PK.JAGDEV Vs. INDIAN BANK

JUDGEMENT

(1.) The petitioner has approached this court challenging Ext.P3 order of the Debts Recovery Tribunal, Ernakulam, on T.S.A No.47/2016 arising out of S.A No.271/2008 filed before the Debts Recovery Tribunal, Chennai and also Exhibit P5 is the order of the Debts Recovery Appellate Tribunal on R.A (SA) 182/2018 dismissing the appeal filed by the petitioner against Ext.P3 order. The facts which are to be noticed for the adjudication of the issues arising for consideration may be briefly noticed:-

(2.) The petitioner is the grandson of the late N. Sundareswaran who was the Managing Partner of a registered partnership firm - namely M/s N.Sundareswaran (hereinafter referred to as "the firm'). The firm was engaged in the business of processing and exporting cashews and was enjoying credit facilities from the Indian Bank through its Kollam branch. Though the business of the partnership firm continued fairly successfully till the year 1980-81, it appears that the business of the firm ran into rough weather, leading to the mounting of liabilities with the Indian Bank. Considering the long banking relationship with the firm, the Indian Bank extended a 'revival and rehabilitation package' to the firm. Even thereafter, the firm's business did not pick up, and finally, the bank decided to initiate proceedings for recovery of the amounts due to it. The bank filed an original application under the provisions of the Recovery of Debts and Bankruptcy Act, 1993 (In short 'the 1993 Act) before the Debts Recovery Tribunal at Chennai, which is now transferred and pending before the Debts Recovery Tribunal-II, Ernakulam, as TA 1/2005. It may be noted here that the petitioner, the grandson of the late N. Sundareswaran and the son of one of the partners of the firm (Smt. Vijayalakshmi) is not a party in the proceedings under the 1993 Act. The bank also initiated proceedings under the SARFAESI Act, leading to the issuance of a sale notice published on 14/6/2008, which is on record as Annexure-II, along with Ext.P1 Securitisation Application filed before the Tribunal. In terms of that notice, a sum of Rs.112,04,05,628.14 (Rupees One hundred and twelve crores, four lakhs five thousand six hundred and twenty eight and fourteen paise) was due as of 31/7/2007. The properties mentioned in that notice were sold on 24/7/2008. According to the petitioner, the entire extent of the property was purchased by the 2nd respondent for Rs.4,45,50,000.00.

(3.) A parcel of the property having an extent of 16 ares and 18.8 Sq. Mtr in Sy No.9658 of Kollam Village (forming part of the properties sold) was settled on the petitioner and his sister through a settlement deed dated 20-12- 1979 executed by his mother - Smt. Vijayalakshmi. The petitioner also claims that under a Will executed by late N. Sundareswaran, the petitioner became entitled to some further extent of property belonging to late N. Sundareswaran. It is the case of the petitioner that there is no valid mortgage in respect of the property settled in favour of the petitioner and his sister by their mother - Vijayalakshmi as only an attested copy of the document executed on 12/12/1969 had been deposited to create the mortgage. It is the case of the petitioner that there was no notice of the sale to the petitioner. It is the case of the petitioner that when the bank extended the renewal and rehabilitation package in the year 1991, it ought to have been aware of the settlement deed executed in the year 1979 and, therefore, the petitioner was also entitled to put on notice regarding the sale. It is the case of the petitioner that there was no proper valuation of the properties brought to sale through Annexure-II notice in Ext.P.1 before the sale was conducted. Certain discrepancies in the extent mentioned in the valuation report, which is on record along with the written statement filed by the bank before the Tribunal, are referred to demonstrate that the sale was conducted without proper valuation. It is also the case of the petitioner that the 2nd respondent deposited 25% of the purchase price on 24/7/2008, and the balance 75% was deposited only on 29/9/2008 and beyond the time permitted by the SARFAESI Act and the Rules framed thereunder. The petitioner seeks to impugn the sale and have the sale set aside on the aforesaid grounds.