act and the Rules in their measures leading to the conduct of the sale and also in issuance of the Sale Certificate. It is admitted that the applicant, his mother and sisters jointly availed the

¶37

SA18 /2024 & 75/2024

¶38

¶39

loan for improving the self-employment, offering their property as security.

¶40

It is also admitted that the demand notice dated 08.06.2021 was issued calling upon the borrowers to pay an amount of Rs. 33,03,336.33/- (Rupees Thirty Three Lakh Three Thousand Three Hundred and Thirty Six and Paise Thirty Three Only). In respect of the demand notice the applicant contends that the demand notice is not properly served upon the borrowers. It is also contended that even though the representation u/s. 13(3A) of the Act has been submitted, the same was not considered and without considering the same, the possession notice was issued to the applicant on 24.08.2021. In respect of the possession notice also, it is the case of the applicant that the same is not published and affixed as mandated under Rule 8(1) and (2) of Security Interest Enforcement Act.

¶41

The applicant further admits that the 1^st respondent had resorted to proceedings u/s 14 under the SARFEASI Act and the said order was challenged by filing an S.A before this Tribunal which got disposed of. It is also admitted that the actual possession of the property was taken, which according

¶42

SA18 /2024 & 75/2024

¶43

¶44

to the applicant is without following the due process of law

¶45

and without giving seven days notice. The applicant is also contending that only when the Writ Petition was filed before the Hon’ble High Court and by the proceedings therein, the applicant came to know about the conduct of the Impugned sale. In respect of the impugned sale, it is the case of the applicant that the same is done without following the mandate of the provisions and, that too by grossly undervaluing the property which according to the applicant is worth Rs. 1.28 Crores

¶46

The impugned auction is sought to be challenged alleging apart from under valuation, by alleging collusion between the Auction Purchaser and the Secured Creditor. The applicant is also putting forward a case that schedule appended to the sale notice leading to the impugned sale is erroneous as the details are varying from the original. The applicant is also alleging the non-compliance of mandate of publication and issuance and uploading of the sale notice in the site of the secured creditor.

¶47

Along with the SA 18/2024 the applicant has produced the following documents:-

¶48

SA18 /2024 & 75/2024

¶49

¶50

Sl.No.	Particulars
1	ANNEXURE A-1- Copy of the Auction Sale Notice dated 07.12.2023 issued by Respondent Bank.
2	ANNEXURE A-2- Copy of Respondent’s Demand notice dated 08.06.2021
3	ANNEXURE A-3- Copy of the Respondent’s Possession Notice dated 28.08.2021
4	ANNEXURE A-4- Copy of final order passed in WP: 29025/2023
5	ANNEXURE A-5-Copy of Applicant’s Aadhar Card
6	ANNEXURE A-6- Copy of Sub-Registrar valuation of Schedule property.

¶51

The issuance of Sale Certificate is challenged in SA 75/2024 by reiteration of the above contentions. Apart from the contentions as taken their challenge as to the conduct of sale, the applicants further alleges that the mandate as to the receipt of EMD as well as the balance sale consideration are not followed in conduct and confirmation of sale. The SA 75/2024 is filed reiterating the contentions as taken in the SA 18/2024 and also has contended that the 2^nd respondent is making efforts to act on the sale certificate issued in his favour.

¶52

Another point sought to be raised in that the E- auction bid was in the name of Mrs. Sumithra Mariyappa that too without designation and the sale certificate was issued in a name of the company “Fast Ark Private Limited”. In respect

¶53

SA18 /2024 & 75/2024

¶54

¶55

of the issuance of the sale certificate in favour of the 2^nd respondent company it is contended that the company should have obtained a Board of Resolution empowering them to participate in the bid, without the Board resolution the sale in their favour is to be treated as non-est. Hence according to the applicant the bid report does not belongs to the entity in whose favour the sale certificate is issued.

¶56

The applicant contends that the sale conducted is in violation of the orders of the Hon’ble High Court in W.P No. 20925/2023.

