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2016 Supreme(Mad) 3124
IN THE HIGH COURT OF JUDICATURE AT MADRAS
S. MANIKUMAR, N. ATHINATHAN, JJ.
Tmt.Suriyakala - Appellants
Vs.
The Authorised Officer State Bank of Bikaner and Jaipur - Respondents
W.P. No. 15505 of 2016 and W.M.P. Nos. 13487 & 29335 of 2016
Decided On : 29-09-2016
For the Petitioner: Mr. P. Ulaganathan.
For the Respondents: Mr. N. Kishore Kumar.
The central legal point established in the judgment is the importance of addressing the crucial issue of whether a property is agricultural and excluded from SARFAESI Act, 2002 in cases involving auction sales and the application of the Act.
Headnote:
SARFAESI Act - Agricultural Property - Section 31 of SARFAESI Act, 2002 - Summary: The court discussed the issue of whether the subject property was an agricultural land and whether it was excluded from the purview of SARFAESI Act, 2002. The court set aside the previous order and directed the Debts Recovery Tribunal to consider the evidence and decide whether the property was agricultural and if SARFAESI Act, 2002 could be pursued by the bank.
Fact of the Case:
The daughters of a guarantor filed a petition for an interim injunction to restrain a bank from proceeding with an auction sale of a property, claiming that the property was agricultural and excluded from SARFAESI Act, 2002. The Debts Recovery Tribunal dismissed the petition, and the daughters filed a writ petition challenging the order.
Finding of the Court:
The court found that the Tribunal did not address the crucial issue of whether the property was agricultural and excluded from SARFAESI Act, 2002. The court set aside the previous order and directed the Tribunal to reconsider the evidence and decide on the nature of the property.
Issues: The main issue was whether the subject property was agricultural and excluded from SARFAESI Act, 2002. The court also addressed the failure of the Tribunal to consider this crucial issue.
Ratio Decidendi: The court's decision was based on the failure of the Tribunal to address the issue of whether the property was agricultural and excluded from SARFAESI Act, 2002. The court directed the Tribunal to reconsider the evidence and make a decision on the nature of the property.
Final Decision: The writ petition was allowed, and the previous order was set aside. The Debts Recovery Tribunal was directed to consider the evidence and decide whether the property was agricultural and if SARFAESI Act, 2002 could be pursued by the bank.
S. MANIKUMAR, J.
Material on record discloses that M/s. Jai Maruthi Energies Pvt. Ltd., represented by its Director Senthilkumar, C-295, Cheran Managar, Vilankurichi Road, Coimbatore - 641 035, has borrowed loan, from State Bank of Bikaner and Jaipur, Coimbatore. S.Velliangiri, has stood as guarantor. Sister and daughter of the said Velliangiri, have filed I.A.No.179/2016 in S.A.No.25/2016, for an interim injunction restraining the bank or its men or agents from in any manner proceeding with the proposed auction sale scheduled on 24.2.2016, in respect of the schedule property, pursuant to the auction sale notice dated 13.1.2016 and publication of the said notice, in Dina Mani on 14.1.2016. In the said application, besides contending that they are the co-owners of the subject property brought for auction, by referring to Section 31 of the SARFAESI Act, 2002, the third parties, namely sister and daughter of Velliangiri/guarantor, have further contended that the subject property being an agricultural property, is excluded from the purview of any action under SARFAESI Act, 2002. To substantiate their contention that the subject property brought for auction, is an agricultural property, applicants/petitioners therein, have produced Adangal extract for Fasli 1424, as plaint document No.5. Responding to the prayer sought for in I.A.No.179/2016 in S.A.No.25/2016, the Bank has filed a reply statement.
2. Adverting to the rival contentions, the Debts Recovery Tribunal, Coimbatore, has passed an order on 23.2.2016, which is impugned in this writ petition. The said order is extracted hereunder:
"PROCEEDING ORDER DATED 23.02.2016
I.A.No.179/16: Stay Petition. This petition has been filed by the petitioners/applicants to stay all further proceedings in pursuance of the impugned Auction sale Notice dated 13.01.2016, and the Sale which is fixed on 24.02.2016.
The petitioners are the daughters of R-2, who are claiming share in the property by inheritance through their father R-2. It is alleged that the secured asset has been acquired from out of the common nucleus of the Joint Hindu Family and claiming 2/3rd share in the property. It is the further allegation of the petitioners/applicants is that the property being an agricultural property, is insulated by S.31(i) of the SARFAESI Act.
The Ld. Counsel for the R/Bank strongly objected to the plea of the Petitioners/Applicants on the ground that the secured asset has not been purchased from out of the common nucleus of the Joint Hindu Family, but it is the absolute property of R-2 and their brothers. The Ld. Counsel further submitted that the property has been first purchased by the 2nd Respondent, his father and his brother by way of release deed bearing Doc. No.447/1986 dated 09.06.1986 and thereafter, both became absolute owners of the property by virtue of the release deed. The Ld. Counsel further submitted that the schedule mentioned property and other properties were partitioned between the 2nd Respondent and his brother on 11.6.1986 bearing Doc. No.448/1986 and the schedule mentioned properties were allotted to the 2nd Respondent by virtue of the Partition Deed dated 11.6.1986 and the 2nd Respondent has been in possession and enjoying the properties as absolute owner. The Ld. counsel further added that the 2nd Respondent, as absolute owner of the schedule mentioned property had executed a valid mortgage in favour of the 1st Respondent Bank and availed the loan and the 2nd Respondent and Respondents 4 to 6, who are the directors of 3rd respondent company had availed the facility from the 1st respondent and the other respondents stood as guarantors. It is the further case of the 1st Respondent is that since the account became NPA, SARFAESI proceedings were initiated and R-2 to R-6 said to have been aggrieved by the issuance of the Possession Notice, challenged the sale by filing SA 189/2015, SA 190/15 and SA 191/2015, in which a conditional order were passed, which were not complied with an
