Madras High Court
M/S.Gowtham Garments vs The Authorized Officer on 31 January, 2023
W.P(MD)No.22678 of 2022
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 31.01.2023
CORAM:
THE HONOURABLE MR.JUSTICE D. KRISHNAKUMAR
and
THE HONOURABLE MR.JUSTICE R.VIJAYAKUMAR
W.P(MD)No.22678 of 2022
and
W.M.P(MD)Nos.16835 & 16836 of 2022
M/s.Gowtham Garments,
Represented through its Proprietrix,
P.Muthulakshmi ... Petitioner
vs.
1.The Authorized Officer,
Canara Bank,
Dindigul Main Branch,
Dindigul.
2.S.V.Nagarajan,
Advocate Commissioner,
19 Sub-Collector Office Road,
Dindigul. ... Respondents
PRAYER : Writ Petition filed under Article 226 of the Constitution of India
praying for issuance of a Writ of Certiorarified Mandamus, to call for the
records pertaining to the impugned order in Crl.M.P.No.12421 of 2022 dated
03.09.2022 on the file of the learned Chief Judicial Magistrate, Dindigul and
quash the same as illegal and consequently, forbear the respondents from in
any way dispossessing the petitioner from the property of house building
1/9
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W.P(MD)No.22678 of 2022
bearing S.No.286/3, Plot No.6, Door No.314/4, Indhra Nagar, Opposite to
Stadium measuring 2490 sq.ft Dindigul Joint II SRO, Dindigul RD, Dindigul
District.
For Petitioner : Mr.V.Santhakumaresan
For R - 1 : Mr.R.Pandivel
Standing Counsel
ORDER
(Order of the Court was made by D. KRISHNAKUMAR, J.)
The petitioner has filed the present Writ Petition for issuance of
a Writ of Certiorarified Mandamus, to quash the impugned order in
Crl.M.P.No.12421 of 2022 dated 03.09.2022 on the file of the learned Chief
Judicial Magistrate, Dindigul and consequently, forbear the respondents
from in any way dispossessing the petitioner from the property of house
building bearing S.No.286/3, Plot No.6, Door No.314/4, Indhra Nagar,
Opposite to Stadium measuring 2490 sq.ft Dindigul Joint II SRO, Dindigul
RD, Dindigul District.
2.Today, when the matter was taken up for hearing, the learned
counsel appearing for the first respondent Bank submitted the subject
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W.P(MD)No.22678 of 2022
property in question was brought for E-auction sale and sale certificate has
been issued in favour of the auction purchaser and the same has also been
registered. 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.
3. Heard the learned counsel appearing on either side and
perused the materials available on record.
4. As rightly contended by the learned standing counsel
appearing for the first respondent Bank, the right to redemption stands
extinguished on the date of execution of the registered sale deed. In this
regard, the relevant portion of the judgment of the Apex Court in Dwarika
Prasad vs. State of Uttar Pradesh and others 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
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W.P(MD)No.22678 of 2022
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 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
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W.P(MD)No.22678 of 2022
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 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
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W.P(MD)No.22678 of 2022
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 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
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W.P(MD)No.22678 of 2022
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).''
5. In the present case on hand, e-auction sale held and the sale
deed was executed in favour of the auction purchaser. As per the aforesaid
Apex Court's judgment, right to redemption stands extinguished on the
execution of the registered sale deed and therefore we find no merits in the
contentions of the petitioner.
6. Accordingly, the Writ Petition is dismissed. However, with
liberty to the petitioner to approach the appropriate forum in the manner
known to law, if he is so advised. No costs. Consequently, connected
Miscellaneous Petitions are closed.
[D.K.K.,J.] [R.V.,J.]
Index : Yes / No 31.01.2023
Internet : Yes
ps
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W.P(MD)No.22678 of 2022
To
1.The Authorized Officer,
Canara Bank,
Dindigul Main Branch,
Dindigul.
2.S.V.Nagarajan,
Advocate Commissioner,
19 Sub-Collector Office Road,
Dindigul.
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W.P(MD)No.22678 of 2022
D. KRISHNAKUMAR,J.
and
R.VIJAYAKUMAR,J.
ps
ORDER MADE IN
W.P(MD)No.22678 of 2022
DATED : 31.01.2023
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