TaxTMI 
TaxTMI 
2021 (9) TMI 1532
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....ommon judgment and order dated 18.11.2019 passed by the High Court of Judicature at Madras in Writ Petition Nos. 30710 and 30712 of 2019 filed by Respondent No. 1-N. Subhash Chand Jain herein (hereinafter referred to as 'the auction purchaser') and in Writ Petition Nos. 28034 and 28036 of 2019 filed by the Appellants herein, thereby disposing of all the four writ petitions. 4. The facts, in brief, giving rise to the present appeals are as under: Ace Concrete Private Limited (hereinafter referred to as 'the borrower') was a company engaged in the manufacture and sale of ready mixed concrete and related business activities. The borrower had availed loans from Respondent No. 5 -Indian Overseas Bank (hereinafter referred to as 'the Respondent-Bank'). The Appellants and Respondent Nos. 2 to 4 herein had mortgaged their four properties as collateral security and executed guarantee for the credit facility granted to the borrower. As per the sanction of the Respondent-Bank dated 30.3.2010, the Respondent-Bank extended financial assistance to the tune of Rs. 21,14,00,000/- to the borrower. The guarantees, which were signed and executed by the App....
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....sit of 50% of the outstanding amount within the said period. On 28.3.2012, a sum of Rs. 12.25 crores was remitted to the Respondent-Bank after sale of the mortgaged property at Item 'B' in the Schedule of Properties. The said sale was through a private treaty. According to the Appellants, they had already deposited an amount of Rs. 50 lakh on 17.8.2011 and 23.8.2011, i.e., prior to the issuance of the First Sale Notice dated 21.1.2012. Vide order dated 2.7.2012, the DRT, Chennai, dismissed S.A. No. 69 of 2012 filed by the Appellants and Respondent Nos. 2 to 4. After the dismissal of S.A. No. 69 of 2012, the Respondent-Bank issued a fresh sale notice dated 9.7.2012 (Second Sale Notice) calling upon the Appellants and Respondent Nos. 2 to 4 to pay the revised outstanding amount of Rs. 11,99,53,926/- within 10 days. The date of sale for the remaining three mortgaged properties was scheduled to be 20.7.2012. Being aggrieved by the said Second Sale Notice dated 9.7.2012, the Appellants and Respondent Nos. 2 to 4 filed S.A. No. 227 of 2012 before the DRT, Chennai, thereby praying to quash the Second Sale Notice dated 9.7.2012, inter alia, on th....
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.... final hearing on 20.9.2012. After the deposit of the balance sale consideration by the auction purchaser on 12.9.2012, a sale certificate came to be issued on 13.9.2012. Being aggrieved by the order passed by the DRT, Chennai, dated 12.9.2012, Civil Revision Petition No. 3487 of 2012 came to be filed before the High Court of Judicature at Madras. Another Civil Revision Petition No. 3597 of 2012 came to be filed against the interim order passed by the DRT, Chennai, dated 7.8.2012 in S.A. No. 227 of 2012 before the Madras High Court. During the pendency of the said Civil Revision Petitions before the Madras High Court, a Third Sale Notice dated 27.9.2012 was issued by the Respondent-Bank for recovery of a sum of Rs. 6,76,07,054/-. The date of sale was scheduled to be 30.10.2012. Vide various interim orders passed in the said Civil Revision Petitions, the Madras High Court restrained the Respondent-Bank and the auction purchaser from taking physical possession of the mortgaged properties. During the pendency of the said Civil Revision Petitions, a sum of Rs. 12 crore was paid to the Respondent-Bank against the sale of mortgaged property at Item ....
