R. D. Khare, Chairperson
1. The present appeal has been filed under section 18 of the SARFAESI Act, 2002 against the judgment dated 19.09.2020, whereby the S.A. filed by the appellants has been dismissed.
2. The brief facts of the matter are that the appellant No. 1 was granted a cash credit facility and appellant No. 2 was granted a housing loan by the respondent-Bank. Appellant No. 2 stood as guarantor to the cash credit limit of appellant No.1, who is proprietor of M/s Sidhi Vinayak. Both the credit facilities were secured by the appellant creating equitable mortgage over a part of the residential land, which was fully constructed house, standing in the name of joint family of the appellants and title deed was deposited with the respondent-Bank. In addition to it, the borrowers also executed their personal security in favour of the respondent-Bank. Since the borrower did not maintain the financial discipline, therefore, both the accounts were classified as NPA on 10.11.2016 and a demand notice dated 10.11.2016 was issued by the Bank under section 13(2) of the SARFAESI Act for a sum of Rs. 17,04,530/-. Since the appellants did not pay any heed to the said demand, therefore, the symbolic possession of the property in question was taken by the Bank by issuing possession notice dated 31.01.2017 under section 13(4) of the said Act.
3. It appears that after taking valuation of the property from the approved valuer, the sale notice dated 06.11.2018 was issued by the Bank scheduling the auction on 12.12.2018 and the property was sold to one Surendra Prasad Singh for a sum of Rs. 13,49,800/-. The auction purchaser has deposited the entire sale consideration, therefore the sale certificate was issued on 27.12.2018 and the sale deed was executed on 06.03.2018 in favour of the auction purchaser, who is respondent No. 5 in the present case.
4. The appellants challenged the entire proceedings of the Bank under the SARFAESI Act by filing the S.A. No. 233/2018 before the Tribunal below, which has been dismissed by the Tribunal below vide order impugned being barred by limitation as well as on merits also. Being aggrieved by the said order, the present appeal has been filed by the appellant.
5. Learned counsel for the appellant submitted that the respondent-Bank has declared the account of the appellant as NPA on 18.03.2012, which is prior to sanction of the loan. Further, the appellant in the present case is the borrower, who was sanctioned a cash credit limit on 25.09.2012 for Rs. 7.00 lacs and another loan was sanctioned on 27.09.2012 for Rs. 7.00 lacs for house improvement. As such the demand notice and the subsequent proceedings thereof are bad in law. In support of this contention the learned counsel has relied upon a judgment passed by the Hon’ble Supreme Court in Keshavlal Khemchand and Sons Pvt. Ltd. & Ors. Vs. Union of Indian and Ors, AIR 2015 Supreme Court 1168.
6. The next contention of the appellant was that the description of the boundary of the property in question mentioned in the sale notice 06.11.2018 differs from the demand notice dated 10.11.2016 and possession notice dated 31.01.2017 and the same also differs from sale notice and sale certificate dated 27.12.2018. As such everything is faulty and the entire procedure of the Bank is illegal.
7. It was lastly contended that the appellant had deposited the entire amount, on which the sale has been made. It was further contended that inspite of restraint order, the property has been sold and the auction purchaser has changed the nature of the property in question. It was also contended that till date, none has put in appearance on behalf of the auction purchaser or subsequent purchaser, who have duly been noticed. It was therefore prayed that the order impugned may be set-aside and the appeal may be allowed.
8. Learned counsel for the respondent-Bank submits that there is only statutory requirement for giving demand notice under section 13(2) of the SARFAESI Act and states that the account has been declared as NPA and the date of NPA is not required to be mentioned in the demand notice and if any date is mentioned therein, it will not have any legal consequence and the same is not required to be mentioned under the law. It was further argued that in case any incorrect date with regard to declaration of NPA has been transcribed in the demand notice, it cannot vitiate the proceedings of the Bank under the SARFAESI Act. Learned counsel for the respondent-Bank has relied upon the judgment passed by the Hon'ble Supreme Court in the matter of Larson and Turbo Housing Finance reported in 2020(10) SCC 659.
9. Learned counsel for the respondent-Bank also argued that so far the averment of the learned counsel for the appellant regarding wrong mentioning of the boundaries is concerned, it was argued that the same has not been pleaded before the Tribunal below or before this appellate Tribunal. It was also stated that even the first argument with regard to the date of NPA has not been pleaded either before the Tribunal below or before this appellate Tribunal. It was further contended that nothing has been shown by the counsel for the appellant as to what boundaries have been incorrectly mentioned in the notices.
10. Learned counsel for the respondent-Bank also submitted that appellants have lost their right of redemption in view of the facts that the property has already been auctioned and sale certificate has also been issued and the auction purchaser was impleaded before the Tribunal below. In support of this contention, the learned counsel has placed reliance on a judgment passed by the Hon’ble Apex Court in Dwarika Prasad Vs. State of Uttar Pradesh and Ors. (2018) 5 Supreme Court cases 491.
11. Having heard the learned counsel for the parties and considering the material available on record, it is observed that the points raised by the appellant with regard to incorrect date of NPA and description of the boundaries of the property in question have never been pleaded by the appellant either before the Tribunal below or before this Tribunal and in this regard, the Tribunal below has not given any finding in the order impugned. On the basis of the oral submission made by the learned counsel for the appellant, it would not be appropriate to deal with these issues. Moreover, if these issues were not pleaded/argued before the Tribunal below, the same cannot be permitted to be raised directly before this Tribunal. The learned counsel for the appellant has not argued/pressed any other points/issues before this Tribunal during course of the argument except the issue with regard to right of redemption of the property in question.
12. So far as the right of redemption available to the appellant is concerned, it is to be seen that the sale notice was issued on 06.11.2018 and the property was sold on 12.12.2018 for a sum of Rs. 13,49,800/- in favour of the respondent No. 5 and after deposit of entire sale consideration, the sale certificate has been issued on 27.12.2018. From Para XV of the memo of the appeal, it is observed that the appellant after concluding the final hearing of the S.A. on 29.01.2020, offered two cheques, one for Rs. 6.50 lacs and another for Rs. 6.80 lacs along with written arguments before the Tribunal below on 10.02.2020 to redeem the property. In this regard, section 13(8) of the SARFAESI Act is relevant which is produced as under:-
13(8)- where the amount of dues of the secured creditor together with all costs charges and expenses incurred by him is tendered to the secured creditor at any time before the date of publication of notice for public auction or inviting quotations or tender from public or private treaty for transfer by way of lease, assignment or sale of the secured asset,-
(i) The secured assets shall not be transferred by way of lease, assignment or sale by the secured; and
(ii) In case, any step has been taken by the secured creditor for transfer by way of lease or assignment or sale of the assets before tendering of such amount under this sub-section, no further steps shall be taken by such secured creditor for transfer by way of lease or assignment or sale of such secured assets.
13. In view of the above, it is clear that the appellant has offered the amount to redeem the property on 10.02.2020, whereas the auction sale was completed on 12.12.2018 and the sale certificate was issued on 27.12.2018, which is much beyond the time as prescribed in the Act. As such the appellant has waived his right to redeem the property in question.
14. In view of the discussions as held above, the order impugned does not call for any interference by this Tribunal. Hence, the appeal is liable to be dismissed. Accordingly, the same is dismissed with no order as to costs.
15. A copy of this judgment be forwarded to the parties concerned and be also uploaded on the e-drt portal.