¶57

Next contention taken by the applicant that the valuation of the Schedule Property is not taken before fixing the reserve price and the same is in violation of Rule 8(5) of Security Interest (Enforcement) Rules. The applicant is also contending that the description of the schedule property in sale notice leading to the impugned sale does not tally with schedule given in the demand notice as well as possession notice. The applicant is also having a case as to alleged nonservice of notice on the borrowers as according to the applicant one Mrs. Vasantha who is one of the borrowers is not served.

¶58

SA18 /2024 & 75/2024

¶59

¶60

The next contention taken by the applicant is regarding the alleged failure of the bank in uploading the Auction notice in their site.

¶61

The applicant has also raised contention as to the alleged non registration of the security interest with the Central Registry and also that Panchanama not drawn while taking physical possession of the property. Hence on the above contentions the applicant assails the sale conducted in respect of the property. Apart from having above contentions the applicant is also having the case that the 1^st respondent failed in publishing the sale notice in a newspaper having wide circulation.

¶62

Along with SA 75/2024 the applicants have filed the

¶63

following documents:

¶64

Sl.No.	Particulars
1	ANNEXURE A-1- Copy of Sale Certificate issued on 01.01.2024 and registered on 03.02.2024
2	ANNEXURE A-2- Copy of Sale Notice dated 07.12.2023
3	ANNEXURE A-3- Copy of Proof of service- Speed post receipts and postal acknowledgements
4	ANNEXURE A-4- Copy of Auction sale notice dated 08.12.2023 published in newspaper
5	ANNEXURE A-5- Copy of Auction of E-auction report of 2^ndrespondent
6	ANNEXURE A-6-Copy of Valuation report

¶65

SA18 /2024 & 75/2024

¶66

¶67

7 ANNEXURE A-7- Copy of Sub Registrar Guidance Value 8 ANNEXURE A-8- Copy of final order passed in WP 29025/2023.

¶68

The 1^st respondent had filed their objections in SA 18/2024 interalia contending as follows: the SA filed by the applicants is belated, frivolous, misconceived and vexatious. The 1^st respondent contends that the measures right from the classification of the account as NPA leading to the conduct of the impugned sale are in accordance with statute as the 1^st respondent has scrupulously followed the provisions of Rule 3 and Rule 8(1) & (2) and Rule 9 of the Security Interest Enforcement Rules.

¶69

It is the case of the 1^st respondent that only as the applicant defaulted in the repayments, the account is classified as NPA on 31.03.2021 with effect from 24.10.2020. It is followed by the issuance of the demand notice calling upon the borrowers to pay back the amount due and as no remittance was made towards the same, the possession notice was issued on 08.06.2021. It is stated that the possession notice was personally acknowledged by one of the parties and received by other borrowers.

¶70

SA18 /2024 & 75/2024

¶71

¶72

It is also the case of the 1^st respondent that the possession notice was duly affixed and published as required under the statute in two dailies: one on vernacular language and other in English.

¶73

Even as the debt remained unpaid, the sale notice dated 30.10.2021 was issued for conducting the E-auction on 08.12.2021, which was also duly served to the borrowers apart from affixing and publishing the same. The said sale notice was challenged by the applicant by filing S.A No. 390/2021 and as no sale took place pursuant to the sale notice the SA stood dismissed. Since no sale took place pursuant to the 1^st sale notice, the 2^nd sale notice dated 20.01.2022 was issued fixing the E-auction on 10.02.2022, which was also duly published, affixed and served as mandated under the Rules.

¶74

In the meanwhile the V Additional Chief Metropolitan Magistrate was approached by the 1^st respondent seeking assistance under section 14 of the Act and in pursuant to the orders passed by the V Additional Chief Metropolitan Magistrate, a notice was issued to the borrowers

¶75

SA18 /2024 & 75/2024

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¶77

and same was challenged by filing S.A 400/2022 which ultimately got dismissed for non prosecution.

¶78

Since no sale could take place pursuant to earlier sale notices, the sale was again fixed on 18.01.2023 and the notice dated 21.12.2022 was issued and published as required under the statute. It is also contended that the notices were duly served which resulted in filing W.P No. 1117/2023 before the Hon’ble High Courts, wherein the Hon’ble High Court has stayed the sale subject to remittance of 20% of the dues in eight weeks.

