Madras High Court
Jebadurai vs M/S.Sundaram House Finance ... on 2 February, 2023
W.P.(MD)No.24298 of 2022
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 02.02.2023
CORAM:
THE HON'BLE MR.T.RAJA, THE ACTING CHIEF JUSTICE
and
THE HON'BLE MR.JUSTICE D.KRISHNAKUMAR
W.P.(MD) No.24298 of 2022
and
W.M.P(MD)Nos.18398 and 18400 of 2022
1.Jebadurai
2.Paulraj
3.Jebastin
4.Paul Thangam
5.Jegan Christober ... Petitioners
-vs-
1.M/s.Sundaram House Finance Limited,
Rep. by its Authorized Officer,
No.21, Pattulos Road,
Chennai – 600 002.
2.Sundaram Home Finance Limited,
Rep. by its Branch Officer,
No.184/9B/6, Palayamkottai Road West,
Opp. To V.V.D. Oil Mill,
Tuticorin District.
3.Arulsekar,
Son of Subbiah,
Door No.32/2, VKC Nagar,
Near 4th Gate,
Tuticorin District.
4.The Sub Registrar,
Mellur,
Tuticorin District. ... Respondents
Page 1 of 10
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W.P.(MD)No.24298 of 2022
PRAYER: Petition filed under Article 226 of the Constitution
of India, to issue a Writ of Certiorarified Mandamus, calling for the
records pertaining to the Sale Certificate issued by the 1st
respondent in favour of the 3rd respondent and registered vide,
document No.4907 of 2022 dated 30.09.2022 on the file of the
Sub Registrar, Mellur, Tuticorin, in respect of the house sites
property comprised in Survey No.513, Plot No.37, situated within
the District of Tuticorin and quash the same as unconstitutional,
illegal and ultra virus the Act and Rules and consequently direct
the respondent Bank to act only in accordance with the SARFAESI
Act and Security Interest (Enforcement) Rules.
For Petitioner : Mr.M.Benazir Begum
For R1 to R3 : No appearance
For R4 : Mr.N.Sathesh Kumar
Additional Government Pleader
ORDER
[Order of the Court was made by
The Hon'ble The ACTING CHIEF JUSTICE]
Petitioners 1, 3 to 5 are sons of the second petitioner. A joint
writ petition has been filed challenging the Sale Certificate issued
by the 1st respondent in favour of the 3rd respondent and registered
vide, document No.4907 of 2022 dated 30.09.2022 on the file of
the Sub Registrar, Mellur, Tuticorin, in respect of the house sites
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W.P.(MD)No.24298 of 2022
property comprised in Survey No.513, Plot No.37, situated within
the District of Tuticorin, as unconstitutional, illegal and ultra virus
the Act and Rules and consequently direct the respondent Bank to
act only in accordance with the SARFAESI Act and Security Interest
(Enforcement) Rules.
2. Learned counsel for the petitioners submitted that
petitioners have availed a loan of Rs.21,00,000/- from the 2nd
respondent finance company, by way of mortgage and by deposit
of title deeds of their property in the year 2013 and they were
paying the loan amount by way of instalments. Due to default in
paying the instalments, the second respondent has issued notice
under Section 13(2) of the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002
(hereinafter referred as the SARFAESI Act, 2022), demanding
payment of defaulted amount within sixth days from the date of
the said notice. Thereafter, the petitioner requested the finance
company to furnish the details of the payments and entries made
in their loan account. Without furnishing the same, the finance
company issued another notice under Section 13(2) of the
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W.P.(MD)No.24298 of 2022
SARFAESI Act, 2022, claiming another sum along with exorbitant
interest. Thereafter, auction sale notice dated 22.06.2022 was
issued fixing the auction on 15.07.2022. Hence, the petitioner filed
W.P. (MD) No. 14091 of 2022 and this Court passed a conditional
order to deposit the entire amount in four instalments. The
petitioner paid the 1st instalment amount of Rs.2,50,000/- on
14.07.2022 but failed to pay the remaining instalments. On
02.10.2022, the 3rd respondent informed the petitioner that he had
purchased the property mortgaged with the first respondent for
Rs.36,30,000/- and the first respondent has issued sale certificate
and the same was registered as document No.4907 of 2022 dated
30.09.2022 on the file of the fourth respondent. Hence, the Writ
Petition has been filed to quash the sale certificate.
3. Heard the learned counsel for the petitioner as well as
the learned Additional Government Pleader appearing for the
fourth respondent and perused the materials available on
record.
4. We are unable to entertain the writ petition in view of
the decision of the Hon'ble Apex Court in Dwarika Prasad vs.
