Madras High Court
S.Sushil Kumar vs The Authorised Officer & on 12 July, 2021
W.P.No.23913 of 2019
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 12.07.2021
CORAM :
THE HON'BLE MR.SANJIB BANERJEE, CHIEF JUSTICE
AND
THE HON'BLE MR.JUSTICE SENTHILKUMAR RAMAMOORTHY
W.P.No.23913 of 2019
1. S.Sushil Kumar
2. S.Lalitha
3. A.Kalpana
4. S.Pushpa
5. A.Latha
6. S.Santhosh
7. V.Kavitha .. Petitioners
Vs.
1. The Authorised Officer &
Chief Manager
Indian Bank ARM Branch-II
55, Ethiraj Salai
Wellington Estate, 4th Floor
Chennai 600 008.
2. M.Subramaniane
3. The Registrar
Debts Recovery Appellate Tribunal
4th Floor, Indian Bank Circle Office
No.55, Ethiraj Salai
Chennai 8. .. Respondents
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W.P.No.23913 of 2019
Prayer: Petition filed under Article 226 of the Constitution of India for
issuance of a Writ of Certiorarified Mandamus calling for the records of
the third respondent comprised in order dated 30.04.2019 passed in
M.A.(S.A) No.124 of 2019, quash the same by allowing S.A.No.118 of
2010 and consequently direct the first respondent to restore
possession of the property comprised in Door Nos.218 to 221,
Kamarajar Street, Survey No.362/B, 34, A1, A1, A1, A1, A1, 81.06
Villupuram Town, land admeasuring about 5733 sq.ft. and constructed
area of 24194 sq.ft. to petitioners.
For Petitioners : Mr.S.Ramesh
For Respondents : Mr.Jayesh B.Dolia
For M/s. Aiyar & Dolia
for respondent-1
Mr.Om Prakash, S.C.
For Mr.Ilaiyarajakumar
For M/s. Ramalingam Associates
for respondent-2
ORDER
(Made by the Hon'ble Chief Justice)
This is another case of a set of borrowers dragging the matter
endlessly in the hope that the debt will just vanish.
2. A many splendoured legal presentation is made with emphasis
on the mandatory nature of the pre-conditions to be followed before a
mortgage sale is conducted under the Transfer of Property Act and the
indispensability of notices and due publication thereof before a sale is
conducted under the Securitisation and Reconstruction of Financial
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W.P.No.23913 of 2019
Assets and Enforcement of Security Interest Act, 2002. The immediate
challenge is to an order passed by the Debt Recovery Appellate
Tribunal on April 30, 2019 arising out of an order rejecting a
restoration application upon the dismissal of default of a petition under
Section 17 of the Act.
3. The facts are not much in dispute, though the conduct of the
petitioners and, indeed, even that of the concerned secured creditor,
Indian Bank, leave a lot to be desired. More often than not when
nationalised banks seek to recover dues, there are several loopholes
which are deliberately designed or accidentally placed for the borrower
to get a toe-hold. In this case, the main plank of the petitioners'
argument is that a sale notice was issued to a dead man despite
previous intimation by the heirs of the deceased borrower that the
borrower had expired. It boils down to the casual approach of a bank
official and the colossal waste of public funds as a consequence with
little or no accountability in such regard. The only justification on the
part of the bank is that it may have been a bona fide mistake; though
a wee bit of diligence may not have been left any room for the
petitioners to question the measures taken by the secured creditor to
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W.P.No.23913 of 2019
realise its dues. More than a decade has been spent between one
adjudicatory authority and another because of the apparent negligence
of an official or of a bank. It must also be recorded that it has not been
considered necessary at this stage to ascertain the veracity of the
petitioners' contention that notice of the death of the original borrower
was issued to the secured creditor.
4. The sale was conducted on February 15, 2010 pursuant to a
notice dated January 11, 2010 which even the first petitioner admits to
have received. The first petitioner had executed a personal guarantee
in connection with the first petitioner's father having obtained the
credit facilities. The father had furnished an immovable property by
way of security. The petitioners claim that they had issued a notice to
the bank in 2008 informing it that the borrower had died; but the bank
proceeded to issue subsequent notices in the name of the deceased
person.
