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Madras High CourtWP/28511/2017disposed of

Roopa Cotton Mills, Rep. By v. The Authorized Officer

2020-03-12Honourable Mr Justice M.M.Sundresh,Honourable Mr Justice Krishnan Ramasamy4 pages

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 12.03.2020

CORAM

THE HONOURABLE MR.JUSTICE M.M. SUNDRESH AND THE HONOURABLE MR.JUSTICE KRISHNAN RAMASAMY W.P.No.28511 of 2017 and W.M.P.Nos.30654, 30655, 33932 & 33933 of 2017 1.Roopa Cotton Mills, Rep.by its Partner Mr.B.R.Arun Eashwar, S.F.No.231/1, 2, Kunnangalpalayam, Karaipudur Village, Veerapandi, Palladam Road, Tiruppur - 641 605.

2.B.Roopa 3.B.Arun Eashwar 4.B.Rajalakshmi ... Petitioner Vs 1.The Authorized Officer, State Bank of India, SAM Branch, 1112, Raja Plaza, Avinashi Road, Coimbatore - 641 037.

2.T.Muthu Suseela 3.TVS Automobile Solutions Ltd., No.58, Eldams Road,Teynampet, Chennai - 600 018.

... Respondents (R2 & R3 are impleaded as per order of this Court dated 09.01.2018 in W.M.P.No.33931 of 2017 in W.P.No.28511 of 2017) Prayer : Writ Petition filed under 226 of the Constitution of India to issue a writ of certiorarified mandamus to call for the records connected with the impugned order dated 24.10.2017 passed by the Debt Recovery Appellate Tribunal in M.A.(S.A.) No.174 of 2017 and quash the same and consequently, order restitution of the parties as of order dated 25.09.2017 passed by the Debt Recovery Tribunal, Coimbatore.

For Petitioners : Mr.H.Karthik Seshadri Mr.S.Sethuraman for R1 Mr.Silambanan, Senior Counsel for Mr.A.Joseph Dorairaj for R2 Mr.G.R.Balakumar for M/s.T.S.Gopalan & Co., for R3 For Respondents :

ORDER

(Order of the Court was made by M.M.SUNDRESH,J) Challenging the order dated 24.10.2017 passed by the Debt Recovery Appellate Tribunal in M.A.(S.A.) No.174 of 2017, the present writ petition is filed.

2. The petitioners are the borrowers, for their non payment of the loan amount, a demand notice was initiated by the first respondent Bank under Section 13(2) of the SARFAESI Act on 31.12.2016. The second respondent before us is the auction purchaser, the third respondent is the tenant of the premises, which has been put into auction. On 28.02.2017, the first petitioner gave a reply to the aforesaid notice. After exchange of notices, a possession notice was issued by the first respondent on 23.3.2017, followed by the E-Auction sale notice dated 18.08.2017. On 21.08.2017, the auction sale was published in a newspaper, stating that the sale was proposed to be held on 25.09.2017. Challenging the said notice, the petitioners moved an application in S.A.No.

278 of 2017 before the Debts Recovery Tribunal, Coimbatore, wherein a conditional order was passed on 25.09.2017, ordering the petitioners to make payment in two trenches, while directing the first respondent not to confirm the sale. However, it appears that on the very same day forenoon, the auction was confirmed in favour of the 2nd respondent, who paid 25% of the bid amount. This factum was disputed by the petitioners. Thereafter, on 5.10.2017, the Debts Recovery Appellate Tribunal stayed the order of the Debts Recovery Tribunal, by which an interim order was granted against the 2nd respondent not to confirm the sale. The petitioners moved a vacate stay petition and after hearing, final order was passed on 24.10.2017, giving liberty to the petitioner to challenge the auction and subsequent confirmation order.

In the meanwhile, sale certificate was issued on 19.10.2017 on payment of remaining 75% by the 2nd respondent.

3.When the 3rd respondent was before this Court, an interim order of protection was given in favour of the petitioners and

the 3rd respondent was directed to deposit the amount on the file of this Court being a tenant. On 26.10.2017, the sale certificate also registered in favour of the 2nd respondent. 4.The learned counsel for the petitioners submitted that no order has been rendered on merit. The conditional order has been misunderstood and misinterrupted by the Debts Recovery Appellate Tribunal and the order of injunction would only mean that no further proceedings shall go on. It is the case where the petitioners complied with the orders imposed. Therefore, the order passed by the Debts Recovery Appellate Tribunal, requires interference.

5.The learned counsel for the respondents 1 and 2 submitted that the confirmation was made in accordance with the Rules on the date of interim order was granted by the Debts Recovery Tribunal. Therefore, consequential action taken also cannot be questioned with respect to the issuance of sale certificate and registration. The 2nd respondent also complied with the requirement of payment of remaining amount. Therefore, no interference is required.

6. Prima facie we are of the view that the Debts Recovery Appellate Tribunal could have go on further and decide the same on merits. Though, we are not inclined to interfere with the main application in S.A.No.278 of 2017, which is still pending for consideration. Now, the 2nd respondent being an auction purchaser, who is also before this Court, the issue is sought to be decided on merits. The issue would start from the date on which the petitioners alleged that the 1st respondent has not followed the correct procedures and acted contrary to law. Subsequent developments will have to be considered along with the issues which were available prior to that. Now the petitioners have got the interim protection.

Therefore, in order to resolve the issue while maintaining the interim protection granted by this Court, we direct the Debts Recovery Tribunal to dispose of S.A.No.278 of 2017 within a period of four months from the date of receipt of a copy of this order. The petitioners shall implead the 2nd respondent herein before the Debts Recovery Tribunal by filing an appropriate application within a period of two months from the date of receipt of a copy of this order.

7.Interim order already granted by this Court on 18.01.2018 shall continue until and unless, if the same is not modified by the Tribunal. So far, the amount deposited by the 3rd respondent is concerned, the same shall be transferred to the credit of S.A.No.278 of 2017 and the future rents will have to be paid to the aforesaid credit. We make it clear that the deposit amount made already and future deposits will have to be paid in no lien

interest bearing deposit. We make it clear that we are not dealing with all these issues on facts and law adjudicated by the Tribunal.

8.Accordingly, the Writ Petition stands disposed of. No costs. Consequently, connected miscellaneous petitions are closed.

Sd/- Assistant Registrar(CCC) //True copy// Sub Assistant Registrar ms To

1. The Authorized Officer, State Bank of India, SAM Branch, 1112, Raja Plaza, Avinashi Road, Coimbatore - 641 037.

2.The Registrar, The Debt Recovery Tribunal, Coimbatore.

3. The Registrar, The Debt Recovery Appellate Tribunal, Chennai.

+1cc to M/s.T.S.Gopalan & Co, Advocate SR.No.22022 +1cc to Mr.H.Karthik Seshadri, Advocate SR.No.22463 +1cc to Mr.A.Joseph Dorairaj, Advocate SR.No.22405 +1cc to Mr.S.Sethuraman, Advocate SR.No.22406 W.P.No.28511 of 2017 and W.M.P.Nos.30654, 30655, 33932 & 33933 of 2017 MK(CO) GMY(01/07/2020)