Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Enforcement of Security Interest Act |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Allowed |
Headnote | Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002) – s.14 – Security Interest (Enforcement) Rules, 2002 (Rules) – r.8(6)(a) and (f) – Transfer of Property Act – ss. 54,55(1)(a) – Defendant-bank secured a property under the 2002 Act – Thereafter, the secured asset admeasuring 54 cents was put to auction – Appellant-plaintiff submitted quotation for sale – Bank took the possession of the property – Plaintiff paid total consideration amount – Thereafter, Tehsildar submitted report that actual measurement of land was 39.60 cents and debtor had already transferred 14.40 cents out of total admeasuring 54 cents prior to the creation of the mortgage with the Bank – Despite the findings, the Bank issued sale certificate for 54 cents and handing over possession of the secured property admeasuring 39.60 cents – Plaintiff instituted suit for recovery of damages/compensation with respect to 14.40 cents – Trial Court decreed suit and directed the defendant-Bank to pay to the plaintiff a sum of Rs.58,10,000/- with 12% p.a. – High Court quashed and set aside the decree passed by the Trial Court inter alia on the grounds (i) that as the fraud has not been established and proved the suit was barred in view of Section 34 of the SARFAESI Act; (ii) That the plaintiff was aware of the fact that the actual area of the secured property put to auction is less than 54 cents and therefore it cannot be said that there was any non-disclosure on the part of the Bank; (iii) that the property was put to auction “as is where is” and “as is what is” basis? – Held: High Court erred in holding that the suit was barred by s. 34 of the SARFAESI Act – 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, s. 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 – Auction notice was for 54 cents; plaintiff paid total consideration for 54 cents; sale certificate issued was for 54 cents – So, it was not open to Bank to contend that though Bank had handed over possession of 34.60 cents still the sale consideration recovered would be 54 cents – Section 54 of Transfer of Property cast a duty on the seller to disclose any buyer any material defect in the property of which the buyer is not aware and which the buyer could not ordinarily discover – Under the circumstances also the submission on behalf of the Bank that the property was put to auction on “as is where is”and “as is what is” condition, thereafter the plaintiff shall not be entitled to compensation of the less area cannot be accepted. |
Judge | Hon'ble Mr. Justice M.R. Shah |
Neutral Citation | 2022 INSC 1214 |
Petitioner | Mrs. Leelamma Mathew |
Respondent | M/s Indian Overseas Bank & Ors. |
SCR | [2022] 18 S.C.R. 696 |
Judgement Date | 2022-11-17 |
Case Number | 7128 |
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