This writ petition challenged failure to hand over possession of a secured property after the DRT set aside the bank's sale notice. The High Court dismissed the petition, holding that mandamus would scuttle the bank's statutory right to appeal the DRT order.
Dismissed the writ petition and closed the connected writ miscellaneous petition.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 28.07.2017
CORAM:
THE HONOURABLE MR.JUSTICE S.MANIKUMAR and
THE HONOURABLE TMT.JUSTICE V.BHAVANI SUBBAROYAN
W.P.No.10084 of 2017 and
WMP No.11070 of 2017
M.Nazneen ... Petitioner
versus
1.The Authorised Officer Indian Bank,Thousand Lights Branch, 611, Anna Salai,Chennai - 600 006
2.The Authorised Officer Indian Bank, ARMB, Ethiraj Salai, Egmore, Chennai - 600 008 3.K.Chitra ... Respondents
Writ Petition filed under Article 226 of the Constitution of India, praying for a Writ of Mandamus, to direct the first and second respondents to hand over physical possession of the petitioner's property at Old Door No.3, Shop No.8, GF/6, Rosy Towers, Nungambakkam, Chennai - 600 034 as directed by the Debts Recovery Tribunal - I in its order dated 29.08.2016 passed in S.A.No.51 of 2011.
For Petitioner : Mr.V.Lakshminarayanan for Mr.Govind Chandrasekhar
For Respondents : Mr.Jayesh B.Dolia for for M/s.Aiyar & Dolia for RR1 & 2 Mr.Praveen Kumar for Mr.P.V.Muralidhar for R3
Borrower has committed default. Bank has recalled the loan facilities and preferred O.A.No.438/1997 before the Debts Recovery Tribunal - I, Chennai. Bank also issued a Possession Notice dated 22.10.2010 followed by a Sale Notice dated 30.11.2010. During the course of hearing Mr.V.Lakshminarayanan, learned counsel appearing for Mr.Govind Chandrasekhar, learned
counsel on record for the petitioner, submitted that physical possession of the said property has been taken.
(1) Whether the sale notice dated 10.1.2011 issued by the first respondent bank is not in conformity with the mandatory provision of the SARFAESI Act and the rules made thereunder? If so, whether the same can be set aside?
" 15. Hence, taking into consideration the aforesaid facts and circumstances and the law laid down in this regard by the Hon'ble Supreme Court of India and the Hon'ble High Courts, it is hereby declared that:
(a) The Sale Notice dated 10.1.2011 issued by the
1st respondent for sale of the secured asset described in the schedule, is not in conformity with the provisions of SARFAESI Act and the rules made thereunder, hence the same is hereby set aside.
(b) Consequently, the auction sale held on 18.2.2011 is liable to be set aside hence the same is hereby set aside.
(a) The first respondent shall restore the possession of the secured asset described in the schedule annexed to the application to the applicant herein within 30 days from the date of this order.
(b) The first respondent bank shall refund the entire sale consideration paid by the Auction Purchaser i.e. the 3rd respondent herein, pursuant to the Auction sale held on 18.2.2011 to the 3rd respondent together with prevailing interest payable
for the Fixed Deposits of a period not less than five years, from the date of the deposit of the entire sale consideration till the date of payment.
c) The third respondent shall return the original title deed of the secured asset and other documents that were handed over to him by the first respondent bank within 30 days from the date of the order, and shall file the compliance memo before this Tribunal.
Heard the learned counsel for the parties and perused the materials available on record.
or sale shall be exercised only where the substantial part of the business of the borrower is held as security for the debt: PROVIDED FURTHER that where the management of whole of the business or part of the business is severable, the secured creditor shall take over the management of such business of the borrower which is relatable to the security for the debt. (c) appoint any person (hereafter referred to as the manager), to manage the secured assets the possession of which has been taken over by the secured creditor; (d) require at any time by notice in writing, any person who has acquired any of the secured assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor, so much of the money as is sufficient to pay the secured debt.
For the above said reasons, writ petition is dismissed. However, there shall be no order as to cost. Conequently, the connected writ miscellaneous petition is closed. Appeal filed against the order dated 29.08.2016 made in S.A.No.51/2011 is stated to be listed before the DRAT on 04.08.2017. Appellate Authority is requested to expedite the disposal of the proceedings. Sd/Assistant Registrar(CS III) //True Copy// Sub Assistant Registrar asr To 1.The Authorised Officer Indian Bank,Thousand Lights Branch, 611, Anna Salai,Chennai - 600 006 2.The Authorised Officer Indian Bank, ARMB, Ethiraj Salai, Egmore, Chennai - 600 008 +1cc to Mr.Aiyar & Dolia, Advocate, S.R.No.53894
W.P.No.10084 of 2017 and WMP No.11070 of 2017 PVS(CO) GN(31/08/2017 )
3 issues framed by the court
Whether a writ of mandamus lies to direct the bank to hand over possession when a statutory appeal against the DRT order setting aside the sale is pending.
Whether the High Court should interfere while the bank has exercised its right to challenge the DRT order before the DRAT.
Whether the borrower can be compelled to refund the sale consideration or settle expenses while the auction is being set aside on appeal.
Colour shows how this judgement treated each authority
Mathew Vargheese v. M.Amirtha Kumar and othersReferred¶49
Mathew Vargheese v. M.Amirtha Kumar and others
4 provisions across 2 enactments
M.Nazneen
The Authorised Officer Indian Bank
K.Chitra
S.Manikumar
V.Bhavani Subbaroyan
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
