Madras High Court
Mr.Ponselvaraj vs The Authorized Officer on 25 January, 2023
W.P(MD)No.25317 of 2022
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 25.01.2023
CORAM :
THE HONOURABLE MR.JUSTICE D.KRISHNAKUMAR
and
THE HONOURABLE MR.JUSTICE R.VIJAYAKUMAR
W.P(MD)No.25317 of 2022
and
WMP(MD)No.19406 of 2022
Mr.Ponselvaraj ... Petitioner
vs.
1. The Authorized Officer,
The Punjab National Bank,
Circle Office-Trichy,
PNB House, Trichy-Tanjore Road,
Kailasapuram,
Trichy-620014.
2. Venkatachalam Balamurali ... Respondents
(R2 is impleaded vide Court order dated 22.11.2022 in WMP(MD)No.
19945/2022 in W.P(MD)No.25317/2022)
PRAYER : Writ Petition filed under Article 226 of the
Constitution of India, for issuance of a Writ of Certiorari, to call for the
records pertaining to the impugned sale held on 14.10.2022 in
connection with the E-Auction Sale Notice dated 26.09.2022 issued by
the respondent Bank and set aside the same as illegal.
1/10
https://www.mhc.tn.gov.in/judis
W.P(MD)No.25317 of 2022
For Petitioner : Mr.G.Vishnuram
For R1 : Mr.V.Veerapandian, Standing Counsel
ORDER
(Order of the Court was made by D.KRISHNAKUMAR, J.)
Challenging the impugned sale held on 14.10.2022 in
connection with the E-Auction Sale Notice dated 26.09.2022 issued by
the respondent Bank, the petitioner has filed this writ petition to
quash the same.
2. Learned counsel for the petitioner submitted that the
petitioner availed housing loan for Rs.56 Lakhs from the respondent
Bank and was repaying the loan regularly. However, due to loss in his
business on account of Covid-19, and other incidental reasons, the
petitioner was unable to pay the loan and hence, his loan account was
declared as non performing asset. Despite the request of the
petitioner for one time settlement, the impugned sale was held.
Hence, the petitioner has filed this writ petition.
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W.P(MD)No.25317 of 2022
3. Learned standing counsel appearing for the respondent
Bank submitted that e-auction sale was conducted on 14.10.2022, in
which, the 2nd respondent purchased the secured property and after
payment of entire sale consideration, sale deed was executed by the
Bank in his favour on 03.11.2022. He further submitted that once the
sale deed is executed, right to redemption is extinguished and
therefore, the writ petition is liable to be dismissed. In support of the
said contention, he relied upon a judgment of the Hon'ble Supreme
Court reported in 2018 (3) CT8C 877, Dwarika Prasad vs. State
of Uttar Pradesh and others.
4. Heard the learned counsel for the petitioner as well as the
1st respondent and perused the materials available on record.
5. As rightly contended by the learned standing counsel
appearing for the respondent Bank, the right to redemption stands
extinguished on the date of execution of the registered sale deed. In
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W.P(MD)No.25317 of 2022
this regard, the relevant portion of the judgment of the Apex Court
reported in 2018 (3) CTC 877 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 of the sale deed.
5. Section 13(8) of the SARFAESI Act provides as
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W.P(MD)No.25317 of 2022
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 secured creditor to resort to a sale without the
intervention of the Court or Tribunal. However, under
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W.P(MD)No.25317 of 2022
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, charges and expenses before
the date fixed for sale or transfer that the secured asset is
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W.P(MD)No.25317 of 2022
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
deed. This is also the view which has been expressed in the
judgment in Mathew Varghese (supra).''
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W.P(MD)No.25317 of 2022
6. In the present case on hand, e-auction sale held on
14.10.2022 and the sale deed was executed on 03.11.2022 in favour
of the 2nd respondent/auction purchaser, but the petitioner has chosen
to file the present writ petition only on 07.11.2022, 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 03.11.2022 itself and therefore we
find no merits in the contentions of the petitioner.
7. Learned counsel for the petitioner submitted that movable
articles of the petitioner are kept inside the secured property at the
time of lock and seal and therefore, he seeks permission to take back
the said movable articles.
8. Learned standing counsel for the respondent Bank
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W.P(MD)No.25317 of 2022
submitted that after taking possession of the property, the entire
possession has been handed over to the Authorised Officer of the
Bank.
9. In view of the said submission, the petitioner is directed to
approach the respondent Bank requesting to take back his movable
articles. If any such request is made by the petitioner, the respondent
Bank shall consider the same. If the respondent Bank has not
considered his request, it is open to the petitioner to file an
appropriate application before the learned Chief Judicial Magistrate
concerned seeking permission to take back the articles kept inside the
secured property.
7. With the above direction, the Writ Petition is dismissed. No
costs. Consequently, connected miscellaneous petition is closed.
NCC : Yes / No [D.K.K.,J.] & [R.V.,J.]
Index : Yes / No 25.01.2023
Internet : Yes
bala
https://www.mhc.tn.gov.in/judis
W.P(MD)No.25317 of 2022
D.KRISHNAKUMAR, J.
and
R.VIJAYAKUMAR, J.
bala
ORDER MADE IN
W.P(MD)No.25317 of 2022
DATED : 25.01.2023
https://www.mhc.tn.gov.in/judis