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....tain proceedings initiated at the instance of the auction purchaser praying for transfer of the proceedings from the DRT-III, Chennai, which was seized of S.A. No. 227 of 2012, wherein the auction purchaser reached upto the High Court, but could not succeed. It appears from the record that in the meantime the third Respondent-Shanthi Sivasamy filed I.A. No. 903 of 2016 in S.A. No. 227 of 2012 seeking refund of the excess amount of Rs. 4.48 crore lying with the Respondent-Bank claiming that she was the owner of the mortgaged property situated at Chrompet, Chennai, that was sold and that the excess money lying with the Respondent-Bank belonged to her. The DRT, Chennai, vide order dated 25.6.2018, allowed S.A. No. 227 of 2012 and set aside the Second Sale Notice dated 9.7.2012 and consequent sale of the mortgaged properties and imposed cost of Rs. 50,000/- on the Respondent-Bank for wilfully violating the provisions of law. Vide the said order dated 25.6.2018, the DRT, Chennai, directed the Respondent-Bank to refund the amounts paid by the auction purchaser along with 10% interest per annum. It further directed the Respondent-Bank to refund the surplus sum of Rs. 4.4....
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....does not take place pursuant to a notice issued Under Rules 8 and 9 of the said Rules, then the procedure prescribed by the said Rules will have to be followed afresh, and a fresh notice of 30 days' period will have to be given. Relying on the judgment of this Court in the case of Vasu P. Shetty v. Hotel Vandana Palace and Ors. (2014) 5 SCC 660, Shri K.V. Viswanathan, learned Senior Counsel, would submit that the sale, which is in breach of the mandatory requirements imposed by the Rules, would be null and void. He submits that it has been held by this Court in the case of Vasu P. Shetty (supra) that the earlier attempts of the borrower to thwart the sale would not constitute a waiver, and the Bank could not be relieved from its obligation to follow the mandatory procedure contained in the Rules. He further submits that this Court, in the case of J. Rajiv Subramaniyan and Anr. v. Pandiyas and Ors. (2014) 5 SCC 651, has reiterated the same legal position. Learned Senior Counsel further submits that the Respondent-Bank also understood that even for a subsequent notice, a 30 days' mandatory period has to be provided inasmuch as in the First Sale Notice dated 21.1.2....
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....y back the amount to the Respondent-Bank, which should be directed to utilise the said amount to compensate the auction purchaser. 7. Ms. Anitha Shenoy, learned Senior Counsel appearing on behalf of the Respondent-Bank, submits that the Second Sale Notice dated 9.7.2012 cannot be construed to be a fresh notice, but a continuation of the First Sale Notice dated 21.1.2012. Learned Senior Counsel submits that the Second Sale Notice dated 9.7.2012 was issued in line with the law laid down by the Division Bench of the Madras High Court in the case of Kalpesh P.C. Surana v. Indian Bank (2010) 3 CTC 287. It is submitted that it has been held in the case of Kalpesh P.C. Surana (supra) that though a 30 days' period is to be provided for auction sale in the First Notice, there is no requirement under the law to provide a 30 day's clear period in the subsequent notice. She further submits that though the DRT, Chennai, the DRAT, Chennai, and the High Court had granted several opportunities to the Appellants to make the payments, they have defaulted to doso. It is submitted that only in pursuance to the directions of the DRT, Chennai, dated 12.9.2012, the sale was completed in favour....
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....towards the First and Second Sale Notice was already accounted by the Respondent-Bank through sale of the mortgaged properties at Items 'A', 'B' and 'D' in the Schedule of Properties in the First Sale Notice dated 21.1.2012, which properties belonged either to Promoters/Directors or their family members. Learned Counsel submits that since the Third Sale Notice dated 27.9.2012 was only for an amount of Rs. 6,76,07,054/- and in respect of the property owned by the Respondent No. 3, there is no error in directing refund of the excess amount along with interest to the Respondent No. 3. 10. The sheet-anchor of the contentions made on behalf of the Appellants is that even in case of Second Sale Notice dated 9.7.2012, a mandatory period of 30 days has to be provided. It is therefore the submission on behalf of the Appellants that since the Second Sale Notice dated 9.7.2012 does not provide for 30 days' mandatory period and provides for a period of only 10 days, the said notice and the consequent sale is invalid in law. Heavy reliance has been placed on the judgment of this Court in the case of Mathew Varghese (supra). 11. This Court in the case of Mathew ....
