Kerala High Court
M/S Benzer Steels Pvt. Ltd Represented ... vs The Authorized Officer on 20 May, 2024
Author: N.Nagaresh
Bench: N.Nagaresh
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
MONDAY, THE 20TH DAY OF MAY 2024 / 30TH VAISAKHA, 1946
WP(C) NO. 10528 OF 2024
PETITIONERS:
1 M/S BENZER STEELS PVT. LTD
REPRESENTED BY ITS MANAGING DIRECTOR
M.P. BABU (REGD. OFFICE), IX/181 C1,
VENGOOR, VENGOOR-POST, ANGAMALY,
ERNAKULAM DISTRICT, PIN - 683572.
2 M P BABU
AGED 65 YEARS
OCC : BUSINESS, S/O PAILAPPAN M L,
RESIDING AT :- MOONJELY HOUSE,
ANGAMALY POST, ERNAKULAM DISTRICT, PIN-683572.
3 SMT. MOLLY BABU
AGED 55 YEARS
OCC : BUSINESS, W/O M P BABU,
RESIDING AT :- MOONJELY HOUSE,
ANGAMALY POST, ERNAKULAM DISTRICT, PIN-683572.
BY ADVS.
BIJU ANTONY ALOOR
K.P.PRASANTH
HASEEB HASSAN.M
KRISHNASANKAR D.
REBIN VINCENT GRALAN
RESPONDENT:
THE AUTHORIZED OFFICER
STATE BANK OF INDIA,
ASSET RECOVERY MANAGEMENT BRANCH,
S R BUILDING, MG ROAD,
ERNAKULAM DISTRICT, PIN - 682011.
BY ADV.SMT.S.LAKSHMY
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 20.05.2024, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
W.P.(C) No.10528/2024
:2:
N. NAGARESH, J.
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W.P.(C) No.10528 of 2024
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Dated this the 20th day of May, 2024
JUDGMENT
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The 1st petitioner is a Private Limited Company and
petitioners 2 and 3 are Partners thereof. The petitioners have
filed the writ petition seeking to command the respondent-
Bank not to proceed further pursuant to Ext.P5 order of the
Debts Recovery Tribunal.
2. The petitioners state that they availed business loan
and cash credit of ₹50 lakhs on 04.02.2015 from the
respondent-Bank. A property was hypothecated for availing
the loan. Petitioners 2 and 3 stood as guarantors. The
petitioners were also extended with a credit facility of ₹20 lakhs
later. As the petitioners were making repayments promptly,
the Bank accepted and issued a sanctioned letter dated
15.03.2017 for an extended amount of ₹70 lakhs.
3. Due to Covid-19 pandemic and consequential
financial recession, the 1st petitioner-Company failed to
maintain the loan accounts. The Bank thereupon issued
Ext.P4 lawyer notice dated 10.03.2020 for realisation of
₹80,06,881/-. The Bank then filed OA No.248/2020 in the
Debts Recovery Tribunal for realisation of ₹84,21,081.13.
though the petitioners approached the Bank for settling the
loan account, the Bank was not ready.
4. The petitioners filed SA No.307/2022 in the Debts
Recovery Tribunal. The Debts Recovery Tribunal granted an
interim stay subject to payment of ₹16,72,000/- in two
instalments. The petitioners deposited one instalment but
failed to deposit the second instalment. The Bank approached
the Additional Chief Judicial Magistrate's Court, Ernakulam
under Section 14. Physical possession of the secured assets
of the petitioners was taken over by the Bank.
5. The petitioners thereafter filed IA No.1222/2022
seeking to stay further proceedings pursuant to e-auction sale
notices. The Tribunal, however, dismissed the IA as per order
dated 27.06.2022.
6. The petitioners state that the respondent-Bank has
an intention to grab the disputed property for a nominal
amount from the petitioners. The petitioners have been fairly
remitting the EMIs without default. The Bank is attempting to
charge exorbitant amount as interest.
7. The petitioners further state that they require some
more time to settle the amounts and are ready to settle the
outstanding dues. The petitioners are residing in the property
along with parents and children and the attachment
proceedings continue without giving any notice to the
petitioners.
8. The respondent resisted the writ petition filing
counter affidavit. The respondent submitted that the
petitioners defaulted in making repayments and a sum of
₹1,09,28,538.67 was outstanding on the loan accounts on
10.03.2022. Hence, the Bank initiated proceedings under the
SARFAESI Act. The Bank offered a One Time Settlement to
the petitioners and granted time till 21.02.2022 to settle the
loan account. The petitioners, however, failed to clear the
liabilities. The petitioners approached the Debts Recovery
Tribunal filing SA No.307/2022. The Debts Recovery Tribunal
granted an order of stay on condition that the petitioners remit
₹16,72,000/- on or before 27.07.2022 and another sum of
₹16,72,000/- on or before 26.08.2022. The petitioners did not
remit the second instalment.
9. The respondent submitted that the respondent had
issued sale notice on the petitioners by registered post, by e-
mail and by affixture and publication. The respondent further
submitted that the secured asset which is subject matter of the
writ petition was put to sale. The sale was confirmed in favour
of the successful bidder. The sale certificate has been issued
on 28.03.2024 in compliance with the provisions of the
SARFAESI Act and the Security Interest (Enforcement) Rules,
2002. The writ petition is therefore liable to be dismissed.
10. I have heard the learned counsel for the petitioners
and the learned Standing Counsel representing the
respondent.
