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IN THE HIGH COURT OF JUDICATURE AT MADRAS
S. MANIKUMAR, SUBRAMONIUM PRASAD, JJ.
Bharath Post Graduate College - Petitioner
Versus
Indiabulls Housing Finance Limited & Ors. - Respondents
W.P.No.33561 of 2017 and W.M.P.No.37083 of 2017
Decided On : 31-07-2018
Sarfaesi Act, 2002 - Sections 13, 17 and 3A – T P Act - Section 60 - Debts Recovery - Bank To Bring Property To Sale Is Bad - Respondent aggrieved by order of DRT approached debts recovery appellate tribunal which by its order which in vide order allowed appeal of respondent herein and restored measures taken by respondent herein under act present - Writ petition has been filed before this court assailing order of debts recovery Appellate Tribunal - learned counsel appearing for petitioner has assailed order of debts recovery Appellate tribunal contending that since bank had not dealt with representation within period of as stipulated of Act all further proceedings initiated by bank to bring property to sale is bad - Learned counsel contented that - Demand notice of act is initiation of proceedings and a first step towards invoking rights of secured creditor – non compliance of demand and expiry of statutory period of determines right under mortgage and enables secured creditor to take further measures of act as against secured asset - In case of reply and objection to demand notice steps in making a mandatory obligation to consider same and communicate consideration within - failure to comply results in initiation of action as null and void and any measures in furtherance there to would be in violation of provisions of act and therefore liable to be interfered – Held, Possession notice as referred to in sub-rule shall also be published as soon as possible but in any case not letter than seven day form of taking possession in two leading newspapers one in vernacular language having sufficient circulation in that locality by authorised officer question that arises is whether affixure of possession notice alone is sufficient compliance of rule and whether sale notice can be issued after affixing of notice but before actual delivery of possession notice stipulates that possession notice has to be delivered by both methods that is by delivery and by affixure - Until both methods of delivery are not complied with sale notice cannot be issued - sale notice has to be issued within of date of delivery of possession notice - Honourable supreme court in para has observed above principles laid down by this Court also make it clear that though recovery of public dues should be made expeditiously it should be in accordance with procedure prescribed by law and that it should not frustrate a constitutional right as well as human right of a person to hold a property and that in event of a fundamental procedural error occurred in a sale same can be set aside – Order Accordingly.
SUBRAMONIUM PRASAD, J.
1. The present Writ Petition seeks to challenge the order of the Debts Recovery Tribunal, Chennai, in R.A.(S.A.) No.102 of 2017 dated 06.12.2017.
2. The facts leading up to the present proceedings, are as follows.
(a) The petitioner herein borrowed a sum of Rs.7,55,02,596/- from the first respondent in terms of Loan Agreement dated 30.09.2014 securing the loan through the mortgage of immovable properties.
(b) The lands so mortgaged are located in survey numbers 391/1, 392/2, and 392/3 of Varadharajapuram Village, Poonamallee Taluk, Thiruvallur District.
(c) The petitioner failed to pay the instalments that were due, and the respondent classified the petitioner as a Non-performing Asset, in the month of March, 2016.
(d) Subsequently, the respondent issued the first demand notice dated 10.06.2016 under Section 13(2) of the SARFAESI Act, 2002, (hereinafter referred to as 'The Act'), for the sum of Rs.7,82,26,477/-.
(e) The respondent took possession of the mortgaged properties vide possession notice dated 02.09.2016, sale notice was published on 26.09.2018. The scheduled action pursuant to this sale notice did not take place.
(f) The respondent thereafter issued a fresh sale notice dated 02.11.2016.
(g) The petitioner approached the Debts Recovery Tribunal, Chennai, which granted a stay to the auction in S.A.No.128 of 2016, on the ground that the mortgaged properties were agricultural properties.
(h) Subsequently, the respondent withdrew its first demand notice dated 10.06.2016 vide letter dated 21.12.2016.
(i) A second demand notice dated 17.01.2017 under Section 13(2) of the Act was issued by the respondent, and the petitioner sent a representation dated 03.02.2017, under Section 13(3-A) of the Act.
(j) Admittedly, before responding to the representation of the petitioner, the respondent issued a possession notice dated 01.04.2017, and a sale notice dated 26.04.2017 was issued.
(k) The petitioner once again approached the Debts Recovery Tribunal, Chennai, in S.A.No.104 of 2017 challenging the possession and sale notice issued by the respondent herein. Subsequently, the respondent withdrew the possession notice dated 01.04.2017 vide letter dated 09.05.2017.
(l) Thereafter, on 10.05.2017, the respondent, rejected the representation of the petitioner under sub-Section (3-A) of the Act.
(m) The respondent issued a fresh possession notice dated 16.05.2017, which was received by the petitioner only on 22.05.2017. The respondent however issued a sale notice on 19.05.2017, before the service of the possession notice on the petitioner, and the auction was scheduled for 29.06.2017.
(n) The petitioner herein approached the DRT in S.A.No.130 of 2017, challenging the sale notice on account of the fact that the property was agricultural land, and for the non-compliance of mandatory provisions of the Act.
(o) The Debts Recovery Tribunal, vide its letter dated 12.07.2017 allowed S.A.No.130 of 2017 filed by the petitioner, setting aside all the measures that taken by the respondent.
(p) The respondent aggrieved by the order of the DRT, approached the Debts Recovery Appellate Tribunal, which by its order, which in R.A.(S.A.) No.102 of 2017 vide order dated 06.12.2017, allowed the appeal of the respondent herein, and restored the measures taken by the respondent herein under the Act. The present Writ Petition, has been filed before this Court assailing the order dated 06.12.2017 of the Debts Recovery Appellate Tribunal.
3. The learned counsel appearing for the petitioner has assailed the order of the Debts Recovery Appellate Tribunal, contending that since the bank had not dealt with the representation dated 03.02.2017 within the period of 15 days as stipulated under Section 13(3-A) of the Act, all the further proceedings initiated by the bank to bring the property to sale is bad. The learned counsel contented that
(a) the Demand Notice under Section 13(2) of the Act is the initiation of proceedings and a first step towards invoking the
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