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....ion (SA) filed by the guarantors, directed the DRT to hear the parties and dispose of the cases without any delay. While disposing of the writ petition, the High Court also gave liberty to the parties to settle the liability and directed the Respondent-Bank to defer the sale posted on 25.9.2007 by six weeks. While doing so, the High Court imposed a condition on the guarantors to deposit a sum of Rs. 10 lakh before the date of sale, i.e., 25.9.2007. As such, the sale, which was scheduled to be held on 25.9.2007, was postponed. Even after the expiry of period of six weeks prescribed in the order of the High Court dated 20.9.2007, the sale was not effected. It was the case of the guarantors that in pursuance of the order passed by the High Court, they had deposited a sum of Rs. 10 lakh with the Respondent-Bank. The said S.A. No. 20 of 2007 came to be dismissed by the DRT vide order dated 27.12.2007. Immediately on the next day, i.e., 28.12.2007, the Respondent-Bank accepted the tender of the Appellant-Mathew Varghese and asked him to deposit 25% of the amount on that day itself, which was accordingly deposited. He was asked to pay the balance amount within 15 days. Mathew Varghese dep....
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....urther six weeks' time to effect the payment of Rs. 2,00,00,000/- to Mathew Varghese. In the said application, the Division Bench passed an order dated 18.6.2010 extending the time period till 20.6.2010. It appears that the guarantors had agreed to sell the property in favour of Mr. Koshi Phillip. The High Court therefore by the said order dated 18.6.2010 directed said Mr. Koshi Phillip to deposit an amount of Rs. 2,03,00,000/- before the Respondent-Bank and further directed that on such deposit being made, the sale made by the Respondent-Bank in favour of Mathew Varghese stood cancelled and the Respondent-Bank should effect the sale in favour of said Mr. Koshi Phillip. In this background, Mathew Varghese had approached this Court. 15. It will be relevant to refer to the following observations of this Court in the case of Mathew Varghese (supra): 29.1. A plain reading of Sub-section (8) would show that a borrower can tender to the secured creditor the dues together with all costs, charges and expenses incurred by the secured creditor at any time before the date fixed for sale or transfer. In the event of such tender once made as stipulated in the said provision, the....
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.... on its behalf is not allowed to exploit the situation of the borrower by virtue of the proceedings initiated under the SARFAESI Act. More so, Under Section 13(1) of the SARFAESI Act, the secured creditor is given a free hand to resort to sale of the property without approaching the court or Tribunal. 30. Therefore, by virtue of the stipulations contained under the provisions of the SARFAESI Act, in particular, Section 13(8), any sale or transfer of a secured asset, cannot take place without duly informing the borrower of the time and date of such sale or transfer in order to enable the borrower to tender the dues of the secured creditor with all costs, charges and expenses and any such sale or transfer effected without complying with the said statutory requirement would be a constitutional violation and nullify the ultimate sale. 31. Once the said legal position is ascertained, the statutory prescription contained in Rules 8 and 9 have also got to be examined as the said Rules prescribe as to the procedure to be followed by a secured creditor while resorting to a sale after the issuance of the proceedings Under Sections 13(1) to (4) of the SARFAESI Act. Under Rul....
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..... Such a detailed procedure while resorting to a sale of an immovable secured asset is prescribed Under Rules 8 and 9(1). In our considered opinion, it has got a twin objective to be achieved: 33.1. In the first place, as already stated by us, by virtue of the stipulation contained in Section 13(8) read along with Rules 8(6) and 9(1), the owner/borrower should have clear notice of 30 days before the date and time when the sale or transfer of the secured asset would be made, as that alone would enable the owner/borrower to take all efforts to retain his or her ownership by tendering the dues of the secured creditor before that date and time. 33.2. Secondly, when such a secured asset of an immovable property is brought for sale, the intending purchasers should know the nature of the property, the extent of liability pertaining to the said property, any other encumbrances pertaining to the said property, the minimum price below which one cannot make a bid and the total liability of the borrower to the secured creditor. Since, the proviso to Sub-rule (6) also mentions that any other material aspect should also be made known when effecting the publication, it would onl....