5. There is equally no dispute that the first petitioner has a
commonality of interests with the other petitioners, who are the sisters
of the first petitioner. The common father of all the petitioners was the
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W.P.No.23913 of 2019
original borrower. The petition proceeds on the basis that the original
borrower may have died intestate and all the petitioners are the joint
heirs of the estate of the original borrower.
6. Three main grounds were urged before the Debts Recovery
Tribunal in proceedings under Section 17 of the Act of 2002. It was
asserted by the petitioners that despite the immovable property being
valued at Rs.1.84 crore nearly six months before the sale was
conducted, the sale notice of January 11, 2010 indicated a reserve
price of Rs.1,30,10,999/- and the property was sold at the auction
conducted on February 15, 2010 for a paltry Rs.1,31,20,000/-. The
second ground canvassed was that the sale notice was not published in
any vernacular newspaper and, as such, better claims could not be
received and a rather insubstantial bid was received and the property
sold without waiting to search for or obtain a better price for the
property. The third ground taken was, of course, that no notice had
been issued to the petitioners other than the first petitioner; and that
too, to the first petitioner as guarantor and not as one of the heirs of
the original principal debtor.
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W.P.No.23913 of 2019
7. The petitioners complain that the matter was taken up before
the jurisdictional Debts Recovery Tribunal on 30 occasions and on 29
occasions, the petitioners were represented, but on one of the days on
or about September 6, 2012 when counsel for the petitioners was not
present, because there was a change in vakalatnama and the previous
clerk had taken down an erroneous date, the matter was dismissed
and even the merits were addressed while dismissing the challenge to
the sale. The petitioners complain that upon restoration proceedings
being filed within ten days of the order of dismissal, the matter was re-
heard and copious notes of arguments were submitted; but, the
Tribunal refused to recall the exparte order of dismissal and
pronounced the order more than two years after reserving the
judgment.
8. According to the petitioners, the Debt Recovery Appellate
Tribunal heard the matter, both on the aspect of the restoration
application and on the merits of the matter and, despite holding that
the restoration application had been rightly rejected, dealt with the
merits of the matter to demonstrate that no prejudice had been
suffered by the petitioners herein in their challenge to the sale notice
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W.P.No.23913 of 2019
and the measures adopted by the secured creditor being rejected. It is
such order of the Appellate Tribunal which is questioned in the writ
petition filed in the year 2019, which is taken up for consideration in
right earnest for the first time today.
9. The petitioner refers to a judgment of the Supreme Court
reported at 2014 (5) SCC 610 (Mathew Varghese v. M.Amritha Kumar)
for the proposition that Rules 8 and 9 of the Security Interest
(Enforcement) Rules, 2002 are mandatory and due notice in
accordance therewith must be issued.
10. In that case, the matter that fell for the Supreme Court's
consideration involved the subsequent sale of a secured asset without
further notice and the failure to publish any advertisement in the
vernacular language. In the present case, it is asserted by the
respondent bank that due publication of the notice for sale had been
made in both English and vernacular papers. The secured creditor says
that the first petitioner was served the sale notice and the auction was
duly held in terms of such notice.
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W.P.No.23913 of 2019
11. The first petitioner, as noticed above, is the brother of six
other petitioners. The brother and the several sisters challenged the
measures taken by the secured creditor in proceedings under Section
17 of the Act of 2002 by filing a common petition. There was no inter
se feud between the brother and the sisters. If such is the case and it
is the admitted position that the first petitioner had due notice of the
sale notice dated March 11, 2010, there is little merit in the
petitioners' assertion that the heirs of the deceased borrower had not
been informed for them to exercise their right of redemption before
the mortgage was enforced.
