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TMI Blog2021 (2) TMI 1361X X X X Extracts X X X X X X X X Extracts X X X X ..... ice, and they also stated that procedure prescribed under sub-rules 1 and 2 of Rule 8 of the Security Interest (Enforcement) Rules, 2002 (for short 'the Rules of 2002') was not followed by the Bank. The same is denied by the 1st respondent-Bank in the counter affidavit. However, this aspect will be considered during the course of judgment. During the course of said recovery proceedings, the 1st respondent-Bank issued sale notice dated 30.10.2019 under Rule 8(6) of the Rules of 2002, and the same was published in Andhra Jyothi and Indian Express newspapers, for auction of the properties on 12.12.2019. Challenging the sale notice dated 30.10.2019, the petitioners, who are the guarantors, filed the present writ petition. 2. In the affidavit filed in support of the writ petition, the petitioners sought to dispute the disbursement of loan amount as per the terms and conditions of the loan agreement, and their case is that as the loan was not disbursed proportionately as per the terms and conditions of the loan agreement, and as the repayment of loan installment was demanded even before disbursement of the entire loan amount, it caused financial crunch, and resulted in declaring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner is the Director of the 2nd respondent-Company, and the said company is represented by its Managing Director. After classifying the loan account of the 2nd respondent-company as NPA, demand notice dated 07.10.2014 was issued under Section 13(2) of the SARFAESI Act, 2002, calling upon the borrower to pay the outstanding debt of Rs. 23,36,90,191.52 ps., as on 24.07.2014, and the same was served on the petitioners, and also on the 2nd respondent-company, but the amount was not paid within the stipulated period of 60 days. 6. The Authorized Officer of the Bank issued possession notice dated 11.02.2015 under the provisions of the SARFAESI Act in respect of the secured assets at Krishna District, Guntur District, Hyderabad District, Rangareddy District and Mahabubnagar District, stipulating three different dates for taking symbolic possession of the secured assets viz., 11.02.2015 for taking symbolic possession of the secured assets at Krishna and Guntur; 12.02.2015 in respect of the properties at Hyderabad and Rangareddy Districts; and 13.02.2015 for taking symbolic possession of the secured assets at Mahabubnagar. The symbolic possession notices were affixed on the secured assets o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, the case of the 1st respondent-Bank, is that they followed the due procedure under Rules 8(6) of the Rules of 2002, before publication of sale notice dated 30.10.2019. 9. In the counter affidavit it is also stated that as the 2nd respondent and its guarantors failed to repay the outstanding loan amount, the Bank was constrained to file O.A. No. 1767 of 2017 on the file of Debts Recovery Tribunal-II at Hyderabad, for recovery of a sum of Rs. 23,36,90,191.52 ps. together with interest and costs, and it was allowed with future interest and costs, on 16.07.2018, but as the said amount was not paid, bank continued the recovery proceedings under the provisions of the SARFAESI Act. 10. With these averments, 1st respondent-Bank seeks to dismiss the writ petition. 11. The auction purchasers were impleaded as respondents 3 to 5 and they also filed counter affidavits seeking to vacate the interim stay granted by this court. 12. No reply affidavit is filed by the petitioners denying the assertions made in the counter affidavit and additional counter affidavit filed by the 1st respondent-Bank. 13. Heard Sri T. Vijay Kumar, learned counsel for the petitioners, Sri M. Narender Reddy, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by holding public auction, the secured creditor shall cause a public notice in two leading newspapers one in vernacular language having sufficient circulation in the locality by setting out the terms of sale, which shall include,-- . . . . 9. Time of sale, issue of sale certificate and delivery of possession etc.- (1) No sale of immovable property under these rules shall take place before the expiry of thirty days from the date on which the public notice of sale is published in newspapers as referred to in the proviso to sub-rule (6) or notice of sale has been served to the borrower. The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002: 13. Enforcement of security interest: . . . (8). Where the amount of dues of the secured creditor together with all costs, charges and expenses incurred by him is tendered to the secured creditor at any time before the date of publication of notice for public auction or inviting quotations or tender from public or private treaty for transfer by way of lease, assignment or sale of the secured assets, -- (i) the secured assets shall not be transferred by way of lease assigned or sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffected in order to provide the required opportunity to the borrower to take all possible steps for retrieving his property. Such a notice is also necessary to ensure that the process of sale will ensure that the secured assets will be sold to provide maximum benefit to the borrowers. The notice is also necessary to ensure that the secured creditor or anyone on itself behalf is not allowed to exploit the situation by virtue of proceedings initiated under the SARFAESI Act, 2002. 