The delay in filing a securitization application must be justified, and the auction sale process must comply with the relevant rules and be legally valid.

V.K. Mathur, Chairperson.

The present appeal has been preferred by the Appellants-Borrowers under Section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the 'SRFAESI Act') against the order dated 27th April 2015 passed by the learned DRT, Allahabad wherein the Securitization Application No. 423/2014 filed by the Appellants was dismissed on the ground of delay.

2. The brief facts of the present case are that the present Appellants were sanctioned a term loan of Rs. 3.00 lacs by the Respondent-Bank for business. The Respondent-Bank had issued a demand notice dated 6th November, 2012 too the Appellants-Borrowers under Section 13(2) of the SRFAESI Act for a sum of Rs. 4,83,655/- plus interest. Therefore, the possession notice under Section 13(4) of the SRFAESI Act was issued by the Bank on 29th January, 2013. It was further stated that the sale notice was issued to the Appellant on 8th July, 2014 by the Respondent-Bank and the same was published in two newspapers scheduling the auction of the property in question on 13th August, 2014.

3. The Appellants preferred a Writ Petition No. 50108/2014 before the Hon'ble High Court, Allahabad challenging the sale notice dated 8th July, 2014 which was dismissed as withdrawn on 17th September, 2014 by the Hon'ble High Court.

4. It was further stated that the said writ petition filed by the Appellants was withdrawn by the Counsel but the same was not communicated to the Appellants by the Counsel.

5. It was further averred that the Appellants had received a letter dated 29th August, 2014 from the Respondent-Bank wherein it was stated that the property in question have been sold for a sum of Rs. 8.19 lacs. Thereafter, the Appellants contacted the office of the Respondents-Bank to get the particulars/papers regarding the auction sale but the same was not provided by the Respondent-Bank.

6. It is further stated that under the RTI the Appellants were informed vide letter dated 31st October, 2014 that the property has been sold to the Respondent No. 3 for a sum of Rs. 8.19 lacs and the sale certificate has been issued on 26th August, 2014. It is further stated that the Respondent-Bank had not provided any information with regard to the sale consideration and as such the certified copy of the registered sale certificate was received by the Appellants on 20th November, 2014 from the Sub-Registrar-III, Kanpur Nagar.

7. The Appellant No.1 after receiving the requisite papers on 20th November, 2014 met his Counsel on 22nd November, 2014 for filing the securitization application and for want of money the Appellant No. 1 returned to Kanpur and after arranging the money, he again came to Allahabad on 9th December, 2014 and filed the securitization application No. 423 of 2014 on 11th December, 2014 before the DRT, Allahabad. The Tribunal below vide impugned order dated 27th April, 2015 dismissed the Securitisation Application on the ground of delay. Being aggrieved by the said impugned order, the Appellants have preferred the present appeal under Section 18 of the SRFAESI Act, 2002.

8. The learned Counsel for the Appellants Borrowers submitted that the learned DRT has erred in dismissing the securitization application of the Appellants on the ground of delay. It was contended that the Appellants had explained the delay. It was also submitted that on account of non-compliance of Rules 8 and 9 of the Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as 'Rules',) the auction sale of the mortgaged property in favour of the Respondent No. 3 by the Respondent-Bank be set aside. It was averred that the Respondent-Bank had auctioned the property at an inadequate price. It was prayed that the impugned order dated 27th April, 2015 cannot be sustained and the auction sale of the mortgaged property be set aside.

9. The learned Counsel for the Appellants placed reliance in the case of Himalayan Coop. Group Hous