12. As to the valuation of the property, there is no doubt that
the bank had conducted an exercise several months before the sale
notice was published and the value of the property was indicated to be
about Rs.1.84 crore. However, when a property is sold in distress or
by way of a court sale, there is always a depression in value and
barring the stray exception, it can scarcely be accepted that the actual
price would be offered in court or before a tribunal, primarily because
there is no finality to any sale conducted by a court or other
adjudicatory body and luxury litigations as the present one continue to
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W.P.No.23913 of 2019
be filed which leave the sales unconfirmed for years together. There is
no merit in the ground that the sale notice was not published in any
vernacular daily, particularly since the secured creditor asserts that the
notice was duly published in a vernacular daily and the secured
creditor claims to have referred to the same by way of an affidavit filed
in course of the Debts Recovery Tribunal proceedings.
13. The petitioners refer to the comment by the Debt Recovery
Appellate Tribunal in the appellate order impugned herein that it was
absurd to commence or continue the proceedings against a dead man
by the relevant bank. Seen in isolation, the argument appears to be
attractive. However, when seen in the context that the son of the
borrower had due notice and the son is one of the heirs of the
borrower and does not have any apparent conflict with his sisters who
had joined him in proceedings under Section 17 of the Act of 2002, it
is not a fit ground to entertain the writ petition to question the
concurrent orders of dismissal passed by statutory adjudicatory
authorities. It is the same underlying thought expressed by the Debts
Recovery Tribunal that has weighed with the Debt Recovery Appellate
Tribunal.
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W.P.No.23913 of 2019
14. It must be remembered that the power of judicial review
exercised in this extraordinary jurisdiction is not akin to appellate
authority. All that the supervision as to the procedural due process or
even substantive due process in the present context requires is to
ascertain whether the adjudicatory authority had adopted a fair and
process of adjudication by affording a reasonable opportunity to the
petitioners to be represented and rendered a cogent decision on the
grounds that were asserted by the petitioners herein. On such tests,
the judgment and order impugned dated April 30, 2019 passed by the
Appellate Tribunal does not call for any interference. There also does
not appear to be any undue prejudice occasioned to the petitioners or
any of them as a result of the alleged mistake, if any, in issuing the
sale notice in the name of the dead borrower and not to the heirs of
such borrower. As to the valuation, as long as the reserve price was
met, the petitioners can have no grievance since the first petitioner
had due notice of the reserve price and could have carried a buyer
with a higher bid or even bid for himself at the reserve price and
obtained the property. There is a limit to which fancied arguments can
be carried and this was a case where such limit was stretched to
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W.P.No.23913 of 2019
almost the fanciful.
15. The auction-purchaser who has paid more than Rs.1.32 crore
in 2010 has been kept at bay for more than a decade. The bank says
that it has further monies to recover from the borrower in accordance
with a certificate for a sum in excess of Rs.6 crore passed by the
appropriate Debts Recovery Tribunal.
16. Since no good grounds are made out by the petitioners in
assailing the orders of the Debts Recovery Tribunal or the Debt
Recovery Appellate Tribunal and no undue prejudice has been caused
to the petitioners thereby, the petition is dismissed with costs assessed
at Rs.50,000/- to paid in equal share to the respondent bank and to
the second respondent auction-purchaser within four weeks from date.
W.P.No.23913 of 2019 stands dismissed. WMP Nos.23757 and
23756 of 2019 are closed.
(S.B., CJ.) (S.K.R., J.)
12.07.2021
Index : Yes/No
kpl
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W.P.No.23913 of 2019
To
1. The Authorised Officer &
Chief Manager
Indian Bank ARM Branch-II
55, Ethiraj Salai
Wellington Estate, 4th Floor
Chennai 600 008.
2. The Registrar
Debts Recovery Appellate Tribunal
4th Floor, Indian Bank Circle Office
No.55, Ethiraj Salai
Chennai 8.
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W.P.No.23913 of 2019
THE HON'BLE CHIEF JUSTICE
AND
SENTHILKUMAR RAMAMOORTHY, J.
(kpl)
W.P.No.23913 of 2019
12.07.2021
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