Allowed

Ms Peri Educational and Charitable Trust v. Indian Overseas Bank

DRT6 Aug 2026SA/493/2025

Case brief

AI extract

What is this about?

Petitioner, a successful auction purchaser under SARFAESI Act, sought impleadment as respondent in an appeal challenging a possession order. Tribunal allowed application, holding purchaser is a necessary party with vested rights.

What did the court decide?

IA allowed; Applicant directed to implead auction purchaser as 3rd respondent and file amended Special Appeal. No order as to costs.

Ms Peri Educational and Charitable Trust versus Indian Overseas Bank — DRT (2026) — LawSathi Research

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IA 2279/25 in SA 493/25

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06.08.2026

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 06^th day of August, 2026

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Present: SMT. S.V. GOWRAMMA

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Presiding Officer

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IA No.2279 of 2025 in S.A No.493 of 2025

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SRM Institute of Science & Technology Represented by its Director Finance Mr. Ganesh R No.3, Veerasamy Street West Mambalam, Chennai – 600 033. …..Petitioner

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-Vs-

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M/s Peri Educational and Charitable Trust

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Rep. by its Chairman, Mr. Saravanan Periasamy Peri Knowledge Park, Mannivakkam

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Chennai – 600 048

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Indian Overseas bank

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Rep. by its Authorised Officer Asset Recovery Management Branch Chennai 3^rd Floor, Annexe Building,

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736, Anna Salai, Chennai – 02

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Indian Overseas Bank Irungattukottai Branch Large Advances Branch SIPCOT Industrial Park, Irungattukottai Sriperumbudur, Kanchipuram – 602 117 …Respondents

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Counsels on record / appeared:

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Counsel for Petitioner : M/s K. Nishanth Counsel for 1^st respondent : M/s L. Murali Krishnan Counsel for 2^nd & 3^rd respondents : M/s P.V. Murlidhar

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IA 2279/25 in SA 493/25

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06.08.2026

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: - ORDER ON IA NO. 1480 of 2025 - :

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The Petitioner, who is successful auction purchaser, has filed IA No.2279 of 2025 seeking to implead themselves as 3^rd respondent in the SA.

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2. Brief averments of the IA:

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2.1 The petitioner is SRM Institute of Science & Technology, seeking to implead themselves as Respondent No. 3 in the SA. The petitioner is the Successful Auction Purchaser in the E-Auction held on 16.07.2025, conducted by the Respondent No. 2, for the property of the Respondent No.1 herein. The Respondent No. 2 issued E - Auction Sale Notice dated 30.06.2025, for sale of the property of the Respondent No. 1, under the provisions of SARFAESI Act.

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2.2 It is submitted that on knowledge of the aforesaid E - Auction Sale Notice, the Petitioner submitted an online application for bid on 15.07.2025 along with EMD for a sum of Rs. 4.55 Crores. Accordingly, the Petitioner was permitted to participate in the E - Auction held on 16.07.2025 and bid for the property. The Petitioner made the final bid of Rs. 45.60 Crores, as against the Reserve Price of Rs. 45.50 Crores. On the same date i.e., 16.07.2025, the Respondent Bank communicated that the Petitioner is declared as the "H1 Bidder" and called upon to make the payment of 25% of the bid price, deducting the EMD amount which was already paid. Thereby, the Petitioner made bank transfer of Rs. 6.85 Crores to the Respondent Bank and subsequently, on 23.07.2025, the Petitioner paid the

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IA 2279/25 in SA 493/25

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06.08.2026

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balance sale consideration of 75% of the Bid price to the tune of Rs. 34.20 Crores to the Respondent Bank. On such compliance, the Respondent Bank has duly issued the Sale Certificate dated 23.07.2025, in favour of the Petitioner confirming the sale of the property. The execution of the order passed under Section 14 of the SARFAESI Act, challenged in the above SA, is to enable the Petitioner as the Auction Purchaser to have physical possession of the property sold in auction. Hence, the Petitioner is a proper and necessary party to the above SA, which is pending before this Tribunal and therefore, in the interest of justice, the Petitioner may be impleaded as Respondent No 3 in S.A. No. 493 of 2025.

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2.3 It is further submitted that the Respondent Bank during the auction process informed that they have already obtained an order dated 07.07.2025 in Crl.MP. No. 1898 / 2025 on the file of the Chief Judicial Magistrate, Chengalpattu in the Petition filed under Section 14 of SARFAESI Act and that they would execute the said order and secure the physical possession through the Advocate Commissioner duly appointed by the Chief Judicial Magistrate (CJM), Chengalpattu. While the Petitioner was waiting for the Respondent Bank to hand over the physical possession of the property in terms of the order dated 07.07.2025, the Respondent Bank vide Letter dated 09.09.2025, communicated that the Respondent No. 1 has preferred this S.A. No. 493 / 2025 against the order dated 07.07.2025 passed by the Chief Judicial Magistrate, Chengalpattu in Crl.MP No. 1898 of 2025 and that a Conditional Stay Order has been granted his favour, by this

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IA 2279/25 in SA 493/25

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06.08.2026

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Tribunal. Further, it was also informed that, the Respondent No. 1 has preferred S.A. No. 515 / 2025, seeking to set-aside the Sale Notice dated 30.06.2025 and declare the E-Auction conducted on 16.07.2025, as null and void. It is submitted that despite knowing that this Petitioner is the successful auction purchaser in the E-Auction conducted by the Respondent Bank on 16.07.2025, the Respondent No.1 has wantonly refused to make this Petitioner as party to both the proceedings. Hence, the Petitioner is a proper and necessary party to the above SA, which is pending before this Tribunal and therefore, in the interest of justice, it is prayed that the Petitioner may be impleaded as Respondent No 3 in S.A. No. 493 of 2025.

