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Mitra Educational and Welfare Society Versus The Authorised Officer, State Bank of India, Srikakulam and another

2016 (9) TMI 821 - ANDHRA PRADESH HIGH COURT

E-auction - procedure prescribed under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Held that:- For the whole of the entire loan transaction availed by a borrower and if he has created different security interests in different movable/immovable properties by using the expression that secured asset, an option has been provided to the borrower to retrieve that particular secured asset, which is sold by the secured creditor, like in the .....

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lic auction of that particular secured asset and retrieve it. But, at the same time, the incidental costs, charges and expenses, which the bank may have incurred for undertaking the securitization measures, may also have to be tendered. - Hence, apart from repayment of ₹ 3,60,10,000/-, which is the price offered and paid by the 2nd respondent herein for the secured asset, which was sold by the 1st respondent on 23.12.2015, the petitioner shall also pay the securitization expenses incur .....

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ore 09.05.2016, the bank would be at perfect liberty to register the Sale Certificate already issued in favour of the 2nd respondent, at his expenses and deliver vacant possession of the secured asset purchased by him. - Should the petitioner honour the commitment, which he made to this Court today, it is needless for us to observe that the Sale Certificate issued in favour of the 2nd respondent with regard to the secured asset shall be cancelled and possession of the secured asset should be .....

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Main Branch, Srikakulam, in issuing e-auction sale notice dated 16.11.2015 without duly following the procedure prescribed under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for brevity the SARFAESI Act), particularly in collusion with the 2nd respondent, as arbitrary and illegal. 2. Heard Sri C. Raghu, learned Senior Counsel on behalf of Sri T. Rajinikanth Reddy, learned counsel for the petitioner, and Sri B.S.S. Prasad, learned Stan .....

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ious occasion when the 1st respondent-Bank conducted sale and this time also he has emerged as the best bidder does not necessarily and invariably lead to the conclusion that there was a collusion between the Authorised Officer of the State Bank of India, Srikakulam Main Branch, and the 2nd respondent. Fortunately, for us, Sri C. Raghu, learned Senior Counsel has not pressed this contention beyond this point. 4. The petitioner herein, an Educational Welfare Society, has availed certain financial .....

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n of bank as defined under Section 2(1)(c) of the SARFAESI Act and the security interest created by them also answers the definition contained under Section 2(1)(z)(f) of the SARFAESI Act, the State Bank of India, the creditor, is entitled to take measures for securitization of the loan as provided for under Section 13 of the SARFAESI Act. Under sub-section (2) of Section 13 of the SARFAESI Act, the secured creditor is required to draw a demand notice calling upon the defaulting borrower to pay .....

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as Non-performing Asset on 19.01.2013 and once again a notice under sub-section (2) of Section 13 of the SARFAESI Act demanding the petitioner to liquidate the entire outstanding liability has been issued by the Bank. It is the claim of the petitioner that it has deposited a sum of ₹ 30,00,000/- on 09.03.2013, another sum of ₹ 30,00,000/- on 31.03.2013, a further sum of ₹ 10,00,000/- on 08.06.2013, and a further sum of ₹ 25,50,000/- subsequently. Since the outstanding lia .....

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/w. Rule 9(1) of the Security Interest (Enforcement) Rules, 2002 (for brevity the Rules) was issued on 04.12.2013. The same was also got published in the Newspapers on 05.12.2013. It appears, auction was conducted and Sale Certificate was also issued in favour of the purchaser on 07.01.2014. Then the petitioner approached the Debts Recovery Tribunal, Visakhapatnam, and the said Tribunal, by order dated 12.02.2014 in S.A.No.245 of 2013, set aside the sale by auction, including the issuance of Sal .....

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15 between 11.30 a.m. to 12.30 p.m. The Reserve Price was fixed as ₹ 3.60 Crores and the Earnest Money required to be deposited was ₹ 36,00,000/-, being 10% of the upset price. The bid increment amount was fixed at ₹ 10,000/-. In the auctions so conducted, the 2nd respondent once again participated and also emerged as the best bidder and his offer of ₹ 3,60,10,000/- was found to be the most responsive offer, as no other bidder has come forward to purchase the property. It .....

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.12.2015, thus maintaining more than 30 days time variation as is required under Rule 8(6) r/w. Rule 9(1) of the Rules referred to supra. In principle, therefore, we cannot find fault, in any manner, with the sale of the secured asset conducted by the 1st respondent-Bank. 6. However, one submission made by Sri C. Raghu, learned Senior Counsel, requires to be taken into account and requires consideration. He would urge that the petitioner has a right to redeem the mortgaged property by paying the .....

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is a complete answer. This apart, the Parliament has also noticed this valuable right of the mortgager and hence incorporated the same in the form of sub-section (8) of Section 13 of the SARFAESI Act, which reads as under: 13. Enforcement of Security Interest :- (1) to (7) (8) If the dues of the secured creditor together with all costs, charges and expenses incurred by him are tendered to the secured creditor at any time before the date fixed for sale or transfer, the secured asset shall not be .....

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re, for the whole of the entire loan transaction availed by a borrower and if he has created different security interests in different movable/immovable properties by using the expression that secured asset, an option has been provided to the borrower to retrieve that particular secured asset, which is sold by the secured creditor, like in the instant case, where more than one collateral security has been created by the borrower as the security for the loan availed and now only one such security .....

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