PADMINI SIVASUBRAMANIAM Vs. COMFORT INN

JUDGEMENT

(1.) THIS Civil Revision Petition has been preferred by the petitioner-auction purchaser to set aside the appeal bearing S.A.No.1 of 2008 on the file of the Debts Recovery Tribunal-I, Chennai, including the order dated 1.1.2008 passed in the said case by the Tribunal.

(2.) ACCORDING to the petitioner, the first respondent-Firm was constituted in May 2005 by two partners, namely Satchidanandam and Chandra and alleged to have been re-constituted with two more partners, Kathirvel and A.Sivasubramaniam. Satchidanandam and Chandra allegedly retired from the Firm on 23.6.2007, whereinafter, notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as 'the SARFAESI Act'), was issued by Indian Overseas Bank against the borrower-Firm. The Firm was allegedly re-constituted on 22.9.2007 with the induction of the second respondent-Lakshmi Ramanan and Syed. On the same day, two others alleged to have retired from the Firm. Subsequently, steps were taken by the third respondent-Authorized Officer, Indian Overseas Bank, under Section 13(4) of the SARFAESI Act and symbolic possession of the property was taken. Public auction notice was issued on 31.10.2007 by the third respondent-Bank in terms of Rules 8 & 9 of the Security Interest (Enforcement) Rules, 2002, bringing to auction the subject property. The notice referred to Satchidanandam and Chandra as the partners. At that stage, the second respondent-Lakshmi Ramanan filed a Writ Petition in W.P.No.36110 of 2007 before this Court, wherein, he claimed to be the Managing Partner of the first respondent-Firm. Prayer was made to quash the possession notice dated 25.10.2007 and auction notice dated 31.10.2007. This Court, by order dated 30.11.2007, dismissed W.P.No.36110 of 2007, holding that since the law is well settled, the remedy is only to file appeal under Section 17 of the SARFAESI Act. The second respondent-Lakshmi Ramanan was granted liberty to approach the Debts Recovery Tribunal under Section 17 of the SARFAESI Act. The auction-sale was allowed to proceed, which was fixed on 6.12.2007. The further case of the petitioner is that the auction-sale was conducted on 6.12.2007. As per the law, the appeal under Section 17 of the SARFAESI Act could have been preferred by 9.12.2007. But it was not filed by the second respondent. On the other hand, the second respondent, along with Syed, preferred a suit in O.S.No.525 of 2007 in the District Munsif Court, Tirupur, against Kathirvel and A.Sivasubramaniam on the ground that they are interfering with the Management of the Firm and sought for a declaration that the second respondent-Lakshmi Ramanan and Syed are the only partners of the first respondent-Firm. In the said case, a compromise was filed by Kathirvel and Sivasubramaniam on 19.12.2007 for settlement of the suit. Finally, the first respondent-Firm, purported to be represented by Lakshmi Ramanan (second respondent) filed appeal, along with the second respondent, on 1.1.2008 under Section 17 of the SARFAESI Act, but it was filed before the Debts Recovery Tribunal, Chennai. Therein, the possession notice, dated 25.10.2007, the auction notice, dated 31.10.2007 and the auction made on 6.12.2007, were challenged. Prayer was also made to stay the confirmation of the sale of immovable secured asset in favour of the auction purchaser. The Debts Recovery Tribunal-I, Chennai, on 1.1.2008 in S.A.No.1 of 2008, granted interim stay restraining the third and fourth respondents herein from taking further proceedings under SARFAESI Act and also in respect of the confirmation of sale of the immovable secured asset in favour of the auction purchaser pursuant to the auction held on 6.12.2007. It is in the above circumstances, the auction purchaser preferred this Civil Revision Petition.

(3.) LEARNED counsel appearing on behalf of the second respondent, disputed the allegation that the second respondent is the driver of the partners. According to him, he is one of the partners of the Firm. Reliance was also placed on the suit, wherein compromise memo was filed by the parties. LEARNED counsel appearing on behalf of the second respondent further submitted that the first and second respondents have already paid a sum of Rs.65 lakhs to the third respondent-Bank on 6.12.2007 to regularise the account and till date, they have been paying a sum of Rs.20,000/- per day and as on date, a sum of Rs.2,34,99,450/- is due and payable by them to the third respondent. They are ready and willing to pay the above dues within 12 weeks to the third respondent-Bank and undertake to pay the same. An affidavit has been filed by the first and second respondents on 16.4.2008 to the above effect.