KARNATAKA BANK LTD. Vs. DEVERASETTY VENUGOPAL

JUDGEMENT

(1.) This appeal has been filed by the appellant against the order dated 27.1.2015 passed by the learned State Commission in Complaint No. 133 of 2013, Deverasetty Venupola v. Karnakata Bank Ltd. and Ors. , by which complaint was allowed.

(2.) Brief facts of the case are that the opposite parties/appellants put the immovable house property for sale under SARFAESI Act, 2002 wherein complainant/Respondent No. 1 participated in the auction and purchased the same for Rs. 26,10,000. The opposite parties issued letter of confirmation of sale dated 18.4.2012 by receiving an amount of Rs. 6,52,500. The opposite party No. 2 issued Sale Certificate dated 26.6.2012 on receipt of balance sale consideration. The complainant alleged that despite paying the entire sale consideration, the opposite parties failed to handover the vacant physical possession of the property. The complainant also pleaded that to his utter surprise and shock a notice in IA No. 1153/2012 in O.S. No. 594/2012 on the file of Vth Additional Senior Civil Judge, Guntur was served on him impleading the complainant and the bank as proposed parties. The notice revealed that Nimmala Venkateswarrama and others filed a suit for partition against Nimmala Srinivasa Rao, the mortgagor of the auctioned property and for a declaration that the sale made by the Opposite party bank in favour of complainant is null and void. Thereupon the complainant issued a letter demanding to pay back the sale consideration as the auctioned property in question is in legal dispute. Vexed with the attitude of the Opposite Party bank the complainant got issued a legal notice on 27.3.2013 for registering and handing over vacant physical possession of the property based on the sale certificate but there is no reply. However, OP-2 issued reply on 10.4.2013 admitting the entire sale transaction but denied any deficiency of service on the part of the bank. Alleging deficiency on the part of opposite party, complainant filed complaint before State Commission. Opposite party resisted complaint, admitted that the complainant purchased the property in question in an auction held on 18.4.2014 under SARFAESI Act and sale certificate was also issued on receipt of entire sale consideration on 26.6.2012. The property was auctioned in 'as is where is condition' and the complainant was aware of the fact that opposite party got symbolic possession of the property. The property would be delivered after taking physical possession of the same. The Opposite Party bank also admitted as to the filing of a suit in O.S. No. 594/2012 on the file of Vth Additional Senior Civil Judge, Guntur for partition of the property. The Opposite Party contended that the bank was verified all the title documents before releasing the loan and mortgaging the property. The bank is taking all legal recourses available to safeguard its interest and intimated the complainant about the status. A suitable reply was given to the legal notice got issued by the complainant on 27.3.2013. It was further pleaded that term loan was sanctioned to M/s. Sai Kiran Packages for purchase of machinery for which Mr, Nimmala Srinivasa Rao stood as guarantor by mortgaging his residential house situated at T.S. No. 91, D. No. 12-7-104 (Old Ward No. 5), Block No. 4, Ganeswara Rao Street, Kothapet, Guntur Municipal Corporation. The said loan account was classified as NPA as on 17.5.2009 as the borrower and guarantor failed to maintain tire account properly. Despite issuance of notice under Section 13(2) of SARFAESI Act on 23.7.2011 neither the borrower nor the guarantor cleared the loan. On 26.22.2011 the authorised officer of the bank took symbolic possession of the mortgaged property and issued paper publication on 29.11.2011 to that effect. On 18.4.2012 the auction was conducted and the complainant was the successful bidder and the sale was confirmed in his favour tor Rs. 26,10,000. It was further submitted that opposite parties are making efforts for handing over physical possession of the property and denied any deficiency on their part and prayed for dismissal of complaint.

(3.) Learned State Commission after hearing both the parties allowed complaint and directed opposite parties. to pay Rs. 26,10,000 to the complainant with 12% p.a. interest from the date of payment till refund along with compensation of Rs. 1 lakh for mental agony and Rs. 10,000 towards cost against which this appeal has been fried.