IMPORTANT POINT
Setting aside auction sale – Mere typographical error due to inadvertence which has not caused any prejudice to borrowers, that in itself could not be considered to be ground to annul process held by secured creditor.

JUDGMENT :

Rastogi, J.

1. Leave granted.

2. The instant appeal has been preferred at the instance of the auction purchaser (appellant herein) assailing the impugned judgment and order dated 20th November, 2019 passed by the High Court for the State of Telangana at Hyderabad setting aside the e-auction sale held by the respondent Bank (secured creditor) under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter being referred to as the “SARFAESI Act, 2002”).

3. The relevant facts in brief to appreciate the controversy are that respondent nos.1­3 have availed three loan facilities vide Mortgage Loan of Rs.10 lakhs, Cash Credit Loan of Rs.8 lakhs and Car Loan of Rs.8 lakhs from the respondent Bank (secured creditor) after executing necessary security documents. Respondent No.4 herein stood as guarantor and created equitable mortgage over her immovable property as security for due repayment of the said loan amount.

4. After availing the above loan facilities, the respondent borrowers have committed default in repaying the outstanding loan amount and have also failed to pay the interest accrued to the loan accounts from time to time. Finally, the loan accounts have been classified as Non-Performing Assets (NPAs) on 30th September, 2012 and in furtherance, the respondent Bank initiated recovery proceedings under the provisions of the SARFAESI Act, 2002 and issued demand notice dated 15th November, 2012 calling upon the respondent borrowers/guarantor to repay and discharge the outstanding loan amount with interest and costs within 60 days. After following the procedure as contemplated under the provisions of the SARFAESI Act, 2002 and Rules made thereunder, on 14th February, 2013, the respondent Bank published a possession notice in the daily newspapers under Section 13(4) of the SARFAESI Act, 2002 and obtained the order from the District Collector on 23rd June, 2013 to take physical possession of the scheduled property from the respondent borrowers/ guarantor and hand over to the respondent Bank (secured creditor).

5. These proceedings came to be challenged by the respondent borrowers by filing a Securitization Application (SA) before the Debts Recovery Tribunal which finally came to be dismissed by the Tribunal by order dated 12th December, 2014 and it is on record that no appeal was preferred against the order dated 12th December, 2014 passed by the Debts Recovery Tribunal and that became final.

6. After taking possession of the mortgaged property, on 29th November, 2014, the respondent Bank (secured creditor) issued a notice prior to e-auction to the respondent borrowers after obtaining valuation of the subject property from an approved valuer in terms of Rules 8(5) and 8(6) of the Security Interest (Enforcement) Rules, 2002 (hereinafter being referred to as the “Rules, 2002”) calling upon the borrowers/guarantor to repay the outstanding loan amount as demanded. When the respondent borrowers/guarantor failed to respond, the respondent bank proceeded further and issued e-auction sale notice dated 25th February, 2015 fixing the date of auction of the schedule property on 28th March, 2015 and the said notice was widely published in Indian Express (English) and Eenadu (Telugu) daily newspapers dated 26th February, 2015.

7. That the aforesaid e-auction sale notice came to be challenged by the respondent borrowers before the Debts Recovery Tribunal and by an interim order dated 26th March, 2015, the Tribunal directed the respondent Bank (secured creditor) to proceed with the auction sale of the secured asset scheduled on 28th March, 2015 with a further direction not to issue the sale certificate provided the respondent borrowers deposits Rs.6 lakhs within 15 days from the date of the said order. It was made clear that in the event of respondent borrowers fai