IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 25.11.2009 CORAM THE HON'BLE MR.JUSTICE S.J.MUKHOPADHAYA AND THE HON'BLE MR.JUSTICE M.DURAISWAMY Writ Petition Nos.16141 & 20070 of 2009 W.P.No.16141 of 2009 N.Kulandaiammal .. Petitioner Vs. 1. The Authorised Officer State Bank of India Nilgiris. 2. C.Palani Gounder 3. Ayyup Sait 4. The Debts Recovery Appellate Tribunal 55, Ethiraj Salai Chennai 8. .. Respondents W.P.No.20070 of 2009 Mohammed Ayub Sait .. Petitioner Vs. 1. The Presiding Officer Debts Recovery Tribunal Coimbatore. 2. The District Magistrate & Collector of Nilgiris Udhagamandalam. 3. State Bank of India Udhagamandalam Branch. 4. N.Kulandaiammal .. Respondents ----- https://hcservices.ecourts.gov.in/hcservices/ Petitions under Article 226 of the Constitution of India praying for a writ of Mandamus for the relief as stated therein ----- For Petitioner in Mr.Jayesh B.Dolia W.P.No.16141/09 : For M/s. Aiyar & Dolia For Petitioner in Ms.P.T.Asha for W.P.No.20070/09 : M/s. Sarvabhauman Associates For R1 in W.P. No.16141/09 & R3 in W.P.No.20070/09: Mr.K.Mohandas For R2 in W.P.No. 16141/09 : Mr.K.Ragupathy For R2 in W.P.No. 20070/09 : Mr.D.Sreenivasan, Addl.G.P. For R3 in W.P.No. Ms.P.T.Asha for 16141/09 : M/s. Sarvabhauman Associates For R4 in W.P.No. Mr.Jayesh B.Dolia 20070/09 : For M/s. Aiyar & Dolia ----- O R D E R (Made by S.J.MUKHOPADHAYA,J.) The borrower has preferred W.P.No.16141 of 2009 for direction on the first respondent for proceeding further under the SARFAESI Act by taking possession of the properties till the disposal of the appeal in IN-SA No.266 of 2009. 2. It is alleged that one appeal has been preferred before the Debt Recovery Appellate Tribunal, Chennai against the order dated 25.3.2009 passed by the Debt Recovery Tribunal, Coimbatore in IA No.2017 and 2018 of 2008 in SA.SR.No.6350 of 2008. But the same has not yet been registered in the absence of Chairperson of the Debt Recovery Appellate Tribunal. It is for the said reason, such prayer has been made, as noticed above. https://hcservices.ecourts.gov.in/hcservices/ 3. The properties of the borrower have been purchased by two auction purchasers. One of them is Mohammed Ayub Sait, who has preferred W.P.No.20070 of 2009 for direction on the District Magistrate and Collector, Nilgiris, Udhagamandalam to proceed further under Section 14 of the SARFAESI Act and thereby, to hand over the vacant possession of the property bearing Plot No.HIG 35, comprised in D.No.49A/22, Coonoor. For the said reason, both the writ petitions were heard together. 4. The main grievance of the petitioners is that both the properties have been auction sold by the respondent State Bank of India, without following the mandatory provisions of the SARFAESI Act and the Rules framed thereunder. It is alleged that no notice was given to the borrower, as required under Rule 8(6) of the SARFAESI Rules. 5. The learned counsel for the Bank was asked to obtain instruction whether such notice was served or not. But, in reply, the Bank could not satisfy whether such notice was actually served on the borrower. 6. The learned counsel appearing on behalf of the borrower submitted that the Tribunal has erred in holding that the appeal under Section 17 was barred by limitation. It was submitted that the counsel for the borrower wrongly calculated the period of limitation and thereby, the petition was wrongly filed for condonation of delay of 15 days, which was uncalled for. The Tribunal ought to have noticed that the appeal under Section 17 was well within the limitation of 45 days and thereby, ought to have rejected the application for condonation of delay on that ground and ought to have entertained the appeal being within the time. 7. The following facts have been brought to the notice of the Court by the learned counsel for the borrower, which have not been disputed by the learned counsel for the Bank or the auction purchaser. (i) As the borrower and the guarantor failed to repay the amount, the respondent Bank issued possession notice with regard to the properties in question, on 26.9.2007, under Section 13(4) of the SARFAESI Act. Subsequently, the sale cum tender notice in respect of secured asset was issued on 04.1.2008 and the auction was fixed to be held on 08.02.2008. Since no bidder turned up on that