Madras High Court
M/S.Thilak International vs Uco Bank on 27 September, 2023
W.P.No.14301 of 2023
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 27.09.2023
CORAM :
THE HON'BLE MR.SANJAY V.GANGAPURWALA, CHIEF JUSTICE
AND
THE HON'BLE MR.JUSTICE P.D.AUDIKESAVALU
W.P.No.14301 of 2023
M/s.Thilak International,
rep. by its Partner D.Joseph Raja,
4C/5, 4C/7, Mani Nagar,
Tuticorin-628 003. .. Petitioner
Vs
1.UCO Bank,
Regional Office,
Chennai-600 024
rep. by the Authorised Officer.
2.UCO Bank,
Tuticorin Branch,
208, C.D., V.E. Road,
Tuticorin-628 003
rep. by its Branch Manager.
3.G.Saravanan
4.Dr.J.Saravanan .. Respondents
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W.P.No.14301 of 2023
Prayer: Petition filed under Article 226 of the Constitution of India
seeking issuance of a writ of certiorarified mandamus calling for the
records and order of the Debt Recovery Appellate Tribunal, Chennai,
dated 3.4.2023 passed in R.A.(S.A) No.62 of 2018 and quash the
same as illegal and further directing the respondents 1 and 2 to
receive entire dues from the petitioner.
For the Petitioner : Mr.T.Mohan
Senior Counsel
for M/s.J.Antony Jesus
For the Respondents : Mr.K.S.Viswanathan
Senior Counsel
for M/s.T.Hemalatha
for respondent Nos.1 and 2
: Mr.N.Alagu Narayanan
for M/s.RRN Legal
for respondent No.3
: R4 – No Appearance
ORDER
(Order of the court was made by the Hon'ble Chief Justice)
We have heard Mr.T.Mohan, learned Senior Counsel for
M/s.J.Antony Jesu, learned counsel for the petitioner;
Mr.K.S.Viswanathan, learned Senior Counsel for M/s.T.Hemalatha,
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W.P.No.14301 of 2023
learned counsel for respondents 1 and 2; and, Mr.N.Alagu
Narayanan for M/s.RRN Legal, learned counsel for respondent No.3.
2. The petitioner is challenging the order passed by the Debt
Recovery Appellate Tribunal dated 3.4.2023 in R.A. (S.A) No.62 of
2018.
3. Learned Senior Counsel for the petitioner submits that the
petitioner has filed Securitisation Application bearing No.50 of 2016
before the Debts Recovery Tribunal, Chennai and subsequently, the
said Securitisation Application was transferred to the Debts
Recovery Tribunal, Madurai and numbered as TSA No.60 of 2007.
The Debts Recovery Tribunal, Madurai, allowed the said application.
The bank had filed an appeal before the Debt Recovery Appellate
Tribunal bearing R.A. (S.A) No.111 of 2008. The said appeal was
allowed on 10.3.2011. The borrower had challenged the order of
the Debt Recovery Appellate Tribunal by filing a writ petition
bearing No.18753 of 2011. This Court upheld the order of the
Tribunal and remanded R.A. (S.A) No.111 of 2008 to the Debts
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W.P.No.14301 of 2023
Recovery Tribunal, Madurai for fresh consideration. After remand,
the Debts Recovery Tribunal, Madurai, dismissed the T.S.A.No.60 of
2007 on 17.11.2017. Aggrieved thereby, the petitioner had filed
appeal before the Debt Recovery Appellate Tribunal in R.A. (S.A)
No.62 of 2018. The Debt Recovery Appellate Tribunal dismissed the
appeal. Aggrieved thereby, the present writ petition is filed.
4. Learned Senior Counsel for the petitioner strenuously
contends that the sale was conducted in contravention of the
provisions of the Security Interest (Enforcement) Rules, 2002,
inasmuch as 30 days notice was not issued. On or about
31.01.2007, stay was granted to the sale. The said stay order was
also communicated to the bank on 01.02.2007. However, in spite
of the order of stay, the bank had proceeded to auction the
property. The auction could not have been conducted in violation of
the order of stay.
5. Learned Senior Counsel further submits that the Tribunal
has failed to consider that the sale was in flagrant violation of the
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W.P.No.14301 of 2023
provisions of the Security Interest (Enforcement) Rules, 2002. The
procedure was not followed. The sale was conducted during the
operation of the order of stay. In view of that, the auction is void
ab initio.
6. The right of redemption to the borrower is not available
after the auction sale notice is issued. Reliance can be had to the
judgment of the Apex Court in Civil Appeal Nos.5542 – 5543 of
2023, dated 21.09.2023 (Celir LLP v. Bafna Motors (Mumbai) Pvt.
Ltd. and others).
7. Prior to the amendment of sub-section (8) of Section 13 of
the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 (for short, “the Act of
2002”) in the year 2016, the borrower had right of redemption of
mortgage until the execution of the conveyance of the secured
asset by way of a registered instrument. In the present case, the
conveyance is executed way back in January, 2008.
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W.P.No.14301 of 2023
8. The petitioner had challenged the auction sale notice by
filing writ petition bearing No.3318 of 2007. In the said writ
petition, this Court observed that all steps under Section 13 of the
Act of 2002 have been taken by the respondent UCO bank and the
notice which is impugned in the writ petition is the auction sale
notice dated 20.1.2007, which has been published pursuant to the
earlier statutory notice dated 15.9.2006 issued under Rule 8(5) of
the Security Interest (Enforcement) Rules, 2002. The said
judgment has become final.
9. It is stated that the petitioner had deposited only pre-
deposit of Rs.10.00 lakh. The property was sold in the auction for
Rs.42.00 lakhs.
10. The sale has been conducted. The petitioner had only
challenged the auction sale notice. The petitioner has never
challenged the auction sale and the issuance of sale certificate. The
Debt Recovery Appellate Tribunal has properly considered the said
aspect.
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W.P.No.14301 of 2023
11. With regard to the pre-deposit made by the petitioner with
the Debt Recovery Appellate Tribunal, the petitioner may make
necessary application for refund of the same. Naturally, the Debt
Recovery Appellate Tribunal will call for the say of the bank and
consider about the amount outstanding and may pass appropriate
orders.
12. In the light of the above, no interference is called for. The
writ petition is dismissed. There will be no order as to costs.
Consequently, W.M.P.No.13808 of 2023 is closed.
(S.V.G., CJ.) (P.D.A., J.)
27.09.2023
Index : Yes/No
Neutral Citation : Yes/No
bbr
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W.P.No.14301 of 2023
To:
1.The Authorised Officer,
UCO Bank,
Regional Office,
Chennai-600 024.
2.The Branch Manager,
UCO Bank,
Tuticorin Branch,
208, C.D., V.E. Road,
Tuticorin-628 003.
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W.P.No.14301 of 2023
THE HON'BLE CHIEF JUSTICE
AND
P.D.AUDIKESAVALU,J.
bbr
W.P.No.14301 of 2023
27.09.2023
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