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....ich one cannot make a bid and the total liability of the borrower to the secured creditor. This Court further held that the purpose of the Rule is to ensure that the secured asset derives the maximum price, and no one is allowed to exploit the vulnerable situation in which the borrower is placed. 17. After referring to the judgment of this Court in the case of Narandas Karsondas v. S.A. Kamtam and Anr. (1977) 3 SCC 247, this Court in the case of Mathew Varghese (supra) observed thus: 38. On a reading of the above paragraphs, we are able to discern the ratio to the effect that a mere conferment of power to sell without intervention of the court in the mortgage deed by itself will not deprive the mortgagor of his right to redemption, that the extinction of the right of redemption has to be subsequent to the deed conferring such power, that the right of redemption is not extinguished at the expiry of the period, that the equity of redemption is not extinguished by mere contract for sale and that the mortgagor's right to redeem will survive until there has been completion of sale by the mortgagee by a registered deed. The ratio is also to the effect that the power to se....
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....ty 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 TP 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 abovestated principles apply on all fours in respect of a transaction as between the debtor and secured creditor under the provisions of the SARFAESI Act. 18. It could thus be seen that this Court observed that the equity of redemption is not extinguished by mere contract for sale and that the mortgagor's right to redeem will survive until there has been completion of sale by the mortgagee by a registered deed. This Court further observe....
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....espect, the only other provision to be noted is Sub-rule (8) of Rule 8 as per which sale by any method other than public auction or public tender can be on such terms as may be settled between the parties in writing. As far as Sub-rule (8) is concerned, the parties referred to can only relate to the secured creditor and the borrower. It is, therefore, imperative that for the sale to be effected Under Section 13(8), the procedure prescribed Under Rule 8 read along with Rule 9(1) has to be necessarily followed, inasmuch as that is the prescription of the law for effecting the sale as has been explained in detail by us in the earlier paragraphs by referring to Sections 13(1), 13(8) and 37, read along with Section 29 and Rule 15. In our considered view any other construction will be doing violence to the provisions of the SARFAESI Act, in particular Sections 13(1) and (8) of the said Act. (emphasis supplied) 20. This Court, in unequivocal terms, held that unless and until a clear 30 days' notice is given to the borrower, no sale or transfer can be resorted to by a secured creditor. It further held that in the event of any such sale properly notified after giving a 30 days'....
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....a Securitisation Application being S.A. No. 69 of 2012 Under Section 17(1) of the SARFAESI Act came to be filed before the DRT, Chennai, by the Appellants and Respondent Nos. 2 to 4. It will be relevant to refer to the interim order passed by DRT, Chennai, on 27.2.2012 in S.A. No. 69 of 2012, which reads thus: 4. The Ld. Counsel for the Applicant submitted that he can sell the property within 15 days and make substantial payment (entire sale consideration) with the bank within 15 days and the balance amount due to the bank will be settled within one month. If an interim injunction is not granted at this juncture, it will cause irreparable injury to the applicants. 5. Hence in the interest of justice interim stay is granted for a period of 30 days restraining the Respondent bank from proceeding further pursuant to the sale notice dated 21.01.2012 subject to deposit of 50% of the outstanding amount within the period. For compliance call on 29.03.2012. 26. It could thus be seen that the counsel for the applicants therein, i.e., the Appellants and the Respondent Nos. 2 to 4 herein submitted that the applicants could sell the property within 15 days and make substan....
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.....7.2012. The Schedule of Properties in the Second Sale Notice dated 9.7.2012 consisted of three properties out of four properties mentioned in the earlier notice dated 21.1.2012 (First Sale Notice) excluding the property mentioned at item 'B' in the First Sale Notice, which was sold by a private treaty on 28.3.2012. 31. The second round of litigation starts with S.A. No. 227 of 2012. It is the contention of the Appellants that the guarantors had immediately challenged the Second Sale Notice dated 9.7.2012 before the DRT, Chennai, by filing S.A. No. 227 of 2012 on 18.7.2012. However, on account of some technical difficulties, S.A. No. 227 of 2012 could be first heard on 24.7.2012. On 24.7.2012, the DRT, Chennai, passed the following order in S.A. No. 227 of 2012: Advanced. Both parties present. Heard. Petitioner agreed to deposit Rs. 1 crore within 2.8.2012 to show their bonafides. They want breathing time to procure prospective purchaser to clear the entire dues within one month from today by selling the remaining property. They want one month time since it is Aady month, no sale would be taken place. Hence for compliance, call on 2.8.2012. 32. It could thus be see....
