Dismissed

M/s.Thilak International v. Uco Bank

Madras HC27 Sept 2023WP/14301/2023

Case brief

AI extract

What is this about?

This writ petition challenged the Debt Recovery Appellate Tribunal's order dismissing an appeal against an auction sale. The petitioner alleged violations of the Security Interest (Enforcement) Rules, 2002 and failure to issue a 30-day notice, arguing the auction was void due to a stay order. The High Court found the petition did not properly challenge the auction sale itself or issuance of the sa

What did the court decide?

Petition dismissed; no interference with DRA order; petitioner directed to approach DRA for refund of pre-deposit.

M/s.Thilak International Vs Uco Bank — Cheque Dishonour | Madras HC (2023)

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W.P.No.14301 of 2023

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED: 27.09.2023

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CORAM :

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THE HON'BLE MR.SANJAY V.GANGAPURWALA, CHIEF JUSTICE

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AND

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THE HON'BLE MR.JUSTICE P.D.AUDIKESAVALU

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W.P.No.14301 of 2023

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M/s.Thilak International, rep. by its Partner D.Joseph Raja, 4C/5, 4C/7, Mani Nagar, Tuticorin-628 003. .. Petitioner

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1.UCO Bank, Regional Office, Chennai-600 024 rep. by the Authorised Officer.

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2.UCO Bank, Tuticorin Branch, 208, C.D., V.E. Road, Tuticorin-628 003 rep. by its Branch Manager.

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3.G.Saravanan

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4.Dr.J.Saravanan .. Respondents

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____________ Page 1 of 9_

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https://www.mhc.tn.gov.in/judis

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W.P.No.14301 of 2023

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Prayer: Petition filed under Article 226 of the Constitution of India seeking issuance of a writ of certiorarified mandamus calling for the records and order of the Debt Recovery Appellate Tribunal, Chennai, dated 3.4.2023 passed in R.A.(S.A) No.62 of 2018 and quash the same as illegal and further directing the respondents 1 and 2 to receive entire dues from the petitioner.

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For the Petitioner : Mr.T.Mohan Senior Counsel for M/s.J.Antony Jesus

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For the Respondents : Mr.K.S.Viswanathan Senior Counsel for M/s.T.Hemalatha for respondent Nos.1 and 2

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: Mr.N.Alagu Narayanan for M/s.RRN Legal for respondent No.3

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: R4 – No Appearance

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ORDER

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(Order of the court was made by the Hon'ble Chief Justice)

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We have heard Mr.T.Mohan, learned Senior Counsel for M/s.J.Antony Jesu, learned counsel for the petitioner; Mr.K.S.Viswanathan, learned Senior Counsel for M/s.T.Hemalatha,

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https://www.mhc.tn.gov.in/judis

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W.P.No.14301 of 2023

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learned counsel for respondents 1 and 2; and, Mr.N.Alagu Narayanan for M/s.RRN Legal, learned counsel for respondent No.3.

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The petitioner is challenging the order passed by the Debt Recovery Appellate Tribunal dated 3.4.2023 in R.A. (S.A) No.62 of 2018.

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Learned Senior Counsel for the petitioner submits that the petitioner has filed Securitisation Application bearing No.50 of 2016 before the Debts Recovery Tribunal, Chennai and subsequently, the said Securitisation Application was transferred to the Debts Recovery Tribunal, Madurai and numbered as TSA No.60 of 2007. The Debts Recovery Tribunal, Madurai, allowed the said application. The bank had filed an appeal before the Debt Recovery Appellate Tribunal bearing R.A. (S.A) No.111 of 2008. The said appeal was allowed on 10.3.2011. The borrower had challenged the order of the Debt Recovery Appellate Tribunal by filing a writ petition bearing No.18753 of 2011. This Court upheld the order of the Tribunal and remanded R.A. (S.A) No.111 of 2008 to the Debts

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W.P.No.14301 of 2023

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Recovery Tribunal, Madurai for fresh consideration. After remand, the Debts Recovery Tribunal, Madurai, dismissed the T.S.A.No.60 of 2007 on 17.11.2017. Aggrieved thereby, the petitioner had filed appeal before the Debt Recovery Appellate Tribunal in R.A. (S.A) No.62 of 2018. The Debt Recovery Appellate Tribunal dismissed the appeal. Aggrieved thereby, the present writ petition is filed.

