2026 (6) TMI 1353

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Rs. 34,20,940/- (Rs. 31,47,000/- + Rs. 2,73,940/-), together with interest at the rate of 24% per annum from 03.05.2024 till the date of repayment. 2. The borrower having defaulted in repayment of the loan, the respondent Bank initiated proceedings under the SARFAESI Act and conducted an auction sale of the secured asset, namely, a vacant land in Survey No.871/2A1 measuring 21.5 cents situated at Eriodu Village, Vedasandur Taluk, Dindigul District. The auction was conducted on 26.03.2024, and the petitioner was declared as the successful bidder. In terms of the auction notice, the petitioner paid the entire sale consideration of Rs. 31,47,000/- in instalments. A sale certificate was issued in favour of the petitioner on 22.05.2024, and ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....bsp; the respondent Bank had been arrayed as defendant No.9 in the civil suit and had entered appearance through counsel. Therefore, the pendency of the suit was well within the knowledge of the respondent Bank. By failing to disclose the pendency of the suit in the sale notice, the respondent Bank has acted in clear contravention of the statutory requirements under the SARFAESI Act and the Rules framed thereunder. Hence, the petitioner is entitled to refund of the amount deposited. In support of the said contention, reliance was placed on the judgment of the Division Bench of this Court in S. Shanmuganathan vs. The Authorized Officer, Indian Overseas Bank (W.P. No.39199 of 2016, dated 28.04.2017). 6. Per contra, learned counsel for the ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the Bank had entered appearance in the said suit, it did not disclose the pendency of the suit in the sale notice nor did it inform the petitioner in any manner. 11. Rule 9(9) of the Security Interest (Enforcement) Rules, 2002 mandates that the Authorized Officer shall deliver the property to the purchaser free from all encumbrances known to the secured creditor upon deposit of the sale amount. Rule 9(10) further requires that the sale certificate shall specifically state whether the property has been sold free from encumbrances known to the secured creditor. 12. In the present case, despite the mandatory nature of the above provisions, the respondent Bank failed to disclose the pendency of the suit and the decree passed therein. The....