date, the respondent Bank once again called for tender cum auction sale notice on 12.6.2008 and fixed the auction on 15.7.2008. The auction had taken place on 15.7.2008 and finally, the sale certificate has been https://hcservices.ecourts.gov.in/hcservices/ issued on 28.7.2008. Thus, the sale was completed on 28.7.2008; (ii) before the sale, no notice seems to have been issued under Rule 8(6) to the borrower or the guarantor; (iii)the borrower filed an appeal under Section 17 challenging the auction sale and not the auction notice. The said appeal under Section 17 was filed on 12.8.2008, i.e. well within the period of 45 days of limitation. However, it appears that the period of limitation was wrongly counted by the borrower or his counsel from the date of auction sale notice dated 12.6.2008 and on that wrong presumption, a petition for condonation of delay of 15 days was filed; and (iv) the Tribunal, merely on the averment made in the petition for condonation of delay, rejected the said petition and dismissed the appeal under Section 17, by the impugned order dated 25.3.2009. 8. From the aforesaid facts, it will be evident that the Tribunal had not applied its mind, while passing the order on 25.3.2009, as to whether the appeal under Section 17 was within the period of limitation (45 days from the date of auction sale). It has not taken into consideration that the auction sale was actually completed on 28.7.2008. It was within 14 days of the auction sale, the appeal under Section 17 was filed. 9. Normally, this Court, under Article 226 of the Constitution of India, does not look into the merit of the case if an order is challenged in appeal under Section 17 of the SARFAESI Act before the Debt Recovery Appellate Tribunal. But, in this case, we find that the appeal has not yet been registered, as the Debt Recovery Appellate Tribunal, Chennai is non functional, in the absence of the Chairperson of the Tribunal. In this background, we have noticed the aforesaid facts and infirmities in the order dated 25.3.2009 passed by the Debt Recovery Tribunal, Chennai. 10. Having heard the learned counsel for the parties, this Court is of the opinion that instead of allowing the prayer as made in the writ petition preferred by the borrower, we should interfere with the illegal order dated 25.3.2009 passed in IA No.2017 and 2018 of 2008 in SA.SR.No.6350 of 2008, by the Debt Recovery Tribunal. Accordingly, the said order is set aside. The Debt Recovery Appellate Tribunal is directed to register the appeal preferred by the borrower under Section 17, hear the case on merit and decide the same, after notice to the parties, on an early date, preferably within three months from the date of receipt/production of a copy of this order. https://hcservices.ecourts.gov.in/hcservices/ 11. The petitioners may raise all the points as raised in these writ petitions, including the question of non service of notice under Rule 8(6). 12. In view of the direction given above, we are not inclined to pass any direction as sought by the auction purchaser in W.P.No.20070 of 2009. However, the learned counsel appearing on behalf of the auction purchaser/ petitioner in W.P.No.20070 of 2009 submitted that the auction purchaser should be given option either to contest the appeal under Section 17 or to withdraw the amount deposited pursuant to the auction, along with interest. Such liberty is given to both the auction purchasers. If any such prayer is made before the Debt Recovery Appellate Tribunal, it will consider the same, after notice to the parties. The writ petitions stand disposed of with the aforesaid observation. There shall be no order as to costs. Consequently, M.P.No.1 of 2009 in W.P.No.16141 of 2009 is closed. kpl Sd/- Asst. Registrar //True Copy// Sub Asst. Registrar To 1. The Presiding Officer Debts Recovery Appellate Tribunal 55, Ethiraj Salai Chennai 8. 2. The Presiding Officer Debts Recovery Tribunal Coimbatore. 3. The District Magistrate & Collector of Nilgiris Udhagamandalam. + 1 cc to Government Pleader, SR No.63929 + 2 ccs to M/s.Sarvabhauman Assocoates, Advocate SR No.63660, 63661 + 1 cc to Mr. K. Mohandoss, Advocate SR No.63762 + 1 cc to M/s.Aiyar and Dolia, Advocate SR No.63669 KA(CO) SR/11.12.2009 W.P.Nos.16141 & 20070 of 2009 https://hcservices.ecourts.gov.in/hcservices/