M.A(S.A):57/2012
1. This appeal impugns the order dated 24.8.2011 passed by the Learned Presiding Officer, DRT Bangalore in SA No.888/2010.
2. The case of the Appellant may be stated as follows:
The Appellant is the Proprietor of M/s P. Ramaiah Chetty Son dealing in old empty bottles, machinery parts etc. The Appellant availed certain credit facilities from the 1stRespondent Bank and defaulted in repayment of the same due to losses sustained in the business. The 1st Respondent Bank initiated proceedings under the provisions of the SARFAESI Act and issued the notice under Section 13(2) of the Act on 23.2.2008 demanding a sum of Rs.22,22,214/-. While the Appellant was negotiating with the Bank for a settlement the 1st Respondent Bank issued the Possession Notice under Section 13(4) of the Act on 9.7.2009 and took symbolic possession of the secured asset. The 1st Respondent Bank also issued the tender-cum-auction sale notice dated 20.8.2009. The Appellant remitted a sum of Rs.5 lakhs on 5.10.2009 and by his letter dated 23.10.2009 sought time till 31.10.2009 for the payment of the remaining dues. The 1stRespondent Bank again issued the sale notice dated 12.6.2010 fixing the auction sale on 21.7.2010. The Respondent Nos. 2 to 5 belonging to one family offered to settle the dues of the Appellant but the same could not be accepted for the reason that they wanted to take the secured asset for a meager sum of Rs.45 lakhs. The Appellant again remitted a sum of Rs.40,000/- on 22.7.2010 and offered to settle the dues in installments which was not accepted by the 1st Respondent Bank. The 1stRespondent brought the secured asset for sale again on 2.11.2010 fixing the auction sale on 6.12.2010 with the reserve price as Rs.75 lakhs for the recovery of its dues of Rs.28,71,026.90. In the auction the Respondent Nos. 2 to 5 jointly submitted a bid for Rs.75,01,000/- and it was the only bid received in the auction. The Respondent Nos. 2 to 5 being the successful bidders in the auction had deposited Rs.18,75,250/- being 25% of the bid amount and did not remit any money thereafter and therefore the sale remained incomplete. Thereafter the Appellant filed SA No.888/2010 before DRT Bangalore and the Tribunal below dismissed the appeal without considering the pleadings and authorities submitted by the Appellant. Hence this appeal.
3. Ld. Counsel appearing on behalf of the Appellant took this tribunal through the factual matrix of the case and stated the following:
a) The valuation of the property has not been properly done because the valuation was not done through the approved valuer as per the Wealth Tax Act.
b) The same valuer had enhanced the value of the property after a year.
c) The secured creditor arrived at the valuation of the property which was obtained three years and 9 months before and that the same is not proper.
d) There was only one bidder and that the price at which the sale was knocked down was just Rs.1000/- more than the reserved price.
e) The successful bidder in this case did not pay the 75% of the bid amount within a period of 15 days as stipulated in the Rules and that he has not paid the said sum even till today and therefore the Authorized officer has violated the provisions of the SARFAESI Act.
f) The order of the Ld. Presiding officer, DRT, Bangalore
g) The Authorized Officer contravened the rule 8(5) and proceeded to sell the whole of the property whereas a portion of the property would have been sufficient to discharge the dues.
Ld. Counsel relied upon judgments laid down in the case of ‘Punjab National Bank, New Delhi Vs Sunil Agarwal and others (2011) (1) D.R.T.C. 271 (DRAT, Delhi New Delhi Delhi
4. Ld. Counsel for the Respondent Bank drew the attention of this Tribunal to the facts of the case and stated that a reading of the securitization application filed by the Appellant would clearly reveal that the ground taken up by the Appellant before the tribunal below was that the valuation was not obtained before the sale of the property and that the point that has been urged with respect to the requirement of the valuer to be registered under the Wealth Tax Act has been developed subsequent to the SA and that such a development cannot be permitted. Ld. Counsel further stated that the Appellant ought to have placed the above fact before the tribunal below to have enabled the Bank to reply to the same and that the Appellant is not entitled to take a new ground at this stage and the said ground has to be negatived. Ld. Counsel prayed that orders may be passed.
5. Ld. Counsel appearing on behalf of R2 to R5 stated that 25% of the bid amount was paid immediately after the knocking down of the bid and that the remaining 75% of the bid amount could not be paid because of the orders of stay passed by the Tribunal below and thereafter by the Hon’ble High Court of Karnataka. Ld. Counsel added that the auction purchasers have offered to deposit the said amount before the Hon’ble High Court of Karnataka but the Hon’ble High Court of Karnataka had directed the auction purchasers to pay the money to the Bank at the appropriate time.