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3. Brief averments of counter by 1^st respondent:

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3.1 It is submitted by the 1^st respondent, who is applicant in the SA, that

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the present application filed by the Petitioner is not maintainable either in law or facts and the same is liable to be dismissed. The applicant is neither a necessary party nor a proper party to adjudicate the issue. The main SA is filed by this respondent challenging the possession order illegally obtained by the respondent bank u/s 14 of the Act. Therefore, the issue can only be adjudicated between the applicant and the respondent bank and the present applicant has nothing to do with the same and therefore the applicant need not be heard and as such their application to implead is not maintainable and liable to be dismissed.

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3.2 It is submitted that the averments in Para 3 are false, baseless, and denied. The claim that the Applicant/Third Party is the successful auction

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IA 2279/25 in SA 493/25

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06.08.2026

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purchaser in the alleged auction held on 16.07.2025 is specifically denied. The sale notice and alleged auction have already been challenged by this Respondent in SA No. 515 of 2025. As stated therein, the auction was conducted with the intention of alienating the valuable property, worth approximately Rs.250 Crore, for a grossly undervalued consideration of Rs.45,60,00,000/-. No proper notice was issued to the borrowers or other interested persons, and the alleged sale was effected in collusion between the Bank and the auction purchaser.

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3.2 It is submitted that the allegations in Para 3 regarding the Petitioner’s bid of Rs.45.60 Crores, declaration as the highest bidder, and payment of 25% are false, fabricated, and denied, and the Petitioner is put to strict proof thereof. The alleged auction was conducted in violation of the SARFAESI Act and Rules, including the requirements relating to notice, auction, valuation, receipt of amounts, sale certificate, and confirmation of sale, in collusion between the Respondent Bank and the Petitioner. The grounds raised in the main SA are reiterated and adopted as part of this Counter.

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3.3 It is further submitted that there cannot be any assurance made by the respondent bank and even as per the e-auction notice no such assurance as alleged was given by the Respondent bank to secure the physical possession through the advocate commissioner. The property was allegedly sold as is where condition as stated in the e auction notice. Therefore, the allegations per contra that the bank has assured the

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IA 2279/25 in SA 493/25

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06.08.2026

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applicant that they would secure possession are baseless and devoid of merits.

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3.4 It is submitted that the contentions in Para 5 are false and baseless. The allegation that the Petitioner was awaiting physical possession and was deliberately not impleaded is denied. The dispute is between this Respondent and the Bank, and the Petitioner is neither a necessary nor a proper party to the proceedings. It is further contended that both the auction notice and the alleged auction conducted as per the notice is already challenged under separate proceedings. The contention that the petitioner herein has purchased the property for a valuable consideration is false and denied. It is submitted that the value of the property is around Rs.250 Crores, however the same was knocked down for a throw away price of Rs.45,60,00,000 in an illegal manner. The petitioner cannot have any direct interest in the property and the outcome of the SA will not affect the petitioner as alleged. Therefore, the petitioner need not be impleaded as party to the proceedings. If the petitioner is impleaded this respondent will be put to serious loss and much hardship will be caused. However, no hardship will be caused to petitioner if the petition is dismissed. This petition is deserved to be dismissed as there is no merit.

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3.5 It is submitted that the Petitioner is neither a necessary nor proper party, having been aware that the Bank was not in possession of the property at the time of the alleged auction. Upon the alleged sale and issuance of the sale certificate, the Bank ceased to be a secured creditor

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IA 2279/25 in SA 493/25

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06.08.2026

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and could not seek physical possession under the unexecuted order under Section 14 of the SARFAESI Act.

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Heard Ld. Counsels for all parties and perused the records of

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the case.

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The Petitioner claims to be the successful auction purchaser of the secured asset pursuant to the auction conducted on 16.07.2025. Since the reliefs sought in the main proceedings may have a direct bearing on the sale conducted and the rights claimed by the Petitioner, their presence is considered necessary for the effective and complete adjudication of the issues involved.

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The Hon’ble Supreme Court and High Courts in catena of judgments has highlighted that auction purchasers have the right to intervene to protect their interests particularly, when a sale is finalized and the sale certificate is issued. As the auction purchaser’s rights are directly affected by the outcome of a challenge to the sale or physical possession, they are considered as a necessary party as they have acquired a right in the property.

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Further, once an auction sale is confirmed, the auction purchaser changes status from a prospective bidder to a person with vested title and ownership rights over the property. Consequently, they are an absolutely necessary party to legal proceeding that challenges, modifies, or seeks to set aside the sale / possession, as the case may be. An effective court

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IA 2279/25 in SA 493/25

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06.08.2026

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order altering the sale / possession cannot be passed behind their back without violating the principles of natural justice.

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Accordingly, IA No.2279/25 stands allowed. Applicant is directed to implead the auction purchaser as 3^rd respondent and file amended SA. No order as to costs.

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Sd/-

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(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

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(Dictated to PS, transcribed by her, corrected, signed and pronounced by me on this the 06^th day of August, 2026)

Ms Peri Educational and Charitable Trust v. Indian Overseas Bank

Case brief

What is this about?

What did the court decide?

Ms Peri Educational and Charitable Trust v. Indian Overseas Bank

Case brief

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