AI Structured Summary
Not yet generated for this judgment
Judgment
D. Murugesan, J.—The Petitioners are the borrower of certain loan facility from City Union Bank Limited, Puducherry. For the default
committed by the Petitioners in repayment, a notice dated 24.06.2009 u/s 13(2) of the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 (hereinafter referred to as SARFAESI Act) was issued by the bank for a total sum of Rs.
8,58,98,125.40. As the Petitioners did not comply with the demand made in the said notice, the Respondents/bank issued the sale notice dated
29.12.2009 for sale of the secured asset. That sale notice was questioned by the Petitioners before the Debt Recovery Tribunal, Chennai by filing
Sarfaesi Appeal No. 14 of 2010 and obtained an interim order as early as 29.01.2010. Thereafter, the Petitioners have submitted an application
for One Time Settlement, but that request was not considered by the bank. Thereafter, the Sarfaesi Appeal was taken up for hearing and the
Tribunal ultimately dismissed it on 16.11.2010. After dismissal of the Sarfaesi Appeal, the bank issued a fresh sale notice dated 29.01.2011, which
is challenged in this writ petition.
Mr. Doraisamy, learned Counsel for the Petitioners would mainly contend that in terms of Rule 8(5) of the SARFAESI Rules, when a
subsequent sale notice is issued by the bank, the Bank is mandated to obtain a fresh valuation report for the purpose of fixing the reserve price and
non-compliance of such a provision by the bank would certainly entitle the Petitioners to challenge the impugned sale notice before this Court
under Article 226 of The Constitution of India.
We have considered the submission of the learned Counsel for the Petitioner and are not inclined to accept it. Even Rule 8 relating to
procedures to be adopted by the bank before issuing fresh sale notice is procedural in nature and certainly any violation on the part of the bank in
complying with that procedure will also be a ground for the borrower to agitate it before the Debts Recovery Tribunal. Inasmuch as the Petitioners
have got an effective remedy of appeal before the Debts Recovery Appellate Tribunal against the dismissal of the Sarfaesi Appeal by the Debts
Recovery Tribunal, we are not inclined to entertain this writ petition. Accordingly, this writ petition is dismissed. No costs. It is made clear that the
order passed by this Court in this writ petition shall not stand in the way of the Petitioners either approaching the Debt Recovery Tribunal
questioning the impugned re-sale notice or raising whatever grounds available to them by filing an appeal before the Debts Recovery Appellate
Tribunal u/s 18 of the Act. Consequently, connected miscellaneous petitions are closed.