M/S Unicorn Technologies And 4 ... vs Authorized Officer Indian Bank ...
2022 Latest Caselaw 3035 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

Court No. - 3
 

 
Case :- SPECIAL APPEAL No. - 401 of 2021
 

 
Appellant :- M/S Unicorn Technologies And 4 Others
 
Respondent :- Authorized Officer Indian Bank And 2 Others
 
Counsel for Appellant :- Dhirendra Narain Awasthi
 
Counsel for Respondent :- Pashupati Nath Tripathi
 

 
Hon'ble Surya Prakash Kesarwani,J.

Hon'ble Jayant Banerji,J.

1. Heard Sri D.N. Awasthi, learned counsel for the appellants and Sri P.N. Tripathi, learned counsel for the respondent no.1 - Bank.

2. This Special Appeal has been filed praying to set aside the judgment dated 08.11.2021 in Writ C No.28844 of 2021 (M/S Unicorn Technologies And 4 Others Vs. Authorized Officer Indian Bank And 2 Other), passed by the learned Single Judge.

3. The case set up by the appellant is that since sale deed has not yet been executed on auction of the secured assets and the appellant is ready and willing to deposit the amount as required under Section 13(8) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI )Act, 2002, therefore, the entire proceedings for sale deserves to be set aside.

4. Learned counsel for the respondent No.1/Bank supports the impugned judgment.

5. We find that the auction sale took place on 08.05.2008. The sale certificate was issued on 26.05.2008. Thereafter the respondent - Bank filed O.A. for balance amount after sale of property which was decreed on 22.10.2010. No proceedings was initiated by the petitioners before the Debt Recovery Tribunal challenging the action of the Bank. It was very belatedly in the year 2016, the appellant - petitioner filed S.A. No.97 of 2016 which was dismissed by the Debt Recovery Tribunal by judgment and order dated 30.04.2016. Against the said order dated 30.04.2016, the appellant - petitioner filed an appeal before the appellate authority which was dismissed by order dated 23.07.2018, which was challenged by the appellant - petitioner in writ petition and the writ petition was dismissed on 27.11.2018. Thereafter the appellant - petitioner filed SLP before Hon'ble Supreme Court which was dismissed on 25.01.2019. Physical possession has been handed over to the auction purchaser on 04.01.2019. Thereafter, the appellant - petitioner filed an application for redemption which was rejected by the Debt Recovery Tribunal, Allahabad against which an appeal No.12 of 2021 was filed before the Debt Recovery Tribunal, Allahabad which was dismissed by order dated 27.09.2021. Thereafter the appellant - petitioner has filed Writ C No.28844 of 2021, which has been dismissed by the impugned judgment dated 08.11.2021. Aggrieved with the said judgment, the appellant has filed the present Special Appeal.

6. We have carefully considered the submissions of learned counsels for the parties and also carefully perused the impugned judgment. In paragraphs 9 to 16 of the impugned judgment, learned Single Judge has considered all relevant facts as well the provisions of Section 13(8) of the SARFAESI Act, 2002, providing for redemption and came to the conclusions as under :-

"9. Before proceeding to decide the controversy in hand, a glance of Section 13(8) is necessary, which is extracted hereasunder:-

"13(8). Where the amount of dues of the secured creditor together with all costs, charges and expenses incurred by him is tendered to the secured creditor at any time before the date of publication of notice for public auction or inviting quotations or tender from public or private treaty for transfer by way of lease, assignment or sale of the secured assets,-

(i) the secured assets shall not be transferred by way of lease assignment or sale by the secured creditor; and

(ii) in case, any step has been taken by the secured creditor for transfer by way of lease or assignment or sale of the assets before tendering of such amount under this sub-section, no further step shall be taken by such secured creditor for transfer by way of lease or assignment or sale of such secured assets.] "