20. Further a Division Bench of the erstwhile High Court of Judicature for the State of Telangana and the State of Andhra Pradesh in the decision reported in SRI SAI ANNADATHA POLYMERS v. CANARA BANK MADANAPALLE 2018(5) ALD 180 (DB), held as under: 11. However, the amended provisions of Section 13(8) of the SARFAESI Act bring in a radical change, inasmuch as the right of the borrower to redeem the secured asset stands extinguished thereunder on the very date of publication of the notice for public action under Rule 9(1) of the Rules of 2002. In fact, the right of redemption available to the borrower under the present statutory regime stands drastically curtailed and would be available only till the date o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'door lock' etc. The copies of the returned postal covers with the above stated endorsements, are filed along with the additional counter affidavit. 23. As per the above averments made in the counter affidavits, it is to be seen that the prior notices dated 03.03.2015 sent by the Bank, were served on the petitioners, but the subsequent notice dated 06.08.2019 were returned un-served with postal endorsements 'unclaimed', 'intimation served', 'door locked' etc. 24. The Apex Court in K. BHASKARAN vs. SANKARAN VAIDHYAN BALAN 1999 Supp (3) SCR 271 while considering the 'service of notice' before filing petition under Section 138 of Negotiable Instruments Act, 1881, held as under: It is well settled that a notice refused to be accepted by the addressee can be presumed to have been served on him, [vide Harcharan Singh v. Smt. Shivrani and Ors., [1981] 2 SCC 535, and Jagdish Singh v. Natthu Singh, [1992] 1 SCC 647.] Here the notice is returned as unclaimed and not as refused. Will there be any significant different between the two so far as the presumption of service is concerned? In this connection a reference to Section 27 of the General Claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to above (2 supra), since the respondent-Bank sent notices to the correct addresses of the petitioners as mentioned in the loan agreement, it has to be presumed to have been served, unless the petitioners proves that they were not really served and that they were not responsible for such non-service. But in the present, the petitioners have not even chosen to file any reply affidavit disputing the claim of the respondent-Bank with regard to service of notice. Hence, it has to be presumed that notices dated 06.08.2019 issued under Rule 8(6) of the Rules of 2002, have been served on the petitioners. 29. The Apex court in T.N. PARAMESWARAN UNNI vs. G. KANNAN and ANOTHER (2017)5 SCC 737 held that "15. This Court in a catena of cases has held that when a notice is sent by registered post and is returned with postal endorsement "refused" or "not available in the house" or "house locked" or "shop closed" or "addressee not in station", due service has to be presumed." In view of the above facts and circumstances and the law laid down by Apex Court, it has to be presumed that the sale notice dated 06.08.2019 issued by the Bank under Rule 8(6) of the Rules of 2002, is served on the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said ground. The Apex Court further held that petitioner in such a case is also required to be dealt with for contempt of court for abusing the process of court. The relevant portion of the judgment is as under: 34. The jurisdiction of the Supreme Court under Article 32 and of the High Court under Article 226 of the Constitution is extraordinary, equitable and discretionary. Prerogative writs mentioned therein are issued for doing substantial justice. It is, therefore, of utmost necessity that the petitioner approaching the writ court must come with the clean hands, put forward all the facts before the court without concealing or suppressing anything and seek an appropriate relief. If there is no candid disclosure of relevant and material facts or the petitioner is guilty of misleading the court, his petition may be dismissed at the threshold without considering the merits of the claim. . . . 36. A prerogative remedy is not a matter of course. While exercising extraordinary power a writ court would certainly bear in mind the conduct of the party who invokes the jurisdiction of the court. If the applicant makes a false statement or suppresses material fact or attempts to m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere not served with sale notice under Rule 8(6), and 30 day notice period fixed there under was not given to them to clear the loan, and to redeem the property, is found to be not correct, and the Bank has followed the due procedure as envisaged under the provisions of SARFAESI Act, and the Rules of 2002, and further, the petitioners have suppressed the material facts with regard to filing of securitization applications before the Debts Recovery Tribunal, and the facts and circumstances manifestly disclose that they are resorting to dilatory and subterfuge tactics, to see that the recovery proceedings initiated by the Bank, are defeated. This cannot be appreciated. For suppression of material facts, as per the law laid down by Apex Court in the above judgment, the writ petition is liable to be dismissed with exemplary costs. 33. Accordingly, the writ petition is dismissed with costs, which are quantified at Rs. 20,000/- (Rupees twenty thousand only), payable to Telangana State Legal Services Authority, within a period of eight weeks from the date of receipt of a copy of this order, failing which it is open for the said Authority, to initiate steps for recovery of the same in accor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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