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IN THE HIGH COURT OF KERALA AT ERNAKULAM
Nitin Jamdar, S.Manu
Everspace Realty LLP. – Appellant
Versus
Vasu Coco Resorts Pvt. Ltd. – Respondent
JUDGMENT :
Nitin Jamdar, C.J.
These two appeals are filed by the Creditor Bank and the Auction Purchaser challenging the judgment of the learned Single Judge by which the writ petition filed by the Borrower was allowed setting aside the orders passed by the Debt Recovery Tribunal and Debt Recovery Appellate Tribunal, and the sale of the secured assets.
2. W.A. No. 2124 of 2024 is filed by the Creditors, the Authorised Officer and the Deputy General Manager of the State Bank of India, (hereinafter referred to as 'the Bank'), and W.A. No. 2005 of 2024 is filed by the Auction Purchaser, M/s. Everspace Realty LLP., (hereinafter referred to as 'the Auction Purchaser').
3. These Appeals are against the judgment of the learned Single Judge dated 19 November 2024 in W.P.(C) No.23464 of 2024 filed by M/s. Vasu Coco Resorts Pvt. Ltd., and its Managing Director (hereinafter referred to as ‘the Borrower’). The learned Single Judge set aside the proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002) against the Borrower, which was confirmed in S.A. No.530 of 2022 of the Debt Recovery Tribunal, Ernakulam and aff
The auction sale is invalid if not compliant with SARFAESI Act rules on property valuation, requiring distinct treatment of movable and immovable assets without collusion.
The auction sale of secured assets was invalid due to violations of statutory procedures, including failure to obtain separate valuations and selling below the reserve price.
Mandatory compliance with procedural requirements under the SARFAESI Act is essential; failure to adhere prejudices borrowers' rights and invalidates auction proceedings.
The court upheld the auction process under the SARFAESI Act, affirming that auctions must follow statutory requirements and can only be challenged on limited grounds such as fraud or procedural irreg....
Secured creditors must adhere to proper notice and valuation requirements per the SARFAESI Act, as failure to do so invalidates asset sales.
The court reinforced that compliance with statutory notice requirements and fair valuation is essential in property auctions under the SARFAESI Act to protect borrower rights.
Auction sales conducted under the Recovery of Debts Due to Banks and Financial Institutions Act must not be disturbed without substantial evidence of irregularity; procedural compliance is paramount.
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.
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