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P. NAVEEN RAO, NAGESH BHEEMAPAKA
Vinayak steels Limited – Appellant
Versus
Om Vishnu Pipes Pvt. Ltd. – Respondent
ORDER :
P.Naveen Rao, J.
These two writ petitions are filed challenging the order of Debts Recovery Tribunal-II at Hyderabad (for short ‘the Tribunal’) dated 10.07.2018 passed in S.A.No.32 of 2017.
2. Briefly noted, to the extent relevant, the facts are as under:
The 1st respondent borrowed money from the State Bank of India who is the petitioner in W.P.No.28947 of 2018. Holding that the borrower defaulted in repayment of loan, the Bank declared the said loan account as Non-Performing Asset and has taken recourse to the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the SARFAESI Act’). At the time of obtaining loan, the borrower mortgaged certain properties as security. Since the amount due was not repaid by the borrower, the Bank has issued notice dated 23.09.2016 under Rule 8(6) of the Security Interest (Enforcement) Rules (for brevity ‘the Rules’) informing the borrower that the secured asset would be sold to recover the amounts due, if the amount due is not repaid by him. On 23.10.2016 a notice
Secured creditors must adhere to proper notice and valuation requirements per the SARFAESI Act, as failure to do so invalidates asset sales.
Point of Law - Rule 15 of Schedule II Part I of the Income Tax Act, 1961, in the first place it will have to be stated that a reading of the said Rule does not in any way conflict with either Section....
The main legal point established in the judgment is that the right of redemption of the mortgaged property exists until the date of publication of notice for public auction, and the failure to exerci....
The court established that strict adherence to notice requirements under the Securitization Act is essential to protect a borrower's right of redemption.
Compliance with statutory notice requirements is imperative in mortgage auctions; failures may invalidate the sale, preserving the mortgagor's right of redemption until formal sale registration.
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