INDIAN OVERSEAS BANK, ARM BRANCH Vs. B SUBASH

JUDGEMENT

(1.) This Civil Revision Petition is filed to strike down the proceedings in appeal bearing S.A. No. 97 of 2007 on the file of the Debts Recovery Tribunal-II, at Chennai filed under Section 17 of the SARFAESI Act, since according to the revision petitioner, the same has been taken on file without jurisdiction.

(2.) According to the revision petitioner-Bank it is the secured creditor, which initiated proceedings under the SARFAESI Act against M/s.Dhinakar Trading to recover its dues from the said borrower's NPA Account. The borrower challenged the proceedings by filing several writ petitions, which were ultimately dismissed. Though this Court gave liberty to the borrower to approach the DRT, the same was not availed within the specified period. Hence the secured asset was brought for sale, which was challenged before the DRT. This revision is filed challenging the said proceedings. According to the revision petitioner, the respondent herein purchased the secured asset fully knowing the actions initiated by the petitioner under the SARFAESI Act and therefore he is not a bona fide purchaser.

(3.) It is submitted by the learned Counsel for the revision petitioner that Section 13(13) of the SARFAESI Act prohibits further encumbrance over the secured assets after the demand notice under Section 13(2) of the SARFAESI Act was issued. The contention that the said prohibition is not absolute in view of the specimen possession notice provided under Appendix (iv) of Security Interest (Enforcement) Rules 2002 is not tenable since it is settled law that where there is conflict between the Rules and Act, the Act alone will prevail. Further, the specimen notice only cautions the public about the charge created in favour of the secured creditor.