10. From reading of sub-section (8) of Section 13 of SARFAESI Act, it is clear that in case debtor deposits with the secured creditor dues together with all costs, charges and expenses incurred by secured creditor at any time before the date fixed for sale or transfer, the secured asset shall not be sold or transferred by secured creditor, and no further steps shall be taken by him for transfer or sale of the secured asset. The right of mortgagor to redeem the property survives until there has been a transfer of the mortgagor's interest by a registered instrument of sale. Applying this principle, Apex Court in case of Mathew Varghese v. M. Amritha Kumar, (2014) 5 SCC 610 held as under:-

"39. When we apply the above principles stated with reference to Section 60 of the T.P. Act in respect of a secured interest in a secured asset in favour of the secured creditor under the provisions of the SARFAESI Act and the relevant Rules applicable, under Section 13(1), a free hand is given to a secured creditor to resort to a sale without the intervention of the Court or Tribunal. However, under Section 13(8), it is clearly stipulated that the mortgagor, i.e. the borrower, who is otherwise called as a debtor, retains his full right to redeem the property by tendering all the dues to the secured creditor at any time before the date fixed for sale or transfer. Under Sub-section (8) of Section 13, as noted earlier, the secured asset should not be sold or transferred by the secured creditor when such tender is made by the borrower at the last moment before the sale or transfer. The said Sub-section also states that no further step should be taken by the secured creditor for transfer or sale of that secured asset. We find no reason to state that the principles laid down with reference to Section 60 of the T.P. Act, which is general in nature in respect of all mortgages, can have no application in respect of a secured interest in a secured asset created in favour of a secured creditor, as all the above-stated principles apply in all fours in respect of a transaction as between the debtor and secured creditor under the provisions of the SARFAESI Act"."

11. Relying on the said judgment in Dwarika Prasad (supra), Apex Court held that statute mandates that it is only where the dues of secured creditor are tendered together with costs, charges and expenses before date fixed for sale or transfer that the secured asset is not to be sold or transferred. As in the said case, entire amount was not  deposited within the time, the court refused to invoke the provisions of Section 13(8) and held that right to redemption stood extinguished on the execution of registered sale deed.

12. Coming to present case, undoubtedly the auction sale took place on 08.05.2008 and sale certificate was issued on 26.05.2008. Thereafter, OA of the Bank for balance amount after sale of property was decreed on 22.12.2010. Till this stage, no proceedings were initiated by petitioners before Tribunal challenging the action of the Bank. It was in the year 2016 that S.A. No. 97 of 2016 was filed which was dismissed vide judgment and order dated 30.04.2016. The appeal was thereafter dismissed on 23.07.2018 and the writ petition filed before this Court was also dismissed on 27.11.2018 and thereafter the Apex Court dismissed the Special Leave Petition on 25.01.2019.

13. The actual physical possession was handed over on 04.01.2019, and the application for redemption being filed subsequently relying upon the observation of this Court was rightly rejected by Debts Recovery Tribunal as well as the Appellate Tribunal as the matter stood concluded on the issuance of sale certificate as well as the physical possession being handed over to auction purchaser.

14. The right of redemption was only available to petitioners before sale took place or the assets were transferred to auction purchaser. In the present case, the sale had already taken place in the year 2008 and sale certificate having been issued on 26.05.2008 and actual physical possession having been handed over on 04.01.2019, no question arises for entertaining the application for redemption filed under sub-section (8) of Section 13. The statutory provision mandates for entertainment of application only in case the entire dues along with costs, charges and expenses are tendered before the date of sale or transfer, as in the present case, both the sale and transfer having already taken place, no question arises for entertaining the redemption application.

15. Considering the facts and circumstances of the case, I find that the Debts Recovery Tribunal had rightly proceeded in rejecting the application for redemption of the property of petitioners.

16. No interference is required in the order impugned. Writ petition fails and is hereby dismissed."

7. We do not find any illegality in the findings recorded by the learned Single Judge. The Special Appeal has no merit and is, therefore, dismissed.

Order Date :- 16.5.2022/vkg