A secured creditor, acting as a trustee, must secure the best possible value for a mortgaged asset; mere intimation of a reduced reserve price to a borrower does not constitute the mandatory 'consent' required under R. 9(2) of the Security Interest (Enforcement) Rules, 2002.

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO PASS AN ORDER SETTING ASIDE THE IMPUGNED ORDER DATED 20.08.2025 PASSED BY THE HON’BLE DRAT, CHENNAI IN R.A. No. 133 OF 2013 (ANNEXURE-A) UPHOLDING THE ORDER PASSED BY THE HONBLE DRT, BENGALURU IN S.A. No. 465/2012 AND THEREBY, UPHOLD THE SALE CONDUCTED BY THE BANK AND THE SALE CERTIFICATE DATED 29.10.2011 ISSUED IN FAVOUR OF THIS PETITIONER/AUCTION PURCHASER.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE D K SINGH

and

HON'BLE MR. JUSTICE T.M.NADAF

ORAL ORDER

(PER: HON'BLE MR. JUSTICE T.M.NADAF)

This Writ Petition is filed invoking the extraordinary jurisdiction of this Court under Articles 226 and 227 of the Constitution of India, by the auction purchaser assailing the order dated 20.08.2025 passed by the Debt Recovery Appellate Tribunal¹1 the DRAT, for short, Chennai in R.A.No.133/2013 (Annexure-A).

2. The DRAT under the impugned order, dismissed the appeal filed by the Bank, upholding the order passed by the Debt Recovery Tribunal, Bengaluru²2 the DRT, for short dated 21.10.2013 in S.A No.465/2012.

3. Facts germane to file this Writ Petition are as under:

3.1 As per the petitioner, respondents 1 and 2 herein are the borrowers. The proceedings contemplated under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002³3 the SARFAESI Act, for short was initiated against them, which has ended in auctioning of the property in favor of the petitioner.

3.2 Respondents 1 and 2 - borrowers approached the DRT, Bengaluru in S.A No.465/2012 calling in question the auction sale in favor of the petitioner herein.

3.3 The DRT, after contest, allowed the application and held that the Bank has not replied to the representation submitted by the borrowers on 05.05.2010 against the notice issued under Section 13(2) of the SARFAESI Act.

3.4 Further, the Possession Notice & Sale Notice were not served on the borrowers and mainly on the ground that the property were sold for excess than what is required to meet the debt due and only single bidder participated in the auction and the properties were undervalued. With this, the DRT allowed the application filed by the borrowers which was assailed by the Bank before the DRAT.

3.5 The DRAT upon consideration of rival submissions has observed that no valuation report was produced before the DRT. The reserve price was fixed as Rs.70,00,000/-, however in the impugned Sale Notice, the reserve price was fixed as Rs.50,00,000/. The valuation was fixed for both land and the building. The land was valued at Rs.35,00,000/- per acre and the building was valued at Rs.3,20,000/-, totaling to Rs.73,20,000/- as per the valuation of the Bank.

3.6 The property in question is fetching more value i.e., in crores of rupees, but sold to a paltry sum i.e., lesser price of Rs.50,50,000/- that too for loan of Rs.11,00,000/- and odd.

3.7 The DRAT observed that the Bank has produced Valuation Report obtained prior to sale and reserved price fixed at first sale was reduced to Rs.50,00,000/- in the impugned sale notice after intimation the reduction of price to the borrowers, as per the contention of the Bank. However, to the query of the DRAT as to why those documents relating to sale of property had not been produced before the DRT, learned counsel for the appellant - Bank submitted that there were no pleadings before the DRT in the SA at all with regard to not sending reply under Section 13(2) notice by the Bank under Section 13(3A), challenge to valuation report, excessive execution by sale of both properties, single bid, etc. However, what was pleaded was only possession and sale notices wer