¶79

It is also pointed out that said amount as directed by Hon’ble High Court was not deposited and another Writ Petition was filed impugning the actual possession was filed. Even though the Hon’ble High Court has passed an order directing the applicant to deposit Rs. 25,00,000/- (Rupees Twenty Five Lakh Only) on or before 29.12.2023 and further permitted the 1^st respondent bank to proceed further on account of failure of the applicant is making the said deposit. Even as the borrower failed in compliance of the direction of the Hon’ble High Court, next E-auction was fixed on

¶80

SA18 /2024 & 75/2024

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¶82

30.12.2023 and sale notice dated 07.12.2023 was issued, served, affixed and published.

¶83

It is also stated that in pursuant to the above sale notice, the 2^nd respondent participated and offered their highest bid amount of Rs. 65,10,000/- (Rupees Sixty Five Lakh Ten Thousand Only) and the sale was confirmed on 01.01.2024. It is also stated that the balance sale consideration was remitted and the sale certificate was issued on 01.02.2024 and registered on 03.02.2024. The 1^st respondent also points out that the right of redemption of the applicant is already lost by issuance of the 1^st sale notice, now the applicant cannot contend that they are having the right of redemption.

¶84

The 1^st respondent in SA 18/2024 has produced the

¶85

following documents:

¶86

Sl.No.	Description	Page No.
1	Sanction order dt. 21.10.2017	13-18
2	Term Loan Agreement dt. 23.10.2017	19-22
3	Memorandum of deposit of title deeds dt. 23.10.2017	23-29
4	Demand notice dt. 08.06.2021	30-34
5	Postal Acknowledgement	35
6	Postal Acknowledgement	35
7	Postal Acknowledgement	36

¶87

SA18 /2024 & 75/2024

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¶89

8	Demand notice dt. 08.06.2021 bearing acknowledgement of Smt. Sujatha	37-42
9	Possession Notice dt. 24.08.2021	43-44
10	Postal Acknowledgement	45
11	Postal Acknowledgement	45
12	Postal Acknowledgement	45
13	Possession Notice published in “Indian Express’dt. 27.08.2021	46
14	Possession notice published in “Kannada Prabha”dt. 27.08.2021	47
15	Public sale notice dt. 30.10.2021	48-51
16	Postal Acknowledgement	52
17	Postal Acknowledgement	53
18	Postal Acknowledgement	54
19	Postal Acknowledgement	55
20	Sale notice published in “Indian Express” dt. 05.11.2021	56
21	Sale Notice published in “kannada Prabha” dt. 05.11.2021	57
22	Order passed by DRT-2 dt. 21.12.2021	58-60
23	Public sale notice dt. 20.01.2022	61-64
24	Postal Acknowledgement	65
25	Postal Acknowledgement	65
26	Postal Acknowledgement	65
27	Postal Acknowledgement	65
28	Sale notice published in ”Indian Express” dt. 23.01.2022	66
29	Sale Notice published in “Kannada Prabha” dt. 23.01.2022	67
30	Public sale notice dt. 20.05.2022	68-71
31	Postal Acknowledgement	72
32	Postal Acknowledgement	72
33	Postal Acknowledgement	72
34	Sale notice published in “Indian Express” dt. 22.05.2022	73
35	Sale Notice published in “Kannada Prabha” dt. 22.05.2022	74
36	Order passed by the V ACMM dt. 24.02.2022	75-79
37	Letter dt. 13.07.2022 by the respondent	80
38	Postal receipts	81
39	Photographs	82
40	Order passed by the DRT-2 dt. 17.03.2023	83-87

¶90

SA18 /2024 & 75/2024

¶91

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41	Public sale notice dt. 21.12.2022	88-91
42	Postal Acknowledgement	92
43	Postal Acknowledgement	92
44	Postal Acknowledgement	92
45	Sale Notice published in “Indian Express” dt. 29.12.2022	93
46	Sale Notice published in “Kannada Prabha” dt. 29.12.2022	94
47	Public sale notice dt. 07.12.2023	95-98
48	Postal Receipt (6 Nos.)	99
49	Postal Acknowledgement	100-101
50	Postal Tracking report	102-103
51	Postal Tracking report	104-105
52	Sale Notice published in “Indian Express” dt. 09.12.2023	106
53	Sale Notice published in ‘Hosa Digantha’ dt. 09.12.2023	107
54	Photographs	108
55	E-auction report dt. 30.12.2023	109-110
56	Sale confirmation letter dt. 01.01.2021	111-112
57	Registered sale certificate dated 03.02.2024	113-120

¶93

The alleged non-compliance of the mandate as to

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the service of the issuance of the sale notices and other notices leading to the issuance of the sale are also denied by the respondents in their objections.

