That the defendant – Bank secured the property in Survey No.48/1 in Tirur Taluk, Tanur Village in exercise of powers under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (hereinafter referred to as ‘SARFAESI Act, 2002’) 2.1
Also Read: https://newslaw.in/supreme-court/quashing-of-high-court-judgment-on-land-acquisition-proceedings/
That the Bank secured the possession and thereafter by notice for auction dated 23.01.2007 the secured asset admeasuring 54 cents was put to auction. It appears that vide communication dated 08.03.2007, the original plaintiff reiterated that she is ready to purchase the property only if, absolute ownership, vacant possession and full enjoyment of 54 cents of land, free from all encumbrances is given, otherwise, she is not ready to purchase the property, if the Bank is not able to assign absolute ownership, vacant possession and full enjoyment of the property admeasuring 54 cents. Despite the above the Bank issued the sale certificate for 54 cents dated 21.11.2007 and handed over the possession of the secured property admeasuring 39.60 cents only however, the sale consideration is issued for 54 cents.
It was the case of the plaintiff that as the plaintiff paid a total sale consideration for 54 cents of the land and even the sale certificate and the sale deed was executed for 54 cents the plaintiff has been handed over the possession of 39.60 cents of the land only and therefore the plaintiff is entitled to the damages/compensation with respect to the 14.40 cents which was less than the area for which the plaintiff paid the amount i.e. (iii) Reliefs and Costs?” 2.4 That the learned Trial Court decreed the suit and directed the defendant – Bank to pay to the plaintiff a sum of Rs.58,10,000/- with future interest @ 12% pa from the date of suit till realization.
6 Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court allowing the appeal and quashing and setting aside the decree passed by the learned Trial Court and consequently dismissing the suit, the original plaintiff has preferred the present appeal. 1
Also Read: https://newslaw.in/supreme-court/final-decision-and-disclosure-in-collegium-meetings/
It is submitted that therefore the Hon’ble High Court has materially erred in observing and holding that the suit was barred by Section 34 of the SARFAESI Act. It is submitted that thereafter the appellant replied on 08.03.2007
the tender bid be considered only if the bank could transfer absolute ownership and possession over the entire 54 cents of land without any encumbrances and if not, she would withdraw her offer and the earnest money would be returned.
3 Learned Counsel appearing on behalf of the appellant has further submitted that the respondent – bank while exercising the powers provided under the SARFAESI Act failed to comply with Rule 8(6)(a) and (f) of the Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as Rules 2002) and Section 55(1)(a) of the Transfer of Property Act (hereinafter referred to as ‘TP Act’). 4 It is submitted that Rule 8(6)(a) and (f) of the Rules 2002 mandates additional duty on the Authorised Officer to make known to the bidders before auction any other thing which the Authorised Officer considers it material for a purchaser to know in order to judge the nature and value of the property. It is submitted that as the property in question was put to auction on “as is where is” and “as is what is” basis and the plaintiff – auction purchaser was from the very beginning aware that the area of the land is less than what was advertised and despite that the offer was made which was accepted, the High Court has rightly set aside the judgment and decree passed by the learned Trial Court.
It is submitted that in the present case from the communications on record and that the possession was handed over to the bank pursuant to the order under Section 14 of the SARFAESI Act on 08.10.2007 and thereafter the plaintiff made the payments on various dates, leading to the issuance of the sale certificate on 21.11.2007, which was registered almost 3 years later on 01.02.2010, it is very much clear that the plaintiff was aware of the extent of the property and no case of fraud is made out. The plaintiff on the basis of the representation made and the auction notice in which the land was put to auction was stated to be 54 cents submitted her offer of Rs.32,05,000/- for sale of 54 cents. However, immediately vide communication dated 08.03.2007
the plaintiff reiterated that she is ready to purchase the property only if, absolute ownership, vacant possession and full enjoyment of 54 cents of land, free from all encumbrances is given, otherwise, she is not ready to purchase the property, if the Bank is not able to assign absolute ownership, vacant possession and full enjoyment of the property admeasuring 54 cents.
Despite the above the Bank issued the sale certificate dated 21.11.2007 for 54 cents of land, however, handed over the possession of the secured property admeasuring 39.60 cents only. 2 Now so far as the submission on behalf of the plaintiff and the finding recorded by the High Court that the suit was barred by Section 34 of the SARFAESI Act is concerned, at the outset it is required to be noted that the suit was for damages/compensation, with respect to the balance land, which could not have been decided by the DRT or Appellate Tribunal, Section 34 of the SARFAESI Act shall be applicable only in a case where the Debt Recovery Tribunal and/or Appellate Tribunal is empowered to decide the matter under the SARFAESI Act.
Case Title: LEELAMMA MATHEW Vs. M/S. INDIAN OVERSEAS BANK (2022 INSC 1214)
Case Number: C.A. No.-007128-007128 / 2022
