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TMI Blog2014 (6) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Single Judge. We are, therefore, of the opinion that in the facts of this case, once the payment is made to the appellant by respondent Nos.1 and 2 in the manner stated hereinafter, the possession of the property shall be delivered to the respondent Nos.1 and 2 with no further liability towards the bank. sale in favour of the appellants dated 18th December, 2006 and the subsequent delivery of possession to the appellants is null and void. The sale is accordingly set aside. The appellants are directed to deliver the possession of the property purchased by them under the Sale Deed dated 20th December, 2006 to Respondent Nos. 1 and 2 immediately upon receiving the entire amount as directed - Decided in favour of appellants. - CIVIL APPEAL NO. 3865 OF 2014 with 3866 OF 2014 - - - Dated:- 14-3-2014 - JUDGMENT Surinder Singh Nijjar, J. Leave granted. 2. These special leave petitions are directed against the final judgment and order dated 14th June, 2011 passed by the Madras High Court (Madurai Bench) in W.A.No.417 of 2011 dismissing the aforesaid Writ Appeal filed by the appellants. 3. We have heard the learned counsel for the parties at length. 4. Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as on that date the outstanding balance due to the bank was a sum of Rs.1.57 crores. A request was made to break up the aforesaid amount as follows : (a) Machineries of M/s. Suruthi Fabrics 0.40 lacs (b) Land and building of M/s. Suruthi Fabrics 0.70 lacs (c) Pandias Garment Factory land and Building - And Suruthi Fabrics 5.51 acres Land 0.47 lacs 6. Permission was sought to sell the assets as stated above within six months. On 11th September, 2006, respondent Nos.1 and 2 made a payment of Rs.42 lacs to respondent No.3-Bank, by selling machinery with the permission of respondent No.3-Bank. A request was also made for an extension of two moths for paying the remaining amount after selling the secured assets. On 8th December, 2006, respondent No.3-Bank gave approval for private sale of the immovable property to the appellants and for issue of sale certificate. On the very same date, the secured assets were sold in favour of the petitioner for a consideration of 123.10 lacs. It is not d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uitable to permit the petitioner to keep the plot which is adjacent to the property of the petitioner. Respondent Nos.1 and 2 can be permitted to take the other plots. 11. Mr. Dhruv Mehta, learned senior counsel appearing on behalf of the respondent Nos. 1 and 2 relying on the judgment of this Court in Mathew Varghese v. M. Amritha Kumar in C.A.No.1927-1929 of 2014 decided on 10th February, 2014 submits that the Rules, 2002 are mandatory in nature. In the present case, the sale has been effected in violation of the aforesaid rules. Both the learned Single Judge as well as the Division Bench have come to the conclusion that the provisions of the aforesaid rules have not been followed. It is not disputed by any of the parties that there is no agreement between respondent Nos. 1 and 2 and respondent No.3-Bank, in writing, to affect the sale by Private Treaty. Mr. Vikas Singh, learned senior counsel appearing for respondent No.3-Bank, however, pointed out that the respondent Nos.1 and 2 had filed a review petition in which it was averred that they may be permitted to sell the secured assets by Private Treaty. Therefore, according to Mr. Vikas Singh, respondent Nos. 1 and 2 cannot no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which either the sale or transfer will be effected 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 any one on its behalf is not allowed to exploit the situation by virtue of proceedings initiated under the SARFAESI Act, 2002. Thereafter, in Paragraph 27, this Court observed as follows: 27. Therefore, by virtue of the stipulations contained under the provisions of the SARFAESI Act, in particular, Section 13(8), any sale or transfer of a SECURED ASSET, cannot take place without duly informing the borrower of the time and date of such sale or transfer in order to enable the borrower to tender the dues of the SECURED CREDITOR with all costs, charges and expenses and any such sale or transfer effected without complying with the said statutory requirement would be a constitutional violation and nullify the ultimate sale. 14. As noticed above, this Court also examined Rules 8 and 9 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d emphasized on behalf of the appellants that no blame at all can be attributed to them. The bank had decided to sell the immovable properties to the appellants for Rs.1,23,10,000/- against the reserve price of Rs.1,23,00,000. This is evident from the joint meeting of the bank held with Ge-Winn on 10th December, 2006, wherein it is observed as follows: Referring to the above in the presence of the undersigned it has been decided to effect the sale to M/s. Susee Automobiles Pvt. Ltd., Madurai and Smt. Nirmala Jeyablan, W/o Shri Jayabaaalan, No.4, S.V. Nagar, S.S. Colony, Madurai for a consideration of Rs.123.10 lakhs (Rupees one crore twenty three lakhs and ten thousand only) against the reserve price of Rs.123.00 lakhs and issue Sale Certificate for registration under private treaty. 21. Mr. Desai had also pointed out that the borrowers-Respondent No.1 and 2 had evaluated the property at Rs.117 lakhs. The evaluation was acknowledged by Respondent Nos. 1 and 2 in the letter dated 28th August, 2006. Therefore, the reserve price was fixed based upon the aforesaid figures. The appellants bought the property for more than the reserve price. The appellants paid the entire consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 to 15.06.2014 Total Rs. 1,41,00,000/- Rs. 1,84,00,500/- Rs. 3,25,00,500/- Rs. 1,23,10,000/- Sale Price Rs. 18,90,000/- (Stamp Duty) 26. Mr. Dhruv Mehta has stated that Respondent Nos. 1 and 2 are prepared to refund the sale amount paid by the appellants as Sale Price together with 18% simple interest from 1st July, 2007 till 15th June, 2014. The total amount spent on Stamp Duty shall also be refunded to the appellants. The total amount shall be paid to the appellants by 15th June, 2014. Mr. Desai had pointed out that the amount deposited with the bank, which is said to be lying in a FDR Bearing 8.25% per annum ought to be refunded by the bank to the appellants. Upon the entire amount being repaid to the appellants, the possession of the property purchased by the appellants will be delivered to the Respondent Nos.1 and 2. 27. Insofar as the submission of Mr. Vikas Singh learned senior counsel is concerned we are unable to accept the same in the facts and circumstances of this cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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