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of <h1>Court dismisses petition over property undervaluation and misclassification, upholding SARFAESI Act's agricultural land exemption. Petitioners' challenge rejected.</h1> <h3>M/s. SHARADA FLOUR PRODUCTS PVT. LTD., M/s. THEKKEMUKKALIL PROPEPRTIES (P) LTD. AND SMT. SREEJA KOZHISSERIL Versus M/s. DHANLAXMI BANK LTD., SMT. ELIZEBETH ROY AND THE DEBTS RECOVERY TRIBUNAL</h3> M/s. SHARADA FLOUR PRODUCTS PVT. LTD., M/s. THEKKEMUKKALIL PROPEPRTIES (P) LTD. AND SMT. SREEJA KOZHISSERIL Versus M/s. DHANLAXMI BANK LTD., SMT. ... Issues Involved:1. Efficacious alternative remedy to challenge the DRT's order.2. Alleged undervaluation affecting the sale of secured assets.3. Sale of agricultural land in violation of Section 31 of the SARFAESI Act.Issue-wise Detailed Analysis:Issue No.I: Efficacious Alternative RemedyThe petitioners challenged the Bank's recovery proceedings in SA No.90 of 2018 before the Tribunal and, after an adverse order, filed this writ petition instead of appealing to the Debt Recovery Appellate Tribunal under Section 18. They argued that the writ petition is maintainable due to a jurisdictional question. The Bank countered this by addressing the case on merits. Given the extensive time spent on merits, the court deemed it imprudent to avoid adjudication based on the alternative remedy, thus leaving this issue unanswered.Issue No.II: Alleged UndervaluationThe Bank fixed the reserve price for the secured assets based on multiple valuations, including those from its panel valuers and government records. The petitioners contended that the properties were undervalued. However, the Bank justified its valuation process, which involved comparing different valuations and selecting the highest. The court noted that the petitioners themselves had sold the properties for a price significantly lower than the reserve price set by the Bank. Thus, the court found the Bank's valuation process reasonable and dismissed the petitioners' claim of undervaluation.Issue No.III: Sale of Agricultural LandThe petitioners claimed that one of the properties was agricultural land, which is exempt from the SARFAESI Act under Section 31. The court examined various documents, including the company's Memorandum and Articles of Association, balance sheets, and the Advocate Commissioner's report. The court found that the company did not engage in agricultural activities and had not informed the Bank that the property was agricultural land. The court referred to several precedents, including Blue Coast Hotels, which emphasized that the exemption under Section 31 is meant to protect genuine agriculturists. The court concluded that the petitioners did not meet the criteria for this exemption, as they were not engaged in agriculture and had not disclosed the nature of the property to the Bank.Conclusion:The court dismissed the writ petition, finding no merit in the petitioners' claims regarding the undervaluation of the properties and the classification of the land as agricultural. The court highlighted that the SARFAESI Act's exemption for agricultural land is intended to protect genuine agriculturists, not corporate entities attempting to evade their obligations.
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