Research › Search › Judgment

Madras High Court · body

2014 DIGILAW 462 (MAD)

Gowtham Industries v. Lakshmi Vilas Bank Ltd.

2014-02-24

K.KALYANASUNDARAM, M.JAICHANDREN

body2014
JUDGMENT K. Kalyanasundaram, J. 1. This writ petition has been filed praying for a Writ of Certiorarified Mandamus, to quash the sale Certificate, dated 17.12.2013, issued by the respondent bank and for a direction to the Debts Recovery Tribunal, Coimbatore, to dispose of the S.A.No.113 of 2013. 2. The petitioner has contended that the respondent bank had invoked the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002,(hereinafter referred to as the SARFAESI Act in short) against the petitioner, to realise the loan given to M/s.Vijaya Traders and M/s.Gowtham Industries, by issuing notice under Section 13(4) of the SARFAESI Act. It was challenged by the petitioner, in S.A.No.24 of 2013 and when the application was pending, the authorised officer of the respondent bank had issued a notice, for sale of the secured asset. The petitioner filed I.A.No.1176 of 2013, before the Debts Recovery Tribunal, Coimbatore, for stay of the auction notice. The Tribunal had granted interim stay on the condition that the petitioner should deposit a sum of Rs.44 lakhs. Due to non-compliance of the condition, the respondent bank had proceeded with the auction sale and the property was sold in an auction held, on 29.11.2013. The petitioner further contended that the sale certificate, issued by the respondent bank, is against the provisions of the SARFAESI Act. 3. The respondent bank had filed the counter stating that M/s.Vijaya Traders, a proprietary concern and M/s.Gowtham Industries, a partnership firm, had availed loan facilities from the respondent bank. On their failure in repayment, the respondent bank had initiated proceedings under the SARFAESI Act, by issuing notice under Section 13(2) of the SARFAESI Act, on 10.4.2012, calling upon the borrowers to pay a sum of Rs.1,37,05,771/- as on 31.3.2012. Since the borrowers did not favourably respond, within the stipulated time, the bank had issued possession notice, under Section 13(4) of the SARFAESI Act, on 26.12.2012. The said proceedings had been challenged by the petitioner, before the Debts Recovery Tribunal, Coimbatore, in S.A.No.24 of 2013, but the petitioner did not comply with the conditional order passed by the Tribunal, dated 7.11.2013. So the bank proceeded with the sale of the secured asset. The respondent bank had contended that the writ petition is not maintainable on the ground that there is an alternative remedy available to the petitioner, under the SARFAESI Act. 4. So the bank proceeded with the sale of the secured asset. The respondent bank had contended that the writ petition is not maintainable on the ground that there is an alternative remedy available to the petitioner, under the SARFAESI Act. 4. It is noted that the Proprietary concern and the Partnership firm have availed loan facilities from the respondent bank and due to their default, in repaying the loan amount, the respondent bank had initiated proceedings under the SARFAESI Act. Admittedly, the petitioner had filed an application under Section 17 of the SARFAESI Act, before the Debts Recovery Tribunal, challenging the notice issued, by the respondent bank, under Section 13(4) of the SARFAESI Act. It is also seen from the records that the Tribunal, in I.A.No.1176 of 2013, granted interim stay of the sale of the secured asset, on 7.11.2013, subject to the payment of Rs.44 lakhs to the respondent bank, in two instalments. It is not in dispute that the petitioner did not comply with the conditional order and hence, the secured asset was sold by the respondent bank in an auction, held on 29.11.2013. 5. As rightly submitted by the learned counsel for the respondent bank, the petitioner has to challenge the sale only before the Debts Recovery Tribunal, under Section 17 of the SARFAESI Act. The petitioner is not entitled to challenge the sale nor the sale certificate issued by the respondent bank, in the present writ petition. Therefore, we are of the view that the writ petition is not maintainable and accordingly, the writ petition is dismissed. No costs. Consequently, connected miscellaneous petition is dismissed.