IN THE HIGH COURT OF JUDICATURE AT MADRAS
S.M.SUBRAMANIAM, MOHAMMED SHAFFIQ
Lakshmi Homes Private Limited, Represented by its Managing Director – Appellant
Versus
Pachaiyammal Educational Trust, Represented by its Managing Trustee, Mr. S. Vengateswaran, S/o. Sekhar – Respondent
JUDGMENT :
S.M. SUBRAMANIAM, J.
I. Introduction:
The present original side appeal has been instituted to assail the judgment and decree passed in C.S.No.51 of 2024, granting permission to sell Public Trust properties at S.Nos.290/1 to 290/8, 291/1A to 291/9, 292/1 to 292/18, 293/3 to 293/18, 294/1 to 294/22 and 264/8 at Kattagaram Village, Sriperumbudur Taluk, Kancheepuram District to an extent of 23.51 acres for a sum of Rs.16 Crore.
2. Civil Suit has been instituted by the Public Trust and its Trustee under Order VII Rule 1 and Section 92 (f) of Code of Civil Procedure, seeking permission to sell the properties of the Public Trust. No one has been shown as defendant.
II. Background of the Trust:
3. The plaintiff/Trust was founded by Mrs.Saradha Sekhar, via Trust Deed (Document No.74 of 1995 dated 30.10.1995), registered on the file of Joint Sub-Registrar-I, Dharmapuri. Properties were purchased as per the Trust Deed Clauses. After her demise, the present Trustees have taken over the Trust with Supplementary Deeds executed on 28.09.1998, registered as Document No.74 of 1998 and on 11.07.2002 vide Document No.123 of 2002. The present Managing Trustee, Mr.S.Venkateshwaran, took charge on
The court must supervise public auctions of Trust properties without participating as an auctioneer, ensuring adherence to established legal procedures.
The High Court exceeded its supervisory role by participating as an auctioneer in the sale of trust property, which led to annulment of the auction and subsequent orders.
The main legal point established in the judgment is the importance of fair valuation, compliance with statutory provisions, and the need to set aside auction-sales with fundamental procedural errors.
(1) Auction Sale of Land – After public auction is held and highest bid is received and property is sold in a public auction in favour of a highest bidder, such a sale cannot be set aside on the basi....
Confirmed auction sales cannot be set aside for alleged inadequacy of price or lack of publicity without proof of fraud or substantial injury.
The court upheld the auction process under the SARFAESI Act, affirming that auctions must follow statutory requirements and can only be challenged on limited grounds such as fraud or procedural irreg....
(1) Auction sale of mortgaged property – Objective of recovery proceedings is not merely to complete sale but to realise maximum value of secured asset so as to balance interests of creditor and borr....
Auction sales conducted under the Recovery of Debts Due to Banks and Financial Institutions Act must not be disturbed without substantial evidence of irregularity; procedural compliance is paramount.
Auction sales may be set aside if material irregularities influence bidding and cause substantial injury to the applicant.
Material irregularity in auction sale requires proof of substantial injury; mere typographical errors do not suffice.
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