The court affirmed the validity of a mortgage auction, emphasizing banks' rights over secured properties despite challenges from subsequent purchasers and procedural compliance in auction processes.

ORDER :

(PER: HON'BLE MR. JUSTICE VENKATESH NAIK T)

WP No.36440 of 2014 and WP No.52283 of 2013

WP No.36440 of 2014 has been filed by the Bank of Baroda erstwhile (Vijaya Bank) to set aside the order dated 23.08.2013 passed by the Debt Recovery Appellate Tribunal, Chennai, (for short, 'the Tribunal') in MA No.138 of 2008 and to set aside the order dated 07.03.2008 passed by the Debt Recovery Tribunal, (for short 'DRT') Bengaluru in AOR No.2 of 2003 and thereby allow the Miscellaneous Appeal No.138 of 2008 on the files of the Debt Recovery Appellate Tribunal, Chennai.

2. Whereas, WP No.52283 of 2013 is filed by the petitioner, auction purchaser, A. Naveen Bhandary, to set aside the order dated 23.08.2013 passed by the Debt Recovery Appellate Tribunal, Chennai in Miscellaneous Appeal No.378 of 2010, wherein, the tribunal dismissed the appeal filed by the petitioner, which was filed challenging the order dated 07.03.2008 passed by the Debt Recovery Tribunal(for short 'DRT'), Bengaluru in AOR No.2 of 2003.

Brief facts of the case in W.P.No.36440/2014 and W.P.No.52283/2013 herein are as under:

3. The 6^th/10^th respondent, M/s. United Distilleries had availed a temporary overdraft facility to the limit of Rs.20,00,000/- from the Bank of Baroda(hereinafter referred to as 'bank'), Gandhi Bazaar Branch, Bengaluru, on 13.06.1991. The property measuring an extent of 1 acre 30 guntas in Survey No.122/1 of Gottigere Village, Uttarahalli Hobli, Bengaluru South Taluk owned by 7^th/11^th respondent, Sri. B.A. Ram, and another property measuring 3 acres 18 guntas in Survey No.122/2 of Gottigere Village, Uttarahalli Hobli, Bengaluru South Taluk owned by the 8^th/12^th respondent, Sri. B.A. Laxman, had mortgaged with the bank as collateral security by deposit of the title deeds to secure the said facility availed by the 6^th/10^th respondent M/s. United Distilleries. The mortgage was created by depositing of title deeds, on 09.07.1991, in favour of the Bank by Sri B.A. Ram and Sri. B.A. Laxman. On account of the default in repayment of the dues, the bank filed OA No.36 of 1996 before the Debt Recovery Tribunal, Bengaluru, against M/s. United Distilleries, Sri. B.A. Ram and Sri. B.A. Laxman and five others, for recovery of a sum of Rs.45,48,567.80 paise together with interest and also for sale of the mortgaged properties. The Debts Recovery Tribunal, Bengaluru by its order dated 28.02.1997 allowed OA No.36 of 1996 and declared that the applicant bank is entitled to recover from defendant Nos.1 to 8 therein jointly severally and personally a sum of Rs.45,48,567.80 paise with costs and interest at 24.50% p.a.

4. In terms of the order passed by the DRT, Bengaluru, the Recovery Officer, issued notice for settling sale proclamation dated 29.06.1998 and on 22.09.1998, order of attachment of immovable property of Sri. B.A. Ram and Sri. B.A. Laxman was made by Recovery Officer and on 16.10.1998, a proclamation of sale was issued by the Recovery Officer. Pursuant to the recovery certificate, the bank initiated further recovery proceedings for sale of the mortgaged properties. The mortgaged properties were