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....e to be challenged by the Appellants and Respondent Nos. 2 to 4 before the High Court of Judicature at Madras by way of Civil Revision Petitions being C.R.P. No. 3597 of 2012 and C.R.P. No. 3487 of 2012 respectively. On 9.11.2012, the Madras High Court passed the following order in the said Civil Revision Petitions: 2. Considering the submissions made by the learned Senior Counsel for the Petitioners that the Petitioners are prepared to pay entire dues to the Bank including the amount deposited by the auction purchaser, without prejudice to their other contentions, and taking into account the fact that the ultimate beneficiary in the Bank in view of the offer of the Petitioners to make the entire payment, we restrain the bank and the auction purchaser from taking physical possession of the properties from the Petitioners and their tenants, until further orders. 37. It could thus be seen that again a representation was made to the Division Bench of the High Court that the Appellants were prepared to pay entire dues to the Respondent-Bank including the amount deposited by the auction purchaser, without prejudice to their other contentions. Acting on the said representatio....
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.... paid on or before 26 April 2013. The affidavit should contain a clear undertaking that in case of failure to adhere to the time limit, the purchase has no objection for forfeiting the amount of Rs. 75 lakhs. 40. On, 22.1.2013, the Division Bench passed the following order: 2. Pursuant to our earlier orders dated 8.1.2013 and 11.1.2013, the Bank is permitted to appropriate the amount of Rs. 75 lakhs towards the loan account of M/s. Ace Concrete Pvt. Ltd. Similarly, the amount of Rs. 6 crore payable by the prospective purchaser, as per our earlier order dated 8.1.2013 shall be paid to the loan account of M/s. Ace Concrete Pvt. Ltd. On such payment, the Bank is permitted to appropriate the said amount. 41. It appears that during the pendency of the proceedings before the High Court, the mortgaged property at Item 'C' was sold by a private treaty, and an amount of Rs. 9 crore was paid by the purchaser M/s. Redbrick Realtors Private Limited on different dates. It is also the contention of the Appellants that an amount of Rs. 3 crore was deposited on 2.4.2013 by late Shri C. Surendran in compliance of the undertaking given to the High Court. 42. When the said C....
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....equently, both the Civil Revision Petitions are dismissed. Connected Miscellaneous Petitions are closed. Further, this Court is constrained to impose costs of Rs. 5,000/- on the Petitioners, payable to the Chief Justice Relief fund, far the reason that, though, from the very beginning of the argument, it was brought to the notice of the learned Senior Counsel appearing for the Petitioners that this Court cannot entertain any submission regarding the, alleged irregularity or illegality in the sale effected and this Court cannot set aside the sale also in the absence of any challenge to the same, this Court has been pressurized by the learned Senior Counsel appearing for the Petitioners to grant the relief of setting aside the sale, and by this, in the considered opinion of this Court, the time of this Court has been wasted, Whatever be the length of time consumed in advancing arguments with regard to the relief sought in the Civil Revision Petitions, certainly, arguments have to be heard by this Court, But, arguments at length cannot be allowed for a relief which is not sought in these Civil Revision Petitions. 45. It could thus be seen that the Division Bench of the Hig....
