Sri Karri Lakshmi Vs The Authorized Officer, Syndicate Bank Presently Canara Bank & Anr.

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Judgment

65 paragraphs · 1,435 words

^1. ^The ^Authorized Officer, Syndicate ^Bank presently ^Canara ^Bank ^at Counsel for Appellant Mr. ^T.Jeevan(Virtual)

^Instant appeal ^has ^arisen against the judgment and order dated 19.06.2023 passed by the Learned DRT Visakhapatnam, dismissing ^the S.A. 07 ^of ²⁰²⁰ (Sri Karri ^Lakshmi ^-vs- ^The ^Authorized Officer, Syndicate Bank).

^2. ^As ^per pleadings of ^the parties, appellant is the borrower ^of ^the respondent bank who availed the loan of Rs. 10,00,000/- ^on 13.10.2015 by creating equitable mortgage ^of ^the ^Schedule ^A ^and ^B properties ^to the Respondent Bank. The husband of the applicant ^stood ^as guarantor. ^Account ^became irregular ^and ^was ^classified ^as ^NPA. ^Notice under

Exhibit reproduced from the original judgment

Section 13(2) of the Securitisation ^and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, ²⁰⁰² (hereinafter referred ^to ^as the 'Act') ^was issued by the bank ^on 11.05.2017 which ^was served ^on 19.05.2017 but the demanded dues ^were not paid.

Possession ^notice under Section 13(4) of the Act, ²⁰⁰² ^was

^issued ^on 19.08.2017 which ^was served and published in ^two ^newspapers ^on ^22.08.2017 within ^seven days. Thereafter ^an application under Section ¹⁴ of the SARFAESI ^Act ^was filed before the Chief Metropolitan Magistrate, Visakhapatnam, which ^was allowed and the possession ^was taken ^on 09.01.2020. The Appellant preferred the securitization application under Section ¹⁷ of the SARFAESI ^Act challenging the order of the Chief Metropolitan Magistrate of Visakhapatnam dated 07.01.2019 with ^a

further relief to set aside the auction. Sale notice dated

25.01.2021 ^was ^issued by ^{the secured} creditor. Opposition filed by the Respondents wherein ^it ^is stated that ^the ^action ^taken by ^the bank ^was ⁱⁿ ^accordance ^of ^the provisions ^of ^the SARFAESI Act. Auction purchaser also preferred the opposition stating the ^same facts ^as ^are narrated by the 2021, Hon'ble High Court of Andhra Pradesh ^at Amravati passed the following order: "The petitioner should deposit the total amount for the property has been sold along with 10% interest thereon from the date of E-Auction till 30.12.2021 ⁱⁿ ^a separate

^account and proof thereof shall be filed by ^way of affidavit by ^next date ^of adjournment."

Learned ^DRT held that conditional ^order of the Hon'ble ^High ^Court ^of ^Andhra Pradesh ^at ^Amravati ^was ^not complied

with. The action of the bank ^was in accordance with law.

Reserve price ^was fixed ^as ^per ^the ^valuation report, submitted by ^the approved valuer. E-Auction sale ^has already been conducted ^and ^sale certificate ^was ^issued in favour of the Auction Purchaser which is also registered. Accordingly, S.A. ^was dismissed.

^5. ^I have ^{heard the Learned} Counsel ^for the Parties and

perused the records.

Learned Counsel ^for ^the appellant would submit that the Learned ^DRT ^has erred ⁱⁿ recording ^its finding regarding compliance of the provisions ^of the SARFAESI Act, 2002. А

sale notice ^was issued ^on 25.01.2021 but thereafter ^no fresh

sale ^notice ^was issued, although ^the ^sale ^was subsequently conducted. No Valuation report is filed ^on record by the

^7. Learned Counsel for the Respondent would submit that

the securitization application under Section 17 of the Act,2002 is ^time barred ^as the limitation ^was sought from the date of order of Chief Metropolitan Magistrate of Visakhapatnam dated 07.01.2019. It is further submitted

that ^no ^notice of Bank Commissioner ^is filed by the Appellant to show as to ^on what date he ^came to know about the

impugned order. ^It is further submitted that ^no plea of

^under ^valuation ^was ^taken ⁱⁿ ^the S.A. although valuation report ^was filed by ^the bank. The directions issued by ^the Hon'ble High Court in the Writ Petition ^were also not complied to by the Appellant. No challenge to the sale is made in the ^S.A. however, ^an ^I.A. ^was filed challenging the sale which ^was dismissed. Order ^was not challenged. ^It is

further submitted that the sale ^was conducted in accordance
8.
In the S.A. filed under Section 17 of the Act, relief

sought ^was ^to ^set aside the order passed under Section ¹⁴ of the ^Act by the Chief Metropolitan Magistrate of Visakhapatnam dated 07.01.2019. Securitization Application ^was filed ^on 27.07.2023. Subsequently, by amendment Е-(6) of the ^Security ^Interest (Enforcement) Rules, 2002 ^was

also challenged.