11. The petitioners have no dispute regarding availing
of the loan and creation of mortgage. The respondent
proceeded against the petitioners under the SARFAESI Act.
Statutory notices were sent to the petitioners. Exts.R1(e) to
R1(l) would show that before selling the property in question,
the respondent had issued sale notice on the petitioners by
registered post with acknowledgment due in the known
address. Notices were sent by e-mail and by affixture and
publication in two leading dailies as required under Rule 8(6)
of the Security Interest (Enforcement) Rules.
12. The respondent states that the secured asset of the
petitioners was put to sale on 15.03.2024 and the sale was
confirmed in favour of Mr. Renji Jose and Mrs. Megha Thampi
residing at Koottunkal House, Chennakunnu PO, Ponkunnam,
Kottayam. Sale Certificate has been issued on 28.03.2024 to
the successful bidders on payment of the entire consideration
of ₹99,50,000/- in compliance of the provisions of the
SARFAESI Act and the Security Interest (Enforcement) Rules,
2002.
13. I find no illegality or irregularity in the proceedings of
the respondent under the SARFAESI Act. The Hon'ble Apex
Court has held in the judgment in Celir LLP v. Bafna Motors
(Mumbai) Private Limited and others [(2024) 2 SCC 1] that it
is the duty of the court to zealously protect the sanctity of any
auction conducted. The courts ought to be loath in interfering
with auctions, otherwise it would frustrate the very object and
purpose behind auctions and deter public confidence and
participation in the same. It is in the larger public interest to
maintain the sanctity of the auction process under the
SARFAESI Act.
14. In the facts and circumstances of the case and in
the absence of any palpable irregularity or illegality in the
SARFAESI proceedings concluded by the respondent, I do not
find any merit in the writ petition.
The writ petition is therefore dismissed.
Sd/-
N. NAGARESH, JUDGE
aks/15.05.2024
APPENDIX OF WP(C) 10528/2024
PETITIONERS' EXHIBITS
Exhibit P1 TRUE COPY OF THE AGREEMENT DATED
04/02/2015.
Exhibit P2 TRUE COPY OF THE SANCTION DATED
09/05/2016.
Exhibit P3 TRUE COPY OF THE SANCTION LETTER DATED
26/06/2019.
Exhibit P4 TRUE COPY OF THE LAWYER NOTICE DATED
10/03/2020.
Exhibit P5 TRUE COPY OF THE ORDER DATED
27/06/2022.
Exhibit P6 TRUE COPY OF THE APPLICATION DATED
30/11/2023.
Exhibit P7 TRUE COPY OF THE E-AUCTION NOTICE DATED
29/01/2024.
RESPONDENT'S EXHIBITS
EXHIBIT (R1) TRUE COPY OF THE INTERIM ORDER IN WPC
NO. 21927/2023 DATED 6/7/2023.
EXHIBIT (R1a) TRUE COPY OF THE JUDGEMENT IN WPC NO.
21927/2023 DATED 7/8/2023.
EXHIBIT(R1b) TRUE COPY OF THE OP(DRT) NO.533/2023
BEFORE THE HONOURABLE HIGH COURT OF
KERALA DATED 12/12/2023.
EXHIBIT (R1c) TRUE COPY OF THE JUDGMENT IN OP (DRT)
NO.533/2023 DATED 02.02.2024.
EXHIBIT (R1d) TRUE COPY OF THE PRIVATE COMPLAINT
DATED 21.12.2023 AND THE RECEIPT ISSUED
BY STATION HOUSE OFFICER, ANGAMALY.
EXHIBIT (R1e) TRUE COPY OF THE SALE NOTICE DATED
29/1/2024.
EXHIBIT (R1f) TRUE COPY OF THE RETURN POSTAL
ACKONOLEDGEMENTS ALONG WITH THE RETURN
POSTAL COVERS ISSUED TO THE
RESPONDENTS.
EXHIBIT (R1g) TRUE COPY OF THE RETURN POSTAL
ACKONOLEDGEMENTS ALONG WITH THE RETURN
POSTAL COVERS ISSUED TO THE
RESPONDENTS.
EXHIBIT (R1h) TRUE COPY OF THE RETURN POSTAL
ACKONOLEDGEMENTS ALONG WITH THE RETURN
POSTAL COVERS ISSUED TO THE
RESPONDENTS.
Exhibit R1(i) TRUE COPY OF THE NOTICE ISSUED TO THE
PETITIONERS BY EMAIL DATED 21/2/2024.
EXHIBIT (R1j) TRUE COPY OF THE PUBLICATION OF SALE
NOTICE IN DEEPIKA DAILY DATED
31/1/2024.
EXHIBIT (R1k) TRUE COPY OF THE PUBLICATION OF SALE
NOTICE IN BUSINESS LINE DAILY
31/1/2024.
Exhibit R1(l) TRUE COPY OF THE PHOTOGRAPHS EVIDENCING
THE AFFIXTURE OF EXHIBIT R1(E).