¶95

Apart from the documents produced along the

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objections in SA 18/2024, the 1^st respondent has produced

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the following additional documents in SA 75/2024:-

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Sl.No.	Description	Page
		No.
1	E-extract of register issued by the CERSAI	22-24
2	Valuation report	116-126

¶99

SA18 /2024 & 75/2024

¶100

¶101

3	Bid form by the respondent No.2	127-128
4	Board resolution of the respondent No.2	129
5	Panchanama dt. 30.08.2023	130-133

¶102

The 2^nd respondent has filed their objections stating that they offered the highest bid for Rs. 65,10,000/- (Rupees Sixty Five Lakh Ten Thousand Only) and had paid 25%. After the issuance of the sale confirmation on 01.01.2024 the balance amount was remitted and sale certificate dated 01.02.2024 was issued. It is also the case of the 2^nd respondent that they are in actual possession and enjoyment of the schedule property ever since the issuance of the sale certificate.

¶103

The 2^nd respondent has filed the following documents in SA No. 18/2024:-

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Sl.No.	List of Documents	Page No.
1	ANNEXURE-R-1:Confirmation of Sale dated: 01-01-2024	5-6
2	ANNEXURE-R-2: Registered Sale Certificate dated 03.02.2024	7-14
3	ANNEXURE-R-3: Tax paid receipt for 2018- 19	15
4	ANNEXURE-R-4: Tax Paid receipt for 2019- 20	16
5	ANNEXURE-R-5: Tax Paid receipt for 2020- 2021	17
6	ANNEXURE-R-6: Tax Paid receipt for 2022- 22	18

¶105

SA18 /2024 & 75/2024

¶106

¶107

7	ANNEXURE-R-7: Tax Paid receipt for 23	2022-	19
8	ANNEXURE-R-8: Tax Paid receipt for 24	2023-	20
9	ANNEXURE-R-9: Transfer of acknowledgement	Khata	21

¶108

The 2^nd respondent has filed the following documents in support of their objections in SA No. 75/2024:-

¶109

Sl.No.	List of Documents	Page No.
1	ANNEXURE-R-1:Certificate of Incorporation of Fast Ark Private limited	6
2	ANNEXURE-R-2: Company PAN Card	7
3	ANNEXURE-R-3: Board Resolution	8
4	ANNEXURE-R-4: Conformation of sale	9-10
5	ANNEXURE-R-5: Sale Certificate	11-18
6	ANNEXURE-R-6: Email’s of bank link to participate in bid	19-21

¶110

Heard the contentions of both sides and

¶111

considered the rival contentions.

¶112

In view of the above, the following issues arises for consideration:-

¶113

I. Whether the measures taken by the 1^st respondent bank leading to the conduct of the Impugned Auction on 30.12.2023 and issuance of

¶114

SA18 /2024 & 75/2024

¶115

¶116

consequential sale certificate are in accordance with the procedure as laid down by this statute.

¶117

II. Whether challenge as to the sale certificate as raised in SA 75/2024 can be entertained.

¶118

III. What orders as to be passed ?

¶119

All these issues are gone into and decided together as the contentions raised in both cases are one and same. The first and foremost contention of the applicant is as to the conduct of the sale which according to the applicant is in violation of the orders of the Hon’ble High Court in W.P No. 20925/2023. According to the applicant the stay was in in force till 29.10.2023 and the sale conducted on 29.12.2023 is in violation of the Orders of the Hon’ble High Court. Going by the pleadings of the applicant it is clear that the stay granted by the Hon’ble High Court was in force only up to 29.10.2023 and hence this Tribunal cannot accept the contention of the applicant that the sale conducted on 31.12.2023 is in violation of the order of the Hon’ble High Court, if any

