Munni Pandey vs Chairman, Allahabad Bank & Ors.

JUSTICE R. D. KHARE, CHAIRPERSON

The present appeal has been filed under section 18 of the Securitization and Reconstruction of financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "The SARFAESI Act") against the order dated 13.02.2020, whereby the S. A. No. 340/2015 filed by the appellant has been dismissed.

The relevant facts of the present case are that the appellant was granted a housing loan of Rs. 2.00 lacs in the year of 2006 and the same was secured by the appellant by mortgaging the property in question and deposited the original title deed with the Bank. Since the appellant-borrower did not maintain the financial discipline therefore, the account was classified as NPA and demand notice dated 22.05.2009 was issued under section 13(2) of the SARFAESI Act for a sum of Rs.2,43,450/- as on 22.05.2009. Since the borrower did not pay any heed to the said demand, therefore, the respondent-bank issued possession notice dated 27.06.2015 under section 13(4) of the SARFAESI Act, which was affixed on 27.06.2015 and sent to the borrower on 02.07.2015 through registered post and the same was published in the newspapers on 30.06.2015. Thereafter, the sale notice was issued on 14.08.2015, which was published in the newspapers on 20.08.2015 scheduling the date of auction of the property in question on 23.09.2015. The property was sold on 23.09.2015 to respondent No. 4 for a sum of Rs. 12.00 lacs and after receipt of entire sale consideration the sale certificate was issued on 06.10.2015.

The appellant has challenged the entire proceedings including the auction sale notice before the Tribunal below by filing the S.A. No. 340/2015 on 23.10.2015 along with application for condonation of delay. The Tribunal below vide order impugned has dismissed the S.A. of the appellant-borrower holding that respondent-Bank rightly classified the loan account as NPA in terms of RBI. Guidelines. Notice issued U/S 13(2) & 13(4) of the SARFAESI Act, 2002 as well as sale notice were duly served upon the applicant, as per Rule 3, 8(1), 8(6), 9(1) of the Security Interest (Enforcement) Rules, 2002. Further, respondent-Bank sold the secured asset in compliance of Rule 9(2), 9(3) & 9(4) of the Security Interest (Enforcement) Rules, 2002. Being aggrieved by the said order, the present appeal has been filed by the appellant.

Learned counsel for the appellant submitted that the Tribunal below has failed to appreciate the fact that the valuation of the property in question was not done before the auction sale and the same is in violation of Rule 8(5) of the Rules, 2002. It was further contended that the valuation report at page No. 112 of the present appeal, which was filed before the Tribunal below, is dated 10.02.2016 and as per the valuation report, the valuation of the property in question was Rs. 39,27,600/-, but the bank put the property on auction for Rs. 10.00 lacs on 23.09.2015 (page No. 82-83 of the appeal) and as such the property has been sold at a value much below the valuation of the property. It was thus contended that there is violation of Rule 8(5) of the Rules, 2002.

Learned counsel further submitted that description of the borrower in the sale notice published in the newspaper was incorrect and the same is depicted from the perusal of the sale notice, which is placed that at page No. 79-81 of the present appeal. It was further contended that the bankers cheque dated 11.01.2015 along with letter dated 17.10.2015 (page 90-91 of the appeal) was presented to the applicant and the applicant refused to take the same and he same was return and till date the excess amount is with the Bank only and the same has not been utilized by the applicant or taken by the applicant till date.

Learned counsel further submitted that the liability of the appellant as per the sale notice dated 14.08.2015 is Rs. 1,79,163/- and the appellant has deposited the debt amount with the Bank, which is reflected from the payment slip placed from page No. 49-55 of the present appeal. It was further contended that the appellant had stated before the Tribunal below for redeeming the property in question, which finds mention in the order dated 24.01.2024, as the same is covered squarely by the judgment passed by the Hon'ble Apex Court in Civil Appeal No. 6843/2023- Surindar Pal Singh Vs. Vijaya Bank, decided on 17.10.2023. It was also contended that the present sale of the property in question was prior to the amendment of section 13(8) of the Rules, 2002. It was therefore prayed that the order impugned to the extent of auction sale may be set-aside and the appeal filed by appellant may be allowed.

