The court emphasized timely consideration of stay applications in debt recovery proceedings, highlighting that borrowers must demonstrate equity through substantial loan payments.

JUDGMENT

1. This OP(DRT) is filed by the borrowers seeking direction to the Debt Recovery Tribunal to allow Ext.P10/ I.A No. 4604/2024 in S.A No.481/2024 filed by them. The prayer in Ext.P10 is to stay all further proceedings pursuant to the Sale Proclamation Notice. Ext.P8 is the Sale Proclamation Notice dated 16.11.2024 issued by the respondent proposing to conduct e-auction on 30.12.2024 from 10.30 AM.

2. I heard Senior Counsel Smt.Liz Mathew instructed by Sri.Binoy Vasudevan and the learned Standing Counsel for the respondent Bank Sri.Sunil Shanker.

3. The learned Senior Counsel pointed out that Ext.P9 Application for amendment to incorporate the challenge against the Sale Proclamation and Ext.P10 Application for stay were filed on 11.12.2024, the Tribunal considered I.A.No.4604/2024 on 18.12.2024, but it was adjourned to 30.12.2024, the day on which the auction is posted. If Ext.P10 I.A is dismissed and the auction is conducted on the same day, the petitioners will be remedy less. The petitioners have valid contentions in the said I.As. Sale of the entire secured asset is not required for realizing the mortgage debt. The reserve price fixed as per Ext.P8 Auction Notice is Rs.3,34,27,000/- for an extent of Rs.22.26 Ares of land in Payyannur Municipality and the residential building therein, whereas registered Sale Deed produced along with Ext.P12 would show that an extent of 27.75 Ares in the very same locality is sold for an amount of Rs.12,84,37,500/-.

4. The learned Standing Counsel for the respondent strongly opposed the prayers in the Original Petition by inviting my attention to a series of litigations initiated at the instance of the borrowers to stall and protract the proceedings. The borrowers have not made any substantial payment towards the loan. Huge amounts are outstanding. The property covered by the Sale Deed is not comparable with the secured asset. The similarities and potentialities of the properties are not before the Court. Hence the said document not reliable.

5. It is revealed from Ext.P11 proceedings that the Debt Recovery Tribunal considered and posted Ext.P10 Application to 30.12.2024, the day on which the auction is to be conducted. I strongly deprecate the practice adopted by the Debt Recovery Tribunal in posting the Application for stay on the day on which the auction is to be conducted. The Debt Recovery Tribunal should have considered Ext.P10 Application before conducting the auction, especially when the Application came up before it on 18.12.2024. At the same time, I find force in the contention of the learned Standing Counsel for the Bank that the petitioners have no equity since they have not paid any substantial payment towards the loan. Even though Ext.P8 E- auction Notice was published on 16.11.2024, the above Applications are filed only on 11.12.2024.

6. Taking into consideration of the totality of the above facts, I dispose of this Original Petition directing the Debt Recovery Tribunal – I, Ernakulam to dispose of Exts.P9 and P10 Applications within a period of one month from the date of receipt of a copy of this judgment. The auction proposed as per Ext.P8 Notice shall stand stayed till the disposal of Exts.P9 and P10 Applications subject to the condition that the petitioners shall pay an amount of Rs.25,00,000/- (Rupees Twenty Five Lakhs only) to the respondent Bank before the time fixed for auction on 30.12.2024.

7. In case the petitioners do not pay the aforesaid amount of Rs.25,00,000/- (Rupees Twenty Five Lakhs only) before the time fixed for auction on 30.12.2024, the respondent Bank is free to proceed with the auction as per Ext.P8.