M CHOKALINGAM Vs. AUTHORISED OFFICER INDIAN BANK

JUDGEMENT

(1.) R. Subbiah, J.

(2.) WRIT petition filed under Article 226 of the Constitution of India, to issue a WRIT of Declaration, calling for the records of the 1st respondent bank in Sale Notice dated 06.12.2008 bearing land in S.F.No,202/1 of T.S.No.11/1300 and 1301 and quash the same as arbitrary, illegal and unconstitutional. The writ petitioner is a guarantor in respect of the credit limit availed by one M/s. Octogen Iron and Steels Indian Private Limited from the respondent bank. This present writ petition has been filed by him to issue a writ of Certiorari, calling for the records of the respondent bank in sale notice dated 06.12.2008 bearing land in S.F.No,202/1 of T.S.No.11/1300 and 1301 and quash the same. According to the petitioner, since the loan account turned into Non-Performance Asset, the bank had issued a demand notice dated 03.12.2007 under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "SARFAESI Act"), claiming a sum of Rs.52,18,560.80. On expiry of the 60 days from the demand notice, the respondent bank had proceeded to issue possession notice under section 13(4) of the SARFAESI Act on 19.02.2008. Though the petitioner made several payments to the bank including a sum of Rs.10 lakhs paid on the date of possession notice, the respondent bank has not given credit to any of the amounts paid by the petitioner. Even in the possession notice, the same amount of Rs.52, 18,560/- was mentioned as an outstanding. Hence, an appeal under Section 17 of the SARFAESI Act was filed by the petitioner before the Debts Recovery Tribunal-II, Chennai and he had sought for a stay of further proceedings pursuant to the notice issued by the bank under section 13(4). While the Debts Recovery Tribunal granting stay in the said application, passed a conditional order on 10.03.2008, directing the petitioner to pay a sum of Rs.6 lakhs on or before 29.04.2008.

(3.) PER contra, the learned counsel for the respondent bank submitted that on previous occasions, i.e. two times, the property was brought for sale, but the auction could not take place as the writ petitioner had obtained stay from the Tribunal for holding the auction. Though in the earlier sale notice dated 01.07.2008, the reserve price was fixed at Rs.85.32 lakhs, on the basis of the valuation report by the approved valuer dated 21.02.2008, the auction price was fixed at Rs.60.02 lakhs. Though the respondent bank had reduced the price in subsequent sale conducted on 09.01.2009 to Rs.75 lakhs on account of the steep fall in property prices, the valuer has not fixed the value below the auction value estimated by the valuer. Further, even if any excess amount after the adjustment of the dues of the bank, the residue of the money shall be paid to the person entitled thereto according with his rights and interests. Therefore, no prejudice would be caused to the petitioner by the sale of the property. Thus, he prayed for the dismissal of the writ petition.