¶120

The applicant contention as to the non-service of the sale notice leading to the impugned sale is also refuted by the 1^st respondent as they have produced the postal receipts and

¶121

SA18 /2024 & 75/2024

¶122

¶123

postal acknowledgement and postal tracking report evidencing the service of notice on the borrowers. In respect of the specific contention of the applicant as to the nonservice on Smt. Vasantha, it is to be noted that the postal receipt evidencing the issuance of the sale notice is produced, though the track report or acknowledgement pertaining to the particular person is not forthcoming. However, it is to be noted that the other mandates as to the publication and affixture of the sale notice in the schedule property is proved to be followed as the 1^st respondent has produced the paper publication in “Indian Express” and “Hosa Digantha” dated 09.12.2023 and also the photograph evidencing the affixture. In view of the production of postal receipt evidencing the issuance of sale notice to all the borrowers and evidence as to the compliance of affixture and publication, this Tribunal is not inclined to accept the proposition that the non production as to the proof of service of sale notice on Smt. Vasantha is crucial and will lead to conclusion that there is procedural irregularity in issuance of the sale notice.

¶124

It is to be noted that the person who alleged to have not been served is not before this Tribunal and the applicant was

¶125

SA18 /2024 & 75/2024

¶126

¶127

not able to substantiate any prejudice that is caused to him by said alleged non-service.

¶128

The next contention taken by the applicant that the auction purchaser has not produced the Board Resolution at the time of participating in the auction and same is in violation of the conditions of E-auction sale notice is also without any basis as the said procedural irregularity if any, is not available to the defaulted borrower and it is for the 1^st respondent bank to take a call as to the veracity and capacity of the auction purchaser to participate, succeed the auction and to get the property registered in their name.

¶129

The next contention taken by the applicant is about the payment of EMD which the applicant alleges that is only remitted on 30.12.2023 and hence that there is alleged noncompliance of the mandate to depositing the EMD on 29.12.2023. This Tribunal has considered the Sale Certificate and page 5 of the Sale certificate clearly mentions about the mode of payment made by the auction purchaser, wherein it is clearly stated that the amount of Rs. 6,50,000/- (Rupees Six Lakh Fifty Thousand) was remitted on 29.12.2023 vide Demand Draft dated 29.12.2023 of IDFC Bank, Bangalore

¶130

SA18 /2024 & 75/2024

¶131

¶132

Basaveshwara branch bearing No. 854259. In view of the specific statement in the sale certificate that EMD was deposited on 29.12.2023 this Tribunal is not inclined to accept the contention of the applicant in contrary.

¶133

The next contention taken by the applicant about the alleged non deposit of 75% of sale consideration within 15 days does not arise as it is evident that the sale certificate is issued on 01.02.2024 well within the maximum time prescribed under Rule 9 (4) of Security Interest Enforcement Rules. The payment of 75% balance sale consideration is a matter between the auction purchaser and the secured creditor and the only thing that needs to be looked is that, whether the payment is made within the prescribed time limit as under Rule 9(4) of the Security Interest Enforcement Rules.

¶134

The contention taken by the applicant in respect of alleged under valuation of the schedule property is liable to be rejected as it is evident that the bank has procured the valuation as mandated under the statute. The contention of the applicant regarding the undervaluation is also discarded for the reason that in the valuation procured on 30.08.2023,

¶135

SA18 /2024 & 75/2024

¶136

¶137

the valuer had valued the property and fixed the forced sale value is given at Rs. 55 lakhs. It is to be noted that the property was sold at Rs. 65 lakhs and the impugned sale is not in pursuant to the 1^st Sale Notice. The fact that the property remained unsold in previous attempts at a reduced reserve price of Rs. 55 lakhs; (as evident from the sale notice dated 21.12.2022) indicates the hollowness to the claim of the applicant as to the alleged under valuation.

¶138

The mistake crept in the valuation report as to the date of valuation is shown as 27.08.2021, as harped upon by the applicant will not come in aid of the applicant especially as the date of inspection is clearly stated in the report as 30.08.2023. The applicant though contends that the valuer is not a competent person, no valid reason is put forth, even to cast a doubt about the competence of the valuer.

