MERIT INTERNATIONAL EDUCATIONAL FOUNDATION Vs. AUTHORIZED OFFICER CANARA BANK TEYNAMPET BRANCH TEYNAMPET

JUDGEMENT

(1.) .

(2.) ONE Merit Resorts Private Limited, having their office at No.547, Anna Salai, Chennai -600018 (hereinafter referred to as the 'borrower company') had borrowed a sum of Rs.13 crores as loan from the first respondent Bank and created an equitable mortgage over the property at Door No.4/278, Ooty -Kotagiri Main Road, Doddabetta Junction, Nilgiris as a security for the above said loan. Since the said company has committed default in payments, the first respondent Bank had issued a notice dated 31.10.2005, demanding payment of the sum of Rs.10,77,02,656/= together with interest at the rate of 10% p.a. from 1.9.2005 and as the borrower company did not comply with the above demand, the first respondent Bank initiated the proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Act 54 of 2002) (SARFAESI Act in short) and issued a statutory notice under Section 13(2) of the SARFAESI Act to the said company on 4.1.2006, calling upon the said borrower company to repay the sum of Rs.10,77,02,656/= (Rupees Ten Crores Seventy Seven Lakhs Two Thousand Six Hundred and Fifty six only) and also published the said notice in the English Daily 'The Hindu'. The said notice issued under Section 13(2) was challenged by the borrower company before the Debts Recovery Tribunal -I, Chennai in S.A.No.27 of 2006 and the same was dismissed by the Tribunal, as being premature, since it was challenging only the notice issued under Section 13(2).

(3.) IN the meantime, the first respondent Bank has proceeded with the sale and conducted auction on 4.10.2007, wherein the second respondent has emerged as the successful purchaser. According to the first respondent Bank, the second respondent/purchaser had complied with all the conditions of auction sale and therefore, they have issued a Certificate of Sale in favour of the second respondent Trust on 15.10.2007 and the same has been registered as Document No.1875 of 2007 on 17.10.2007 in the office of the Sub Registrar at Ootacamund.