Swaran Singh vs Central Bank Of India And Another

The petitioner, namely, Swaran Singh apart from being a borrower of a loan amount of Rs. 21.95 lacs from Central Bank of India also stood a guarantor for a loan of Rs. 35 lacs raised by his son, namely, Gurinder Pal Singh from Central Bank of India, Branch office at G.T. Road Karnal.

A plot measuring total 276.5 sq. yd. upon which 7 shops are stated to have been constructed stood offered as a security for both the aforesaid loans raised by the petitioner and his son-Guinder Pal Singh. Admittedly, due to default of both the loans, the respective accounts have been declared to be Non Performing Accounts resulting into invoking of the provision of SARFAESI Act by Central Bank of India.

By filing the present petition, the prayer is for setting aside the auction notice dated 22.11.2018 (Annexure P-3) whereby, it is alleged that the mortgaged property is sought to be sold much below the market price.

After hearing learned counsel for the petitioner, no case for invoking the writ jurisdiction is made out. As per the valuation report dated 28.7.2017 (Annexure P-1), admittedly the estimated total value of the land plus building was ascertained to be Rs. 81.56 lacs. The valuation report further records as under:

Present market value of the above property in the condition with aforesaid specifications I

Rs. 81.56 Lac

Rs. Eight one Lac & Fifty Six Thousand only

Realizable Value of the Property

Rs. 73.01 Lac

Rs. Seventy Three Lac only

Distress value of the above property is

Rs. 65.00 Lac

Rs. Sixty Five Lac only

We find that in the impugned notice (Annexure P-5), the reserve price fixed for the auction to be held on 05.12.2019 is notified as Rs. 60 lacs. The plea that the Bank is proceeding to sell the property much below the market value is absolutely misconceived at this stage since auction is yet to take place. In the face of the valuation report itself acknowledging that the distress sale value would be around Rs. 65 lacs, that too, in the year 2017, the fixing of the reserve price in the present financial scenario, thus, cannot even be presumed as, in any manner, be prejudicial to the interest of the petitioner defaulter.

In view of the above discussion, this writ petition is dismissed being devoid of any merit.