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Learned Senior Counsel for the petitioner strenuously contends that the sale was conducted in contravention of the provisions of the Security Interest (Enforcement) Rules, 2002, inasmuch as 30 days notice was not issued. On or about 31.01.2007, stay was granted to the sale. The said stay order was also communicated to the bank on 01.02.2007. However, in spite of the order of stay, the bank had proceeded to auction the property. The auction could not have been conducted in violation of the order of stay.

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Learned Senior Counsel further submits that the Tribunal

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has failed to consider that the sale was in flagrant violation of the

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https://www.mhc.tn.gov.in/judis

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W.P.No.14301 of 2023

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provisions of the Security Interest (Enforcement) Rules, 2002. The procedure was not followed. The sale was conducted during the operation of the order of stay. In view of that, the auction is void ab initio .

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The right of redemption to the borrower is not available after the auction sale notice is issued. Reliance can be had to the judgment of the Apex Court in Civil Appeal Nos.5542 – 5543 of 2023, dated 21.09.2023 (Celir LLP v. Bafna Motors (Mumbai) Pvt. Ltd. and others) .

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Prior to the amendment of sub-section (8) of Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, “ the Act of 2002 ”) in the year 2016, the borrower had right of redemption of mortgage until the execution of the conveyance of the secured asset by way of a registered instrument. In the present case, the conveyance is executed way back in January, 2008.

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W.P.No.14301 of 2023

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The petitioner had challenged the auction sale notice by filing writ petition bearing No.3318 of 2007. In the said writ petition, this Court observed that all steps under Section 13 of the Act of 2002 have been taken by the respondent UCO bank and the notice which is impugned in the writ petition is the auction sale notice dated 20.1.2007, which has been published pursuant to the earlier statutory notice dated 15.9.2006 issued under Rule 8(5) of the Security Interest (Enforcement) Rules, 2002. The said judgment has become final.

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It is stated that the petitioner had deposited only pre-

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deposit of Rs.10.00 lakh. The property was sold in the auction for Rs.42.00 lakhs.

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The sale has been conducted. The petitioner had only challenged the auction sale notice. The petitioner has never challenged the auction sale and the issuance of sale certificate. The Debt Recovery Appellate Tribunal has properly considered the said aspect.

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W.P.No.14301 of 2023

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With regard to the pre-deposit made by the petitioner with the Debt Recovery Appellate Tribunal, the petitioner may make necessary application for refund of the same. Naturally, the Debt Recovery Appellate Tribunal will call for the say of the bank and consider about the amount outstanding and may pass appropriate orders.

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In the light of the above, no interference is called for. The writ petition is dismissed. There will be no order as to costs. Consequently, W.M.P.No.13808 of 2023 is closed.

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(S.V.G., CJ.) (P.D.A., J.) 27.09.2023 Index : Yes/No Neutral Citation : Yes/No bbr

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https://www.mhc.tn.gov.in/judis

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W.P.No.14301 of 2023

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To:

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1.The Authorised Officer, UCO Bank, Regional Office, Chennai-600 024.

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2.The Branch Manager, UCO Bank, Tuticorin Branch, 208, C.D., V.E. Road, Tuticorin-628 003.

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Page 8 of 9

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https://www.mhc.tn.gov.in/judis

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W.P.No.14301 of 2023

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THE HON'BLE CHIEF JUSTICE AND P.D.AUDIKESAVALU,J.

bbr

W.P.No.14301 of 2023

27.09.2023

____________ Page 9 of 9_

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https://www.mhc.tn.gov.in/judis

M/s.Thilak International v. Uco Bank

Case brief

What is this about?

What did the court decide?

M/s.Thilak International v. Uco Bank

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

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