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2020 Supreme(Mad) 84
IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. SATHYANARAYANAN, R. HEMALATHA, JJ.
P.S. Sivaperumal & Another - Appellant
Versus
Authorised Officer, UCO Bank, Chennai & Another - Respondent
WP. No. 32814 of 2019 & WMP. Nos. 33241 to 33243 of 2019
Decided On : 28-02-2020
For the Petitioners:S.R. Rajagopal for M/s. Antony L.X. Selvam, Advocates. For the Respondents:R1, V. Suthakar, R2, R. Thiyagarajan, Advocates.
Headnote:
Constitution of India ,1950 - Article 226 - SARFAESI Act - Section 13 (8) - quash - Debt Recovery Appellate Tribunal - However it appears that accounts were upgraded after corers was remitted by petitioners by way of sale Annan agar property and accounts turned nonperforming assets again after which notices Section Act were again issued on and thereafter symbolic possession notice Section - Simultaneously first respondent Bank also filed an Original Application before Debts Recovery Tribunal Chennai in respect of two accounts Stores Private Limited and Stores Firm Partnership numbered - Both Original Applications were allowed by Debts Recovery Tribunal Chennai and Debt Recovery Certificates were issued on respectively - One of five properties Edmore property was sold for corers on per compromise proposal approved by first respondent Bank and proceeds was credited to all three accounts as requested by borrower – Held, When court apply above principles stated with reference to Section Act in respect of secured interest in secured asset in favor of secured creditor provisions of Act and the relevant Rules applicable Section a free hand is given to secured creditor to resort to sale without intervention of Court or Tribunal - However Section is clearly stipulated that mortgagor borrower who is otherwise called as debtor retains his full right to redeem property by tendering all dues to secured creditor at any time before date fixed for sale or transfer - Sub-section Section noted earlier secured asset should not be sold or transferred by secured creditor when such tender is made by borrower at last moment before sale or transfer - Said Sub section also states that no further step should be taken by secured creditor for transfer or sale of that secured asset - Court find no reason to state that principles laid down with reference to Section which is general in nature in respect of all mortgages can have no application in respect of secured interest in secured asset created in favor of secured creditor as all above-stated principles apply in all fours in respect of transaction as between debtor and secured creditor provisions - Same has been applied in Dwarika Prasad reported in present case petitioners failed to comply with provisions of Section - Statute mandates that it is only where dues of secured creditors are tendered together with costs charges and expenses before date fixed for sale or transfer that saved asset is not to be sold or transferred - In decision in Mathew Varghese Kumar and others cited supra it is also that right of mortgagors to redeem mortgage property survives until there has been transfer of mortgage of interest by registered instrument sale - Therefore right to redemption stood extinguished on execution of registered sale deed – Petition dismissed
JUDGMENT
(Prayer: Writ Petition filed under Article 226 of the Constitution of India praying for issuance of a writ of certiorarified mandamus calling for the records in AIR.No.5 of 2019 on the file of the Debt Recovery Appellate Tribunal, Chennai and quash the order dated 22.05.2019 dismissing the appeal for non-compliance of pre-deposit in waiver application in IA.No.208 of 2019 and thereby direct the Debt Recovery Appellate Tribunal, Chennai to restore the appeal and adjudicate the matter on merits.)
R. Hemalatha, J.
1. The petitioners have challenged the order dated 22.05.2019 in AIR.No.5 of 2019 on the file of the Debt Recovery Appellate Tribunal, Chennai dismissing the appeal for non-compliance of pre-deposit in the waiver application in IA.No.208 of 2019.
2. For a better understanding, running through the facts of the case briefly is essential:
The petitioners are husband and wife and along with their four sons have a group of firms / business entities and had availed loans from the first respondent bank for their different business entities. They are,
(1) M/s.Rathna Stores Private Limited
(2) M/s.Rathna Stores Firm (Partnership)
(3) M/s.Rathna Stores (Sole proprietor)
All the entities were financed by the first respondent bank and the loans were collaterally secured by five properties, namely,
a) Land measuring 6000 sq feet and small commercial building in the name of Rathna Stores Private Limited situated at Plot No.4675, Old No.AA12, Present Door No.87, TS No.118, Naduvakkarai Village, Egmore Ward, Nungambakkam Taluk, Chennai Central District, 2nd Avenue, Anna Nagar, Chennai - 600 040.
b) Land measuring 8034 sq feet and commercial building with ground plus 5 floors totally measuring 30240 sq feet, in the name of Rathna Stores Private Limited situated at TS No.6044/1, 6063/1, 6064/1, T.Nagar Village, Mambalam Ward, Guindy Taluk, Chennai South District, New No.79, Usman Road & No.19, 20 part of Sarojini Street, T.Nagar, Chennai - 600 017.
c) Land measuring 17800 sq feet, in the name of Hotel Sivapriya situated at RS No.845/4, Block No.39, Egmore Village & Ward, Nungambakkam Taluk, Chennai Central District, New No.100, Old No.18, Kennet Lane, Egmore, Chennai - 600 008.
d) Land measuring 3884 sq feet and building ground plus 5 floors measuring 20304 sq feet, in the name of Mr.P.S.Sivaperumal & Mrs.S.Periyaperatti, situated at TS No.7526 part, 7559, 7560, T.Nagar Village, Mambalam Ward, Guindy Taluk, Chennai South District, Door No.78, New No.91, Sir Thyagaraya Road, Chennai - 600 017.
e) Land measuring 40 cents and building thereon measuring 39058 sq feet, in the name of M/s.Hotel Sivapriya Kodaikanal situated at Convent Road Kodaikanal, Dindigul District, Tamilnadu.
out of which, the subject matter of this Writ Petition is the Hotel Sivapriya in Kodaikanal. The total dues from the group payable to the first respondent Bank was to the tune of Rs.45.33 crores as on the date of the issue of demand notice on 22.10.2013 after the accounts became non-performing assets on 21.10.2013. Since all the collateral securities were extended for all the facilities and all the family members were either the principal / co-borrower or the guarantors in all the accounts, the issue of notice under Section 13 (2) of SARFAESI Act on 22.10.2013 and subsequent possession notice on 28.01.2014 were sent and published for all the properties together.
3. However, it appears that the accounts were upgraded after Rs.18.81 crores was remitted by the petitioners by way of sale of the AnnaNagar property and the accounts turned non-performing assets again on 31.03.2015, after which notices under Section 13 (2) of SARFAESI Act were again issued on 20.04.2015 and thereafter a symbolic possession notice under Section 13 (4) of SARFAESI Act was issued on 09.07.2015. Simultaneously, the first respondent Bank also filed an Original Application before Debts Recovery Tribunal II, Chennai in respect of two accounts viz., M/s.Rathna Stores Private Limited and M/s.Rathna Stores F
