TaxTMI 
TaxTMI 
2018 (12) TMI 1982
X X X X Extracts X X X X
X X X X Extracts X X X X
.... b) The 1st petitioner committed default in repayment and the account was classified as NPA on 31.10.2016. c) Therefore, a demand notice dated 07.11.2016 was issued under Section 13(2). A possession notice was issued on 24.03.2017. d) Thereafter, a sale notice under Rule 8(6) was issued on 10.07.2017. It was actually a notice under Rule 8(6) as well as notice under Rule 9(1). However, the date of auction was fixed as 18.08.2017, which was beyond 30 days of the date of the notice. e) Since the auction failed, a fresh notice dated 23.08.2017 was issued fixing the date of auction as 15.09.2017. Since the same also failed, a fresh notice dated 21.09.2017 was issued fixing the date of auction as 12.10.2017. f) The third auction also failed forcing the Bank to issue a 4th notice dated 23.10.2017 fixing the date of auction as 16.11.2017. The same also failed and hence a 5th notice was issued on 20.11.2017 fixing the auction on 21.12.2017. g) The same also failed forcing the Bank to issue a 6th notice on 12.12.2017. The same also failed forcing the Bank to issue a 7th notice on 29.12.2017 fixing the auction on 19.01.2018. h) For....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... at the time of sanction of the loan, that the property was not being used any more as agricultural land and that he will have no objection for proceeding against the property under the SARFAESI Act, 2002. The third contention was rejected on the ground that the Bank had obtained a fresh valuation. 6. In other words, all the three contentions raised by the petitioners to the auction sale, were dealt with by the Tribunal and were rejected for reasons recorded. Once it is found that a quasi judicial Tribunal created under a special enactment has considered all the issues and arrived at a conclusion for reasons recorded in the order, the role of this Court in writ jurisdiction is extremely circumscribed. It must be remembered that the jurisdiction under Article 226 is a supervisory jurisdiction, to keep the Tribunals and other authorities within their bounds. We are not exercising an appellate jurisdiction over the orders of the Tribunal. We do not find any perversity in the findings of the Tribunal. The legal and factual issues raised by the petitioners have been properly addressed to by the Tribunal. Therefore, even in extreme cases where we may be persuaded to take a different v....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 10. The first distinction between the unamended and amended sub-section (8) of Section 13 is that before amendment, the facility of repayment of the entire dues along with the costs, charges and expenses, was available to the debtor at any time before the date fixed for the sale or transfer. But after the amendment, the facility is available upto the time before the date of publication of notice for public auction or inviting quotations or tender from public or private treaty. The second distinction is that the unamended sub-section (8) did not provide for the contingency when the dues are tendered by the borrower before the date of completion of the sale or lease but after the issue of notice. But the amended sub-section (8) takes care of the contingency where steps have already been taken by the secured creditor for the transfer of the secured asset, before the payment was made. Except these two distinctions, there is no other distinction. 11. Coming to the Rules, Rule 8(6) did not undergo any change under GSR No. 1046E, dated 03-11-2016, though certain amendments were made with effect from 04-11-2016 to the Rules, after the amendment of the Act under Act 44/2016. However, Ru....
X X X X Extracts X X X X
X X X X Extracts X X X X
....empted to think that Section 13(8) speaks about redemption, only on account of what is found in Rule 3(5) of the Security Interest (Enforcement) Rules, 2002. Rule 3(5) inserted by way of amendment with effect from 04-11-2016 states that the demand notice issued under Section 13(2) should invite the attention of the borrower to the provisions of Section 13(8), in respect of the time available to the borrower to redeem the secured assets. Today, it may be convenient for one borrower to contend that the right of redemption will be lost immediately upon the issue of notice under Rule 9(1). But if it is held so, the same would tantamount to annulling the relevant provisions of the Transfer of Property Act, which do not stand expressly excluded, insofar as the question of redemption is concerned. 15. Keeping the above distinction in mind, if we come back to the contention with regard to the notice period of 30 days between the publication under Rule 8(6) and the sale under Rule 9(1), it may be seen that the Rules do not contemplate two different notices, one under Rule 8(6) and another under Rule 9(1). We have already extracted both the Rules. Rule 8(6) mandates - (i) the service of a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of Rule 9 and this second notice shall be of a duration of 15 days. If the second attempt also fails, a third notice may be issued under the proviso to sub-rule (1) of Rule 9, of a duration of not less than 15 days for the third auction. 19. We think that some Courts have been tempted to think that Rule 9(1) requires another notice of sale in addition to the notice of sale served on the borrower under Rule 8(6), due to a mix up. This can be appreciated if we again have a look at Rule 9(1) once more: "9(1). No sale of immovable property under these rules shall take place before the expiry of thirty days from the date on which the public notice of sale is published in newspapers as referred to in the proviso to sub-rule (6) or notice of sale has been served to the borrower." 20. What is shown in bold, italics and underlined in Rule 9(1) extracted above, should have come towards the end of Rule 9(1), especially without the words "the proviso to". If it had come towards the end, without the words "the proviso to", no confusion would have arisen, about whether a second notice of sale is necessary under Rule 9(1). If the words in bold, italics and underlined, appear toward....
X X X X Extracts X X X X
X X X X Extracts X X X X
....not less than the one prescribed in the proviso to Rule 9(1). This can be demonstrated by the dates of notices and dates of sale in a tabular column: 25. While the main part of Rule 9(1) is focussed on the sale "in the first instance" the proviso focuses on subsequent sales. Therefore, assuming that there was no compliance of the prescription requiring a second notice under Rule 9(1), the same was more than compensated by subsequent notices of sufficient duration. 26. The theme of the song of almost all the borrowers, relying upon the decision in Mathew Varghese is that if the notice of sale is of a duration of less than 30 days, the right of redemption is lost (though it is not). In other words, the borrowers request the Court to presume that they are honest enough to discharge all the dues, if only 30 days notice had been granted. In this case, the petitioner has had 7 notices and the sale actually materialised only after 5 months of the date of first auction. After the date of first auction, another period of 11 months have passed. Except Case Law, the bank was unable to recover anything from the borrower. Therefore, it is not open to the petitioner to wave the magic wand ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....relevant portion of the legal opinion taken by the Bank on 07-4-2011 from their panel lawyer reads as follows: "Note: The Revenue records and the documents referred above goes to show that the land is agricultural land. However, it appears that there is no agricultural activity and the land is used for non-agricultural purpose. In part of the land, sheds were constructed and the same is assessed to property tax. However, to avoid any future complications, an Affidavit may be obtained from Ms. Sunitha Reddy stating that she is using the land for non-agricultural purpose and she has no objection, if the Bank proceeds under the Securitisation Act." 31. Pursuant to the aforesaid legal opinion, the 2nd petitioner gave a Sworn Affidavit on 08-4-2011. It is only thereafter that the petitioners were sanctioned a term loan as well as cash credit limit on 10-5-2011. 32. A person who made a representation of a crucial fact in the form of a Sworn Affidavit and thereby induced a Bank to sanction a term loan, cannot go back on the representation made by him in his Affidavit. If the petitioners had refused to swear to an Affidavit in April, 2011, the Bank would not have sa....