Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Allowed |
Headnote | Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 – ss.13(2), 13(4), 14 and 17 – Security Interest (Enforcement) Rules, 2002 – r.8 r/w r.9 – Appellant (bank) granted term loan of Rs.100 lakhs and cash credit limit of Rs.95 lakhs to respondent (borrower) against security of two mortgaged properties – Borrower failed to repay the loan as per terms & conditions of the agreement – The account of the borrower became NPA on 31.10.2012 – Notice u/s.13(2) of SARFAESI Act served upon the borrower on 07.01.2013 demanding sum of Rs.1,85,37,218.80/- – Bank took symbolic possession of the immovable property / residential house and issued notice u/s. 13(4) of SARFAESI Act on 22.08.2013 – The bank issued sale notice by public auction of the residential property on 16.12.2013 – Reserve price fixed was Rs.48.65 lakhs – Date of auction notified was 20.01.2014 – Borrower challenged the auction by filing application u/s 17 of the SARFAESI Act before DRT – DRT passed interim order directing release / handover of possession of the mortgaged property to the borrower on deposit of Rs.48.65 lakhs – Bank filed appeal before DRAT which was dismissed – Single Judge of High Court set aside the orders passed by DRT & DRAT on ground that the orders were in contravention of s.13(8) of SARFAESI Act – Division Bench set aside the order of Single Judge and directed the bank to release the secured property (residential house) on the borrower depositing a further sum of Rs.17 lakhs to the bank and handover possession along with title deeds to the borrower – Propriety – Held: Not proper –The bank/secured creditor could be restrained from selling the mortgaged property/secured property if the borrower deposited entire dues that was Rs.1,85,37,218.80/- as on 07.01.2013 with the secured creditor – DRT in its order which as such was an interim relief order pending appeal u/s.17 of the SARFAESI Act was not justified in directing to release the mortgaged property and handover the possession along with the original title deeds to the borrower on payment of Rs.48.65 lakhs only which was the base price/ reserve price, which the Division Bench of the High Court increased to Rs.65.65 lakhs on the ground that the highest bid received was Rs.71 lakhs – Unless and until the borrower was ready to deposit /pay the entire amount payable together with all costs and expenses with the secured creditor, the borrower could not be discharged from the entire liability outstanding – It will be open for the appellant to proceed with the auction proceedings of the mortgaged properties – At the same time, DRT to decide and dispose of the application filed by the borrower u/s 17 of the SARFAESI Act in accordance with law. |
Judge | Hon'ble Mr. Justice Mukeshkumar Rasikbhai Shah |
Neutral Citation | 2022 INSC 169 |
Petitioner | Bank Of Baroda |
Respondent | M/s Karwa Trading Company & Anr. |
SCR | [2022] 1 S.C.R. 1100 |
Judgement Date | 2022-02-10 |
Case Number | 363 |
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