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.... the DRT, Chennai, to restore S.A. No. 227 of 2012 and dispose of the same in accordance with law as expeditiously as possible. 50. It also appears from the record that there were certain proceedings initiated at the instance of the auction purchaser praying for transfer of the proceedings from the DRT-III, Chennai, which was seized of S.A. No. 227 of 2012, which reached upto the High Court, wherein the auction purchaser could not succeed. 51. It appears from the record that in the meantime the third Respondent-Shanthi Sivasamy filed I.A. No. 903 of 2016 in S.A. No. 227 of 2012 seeking refund of the excess amount of Rs. 4.48 crore lying with the Respondent-Bank claiming that she was the owner of the mortgaged property situated at Chrompet, Chennai, that was sold and that the excess money lying with the Respondent-Bank belonged to her. 52. The third round of litigation begins with the order passed by DRT, Chennai, dated 25.6.2018 in S.A. No. 227 of 2012 in pursuance of the order of the DRAT, Chennai, dated 10.7.2014 restoring S.A. No. 227 of 2012. The relevant paragraphs of the order dated 25.6.2018 passed by the DRT, Chennai, in S.A. No. 227 of 2012 read thus: 10.....
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....ng the pendency of these proceedings, the Appellants had augmented funds to the tune of Rs. 5,23,92,946/- and remitted the same. Both parties viz., the Appellants and the 1st Respondent bank had filed their calculation memos into this Tribunal, where under it has been commonly conceded to and accepted that a sum of Rs. 4,48,00,000/- being the surplus sale proceeds of 'B' Schedule property is lying with the bank from the date of deposit by the auction purchaser of item 'B' Schedule property, which was sold pursuant to the sale notice dated 27.09.2012 scheduling the auction sale to 30.10.2012, and which sale was never challenged and thus attained finality. Therefore, the 1st Respondent bank is directed to refund the said sum of Rs. 4,48,00,000/- (sic however, a sum of Rs. 4,46 crores is claimed by the 4th Appellant in IA No. 903/2013) to the 4th Appellant herein, who is the owner/mortgagor of the said Item 'B' Schedule property since that is the property which has been sold for recovering the overdue amounts after adjusting the payments made by the Appellants, together with subsequent interest @ 10% p.a. (simple) from the date of receipt till the date of actua....
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....amount deposited by him with interest. Insofar as the present Appellants are concerned, they were aggrieved by the finding of the DRAT, Chennai, reversing the order passed by the DRT, Chennai, setting aside the sale. 56. It will be relevant to note that this Court in the case of Mathew Varghese (supra) itself has held that in the event of any such sale properly notified after giving a 30 days' clear notice to the borrower does not take place as scheduled for the reasons, which are not solely attributable to the borrower, then the secured creditor cannot effect the sale and he will have to initiate the procedure de novo. Therefore, the question, that will have to be considered, is, as to whether the sale, which was notified as per the notice dated 21.1.2012, could not take place on the date scheduled in the said notice for the reasons, which are solely attributable to the guarantors or not. 57. It could be seen that immediately after the notice was issued on 21.1.2012, the guarantors approached the DRT, Chennai, by way of S.A. No. 69 of 2012. The guarantors gave an impression to the DRT, Chennai, that they can sell the property within 15 days and make the payment of the en....
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....een that the Second Sale Notice dated 9.7.2012 was in continuation of the proceedings of the First Sale Notice dated 21.1.2012, which sale could not be effected only on account of the interim orders passed by the DRT, Chennai, on the representation made by the Appellants and Respondent Nos. 2 to 4. It could further be seen that even in view of the law laid down by this Court in the case of Mathew Varghese (supra), since the sale scheduled on 27.2.2012, as per the First Sale Notice dated 21.1.2012, could not be held due to the reasons attributable solely to the guarantors, there was no necessity of again following the same procedure of providing a 30 days' clear notice. In any case, the Respondent-Bank issued a fresh Second Sale Notice on 9.7.2012 to the Appellants, scheduling the sale on 20.7.2012. There is a substantial distinction of facts in the present case as compared to those in the case of Mathew Varghese (supra). In the case of Mathew Varghese (supra) after the dismissal of S.A., the Respondent-Bank had surreptitiously accepted the tender of the auction purchaser on the very next day of dismissal of S.A. without issuing a notice to the guarantors/borrowers and also conf....