¶139

The next contention taken by the applicant is as to the mismatch of the schedule between the property mentioned in the sale certificate and the schedule to the demand notice, possession notice and the sale notice. On consideration of the fact that the sale certificate could be issued in respect of the actual extent of the property, and the

¶140

SA18 /2024 & 75/2024

¶141

¶142

minor variation in mentioning the sanction plan and actual measurement will no way prejudice the defaulted borrower. If it at all the sale certificate is issued in respect of the actual extent of the property which is less than what is mentioned in the sale notice, the same will only affect the auction purchaser. Hence the defaulted borrower could not be allowed to contend that the sale certificate issued in respect of the less extent of the property than mentioned in the sale notice leading to the impugned sale.

¶143

The Hon’ble Supreme Court in “ L & T Housing Finance Ltd V/s. Trishul Developers and others ” (2010) 10 SCC659 has held in para 19 that “ In the facts and circumstances, when the action has been taken by the competent authority as per the procedure prescribed by law and the person affected has a knowledge leaving no ambiguity or confusion in initiating proceedings under the provisions of the SARFAESI Act by the secured creditor, in our considered view, such action taken thereof cannot be held to be bad in law merely on raising

¶144

a trivial objection which has no legs to stand unless the person is able to show any substantial prejudice being

¶145

SA18 /2024 & 75/2024

¶146

¶147

caused on account of the procedural lapse as prescribed under the Act or the rules framed thereunder still with a caveat that it always depends upon the facts of each case to decipher the nature of the procedural lapse being complained of and the resultant prejudiced if any, being caused and there cannot be a straitjacket formula which can be uniformly followed in all the transactions”. Hence unless the debtor is able to show any substantial prejudice caused on account of the procedural lapse as prescribed under the Act and Rules framed thereunder, a still with a caveat that it always depends upon the facts of each case to decipher the nature of procedural lapse being complained of and the resultant prejudice, if any, being cause. In the case in hand apart from alleging minor discrepancies which no way will cause any prejudice to the applicant, the applicant was not able to put forward any valid challenge as to the legality of measures.

¶148

As far as SA 75/2024 is concerned it is to be noted that the same is filed impugning the Sale Certificate. Even

¶149

SA18 /2024 & 75/2024

¶150

¶151

though the applicant is resorting to the directions of the Hon’ble High Court in W.P No. 20925/2023 and contends that by virtue of auction passed the Hon’ble High Court is entitled to impugn the same. This Tribunal is not inclined to accept the same as by the order in W.P No. 20925/2023 the Hon’ble High Court had only reserved the liberty to the petitioner to question the measures. The issuance of sale certificate being not a measure u/s 13(4) of the Act, the challenge as to the same cannot be entertained u/s 17(1) of the Act. The S.13(4) of the Act empowers the secured creditor to exercise the measures leading to the sale of the property and what can be impugned under section 17 is only the measures including the sale. The issuance of the Sale Certificate being a consequential action after conduct of the sale cannot be impugned u/s 17 of the Act and hence SA 75/2024 is liable to be rejected on that ground.

¶152

Hence on the above discussion this Tribunal is of the view that both the issue are to be held against the applicant. The applicant failed in putting forward any valid contentions as to the legality of the measures leading to the conduct of the impugned sale and SA’s are devoid of any merits and liable to be dismissed. Hence SA 18/2024 and 75/2024 stands

¶153

SA18 /2024 & 75/2024

¶154

¶155

dismissed. Interim order, if any granted and subsisting till this day stands vacated. Pending I.A’s if any are all disposed of in terms of this Order. No order as to cost.

¶156

(Dictated to the Stenographer (AJ), after its transcription and necessary corrections, signed and

¶157

Order is passed on this day 21^st Day of February, of 2025)

¶158

Sd/- (T.RAJESH) PRESIDING OFFICER DRT-2, BENGALURU

Mr Munindra Kumar K M v. Karnataka Bank Limited

Case brief

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Mr Munindra Kumar K M v. Karnataka Bank Limited

Case brief

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What did the court decide?

What the court decided

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