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2018 Supreme(Mad) 1933
IN THE HIGH COURT OF JUDICATURE AT MADRAS
S. MANIKUMAR, SUBRAMONIUM PRASAD, JJ.
M/s. S.R.S.Exports rep. By its Partner Mr.S.Rajasekara Reddy - Petitioner
Versus
Karur Vysya Bank Limited rep. By its Branch Manager T. Nagar Branch - Respondent
Civil Revision Petition Nos.3047 and 3258 of 2017
Decided on : 04-09-2018
Advocate Appeared:
For the Petitioners: Mr.B.Kumarasamy, Mr.M.Balachandar
For the Respondent: Mr.S.Udaya Kumar, Mr.Jhyesh B.Dolia
Headnote:
Recovery of Debts and Bankruptcy Act- r/w. Part III, Section 29 - Income Tax Act, 1961 – Schedule II, Clause 53, 50,52 and 54 and Part-III - Civil Revision Petition No.3047 is filed by the lessee - Civil Revision Petition No.3258 is filed by the guarantor - Bank has filed C.S.No.1072 for recovery of the amount due - During the pendency of the suit, Pharmaceutical Ltd., went, on liquidation - After the Recovery of Debts and Bankruptcy Act, 1993 came in to force, suit was transferred, to the file of the Debts Recovery Tribunal - I, and was renumbered as T.A.No.145 - Suit was decreed, and the Debts Recovery Tribunal held that the bank is entitled to a recovery certificate for a sum with future interest with quarterly rest - Guarantor filed applications, in M.A.Nos.170 and 171 for setting aside the auction sale. I.A.No.3 was filed by the lessee, offering a sum and for a direction to confirm the sale in his favour- An order of Status-quo order was passed, by the Tribunal and the lessee made a further deposit against the conditional order s made by the Tribunal – Held, Learned counsel appearing for the guarantor would submit that the procedure for sale has not been followed, in as much as there has been no proclamation of sale - It was also contended that the notice of sale did not contain all the requisite information which has to be provided - No complaint has been received from the auction purchaser stating that, had he known about the revenue assessed on the property he would not have purchased the property - Since the absence of the details of the revenue assessed in the property does not cause any prejudice to the petitioner, the petitioner cannot be heard to raise a challenge to the same - Purpose of proclamation is primarily to put on notice, the person whose property is being put on auction and the general public that auction for the property would be held. tenant cannot be heard in this proceeding. Tenant cannot challenge the sale of the property - He has to locus to do so - He can only contest his eviction by filing an application under section 17 (4-A) of the SARFAESI Act - Sale has taken place way back and the purchaser has not been given the possession of the property even after 13 years due to the number of proceedings initiated by the tenant and the guarantor - As stated earlier, all the requirements under part III in the Second Schedule to the Income Tax Act laying down the procedure for Recovery of Tax under Income Tax Act, have been followed - In the result, Civil Revision Petitions are dismissed - Consequently, the connected Miscellaneous Petitions are closed.
SUBRAMONIUM PRASAD, J.
1. By this common judgment, revision petitions viz., C.R.P.Nos.3047 and 3258 of 2017 are disposed of, is they arise from the same set of facts.
2. Civil Revision Petition No.3047 of 2017 is filed by the lessee M/s.S.R.S.Exports. Civil Revision Petition No.3258 of 2017 is filed by the guarantor, Mrs.Thara Ramamurthy.
3. Facts leading to both the revision petitions are that:-
One M.C.Sherin Pharmaceuticals Limited, Chennai, respondent No.5, in C.R.P.3258/2017 had availed a loan from Karur Vysya Bank. Mrs.Dr.Thara Ramamurthi stood as the guarantor, for the loan and she mortgaged property situated at Door No.4, Artisan Shanmugam Street, Ayanavaram, Chennai.
4. K.Ramamurthi, husband of Mrs.Thara Ramamurthy is the Managing Director of M.C.Sharin Pharmaceuticals Limited. The property was leased out to S.R.S.Exports, represented by its partner, Mr.S.Rajasekar Reddy, who is related to Dr.Thara Ramamurthy. It is submitted that the abovesaid property was given on lease, vide lease agreement, dated 5/11/1983, by receiving, lease advance amount of Rs.12,60,000/-.
5. Bank has filed C.S.No.1072 of 1992, for recovery of the amount due. During the pendency of the suit, M.C.Sharin Pharmaceutical Ltd., went, on liquidation. After the Recovery of Debts and Bankruptcy Act, 1993 came in to force, suit was transferred, to the file of the Debts Recovery Tribunal - I, Chennai, and was renumbered as T.A.No.145 of 1997. Suit was decreed, on 25/5/2000 and the Debts Recovery Tribunal held that the bank is entitled to a recovery certificate for a sum of Rs.56,45,1460.06/- with future interest at the rate of 24.75% per annum with quarterly rest.
6. S.R.S.Exports, the lessee approached the Bank for a one time settlement and offered a sum of Rs.28 lakhs towards the due. The lessee remitted a sum of Rs.1.5 lakhs, against the amount of Rs.28 lakhs. Since the lessee did not pay the said amount of Rs.28 lakhs, proceedings to execute the decree was initiated by the bank. Auction was conducted on 18.05.2004 and the property was sold at a price of Rs.22.6 lakhs against the upset price of Rs.22.5 lakhs.
7. Dr.Thara Ramamurthy, the guarantor filed applications, in M.A.Nos.170 and 171 of 2004, for setting aside the auction sale. I.A.No.3 of 2006 was filed by the lessee, offering a sum of Rs.28 lakhs and for a direction to confirm the sale in his favour. An order of Status-quo order was passed, on 18/6/2004 by the Tribunal and the lessee made a further deposit of Rs.3.75 lakhs, against the conditional order of Rs.6 lakhs made by the Tribunal.
8. Further proceedings were taken in this Court in W.P.No.3351 of 2005, by the lessee against the order of pre-deposit. The lessee paid a further sum of Rs.14 lakhs, in compliance of the order, dated 4/3/2005 passed by this Court in W.P.No.3351 of 2005. The lessee has therefore, deposited a sum of Rs.17.75 lakhs.
9. The Debt Recovery Tribunal, considered MA 170 and MA 171 filed by the guarantor, to set aside the auction sale. It was contended that Dr.Thara Ramamurthy, the guarantor is the wife of the Managing Director of the debtor and she had offered her property, as collateral security for the loan availed by her husband as Managing Director of M.C.Sharin Pharmaceuticals Limited. The first respondent bank, without exhausting all other remedies available, brought the petitioner's property to sale which is not proper. The said property was leased out to M/s. S.R.S.Exporters, represented by its Managing Partner, Mr.S.Rajasekara Reddy for a period of 30 years, under the lease deed, dated 5/11/1993. The lessee, having got interest in the said property, had opted to settle the decree debt by availing One Time Settlement Scheme, introduced by the first respondent bank, for a sum of Rs.28.00 lakhs and thereby made a part payment of Rs.1.50 lakhs on 29/1/2002. It was stated that, though the guarantor is still within her right to challenge the said sale, on the ground of material irregularity and fraud, she has opted
