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2020 Supreme(Mad) 469
IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. SATHYANARAYANAN, R. HEMALATHA, JJ.
M/s.Navashila Agro Private Limited - Petitioner
Versus
The Debts Recovery Appellate Tribunal, Chennai & Ors. - Respondents
W.P. No. 2881 of 2019 & W.M.P. No. 3138 of 2019
Decided On : 20-02-2020
For the Petitioner: Mr. A.K. Sriram.
For the Respondent: Mr. K.S. Sundar, Mr. R. Ramesh.
Headnote:
Constitution of India, 1950 - Article 226 - Recovery of Debts Due to Banks and Financial Institutions Act, 1993 - SARFAESI Act - Section 13 - Order is concerned and to quash - Equitable jurisdiction - Respondent herein Tea Industries had availed financial assistance credit facilities in the form Limit for sum of Additional Medium Term Loan for sum Lakes and Additional Medium Term Loan for sum of Lakes in all aggregating to sum of Lakes from respondent Bank – Held, In paragraph very same judgment Honble Apex Court has taken note of decision reported in Upper Dab Sugar Mills Delhi Saharanpur Light Railway wherein it has been that when Tribunal has not been conferred with jurisdiction to direct for refund it cannot - Light of fact that exercise of power or jurisdiction Section on part of Tribunal is very limited coupled with factual circumstances narrated above this Court is of considered view that direction issued by Chennai respondent herein in paragraph impugned order warrants interference especially in light of statutory provision Section that once sale is confirmed right of redemption is lost - It is also to be noted at this juncture that except paragraph respondent herein had concurred with findings of Debts Recovery Tribunal at Coimbatore, rendered - Directions given in paragraph impugned order is an error apparent on fact of record and at Chennai respondent herein lacks such power in issuing said directions - Petition allowed
ORDER :
M. SATHYANARAYANAN, J.
PRAYER: Writ petition filed under Article 226 of the Constitution of India praying for issuance of a writ of certiorari calling for the records of the 1st respondent which culminated in the impugned order dated 03.10.2018 in RA [SA] No.163/2017 insofar as the direction in paragraph 13 of the order is concerned and to quash the same.
1. The 3rd respondent in RA[SA] No.163 of 2017 on the file of the Debts Recovery Appellate Tribunal, at Chennai / the 1st respondent herein, is the writ petitioner herein. The petitioner / auction purchaser, aggrieved by the disposal of the said appeal with certain directions, vide impugned order dated 03.10.2018 passed by the 1st respondent herein, had filed the present writ petition.
2. The 2nd respondent herein, viz., Priya Tea Industries, had availed financial assistance/credit facilities in the form of OCC Limit for a sum of Rs.25 Lakhs, Additional Medium Term Loan-I for a sum of Rs.21 Lakhs and the Additional Medium Term Loan-II for a sum of Rs.14 Lakhs, in all, aggregating to a sum of Rs.60 Lakhs from the 5th respondent / Bank.
3. The Managing Partner of the 2nd respondent, viz., Mr. A. Chandran, had created equitable mortgage in respect of the land and building admeasuring to an extent of 2 Acres situate at RS.No.1310, 1379/1 to 3 [Part] of Kothagiri Village, Nilgiris District and also the land admeasuring to an extent of 6 cents along with the superstructure, bearing No.27/94A, Kothagiri Village, Nilgiris District.
4. According to the 5th respondent / Bank, the 2nd respondent herein had committed default in repayment of the dues and therefore, the Account has been classified as "Non Performing Assets" [NPA] on 30.09.2005. The 5th respondent / Bank had initiated proceedings under the Securitisation And Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [in short "SARFAESI Act"] by issuing a Demand Notice under Section 13[2] of the SARFAESI Act on 28.10.2005 and the respondents 2 and 3 herein had failed to comply with the terms of the said Notice and therefore, the 4th respondent / Bank had issued Possession Notice under Section 13[4] of the SARFAESI Act on 05.05.2006 and the symbolic possession of the secured assets was also taken.
5. The 2nd respondent herein filed WP.No.16355 of 2006 challenging the Possession Notice dated 05.05.2006 and it was entertained and initially an interim order was granted. The said writ petition was dismissed subsequently and the 4th respondent / Bank had taken physical possession of the secured assets on 26.10.2007. The secured assets were brought for sale on 27.12.2007 and it was preceded by a Sale Notice dated 19.11.2007.
6. The borrowers / respondents 2 and 3 herein, made a challenge to the said proceedings by filing Sponsoring Authority.No.142 of 2007 on the file of the Debts Recovery Tribunal, at Coimbatore and pending disposal of the appeal, filed IA.No.2605 of 2007 praying for the stay of the sale. A conditional interim order was passed and the borrowers/respondents 2 and 3 did not comply with the said order and therefore, the sale of the secured assets was conducted on 27.12.2007 and for want of bidders, the sale did not fructify.
7. The 4th respondent / Bank once again brought the secured assets for sale on 02.02.2008 and challenging the same, the 2nd respondent herein filed W.P.No.3800 of 2008 and it was entertained and an interim order was passed by directing the Bank not to confirm the sale. The said writ petition was dismissed on 05.03.2008 and challenging the same, the 2nd respondent herein filed WA.No.476 of 2008 and it was also dismissed on 17.04.2008 by granting liberty to the 2nd respondent herein to avail the appellate remedy under section 17 of the SARFAESI Act. The 2nd respondent has filed an appeal in SA.No.100 of 2008 on the file of the Debts Recovery Tribunal at Coimbatore.
8. The petitioner herein had participated in the auction sale and was declared as the successful bidder and upon t