Section 17(1) of the Act provides that the application should be filed within ⁴⁵ days from the date from which the

^measures referred ^to ⁱⁿ sub-section (4) of Section 13 taken

by ^the Secured creditor, ^was challenged by the Applicant. Challenge ^to the order under ^Section 14 dated 07.01.2019 ^was initially ^made which should ^have been challenged within ⁴⁵ days but ^the ^same ^was ^not challenged within time. Further, ⁱⁿ the Limitation Clause, limitation ^was sought ^from 12.12.2019, ^when the respondent has ^taken physical possession of Schedule-A Property. Accordingly, the challenged made by the appellant ⁱⁿ ^the S.A. ^was ^not ^within

^the prescribed period ^of limitation and ^was ^barred by

10.

Jural relationship of creditor ^and ^borrower ^between the parties ^is ^not ⁱⁿ dispute. ^Account ^of ^the Appellant became irregular and ^was classified ^as ^NPA ^on 03.05.2017. Notices ^under Section 13(2) ^of ^the ^Act ^was issued ^on 11.05.2017

which ^was received ^on 19.05.2017, thereafter possession notice under Section 13(4) ^was issued ^on 19.08.2017 which

^was also affixed ^on secured ^assets and ^was published in the ^two ^newspapers ^on 22.08.2017. Subsequently, application

under Section 14 of the Act ^was preferred before the Chief

Metropolitan Magistrate of Visakhapatnam. Accordingly, ^there ⁱⁿ ^no illegality in the steps taken by ^the secured

11.

Challenge ^to ^the Notice issued under Rule 8(6) ^of ^the

Rules, 2002 ^was also made. An I.A. 1724 of 2022

challenging ^the ^sale ^was filed before ^the Learned DRT ^which

^was dismissed. That order ^was not challenged and attained

finality. ^As ^far ^as ^the ^notice under Rule 8(6) ^of ^the ^Rules ^is concerned, ⁱⁿ the Securitization Application ^no ground is mentioned to show ^as ^to ^on what ground ^notice is being challenged. However, perusal of the notice would reveal,

which ^was issued ^on 25.01.2021 and the auction ^was fixed ^on 08.03.2021, ^was in accordance with law.
12.
^In M. Rajendran and others ^-vs- KPK Oils and

^Proteins India Pvt. Ltd. and Others. (2026) ³ SCC 505, it ^was held in ^Para 168(v) that;

(v)
^The ^notice of ^sale both ^under Rule 8(6) read with Rule 9(1) respectively ^can ^be served ^as ^well ^as published in the newspaper,

simultaneously ^the ^same ^date. ^All ^that ^is required ^under ^Rule 9(1)

^13. Learned ^Counsel ^for ^the Appellant raised ^the plea of under-valuation ⁱⁿ conducting ^the sale, however, since, ^neither the sale ^is under challenge ^nor ^the plea of under valuation is taken in the securitization application, accordingly, the issue of under valuation ^loses its importance and could ^not be looked into.

14.
Learned DRT has rightly arrived ^at this conclusion that the E-Auction ^was conducted in accordance with law.

Further, ⁱⁿ ^the writ petition before ^the Hon'ble High Court, conditional order ^was passed giving ^a liberty ^to ^the Appellant

to pay ^same amount, but the ^same amount ^was also not

^complied ^to by ^the Appellants. Sale certificate ^has already been issued and registered in favour of the Auction Purchaser. It ^was held by the Hon'ble Apex Court ⁱⁿ Celir

LLP Mr. Sumati Prasad Bafna & Ors. (2024 SCC

OnLine SC 3727) in ^Para 218 that;

^218. ^Any ^sale by ^auction ^or ^other public procurement ^methops

^interfered with lightly except ^on grounds ^that ^go ^{to the} ^core ^of such ^sale pročess, ^such ^as ^either being collusive, fraudulent ^or vitiated by inadequate pricing ^of underbidding. ^Mere irregularity ^or ^deviation ^from ^rule which ^does ^not ^have ^any fundamental procedural does not ^take ^away the foundation of authority ^for such proceeding. ^In such ^cases, ^courts ⁱⁿ particular ^should be ^mindful ^to ^refrain entertaining ^any ground forchallenging ^an auction which either could have been ^taken ^substantial injury ^has ^been caused ^on ^account ^of such irregularity.

15.

Sale certificate ^is issued and registered in favour of the Auction Purchaser. No ground could be shown by the

Appellants which ^goes ^to the ^root ^of the ^matter ^to ^prove

collusion between the parties ^or inadequate pricing ^or under

valuation. Accordingly, rights ^of the ^Auction ^Purchaser ^have

^to be protected ⁱⁿ such ^cases.
16.
On the basis of discussions made above, ^we ^are of the

^considered ^view ^that ^Learned DRT ^has rightly arrived ^at ^its findings. ^No ^interference ^is ^called ^for ⁱⁿ ^the appeal. Appeal Appeal is dismissed. Impugned judgment dated 19.06.2023 passed by Learned DRT Visakhapatnam in S.A. ^No. ⁰⁷ ^of ²⁰²⁰ (Sri ^Karri Lakshmi ^-vs- ^The Authorized Officer, Syndicate Bank and Others) is confirmed.

Copy of the Judgment/Final Order be uploaded in the

Tribunal's Website.

Order signed, dated and pronounced ⁱⁿ ^open Court.

(Anil Kumar Srivastava,J) Chairperson

Sri Karri Lakshmi vs The Authorized Officer, Syndicate Bank Presently Canara Bank & Anr.

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