TaxTMI 
TaxTMI 
2025 (1) TMI 1676
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....DRAT) dated 11-4-2017 in RA(SA) 151/2011. 3. The facts giving rise to this Appeal may be summarized as under: (i) The appellant - herein before us is the auction purchaser. The Respondent No. 4 is the guarantor. The Respondent No. 2 before us M/s. Arihant Sarees had availed of loan facility from the Respondent No. 1 - Bank. (ii) As the borrower defaulted in repaying the loan amount, the Bank decided to proceed under the provisions of the SARFAESI Act. (iii) The property in question was mortgaged by the original borrower, with the Respondent No. 1 - Bank. Thus, a security interest was granted in favour of the Bank. (iv) The Bank proceeded to put the property in question to auction after due compliance with the provisions of the SARFAESI Act. (v) The Auction was conducted on 31-7-2007. The appellant - herein was declared as the successful bidder in the said auction proceedings. He deposited a total sum of Rs. 24,00,000/- (Approx.) with the Bank. (vi) It is not in dispute that thereafter on 30-11-2007, a Sale Certificate also came to be issued in favour of the appellant - herein. (vii) The appel....
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....idder, i.e. on 31.7.2007 itself. But, as per law laid down under Securitization Act, the respondent bank ought to have sold the property by giving 30 days time after publication of sale notice. No doubt in this case the respondent bank published of sale notice on 8.6.2007, but the sale was not held in pursuance of the same. While in respect of the 2nd publication of sale notice, the respondent bank not followed the law laid down under Securitization Act i.e. 30 days gap in selling the property. Further, the respondent bank in spite of saying that it has issued demand notice, no copy of the demand notice is filed by the respondent bank to verify whether it was properly issued or not. Under the above circumstances it can be presumed that the respondent bank has not proceeded in accordance with the law, but proceeded. according to its wishes. Further, the filing of the documents by the respondent bank on 8.12.2008 gives rise to a kind of suspicion regarding the valuation report said to have been obtained by them dated 25.5.2007 itself. Under the above circumstances, the proceedings initiated by the respondent bank under Securitization Act are not in terms of the provisions laid down u....
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....e 4th respondent that Rule 9(1) is amended by way of substitution in the year 2016 and as per the amended Rules 15 days clear notice is sufficient if the property is brought to sale on the second occasion. In the instant case, as the sale is on the second occasion, he contends that there was 15 days clear notice and the 1st respondent Indian Bank had rightly issued the sale certificate. 12. Even though the Rule is amended by way of substitution in the year 2016, it would have no application to the facts of the present case. The sale has taken place in the year 2007 and the law as stood on the date of sale is to be looked into. The amendment made is to procedural law and not substantive law. When the amendment is brought into procedural law, it would always be prospective. In the case on hand, as on the date of sale 30 days clear notice was mandatory and as such the contention of 4th respondent is liable to be rejected. Even assuming that as the amended Rule would apply 15 days notice is sufficient, but the sale has not taken place in accordance with the amended Rules. The amended Rules would specify that the sale on the second occasion could take place if the sale notice i....
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....rtificate also came to be issued. Till that point of time, neither the borrower nor the guarantor said anything in this regard. It is sometime in March, 2008 that the guarantor conceived the idea of challenging the auction proceedings before the DRAT. 6. At this stage, it is also relevant to refer to the order passed by this Court dated 8.11.2019 which reads thus:- "We have heard Mr. S. N. Bhat, learned counsel appearing for the petitioner, who has inter alia submitted that he was successful in the auction conducted way back on 31.07.2007 and the sale certificate was issued on 30.11.2007. Learned counsel has further own submitted that the petitioner has been in possession of the property in-question over the years and the petitioner had put up construction in the said property. In this regard, learned counsel for the petitioner has drawn the attention of the Court to approved plan (page 227 of the SLP papers) and also the photograph depicting the building constructed thereon (page 228 of the SLP papers). Learned counsel also raised other contentions in support of his submissions. Having regard to the submissions made at the Bar, issue notice. There sha....