1 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 09.11.2011 C O R A M THE HONOURABLE MR.JUSTICE V.RAMASUBRAMANIAN W.P.(MD)No. 11699 of 2011 and M.P.(MD) Nos. 1 and 2 of 2011 T.N.S.M.Sankaralingam ... Petitioner Vs. 1.The Recovery Officer, Debt Recovery Tribunal, Madurai. 2.The Branch Manager, Central Bank of India, No.15, Meenakshiamman Kovil Street, Madurai. 3.P.R.K.Augustine, P.R.K. St. Joseph Coffee Estate, Sirumalai Village, Dindigul Taluk & District. ... Respondents Prayer: Writ Petition filed under Article 226 of the Constitution of India to issue a Writ of Certiorarified Mandamus to call for the records relating to the impugned auction sale notice in DRC No. 14/2011 in TA No.205/2007/RP. No. 14/2011 dated 6.9.2011 and quash the same and consequently directing the firs respondent to fix the upset price in consonance with the market value and pass such further or other orders as this Court may deem fit and proper in the circumstances of the case. For Petitioner : Mr.B.Vijay Karthikeyan For R2 : Mr.R.Pandivel For R3 : Mr.C.Vakeeswaran O R D E R The petitioner has come up with the above Writ Petition challenging an auction sale notice issued by the Recovery Officer of Debt Recovery Tribunal. 2. Heard Mr.B.Vijay Karthikeyan, learned counsel for the petitioner, Mr.R.Pandivel, learned counsel for the second respondent and Mr.C.Vakeeswaran, learned counsel for the third respondent/debtor. 3. The petitioner is an unsecured creditor of the third respondent. The third respondent filed I.P. No. 46 of 2002 on the file of the Sub Court, Tiruchirappalli for adjudicating him as an insolvent. About 247 persons were cited in the Insolvency Petition as the respondents/creditors. The Central Bank of India, which is the second respondent herein was also cited in the insolvency petition as respondent Nos. 244 and 245. The petitioner herein was cited as respondent No.229, in the insolvency petition, as he happens to be the unsecured creditor. The insolvency proceedings are now pending. https://hcservices.ecourts.gov.in/hcservices/ 2 4. In the mean time, the first respondent issued an auction sale notice on 6.9.2011, in pursuance of a certificate of recovery issued by Debt Recovery Tribunal. Challenging the auction sale notice, the petitioner, who is an unsecured creditor, who is also a party to the insolvency proceedings, has come up with the above Writ Petition. 5. The short ground of which the petitioner challenges the auction sale notice is that the property in question is a very valuable property whose market value is many times more than the upset price and that due to wrong valuation and also due to the interim order passed by the civil court, the property is sought to be sold at a throwaway price. 6. There is no dispute about the fact that the second respondent bank is a secured creditor. The secured creditor is entitled to stand outside the insolvency proceedings and enforce his security. Therefore, on legal grounds, the action taken by the petitioner cannot be challenged. 7. On the factual ground that a very valuable property is sought to be sold at a throwaway price, I decided to give an opportunity to the petitioner. Therefore, I passed an order on 12.10.2011 directing the issue of notice to the respondents. In the mean time, I directed the first respondent to proceed with the auction, but not to confirm it, in view of serious allegations. 8. Subsequently, when the Writ Petition came up for hearing on 28.10.2011, the learned counsel for the petitioner submitted that persons, who are prepared to pay at least more than two times the upset price fixed by the Recovery Officer, wanted to inspect the property and that an interim order passed by the District Munsif Court in respect of this property and other properties was creating an apprehension in the minds of the prospective purchasers. 9. Therefore, in order to give one more opportunity, I passed another order on 28.10.2011, making it clear that the interim order of status-quo passed by the District Munsif court, Dindigul in I.A. No. 804 of 2010 in O.S. No. 707 of 2010 will be of no consequence and will not be an impediment for the purchase of the property. I also directed the petitioner, the Bank as well as the debtor to take any prospective buyers to inspect the property. This order was passed on 28.10.2011, in order to give an opportunity to the petitioner to demonstrate before this Court that there are persons willing to offer at least two times more than the upset price fixed by the first respondent. In other words, the petitioner was given the benefit of (1) taking prospective buyers to the property for inspection (2) indicating that the interim order passed by the Munsif Court will be no impediment. 10. Despite the above concessions, the petitioner is not able to bring any buyer to demonstrate that there are other persons who are prepared to buy the property for a much higher value. Therefore, the Writ Petition cannot be entertained. 11. According to the bank, the upset price was fixed at Rs.2,63,94,000/- (Rupees two crores sixty three lakhs and 94 thousand only), on the basis of the valuation report submitted by a Chartered Engineer and the valuers. According to the bank, the property is not undervalued and that the petitioner has not produced any document to show that the property is undervalued. Two persons participated in the auction and highest bid was Rs.12,000/-(Rupees twelve thousand only) more than the upset price. https://hcservices.ecourts.gov.in/hcservices/ 3 12. I do not know whether the highest bid matches the actual market value or not. But unfortunately, the petitioner as well as the debtor have not been able to demonstrate before me that there are other persons willing to pay a much higher amount. The auction purchasers have quoted a little more than the upset price (1) without the benefit of superseding the interim order of the District Munsif Court and (2) without the concession shown by me to the petitioner. With two concessions shown to the petitioner, which the auction purchasers were not able to get, the petitioner could not bring any purchaser. Therefore, the Writ Petition is dismissed. The dismissal of the Writ Petition will not preclude either the petitioner or debtor from working out their remedies before the Debt Recovery Tribunal and the Insolvency Court on the basis of the very same contentions. No costs. Consequently, connected M.P.s are closed. Sd/- Assistant Registrar (CO) / True Copy / Sub Assistant Registrar To 1. The Recovery Officer,Debt Recovery Tribunal,Madurai. 2. The Branch Manager,Central Bank of India, No.15, Meenakshiamman Kovil Street,Madurai. +1CC TO MR.VIJAY KARTHIKEYAN, ADVOCATE SR : 38560 +1CC TO MR.R.PANDIVEL, ADVOCATE SR : 38521 Ses SR : 10.11.2011 : 3p/5c : IT W.P.(MD)No.11699 of 2011 9.11.2011 https://hcservices.ecourts.gov.in/hcservices/