FEDERAL BANK LTD. Vs. A. C. CHUMMAR

JUDGEMENT

(1.) The protracted legal battle between the parties, a bank and a group of borrowers commenced two decades ago, proceeds further with these appeals.

(2.) By the impugned judgment in W.P(C)No.31683 of 2011, order dtd. 16/11/2011 in R.A.(SA) No. 76 of 2009 of the Debts Recovery Appellate Tribunal (DRAT) was set aside and the order of the Debts Recovery Tribunal (DRT) in S.A.No.9 of 2008 was restored. The DRT had set aside sale of secured assets mainly on the ground that the requirement of minimum thirty days ' notice under Rule 9 of the Security Interest (Enforcement) Rules, 2002 was violated. In W.A.No.1802 of 2016, the secured creditor Bank is the Appellant. W.A.No.2124 of 2016 is filed by the auction purchaser. W.A.No.2079 of 2016 was filed by the borrower. We will refer to the parties as they are arrayed in the cause title in W.A.No.1802 of 2016.

(3.) The learned Single Judge found that the sale proceeded on the basis of the notice dtd. 23/12/2007 by which the sale was scheduled on 29/12/2007. The same was found illegal by the learned Single Judge as Rule 9(1) of the Security Interest (Enforcement) Rules stipulates 30 days notice. Though the learned Single Judge noted that the borrowers never fulfilled any of their commitments and made every possible endeavour to defeat sale of secured asset, the failure on the part of the Bank to ensure 30 days notice was considered as a grave violation vitiating the sale. Issue regarding computation of the dues was kept open to be agitated before the DRT and a direction was issued that even if proceeding is initiated by the borrowers against fresh sale notice no stay shall be granted if the procedure in the Enforcement Rules were complied with. O.P. (DRT)No.262/2010 was closed as W.P.(C)No.31683/2011 was allowed.