Case: V. Ganesan Vs. Canara Bank &amp; Others

The respondent No.2 in this appeal is the borrower whose persistent failure to pay the agreed amounts led to the sale of the mortgaged property which was purchased by the appellant in an auction held on 13th December, 2005.On 10th January, 2006, the second respondent filed an application for setting aside the aforesaid sale which was rejected by the Recovery Officer on 20th January, 2006. On the same day, i.e. 20th January, 2006, the sale in favour of the appellant was confirmed and sale certificate was issued. On the next date i.e. 21st January, 2006, a sale deed was executed in favour of the appellant and the title deeds were handed over to the said appellant. Thereafter on 3rd February, 2006 the respondent No.2 filed another application under Section 27(2) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 seeking leave to deposit the amount at which the property was purchased by the appellant. The said application was once again dismissed.Thereafter, it appears that the second respondent preferred Transfer Petition No.61 of 2006 before the Debts Recovery Appellate Tribunal, Chennai (hereinafter referred to as "the DRAT, Chennai") for transfer of proceedings from Debts Recovery Tribunal, Coimbatore ("DRT, Coimbatore" for short) where it was pending to Debts Recovery Tribunal, Chennai ("DRT, Chennai" for short) on the ground that the DRT, Coimbatore was not in a position to hear the case due to the absence of a Presiding Officer. During the pendency of the aforesaid Transfer Petition, the second respondent on 19th June, 2006 filed an I.A. under Rule 22 of the DRAT (Procedure) Rules, 1994 seeking the same relief i.e. setting aside of the sale. The aforesaid relief was sought, ostensibly, to secure the ends of justice as according to the said respondent the property in question was the only piece of property left with him. Though the aforesaid prayer was opposed by the appellant, the DRAT, Chennai by order dated 19th October, 2006 allowed the said application and set aside the sale made in favour of the appellant on certain conditions. Aggrieved, the appellant moved the High Court of Madras by way of a writ petition which was dismissed by the impugned order dated 29th March, 2007. Hence the present appeal.

Court's reasoning:
4. A reading of the order of the DRAT, Chennai as well as the order of the High court would go to show that what had prompted the said authorities to hold in favour of the respondent No.2 was the fact that the property in question was the sole item of property owned by the said respondent and furthermore as the appellant had received the amount paid by him in the auction sale from the respondent No.2.Having considered the matter we are of the view that the said grounds cannot constitute a sufficient basis for setting aside a confirmed sale in favour of the appellant which has also crystallised into execution of a sale deed in his favour. Even the jurisdiction of the DRAT to pass the impugned order in purported exercise of powers under Rule 22 of the DRAT (Procedure) Rules, 1994 would remain in serious doubt as the DRAT was only in seisin of the issue of transfer of the proceedings from the DRT at Coimbatore to the DRT at Chennai and not the merits of the dispute. The receipt of the money paid by the respondent No.2 to the appellant under the orders of the DRAT cannot also be a sufficient ground for granting relief to the respondent No.2 as apparently from the order of the DRAT, Chennai itself, it appears that the said amount was received by the appellant under protest and without prejudice to his rights. The sale in favour of the appellant having been refused to be set aside by the Recovery Officer on two occasions we do not think that the impugned order passed by the DRAT, Chennai while in seisin of a transfer petition would be justified in law.We do not consider that in the facts of the case when the sale has been confirmed and the same has been refused to be set aside by the Recovery Officer the exercise of jurisdiction under Article 136 of the Constitution of India should be, in any way, inhibited or restrained on the grounds