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....to the sale notice dated 9.7.2012 subject to deposit of Rs. 4.80 crore within the said period of 30 days. The said order dated 7.8.2012 also made it clear that on failure to make such payment, the said order would stand vacated. 64. It is not in dispute that in pursuance of the said order dated 7.8.2012, the Appellants have not deposited the amount of Rs. 4.80 crore within 30 days. It is to be noted that the order dated 7.8.2012 was self-operative. On failure on the part of the Appellants to deposit the amount of Rs. 4.80 crore prior to 7.9.2012, the interim injunction stood automatically vacated. It could thus be seen that even on this occasion, the Appellants had an opportunity for redemption of the mortgage and clearing their properties from encumbrances. However, the Appellants, even during this period, did not avail of the said opportunity. 65. It is to be noted that in the meanwhile, the auction purchaser had bid for the properties at Items 'A' and 'C' in the Schedule of Properties in the Second Sale Notice dated 9.7.2012 (i.e. the properties at Items 'A' and 'D' in the Schedule of Properties in the First Sale Notice dated 21.1.2012). In ....
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....nabove, the said S.A. No. 227 of 2012 was allowed by the DRT, Chennai, vide order dated 25.6.2018, which order was reversed by the DRAT, Chennai, vide order dated 6.9.2019, and the order of the DRAT, Chennai, dated 6.9.2019 was maintained by the High Court vide the impugned judgment and order dated 18.11.2019. 68. It could thus be seen that the Appellants had more than one opportunity for redemption of the mortgage. However, from their conduct, it appears that they were only interested in protracting the litigation. It is the Appellants at whose intervention and on whose incorrect representation, the sale, which was scheduled to be held on 27.2.2012 in pursuance of the notice dated 21.1.2012, could not be held. Even after the dismissal of S.A. No. 69 of 2012 on 2.7.2012, the Respondent-Bank again issued a Second Sale Notice on 9.7.2012 scheduling the sale on 20.7.2012 in which the auction purchaser emerged as a successful bidder. It is thus clear that the Appellants had enough time from 21.1.2012 till 2.7.2012 for redemption of their mortgaged properties. However, they did not avail of that opportunity. Even after the auction purchaser emerged successful in the bid and had paid ....
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.... of the said Rules. 72. In the case of Vasu P. Shetty (supra), after the first notice was issued, the same was challenged before the High Court. Though the High Court did not grant stay against the scheduled auction, it granted stay against the confirmation of sale. It was the Bank's case therein that in view of the partial stay order by the High Court, nobody came forward to participate in the auction and the exercise went into futility. After dismissal of the writ petition, it came to the notice of the Bank that there were other encumbrances on the property, which required the reserve price to be changed. Thereafter, there were proposals exchanged between the Bank and the borrower with regard to One Time Settlement ('OTS'). On failure to arrive at OTS, a fresh notice came to be issued. In the said notice, the mandatory period of 30 days from the date of publication was not provided. The matter was proceeded in this background. 73. The present case is totally on different facts. Though the Appellants had ample opportunities for redemption of mortgage, they failed to avail of the said opportunities. 74. Even if viewed from another angle, the claim of the Appell....
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....e power to take possession of securities and sell them. It was, therefore, noticed, that it had resulted in slow pace of recovery of defaulting loans and mounting levels of non-performing assets of banks and financial institutions. It was also noticed that there were certain areas in which the banking and financial sector did not have a level playing field as compared to other participants in the financial markets in the world. It was further noticed that the existing legal framework relating to commercial transactions had not kept pace with the changing commercial practices and financial sector reforms. As such, the SARFAESI Act was enacted with the purpose for securitization and empowering banks and financial institutions to take possession of the securities and to sell them without the intervention of the Court. 77. If we look at the facts in the present case, it would show that, every attempt has been made to frustrate the purpose of the SARFAESI Act. The Respondent-Bank was required to indulge in three rounds of litigations, out of which, the two have reached upto this Court. 78. Though the auction purchaser emerged as the successful bidder, in the bids held on 20.7.2012....