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TMI Blog2022 (3) TMI 1614X X X X Extracts X X X X X X X X Extracts X X X X ..... ccept the plaintiffs case that the defendant nos.1 and 2 colluded with the bank officers and managed to purchase the suit property at undervalued price. Although in the plaint, plaintiffs alleged secret understanding between the officers of the bank and the defendant nos.1 and 2, the allegations require no consideration for two simple reasons; first, is that, bank was not aware of the MOU and second, the officers against whom allegations of collusion, have been made, are not parties to the suit. Additionally, the allegations of the fraud are vague and no better particulars have been pleaded. The plaintiffs have not made out prima-facie case that defendant no.1, in secret understanding with the bank officers bye- passed plaintiff s interest and purchased the suit property with an intention to extinguish their title over suit property. The material on record shows, that the defendant nos.1 and 2 have invoked the alternative dispute resolution mechanism and called upon the plaintiffs to accept the nomination of either persons to act as sole arbitrator. As such, if at all plaintiffs had suffered any losses for the alleged breach of MOU by the defendant nos.1 and 2, they may claim the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with 104 of the Civil Procedure Code, 1908 passed by the learned Judge, City Civil Court at Greater Bombay. 2 Briefly stated, undisputed facts of the case are as under; Plaintiffs are borrowers within the meaning of Section 2(f) of the SARFAESI Act ( Act for short). They created a security interest in the suit property, in favour of State Bank of India ( Bank for short), by executing security agreement. Where upon, bank had sanctioned and disbursed loan to them. Plaintiffs account was, categorised, under stressed asset and transferred to asset recovery branch at Thane. Thereafter, on 15th May, 2019, notice under Section 13(2) under SARFAESI Act was issued, by which plaintiffs were called upon to pay Rs.1,69,00,299/-. Despite, several reminders, plaintiffs failed and neglected to pay the dues to the bank. Thus, to enforce security interest, the bank (Secured Creditor) after complying with the mandatory provisions and rules of the SARFAESI, E-auctioned the suit property, on 25th October, 2021. Before auctioning, bank had published sale notices, in five newspapers, in various places. That apart, notice was also uploaded on NSTCE web-site. E-Auction was conducted through Government ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oan, although they were instructed not to contact the bank since same would jeopardise the settlement talks. Plaintiffs would thus, allege, in spite of the same, defendant nos.1 and 2 began to speak directly with the officers of bank to the exclusion of the plaintiffs and due to that, chances of said loan being settled was getting bleak. It is Plaintiffs case, that on 13th September, 2021, his last OTS proposal was rejected and five days later, the bank issued, sale notice dated 18th September, 2021. Thereafter, on 24th September, 2021, the plaintiff no.1 received termination notice dated 20th September, 2021 from Advocate of the defendant nos.1 and 2 inter-alia terminating MOU. Thus, according to the plaintiffs, defendant nos.1 and 2 in collusion with officers of the bank, bye- passed the plaintiffs, firstly, by establishing contacts with the Bank Officers; there after terminated the MOU; Where after they managed to auction the suit property for Rs.1,90,50,000/- (Rupees One Crore Ninety Lacs and Fifty Thousand Only), which was much lower than the price for which they had agreed to purchase the Suit Property and further purchased the same in auction held by the Bank. Plaintiffs wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 13(2) of the SARFAESI Act was issued on 15th May, 2019. 2 MOU, was executed on 11th February, 2021. 3 Plaintiffs were to reach the settlement with Bank before 11th April, 2021. 4 Time line was extended by defendant nos.1 and 2 from time to time; yet, plaintiffs postponed and/or avoided to settle Bank s dues. 5 On 20 th September, 2021 defendants terminated MOU vide advocate s notice. 6 On 20th September, 2021 Bank issued sale notice. 7 On 12th October, 2021 suit was filed. 8 On 25 th October, 2021, Suit Property was auctioned by the bank. 9 It was purchased by defendant nos.1 and 2 in e-auction for Rs.1,90,50,000/- (Rupees One Crore Ninety Lakhs and Fifty Thousand Only). 10 Sale certificate was issued on 27th October, 2021 under Rule 9(6) of the Security Interest (Enforcement) Rules, 2002. . It may also be noted that although, the application for temporary reliefs, was moved along with the suit may be on 12th October, 2021, however, by the time, application was heard, the suit property was auctioned and purchased by the defendant nos.1 and 2. As a consequence, taking note of these events and facts of the case, learned trial Court declined the interim reliefs and rejecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uit Property. In fact, the bank was not aware of the MOU executed between the plaintiffs and defendant no.1. As a consequence, for want of knowledge of the MOU, it is inconceivable, and improbable, to accept the plaintiffs case that the defendant nos.1 and 2 colluded with the bank officers and managed to purchase the suit property at undervalued price. Although in the plaint, plaintiffs alleged secret understanding between the officers of the bank and the defendant nos.1 and 2, the allegations require no consideration for two simple reasons; first, is that, bank was not aware of the MOU and second, the officers against whom allegations of collusion, have been made, are not parties to the suit. Additionally, the allegations of the fraud are vague and no better particulars have been pleaded. In that view of the matter, the plaintiffs have not made out prima-facie case that defendant no.1, in secret understanding with the bank officers bye- passed plaintiff s interest and purchased the suit property with an intention to extinguish their title over suit property. 6 Assuming, the defendant nos.1 and 2 purchased the suit property in the public auction conducted by bank in defiance of ter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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