Learned counsel for the respondent-bank submitted that the loan account was declared as Non performing Assets (NPA) due to non payments of the installments and the Bank proceeded under SARFAESI Act, 2002 by issuing a demand notice dated 22.05.2009 for demanding of Rs. 2,43,450.00 under section 13(2) of the SARFAESI Act, 2002 according to provisions of the Act and Rules made there under. It was further contended that the creditor bank issued sale notice dated 14.08.2015 and sent 30 days' notice dated 14.08.2015 in compliance of Rule 8(6) of the Security Interest (Enforcement) Rules, 2002 on 14.08.2015 by registered post, which was received to respondent No. 1 on 15.08.2015 and no one challenged the sale proclamation nor any prior action of the bank.

It was further submitted that in the auction dated 23.09.2015, the auction purchaser Shri Ajay Kumar Gupta participated and on bidding Rs. 12.00 lacs he was declared as successful bidder and deposited entire amount within stipulated time and the Bank accordingly confirmed the sale & issued sale certificate dated 06.10.2015 in favour of the respondent No. 5. It was therefore prayed that the appeal filed by the appellant may be dismissed with heavy costs.

Learned counsel for the respondent-auction purchaser has adopted the arguments as advanced by the learned counsel for the respondent-Bank adding further that he has deposited the entire sale proceeds with the Bank in accordance with Act and Rules made thereunder. It was further contended that the entire proceedings initiated by the Bank are in accordance with the provisions of law and Rules made thereunder and as such the order dated 13.02.2020 passed by the Tribunal below in S. A. No. 340/2015 is just and proper. It was, therefore, prayed that the appeal filed by the appellant may be dismissed with heavy costs.

Having heard the learned counsels for the parties and considering the material available on record, undisputedly, after classification of the account of the appellant as NPA, the demand notice, possession notice and sale notice were issued in accordance with the provisions of the Act and Rules made thereunder.

The controversy involved in the present case is only, as to whether the property has been sold by the Bank in accordance with the Rules 8(5) and 8(6) of the Rules, 5002 and as to whether the appellant has right to redeem the property in question or not?

So far as the valuation of the property in question is concerned, the said issue has been pleaded in para 5.98 of the memo of appeal, wherein it is stated that respondent-bank has not filed any valuation report of the property in question, but while going through the reply filed by the respondent-Bank, in para 13 of the same, it is stated "...respondent-Bank proved on record that entire proceedings initiated by the Bank were according to provisions of the law and Rules made under the SARFAESI Act, 2002 as such order dated 13.02.2020 passed by the Id. Tribunal below in S.A. No. 340/2015 is just & proper and does not call for any interference." Thus the said issue as raised by the appellant has not been controverted by the Bank, but while going through the amended S.A. of the appellant, it is found that no such issue was raised by the appellant before the Tribunal below nor any finding in this regard has been given by the Tribunal below in the order impugned. As such, the said issue cannot be permitted to be raised directly before this Tribunal by the appellant. Hence the contention of the appellant that the property has been sold without valuation of the property in question and at throw-away price is not tenable.

The next contention of the appellant is that the description of the borrower in the sale notice as well as in its publication was incorrect and in this regard, he has referred to page no. 79-81 of the memo of appeal. The page no. 79 to 81 is not the sale notice, therefore, the contention of the appellant is not considerable and is incorrect.

With regard to the issue of redemption as raised by the appellant, it is stated that no such issue has ever been pleaded either before the Tribunal below or before this Appellate Tribunal, but only the said issue has been raised by the appellant in her written statement, therefore, the said issued cannot be considered and decided without pleading of the same. Thus the contention of the appellant that she has right to redeem her property is also not tenable.

The contention of the respondent-Bank that the S.A. was barred by time is not tenable, because the said issue has already been decided by the Tribunal below vide order dated 18.01.2016, copy of which is placed as Annexure No. 11 to the memo of appeal. If the respondent-Bank had any grievance with regard to the said order, it ought to have challenged the same by filing separate appeal, but the Bank did not do so, therefore, they cannot be permitted to agitate this issue in the present appeal filed by the appellant-borrower.

In view of the discussions as recorded above, there is no infirmity or illegality in the order impugned, therefore, the same does not call for any interference by this Tribunal. Consequently, the appeal filed by the appellant is dismissed with no order as to costs.

A copy of this judgment be forwarded to the parties as well as the DRT concerned and be also uploaded on the e-DRT portal.