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IN THE HIGH COURT OF JUDICATURE AT MADRAS
S. MANIKUMAR, R. SURESH KUMAR, JJ.
M/s. M.A.M. Spinning Mills, Reptd. by Proprietor M. Alli – Petitioner
Versus
The Authorised Officer, City Union Bank Ltd., Kumbakonam – Respondent
W.P. No. 28228 of 2017 & WMP. No. 30349 of 2017
Decided On : 06-11-2017
SARFAESI - Auction Sale Notice - Security Interest (Enforcement) Rules 2002 - Summary of Acts and Sections: The court discussed the Security Interest (Enforcement) Rules 2002 and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The key legal provisions interpreted include Section 13(2) and Section 31(i) of the SARFAESI Act, 2002. The court's decision was influenced by the interpretation of these provisions and the established legal principle that the remedy for aggrieved parties against the notice issued under Section 13(4) of SARFAESI Act is to approach the appropriate Tribunal, making the writ petition not maintainable.
Fact of the Case:
The auction sale notice was issued for properties mortgaged with City Union Bank, Kumbakonam Branch, under the Security Interest (Enforcement) Rules 2002. The petitioner challenged the notice on the grounds that some properties included were agricultural and thus not within the ambit of SARFAESI Act, 2002.
Finding of the Court:
The court found that the writ petition was filed at the eleventh hour and held that when there is an effective and alternative remedy, a writ is not maintainable. The court cited previous decisions emphasizing that the remedy for aggrieved parties against the notice issued under Section 13(4) of SARFAESI Act is to approach the appropriate Tribunal.
Issues: The issues revolved around the inclusion of agricultural properties in the auction sale notice and the maintainability of the writ petition due to the availability of an alternative remedy.
Ratio Decidendi: The court's decision was based on the established legal principle that the remedy for aggrieved parties against the notice issued under Section 13(4) of SARFAESI Act is to approach the appropriate Tribunal, making the writ petition not maintainable.
Final Decision: The court dismissed the writ petition, citing that the issue regarding the properties can be pleaded and substantiated before the competent forum, the Debts Recovery Tribunal. No costs were awarded, and the connected Writ Miscellaneous Petition was closed.
S. Manikumar, J.
1. Tender-cum-auction sale notice dated 29.01.2017 issued under Rule 8(6) of the Security Interest (Enforcement) Rules, 2002 is extracted hereunder.
TENDER CUM AUCTION SALE NOTICE UNDER SARFAESI ACT, 2002
Notice of intended sale under Rule 8 (6) of the Security Interest (Enforcement) Rules 2002 under Securitisation of Financial Assets and Enforcement of Security Interest Act, 2002
1. M/s. M.A.M.Spinning Mills
SF No.678/5 Murugankattu Valasu
Olapalayam
Kangayam Taluk
Tiruppur Dist 638 701.
Also at
M/s. M A M Spinning Mills
No.347-J Bharathi Illam
Kamarajapuram
Vellakovil
Kangayam Taluk
Tiruppur District 638 111
2. Mrs.M.Alli
W/o Mohanraaj
No.347-J Bharathi Illam
Kamarajapuram
Vellakovil
Kangayam Taluk
Tiruppur Dist 638 111.
3. Mr.M.A.Mohanraaj
S/o.Ayyavoo
No.347-J Bharathi Illam
Kamarajapuram
Vellakovil
Kangayam Taluk
Tiruppur District 638 111.
4. Mrs.A.Nallammal
W/o M. Ayyavoo
No 79 LKC Nagar
Vellakoil,
Kangayam Taluk
Tiruppur District 638 111.
5. M/s. Praanesh Textiles
Door No.330
Murugankattuvalasu
Olapalayam
Kangayam Taluk
Tiruppur District 638 701.
Sub: Loan account of M/s. MAM Spinning Mills – with our Vellakoil Branch
All of you had availed a credit facility from City Union Bank Limited, Vellakoil branch, 210/D, Muthaiah Towers, Muthur Road, Vellakovil 638 111, the repayment of which is secured by mortgage of schedule mentioned property hereinafter referred to as “The Property”. All of you failed to pay the outstanding to the Bank. Therefore, Demand Notice dated 27/4/2017 under Section 13 (2) of Securitisation and Reconstruction of Financial Asset and Enforcement of Security Interest Act, 2002 (for short called as “The Act”), was issued by the Authorised Officer calling upon all of you to pay a sum of Rs.3,65,80,134/- (Rupees Three crore sixty five lakh eighty thousand one hundred thirty four only) as on 11/4/2017 with further interest from 12/4/2017 but all of you failed to discharge the dues.
As all of you failed to make payment despite Demand Notice dated 27/4/2017 the Authorised Officer took possession of the schedule mentioned property under the Act on 1/8/2017 after complying with all legal formalities. Now all of you are liable to pay Rs.3,89,96,712/- (Rupees Three Crore Eighty Nine Lakh Ninety Six Thousand Seven Hundred Twelve Only) including interest as on 28/8/2017 and further interest from 29/8/2017 and other charges till the settlement of the account in full. Therefore, the under mentioned mortgaged property as per schedule is proposed to be sold by the Authorised Officer on 7/11/2017 at City Union Bank Limited, Vellakoil Branch, 210/D, Muthaiah Towers, Muthur Road, Vellakovil 638 111.
The sale is intended to be carried out by way of inviting Tender cum Auction from public. The Tender/Bid/offer forms with the terms and conditions can be had on behalf of the undersigned from City Union Bank Ltd., Vellakoil branch, 210/D Muthaiah Towers, Muthur Road, Vellakovil 638 111 against written request. The last date for submitting tenders/bids complying with all necessary terms along with EMD to the undersigned in the above mentioned address is 7/11/2017 before 12.00 Noon. The tenders/bids shall be opened on 7/11/2017 at 1.00 p.m., at the same address.
The reserve price for sale of the secured assets is fixed as mentioned in the schedule. The probable purchaser shall remit Earnest Money Deposit (EMD) as specified in the schedule. In the case of immovable properties the sale shall be conferred on the person making highest offer/tender/bid. In the case of immovable properties 25% of the sale price shall be paid immediately on the date of sale and the balance of sale price shall be paid within 15 days of confirmation of sale. The sale is subject to confirmation by City Union Bank Limited. The undersigned reserves right to accept or reject the Tender/Bid/officer without assigning any reason therefor.
This Notice is issued without prejudice to any other remedy available to the Bank
SCHEDULE OF PROPERTIES
Immovable Property Mortgaged to our Bank
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