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W.P.(MD)No.24298 of 2022
State of Uttar Pradesh and others [2018 (3) CT8C 877]
that the right to redemption stands extinguished on the date of
execution of the registered sale deed. The relevant portions of
the said decision is extracted below:-
''4. On the other hand, the learned counsel
appearing on behalf of the bank and for the auction
purchasers supported the order of the High Court. It
was urged that despite moving the DRT, the appellant
sought relief before the Allahabad High Court in
proceeding under Article 226 of the Constitution.
After the High Court passed an order on 15 March
2016 recording the statement that the appellant
would deposit an amount of Rs 7,00,000 by 28 March
2016 and the balance by 30 April 2016 the writ
petition was withdrawn on 28 March 2016 with liberty
to pursue the proceedings before the Tribunal. At no
stage did the Tribunal interdict the issuance of a
certificate of sale. The sale certificate was issued and
was followed by the registration of the sale deed in
April 2016. The bank had advertised the proposed
sale by auction and followed all requisite procedure
under law. The appellant failed to comply with the
provisions of Section 13(8). Having failed to do so,
the appellant cannot assert an equity of redemption
upon the completion of the sale and the registration
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W.P.(MD)No.24298 of 2022
of the sale deed.
5. Section 13(8) of the SARFAESI Act provides
as follows:-
''(8) If the dues of the secured creditor together
with all costs, charges and expenses incurred by him
are tendered to the secured creditor at any time
before the date fixed for sale or transfer, the secured
asset shall not be sold or transferred by the secured
creditor, and no further step shall be taken by him for
transfer or sale of that secured asset.''
These provisions have fallen for interpretation
before this Court in Mathew Varghese (supra).
Dwelling on Section 60 of the Transfer of the Property
Act, this Court held that the right of redemption is
available to a mortgagor unless it stands
extinguished by an act of parties. The right of the
mortgagor to redeem the property survives until
there has been a transfer of the mortgagor’s interest
by a registered instrument of sale. Applying these
principles in the context of the SARFAESI Act this
Court held as follows:-
''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
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W.P.(MD)No.24298 of 2022
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”.
6. In the present case, the appellant failed to
comply with the provisions of Section 13(8). The
statute mandates that it is only where the dues of the
secured creditor are tendered together with costs,
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W.P.(MD)No.24298 of 2022
charges and expenses before the date fixed for sale
or transfer that the secured asset is not to be sold or
transferred. The appellant was aware of the
proceedings initiated by the bank for asserting its
right to recover its dues by selling the property. The
appellant moved the DRT in Securitization Application
176 of 2015. During the pendency of those
proceedings, orders were passed by the Tribunal on 1
February 2016 and 3 February 2016. The appellant
moved the Allahabad High Court which by its order
dated 9 March 2016 restrained the bank and the
auction purchaser from executing the sale deed until
15 March 2016. The stay was extended till 28 March
2016 by which date the appellant was to deposit an
amount of Rs 7,00,000. The balance was required to
be deposited by 30 April 2016. While appellant
deposited an amount of Rs.7,00,000 with the bank,
he failed to deposit the balance in accordance with
the provisions of Section 13(8). Even after the writ
proceedings before the High Court was withdrawn,
the appellant did not deposit the balance due
together with the costs, charges and expenses. The
sale was confirmed, a sale certificate was issued and
a registered sale deed was executed on 12 April
2016. The appellant failed to ensure compliance with
Section 13(8). The right to redemption stands
extinguished on the execution of the registered sale
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W.P.(MD)No.24298 of 2022
deed. This is also the view which has been expressed
in the judgment in Mathew Varghese (supra).''
5. In the present case on hand, auction sale held on
09.08.2022 and the sale deed was executed on 30.09.2022 in
favour of the third respondent, but the petitioner has chosen to
file the present writ petition only on 19.10.2022, after the
execution of the sale deed. As per the aforesaid Apex Court's
judgment, right to redemption stands extinguished on the
execution of the registered sale deed i.e., on 30.09.2022 itself
and therefore we find no merits in the contentions of the
petitioners.
6. Accordingly, the Writ Petition is dismissed. No costs.
Consequently, connected miscellaneous petitions are closed.
[T.R., A.C.J.] [D.K.K., J.]
02.02.2023
NCC : Yes / No
Index : Yes / No
Internet: Yes / No
sj/myr
https://www.mhc.tn.gov.in/judis
W.P.(MD)No.24298 of 2022
T.RAJA, A.C.J.
and
D.KRISHNAKUMAR, J.
sj/myr
To
1.The Sub Registrar,
Mellur,
Tuticorin District.
ORDER MADE IN
W.P.(MD) No.18400 of 2022
DATED : 02.02.2023
https://www.mhc.tn.gov.in/judis
