The court established that failure to accurately describe property in auction notices violated statutory requirements, impacting fair participation and optimal sale price.

ORDER

1. This Appeal is filed under Section 18 (1) of SARFAESI Act, 2002 , challenging the final order passed by the Learned Presiding Officer, DRT - II, Chennai, in TSA 182/2023 dated 07.07.2023.

2. Appellant is a borrower, the 1st Respondent is a Secured Creditor and 2nd Respondent is the Auction Purchaser. The Appellant filed TSA 182/2023 against the measures taken under SARFAESI Act, 2002 , with a prayer to set aside the Sale Notice dated 01.10.2021 fixing the auction sale on 25.10.2021.

3. On considering the materials produced before the Tribunal, Learned Presiding Officer, DRT–II, Chennai, found that the measures taken by the 1st Respondent Institution were in accordance with the statute, and in view of the same, dismissed TSA 182/2023, and hence, this Appeal has been filed by the Appellant.

4. Learned Senior Counsel, Mr. E. Om Prakash, appearing for Appellant submitted that a Sale Notice dated 01.10.2021 was issued for the recovery of a sum of Rs.18,51,748/- fixing the sale on 25.10.2021. The reserve price fixed for the property was Rs.40 Lakhs. The description of the property refers to only the land admeasuring 1890 sq. ft., and for more information, the description referred in the Title Deed of the Appellant, i.e., the Sale Deed bearing No.6286/2013 has been referred to. The loan was for the purpose of construction of an independent house, which is evident from the loan application of the Appellant. In the sanction letter issued by the Respondent Institution on 25.07.2013, Appellant was sanctioned a sum of Rs.15 Lakhs for the purpose of construction of house on the land.

4.1 In the absence of description of the superstructure i.e., Ground + Two Floor building in the Sale Notice, the prospective Auction Purchasers were not given correct and accurate description of the property which deprived many bidders to participate in the auction and engage in a competitive bidding. The upset price should have been fixed at more than Rs.40 Lakhs. The amount fixed at upset price, does not reflect the correct value of the property. The 25% of EMD on the bid amount should have been deposited on the date of sale, but that was not properly complied with. It is also submitted that no appropriate service of notices were effected in the measures taken under Section 13 of the SARFAESI Act, 2002 . When a statute requires a particular action to be done in a particular manner, it ought to have been done in a particular manner. It is mandatory on the part of the Bank to take measures strictly in compliance with the provisions of the Act and Rules. When that had not happened, necessarily measures taken have to fail.

5. It is further submitted that when a Secured Creditor has the power, without intervention of the Court or Tribunal, to enforce against any security interest, it is required that measures are taken in tune with the provisions of the Act. Rule 8(5) requires that the Authorised Officer shall obtain valuation of the property from an approved valuer, in consultation with the Secured Creditor to fix the reserve price of the property which is intended to be sold. As per Rule 8 [7 (a) and (f)], the Sale Notice should consists of description of the immovable property to be sold including the details of the encumbrances known to the Secured Creditor and any other terms and conditions,