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IN THE HIGH COURT OF JUDICATURE AT MADRAS
D.KRISHNAKUMAR, P.B.BALAJI
Chandru Enterprises – Appellant
Versus
Authorized Officer, ICICI Bank Limited – Respondent
JUDGMENT :
D. KRISHNAKUMAR, J.
1. Challenging the sale certificate issued by the first respondent in favour of the third respondent in pursuant to the order passed by the Chief Judicial Magistrate, Chengalpattu dated 14.07.2022 in CMP.No.5208 of 2022, the present writ petition has been filed.
2. Brief facts of the case reads as follows:
2.1. The petitioner is carrying on the business of Man Power Service and the land belonging to the second respondent was leased out to the petitioner and a lease agreement was also executed between the petitioner and the second respondent, which expires on 14.01.2025.
2.2. The second respondent had availed a term loan of Rs.5,32,00,000/- between the years 2011 to 2013, by mortage of properties from the first respondent bank for putting up additional construction. Since the second respondent had defaulted in repayment of loan, the first respondent/bank had initiated proceedings under the SARFAESI Act, 2002 against the mortgaged properties by issuing a demand notice on 18.01.2019 under Section 13 (2) of the SARFAESI Act and symbolic possession was also taken by the first respondent on 05.12.2019. Thereafter e-auction notice was issued on 11.03.2021.
2.3. T
The right of redemption under SARFAESI Act is extinguished after the issuance of a sale certificate, rendering claims by lessees during such proceedings legally unsustainable.
A secured creditor retains rights over a property until actual possession is transferred, despite a sale certificate being issued to an auction buyer, as affirmed by the court.
The bank retains the right to recover debts through mortgaged properties even if the borrower sells the property to a third party, as established under the SARFAESI Act, 2002.
Procedural violations in auction processes under the SARFAESI Act invalidate proceedings, emphasizing the right of redemption and proper valuation of secured assets.
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