6. Heard the Ld. Counsel for the Appellant, Ld. Counsel for the 1st Respondent Bank and the Ld. Counsel for the auction purchasers i.e. R2 to R5.
7. A perusal of SA No. 888/2010 on the file of DRT, Bangalore
8. A perusal of the order of the Ld. Presiding Officer passed in SA 888/2010 reveals that the Appellant has not demonstrated any violation of any of the provisions of the SARFAESI Act or the rules made there under in the SA and that the Appellant has also not utilized the opportunity given to him to redeem the mortgage before the sale. It is also seen that the Appellant has not put forward the plea that the valuer is not a registered valuer under the Wealth Tax Act before the Tribunal below and that when the Appellant has chosen to give up his right to submit a plea on the above question before the Tribunal below the Appellant cannot be permitted to raise the plea of non registration of the valuer under the Wealth Tax Act before this Tribunal in this Appeal and such being the case the Appellant’s contentions made for the first time with respect to the valuer cannot be taken into the consideration especially when the Respondent Bank had been denied the opportunity to counter a claim not made before the Tribunal below but presently made before this Tribunal with respect to the registration of the valuer under the Wealth Tax Act. It is seen that two valuations have been made by valuer in this case. A perusal of the valuation report dated 10.3.2008 i.e. the first report reveals that the “PURPOSE” of the valuation is “For City Union Bank Ltd., Sultanpet Branch, Bangalore
9. Therefore from the fact that the Appellant has chosen not to aver the aspect of the valuer being not registered under the Wealth Tax Act before the Tribunal below, from the fact that it can be seen that the Appellant has chosen to give up his right to challenge the aspect of the registration of the valuer under the Wealth Tax Act in the securitization application filed in the Tribunal below, from the fact that the Appellant by not averring about the non registration of the valuer under the Wealth Tax Act had denied the opportunity to the 1st Respondent Bank to counter the claim about the non registration before the Tribunal below, from the fact that the Appellant has made a new claim about the non registration of the valuer for the first time in this appeal before this Tribunal, from the fact that the Appellant has not shown that he was prejudiced by the non registration of the valuer under the Wealth Tax Act this Tribunal is driven to conclude that the finding of the Ld. Presiding Officer in paragraph IV(ii) that “it is also seen that proper valuation has been obtained by the Respondent Bank from the approved valuer before issuing the sale notice as per the relevant rules made under the Act” is correct.
10. The Appellant’s contentions that the property has been undervalued and a property of a very high value has been sold for a very meager sum and the further contention that only the sale of a portion of the secured assets would have been sufficient to meet out the dues payable to the Bank have all to be watered down in view of the findings of the Ld. Presiding Officer in his order that the Authorized Officer has not contravened any of the provisions of the SARFAESI Act or the rules made thereunder. It is also seen that the Ld. Presiding Officer has correctly come to the conclusion that the Appellant has not utilized the opportunity available to him to redeem the property.
11. A combined reading of the proceedings of the Authorized Officer dated 6.12.2010 and Ground No. iv of the Affidavit filed in support of IA 1156/2011 before this Tribunal reveals that the sale had not been confirmed. Rule 9(4) of the SARFAESI Interest (Enforcement) Rules 2002 states that the balance 75% of the bid amount has to be paid on or before the fifteenth day of the confirmation of sale of the immovable property or such extended period as may be agreed upon in writing between the parties. The confirmation of the sale was not done as on 21.12.2010 and an interim order of ‘status quo’ was passed by the Tribunal below on the said day and therefore the successful bidders could not pay the remaining 75% of the bid amount. Further it is also seen that the Hon’ble High Court of Karnataka was pleased to pass an interim order due to which also the 75% of the bid amount could not be paid by the successful bidders. It is also seen in the “sealed application form for Tender cum Sale” dated 6.12.2010 submitted by the successful bidders that they have stated that they will pay the 75% of the bid amount on the same day of the delivery of possession of the property to them and that from this it can be seen that both the bidders and Authorized Officer have agreed to the condition that the successful bidders will pay 75% of the bid amount only on the delivery of possession. Therefore it can be seen that the Authorized Officer has not contravened Rule 9(4) of the SARFAESI Interest (Enforcement) Rules 2002 and that the finding of the Ld. Presiding Officer that no Rule has been contravened is proper.
12. Therefore as it is seen that the Ld. Presiding Officer has properly considered all the material before him and arrived at a proper decision in his order no interference is warranted in this case. Accordingly this Tribunal is driven to dismiss the appeal.
13. In the result this appeal is dismissed.
IA 1155/2011 (Waiver): RA(SA) is dismissed today. The Registry is directed to send the deposit lying in this Tribunal alongwith the accrued interest to the Respondent Bank for being dealt with in accordance with law within a week. This IA is closed.
This order was issed by the Honble Chair person of DRAT chennnai on 24th july 2012
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